UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

            |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 2007

                        Commission File Number 333-07953

                           DYNAMIC LEISURE CORPORATION
                 (Name of small business issuer in its charter)

                 Minnesota                                 41-1508703
      (State or other jurisdiction of                   (I.R.S. Employer
       incorporation or organization)                  Identification No.)

                             5680A W. Cypress Street
                                 Tampa, FL 33607
                    (Address of principal executive offices)

                    Issuer's Telephone Number: (813) 877-6300

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $0.01 Par Value
                                (Title of Class)

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 | |

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

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.) YES | | NO |X|

The issuer's revenues for the fiscal year ended December 31, 2007 were
$8,101,205.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. April 9, 2008: $1,843,991.

      ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

                                       N/A

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after
the distribution of securities under a plan confirmed by a court.
Yes[ ]  No[ ]

<PAGE>

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

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

              Class                      Outstanding as of  April 9, 2008

       Common Stock, $0.01                         16,888,557

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (i) any annual report to security holders;
(ii) any proxy or information statement; and (iii) any prospectus filed pursuant
to Rule 424(b) or (c) of the Securities Act of 1933 (the "Securities Act"). The
listed documents should be clearly described for identification purposes (e.g.
annual reports to security holders for fiscal year ended December 24, 1990).

                                       N/A

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

                                       ii
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                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I

Forward Looking Statements..................................................   3

Item 1.  Description of Business............................................   4

Item 2.  Description of Property............................................  25

Item 3.  Legal Proceedings..................................................  25

Item 4.  Submission of Matters to a Vote of Security Holders................  26

PART II

Item 5.  Market for Common Equity, Related Stockholder Matters and
         Small Business Issuer Purchases of Equity Securities...............  26

Item 6.  Management's Discussion and Analysis or Plan of Operation..........  31

Item 7.  Financial Statements...............................................  43

Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure...........................................  43

Item 8A. Controls and Procedures............................................  43

Item 8B. Other Information..................................................  44

PART III

Item 9.  Directors, Executive Officers, Promoters, and Control Persons,
         Compliance With Section 16(a) of the Exchange Act..................  45

Item 10. Executive Compensation.............................................  48

Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters ........................  48

Item 12. Certain Relationships and Related Transactions.....................  51

Item 13. Exhibits...........................................................  51

Item 14. Principal Accountant Fees and Services.............................  55

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                                     PART I

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Portions of this Form 10-KSB, including disclosure under "Management's
Discussion and Analysis or Plan of Operation," contain forward-looking
statements. These forward-looking statements are subject to risks and
uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from the results, performance or
achievements expressed or implied by the forward-looking statements. You should
not unduly rely on these statements.

Forward-looking statements can be identified by the fact that they do not relate
strictly to historical or current facts. They use words such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe," "project,"
"contemplate," "would," "should," "could," or "may."

With respect to any forward-looking statement that includes a statement of its
underlying assumptions or bases, we believe such assumptions or bases to be
reasonable and have formed them in good faith, assumed facts or bases almost
always vary from actual results, and the differences between assumed facts or
bases and actual results can be material depending on the circumstances. When,
in any forward-looking statement, we express an expectation or belief as to
future results, that expectation or belief is expressed in good faith and is
believed to have a reasonable basis, but there can be no assurance that the
stated expectation or belief will result or be achieved or accomplished. All
subsequent written and oral forward-looking statements attributable to us, or
anyone acting on our behalf, are expressly qualified in their entirety by the
cautionary statements. We do not undertake any obligations to publicly release
any revisions to any forward-looking statements to reflect events or
circumstances after the date of this report or to reflect unanticipated events
that may occur.

Factors that may cause our actual results to differ materially from those
described in forward-looking statements include the risks discussed elsewhere in
this Form 10-KSB under the caption "Risk Factors".

You should read the following summary together with the more detailed
information regarding us by means of this Form 10-KSB and our financial
statements and notes to those statements appearing elsewhere in this Form
10-KSB. This summary highlights information contained elsewhere in this Form
10-KSB.

All information contained in this Form 10-KSB is adjusted to reflect our
recapitalization in January 2006 and a 1-for-30 reverse split of our common
stock effective in March 2006.

In this filing, unless the context requires otherwise, references to the
"Company", "Dynamic", "we", "us" and "our" are to Dynamic Leisure Corporation,
formerly known as DynEco Corporation, and its wholly-owned subsidiaries, DynEco
International, Inc., Dynamic Leisure Group North America, Inc., Dynamic Leisure
Europe Limited (currently inactive), Dynamic Leisure Technologies, Inc.
(currently inactive), Changes in L'Attitudes, Inc. ("CIL"), Island Resort Tours,
Inc. ("IRT"), and International Travel and Resorts, Inc. ("ITR").

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ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

Dynamic Leisure Corporation is engaged in the business of marketing, selling and
distributing a variety of vacation packages, cruises, domestic and international
airline tickets, car rental services and accommodation products and services on
a wholesale basis to travel agencies and other travel resellers and on a retail
basis directly to consumers. The Company also sells certain stand-alone travel
products on an agency basis. For the fiscal years ended December 31, 2007 and
2006, substantially all of the Company's travel products were for destinations
in the Caribbean and Mexico.

Through our websites and customer service center, customers can search for,
inquire about, price and purchase vacation packages and other travel-related
products. We have experienced travel consultants and customer service
representatives available to both our wholesale and retail customers via
toll-free telephone or e-mail to assist customers in selecting and purchasing
vacation packages and stand-along travel related products.

Through our websites, www.Changes.com and www.eCasual.com, consumers can search
for and price cruises and vacation packages. Through our website
www.IslandResortTours.com, travel agencies and other travel resellers can search
for and price vacation packages for their clients. At December 31, 2007, we have
8 travel consultants and customer service representatives headquartered in our
10,000 square foot facility in Tampa, Florida and 5 travel consultants and
customer service representatives in our New York office with whom both our
wholesale and retail customers may contact via toll-free telephone or email to
purchase vacation packages.

The Company intends to grow in 2008 by continuing to focus on the leisure travel
markets of the Caribbean and Mexico, by expanding its travel products for
destinations in Florida, California, Las Vegas, Hawaii, Europe, and Central and
South America, and by developing a more prominent Internet presence.

We are a Minnesota corporation with our principal executive offices located at
5680A W. Cypress Street Tampa, Florida 33607. Our telephone number is (813)
877-6300.

The report of our independent registered public accounting firm with respect to
our consolidated financial statements for the fiscal years ended December 31,
2007 and 2006 includes an explanatory paragraph wherein the auditors expressed
substantial doubt about our ability to continue as a going concern. Our
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties. For the fiscal years ended
December 31, 2007 and 2006, the Company had revenues of $8,101,205 and
$5,817,252, a net loss of $5,674,960 and $11,009,388 and cash used in operations
of $1,658,698 and $2,720,651, respectively.

COMPANY HISTORY

We were incorporated under the laws of the State of Minnesota in December 1984,
under the name TERTM, Inc. In 1989, we changed our name to TERTM Technology
Corporation and, in December 1993, again changed our name to DynEco Corporation.
In March 2006, we again changed our name to Dynamic Leisure Corporation.

Prior to January 13, 2006, we were engaged in the business of licensing to
Parker-Hannifin Corporation on a royalty basis our UniVane air compressor and
hydrogen circulator technology, as well as the technology and patents
incorporated therein pursuant to an Exclusive Worldwide License Agreement. With
the exception of an immaterial number of sales of prototype units, no sales of
licensed products have been made to date. Consequently, the Company's
then-directors sought a business partner to save the Company from ceasing
operations, which ultimately required that the Company change its business plan.

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In January 2006, we entered into a stock exchange agreement (the "Stock Exchange
Agreement") with the former shareholders of Dynamic Leisure Group, Inc., a
privately held Florida corporation ("Dynamic Leisure"), under which the Company
acquired all of the outstanding capital stock of Dynamic Leisure, and Dynamic
Leisure became a wholly owned subsidiary of the Company. Dynamic Leisure was
founded in May 2005 for the purpose of consolidating leisure-based travel
products, such as airfares, hotels, car rentals, excursions, and tours, using
proprietary dynamic packaging software.

On February 8, 2006, the Company acquired Changes in L'Attitudes, Inc., a Largo,
Florida online leisure travel company. On March 6, 2006, the Company acquired
Island Resort Tours, Inc. and International Travel and Resorts, Inc., two New
York-based wholesale tour operators.

CURRENT OPERATIONS

The Company is engaged in the business of marketing, selling and distributing a
variety of travel products and services either as bundled vacation packages or
as stand-alone products. The Company markets and sells its products and services
on a wholesale basis to travel agencies and other travel resellers and on a
retail basis directly to consumers.

Through our websites and customer service center, customers can search for,
inquire about, price and purchase vacation packages and other travel-related
products. We have experienced travel consultants and customer service
representatives available to both our wholesale and retail customers via
toll-free telephone or e-mail to assist customers in selecting and purchasing
vacation packages and stand-alone travel-related products. We have established
relationships with leading hotels, car rental agencies and cruise lines which
enable us to offer competitive rates at thousands of hotel properties, including
but not limited to hoteliers, such as Hilton, Marriott, Leading Hotels,
Starwood, Accor (Sofitel, Novotel, Mercure and Ibis), Best Western and hundreds
of individual hotels, and numerous car rental companies and cruise lines. In
addition, we have entered into agreements with a number of leading airlines such
as American Airlines, British Airways, Delta, Air France, US Air, Continental,
SwissAir, Iceland Air and TACA. Many of these contracts are "net" or "bulk"
contracts, which allow us to offer competitive pricing with reasonable margins.
In Spring 2006, one major airline informed us that it recently cancelled
wholesale bulk contracts with many of our competitors. This airline is our
primary airline supplier; however, no airline has cancelled or limited the
Company's access to or use of our wholesale bulk contracts. However, these
contracts are not exclusive to us and may be modified or cancelled in the
airline's discretion.

In addition, as a result of our long standing relationships with our suppliers,
we have been able to negotiate a number of bulk contracts with these suppliers.

STRATEGY

Our objective is to become a leading supplier and distributor of bundled travel
products. The key elements of our strategy include the following:

Implement Innovative Technology Platform. In 2005 we acquired the rights to
TourScape, a dynamic packaging reservation and purchasing software system
developed by the SABRE group. TourScape provides our customers greater
flexibility and advanced functionality in searching for, pricing and purchasing
bundled vacation packages online. TourScape also provides faster information
flow to our reservation agents, and can be integrated into our accounting and
other business systems. It also supports multiple product lines, multiple
currencies, unlimited packaging capabilities, numerous pricing and costing
methods and various commission levels. We believe that TourScape will improve
our productivity, efficiency, recordkeeping and business tracking, and reduce
operator training and booking time. We completed the implementation of TourScape
in March 2007.

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Increase Sales of Bundled Vacation Packages. We believe that in order to become
profitable we must increase sales of our bundled vacation packages, which have
higher margins than stand-alone travel related products. We intend to achieve
this objective by:

   o  Offering attractive prices on personalized vacation packages and tours;

   o  Expanding our product offerings by developing relationships with suppliers
      in new destinations;

   o  Increasing awareness of our travel products by travel agencies, affiliates
      and travel resellers through developing and distributing printed and
      online marketing materials, attending trade shows and networking with
      existing industry contracts.

Expand our Customer Base. Our goal is to increase our customer base by acquiring
new customers in a cost-effective manner and increasing our market share in the
rapidly growing online travel industry. We intend to achieve this objective by:

   o  Emphasizing online advertising and other targeted marketing strategies;

   o  Cost-effectively building our brand through traditional broadcast and
      print channels;

   o  Generating increased transactions from frequent customers using direct
      mail recognition programs and encouraging infrequent bookers to purchase
      more travel from us using supplier incentives;

   o  Implementing strategies to drive traffic to our websites. We currently own
      over one hundred (100) uniform resource locators (URL's), most of which
      have been operating for at least five years. These URL's direct visitors
      to one of 30 websites and are currently registering monthly traffic
      ranging from 400 to 140,000 unique visitors per month. We are in the
      process of updating our existing websites and developing new websites to
      attract new customers based in the United States, Europe, Asia and Latin
      America.

   o  Increasing brand awareness of our websites and travel products.

   o  Target International Customers. We believe Europe represents a large
      market for vacation packages to U.S. destinations. We intend to target
      international customers through our wholly owned subsidiary Dynamic
      Leisure Europe Limited located in London, England.

Expand Relationships With Suppliers. As a result of our long-established
relationships with travel industry vendors, we have been able to secure
wholesale hotel and bulk airline contracts with a number of our suppliers, which
permits us to price our products competitively while maintaining our gross
margins. Our goal is to leverage these relationships and our reputation as an
established wholesale travel supplier to increase the number of relationships we
have with travel suppliers with the goal of increasing the number of bulk
contracts that we have with our suppliers.

Improve Cross-Selling and Marketing Techniques. We have increased and intend to
continue to increase cross-selling of lodging and car rental products by
presenting air customers at the point of sale with an improved matrix display of
lodging and car rental choices, based on their selected air travel itinerary. We
are also increasing consumer awareness of our non-air travel offerings through
targeted direct marketing of these products to our registered user base and
other potential customers. A portion of our recent broadcast advertising has
focused on our hotel initiatives and we expect to continue this targeted
advertising.

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Retain Customers by Providing a Superior Experience. Our goal is to offer
consumers the broadest selection of travel options, the largest selection of low
fares generally available to the public and a wide array of competitive rates on
other travel products. We believe these factors will generate a high degree of
customer loyalty and result in high customer retention rates. Key initiatives to
promote higher customer retention include:

   o  Continue to maintain strong supplier relationships to ensure the largest
      selection of low fares generally available to the public and a wide array
      of competitive rates on other travel products;

   o  Have specialized vacation package inventory available to consumers;

   o  Utilize online tools that help facilitate complex leisure travel
      purchases; and

   o  Provide the customer service, both online and off, that is necessary to
      make the customer feel comfortable booking our bundled leisure travel
      packages online.

Pursue New Business Opportunities. We plan to use our innovative technology and
our relationships with travel suppliers to expand into new business
opportunities that enhance our growth prospects.

In order to pursue these business opportunities and our other growth
initiatives, we may make strategic acquisitions of other businesses, products
and technologies. The discussion of our strategy in this section reflects our
current view of the ways we intend to develop our business in the future. Many
of the initiatives we describe above are at an early stage, and we continue to
review them in light of changing business conditions. We may change our plans,
and future developments could differ from those we intend or expect to occur.

Foster Strategic Partnerships And Private Label Programs. We believe that one of
the most important aspects of developing a successful online travel website is
the process of creating and managing the requisite strategic partnerships and
alliances. Strategic partnerships with web portals, e-commerce companies and
content providers have the potential to generate revenue from transactions and
advertisements, and also place the brand in front of Internet users. We intend
to pursue these types of strategic online partnerships as a means to generate
traffic, customer acquisition and revenue. We are also looking for opportunities
to supply travel services to other companies under their brand. Under these
private-label programs, we would provide travel packages and fulfillment
services to companies who would market these packages and services as their own.
As of March 31, 2008, we have one private-label program.

Establish A Dynamic Affiliate Program. Thousands of websites are currently
utilizing the affiliate (also known as associate or referral) programs of online
vendors to offer their visitors the opportunity to buy everything from books to
sporting goods to cars. These programs allow any website owner to create banner
links that transport visitors to the affiliate e-commerce website in the hope
they will make a purchase, thereby entitling the website owner to a commission.
By establishing and promoting an affiliate program, we believe we will create an
opportunity to sell travel products in appropriate contextual settings on
complementary we sites. We are currently identifying e-commerce companies to
establish our affiliate program. At this time we have established one affiliate
program and we had begun the process of implementing additional affiliate links.

SALES AND MARKETING

We use various forms of marketing, including traditional advertising such as
print publications and Internet advertising, placement on search engine websites
such as Google and targeted online marketing efforts. For example, in June 2006,
the Company initiated a targeted email marketing campaign to existing customers
and individuals selected based on demographics and travel history. We expect to
continue to use online advertising as our primary marketing vehicle. A smaller
portion of our marketing budget is dedicated to traditional advertising such as
print publications.

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In addition, we participate in industry trade shows such as American Society of
Travel Agents and the National Association of Commissioned Travel Agents to
introduce our products and brands to the industry.

Creating our brands is a critical aspect of developing our business model and
resulting sales. We intend to continue to utilize a combination of advertising
strategies to market our brands, including the use of targeted e-mail campaigns,
promotions, special offers, and newsletters.

To date, the amount that we have spent on marketing and advertising has not been
significant, and we recognize the need to be able to increase the amount we
spend on sales and marketing significantly in 2008.

COMPETITION

Our competitors in the online travel industry include travel suppliers and
travel agencies. Each of these types of competitors and factors upon which we
compete are described below. Many of our competitors have greater experience,
brand name recognition and/or financial resources than we do. We may be unable
to compete successfully and our failure to compete successfully may have a
material adverse effect on our business, financial condition and results of
operation.

Suppliers. Suppliers primarily encompass airlines, hotels, car rental agencies
and cruise lines. Advantages of suppliers over their agency counterparts
include, among others,

   o  Well-established brands and consumer confidence in those brands;

   o  Customer loyalty;

   o  Existing operational infrastructure and fulfillment of capabilities;

   o  Access to additional inventories and pricing incentives;

   o  Other incentives such as frequent flyer miles programs; and

   o  Availability of extensive financial resources to invest in Internet
      initiatives.

Travel Agencies. Travel agencies with an online presence are comprised of both
online companies and established brick-and mortar operations. According to
reports available in the public domain of online travel by such companies and/or
publications as PhoCuswright, Inc., Jupiter Research and Research Works, some of
the leaders in online travel include, among others:

   o  Orbitz

   o  Travelocity

   o  Expedia

   o  GetThere.com

   o  Travel Network

   o  Uniglobe Travel

   o  Lowestfare.com

All of the leaders mentioned above offer price and availability search
capabilities for air, hotel and car rental and allow the user to book directly
online without human intervention. Most of the agencies also offer special deals
and discounted offerings. Some provide destination content. One of the areas
some agencies are endeavoring to enhance is their offering of tour packages and
cruises.

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INTELLECTUAL PROPERTY

We regard the protection of our intellectual property as important to our future
success and rely on a combination of copyright, trademark, service mark and
trade secret laws, license agreements and contractual restrictions to establish
and protect intellectual property rights in our website architecture and
technology, products, content and services. We plan to enter into
confidentiality and invention assignment agreements with our employees and
contractors in order to limit disclosure of our confidential information and to
protect our ownership interest in our website architecture and technology. We
cannot assure you that these contractual arrangements or the other steps taken
by us to protect our intellectual property will prove sufficient to prevent
misappropriation of our technology or deter independent third-party development
of similar technologies.

REGULATORY ENVIRONMENT

The services we provide are subject to various federal, state and local
regulations. For example, our travel service is subject to laws governing the
offer and/or sale of travel services as well as laws requiring us to register as
a "seller of travel." In addition, our services may be subject to various state
and local taxing regulations.

In addition, our business is indirectly affected by regulatory and legal
uncertainties affecting travel suppliers and global distribution systems. In
2004, the Department of Transportation (the "DOT") published a Final Rule,
abolishing the rules governing global distribution systems. As a part of the
Final Rule, the DOT rejected proposals to regulate online travel service
providers' fare displays. However, the DOT deferred consideration of a proposal
to amend its policies regarding advertising of air tickets, to require that
agency service fees be stated separately from the price being charged by the
airlines. Our current service fee disclosure practices differ from those
proposed by the DOT. If the DOT were to resume consideration of and adopt the
service fee proposal, we may have less flexibility regarding merchandising air
travel on our websites.

We are subject to federal, state and international laws that require protection
of user privacy and user data. In our processing of travel transactions, we
receive and store a large volume of personally identifiable data. This data is
increasingly subject to legislation and regulations in numerous jurisdictions
around the world, including the Commission of the European Union through its
Data Protection Directive and variations of that directive in the member states
of the European Union. Such government action is typically intended to protect
the privacy of personal data that is collected, processed and transmitted in or
from the governing jurisdiction. We are currently developing a privacy policy
that is being designed to ensure the protection of the privacy of our customers
and that we intend to be in compliance with the federal, state and international
laws applicable to the Company. We also intend to take the necessary measures to
ensure that our websites comply with industry standards relating to user
privacy.

All of our services are subject to federal and state consumer protection laws
and regulations prohibiting unfair and deceptive trade practices.

We are also subject to regulations applicable to businesses conducting online
commerce. Today there are relatively few laws specifically directed toward
online services. However, due to the increasing popularity and use of the
Internet and online services, it is possible that laws and regulations will be
adopted with respect to the Internet or online services. These laws and
regulations could cover issues such as online contracts, user privacy, freedom
of expression, pricing, fraud, content and quality of products and services,
taxation, advertising, intellectual property rights and information security.
Applicability to the Internet of existing laws governing issues such as property
ownership, copyrights and other intellectual property issues, taxation, libel,
obscenity and personal privacy is developing, but any such new legislation could
have significant implications on how we conduct online business. In addition,

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some states may require us to qualify in that state to do business as a foreign
corporation because our service is available in that state over the Internet.
Recently telephone carriers have requested the Federal Communications Commission
to regulate Internet service providers and online service providers and impose
access fees on those providers. If the FCC imposes access fees, the costs of
using the Internet could increase dramatically. These regulations, if
promulgated, could result in the reduced use of the Internet as a medium for
commerce, which could have a material adverse effect on our business, financial
condition and results of operations.

EMPLOYEES

The Company has 37 full-time and 3 part-time employees. No employee is a party
to a collective bargaining agreement.

RISK FACTORS

An investment in our common stock involves a number of very significant risks.
You should carefully consider the following risks and uncertainties in addition
to other information in evaluating our company and its business before
purchasing shares of our common stock. Our business, operating results and
financial condition could be seriously harmed due to any of the following risks.
The risks described below are all of the material risks that we are currently
aware of that are facing our company. Additional risks not presently known to us
may also impair our business operations. You could lose all or part of your
investment due to any of these risks.

RISKS RELATED TO OUR BUSINESS

ESTABLISHING, MAINTAINING AND ENHANCING OUR BRAND RECOGNITION WILL BE A CRITICAL
ASPECT OF OUR EFFORTS TO ATTRACT AND EXPAND OUR ONLINE TRAVEL SALES.

We believe that establishing, maintaining and enhancing our brand will be a
critical aspect of our efforts to attract and expand our online sales. The
number of Internet sites that offer competing services, many of which already
have well-established brands in online services or the travel industry
generally, increases the importance of establishing and maintaining brand
recognition of our "Dynamic Leisure" and "eCasual" brands, and maintaining and
enhancing brand recognition of Changes in L'Attitudes, Island Resort Tours,
International Travel and Resorts, and any other brands that we may acquire
through future acquisitions.

Promotion of our brands will depend largely on our success in providing a
high-quality travel agent hosting experience and high level of customer service.
In addition, to attract and retain travel agents and customers and to respond to
competitive pressures, we intend to increase our spending substantially on
marketing and advertising with the intention of expanding our brand recognition.
We currently do not and may never have the available resources for marketing and
advertising that may be required However, we cannot assure you that these
expenditures if made will be effective to promote our brands or that our
marketing efforts generally will achieve our goals.

If we are unable to provide high-quality hosting services or customer support,
if we fail to promote and maintain our brands or if we incur excessive expenses
in these efforts, our business, operating results and financial condition would
be materially adversely affected.

IF WE ARE UNABLE TO INTRODUCE AND SELL NEW PRODUCTS AND SERVICES, OUR BRANDS
COULD BE DAMAGED.

We need to broaden the range of travel products and services and increase the
availability of products and services that we offer in order to enhance our
service. We will incur substantial expenses and use significant resources trying
to expand the range of products and services that we offer. However, we may not
be able to attract sufficient travel suppliers and other participants to provide
desired products and services to our consumers. In addition, consumers may find

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that delivery through our service is less attractive than other alternatives. If
we launch new products and services and they are not favorably received by
consumers, our reputation and the value of our brands could be damaged.

Our relationships with consumers and travel suppliers are mutually dependent
since consumers will not use a service that does not offer a broad range of
travel services. Similarly, travel suppliers will not use a service unless
consumers actively make travel purchases through it. We cannot predict whether
we will be successful in expanding the range of products and services that we
offer. If we are unable to expand successfully, this could also damage our
brand.

If we are unable to broaden the range of travel products and services we offer
and successfully introduce and sell those new products and services, our
business may be harmed. Our business strategy is dependent on our further
diversifying our revenues into lodging, car rentals, cruises, vacation packages
and other travel related products. We cannot assure that our efforts will be
successful or result in greater revenues or higher margins.

THE SUCCESS OF OUR BUSINESS DEPENDS ON CONTINUED GROWTH OF ONLINE TRAVEL
COMMERCE AND ATTRACTING CUSTOMERS IN A COST-EFFECTIVE MANNER.

Our sales and revenues will not grow as we plan if consumers do not purchase
significantly more travel products online than they currently do and if the use
of the Internet as a medium of commerce for travel products does not continue to
grow or grows more slowly than expected. Consumers have traditionally relied on
travel agents and travel suppliers and are accustomed to a high degree of human
interaction in purchasing travel products. The success of our business is
dependent on significant increase in the number of consumers who use the
Internet to purchase travel products.

Our business strategy depends on our ability to broaden the appeal of our
website to business and other travelers and to increase the overall number of
consumer transactions conducted on our website in a cost-effective manner. In
order to increase the number of consumer transactions, we must attract more
visitors to our website and convert a larger number of these visitors into
paying customers. Currently, our website has focused on serving the leisure
traveler. Our ability to offer products and services that will attract a
significant number of business travelers to use our services is not certain. If
it does not occur, our growth may be limited. It may be necessary to spend
substantial amounts on marketing and advertising to enhance our brand
recognition and attract new customers to our website, and to successfully
convert these new visitors into paying customers. We cannot assure you that our
marketing and advertising efforts will be effective to attract new customers. If
we fail to attract customers and increase our overall number of consumer
transactions in a cost-effective manner, our ability to grow and become
profitable may be impaired.

Moreover, we rely on the Internet infrastructure which may be unable to support
increased levels of demand. The internet infrastructure may not expand fast
enough to meet the increased levels of demand. In particular, the expected
benefits from our online operations may be reduced if internet usage does not
continue to grow. In addition, activities that diminish the experience for
internet users, such as spyware, spoof e-mails, viruses and spam directed at
internet users, as well as viruses and "denial of service" attacks directed at
internet companies and service providers, may discourage people from using the
internet, including for commerce. If consumer use diminishes or grows at a
slower rate, then our business and results of operations could be adversely
affected.

IF WE FAIL TO ATTRACT AND RETAIN SALES AGENTS IN A COST-EFFECTIVE MANNER, OUR
ABILITY TO GROW AND BECOME PROFITABLE MAY BE IMPAIRED.

Our business strategy depends on increasing our overall number of customer
transactions in a cost-effective manner. In order to increase our number of
transactions, we must attract additional sales agents. Although we have spent

                                     - 11 -
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significant financial resources on sales and marketing and plan to continue to
do so, these efforts may not be cost effective in attracting new sales agents or
increasing transaction volume. If we do not achieve our marketing objectives,
our ability to grow and increase revenues may be impaired. Presently, we have
two sales agents, and although we will require more sales agents to achieve our
business strategy, we cannot at this time estimate the number of additional
sales agents that will be necessary.

Moreover, violations by our travel agents of applicable laws or of our policies
and procedures in dealing with customers could reflect negatively on our
products and operations and harm our business reputation. In addition, it is
possible that a court could hold us civilly or criminally accountable based on
vicarious liability because of the actions of our travel agents. Adverse
publicity concerning any actual or purported failure of us or our travel agents
to comply with applicable laws and regulations, whether or not resulting in
enforcement actions or the imposition of penalties, could harm the goodwill of
our company and could reduce our ability to attract, motivate and retain travel
agents, which would reduce our revenues. We cannot ensure that all travel agents
will comply with applicable legal requirements.

ADVERSE CHANGES OR INTERRUPTIONS IN OUR RELATIONSHIPS WITH THIRD PARTIES COULD
AFFECT OUR ACCESS TO TRAVEL OFFERINGS, IMPAIR THE QUALITY OF OUR SERVICE AND
REDUCE OUR REVENUES.

Although our business is not substantially dependent on any agreement with any
specific third party, such as a travel supplier, we rely on various agreements
with our airline, hotel and auto suppliers. These agreements contain terms that
could affect our access to inventory and reduce our revenues. All of the
relationships we have are freely terminable by the supplier upon notice. None of
these arrangements are exclusive and any of our suppliers could enter into, and
in some cases may have entered into, similar agreements with our competitors. We
cannot assure you that our arrangements with third parties will remain in effect
or that any of these third parties will continue to supply us and our agents
with the same level of access to inventory of travel offerings in the future. If
access to inventory is affected, or our ability to obtain inventory on favorable
economic terms is diminished, it may reduce our revenues. Our failure to
establish and maintain representative relationships for any reason could
negatively impact sales of our products and reduce our revenues.

We also rely on third-party computer systems and other service providers,
including the computerized central reservation systems of the airline, lodging
and car rental industries to make airline ticket, lodging and car rental
reservations and credit card verifications and confirmations. Third parties
provide, for instance, our data center, telecommunications access lines and
significant computer systems, support and maintenance services. Any interruption
in these, or other, third-party services or deterioration in their performance
could impair the quality of our service. We cannot be certain of the financial
viability of all of the third parties on which we rely. If our arrangements with
any of these third parties are terminated or if they were to cease operations,
we might not be able to find an alternate provider on a timely basis or on
reasonable terms, which could hurt our business.

OUR BUSINESS BENEFITS FROM FAVORABLE "NET" OR "BULK" CONTRACTS, AND CANCELLATION
OR LIMITATION ON USE OF THESE CONTRACTS COULD ADVERSELY AFFECT OUR BUSINESS.

We hold "net" or "bulk" air contracts with American Airlines, British Airways,
Delta, Air France, US Air, Continental, SwissAir, Iceland Air and TACA. These
contracts permit us to create and sell air and bundled travel packages that are
less expensive to consumers and more profitable for us than packages based upon
"scheduled" airfare. In spring 2006, one major airline informed us that it
recently cancelled wholesale bulk contracts with many of our competitors. This
airline is our primary airline supplier. Although no airline has cancelled or
limited our bulk contracts, the contracts are terminable and modifiable at the
will of the airlines, in which case our business could be adversely affected.

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OUR SUCCESS DEPENDS UPON IMPLEMENTING AND INTEGRATING OUR TOURSCAPE TECHNOLOGY.

As part of our business model, the implementation and integration of the
TourScape dynamic packaging technology is vital to increasing our company
efficiencies and thus increasing overall revenues. TourScape is a technology
platform designed to market and sell domestic and international leisure travel
products, both retail and wholesale. TourScape permits user-friendly interface
on the Internet and allows us to update product information for our reservation
agents quickly. We have installed TourScape into our servers and computers and
interfaced it with our websites. Because our employees helped design and refine
the TourScape program, we believe that we can expand TourScape as our needs
develop. However, if we cannot succeed in expending our TourScape technology,
our profitability may not increase as planned, or at all.

Our websites rely on our TourScape intellectual property and we cannot be sure
that this intellectual property is protected from copying or use by others,
including potential competitors. We regard much of our content and technology as
proprietary and try to protect our proprietary technology by relying on
trademarks, copyrights, trade secret laws and confidentiality agreements. In
connection with our license agreements with third parties, we seek to control
access to and distribution of our technology, documentation and other
proprietary information. Even with all of these precautions, it is possible for
someone else to copy or otherwise obtain and use our proprietary technology
without our authorization or to develop similar technology independently.
Effective trademark, copyright and trade secret protection may not be available
in every country in which our services are made available through the internet,
and policing unauthorized use of our proprietary information is difficult and
expensive. We cannot be sure that any steps we take will prevent
misappropriation of our proprietary information. This misappropriation could
have a material adverse effect on our business. In the future, we may need to go
to court to enforce our intellectual property rights, to protect our trade
secrets or to determine the validity and scope of the proprietary rights of
others. This litigation might result in substantial costs and diversion of
resources and management attention.

In the event we do not protect our TourScape technology effectively, this would
allow competitors to duplicate our product and services and this could make it
more difficult for us to compete with them. Since we currently do not have any
patents or trademarks, our success and ability to compete in the online travel
industry depend, in part, upon our TourScape technology. We rely primarily on
provisions in our contracts to protect our technology. We attempt to negotiate
beneficial intellectual property ownership provisions in our contracts. However,
laws and our actual contractual terms may not be sufficient to protect our
technology from use or theft by third parties. For instance, a third-party might
try to reverse engineer or otherwise obtain and use our technology without our
permission and without our knowledge, allowing competitors to duplicate our
products. We may have legal or contractual rights that we could assert against
such illegal use, but lawsuits claiming infringement or misappropriation are
complex and expensive, and the outcome would not be certain. In addition, the
laws of some countries in which we may wish to sell our products may not protect
software and intellectual property rights to the same extent as the laws of the
United States. Moreover, the intellectual property right laws afford us no
protection since we have no patents or trademarks.

OUR SUCCESS DEPENDS ON MAINTAINING THE INTEGRITY OF OUR SYSTEMS AND
INFRASTRUCTURE. SYSTEM INTERRUPTION AND THE LACK OF INTEGRATION AND REDUNDANCY
IN OUR INFORMATION SYSTEMS MAY AFFECT OUR BUSINESSES.

In order to be successful, we must provide reliable, real-time access to our
systems for our sales agent, customers and suppliers. As our operations grow in
both size and scope, we will need to improve and upgrade our systems and
infrastructure to offer an increasing number of people and travel suppliers
enhanced products, services, features and functionality. The expansion of our
systems and infrastructure will require us to commit substantial financial,
operational and technical resources before the volume of business increases,

                                     - 13 -
<PAGE>

with no assurance that the volume of business will increase. Consumers and
suppliers will not tolerate a service hampered by slow delivery times,
unreliable service levels or insufficient capacity, any of which could reduce
our revenues.

We may experience occasional system interruptions that make some or all systems
unavailable or prevent us from efficiently fulfilling orders or providing
services to our travel agents or third parties. We rely on our travel agents and
third party computer systems and service providers to facilitate and process a
portion of our transactions. Any interruptions, outages or delays in our systems
or third party providers' systems, or deterioration in their performance, could
impair each company's ability to process transactions for its travelers and the
quality of service that we can offer to our travel agents and travelers. We do
not have backup systems for certain critical aspects of our operations, many
other systems are not fully redundant and our disaster recovery planning may not
be sufficient. Fire, flood, power loss, telecommunications failure, break-ins,
earthquakes, acts of war or terrorism, acts of God, computer viruses, physical
or electronic break-ins and similar events or disruptions may damage or
interrupt computer or communications systems at any time. Any of these events
could cause system interruption, delays and loss of critical data, and could
prevent us from providing services to our travelers and/or third parties for a
significant period of time. In addition, we may have inadequate insurance
coverage or insurance limits to compensate for losses from a major interruption,
remediation may be costly and have a material adverse effect on our operating
results and financial condition.

Furthermore, developing our website and other technology entails significant
technical and business risks when using new technologies. We may fail to adapt
our website, transaction processing systems and network infrastructure to
consumer requirements or emerging industry standards. For example, our website
allows searches and displays of ticket pricing and travel itineraries will be a
critical part of our service, and may quickly become out-of-date or insufficient
from our customers' perspective and in relation to the search and display
functionality of our competitors' websites. If we face material delays in
introducing new services, products and enhancements, our sales agents, customers
and suppliers may forego the use of our products and use those of our
competitors.

WE MAY BE FOUND TO HAVE INFRINGED ON INTELLECTUAL PROPERTY RIGHTS OF OTHERS THAT
COULD EXPOSE US TO SUBSTANTIAL DAMAGES AND RESTRICT OUR OPERATIONS.

We could face claims that we have infringed the patents, copyrights or other
intellectual property rights of others. In addition, we may be required to
indemnify travel suppliers for claims made against them. Any claims against us
could require us to spend significant time and money in litigation, delay the
release of new products or services, pay damages, or develop new intellectual
property. As a result, intellectual property claims against us could have a
material adverse effect on our business, operating results and financial
condition.

RAPID TECHNOLOGICAL CHANGES MAY RENDER OUR TECHNOLOGY OBSOLETE OR DECREASE THE
ATTRACTIVENESS OF OUR PRODUCTS TO TRAVEL AGENTS AND CONSUMERS.

To remain competitive in the online travel industry, we must continue to enhance
and improve the functionality and features of our website. The Internet and the
online commerce industry are rapidly changing. In particular, the online travel
industry is characterized by increasingly complex systems and infrastructures
and new business models. If competitors introduce new products embodying new
technologies, or if new industry standards and practices emerge, our existing
web-site, technology and systems may become obsolete.

Our future success will depend on our ability to do the following: (i) enhance
our existing products; (ii) develop and license new products and technologies
that address the increasingly sophisticated and varied needs for prospective
customers and supplies; and (iii) respond to technological advances and emerging
industry standards and practices on a cost-effective and timely basis.

                                     - 14 -
<PAGE>

OUR BUSINESS IS EXPOSED TO RISKS ASSOCIATED WITH ONLINE COMMERCE SECURITY AND
CREDIT CARD FRAUD WHICH COULD REDUCE OUR REVENUES.

A fundamental requirement for online commerce and communications is the secure
transmission of confidential information, such as credit card numbers or other
personal information, over public networks. Our security measures may be
inadequate and, if any compromise of security were to occur, it could have a
detrimental effect on our reputation and adversely affect our ability to
maintain our existing travelers and/or attract new travelers.

Consumer concerns over the security of transactions conducted on the Internet or
the privacy of users may inhibit the growth of the Internet and online commerce.
To transmit confidential information such as customer credit card numbers
securely, we rely on encryption and authentication technology. Unanticipated
events or developments could result in a compromise or breach of the systems we
use to protect customer transaction data. Our servers and those of our service
providers may be vulnerable to viruses or other harmful code or activity
transmitted over the Internet. A virus or other harmful activity could cause a
service disruption.

In addition, we bear financial risk from products or services purchased with
fraudulent credit card data. Although we have implemented anti-fraud measures, a
failure to control fraudulent credit card transactions adequately could
adversely affect our business. Because of our limited operating history, we
cannot assure you that our anti-fraud measures are sufficient to prevent
material financial loss. Since we cannot exert the same level of influence or
control over our sales agents as we could were they our own employees, our sales
agents could fail to comply with our policies and procedures, which could result
in claims against us that could harm our financial condition and operating
results. We are not in a position to directly provide the same direction,
motivation and oversight for our sales agents as we would if such sales agents
were our own employees. As a result, there can be no assurance that our sales
agents will participate in our marketing strategies or plans, accept our
introduction of new products and services, or comply with our policies and
procedures.

Moreover, our processing, storage, use and disclosure of personal data could
give rise to liabilities as a result of government regulation, conflicting legal
requirements or differing views of personal privacy rights. In the processing of
our traveler transactions, we receive and store a large volume of personally
identifiable information. This information is also increasingly subject to
legislation and regulations in numerous jurisdictions around the world. This
government action is typically intended to protect the privacy of personal
information that is collected, processed and transmitted in or from the
governing jurisdiction. We could be adversely affected if legislation or
regulations are expanded to require changes in our business practices or if
governing jurisdictions interpret or implement their legislation or regulations
in ways that negatively affect our business, financial condition and results of
operations. As privacy and data protection have become more sensitive issues, we
may also become exposed to potential liabilities as a result of differing views
on the privacy of travel data. These and other privacy developments that are
difficult to anticipate could adversely affect our business, financial condition
and results of operation.

WE OPERATE IN A VERY COMPETITIVE ENVIRONMENT AND FACE INCREASING COMPETITION
FROM A VARIETY OF COMPANIES WITH RESPECT TO PRODUCTS AND SERVICES WE OFFER.

The market for the services we offer is intensely competitive. We compete with
both established and emerging traditional and online sellers of travel services
with respect to each of the services we offer. We face significant competition
from other distributors of travel products, including: (i) local, regional,
national and international traditional travel agencies; (ii) consolidators and
wholesalers of airline tickets, lodging and other travel products, including
Orbitz, Cheaptickets.com, Hotwire, Hotels.com; and (iii) operators of GDSs,
which control the computer systems through which travel reservations
historically have been made. Some of our competitors may offer services and

                                     - 15 -
<PAGE>

products on more favorable terms such as no fees and with unique access to
loyalty programs. Many of these competitors, such as airlines, hotel and rental
car companies, are also focusing on driving online demand to their own websites
in lieu of intermediaries like us. The introduction of new technologies and the
expansion of existing technologies may increase competitive pressures. Increased
competition may result in reduced operating margins, as well as loss of travel
agent partners, travelers, transactions and brand recognition. Some of our
competitors may have longer operating histories, larger customer bases, greater
brand recognition and significantly greater financial, marketing and other
resources than we have.

We cannot assure you that we will be able to compete successfully against
current, emerging and future competitors or provide differentiated products and
services to our travel agent partners and traveler base. Increased competition
could result in reduced operating margins, loss of segment share and damage to
our brand. There can be no assurance that we will be able to compete
successfully against current and future competitors or that competition will not
have a material adverse effect on our business, results of operations and
financial condition.

DECLINES OR DISRUPTIONS IN THE TRAVEL INDUSTRY, SUCH AS THOSE CAUSED BY GENERAL
ECONOMIC DOWNTURNS, TERRORISM, HEALTH CONCERNS OR STRIKES OR BANKRUPTCIES WITHIN
THE TRAVEL INDUSTRY COULD REDUCE OUR REVENUES.

Our business is affected by the health of the travel industry. Travel
expenditures are sensitive to business and personal discretionary spending
levels and tend to decline during general economic downturns. Events or
weaknesses in the travel industry that could negatively affect our business
include price escalation in travel-related industries, travel related strikes,
airline bankruptcies or liquidations and fuel price escalation. Additionally,
our business is sensitive to safety concerns and thus may decline after
incidents of terrorism, during periods of political instability or geopolitical
conflict in which travelers become concerned about safety issues, as a result of
inclement weather such as the hurricane that affected the markets around the
Gulf of Mexico in 2005 or when travel might involve health-related risks, such
as the avian flu. Moreover, since 2001, the travel industry has experienced a
protracted downturn, and there is a risk that a future downturn, or the
continued weak demand for travel, could adversely affect the growth of our
business. The long-term effects of events such as these could include, among
other things, a protracted decrease in demand for air travel due to fears
regarding terrorism, war or disease. These effects, depending on their scope and
duration, which we cannot predict at this time, could significantly reduce our
revenues.

BECAUSE OUR MARKET IS SEASONAL, OUR QUARTERLY RESULTS WILL FLUCTUATE.

Our business experiences seasonal fluctuations, reflecting seasonal trends for
the products offered by our sales agents, as well as Internet services
generally. For example, traditional leisure travel bookings are higher in the
first two calendar quarters of the year in anticipation of spring and summer
vacations and holiday periods, but online travel reservations may decline with
reduced Internet usage during the summer months. In the last two quarters of the
calendar year, demand for travel products generally declines and the number of
bookings flattens or decreases. These factors could cause our revenues to
fluctuate from quarter to quarter. Our results may also be affected by seasonal
fluctuations in the inventory made available to us by travel suppliers.

EVOLVING GOVERNMENT REGULATION COULD IMPOSE TAXES OR OTHER BURDENS ON OUR
BUSINESS, WHICH COULD INCREASE OUR COSTS OR DECREASE DEMAND FOR OUR PRODUCTS.

As a travel company selling air transportation products, we are subject to
regulation by government agencies having jurisdiction over economic issues
affecting the sale of air travel, including consumer protection issues and
competitive practices. We must also comply with laws and regulations relating to
our sales activities, including those prohibiting unfair and deceptive practices

                                     - 16 -
<PAGE>

and those requiring us to register as a seller of travel products, comply with
disclosure requirements and participate in state restitution funds. In addition,
many of our travel suppliers are heavily regulated and we are indirectly
affected by such regulation. Such agencies have the authority to enforce
economic regulations, and may assess civil penalties or challenge our operating
authority.

Increased regulation of the Internet or different applications of existing laws
might slow the growth in the use of the Internet and commercial online services,
which could decrease demand for our products, increase the cost of doing
business or otherwise reduce our sales and revenues. The statutes and case law
governing online commerce are still evolving, and new laws, regulations or
judicial decisions may impose on us additional risks and costs of operations. In
addition, new regulations, domestic or international, regarding the privacy of
our users' personally identifiable information may impose on us additional costs
and operational constraints.

Federal legislation imposing limitations on the ability of states to impose
taxes on Internet-based sales was enacted in 1998. The Internet Tax Freedom Act,
which was extended by the Internet Nondiscrimination Act, exempted certain types
of sales transactions conducted over the Internet from multiple or
discriminatory state and local taxation through November, 2007. The majority of
products and services we sell are already taxed: hotel rooms and car rentals at
the local level, and air transportation at the federal level with state taxation
preempted. Nevertheless, failure to renew this legislation could allow state and
local governments to impose additional taxes on some aspects of our
Internet-based sales, and these taxes could decrease the demand for our products
or increase our cost of operations.

Moreover, changing laws, rules and regulations and legal uncertainties may
adversely affect our business, financial condition and results of operations.
Our business, financial condition and results of operations could be adversely
affected by unfavorable changes in or interpretations of existing, or the
promulgation of new laws, rules and regulations applicable to us and our
businesses, including those relating to the internet and online commerce,
consumer protection and privacy, escheat and sales, use, occupancy, value-added
and other taxes, could decrease demand for products and services, increase costs
and/or subject us to additional liabilities. For example, there is, and will
likely continue to be, an increasing number of laws and regulations pertaining
to the internet and online commerce, which may relate to liability for
information retrieved from or transmitted over the internet, user privacy,
taxation and the quality of products and services. Furthermore, the growth and
development of online commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on online businesses
generally.

In addition, the application of various domestic and international sales, use,
occupancy, value-added and other tax laws, rules and regulations to our
historical and new products and services is subject to interpretation by the
applicable taxing authorities. While we believe that we are compliant with these
tax provisions, there can be no assurances that taxing authorities will not take
a contrary position, or that such positions will not have an adverse effect on
our businesses, financial condition and results of operations. If the tax laws,
rules and regulations were amended or if current interpretations of the laws
were to change adversely to us, particularly with respect to occupancy or
value-added taxes, the results could have an adverse affect on our businesses,
financial condition and results of operations.

WE HAVE ACQUIRED THREE BUSINESSES AND MAY ACQUIRE OTHER BUSINESSES, PRODUCTS OR
TECHNOLOGIES. IF WE DO, WE MAY BE UNABLE TO INTEGRATE THEM WITH OUR BUSINESS OR
WE MAY IMPAIR OUR FINANCIAL PERFORMANCE.

                                     - 17 -
<PAGE>

During fiscal year 2006, we acquired three wholesale travel companies, Changes
in L'Attitudes, Inc., Island Resort Tours, Inc. and International Travel and
Resorts, Inc., and plan to acquire several more wholesale travel companies both
in the U.S.A. and in Europe as soon as practicable. We are currently negotiating
to purchase company assets and/or hire key personnel to expand our key
destinations to Hawaii and to Europe and to increase revenues through increased
bookings and utilization of our bulk air contracts. We are negotiating a
non-binding term sheet for a travel company with European expertise based
outside of London, England. These transactions will require additional funding
that has currently not been obtained.

Our future growth may depend, in part, on acquisitions. To that extent, we may
face the operational and financial risks that commonly accompany that strategy.
We may experience operational and financial risks in connection with any
potential acquisitions. In addition, businesses we may acquire may incur
significant losses from operations or experience impairment of carrying value.
We could face further operational risks, such as failing to assimilate the
operations and personnel of the acquired businesses, disrupting their ongoing
businesses, impairing management resources and their relationships with
employees and travelers as a result of changes in their ownership and management
Further, the evaluation and negotiation of potential acquisitions, as well as
the integration of an acquired business, will divert management time and other
resources. Some acquisitions may not be successful and their performances may
result in the impairment of their carrying value.

Certain financial and operational risks related to acquisitions that may have a
material impact on our business are: (i) use of cash resources and incurrence of
debt and contingent liabilities in funding acquisitions; (ii) stockholder
dilution if an acquisition is consummated through an issuance of our securities;
(iii) amortization expenses related to acquired intangible assets and other
adverse accounting consequences; (iv) costs incurred in identifying and
performing due diligence on potential acquisition targets that may or may not be
successful; (v) difficulties and expenses in assimilating the operations,
products, technology, information systems or personnel of the acquired company;
(vi) impairment of relationships with employees, retailers and affiliates of our
business and the acquired business; (vii) the assumption of known and unknown
liabilities of the acquired company; (viii) entrance into markets in which we
have no direct prior experience; and (ix) impairment of goodwill arising from
our acquisitions.

THE SUCCESS OF OUR BUSINESS DEPENDS UPON THE CONTINUING CONTRIBUTION OF OUR KEY
PERSONNEL AND EMPLOYEES, INCLUDING MR. DANIEL BRANDANO, OUR PRESIDENT AND CHIEF
EXECUTIVE OFFICER, WHOSE KNOWLEDGE OF OUR BUSINESS WOULD BE DIFFICULT TO REPLACE
IN THE EVENT WE LOSE HIS SERVICES.

Our operations are dependent on the efforts and relationships of Daniel Brandano
and the other executive officers as well as the senior management of our
organization. We will likely be dependent on the senior management of our
organization for the foreseeable future. If any of these individuals becomes
unable to continue in their role, our business or prospects could be adversely
affected. For example, the loss of Mr. Brandano could inhibit the development
and enhancement of our websites, could damage customer relations and our brand,
and could restrict our ability to raise additional working capital if and when
needed. Although we have entered into an employment agreement with Mr. Brandano,
there can be no assurance that he will continue in his present capacity for any
particular period of time. Moreover, our continued ability to compete
effectively depends on our ability to attract new employees and to retain and
motivate our existing employees. If we do not succeed in attracting
well-qualified employees or retaining or motivating existing employees, our
business would be adversely affected.

                                     - 18 -
<PAGE>

RISKS RELATED TO OUR COMPANY AND COMMON STOCK

WE HAVE EXPERIENCED HISTORICAL LOSSES AND A SUBSTANTIAL ACCUMULATED DEFICIT. IF
WE ARE UNABLE TO REVERSE THIS TREND, WE WILL LIKELY BE FORCED TO CEASE
OPERATIONS.

During fiscal year ended December 31, 2007, we experienced net losses of
$5,674,960. During fiscal year ended December 31, 2006, we experienced net
losses of $11,009,388. In addition, at December 31, 2007, we had a stockholders'
deficit of $9,330,508. Our operating results for future periods will include
significant expenses, including new product development expenses, potential
marketing costs, professional fees and administrative expenses, and will be
subject to numerous uncertainties. As a result, we are unable to predict whether
we will achieve profitability in the future, or at all.

WE HAVE A WORKING CAPITAL DEFICIT AND SIGNIFICANT CAPITAL REQUIREMENTS. SINCE WE
WILL CONTINUE TO INCUR LOSSES UNTIL WE ARE ABLE TO GENERATE SUFFICIENT REVENUES
TO OFFSET OUR EXPENSES, INVESTORS MAY BE UNABLE TO SELL OUR SHARES AT A PROFIT
OR AT ALL.

We had a net loss of $5,674,960 during fiscal year ended December 31, 2007. Net
cash used in operations for fiscal year ended December 31, 2007 was $1,658,698.
During fiscal year ended December 31, 2007, we had a working capital deficient
of $15,888,284. Because we have not yet achieved or acquired sufficient
operating capital and given these financial results together with our expected
cash requirements in 2008, additional capital investments will be necessary to
develop and sustain our operations.

WE HAVE HISTORICALLY BEEN UNSUCCESSFUL IN OUR ATTEMPTS TO RAISE SUFFICIENT
CAPITAL TO FUND OUR PLANS. IF WE ARE UNABLE TO DO SO, WE MAY CEASE OPERATIONS.

Historically, we have funded our operations through limited revenues and debt
and equity financing. Although we were successful in obtaining a $2,000,000
financing in January 2006, sold common stock for cash of $1,005,500 during the
two years ended December 31, 2007, and obtained bridge financing of
approximately $4,170,000 from September 2006 through January 2008, we have been
unsuccessful in attracting significant additional private funding for our
business. We continue to incur operating expenses, including executive and staff
salaries, lease obligations and acquisition costs, but we have not yet
integrated our acquired businesses and technologies, acquired target companies
according to our business model, obtained sufficient financing to carry out our
plans, or received sufficient operating revenues to support our human and
equipment infrastructures. Until such time, if ever, that we are successful in
obtaining additional financing to carry out our strategy, there is significant
risk that we may be required to cease operations.

SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK INTO THE PUBLIC
MARKET BY CERTAIN STOCKHOLDER MAY RESULT IN SIGNIFICANT DOWNWARD PRESSURE ON THE
PRICE OF OUR COMMON STOCK AND COULD AFFECT YOUR ABILITY TO REALIZE THE CURRENT
TRADING PRICE OF OUR COMMON STOCK.

Sales of a substantial number of shares of our common stock in the public market
by certain stockholders could cause a reduction in the market price of our
common stock. As of the date of this Annual Report, we have 16,888,557 shares of
common stock issued and outstanding plus 2,250,000 shares of common stock
issuable.

                                     - 19 -
<PAGE>

As of the date of this Annual Report, there are 12,045,994 outstanding shares of
our common stock that are restricted securities as that term is defined in Rule
144 under the Securities Act of 1933, as amended (the "Securities Act").
Although the Securities Act and Rule 144 place certain prohibitions on the sale
of restricted securities, restricted securities may be sold into the public
market under certain conditions. Further, as of the date of this Annual Report,
there are an aggregate of 1,149,762 stock options outstanding and an aggregate
of 83,780,968 warrants outstanding.

Any significant downward pressure on the price of our common stock as the
selling stockholders sell their shares of our common stock could encourage short
sales by the selling stockholders or others. Any such short sales could place
further downward pressure on the price of our common stock.

THE TRADING PRICE OF OUR COMMON STOCK ON THE OTC BULLETIN BOARD WILL FLUCTUATE
SIGNIFICANTLY AND STOCKHODLER MAY HAVE DIFFICULTY RESELLING THEIR SHARES.

Our common stock trades on the Over-the-Counter Bulletin Board. There is a
volatility associated with Bulletin Board securities in general and the value of
your investment could decline due to the impact of any of the following factors
upon the market price of our common stock: (i) disappointing results and/or
revenues from our websites; (ii) failure to meet our revenue or profit goals or
operating budget; (iii) decline in demand for our common stock; (iv) downward
revisions in securities analysts' estimates or changes in general market
conditions; (v) technological innovations by competitors or in competing
technologies; (vi) lack of funding generated for operations; (vii) investor
perception of our industry or our prospects; and (viii) general economic trends.

In addition, stock markets have experienced price and volume fluctuations and
the market prices of securities have been highly volatile. These fluctuations
are often unrelated to operating performance and may adversely affect the market
price of our common stock. As a result, investors may be unable to sell their
shares at a fair price and you may lose all or part of your investment.

ADDITIONAL ISSUANCE OF EQUITY SECURITIES MAY RESULT IN DILUTION TO OUR EXISTING
STOCKHOLDERS.

As of December 31, 2007, we have executed convertible promissory notes, granted
stock options, issued warrants to the same promissory note holders and others
and reserved options to be granted upon formation of a stock option plan to
purchase an aggregate of 101,116,182 shares of our common stock. The stock
options are exercisable at prices ranging from $0.485 per share to $11.40 per
share, and the warrants are exercisable ranging from $0.128 per share to $11.25
per share. In addition, we have granted common stock in the past to financiers
and consultants, and as we procure additional financing and acquire additional
business assets, we shall undoubtedly grant additional shares, as well as
warrants and stock options, to the financiers and shareholders of target
companies. To the extent that additional shares are issued, notes are converted,
and stock options and warrants are exercised, the shares that are issued may
result in an oversupply of shares and an undersupply of purchasers, thereby
diluting the market for our shares.

Our Articles of Incorporation authorize the issuance of 300,000,000 shares of
common stock and 20,000,000 shares of "blank check" preferred stock, which may
adversely affect the voting power of the holders of our securities and may deter
or delay changes in management. The board of directors has the authority to
issue additional shares of our capital stock to provide additional financing in
the future and the issuance of any such shares may result in a reduction of the
book value or market price of the outstanding shares of our common stock. If we
do issue any such additional shares, such issuance also will cause a reduction
in the proportionate ownership and voting power of all other stockholders. As a
result of such dilution, your proportionate ownership interest and voting power
will be decreased accordingly. Further, any such issuance could result in a
change of control.

                                     - 20 -
<PAGE>

To date, we have not issued any shares of preferred stock. Our Board of
Directors, without further approval of our common stockholders, is authorized to
fix the dividend rights and terms, conversion rights, voting rights, redemption
rights, liquidation preferences and other rights and restrictions relating to
any series of our preferred stock. Issuances of additional shares of preferred
stock, while providing flexibility in connection with possible financings,
acquisitions and other corporate purposes, could, among other things, adversely
affect the voting power of the holders of other of our securities and may, under
certain circumstances, have the effect of deterring hostile takeovers or
delaying changes in management control.

OUR COMMON STOCK IS CLASSIFIED AS A "PENNY STOCK" UNDER SEC RULES WHICH LIMITS
THE MARKET FOR OUR COMMON STOCK.

The SEC has adopted rules that regulate broker-dealer practices in connection
with transactions in "penny stocks." Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system). Penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure document prepared by the
SEC, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. A broker-dealer must also
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer, and sales person in the transaction, and
monthly account statements indicating the market value of each penny stock held
in the customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the trading activity in the secondary market for stock that becomes
subject to those penny stock rules. If a trading market for our common stock
develops, our common stock will probably become subject to the penny stock
rules, and shareholders may have difficulty in selling their shares.

WE HAVE RECEIVED A GOING CONCERN OPINION FROM OUR INDEPENDENT AUDITORS REPORT
ACCOMPANYING OUR DECEMBER 31, 2007 AND DECEMBER 31, 2006 FINANCIAL STATEMENTS.

The independent registered public accounting firm's report accompanying our
December 31, 2007 and 2006 audited consolidated financial statements contains an
explanatory paragraph expressing substantial doubt about our ability to continue
as a going concern. The consolidated financial statements have been prepared
"assuming that the Company will continue as a going concern." Our ability to
continue as a going concern is dependent on raising additional capital to fund
our operations and ultimately on generating future profitable operations. There
can be no assurance that we will be able to raise sufficient additional capital
or eventually have positive cash flow from operations to address all of our cash
flow needs. If we are not able to find alternative sources of cash or generate
positive cash flow from operations, our business and shareholders will be
materially and adversely affected.

RISKS RELATED TO HOLDING OUR SECURITIES THERE ARE A LARGE NUMBER OF SHARES
UNDERLYING OUR CALLABLE SECURED CONVERTIBLE NOTES, WARRANTS AND STOCK OPTIONS
THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE SHARES MAY DEPRESS
THE MARKET PRICE OF OUR COMMON STOCK.

As of December 31, 2007, we had callable secured convertible notes outstanding
or an obligation to issue callable secured convertible notes that may be
converted into an estimated 60,480,645 shares of our common stock at current
market prices, outstanding warrants or an obligation to issue warrants to
purchase 39,485,775 shares of our common stock and outstanding options to

                                     - 21 -
<PAGE>

purchase 1,149,762 shares of the Company's common stock. In addition, the number
of shares of our common stock issuable upon conversion of the outstanding
callable secured convertible notes may increase if there is an event of default.
The sale of these shares may adversely affect the market price of our common
stock.

IF VARIOUS THIRD PARTIES CONVERT THEIR CONVERTIBLE NOTES BASED ON CURRENT
CONVERSION TERMS, THE ADDITIONAL STOCK ISSUANCES UNDERLYING THE CONVERSIONS
COULD HAVE A DEPRESSIVE EFFECT ON THE PRICE OF OUR COMMON STOCK.

At December 31, 2007, the Company had multiple convertible promissory notes
outstanding and payable to various third parties each with anti-dilution
provisions. Following is a summary of the material conversion terms related to
our largest convertible notes as of December 31, 2007: Note 1) a fixed
conversion price of $0.128, Note 2) a variable conversion price of the lesser of
(a) $0.23 per share or (b) an amount equal to 80% of the lowest daily closing
bid price of the Company's common stock, as quoted by Bloomberg, LP, for the
five (5) trading days immediately prior to conversion and Note 3) a variable
conversion price convertible into common stock of the Company at a 45% discount
to the average of the three lowest trading prices of the common stock during the
twenty (20) trading-day period prior to conversion. The significant downward
pressure on the price of our common stock as the selling stockholder converts
and sells material amounts could have an adverse affect on our stock price. In
addition, not only the sale of shares issued upon conversion or exercise of
notes, warrants and options, but also the mere perception that these sales could
occur may adversely affect the market price of our common stock.

IF WE ARE REQUIRED TO ISSUE SECURITIES WHICH ARE PRICED AT LESS THAN THE
CONVERSION PRICE OF OUR CONVERTIBLE SECURITIES OR THE EXERCISE PRICE OF WARRANTS
SOLD, IT WILL RESULT IN ADDITIONAL DILUTION TO US.

At December 31, 2007, we had debentures convertible into and warrants to
purchase 60,480,645 and 39,485,775 shares of common stock, respectively. The
convertible debentures and certain warrants contain provisions that will require
us to reduce their conversion/exercise price in the event that we issue and/or
sell additional securities at a price less than the conversion price of our
convertible debentures or the exercise price of these warrants. If this were to
occur, current investors, other than the purchasers of the convertible
securities and warrants, would sustain material dilution in their ownership
interest of Dynamic Leisure Corporation.

THE ISSUANCE OF SHARES UPON CONVERSION OF THE CALLABLE SECURED CONVERTIBLE NOTES
AND EXERCISE OF OUTSTANDING WARRANTS MAY CAUSE IMMEDIATE AND SUBSTANTIAL
DILUTION TO OUR EXISTING STOCKHOLDERS.

The issuance of shares upon conversion of the callable secured convertible notes
and exercise of warrants may result in substantial dilution to the interests of
other stockholders since the selling stockholders may ultimately convert and
sell the full amount issuable on conversion. Although the selling stockholders
may not convert their callable secured convertible notes and/or exercise their
warrants if such conversion or exercise would cause them to own more than 4.99%
of our outstanding common stock, this restriction does not prevent the selling
stockholders from converting and/or exercising some of their holdings and then
subsequently converting the remainder of their holdings. In this way, the
selling stockholders may sell more than 4.99% while never holding more than the
foregoing limit at any one time. There is no upper limit on the number of shares
that may be issued which may in effect further dilute the proportionate equity
interest and voting power of holders of our common stock, including investors in
this offering.

IF WE ARE REQUIRED FOR ANY REASON TO REPAY OUR OUTSTANDING CALLABLE SECURED
CONVERTIBLE NOTES, WE WOULD BE REQUIRED TO DEPLETE OUR WORKING CAPITAL, IF
AVAILABLE, OR RAISE ADDITIONAL FUNDS. OUR FAILURE TO REPAY THE CALLABLE SECURED
CONVERTIBLE NOTES, IF REQUIRED, COULD RESULT IN LEGAL ACTION AGAINST US, WHICH
COULD REQUIRE THE SALE OF SUBSTANTIAL ASSETS.

                                     - 22 -
<PAGE>

On January 13, 2006, we issued a convertible promissory note in the amount of
$2,000,000. This note bears simple interest at the rate of 8% per annum and was
due and payable with interest on January 13, 2007 and was subsequently extended
to March 5, 2008. In February and March 2006, we issued convertible promissory
notes related to our acquisitions of CIL and IRT/ITR in the aggregate principal
amount of $2,050,000. These notes bear interest at the rate of 9% and were due
and payable with interest in February and March 2007. On September 20, 2006, we
modified our $2,000,000 convertible promissory note, pursuant to which the
principal of the note was increased by $250,000 to $2,250,000. On November 9,
2006, we entered into a Security Purchase Agreement involving the sale of an
aggregate of $1,000,000 principal amount of callable secured convertible notes
issuable in two tranches of $600,000 and $400,000 each and stock purchase
warrants to buy 5,000,000 shares of our common stock. The callable secured
convertible notes are due and payable, with 6% interest, three years from the
date of issuance, unless sooner converted into shares of our common stock. The
entire $1,000,000 was outstanding on March 31, 2007.

On March 5, 2007, we modified our $2,250,000 convertible note to extend the
maturity date to March 5, 2008 and granted the note holders a warrant to
purchase 3,000,000 shares of our common stock at $1.50 per share. On June 29,
2007 and January 22, 2008, we issued to an investor secured convertible
debentures of $1,310,000 and $1,200,000 and warrants to purchase 8,000,000 and
15,000,000 shares of our common stock, respectively. We were in default for
non-payment of its promissory notes aggregating $4,150,792 as of March 31, 2008,
along with certain other promissory notes totaling $107,500. Any event of
default such as our failure to repay the principal or interest when due, our
failure to issue shares of common stock upon conversion by the holder, our
failure to timely file a registration statement or have such registration
statement declared effective, breach of any covenant, representation or warranty
in the Securities Purchase Agreement or related convertible note, the assignment
or appointment of a receiver to control a substantial part of our property or
business, the filing of a money judgment, writ or similar process against us in
excess of $50,000, the commencement of a bankruptcy, insolvency, reorganization
or liquidation proceeding against us and the delisting of our common stock could
require the early repayment of the callable secured convertible notes, including
a default interest rate on the outstanding principal balance of the notes if the
default is not cured within the specified grace period. We anticipate that the
full amount of the callable secured convertible notes will be converted into
shares of our common stock, in accordance with the terms of the callable secured
convertible notes. If we are required to repay the callable secured convertible
notes, we would be required to use our limited working capital and raise
additional funds. If we were unable to repay the notes when required, the note
holders could commence legal action against us and foreclose on all of our
assets to recover the amounts due. Any such action would require us to curtail
or cease operations.

The Company was in default for non-payment of its promissory notes aggregating
$4,150,792 as of March 31, 2008, along with certain other promissory notes
totaling $156,434. Any event of default such as our failure to repay the
principal or interest when due, our failure to issue shares of common stock upon
conversion by the holder, our failure to timely file a registration statement or
have such registration statement declared effective, breach of any covenant,
representation or warranty in the Securities Purchase Agreement or related
convertible note, the assignment or appointment of a receiver to control a
substantial part of our property or business, the filing of a money judgment,
writ or similar process against us in excess of $50,000, the commencement of a
bankruptcy, insolvency, reorganization or liquidation proceeding against us and
the delisting of our common stock could require the early repayment of the
callable secured convertible notes, including a default interest rate on the
outstanding principal balance of the notes if the default is not cured within
the specified grace period. We anticipate that the full amount of the callable
secured convertible notes will be converted into shares of our common stock, in
accordance with the terms of the callable secured convertible notes. If we are

                                     - 23 -
<PAGE>

required to repay the callable secured convertible notes, we would be required
to use our limited working capital and raise additional funds. If we were unable
to repay the notes when required, the note holders could commence legal action
against us and foreclose on all of our assets to recover the amounts due. Any
such action would require us to curtail or cease operations.

On March 5, 2007, counsel for Stephen Hicks notified us that we were allegedly
in breach of a convertible debenture payable under the March 6, 2006 Purchase
Agreement between us and Hicks (the "Agreement") that provided for acquisition
of IRT/ITR. The Agreement calls for payment of a convertible debenture in the
amount of $1,450,000 as of March 6, 2007. If we are unable to resolve these
matters, the note holders could proceed with these legal actions against us and
foreclose on all of our assets to recover the amounts due. Any such action would
require us to curtail or cease operations.

WE MAY BE SUED OR BECOME A PARTY TO LITIGATION, WHICH COULD REQUIRE SIGNIFICANT
MANAGEMENT TIME AND ATTENTION AND RESULT IN SIGNIFICANT LEGAL EXPENSES AND MAY
RESULT IN AN UNFAVORABLE OUTCOME WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND CASH FLOWS.

We may be subject to a number of lawsuits from time to time arising in the
ordinary course of our business. For example, on March 2, 2007, we named Stephen
Hicks as a principle party to proceedings seeking recovery of damages or
alternative relief arising from breach of a contract under which we acquired
IRT/ITR. The complaint alleges non-compliance with certain terms and conditions
providing for integration of the companies. On March 5, 2007, counsel for
Stephen Hicks notified us that we were allegedly in breach of a convertible
debenture payable under the March 6, 2006 Purchase Agreement between us and Mr.
Hicks that provided for our acquisition of IRT/ITR. The Purchase Agreement calls
for payment of a convertible debenture in the amount of $1,450,000 as of March
6, 2007. The expense of defending this and other litigation may be significant.
The amount of time to resolve these lawsuits is unpredictable and defending
ourselves may divert management's attention from the day-to-day operations of
our business, which could adversely affect our business, results of operations
and cash flows. In addition, an unfavorable outcome in such litigation could
have a material adverse effect on our business, results of operations and cash
flows.

                                     - 24 -
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

Our principal executive offices are in Tampa, Florida, where we lease
approximately 10,000 square feet under a lease scheduled to expire on June 30,
2011, with monthly rental payments of approximately $13,700.

We also lease approximately 5,000 square feet in New York City under a lease
scheduled to expire in April 2008, with monthly rental payments of approximately
$11,500. The Company is in the process of relocating its New York office.

ITEM 3.  LEGAL PROCEEDINGS

The Company was named as a principal party to proceedings brought by Raymon
Valdes and Changes in L'Attitudes, Inc. in Hillsborough County, Florida, Circuit
Court. The proceedings began on November 13, 2006. This matter was resolved on
April 13, 2007 when the parties entered into a Settlement Agreement pursuant to
which (i) Mr. Valdes agreed to convert the outstanding $600,000 convertible
promissory note issued by the Company pursuant to the acquisition by the Company
of Changes in L'Attitudes, Inc. into 600,000 shares of the Company's common
stock; (ii) the Company agreed to pay the remaining approximately $411,000 owed
to Mr. Valdes in 52 weekly installments commencing on the earlier to occur of 75
days from the settlement date or the receipt by the Company of outside financing
in a minimum amount of $750,000; and (iii) the Company agreed to issue to Mr.
Valdes an additional 170,000 shares of its common stock. On April 13, 2007, the
Company issued 770,000 shares of common stock for the conversion of the $600,000
promissory note and settlement of all accrued interest.

The Company was named as a principal party to proceedings brought by MMA
Capital, LLC in United States District Court for the Northern District of
California. The proceedings began on November 22, 2006. The matter was resolved
on March 5, 2007 when the parties entered into a Settlement Agreement that
provided for the issuance of a warrant to MMA, and MMA agreed to (i) extend the
maturity date of the Company's outstanding promissory note payable to MMA to
March 5, 2008; and (ii) to dismiss its action against the Company. Note 6
further describes the terms of settlement.

The Company was named as a principal party to proceedings brought by MBN
Consulting, LLC in Hillsborough County, Florida, Circuit Court. The proceedings
began on November 22, 2006. On June 30, 2007, this matter was resolved and the
Company issued 50,000 shares of its common stock with a fair value on the date
of grant of $38,000 or $0.76 per share in settlement of this dispute. The
Company has previously accrued $29,333 related to this matter and charged an
additional $8,667 to operations on June 30, 2007.

The Company filed a lawsuit in Hillsborough County, Florida, Circuit Court on
March 2, 2007 against Stephen Hicks. The complaint seeks recovery of damages or
alternative relief arising from breach of a contract under which the Company
acquired IRT/ITR. The complaint alleges non-compliance with certain terms and
conditions providing for integration of the companies.

On March 5, 2007, counsel for Stephen Hicks notified the registrant that it was
allegedly in breach of a convertible debenture payable under the March 6, 2006
Purchase Agreement between the registrant and Hicks (the "Agreement") that
provided for the registrant's acquisition of IRT/ITR. The Agreement calls for
payment of a convertible debenture in the amount of $1,450,000 as of March 6,
2007. In the event of any failure to pay on the convertible debenture, the
Agreement provides for a continuing obligation to pay interest at a nine percent
annual rate. The Company has classified the convertible debenture as a current
liability and has recorded accrued interest of $107,260 related to this
obligation on its consolidated balance sheet as of December 31, 2006.

The Company is currently in discussions with Mr. Hicks regarding the settlement
of the matters arising on March 2, 2007 and March 5, 2007.

                                     - 25 -
<PAGE>

In January 2008, the Company has been named as a principal party to proceedings
brought in the name of MMA Capital, LLC ("MMA") in United States District Court
for the Northern District of California alleging breach of the Secured
Convertible Promissory Note and Security Agreement executed by the parties on or
about January 11, 2006. The complaint also alleges breach of the Confidential
Settlement Agreement executed by the parties on or about March 5, 2007. On
February 23, 2008, the Company filed a counter claim against MMA Capital, LLC in
United States District Court for the Northern District of California alleging
breach of the Secured Convertible Promissory Note, Security Agreement and
Confidential Settlement Agreement. Section 6 of the Confidential Settlement
Agreement encouraged the Company to obtain additional or alternative financing
and that if the Company obtained additional or alternative financing from any
lender, which exceeded $3,000,000, MMA would subordinate its security position
in the collateral to the security position of the other lender. The Company
alleges MMA breached the Agreements by attempting to prevent and interfere with
its efforts to obtain additional financing with Trafalgar, by MMA refusing to
agree to subordinate its security interest in the collateral to the security
interest of Trafalgar despite Trafalgar already lending or investing more than
$3,000,000 to the Company. The Company also alleges MMA's interference by, among
other things, attempting to dissuade Trafalgar from providing additional
financing or investment and filing a bad faith temporary restraining order that
interfered with the Company's prospective economic advantage by preventing the
Company from obtaining all or more financing and/or investment from Trafalgar
and other investors or lenders. As a direct and proximate result of MMA's
alleged interference, the Company has been damaged in an amount in excess of
$2,500,000. The Counterclaim alleges MMA's actions were wanton, willful and
despicable, entitling the Company to punitive damages also. The parties are in
discussions to settle this matter.

In January 2008, the Company has been named as a principal party to proceedings
brought in the name of Bay West Tampa Investors, LLC in Hillsborough County,
Florida, Circuit Court seeking collection of payments under the corporate office
real estate lease. This matter was settled on February 6, 2008, and full payment
of obligations under the real estate lease was made on March 14, 2008.

We are not a party to any other pending legal proceeding, nor are we aware of
any other legal proceedings being contemplated against us by any governmental
authority. We are not aware of any other legal proceeding in which any of our
officers, directors, affiliates or security holders is a party adverse to us or
in which any of them have a material interest adverse to us.

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

None.

                                     PART II

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

MARKET INFORMATION

Our common stock is traded on the OTC Bulletin Board over-the-counter market
under the symbol "DYLI." Prior to the Stock Exchange in which Dynamic Leisure
Group became our wholly owned subsidiary on January 13, 2006, our common stock
was listed on the OTC Bulletin Board over-the-counter market under the symbol
"DYCO." The following table sets forth the high and low bid prices for our
common stock on the over-the-counter bulletin board from January 1, 2006 to
December 31, 2007. The source of this information is Capital IQ, a division of
Standard and Poor's. The bid prices are inter-dealer prices, without retail
markup, markdown or commission, and may not reflect actual transactions.

                                     - 26 -
<PAGE>

                                   PERIOD                HIGH BID       LOW BID
--------------------------------------------------       --------       -------
                                    2007
December 31, 2007.................................        $ 0.29         $ 0.07
September 30, 2007................................        $ 0.85         $ 0.13
June 30, 2007.....................................        $ 0.95         $ 0.15
March 31, 2007....................................        $ 1.06         $ 0.30
                                    2006
December 31, 2006.................................        $ 1.65         $ 1.00
September 30, 2006................................        $ 1.65         $ 1.00
June 30, 2006.....................................        $ 2.60         $ 1.22
March 31, 2006....................................        $ 4.00         $ 0.81

SHAREHOLDERS OF RECORD

As of March 31, 2008, there were 685 shareholders of record of our common stock.

DIVIDENDS

We have never paid cash dividends on our common stock. We intend to keep future
earnings, if any, to finance the expansion of our business, and we do not
anticipate that any cash dividends will be paid in the foreseeable future. Our
future payment of dividends will depend on our earnings, capital requirements,
expansion plans, financial condition and other relevant factors. Our retained
earnings deficit currently limits our ability to pay dividends.

EQUITY COMPENSATION PLAN INFORMATION
<TABLE>
<CAPTION>
                                                                             AVAILABLE FOR
                                                                                FUTURE
                                         NUMBER OF                          ISSUANCE UNDER
                                       SECURITIES TO                            EQUITY
                                       BE ISSUED UPON                        COMPENSATION
                                        EXERCISE OF     WEIGHTED-AVERAGE         PLANS
                                        OUTSTANDING     EXERCISE PRICE OF     (EXCLUDING
                                          OPTIONS,         OUTSTANDING        SECURITIES
                                        WARRANTS AND    OPTIONS, WARRANTS    REFLECTED IN
                                           RIGHTS          AND RIGHTS         COLUMN (A)
                                       --------------   -----------------   --------------
<S>                                    <C>              <C>                 <C>
EQUITY COMPENSATION PLANS APPROVED
  BY SECURITY HOLDERS:
    2001 Equity Incentive Plan              22,278            $3.00             11,055
    1993 Corporate Stock Option Plan        70,817            $3.05                  0*
    1993 Advisors Stock Option Plan          6,667            $3.60                  0*

EQUITY COMPENSATION PLANS NOT
  APPROVED BY SECURITY HOLDERS:
    2007 Stock Option/Stock
      Issuance Plan                              -            $0.00                  0
    Non-Plan Options                     1,050,000            $0.70                  0
    Warrants                               308,000            $1.16                  0
    Total                                1,350,000            $0.80                  0
</TABLE>

* The 1993 Corporate Stock Option and 1993 Advisors Stock Option Plans have
expired.

On January 13, 2006, in conjunction with the recapitalization, the Company
assumed DynEco's obligations under the 2001 Equity Incentive Plan, the 1993
Corporate Stock Option Plan and the 1993 Advisors Stock Option Plan. No grants
were made under these plans in 2007 or 2006.

                                     - 27 -
<PAGE>

2001 Equity Incentive Plan

Under the 2001 Equity Incentive Plan, a total of 1,000,000 shares of our common
stock are reserved for issuance upon exercise of incentive and non-qualified
stock options, stock bonuses and rights to purchase awarded from time-to-time,
to our officers, directors, employees and consultants. As of December 31, 2007,
options to purchase 22,278 shares were issued and outstanding under this plan.

1993 Corporate Stock Option Plan

Under the 1993 Corporate Stock Option Plan, a total of 750,000 shares of our
common stock were reserved for issuance upon exercise of stock options granted,
from time-to-time, to our officers, directors, and employees. As of December 31,
2007, options to purchase 70,817 shares were issued and outstanding under this
plan. This plan has expired.

1993 Advisors Stock Option Plan

Under the 1993 Advisors Stock Option Plan, a total of 750,000 shares of our
common stock were reserved for issuance upon exercise of stock options granted,
from time-to-time, to our advisors and consultants. This plan has expired.

Absent registration under the Securities Act of 1933, as amended, or the
availability of an applicable exemption wherefrom, shares of common stock issued
upon the exercise of options issued pursuant to these plans are subject to
restrictions on sale or transfer.

Other Plans

Other plans include equity compensation plans not approved by shareholders.
These plans are comprised of options granted and/or warrants issued to employees
and non-employees, including directors, consultants, advisers, suppliers,
vendors, customers and lenders for purposes including to provide continued
incentives, as compensation for services and/or to satisfy outstanding
indebtedness to them.

2007 Stock Option/Stock Issuance Plan

In May 2007, the Company's Board of Directors approved the 2007 Stock
Option/Stock Issuance Plan and reserved a total of 5,500,000 shares of our
common stock for issuance under this plan. On May 23, 2007, the Company filed a
Form S8 registering the shares issuable under this plan with the Securities and
Exchange Commission. The plan allows the issuance of stock options and outright
grants of common stock, from time-to-time, to our officers, directors, employees
and independent contractors who provide services to the Company. As of December
31, 2007, a total of 1,050,000 shares of common stock have been granted to
independent contractors/consultants and accounted for as described in Note 9 of
the December 31, 2007, consolidated financial statements. No grants of options
have been made from the Plan as of December 31, 2007.

Non-Plan Options

From time to time the Company has granted options to purchase shares of the
Company's common stock at a purchase price equal to the closing price of the
Company's common stock on the date of grant. The Board of Directors establishes
the life of the security and vesting period, if any, at the grant date.

Warrants

From time to time the Company has granted warrants to purchase shares of the
Company's common stock as compensation for services rendered in connection with
financing transactions. The exercise prices of these warrants are equal to the
exercise prices of warrants issued in such financings. The Board of Directors
establishes the life of the security and vesting period, if any, at the grant
date.

                                     - 28 -
<PAGE>

As of December 31, 2007, the Company had no other plans.

The grants of other options and warrants are approved on a case-by-case basis by
the Board of Directors, and are within the limits of the number of shares that
we are authorized to issue. The grant of other options and warrants are not
authorized by our shareholders. We may, in the future, authorize the grant of
additional options and/or issuance of additional warrants for the foregoing
purposes and other valid corporate purposes.

RECENT SALES OF UNREGISTERED SECURITIES

As a result of the August 1, 2008, modification of secured convertible
debentures (the "August 1, 2008 Modification") sold to Trafalgar aggregating
$1,310,000 with a maximum conversion price of $0.23 per share, the Company
recorded 836,957 shares of common stock as issuable with a charge to additional
paid-in capital for the shares' par value of $8,370. The shares are issuable to
Miller Investments pursuant to a 2006 stock subscription agreement with
anti-dilution provisions invoked by the August 1, 2008, Modification.
Additionally, shares of common stock purchasable under warrant agreements with
AJW Partners, LLC and affiliates increased from 5,000,000 to 6,929,812 shares,
and the exercise prices of these warrants decreased from approximately $1.50 to
approximately $1.08 per share as of result of the August 1, 2008 Modification.
The issuance of the shares and warrants are exempt from the registration
requirements of the Act by reason of Section 4(2) of the Act and the rules and
regulations thereunder as transactions by an issuer not involving any public
offering.

On October 15, 2007, the Company issued director David Shapiro 100,000 shares of
the Company's common stock valued at $17,000 or $0.17 per share. The issuance of
the common stock was exempt from the registration requirements of the Act by
reason of Section 4(2) of the Act and the rules and regulations thereunder, as
transactions by an issuer not involving any public offering.

On October 16, 2007, the Company's Board of Directors granted 200,000 fully
vested shares of the Company's common stock to Dan Brandano, Chairman and Chief
Executive Officer, pursuant to an employment agreement and was valued at $18,000
or $0.18 per share (the closing market price of the Company's common stock on
the day of issuance). The issuance of the common stock was exempt from the
registration requirements of the Act by reason of Section 4(2) of the Act and
the rules and regulations thereunder, as transactions by an issuer not involving
any public offering.

On October 25, 2007 and December 1, 2007, the Company entered into agreements
with Miller Investments that extended the maturity date of a $150,000 unsecured
promissory note and in consideration for this note extension, the Company issued
Miller Investments 150,000 and 300,000 shares of its common stock valued at
$34,500 or $0.23 per share and $39,000 or $0.13 per share, respectively. The
issuance of the common stock was exempt from the registration requirements of
the Act by reason of Section 4(2) of the Act and the rules and regulations
thereunder, as transactions by an issuer not involving any public offering.

On November 11, 2007, Trafalgar converted $5,000 of secured convertible term
notes it acquired on August 18, 2007 into 39,062 shares of the Company's common
stock at a conversion rate of $0.128 per share. The issuance of the shares was
exempt from the registration requirements of the Act by reason of Section
3(a)(9) of the Act and the rules and regulations thereunder.

As a result of the November 11, 2007, Trafalgar conversion of $5,000 of secured
convertible term notes at a conversion rate of $0.128 per share, the conversion
price of the MMA convertible debentures deceased to $0.128, and shares of common
stock purchasable under warrant agreements with MMA and Miller Investments
increased from 2,250,000 and 250,000 to 17,578,125 and 1,953,125 shares,
respectively, and the exercise price of these warrants decreased from $1.00 to

                                     - 29 -
<PAGE>

$0.128 per share. The issuance of the shares and warrants are exempt from the
registration requirements of the Act by reason of Section 4(2) of the Act and
the rules and regulations thereunder as transactions by an issuer not involving
any public offering.

Effective December 31, 2007, pursuant to a consulting agreement with Forte
Partners, LLC, the Company issued warrants exercisable for 108,000 shares of its
common stock at an exercise price of $1.00 per share for past services with a
fair value of $4,838. The warrants expire on dates ranging from January 31, 2009
to June 15, 2010. The issuance of the shares and warrants was exempt from the
registration requirements of the Act by reason of Section 4(2) of the Act and
the rules and regulations thereunder, as transactions by an issuer not involving
any public offering.

On January 22, 2008, the Company entered into an agreement (the "Purchase
Agreement") with Trafalgar Capital Specialized Investment Fund, Luxembourg
("Trafalgar") with respect to the purchase by Trafalgar of $1,200,000 of secured
convertible debentures and the issuance of related warrants. On January 24,
2008, the Company issued two (2) 42-month convertible debentures to Trafalgar
aggregating $1,200,000. The debentures bear interest at twelve percent (12%) per
annum, compounded monthly, and are convertible into common stock at the lesser
of (a) an amount equal to ten cents ($0.10) per share (the "Fixed Conversion
Price"), or (b) an amount equal to eighty-five percent (85%) of the lowest daily
closing bid price of the Company's common stock, as quoted by Bloomberg, LP, for
the five (5) trading days immediately prior to conversion with each debenture
subject to current exchange rate protection. In no event is Trafalgar entitled
to convert the debentures or accrued interest into an amount of shares that
would cause Trafalgar's ownership in the Company to exceed 4.99%. The $1,000,000
debenture requires interest only payments for the first six (6) months from the
closing date after which this debenture is to be redeemed over the remaining
twenty-four (24) months through monthly principal and interest at a ten percent
(10%) redemption premium. The $200,000 debenture requires redemption over twelve
(12) months after closing through monthly principal and interest at a ten
percent (10%) redemption premium. Should the Company raise in excess of $500,000
during the life of the debentures, it shall be required to redeem thirty percent
(30%) of the outstanding principal balance of the debentures. Interest is
payable in cash or common stock at a value equal to the closing bid price on the
date the interest is due or when the interest is paid at the option of
Trafalgar. In connection with the offering, the Company issued a warrant to
purchase fifteen million (15,000,000) shares of the Company's common stock at
one tenth of one cent ($0.001) per share ("Warrant"). The Warrant is exercisable
for a period of five (5) years. The number of shares subject to the Warrant and
the exercise price are subject to adjustment for stock splits, stock
combinations and certain dilutive issuances, including the issuance of shares of
common stock for no consideration or for a consideration per share less than
warrant price in effect immediately prior to such issuance. In no event is
Trafalgar entitled to acquire common stock through the exercise of this warrant
in an amount of shares that would cause Trafalgar's ownership in the Company to
exceed 4.99%. The issuance of the shares and warrants was exempt from the
registration requirements of the Act by reason of Section 4(2) of the Act and
the rules and regulations thereunder, as transactions by an issuer not involving
any public offering.

On January 22, 2008, as a result of the sale of secured convertible debentures
to Trafalgar with a maximum conversion price of $0.10 per share, the Company
recorded 1,086,957 shares of common stock as issuable with a charge to
additional paid-in capital for the shares' par value of $10,870. The shares are
issuable to Miller Investments pursuant to a 2006 stock subscription agreement
with anti-dilution provisions invoked by the January 22, 2008, sale of
convertible debenture to Trafalgar. The issuance of the shares are exempt from
the registration requirements of the Act by reason of Section 4(2) of the Act
and the rules and regulations thereunder as transactions by an issuer not
involving any public offering.

                                     - 30 -
<PAGE>

On March 6, 2008, the Company granted its Directors Daniel Brandano, David
Shapiro and Jay Vahl 240,000, 340,000 and 200,000 shares of fully vested common
stock, respectively, for services as board members valued at $78,000 in the
aggregate. For accounting purposes, the shares were valued at $46,800 or $0.06
per share (based on the closing price of the Company's common stock on the date
of grant). The issuance of the common stock was exempt from the registration
requirements of the Act by reason of Section 4(2) of the Act and the rules and
regulations thereunder, as transactions by an issuer not involving any public
offering.

On March 6, 2008, Trafalgar converted $15,000 of secured convertible term notes
it acquired on August 18, 2007 into 375,000 shares of the Company's common stock
at a conversion rate of $0.04 per share (80% percent of the lowest bid price for
the five (5) trading days immediately prior to the date of this conversion
notice). The issuance of the shares was exempt from the registration
requirements of the Act by reason of Section 3(a)(9) of the Act and the rules
and regulations thereunder.

On March 6, 2008, as a result of the Trafalgar conversion of $15,000 of secured
convertible term notes at a conversion rate of $0.04 per share, the conversion
price of the MMA convertible debentures deceased to $0.04, and shares of common
stock purchasable under warrant agreements with MMA and Miller Investments
increased from 17,578,125 and 1,953,125 to 56,250,000 and 6,250,000 shares,
respectively, and the exercise price of these warrants decreased from $0.128 to
$0.04 per share. Additionally, shares of common stock purchasable under warrant
agreements with AJW Partners, LLC and affiliates increased from 6,929,812 to
8,256,255 shares, and the exercise prices of these warrants decreased from
approximately $1.08 to approximately $0.91 per share. The issuance of the shares
and warrants are exempt from the registration requirements of the Act by reason
of Section 4(2) of the Act and the rules and regulations thereunder as
transactions by an issuer not involving any public offering.

ITEM 6.  MANAGEMENT DISCUSSION AND ANALYSIS

         The following discussion and analysis provides information that
Management believes is useful in understanding our operating results, cash flows
and financial condition. The discussion should be read in conjunction with, and
is qualified in its entirety by reference to, the consolidated financial
statements and related notes to consolidated financial statements appearing
elsewhere in this annual report on Form 10-KSB. Except for the historical
information contained herein, the discussions in this document contain
forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those discussed here. Factors that could
cause or contribute to such differences include, but are not limited to, those
discussed below under "Risk Factors". In January 2006, our business plan changed
significantly. Investors should review the Company's consolidated financial
statement for the fiscal years ended 2007 and 2006 contained herein, as well as
the audited financial statements of Changes in L'Attitudes, Inc., International
Travel and Resorts, Inc., and Island Resort Tours, Inc. filed with the
Securities and Exchange Commission on forms 8K/A on April 24, 2006 and May 22,
2006, respectively.

GENERAL

         Through January 13, 2006, we were engaged primarily in developing and
commercializing patented high-efficiency, low-pressure, non-lubricated air
compressors and hydrogen.

         On January 13, 2006, we entered into a Stock Exchange Agreement with
the former shareholders of Dynamic Leisure Group, Inc. ("Dynamic"), a privately
held Florida corporation, under which we acquired all of the outstanding capital
stock of Dynamic, and Dynamic became a wholly-owned subsidiary of the Company,
in a transaction for accounting purposes that was treated as a recapitalization.
As part of the Stock Exchange Agreement, we issued 6,566,667 shares of our
common stock.

                                     - 31 -
<PAGE>

         Following the recapitalization, the Company changed the focus of its
business strategy to pursue opportunities in the leisure travel market,
primarily as a wholesaler of bundled travel packages to frequently traveled
destinations such as Florida, Las Vegas, California, Hawaii, the Caribbean,
Mexico, Central and South America, and the United Kingdom and Europe.

         In February and March 2006 the Company acquired Changes in L'Attitudes,
Inc., ("CIL") a Florida-based direct-to-consumer internet seller of vacation
packages primarily to the Caribbean and Mexico, and Island Resort Tours, Inc.
("IRT") and International Travel and Resorts, Inc. ("ITR"), wholesalers of
Caribbean travel primarily through established networks of travel agencies, and
a provider of telephone and marketing support to various Caribbean locations.

RESULTS OF OPERATIONS

REVENUE

         Revenues increased for the year ended December 31, 2007, compared to
the corresponding period ended December 31, 2006 as follows:
<TABLE>
<CAPTION>
                                                Percent                Percent
                                                  of                     of
                                      2007      Revenue      2006      Revenue   Change
                                   ----------   -------   ----------   -------   ------
<S>                                <C>          <C>       <C>          <C>       <C>
Vacation packages ..............   $7,216,099      89%    $4,850,334      83%      49%
Airline tickets and related fees      885,106      11%       894,937      16%      (1%)
General service agreement fees .            -       -%        71,981       1%    (100%)
                                   ----------   -------   ----------   -------   ------
Total ..........................   $8,101,205     100%    $5,817,252     100%      39%
                                   ==========   =======   ==========   =======   ======
</TABLE>

         Our revenue was primarily derived from the sale of vacation packages
recorded on a gross basis and the sale of airline tickets recorded on a net
revenue basis. Our revenues increased $915,099 as a result of our having a full
twelve months of operation in 2007 compared to revenues that commenced on
February 8, 2006 and March 6, 2006 related to our acquisitions of CIL and
IRT/ITR, respectively, and $1,440,675 from a general increase in sales volume
partly offset by a $71,821 reduction in general service agreement fees between
the years.

COST OF REVENUE

         Cost of revenues increased for the year ended December 31, 2007,
compared to the corresponding period ended December 31, 2006 as follows:

                                                Percent                Percent
                                                  of                     of
                                                Related                Related
                                      2007      Revenue      2006      Revenue
                                   ----------   -------   ----------   -------

Vacation packages ..............   $6,486,421     90%     $4,098,660     85%
Airline tickets and related fees      162,556     18%        238,229     27%
                                   ----------   -------   ----------   -------
Total ..........................   $6,648,977     82%     $4,336,889     75%
                                   ==========   =======   ==========   =======

                                     - 32 -
<PAGE>

         Cost of revenues related to the sale of vacation packages includes the
cost of hotel rooms, airline tickets, rental cars, transfers and other related
fees bundled into a single travel product purchased by our customers. Cost of
revenues related to the sale of airline tickets and related fee revenue reported
on a net basis consists of commissions payable to independent travel agents and
certain third-party processing fees.

         The cost of revenues increased for the year ended December 31, 2007
compared to the corresponding period of 2006 and the percentage of cost of
revenues to revenues increased. The increase in cost of revenues is the result
of our having a full year of operations in 2007 compared to revenues that
commenced on February 8, 2006 and March 6, 2006 related to our acquisitions CIL
and IRT/ITR, respectively. The increase in the percentage of cost of revenue to
revenue is the result of certain vacation packages sold at or below cost
stemming from employee training issues causing late procurement of certain
vacation package components thus increasing product costs to the Company. The
Company believes it has resolved these training issues and expects cost of
revenues as a percentage of revenues to return to its historical percentages.

         The Company expects its cost of revenues related to vacation packages
to decrease as a percentage of revenues in the future through improved
utilization of its wholesale bulk air contracts, expanded product offerings and
the full deployment of its TourScape software system; however, competitive
pressures are expected to limit the Company's ability to substantially increase
margins and reduce cost of revenues.

GROSS PROFIT

         Gross profit decreased for the year ended December 31, 2007, compared
to the corresponding period ended December 31, 2006 as follows:
<TABLE>
<CAPTION>
                                                Percent                Percent
                                                  of                     of
                                                Related                Related
                                      2007      Revenue      2006      Revenue   Change
                                   ----------   -------   ----------   -------   ------
<S>                                <C>          <C>       <C>          <C>       <C>
Vacation packages ..............   $  729,678      10%    $  751,674      15%       (3%)
Airline tickets and related fees      722,550      82%       656,708      73%       10%
General service agreement fees .            -       -%        71,981     100%     (100%)
                                   ----------   -------   ----------   -------   ------
Total ..........................   $1,452,228      18%    $1,480,363      25%       (2%)
                                   ==========   =======   ==========   =======   ======
</TABLE>
         Our gross profit decreased for the year ended December 31, 2007,
compared to the corresponding period of 2006 and the percentage of gross profit
to revenues decreased. The decrease in gross profit between periods is the
result of certain vacation packages sold at or below cost stemming from employee
training issues causing late procurement of certain vacation package components
thus increasing product costs to the Company. The Company believes it has
resolved these training issues and expects the gross profit percentage to return
to its historical percentages.

OPERATING EXPENSES

         Our operating expenses increased throughout the Company for the year
ended December 31, 2007, compared to the corresponding period ended December 31,
2006, as follows:

                                     - 33 -
<PAGE>
<TABLE>
<CAPTION>
                                                2007                             2006
                                   -------------------------------  ------------------------------
                                                          Stock-                           Stock-
                                               Percent    Based                 Percent    Based
                                                 of       Compen-                 of       Compen-
                                      Total    Revenue    sation      Total     Revenue    sation    Change
                                   ----------  -------  ----------  ----------  -------  ----------  -------
<S>                                <C>         <C>      <C>         <C>         <C>      <C>         <C>
Employee compensation ..........   $2,085,622    26%    $        -  $1,362,290    23%    $        -     53%
Financial consulting ...........      633,167     8%       409,266     798,042    14%       694,776    (21%)
Legal expense ..................      194,578     2%             -     719,951    12%       524,000    (73%)
Depreciation & amortization ....    1,036,922    13%         4,838     704,726    12%             -     47%
Internal accounting and external
  auditing expense .............      345,885     4%             -     613,588    11%             -    (44%)
Director fees ..................      336,464     4%       280,348     496,000     9%       496,000    (32%)
Investor relations .............      530,957     6%       436,478     314,200     5%       314,200     69%
Other G&A expenses .............    1,618,436    20%             -   2,032,192    35%             -    (20%)
                                   ----------  -------  ----------  ----------  -------  ----------  -------
Total ..........................   $6,782,031    84%    $1,130,930  $7,040,989   121%    $2,028,976     (4%)
                                   ==========  =======  ==========  ==========  =======  ==========  =======
</TABLE>
         Operating expenses for the year ended December 31, 2007 were $6,782,031
compared to $7,040,989 for the corresponding period for 2006 or a decrease of 4%
between periods. Operating expenses exclusive of stock based compensation
increased by $639,088 an increase of 13% between periods. Operating expenses
related to stock-based compensation decreased by $898,046 or 44% between
periods.

         Employee compensation increased as the result of having a full twelve
months of operation in 2007 compared to revenues subsequent to our acquisitions
in 2006 of CIL and IRT/ITR on February 8, 2006 and March 6, 2006, respectively,
and the addition of corporate staff to support the Company's business growth
plans. However, the Company began reducing its staffing levels in November 2007
by not replacing individuals who voluntarily terminated employment with the
Company in an effort to align its expense structure with its current volume of
business.

         Financial consulting expense decreased between 2007 and 2006; however,
financial consulting expense net of stock-based compensation increased by
$120,635. The increase in cash-based expenses is the result of employing several
consultants to assist the Company in the areas of management and capital
raising.

         Legal expense decreased between 2007 and 2006 and, likewise, legal
expense net of stock-based compensation decreased by $1,373. The decrease is the
result no stock-based compensation being granted during 2007 partly offset by
increased cash-based expenses for legal services related to the filing of
registration statements, convertible debt financings and resolving disputes.

         Depreciation expense increased $102,674 between 2007 and 2006 as a
result of Company's Tourscape software being placed in service in March 2007.
The amortization of intangible assets increased by $298,012 due to having a full
twelve months of amortization in 2007. The amortization of deferred loan costs
decreased $68,489 between 2007 and 2006 as a result of the amortization periods
for certain loans costs expiring early in 2007. Amortization expense for 2007
includes $4,838 related to the value of warrants granted for consulting services
recorded as deferred loan costs and amortized during 2007.

         Internal accounting and external auditing expenses decreased $267,703
between 2007 and 2006 as a result of fiscal year 2006 including the costs of
multiple acquisition audits and use of numerous independent contractors to
maintain the Company's internal financial reporting system.

                                     - 34 -
<PAGE>

         Director fees decreased in total as a result of fewer grants of
stock-based compensation to directors during 2007 compared to 2006 and the
reduction in market value of the Company's common stock used to determine the
value of stock-based compensation granted to directors.

         Investor relations expense increased between 2007 and 2006; likewise,
investor relations expense net of stock-based compensation increased by $94,479.
The increase in expense is the result of great expenditures to employ public
relations consultants to raise the Company's visibility in the financial markets
and maintain relations with the Company's current investors.

         Other general and administrative costs decreased between 2007 and 2006
by $413,756 or 20%. The Company incurred significant expense in 2006 that did
not reoccur to integrate its acquisitions, build its corporate infrastructure
and launch it business plan. These reductions in costs in 2006 were partly
offset by having a full twelve months of operations in 2007. As we increase the
volume of our business, enter into additional contracts with suppliers, and sell
more products directly to customers over the Internet, we anticipate general and
administrative expenses as a percentage of revenue to decrease even more.

         The Company has utilized its securities as consideration to purchase
certain services from business and financial consultants, investor relation
firms, attorneys and directors. As a result, operating expenses for the year
ended December 31, 2007 included $1,130,930 in stock-based compensation
representing the fair value of grants to common stock, warrants and options to
these parties compared to $2,028,976 in the corresponding period in 2006. The
Company expects to continue to use its securities to purchase services in the
future as the board of directors deems appropriate. Should this occur, the
Company will recognize stock-based compensation expense based on the fair value
of securities issued for services.

OTHER INCOME / EXPENSE

         Our interest expense decreased for the year ended December 31, 2007,
compared to the year ended December 31, 2006, as follows:

                                                            2007         2006
                                                            ----         ----

Regular interest expense .............................   $1,197,246   $  676,128
Amortization of debt discount on convertible debt ....    2,400,700    4,358,733
                                                         ----------   ----------
Total ................................................   $3,597,946   $5,034,861
                                                         ==========   ==========

         Interest expense decreased between periods as a result of a reduction
in debt discount amortization partly offset by an increase in accrued interest
on outstanding debt obligations. The decrease in debt discount amortization is a
result of debt discounts recognized on financing that occurred in 2006 that were
fully amortized during but prior to the end of 2007. The increase in regular
interest expense on outstanding debt obligations is a result of greater
borrowing levels during the year ended December 31, 2007 compared to the
corresponding period of the prior year.

         The Company recorded a non-cash loss on extinguishment of debt of
$76,635 during 2007. The 2007 loss of $76,635 represented the value of shares of
common stock issued to a convertible note holder pursuant to an April 13, 2007
settlement. The 2006 loss included $180,000 representing the value of 200,000
shares of common stock issued to convertible note holders pursuant to the
January 13, 2006 Modification and Waiver Agreement and $28,442 representing the
value of additional warrants issued to the convertible note holders and the
write off of certain deferred debt issue costs. The Company treated the
modification as a cancellation of warrants (which resulted in a reclassification
of $240,592 of warrant liability to equity) and issuance of new warrants valued
at $233,227 on the modification date.

                                     - 35 -
<PAGE>

         The fair value adjustment for outstanding warrants and options as of
December 31, 2007, resulted in the recognition of non-cash income of $5,329,977
for the year ended December 31, 2007, compared to a non-cash income for the
corresponding period of the prior year of $249,662. The fair value of
outstanding warrants and options recorded as liabilities and the related
increase or decrease in warrant and option valuation income (expense) is
directly related to the number of potentially dilutive securities being valued,
the trading price of the Company's common stock at the balance sheet date and
the Company's common stock volatility factor. At December 31, 2007 and 2006, the
Company had 40,635,537 and 11,604,550 options and warrants subject of liability
treatment, the trading value of the Company's common stock was $0.128 and $0.65
per share and the volatility factor was 245% and 166%, respectively.

         The embedded conversion option valuation for the year ended December
31, 2007 resulted in expense of $3,272,977. This expense is the result of the
change in value of conversion option associated with the issuance of convertible
notes totaling $2,505,000 with a conversion price at 15% to 45% discount off the
trading price of the Company's common stock. The valuation of the embedded
conversion option is a non-cash expense to the Company.

NET INCOME (LOSS)

         The Company had a net loss during the year ended December 31, 2007, of
$5,674,960 compared to a net loss of $11,009,388 in the corresponding period in
2006. The net loss for the year ended December 31, 2007, includes non-cash
general and administrative expenses of $1,130,930 from stock-based compensation,
depreciation and amortization expense of $1,036,922, non-cash interest expense
of $2,400,700 attributed to the issuance of securities and related amortization
of the resulting debt discount and non-cash embedded conversion option
revaluation expense of $2,005,901. These non-cash expenses were partly offset by
non-cash income from warrant and option liability revaluation of $5,329,977.

         The net loss for the year ended December 31, 2006, was $11,009,388 and
includes non-cash general and administrative expenses of $2,032,192 from
stock-based compensation, depreciation and amortization expense of $704,726,
non-cash interest expense of $4,358,733 attributed to the issuance of securities
and related amortization of the resulting debt discount, non-cash extinguishment
of debt and non-cash loss on disposal of fixed assets of $474,605. The non-cash
expenses were partly offset by non-cash income from warrant and option liability
revaluation of $249,662.

LIQUIDITY AND CAPITAL RESOURCES

         Our capital requirements consist of general working capital needs,
scheduled principal payments on our debt obligations and capital leases, planned
capital expenditures and, currently, the funding of deficit operations. Our
capital resources consist of cash generated from operations, short-term
borrowings under promissory notes payable and the sale of our common stock. Our
capital resources are impacted by our deficit operations and changes in the
volume of advance payments from customers and the timing of related payments to
suppliers. Our financial condition relies on continuing debt and equity
investment until the Company is able to achieve profitability in our wholesale
leisure travel business.

         At December 31, 2007, we had cash of $198,500. The following table
reflects the cash flow activities during the years ended December 31, 2007 and
2006:

                                                       2007             2006
                                                       ----             ----

Cash used by operating activities .............    $(1,658,695)     $(2,720,651)
Cash provided by (used in) investing activities         42,845         (341,666)
Cash provided by financing activities .........      1,610,439        3,246,665
                                                   -----------      -----------
Increase (decrease) in cash ...................    $    (5,411)     $   184,348
                                                   ===========      ===========

                                     - 36 -
<PAGE>

Operating activities

         For the year ended December 31, 2007, the Company used cash in
operating activities of $1,658,695. Cash was used to fund the Company's loss
from operations of $5,674,960 offset by non-cash expenses for common stock and
warrants issued for services of $1,181,680 and common stock issued for debt
waivers of $140,000 and depreciation and amortization expense of $1,036,922 and
non-cash income from warrant and option valuation income of $5,329,977. Cash
used for operations included and accounts receivable of $188 and a decrease in
deferred revenues and customer deposits of $160,493. Cash was generated from
operations by decreasing prepaid customer travel costs of $127,214 and other
assets by $23,191 and increasing accounts payable by $1,867,372 and accrued
expenses by $719,511.

Investing activities

         For the year ended December 31, 2007, the Company provided cash from
investing activities of $42,845 by converting investments to cash.

Financing activities

         For the year ended December 31, 2007, the Company provided cash from
financing activities of $1,610,439. Cash was received from the proceeds of a
$2,060,000 convertible promissory note, $22,500 from the issuance of common
stock from the exercise of a warrant and $110,000 advanced from an employee. The
Company used cash for the payment of debt issuance costs of $316,952 and
principal payments on capital leases of $29,966.

Primary source of liquidity

         As of December 31, 2007, our primary source of liquidity was $198,500
of cash and $135,075 of accounts receivable. At December 31, 2007, the Company
had a working capital deficit of $14,763,498, primarily due to warrant and
option liability of $2,475,112, embedded conversion option liability of
$3,272,977, acquisitions payable of $1,204,857, and the current maturity of
convertible notes payable of 3,939,770 partially offset by debt discount of
$211,022. The convertible notes payable consists of promissory notes convertible
into approximately 60,480,645 shares of the Company's common stock as of
December 31, 2007. While we expect these notes to be converted into the
Company's common stock, thereby reducing liabilities, there is no assurance this
will occur. As of December 31, 2007, the Company has vested and outstanding
warrants, non-plan and plan options to purchase 39,485,775, 1,050,000 and 99,762
shares of the Company's common stock with weighted average exercise prices of
$0.58, $0.66 and $7.25 per share, respectively. Exercise of any of these
securities would provide cash to the Company without additional financing fees.
There is no assurance that any of these securities will be exercised. As of
March 31, 2008 we were in default on $4,150,792 in convertible promissory notes
and $156,434 in notes payable. We anticipate being able to extend the maturity
or settle the balance owing on the convertible promissory notes through issuance
of common stock; however, such extension of the maturity dates or conversion of
these notes to common stock is not assured.

         We have relied upon convertible debt and equity financing in order to
fund our operating deficit. Our inability to generate cash flow in excess of
immediately needed funds has created a situation where we will require
additional capital from external sources. There is no guarantee that we will be
able to obtain any necessary financing on terms favorable to us, if at all.
While we anticipate that all of our Convertible Note Payables will convert to
shares of the Company's common stock, which would reduce our potential cash
payment for the notes, the issuance of additional shares of our common stock
would further dilute our existing shareholders' holdings. It is not expected
that the internal sources of liquidity will improve until net cash is provided
from operating activities and, until such time, we will rely upon external
sources of liquidity, including additional private placements of the Company's
common stock and exercise of various outstanding stock warrants and stock
options. We are hopeful that the continued listing of our shares on the OTC

                                     - 37 -
<PAGE>

Bulletin Board and expansion of our business opportunities in the leisure travel
market will help increase the Company's market capitalization, encourage the
exercise of outstanding warrants and attract new sources of financing. We have
no understandings or commitments from anyone with respect to external financing,
and we cannot predict whether we will be able to secure necessary funding when
needed, or at all. As we continue to expand our business and deploy our
technology in our leisure travel business, our current monthly cash flow
requirements will exceed our near-term cash flow from operations. Even if we are
not required to meet our financing and interest payment needs from cash, and
instead our investors convert their outstanding convertible notes to common
stock, our available cash resources and anticipated cash flow from operations
are insufficient to satisfy our anticipated costs associated with new product
development and expansion into new markets in the near future. There can be no
assurance that we will be able to generate sufficient cash from operations in
future periods to satisfy our capital requirements; therefore, we will have to
continue to rely on external financing activities, including the sale of our
equity securities, to satisfy our capital requirements for the foreseeable
future. Due, in part, to our lack of historical earnings, our prior success in
attracting additional funding has been limited to transactions in which our
equity is used as currency. In light of the availability of this type of
financing, and the lack of alternative proposals, our board of directors has
determined that the continued use of our equity for these purposes may be
necessary if we are to sustain operations. Equity financings of the type we have
been required to pursue are dilutive to our stockholders and may adversely
impact the market price for our shares. However, we have no commitments for
borrowings or additional sales of equity, the precise terms upon which we may be
able to attract additional funding is not known at this time, and there can be
no assurance that we will be successful in consummating any such future
financing transactions on terms satisfactory to us, or at all.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Stock-Based Compensation Plans

         On January 13, 2006, in conjunction with the recapitalization, the
Company assumed DynEco's obligations under one active and two expired
stock-based non-qualified compensation plans. The Board of Directors administers
these plans. There were no grants under these plans during 2007 or 2006. Terms
and prices are determined by the compensation committee or the board.

         On January 1, 2006, the Company implemented Statement of Financial
Accounting Standard 123 (revised 2004) ("SFAS 123(R)"), "Share-Based Payment"
which replaced SFAS 123 "Accounting for Stock-Based Compensation" and superseded
APB Opinion No. 25 "Accounting for Stock Issued to Employees." SFAS 123(R)
requires the fair value of all stock-based employee compensation awarded to
employees to be recorded as an expense over the related vesting period. The
statement also requires the recognition of compensation expense for the fair
value of any unvested stock option awards outstanding at the date of adoption.

         In May 2007, the Company's Board of Directors approved the 2007 Stock
Option/Stock Issuance Plan and reserved a total of 5,500,000 shares of common
stock for issuance under this plan. On May 23, 2007, the Company filed a
Registration Statement on Form S-8 with the Securities and Exchange Commission
to register the shares issuable under this plan. The plan allows the issuance of
stock options and outright grants of common stock, from time-to-time, to its
officers, directors, employees and independent contractors who provide services
to the Company. As of December 31, 2007, a total of 1,050,000 shares of common
stock have been granted to independent contractors/consultants and accounted for
as described in Note 9 to the consolidated financial statements.

         Beginning January 1, 2006 all employee stock compensation is recorded
at fair value using the Black-Scholes Pricing Model. In adopting SFAS 123(R),
the Company used the modified prospective application ("MPA"). MPA requires the

                                     - 38 -
<PAGE>

Company to account for all new stock compensation to employees using fair value.
For any portion of awards prior to January 1, 2006 for which the requisite
service has not been rendered and the options remain outstanding as of January
1, 2006, the Company shall recognize the compensation cost for that portion of
the award for which the requisite service was rendered on or after January 1,
2006. The fair value for these awards is determined based on the grant date. As
of the date of the recapitalization, there was no further service obligations
related to outstanding options. There was no cumulative effect of applying SFAS
123(R) at January 1, 2006.

Goodwill and Other Intangibles

         The Company accounts for goodwill in a purchase business combination as
the excess of the cost over the fair value of net assets acquired. Business
combinations can also result in other intangible assets being recognized.
Amortization of intangible assets, if applicable, occurs over their estimated
useful lives. Statement of Financial Accounting Standard No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142") requires testing goodwill for impairment
on an annual basis (or interim basis if an event occurs that might reduce the
fair value of a reporting unit below its carrying value). The Company conducts
the annual review for all of its reporting units during the fourth quarter of
the calendar year. No impairment was recognized during the year ended December
31, 2007.

Impairment of Other Long-Lived Assets

         The Company reviews other long-lived assets and certain identifiable
assets related to those assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying amounts may
not be recoverable. If the undiscounted future cash flows of the long-lived
assets are less than their carrying amounts, their carrying amounts are reduced
to fair value and an impairment loss is recognized. No impairment was recognized
during the year ended December 31, 2007.

Revenue Recognition

         The Company follows the criteria for the United States Securities and
Exchange Commission Staff Accounting Bulletin 104 and EITF 99-19 "Reporting
Revenue Gross as a Principal versus Net as an Agent" for revenue recognition.
The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery of product has occurred, the sales price is fixed or
determinable, and collectibility is reasonably assured.

         The Company records merchant sales transactions at the gross purchase
price generally on the date of travel. The Company considers a transaction to be
a "merchant sales transaction" where the Company is the primary obligor to the
customer and the Company acts as the merchant of record in the package
transaction, which consists of several products from different vendors. In these
transactions the Company also controls selling prices, and is solely responsible
for making payments to vendors. The Company records transactions at the net
purchase price where the Company is not the merchant of record or the product is
not sold as a package. The Company records revenue and related costs of products
when travel occurs or, for certain products, when the service is completed. It
is the Company's policy to be paid by the customer in advance, with monies
received in advance of travel recorded as a deferred revenue liability. The
Company may receive cash or hotel room credits in exchange for providing
cooperative advertising for its vendors. The Company records accounts receivable
for these amounts and offsets the applicable advertising expense. Once the
advertising expense is reduced to zero, any excess cooperative advertising fees
are recorded as revenue.

         The Company is not required to buy a specific number of lodging
occupancies but has pre-purchased lodging occupancies, creating inventory risk,
over the past several years. The Company is not expressly required to buy a
specific number of bulk airline tickets, although the Company's primary airline
supplier eliminated approximately 80% of bulk rate contracts, which creates an
implied minimum of ticket sales requirement.

                                     - 39 -
<PAGE>

Accounting for Derivatives

         The Company evaluates its convertible debt, options, warrants or other
contracts to determine if those contracts or embedded components of those
contracts qualify as derivatives to be separately accounted for under Statement
of Financial Accounting Standards 133 "Accounting for Derivative Instruments and
Hedging Activities" and related interpretations including EITF 00-19 "Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock".

         The result of this accounting treatment is that the fair value of the
embedded derivative is marked-to-market each balance sheet date and recorded as
a liability. In the event that the fair value is recorded as a liability, the
change in fair value is recorded in the consolidated statement of operations as
an "other income or expense." Upon conversion or exercise of a derivative
instrument, the instrument is marked to fair value at the conversion date and
then that fair value is reclassified to equity. Equity instruments that are
initially classified as equity that become subject to reclassification under
SFAS 133 are reclassified to liability at the fair value of the instrument on
the reclassification.

Warrant and Option Liability and Embedded Conversion Option Liability

         During our efforts to raise capital from external investments, we have
issued secured and unsecured convertible promissory notes that include
provisions requiring us to register related shares of common stock and one
issuance of convertible debt contains a variable conversion price. Per SFAS 133
and EITF 00-19 we are required to record the fair value of all outstanding
warrants and-non employee options and the fair value of the embedded conversion
option as liabilities.

         The valuation of these liabilities is based on a Black-Scholes model
and will vary, potentially significantly, based on factors such as the remaining
time left to exercise the warrants, recent volatility in the price of the
Company common stock, and the market price of our common stock. Changes in the
valuation of the warrant and option liability and the embedded conversion option
liability are recorded as other income or expense in the period of the change.
In the fiscal year ended December 31, 2006, the Company's revaluation of its
warrant and option liability resulted in income of $249,662 due to the reduction
in volatility of the Company's common stock. For the same period, the Company's
initial recording and revaluation of its embedded conversion option liability
resulted in expense of $667,076. The valuation of the warrant and option
liability and embedded conversion option liability are non-cash income or
expense items to the Company.

         The change in volatility is a result of the change in the expected term
of outstanding warrants and options due to the passage of time, which results in
a change in the time frame from which the stock price data points to compute
volatility were selected. Since volatility has been computed based on historical
volatility of the corporation, less data points are selected from the beginning
of the period and more data points are selected from the end of the period being
measured.

CONTRACTUAL OBLIGATIONS

Operating Lease Obligations

         The Company currently leases office space in its Tampa, Florida, and
New York City locations. Monthly rent expense under the Tampa, Florida lease is
approximately $13,700 per month, and the lease expires June 2011. Monthly rent
expense under the New York City lease is approximately $11,500 per month, and
the lease expires April 2008.

                                     - 40 -
<PAGE>

Purchase Obligations

         We are not a party to any significant long-term service or supply
contracts.

Letters of Credit

         At December 31, 2007, the Company had two outstanding letters of credit
totaling approximately $97,400 payable to the Airlines Reporting Corporation
(ARC), which allows the Company to purchase airline tickets through ARC's
computerized ticket system. The terms of the letter of credit agreements require
the Company to maintain certificates of deposit with the issuer of the letters
of credit in the amount of the letters of credit. These certificates of deposit
are reflected as short-term investments, restricted, on the accompanying balance
sheet. Short-term investments at December 31, 2007, also includes $10,000
restricted to cover a letter of credit for a seller of travel license.

RECENT ACCOUNTING PRONOUNCEMENTS

         FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes
-- an Interpretation of FASB Statement No. 109" ("FIN 48"): In June 2006, the
FASB issued this statement which clarifies the accounting for uncertainty in
income taxes recognized in an enterprise's financial statements in accordance
with SFAS No. 109, "Accounting for Income Taxes." FIN 48 prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. FIN 48, which was effective for fiscal years beginning after
December 15, 2006, also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. The Company plans on reviewing in detail its tax situation to
determine whether there are any uncertain tax positions, but presently believes
there are no material matters.

         Staff Accounting Bulletin No. 108, "Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements" ("SAB 108"): In September 2006, the Securities and Exchange
Commission issued SAB 108 which provides guidance on consideration of the
effects of prior year misstatements in quantifying current year misstatements
for the purpose of a materiality assessment. SAB 108 was effective for fiscal
years ending after November 15, 2006. The adoption of SAB 108 did not have an
impact on our consolidated financial statements.

         FASB Statement No. 141(R),"Business Combinations" ("SFAS 141(R)"): In
December 2007, the FASB issued No. 141R which will change the accounting for and
reporting of business combination transactions. The most significant changes in
the accounting for business combinations under SFAS 141(R) include: (1)
valuation of any acquirer shares issued as purchase consideration will be
measured at fair value as of the acquisition date; (2) contingent purchase
consideration, if any, will generally be measured and recorded at the
acquisition date, at fair value, with any subsequent change in fair value
reflected in earnings rather than through an adjustment to the purchase price
allocation; (3) acquired in-process research and development costs, which have
historically been expensed immediately upon acquisition, will now be capitalized
at their acquisition date fair values, measured for impairment over the
remaining development period and, upon completion of a successful development
project, amortized to expense over the asset's estimated useful life; (4)
acquisition related costs will be expensed as incurred rather than capitalized
as part of the purchase price allocation; and (5) acquisition related
restructuring cost accruals will be reflected within the acquisition accounting
only if certain specific criteria are met as of the acquisition date; the prior
accounting convention, which permitted an acquirer to record restructuring
accruals within the purchase price allocation as long as certain, broad criteria

                                     - 41 -
<PAGE>

had been met, generally around formulating, finalizing and communicating certain
exit activities, will no longer be permitted. SFAS 141(R) is effective for
reporting periods beginning on or after December 15, 2008. Earlier adoption is
not permitted. The Company anticipates that adoption of this pronouncement will
significantly impact how the Company accounts for business combination
transactions consummated after the effective date, in the various areas outlined
above.

         FASB Statement No. 156, "Accounting for Servicing of Financial Assets
-- an amendment of FASB Statement No. 140" ("FASB Statement No. 156"): In March
2006, the FASB issued Statement No. 156 which amends FASB Statement No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," with respect to the accounting for separately recognized
servicing assets and servicing liabilities. FASB Statement No. 156 was effective
for years beginning after September 15, 2006. The Company does not believe FASB
Statement No. 156 will have a material effect on the Company's financial
statements.

         FASB Statement No. 157, "Fair Value Measurements" ("FASB Statement No.
157"): In September 2006, the FASB issued FASB Statement No. 157 which defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. FASB Statement No. 157 applies under other accounting
pronouncements that require or permit fair value measurements, the FASB having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements.

         SFAS No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("SFAS 159"): In February 2007, the FASB issued SFAS 159 which
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at fair
value. SFAS 159 will be effective for us on January 1, 2008. We are currently
evaluating the impact of adopting SFAS 159 on our financial position, cash
flows, and results of operations.

         SFAS No. 160, "Non-Controlling Interests in Consolidated Financial
Statements" ("SFAS 160"): In December 2007, the FASB issued SFAS No. 160, this
Statement amends Accounting Research Bulletin No. 51, "Consolidated Financial
Statements" to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS 160 is required to be adopted simultaneously with SFAS 141(R)
and is effective for reporting periods on or after December 15, 2008. An earlier
adoption is not permitted. Currently, the Company does not have any
non-controlling interest in our subsidiary and accordingly, the adoption of SFAS
160 is not expected to have a material impact on our consolidated financial
position, cash flows or results of operations.

         FASB Staff Position EITF 00-19-2, "Accounting for Registration Payment
Arrangements" ("FSP EITF 00-19-2"): In December 2006, the FASB issued FSP EITF
00-19-2 which specifies that the contingent obligation to make future payments
or otherwise transfer consideration under a registration payment arrangement,
whether issued as a separate agreement or included as a provision of a financial
instrument or other agreement, should be separately recognized and measured in
accordance with FASB Statement No. 5, "Accounting for Contingencies." A
registration payment arrangement is defined in FSP EITF 00-19-2 as an
arrangement with both of the following characteristics: (1) the arrangement
specifies that the issuer will endeavor (a) to file a registration statement for
the resale of specified financial instruments and/or for the resale of equity
shares that are issuable upon exercise or conversion of specified financial
instruments and for that registration statement to be declared effective by the

                                     - 42 -
<PAGE>

US SEC within a specified grace period, and/or (b) to maintain the effectiveness
of the registration statement for a specified period of time (or in perpetuity);
and (2) the arrangement requires the issuer to transfer consideration to the
counterparty if the registration statement for the resale of the financial
instrument or instruments subject to the arrangement is not declared effective
or if effectiveness of the registration statement is not maintained. FSP EITF
00-19-2 was effective for registration payment arrangements and the financial
instruments subject to those arrangements that are entered into or modified
subsequent to December 21, 2006. For registration payment arrangements and
financial instruments subject to those arrangements that were entered into prior
to the issuance of FSP EITF 00-19-2, this guidance is effective for financial
statements issued for fiscal years beginning after December 15, 2006, and
interim periods within those fiscal years. We do not expect the adoption of FSP
EITF 00-19-2 to have a material impact on our consolidated financial statements.

         In June 2007, the FASB ratified EITF Issue No. 07-03, "Accounting for
Nonrefundable Advance Payments for Goods and Services Received for Use in Future
Research and Development Activities." EITF 07-03 requires companies to defer
nonrefundable advance payments for goods and services and to expense such
advance payments as the goods are delivered or services are rendered. If the
Company does not expect to have the goods delivered or services performed, the
advance should be expensed. EITF 07-03 is effective for fiscal years beginning
after December 15, 2007. We do not expect the adoption of EITF Issue No. 07-03
to have a material impact on our consolidated financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

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

ITEM 7.  FINANCIAL STATEMENTS

The information required by this Item is incorporated by reference to the
financial statements beginning on page F-1.

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

None.

ITEM 8A(T)  CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation
of our management, including our chief executive officer/chief financial
officer, of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the issuer's management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Based upon
our evaluation, our chief executive officer/chief financial officer concluded
that our disclosure controls and procedures are effective, as of the year ended
December 31, 2007, in ensuring that material information that we are required to
disclose in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms.

                                     - 43 -
<PAGE>

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during
the fourth quarter of the year ended December 31, 2007 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act as a
process designed by, or under the supervision of, a company's principal
executive and principal financial officers and effected by a company's board of
directors, management and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes
those policies and procedures that:

         o  pertain to the maintenance of records that, in reasonable detail,
            accurately and fairly reflect the transactions and dispositions of
            our assets;

         o  provide reasonable assurance that transactions are recorded as
            necessary to permit preparation of financial statements in
            accordance with generally accepted accounting principles, and that
            our receipts and expenditures are being made only in accordance with
            authorizations of our management and directors; and

         o  provide reasonable assurance regarding prevention or timely
            detection of unauthorized acquisition, use or disposition of our
            assets that could have a material effect on the financial
            statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2007. In making this assessment, management used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control --Integrated Framework.

ITEM 8B. OTHER INFORMATION

None.

                                     - 44 -
<PAGE>

                                    PART III

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

The Board of Directors is presently composed of 3 members: Daniel Brandano,
David Shapiro and Jay E. Vahl. Mr. Brandano serves as Chairman of the Board of
Directors.

Set forth below is information regarding our officers and directors as of March
31, 2008:

        NAME          AGE                 POSITION                DIRECTOR SINCE
------------------    ---   -----------------------------------   --------------
Daniel G. Brandano    58    President, Chief Executive Officer,        2006
                            acting Chief Financial Officer and
                            Director

David Shapiro ....    37    Director                                   2007

Jay E. Vahl ......    72    Director                                   2007

Daniel G. Brandano has served as a Director and the Company's President and
Chief Executive Officer since January 13, 2006 and as the Company's acting Chief
Financial Officer since May 2006. From May 2005 until January 2006, he served as
President, Chief Executive Officer, and Chairman of the Board of Directors of
Dynamic Leisure Group North America, Inc. (formerly known as Dynamic Leisure
Group, Inc.). From May 2003, Mr. Brandano has served as the Managing Director of
Street Venture Partners, LLC, a consulting firm designed to identify
opportunities in the travel and technology industry for mergers, acquisitions
and alternative exit strategies. From 1998 through 2002, Mr. Brandano served as
the Chief Executive Officer for Affinity International Travel Systems, Inc.,
based in St. Petersburg, Florida. Mr. Brandano received a B.S. in Business
Administration and Marketing from the University of Massachusetts - Lowell.

David Shapiro has been a Director of the Company since January 8, 2007. Mr.
Shapiro is a member of the Academy of Television Arts and Sciences and since May
2006 has been the Senior Vice President, Business and Legal Affairs for DIC
Entertainment, a publicly traded, global brand management company focused on the
development, distribution and marketing of intellectual properties. From
December 2002 until May 2006, Mr. Shapiro was the head of Corporate Projects and
Initiatives at LRN, the leading provider of technology-enabled ethics and
corporate governance solutions. From September 2000 until December 2002, Mr.
Shapiro was a corporate attorney at Wilson Sonsini Goodrich and Rosati, where he
specialized in venture capital financings and mergers and acquisitions for
public and private technology companies. Earlier, he served as a prosecutor in
the Manhattan District Attorney's Office. Mr. Shapiro graduated with honors from
Harvard Law School and received a Master's degree in Public Policy from the
Eagleton Institute of Politics and a Bachelor of Arts degree in Politics from
Brandeis University, where he graduated Phi Beta Kappa.

On November 5, 2007, the Board appointed Jay E. Vahl to the Company's Board of
Directors. Mr. Vahl is an international business consultant with over 35 years
of international business experience. From July 2004 to the present Mr. Vahl has
been a business consultant assisting company with respect to opportunities in
China. From 2000 to 2005, Mr. Vahl represented Sampo Corporation in establishing
distributorships in Taiwan for Land Rover Motor Cars and Chrysler-Dodge. From
1998 to 2001 he was President of Payless Rent-A-Car System, an international
rental car-franchising firm where he developed a strategic business alliance
with British Car Rental in the U.K. From 1996 to 1998, Mr. Vahl served as a
Director of SunStyle International Holidays, Inc. a leisure tour operator. Mr.
Vahl also represented Huitung, a Chinese entity to acquire the exclusive Land
Rover distributorship in China.

                                     - 45 -
<PAGE>

                             DIRECTORS' COMPENSATION

Directors of the Company do not receive cash compensation for their services as
members of the Board of Directors. From time to time the Company has granted
non-employee directors equity compensation in the form of stock or stock
options.

The following Director Compensation Table summarizes the compensation of our
directors for services rendered to the Company during the year ended December
31, 2007:

                           DIRECTOR COMPENSATION TABLE

                              STOCK AWARDS         OPTION AWARDS          TOTAL
NAME                               ($)                  ($)                ($)
(A)                              (B) (1)              (C) (1)              (D)
---------------------         ------------         -------------        --------
Daniel G. Brandano (2)          $18,000                   --            $ 18,000
Eric H. Winston (3) .           $81,667                   --            $ 81,667
Ben J. Dyer (4)......           $73,333                   --            $ 73,333
David Shapiro (5)....           $17,000              $96,464            $113,464

(1) The amounts in column (b) reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended December 31, 2007, in
accordance with SFAS 123(R) of awards of stock. Assumptions used in the
calculation of this amount are included in Note 9 of our audited financial
statements for the fiscal year ended December 31, 2007, and included in Part II,
Item 7, Financial Statements of this Annual Report on Form 10-KSB.

(2) As of December 31, 2007, the Company granted Daniel Brandano 200,000 shares
of common stock.

(3) Eric H. Winston resigned as a director effective December 20, 2007. The
Company granted former director Eric H. Winston 200,000 shares of common stock
during the year ended December 31, 2006. The shares were subject to a repurchase
right in favor of the Company, which right lapses as to 50,000 shares each
quarter subject to Mr. Winston's service on the Company's Board of Directors.
During 2007, repurchase rights lapsed on 150,000 shares valued at $81,667.
Effective December 31, 2007, Mr. Winston returned 150,000 shares to the Company.
The return of the shares was recorded as a reduction in the number of shares
outstanding and the value in the common stock account and an increase in
additional paid-in capital at the par value of the shares returned.

(4) Ben J. Dyer resigned as a director effective September 19, 2007. The Company
granted former director Ben J. Dyer 200,000 shares of common stock during the
year ended December 31, 2006. The shares were subject to a repurchase right in
favor of the Company, which right lapses as to 50,000 shares each quarter
subject to Mr. Dyer's service on the Company's Board of Directors. During 2007,
repurchase rights lapsed on 150,000 shares value at $81,667. Effective December
31, 2007, Mr. Dyer returned 150,000 shares to the Company. The return of the
shares was recorded as a reduction in the number of shares outstanding and the
value in the common stock account and an increase in additional paid-in capital
at the par value of the shares returned.

(5) David Shapiro was appointed to the Board of Directors on January 8, 2007. As
of December 31, 2007, the Company granted David Shapiro 100,000 shares of common
stock. The Company also granted Mr. Shapiro an option to purchase 200,000 shares
of the Company's common stock at an exercise price of $0.485 per share on
January 8, 2007.

CORPORATE GOVERNANCE MATTERS

Audit Committee. The Board of Directors has not yet established an audit
committee, and the functions of the audit committee are currently performed by
our Chief Financial Officer, with assistance by expert independent accounting
personnel and oversight by the entire board of directors. Given the limited

                                     - 46 -
<PAGE>

scope of our operations to date, the Board of Directors believes that we do not
currently need to have an audit committee. We are not currently subject to any
law, rule or regulation requiring that we establish or maintain an audit
committee. We may establish an audit committee in the future if the Board
determines it to be advisable or we are otherwise required to do so by
applicable law, rule or regulation.

Board of Directors' Independence. Our Board of Directors currently consists of
four members. We are not currently subject to any law, rule or regulation
requiring that all or any portion of our Board of Directors include
"independent" directors.

Audit Committee Financial Expert. The Board of Directors has not yet established
an audit committee and, as a result, we have no "audit committee financial
expert" within the meaning of Item 401(e) of Regulation S-B. In general, an
"audit committee financial expert" is an individual member of the audit
committee who (a) understands generally accepted accounting principles and
financial statements, (b) is able to assess the general application of such
principles in connection with accounting for estimates, accruals and reserves,
(c) has experience preparing, auditing, analyzing or evaluating financial
statements comparable to the breadth and complexity to the Company's financial
statements, (d) understands internal controls over financial reporting and (e)
understands audit committee functions.

CODE OF ETHICS

We adopted a Code of Business Conduct and Ethics on April 12, 2005 applicable to
all of our Officers, Directors and Employees. The Code of Business Conduct and
Ethics is a written standard designed to deter wrongdoing and to promote (a)
honest and ethical conduct, (b) full, fair, accurate, timely and understandable
disclosure in regulatory filings and public statements, (c) compliance with
applicable laws, rules and regulations, (d) the prompt reporting violation of
the code and (e) accountability for adherence to the Code. We are not currently
subject to any law, rule or regulation requiring that we adopt a Code of Ethics.
The Code of Business Conduct and Ethics was filed with the SEC on April 22,
2005. We shall provide a copy, without charge, to any person desiring a copy of
the Code of Ethics, by written request to us at our principal offices.

NOMINATING COMMITTEE

We have not yet established a nominating committee. Our Board of Directors,
sitting as a board, performs the role of a nominating committee. We are not
currently subject to any law, rule or regulation requiring that we establish a
nominating committee.

COMPENSATION COMMITTEE

We have not yet established a compensation committee. Our Board of Directors,
sitting as a board, performs the role of a compensation committee. We are not
currently subject to any law, rule or regulation requiring that we establish a
compensation committee.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires officers and
directors, and persons who own more than ten percent of a registered class of
our equity securities, to file reports of ownership and changes in ownership
with the Commission. Officers, directors and greater than ten percent beneficial
owners are required by Commission regulations to furnish us with copies of all
forms they file pursuant to Section 16(a). Based solely on our review of the
copies of such forms received and written representations from reporting persons
required to file reports under Section 16(a), all of the Section 16(a) filing
requirements applicable to such persons, with respect to fiscal 2006, appear to
have been complied with to the best of our knowledge.

                                     - 47 -
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

The following table sets forth certain information relating to all compensation
of our named executive officers for services rendered in all capacities to the
Company during the fiscal years ended December 31, 2007 and 2006:
<TABLE>
<CAPTION>
                                                    LONG-TERM COMPENSATION AWARDS
                                               ----------------------------------------
                                               RESTRICTED   SECURITIES
                        ANNUAL COMPENSATION      STOCK       UNDERLYING        ALL
     NAME AND           -------------------      AWARDS     OPTIONS/SARs      OTHER
PRINCIPAL POSITION       YEAR   SALARY ($)        ($)           (#)        COMPENSATION
---------------------   ------  -----------    ----------   ------------   ------------
<S>                     <C>     <C>            <C>          <C>            <C>
Daniel G. Brandano,
  President and
  Chief Executive
  Officer ...........    2007     112,674        18,000 (b)          -              -
                         2006     203,365             -              -              -

Nigel Osborne, (a)
  Executive Vice
  President .........    2007     111,898             -              -              -
                         2006     115,153             -              -              -

Steve Hicks,
  Division
  President .........    2007      92,308             -              -              -
                         2006     115,788             -              -              -
</TABLE>
(a) - Nigel Osborne resigned as Executive Vice President and voluntary
terminated his employment with the Company on November 16, 2007.

(b) - On October 16, 2007, the Company's Board of Directors granted 200,000
fully vested shares of the Company's common stock to Dan Brandano, Chairman and
Chief Executive Officer, pursuant to an employment agreement. The common stock
was valued at $18,000 or $0.18 per share (the closing market price of the
Company's common stock on the day of issuance).

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

The following table sets forth information regarding the beneficial ownership of
our common stock as of March 31, 2008 as to (i) each person who is known by us
to own beneficially more than 5% of our outstanding common stock, (ii) each of
the executive officers and other persons named in the Summary Compensation
Table, (iii) each director, and (iv) all directors and executive officers as a
group. Unless otherwise indicated, the address of each listed stockholder is c/o
Dynamic Leisure Corporation, 5680A W. Cypress Street, Tampa, Florida 33607.

The number of shares and the percentage of shares beneficially owned by each
such person or group, as set forth below, include shares of common stock that
such person or group has the right to acquire on or within 60 days after March
31, 2008 pursuant to the exercise of options or warrants. For this purpose as of
March 31, 2008, 19,138,557 shares of our common stock were issued and
outstanding including 2,250,000 shares classified as issuable for accounting
purposes.

                                     - 48 -
<PAGE>

                                                  NUMBER OF          PERCENT OF
                                                   SHARES              SHARES
                                                BENEFICIALLY        BENEFICIALLY
NAME OF BENEFICIAL OWNER                            OWNED               OWNED
------------------------                      -----------------     ------------
NAMED EXECUTIVE OFFICERS AND DIRECTORS:
Daniel G. Brandano ......................       10,117,777(1)           37.6%

David Shapiro ...........................          640,000(2)            3.3%

Jay E. Vahl..............................          200,000               1.0%

Nigel P. Osborne ........................                -                 -

All Executive Officers and Directors as
 a Group (4 persons) ....................       10,957,777              40.4%

5% HOLDERS:
MMA Capital, LLC(3)
456 Montgomery Street, Ste. 2200
San Francisco, CA 94104 .................      117,130,000              87.0%

Diversified Acquisition Trust, LLC(4)
50 Braintree Hill Park, Ste. 108
Braintree, MA ...........................        1,839,506               9.4%

Stephen A. Hicks(5)
300 East 40th Street
New York, NY 10016 ......................        1,666,667               8.3%

Miller Investments, LLC(6)
14835 East Bluff Road
Alpharetta, GA 30004 ....................       11,878,571              42.3%

Raymon Valdes(7)
3080 East Bay Drive
Largo, Florida 33771 ....................        1,110,000               5.8%

AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millenium Capital Partners, II, LLC .          955,014(8)(9)         4.9%

Trafalgar Capital Specialized
Investment Fund,
4, rue Thomas Edison, L-1445
LUXEMBOURG-Strassen. ....................          955,014(10)(11)       4.9%

(1)   Includes (a) 833,333 shares held by Mr. Brandano, (b) 1,066,666 shares of
      common stock held by Street Ventures Partners, LLC, a limited liability
      company in which Mr. Brandano shares equal ownership with his spouse, (c)
      388,889 shares issuable upon exercise of the convertible feature of a note
      held by Street Venture Partners, LLC, (d) 7,000,000 shares issuable upon
      exercise of a fully vested option the Company is contractually obligated
      to issue to Mr. Brandano pursuant to the January 22, 2008 financing with
      Trafalgar and (e) 388,889 shares issuable upon exercise of currently
      exercisable warrants held by Street Venture Partners, LLC. Does not
      include shares issuable upon conversion of accrued interest, which is
      convertible at the option of the holder.

(2)   Includes (a) 340,000 shares held by Mr. Shapiro and (b) 200,000 shares
      subject to options that are currently exercisable.

(3)   Consists of (a) 56,250,000 shares issuable upon exercise of the
      convertible feature of a note, (b) 59,250,000 shares issuable upon
      exercise of outstanding warrants, (c) 1,000,000 shares transferred to MMA

                                     - 49 -
<PAGE>

      Capital from Diversified Acquisition Trust, LLC related to a private
      transaction between the parties pursuant to the recapitalization of the
      Company on January 13, 2006, (d) 100,000 shares from a stock purchase
      agreement on June 29, 2006, (e) 400,000 shares from a stock purchase
      agreement on July 10, 2006, (f) 100,000 shares issued on August 16, 2006,
      pursuant to a Loan Modification and Amendment Agreement and (g) 30,000
      shares issued August 21, 2006, pursuant to a consulting agreement with the
      Company. Does not include shares issuable upon conversion of accrued
      interest, which is convertible at the option of the holder.

(4)   Geoffrey J. Eiten is the sole beneficial owner of Diversified Acquisition
      Trust, LLC. Consists of (a) 1,395,066 shares of common stock, and (b)
      444,440 shares issuable upon exercise of currently exercisable warrants.

(5)   Consists of (a) 700,000 shares of common stock and (b) 966,667 shares
      issuable upon exercise of the convertible feature of a note. Does not
      include shares issuable upon conversion of accrued interest, which is
      convertible at the option of the holder.

(6)   Consists of (a) 2,950,000 shares of common stock (b) 6,250,000 shares
      issuable upon exercise of warrants (c) 2,678,571 shares issuable upon
      exercise of the convertible feature of a note. Does not include shares
      issuable upon conversion of accrued interest, which is convertible at the
      option of the holder.

(7)   Consists of (a) 1,110,000 shares of common stock.

(8)   Consists of (a) 500,000 shares of common stock and (b) 455,014 shares
      issuable upon exercise of currently exercisable warrants. The stockholders
      are affiliates of each other because they are under common control. AJW
      Partners, LLC is a private investment fund that is owned by its investors
      and managed by SMS Group, LLC. SMS Group, LLC, of which Mr. Corey S.
      Ribotsky is the fund manager, has voting and investment control over the
      shares owned by AJW Partners, LLC. AJW Offshore, Ltd., formerly known as
      AJW/New Millennium Offshore, Ltd., is a private investment fund that is
      owned by its investors and managed by First Street Manager II, LLC. First
      Street Manager II, LLC, of which Corey S. Ribotsky is the fund manager,
      has voting and investment control over the shares owned by AJW Offshore,
      Ltd. AJW Qualified Partners, LLC, formerly known as Pegasus Capital
      Partners, LLC, is a private investment fund that is owned by its investors
      and managed by AJW Manager, LLC, of which Corey S. Ribotsky is the fund
      manager, has voting and investment control over the shares owned by AJW
      Qualified Partners, LLC. New Millennium Capital Partners II, LLC, is a
      private investment fund that is owned by its investors and managed by
      First Street Manager II, LLC. First Street Manager II, LLC, of which Corey
      S. Ribotsky is the fund manager, has voting and investment control over
      the shares owned by New Millennium Capital Partners II, LLC.

(9)   The investors have contractually agreed to restrict their ability exercise
      their warrants and receive shares of our common stock such that the number
      of shares of common stock held by them and their affiliates after such
      conversion or exercise does not exceed 4.99% of the then issued and
      outstanding shares of common stock. The investors current hold warrants to
      purchase 5,000,000 shares of the Company's common stock.

(10)  Consists of (a) 414,062 shares of common stock and (b) 540,952 shares
      issuable upon exercise of the convertible feature of notes. Does not
      include shares issuable upon conversion of accrued interest, which is
      convertible at the option of the holder.

(11)  The investors have contractually agreed to restrict their ability to
      convert their convertible promissory notes or exercise their warrants and
      receive shares of our common stock such that the number of shares of
      common stock held by them and their affiliates after such conversion or
      exercise does not exceed 4.99% of the then issued and outstanding shares
      of common stock. The investors currently hold warrants to purchase
      23,000,000 shares of the Company's common stock.

                                     - 50 -
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company entered into a consulting agreement with Innovations
Publishing, LLC, pursuant to which the Company has recognized consulting fee
expense of $5,000 for the year ended December 31, 2007. Mr. Dyer, a former
member of the Company's Board of Directors, owns 75% of Innovations Publishing.

         On November 3, 2006, the Company entered into a consulting agreement
with E. H. Winston & Associates, pursuant to which Mr. Winston, a former
director of the Company, provides the Company with general business consulting
services and advice. The initial term of the consulting agreement was three
months. On February 5, 2007, the parties extended the agreement until June 5,
2007. The Company was to pay E. H. Winston & Associates a consulting fee of
$10,000 per month plus reimbursement of all reasonable out-of-pocket expenses.
The Company has recorded $60,000 in professional fees related to the agreement
during fiscal year 2007.

         On November 17, 2006, the Company entered into another consulting
services agreement with E. H. Winston & Associates pursuant to which Mr. Winston
would identify and introduce the Company to prospective investors and would
assist the Company in preparing introductory materials in connection therewith.
The term of this agreement is six months unless terminated earlier by either
party. The Company may terminate this agreement for any reason on 14 days' prior
written notice. The Company was to pay E. H. Winston & Associates a consulting
fee of $10,000 per month plus reimbursement of all reasonable out-of-pocket
expenses related to this November 17, 2006 agreement. In addition, if the
Company enters into a financial commitment with any prospective investor
introduced by E. H. Winston & Associates, the Company will pay an additional fee
of $8,000 for each $100,000 of financial commitment or part thereof. In
addition, if the Company issues warrants in connection with such financial
commitment, the Company will issue to E. H. Winston & Associates a warrant
exercisable for a number of shares equal to 10% of the warrants issued by the
Company in connection with such financial commitment. The Company has recorded
$50,000 in expenses related to this agreement during fiscal year 2007.

         On October 1, 2007, the Company entered into a month-to-month
consulting agreement with Brian J. Brandano for management services as directed
by the corporate controller for which the Company pays $1,500 per week.

                                     PART IV

ITEM 13. EXHIBITS

2.1      Stock Exchange Agreement dated January 13, 2006 by and between DynEco
         Corporation and the former shareholders of Dynamic Leisure Group, Inc.
         (1)

3.1      Articles of Amendment Designating Series A Preferred Stock (2)

3.2      Certificate of Amendment of Amended Articles of Incorporation, filed
         and effective February 2, 2006 (3)

3.3      Articles of Correction (4)

3.4      Articles of Correction (5)

4.1      Form of Stock Purchase Warrant (6)

10.2     Separation Agreement dated January 13, 2006 by and between DynEco
         Corporation and Dr. Thomas Edwards (7)

10.3     Modification and Waiver Agreement dated January 13, 2006 by and between
         DynEco Corporation and Alpha Capital Aktiengesellschaft, JM Investors,
         LLC, Libra Finance, S.A. and RJ Prager Corporation (8)

                                     - 51 -
<PAGE>

10.4     Exclusive Patent and Know-How License Agreement dated January 12, 2006
         by and between DynEco Corporation and Dr. Thomas Edwards (9)

10.5     Secured Convertible Promissory Note dated January 13, 2006 to MMA
         Capital, LLC (10)

10.6     Security Agreement dated January 13, 2006 with MMA Capital, LLC (11)

10.7     Common Stock Purchase Warrant dated January 13, 2006 to MMA Capital,
         LLC (12)

10.8     Purchase Agreement, dated February 8, 2006 between Dynamic Leisure
         Group, Inc. and Raymon Valdes (13)

10.9     Security Agreement, dated February 8, 2006 between Dynamic Leisure
         Group, Inc and Raymon Valdes (14)

10.10    Purchase Agreement, dated March 6, 2006 between Dynamic Leisure Group,
         Inc. and Stephen A. Hicks (15)

10.11    Consulting Agreement dated January 16, 2006 with MBN Consulting, LLC
         (16)

10.12    Second Modification of Secured Convertible Promissory Note dated
         September 20, 2006 (17)

10.13    Modification to Warrant Purchase Shares of Common Stock dated September
         20, 2006 (18)

10.14    Consulting Agreement between Dynamic Leisure Corporation and IMS-GA LLC
         dated September 20, 2006 (19)

10.15    Employment Agreement between the Company and Nigel Osborne dated
         October 5, 2006 (20)

10.16    Assignment and Assumption Agreement dated October 5, 2006 regarding
         License Agreement (21)

10.17    Assignment and Assumption Agreement dated October 5, 2006 regarding
         TRDA Funding Agreement (22)

10.18    Assignment and Assumption Agreement dated October 5, 2006 regarding
         Edwards Patent Agreement (23)

10.19    Form of Secured Convertible Term Note regarding Secured Convertible
         Note Offering dated November 9, 2006 (24)

10.20    Securities Purchase Agreement (without schedules) regarding Secured
         Convertible Note Offering dated November 9, 2006 (25)

10.21    Security Agreement regarding Secured Convertible Note Offering dated
         November 9, 2006 (26)

10.22    Intellectual Property Security Agreement regarding Secured Convertible
         Note Offering dated November 9, 2006 (27)

10.23    Registration Rights Agreement regarding Secured Convertible Note
         Offering dated November 9, 2006 (28)

10.24    Settlement agreement regarding MMA Capital LLC dated March 5, 2007 (29)

10.25    Form of Stock Purchase Warrant regarding MMA Capital LLC dated March 5,
         2007 (30)

14.1     Code of Ethics (31)

                                     - 52 -
<PAGE>

21.1     Subsidiaries of the Registrant (32)

31.1     Certification of Chief Executive Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

31.2     Certification of Chief Financial Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

32.1     Certification of Chief Executive Officer pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

32.2     Certification of Chief Financial Officer pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

(1)      Incorporated by reference to Exhibit 10.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006

(2)      Incorporated by reference to Exhibit 3.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006.

(3)      Incorporated by reference to Exhibit 3.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on February 3, 2006.

(4)      Incorporated by reference to Exhibit 3.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on March 3, 2006.

(5)      Incorporated by reference to Exhibit 3.2 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on March 3, 2006.

(6)      Incorporated by reference to Exhibit 4.1 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on November 9, 2006

(7)      Incorporated by reference to Exhibit 10.2 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006.

(8)      Incorporated by reference to Exhibit 10.3 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006.

(9)      Incorporated by reference to Exhibit 10.4 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006.

(10)     Incorporated by reference to Exhibit 10.5 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006.

(11)     Incorporated by reference to Exhibit 10.6 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006.

(12)     Incorporated by reference to Exhibit 10.7 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on January 23, 2006.

(13)     Incorporated by reference to Exhibit 10.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on February 10, 2006.

                                     - 53 -
<PAGE>

(14)     Incorporated by reference to Exhibit 10.2 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on February 10, 2006.

(15)     Incorporated by reference to Exhibit 10.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on March 8, 2006.

(16)     Incorporated by reference to Exhibit 10.11 to the Company's Current
         Report on Form 10KSB/A filed with the Securities and Exchange
         Commission on September 5, 2006.

(17)     Incorporated by reference to Exhibit 99.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on September 20, 2006.

(18)     Incorporated by reference to Exhibit 99.2 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on September 20, 2006.

(19)     Incorporated by reference to Exhibit 99.3 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on September 20, 2006.

(20)     Incorporated by reference to Exhibit 99.1 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on October 5, 2006

(21)     Incorporated by reference to Exhibit 99.2 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on October 5, 2006

(22)     Incorporated by reference to Exhibit 99.3 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on October 5, 2006

(23)     Incorporated by reference to Exhibit 99.4 to the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on October 5, 2006

(24)     Incorporated by reference to Exhibit 10.1 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on November 9, 2006

(25)     Incorporated by reference to Exhibit 10.2 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on November 9, 2006

(26)     Incorporated by reference to Exhibit 10.3 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on November 9, 2006

(27)     Incorporated by reference to Exhibit 10.4 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on November 9, 2006

(28)     Incorporated by reference to Exhibit 10.2 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on November 9, 2006

(29)     Incorporated by reference to Exhibit 10.31 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on March 5, 2007

                                     - 54 -
<PAGE>

(30)     Incorporated by reference to Exhibit 10.32 to the Company's Current
         Report on Form 8-K, files with the Securities and Exchange Commission
         on March 5, 2007

(31)     Incorporated by reference to Exhibit 14 to the Company's registration
         statement on Form SB-2, filed with the Securities and Exchange
         Commission on April 22, 2005.

(32)     Incorporated by reference to Exhibit 21 to the Company's Current Report
         on Form 10KSB/A filed with the Securities and Exchange Commission on
         September 5, 2006.

(33)     Incorporated by reference to Exhibit 99.1 to the Company's Current
         Report on Form 8-K/A, filed with the Securities and Exchange Commission
         on March 29, 2006.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Salberg & Company P.A. has served as independent registered public accounting
firm since January 13, 2006 when we became a publicly held Company. Salberg &
Company P.A. was also our independent registered public accounting firm for
periods prior to January 13, 2006 when we were privately held.

(1) AUDIT FEES

Salberg & Company P.A., our independent registered public accounting firm our
fiscal years 2007 and 2006, billed us audit fees in the aggregate amounts of
$158,000 and $176,000, respectively. These fees relate to the audit of our
annual financial statements, audit of acquired companies and the review of our
interim quarterly financial statements.

(2) AUDIT-RELATED FEES

Salberg & Company P.A, our independent registered public accounting firm for our
fiscal years 2007 and 2006, billed us audit-related fees in the aggregate
amounts of $6,700 and $31,000, respectively. These fees relate primarily to the
auditor's review of registration statements and related consents and audit
related consulting.

(3) TAX FEES

No fees of this sort were billed by Salberg & Company P.A., our principal
accountant, during 2007 and 2006.

(4) ALL OTHER FEES

No fees of this sort were billed by Salberg & Company P.A. during 2007 and 2006.

                                     - 55 -
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on April 15, 2008.


                                       Dynamic Leisure Corporation


                                       By: /s/ Daniel G. Brandano
                                           ----------------------
                                           Daniel G. Brandano
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)


         In accordance with the Exchange Act, this Report has been signed below
by the following persons on behalf of the Registrant and in the capacities
indicated, on April 15, 2007.


/s/ Daniel G. Brandano        President and Chief Executive       April 15, 2008
----------------------             Officer and Director
    DANIEL G. BRANDANO


/s/ David Shapiro                        Director                 April 15, 2008
-----------------
    DAVID SHAPIRO


/s/ Jay E. Vahl                          Director                 April 15, 2008
---------------
    JAY E. VAHL

                                     - 56 -
<PAGE>

                              FINANCIAL STATEMENTS

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2007 and 2006

                                                                            Page
                                                                            ----

Report of Independent Registered Public Accounting Firm -
  For the Years Ended December 31, 2007 and 2006 ........................... F-2

Consolidated Balance Sheets - December 31, 2007 and 2006 ................... F-3

Consolidated Statements of Operations - For the Years Ended
  December 31, 2007 and 2006 ............................................... F-4

Consolidated Statements of Changes in Stockholders' Deficit -
  For the Years Ended December 31, 2007 and 2006 ........................... F-5

Consolidated Statements of Cash Flows - For the Years Ended
  December 31, 2007 and 2006 ............................................... F-6

Notes to Consolidated Financial Statements at
  December 31, 2007 and 2006 ............................................... F-7

                                       F-1
<PAGE>

             Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of:
   Dynamic Leisure Corporation

We have audited the accompanying consolidated balance sheets of Dynamic Leisure
Corporation and Subsidiaries as of December 31, 2007, and 2006, and the related
consolidated statements of operations, changes in stockholders' deficit and cash
flows for the years ended December 31, 2007, and 2006. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Dynamic
Leisure Corporation and Subsidiaries as of December 31, 2007, and 2006, and the
consolidated results of its operations, and cash flows for the years ended
December 31, 2007, and 2006, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has a net loss of $5,674,960 and
net cash used in operations of $1,658,698 for the year ended December 31, 2007,
and a working capital deficiency and stockholders deficit of $15,888,284 and
$9,330,508, respectively, at December 31, 2007. In addition, the Company is in
default on convertible promissory notes totaling $1,900,792 at December 31,
2007. These matters raise substantial doubt about its ability to continue as a
going concern. Management's Plan in regards to these matters is also described
in Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


/s/ Salberg & Company, P.A.


SALBERG & COMPANY, P.A.
Boca Raton, Florida
April 11, 2008

                                       F-2
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                     DECEMBER 31,  DECEMBER 31,
                                                        2007           2006
                                                    ------------   ------------
                        ASSETS
Current Assets
  Cash ...........................................  $    198,500   $    203,911
  Investments, restricted ........................        84,997        127,842
  Accounts receivable, net of an
    allowance of $9,984 and $5,551 ...............       135,076        139,321
  Prepaid travel .................................       387,847        515,061
  Other current assets ...........................        54,139         78,190
                                                    ------------   ------------
    Total Current Assets .........................       860,559      1,064,325
                                                    ------------   ------------
Property and equipment, net ......................       922,028      1,076,669
                                                    ------------   ------------
Other Assets
  Goodwill .......................................     2,902,196      2,902,196
  Intangible assets, net .........................     3,565,085      4,307,505
  Deposits .......................................       100,595         99,735
  Debt issue costs, net ..........................       271,112         94,022
                                                    ------------   ------------
    Total Other Assets ...........................     6,838,988      7,403,458
                                                    ------------   ------------
    Total Assets .................................  $  8,621,575   $  9,544,452
                                                    ============   ============
         LIABILITIES AND STOCKHOLDERS DEFICIT

Current Liabilities
  Convertible promissory notes, net of
    discount of $211,022 and $266,471 ............  $  3,939,770   $  2,046,187
  Notes payable, current portion .................       386,588        386,245
  Acquisitions payable ...........................     1,204,857      1,440,000
  Convertible promissory note to related party ...       350,000              -
  Accounts payable ...............................     2,165,901        752,152
  Accounts payable to related parties ............       471,284         65,930
  Accrued compensation ...........................        16,133         74,707
  Accrued interest ...............................       865,728        652,823
  Other accrued liabilities ......................       286,221        294,271
  Capital lease obligation .......................        37,852         34,152
  Deferred revenue and customer deposits .........     1,116,420      1,276,913
  Due to employee ................................       160,000         50,000
  Warrant and option liability ...................     2,475,112      5,419,729
  Embedded conversion option liability ...........     3,272,977        667,076
                                                    ------------   ------------
    Total Current Liabilities ....................    16,748,843     13,160,185
                                                    ------------   ------------
Long-Term Liabilities
  Convertible promissory notes, net of
    current portion, net of discount
    of $1,346,542 and $624,671 ...................     1,163,458      2,225,329
  Convertible promissory note to related party,
    net of current portion .......................             -        350,000
  Notes payable, net of current portion ..........             -            343
  Capital lease obligation, net of current portion        39,782         73,448
                                                    ------------   ------------
    Total Long-Term Liabilities ..................     1,203,240      2,649,120
                                                    ------------   ------------

    Total Liabilities ............................  $ 17,952,083   $ 15,809,305
                                                    ------------   ------------
COMMITMENTS AND CONTINGENCIES (Note 15)

Stockholders' Deficit
  Preferred stock, $0.01 par value,
    20,000,000 shares authorized,
    none issued and outstanding ..................  $          -   $          -
 Common stock, $0.01 par value, 300,000,000
    shares authorized, 15,733,557 and 12,101,195
    issued and outstanding .......................       157,336        121,012
 Common stock issuable, at par value
    (836,957 and 130,000 shares) .................         8,370          1,300
 Additional paid-in capital, net of
    deferred consulting fees of $33,822
    and $51,536 ............................ .....     7,673,448      5,107,537

 Accumulated deficit .............................   (17,169,662)   (11,494,702)
                                                    ------------   ------------
    Total Stockholders' Deficit ..................    (9,330,508)    (6,264,853)
                                                    ------------   ------------

    Total Liabilities and Stockholders' Deficit ..  $  8,621,575   $  9,544,452
                                                    ============   ============

        See accompanying notes to the consolidated financial statements.
                                       F-3
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                      FOR THE        FOR THE
                                                     YEAR ENDED     YEAR ENDED
                                                    DECEMBER 31,   DECEMBER 31,
                                                        2007           2006
                                                    ------------   ------------

Total revenues ...................................  $  8,101,205   $  5,817,252

Cost of revenues .................................     6,648,977      4,336,889
                                                    ------------   ------------

  Gross Profit ...................................     1,452,228      1,480,363

Operating Expenses
  Employee Compensation ..........................     2,085,622      1,362,290
  Financial consulting, includes $409,266 and
    $694,776 stock-based compensation for 2007
    and 2006, respectively .......................       633,167        798,042
  Legal expense, includes $0 and $524,000 stock-
    based compensation for 2007 and 2006,
    respectively .................................       194,578        719,951
  Depreciation and amortization expense,
    includes $4,838 and $0 deferred debt issue
    cost amortization for 2007 and 2006,
    respectively .................................     1,036,922        704,726
  Internal accounting and external auditing
    expense ......................................       345,885        613,588
  Director fees, includes $280,348 and $496,000
    stock-based compensation for 2007 and 2006,
    respectively .................................       336,464        496,000
  Investor relations, includes $436,428 and
    $314,200 stock-based compensation for 2007
    and 2006, respectively .......................       530,957        314,200
  Other general and administrative expenses ......     1,618,436      2,032,192
                                                    ------------   ------------

    Total Operating Expenses .....................     6,782,031      7,040,989
                                                    ------------   ------------

    Loss from Operations .........................    (5,329,803)    (5,560,626)

Other Income (Expense)
  Interest income ................................         5,348         19,494
  Interest expense ...............................    (3,597,946)    (5,034,861)
  Gain on disposal of assets, net ................             -        192,471
  Loss on extinguishment of debt .................       (76,635)      (208,452)
  Warrant and option valuation income ............     5,329,977        249,662
  Embedded conversion option valuation expense ...    (2,005,901)      (667,076)
                                                    ------------   ------------

    Total Other Income (Expense), net ............      (345,157)    (5,448,762)
                                                    ------------   ------------

    Net Loss .....................................  $ (5,674,960)  $(11,009,388)
                                                    ============   ============

Net Loss Per Share - Basic and Diluted ...........  $      (0.39)  $      (1.08)
                                                    ============   ============

Weighted average number of shares outstanding
  during the year - basic and diluted ............    14,489,727     10,154,497
                                                    ============   ============

         See accompanying notes to the consolidated financial statements
                                       F-4
<PAGE>
<TABLE>
                                        DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                                      For the Years Ended December 31, 2007 and 2006

<CAPTION>
                                                                   Common
                                                                   Stock        Additional
                                               Common Stock     Subscription     Paid In      Accumulated      Total
                          Common Stock           Issuable        Receivable      Capital        Deficit     Stockholders'
                     ---------------------   ----------------   ------------   -----------   ------------      Equity
                       Shares      Amount    Shares    Amount      Amount         Amount        Amount       (Deficit)
                     ----------   --------   -------   ------   ------------   -----------   ------------   -------------
<S>                  <C>          <C>        <C>       <C>      <C>            <C>           <C>            <C>
BALANCE AT
  DECEMBER 31, 2005   6,566,667   $ 65,666   $     -   $    -   $       (537)  $   (57,629)  $   (485,314)  $    (477,814)

Deemed issuance
  for prior
  shareholders of
  DynEco ..........   1,157,951     11,580         -        -              -      (944,862)             -        (933,282)

Common stock
  issued in
  acquisitions ....   1,040,000     10,400         -        -              -     2,673,580              -       2,683,980

Common stock
  issued in note
  payable
  modification and
  waiver agreement      300,000      3,000         -        -              -       302,018              -         305,018

Common stock
  issued for cash .     855,000      8,550    50,000      500            537       837,150              -         846,737

Common stock
  issued in warrant
  exercise ........     199,932      1,999         -        -              -       134,400              -         136,399

Common stock
  issued in
  conversion of
  notes payable ...     901,645      9,017         -        -              -       803,834              -         812,851

Common stock
  issued for
  services ........   1,080,000     10,800    80,000      800              -     1,051,400              -       1,063,000

Value of options
  issued for
  services ........           -          -         -        -              -       655,000              -         655,000

Value of warrants
  issued to
  consultants .....           -          -         -        -              -       185,976              -         185,976

Beneficial
  conversion
  feature .........           -          -         -        -              -     2,032,323              -       2,032,323

Reclassification of
  warrant liability
  due to debt
  extinguishment ..           -          -         -        -              -       240,592              -        240,592

Reclassification
  of financial
  instruments to
  liabilities .....           -          -         -        -              -    (2,806,245)             -      (2,806,245)

Net Loss (2006)....           -          -         -        -              -             -    (11,009,388)    (11,009,388)
                     ----------   --------   -------   ------   ------------   -----------   ------------    ------------
BALANCE AT
  DECEMBER 31, 2006  12,101,195   $121,012   130,000   $1,300   $          -   $ 5,107,537   $(11,494,702)   $ (6,264,853)
                     ----------   --------   -------   ------   ------------   -----------   ------------    ------------
                                                         (continued)
                                                            F-5A
</TABLE>
<PAGE>
<TABLE>
                                        DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                                      For the Years Ended December 31, 2007 and 2006
                                                       (continued)
<CAPTION>
                                                                   Common
                                                                   Stock        Additional
                                               Common Stock     Subscription     Paid In      Accumulated      Total
                          Common Stock           Issuable        Receivable      Capital        Deficit     Stockholders'
                     ---------------------   ----------------   ------------   -----------   ------------      Equity
                       Shares      Amount    Shares    Amount      Amount         Amount        Amount       (Deficit)
                     ----------   --------   -------   ------   ------------   -----------   ------------   -------------
<S>                  <C>          <C>        <C>       <C>      <C>            <C>           <C>            <C>
Common stock
  issued in
  conversion of
  promissory
  notes ...........   1,129,062     11,291         -        -              -     1,172,073              -       1,183,364

Common stock
  issued in warrant
  exercise ........      33,300        333         -        -              -        22,167              -          22,500

Common stock
  issued for
  services ........   1,470,000     14,700   (80,000)    (800)             -     1,066,478              -       1,080,378

Common stock
  issued in
  notes payable
  waiver agreement      950,000      9,500         -        -              -       204,000              -         213,500

Common stock
  issued for
  cash ............      50,000        500   (50,000)    (500)             -             -              -               -

Common stock
  issuable
  related to
  anti-dilution
  provisions ......           -          -   836,957    8,370              -        (8,370)             -               -

Value of options
  issued for
  services ........           -          -         -        -              -        24,116              -          24,116

Reclassification
  from warrant
  and option
  liability .......           -          -         -        -              -        85,447              -          85,447

Net Loss (2007)               -          -         -        -              -             -     (5,674,960)     (5,674,960)
                     ----------   --------   -------   ------   ------------    ----------    -----------    ------------
BALANCE AT
  DECEMBER 30, 2007  15,733,557   $157,336   836,957   $8,370   $          -    $7,673,448   $(17,169,662)   $ (9,330,508)
                     ==========   ========   =======   ======   ============    ==========   ============    ============

                              See accompanying notes to the consolidated financial statements
                                                            F-5B
</TABLE>
<PAGE>
<TABLE>
                         DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                                  FOR THE         FOR THE
                                                                 YEAR ENDED      YEAR ENDED
                                                                DECEMBER 31,    DECEMBER 31,
                                                                    2007            2006
                                                                -----------     ------------
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) ........................................    $(5,674,960)    $(11,009,388)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
      Change in accounts receivable allowance ..............          4,433            5,551
      Depreciation .........................................        154,640           51,966
      Amortization of intangible assets ....................        742,420          444,408
      Amortization of debt issue costs .....................        139,862          208,351
      Loss on extinguishment of debt .......................              -          208,452
      Amortization of debt discount to interest expense ....      2,400,700        4,358,733
      Common stock and warrants for services ...............      1,181,680        1,903,976
      Common stock for debt waiver .........................        140,000                -
      Embedded conversion option valuation expense .........      2,005,901          667,076
      Warrant and option valuation income ..................     (5,329,978)        (249,662)
      Loss (gain) on disposal of assets ....................              -         (192,471)
    (Increase) decrease in assets and liabilities:
      Accounts receivable ..................................        (   188)         318,106
      Prepaid assets .......................................        127,214        (275,933)
      Other assets .........................................         23,191          (73,508)
      Accounts payable .....................................      1,819,103          250,747
      Accrued expenses .....................................        767,780          719,113
      Deferred revenue and customer deposits................       (160,493)         (56,168)
                                                                -----------     ------------
      Net Cash Used In Operating Activities ................     (1,658,698)      (2,720,651)
                                                                -----------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Change in investments ....................................         42,845           25,348
  Acquisition of property and equipment ....................              -         (325,937)
  Acquisition of business ..................................              -          (41,077)
                                                                -----------     ------------
      Net Cash Provided By (Used In) Investing Activities ..         42,845         (341,666)
                                                                -----------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from convertible promissory notes ...............      2,060,000        2,910,000
  Repayment of convertible promissory notes ................              -         (345,158)
  Proceeds from line of credit .............................              -           10,000
  Repayments of notes payable ..............................       (235,143)               -
  Proceeds from employee advances ..........................        110,000                -
  Debt issue costs .........................................       (316,952)        (302,373)
  Repayment of capital leases ..............................        (29,966)          (8,940)
  Proceeds from common stock issuance ......................         22,500          983,136
                                                                -----------     ------------
      Net Cash Provided By Financing Activities ............      1,610,439        3,246,665
                                                                -----------     ------------
Net Increase (Decrease) in Cash ............................         (5,411)         184,348

Cash at Beginning of Year ..................................        203,911           19,563
                                                                -----------     ------------
Cash at End of Year ........................................    $   198,500     $    203,911
                                                                ===========     ============
Supplemental disclosure of cash flow information:

  Cash paid during the period for income taxes .............    $         -     $          -
                                                                ===========     ============
  Cash paid during the period for interest .................    $   340,016     $     91,943
                                                                ===========     ============
                                         (continued)
                                             F-6A
</TABLE>
<PAGE>
<TABLE>
                         DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (continued)
<CAPTION>
                                                                  FOR THE         FOR THE
                                                                 YEAR ENDED      YEAR ENDED
                                                                DECEMBER 31,    DECEMBER 31,
                                                                    2007            2006
                                                                -----------     ------------
<S>                                                             <C>             <C>
Supplemental Disclosure of non-cash investing and
 financing activities:

  Debt and stock issue in acquisitions .....................    $         -     $  6,173,980
                                                                ===========     ============
  Assets received on capital lease .........................    $         -     $    116,540
                                                                ===========     ============
  Discount on promissory notes .............................    $ 2,993,622     $  2,630,202
                                                                ===========     ============
  Conversion option liability related to promissory note ...    $   600,000     $  1,954,950
                                                                ===========     ============
  Reclassification of FV of warrants and options from equity    $    85,447     $          -
                                                                ===========     ============
  Promissory notes converted to common stock ...............    $   830,000     $    812,851
                                                                ===========     ============
  Accrued interest converted to promissory note principal ..    $   268,134     $          -
                                                                ===========     ============
  Purchase of GSA agreement and deposits for notes payable .    $         -     $    350,000
                                                                ===========     ============

               See accompanying notes to the consolidated financial statements.
                                             F-6B
</TABLE>
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 1   NATURE OF OPERATIONS

Nature of Business

         The Company is engaged in the business of marketing, selling and
distributing vacation packages that include cruises, domestic and international
airline tickets, car rental services and accommodation products and services on
a wholesale basis to travel agencies and other travel resellers and on a retail
basis directly to consumers. The Company also sells certain stand-alone travel
products on an agency basis. For the years ended December 31, 2007 and 2006,
substantially all of the Company's travel products were for destinations in the
Caribbean and Mexico.

NOTE 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

         All share and per share data in the accompanying consolidated financial
statements have been adjusted retroactively for the effect of a recapitalization
transaction between Dynamic Leisure Corporation ("Dynamic," "we," "us," "our" or
"the Company") (formerly, DynEco Corporation), and Dynamic Leisure Group, Inc.
("DLG") in January 2006 and a subsequent one-for-thirty reverse stock split (see
Note 12).

         In 2005, DLG was a development-stage company, with its focus on
establishing a corporate structure, researching and identifying companies and
businesses to acquire and obtaining financing to consummate such acquisitions.
During February and March 2006, the Company acquired operating companies with
revenue and is no longer a development-stage company.

Principles of Consolidation

         The consolidated financial statements include the accounts of Dynamic
and its subsidiaries. All significant intercompany balances and transactions
have been eliminated in consolidation.

Reclassifications

         Certain amounts in the 2006 financial statements have been reclassified
to conform with the 2007 presentation.

Use of Estimates

         Our consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States ("GAAP"). These
accounting principles require us to make certain estimates, judgments and
assumptions. We believe that the estimates, judgments and assumptions upon which
we rely are reasonable based upon information available to us at the time that
these estimates, judgments and assumptions are made.

         These estimates, judgments and assumptions can affect the reported
amounts of assets and liabilities as of the date of our consolidated financial
statements as well as the reported amounts of revenues and expenses during the
periods presented. Our consolidated financial statements would be affected to
the extent there are material differences between these estimates and actual
results. In many cases, the accounting treatment of a particular transaction is
specifically dictated by GAAP and does not require management's judgment in its
application. There are also areas in which management's judgment in selecting
any available alternative would not produce a materially different result.
Significant estimates in 2007 and 2006 include the valuation of accounts
receivable, valuation of goodwill, valuation and amortization of intangible
assets, valuation of stock based transactions, valuation of derivatives,

                                      F-7
<PAGE>

valuation of beneficial conversion features on convertible debt, estimates of
allowances for customer refunds and the estimate of the valuation allowance on
deferred tax assets.

Cash and Cash Equivalents

         For the purpose of the cash flow statement, the Company considers all
highly liquid investments with original maturities of three months or less at
the time of purchase to be cash equivalents. In addition, receivables from
merchant banks for credit card transactions are included as cash equivalents as
they are considered deposits in transit. Credit card receivables included in
cash and cash equivalents at December 31, 2007, and December 31, 2006 were
$6,830 and $20,769, respectively. The Company places its cash with a financial
institution and, at times, such deposits may be in excess of the FDIC insurance
limit. At December 31, 2007, the Company had one such amount that was in excess
of such limits by $112,872; however, the Company has not experienced any losses
on such accounts to date.

Accounts Receivable

         Accounts Receivable result from either the sale of travel products or
agreements with various hotels, including co-op advertising support. The Company
evaluates the collectibility of accounts receivable while working with its
individual customers and vendors. A majority of the accounts receivable for
travel products are collected prior to travel departure.

Prepaid Travel

         The Company is required to pay for certain travel (mainly airlines and
hotels) in advance. Payments made to these vendors in advance are recorded as an
asset in the prepaid travel account. The Company recognizes the expense when the
associated revenue is recognized.

Property and Equipment

         Property and equipment is stated at cost. Depreciation is computed
using the straight-line method and is expensed based upon the estimated useful
lives of the assets which ranges from three to seven years. Expenditures for
additions and improvements are capitalized, while repairs and maintenance are
expensed as incurred.

Goodwill and Other Intangibles

         The Company accounts for goodwill in a purchase business combination as
the excess of the cost over the fair value of net assets acquired. Business
combinations can also result in other intangible assets being recognized.
Amortization of intangible assets, if applicable, occurs over their estimated
useful lives. Statement of Financial Accounting Standard No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142") requires testing goodwill for impairment
on an annual basis (or interim basis if an event occurs that might reduce the
fair value of a reporting unit below its carrying value). The Company conducts
the annual review during the fourth quarter of the calendar year. The Company
conducted its review as of December 31, 2007. For purposes of the review, the
Company is considered one reporting unit as defined in SFAS 142. The fair value
of the Company's equity was determined by multiplying the market price of the
Company's common stock by the number of shares outstanding at December 31, 2007.
The fair value of the Company's outstanding common stock exceeded the carrying
value of the Company's assets net of liabilities; therefore, no impairment was
recognized during the year ended December 31, 2007.

Impairment of Other Long-Lived Assets

         The Company reviews other long-lived assets and certain identifiable
assets related to those assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying amounts may
not be recoverable. If the undiscounted future cash flows of the long-lived

                                      F-8
<PAGE>

assets are less than their carrying amounts, their carrying amounts are reduced
to fair value and an impairment loss is recognized. No impairment was recognized
during the year ended December 31, 2007.

Letters of Credit and Restricted Investments and Surety Bond

         At December 31, 2007 and 2006, the Company had two outstanding letters
of credit totaling approximately $97,400 and $112,000, respectively, payable to
the Airlines Reporting Corporation (ARC), which allows the Company to purchase
airline tickets through ARC's computerized ticket system. The terms of the
letter of credit agreements require the Company to maintain certificates of
deposit with the issuer of the letters of credit in the amount of the letters of
credit. These certificates of deposit are reflected as short-term investments,
restricted, on the accompanying balance sheet. Short-term investments at
December 31, 2007, also includes $10,000 restricted to cover a letter of credit
for a seller of travel license.

         At December 31, 2006, the Company had outstanding a surety bond for
approximately $75,000 in favor of ARC, which allows the Company to purchase
airline tickets through the ARC's computerized ticket system. The terms of the
surety bond agreement require the Company to maintain a collateral deposit of
$22,500 with the ARC. The deposit is included in Other Assets - Deposits on the
accompanying consolidated balance sheet. The Company also maintains a restricted
investment at December 31, 2006, of $127,842 related to its ARC agreement.

Deferred Revenue And Customer Deposits

         Deferred revenue and customer deposits primarily represents money
received from customers as either a deposit on, or full payment for, trips not
yet traveled or services not yet earned.

Revenue Recognition

         The Company follows the criteria for the United States Securities and
Exchange Commission Staff Accounting Bulletin 104 and EITF 99-19 "Reporting
Revenue Gross as a Principal versus Net as an Agent" for revenue recognition.
The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery of product has occurred, the sales price is fixed or
determinable, and collectibility is reasonably assured.

         The Company records merchant sales transactions at the gross purchase
price generally on the date of travel. The Company considers a transaction to be
a "merchant sales transaction" where the Company is the primary obligor to the
customer and the Company acts as the merchant of record in the package
transaction, which consists of several products from different vendors. In these
transactions the Company also controls selling prices, and is solely responsible
for making payments to vendors. The Company records transactions at the net
purchase price where the Company is not the merchant of record or the product is
not sold as a package. The Company records revenue and related costs of products
when travel occurs or, for certain products, when the service is completed. It
is the Company's policy to be paid by the customer in advance, with monies
received in advance of travel recorded as a deferred revenue liability. The
Company may receive cash or hotel room credits in exchange for providing
cooperative advertising for its vendors. The Company records accounts receivable
for these amounts and offsets the applicable advertising expense. Once the
advertising expense is reduced to zero, any excess cooperative advertising fees
are recorded as revenue.

Advertising Costs

         The Company expenses advertising costs as incurred. During the year
ended December 31, 2007 and 2006, the Company's advertising expense totaled
$31,419 and $36,917, respectively.

                                      F-9
<PAGE>

Capitalized Software Costs

         Costs associated with acquiring Tourscape, the Company's proprietary
software for use in the wholesale travel industry, and certain third party
database software (completed software) and costs of implementing this software
was capitalized as internal use software pursuant to Statement of Position 98-1
"Accounting for Costs of Computer Software Developed or Obtained for Internal
Use" (SOP 98-1). Capitalized software costs are amortized commencing when the
system is placed in service and continues over the estimated life of the related
product using the straight-line method. The Company evaluates its software
assets for impairment whenever events or change in circumstances indicate that
the carrying amount of such assets may not be recoverable. Recoverability of
software assets to be held and used is measured by a comparison of the carrying
amount of the asset to the future net undiscounted cash flows expected to be
generated by the asset. If such software assets are considered to be impaired,
the impairment to be recognized is the excess of the carrying amount over the
fair value of the software asset.

Accounting for Derivatives

         The Company evaluates its convertible debt, options, warrants or other
contracts to determine if those contracts or embedded components of those
contracts qualify as derivatives to be separately accounted for under Statement
of Financial Accounting Standards 133 "Accounting for Derivative Instruments and
Hedging Activities" and related interpretations including EITF 00-19 "Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock".

         The result of this accounting treatment is that the fair value of the
embedded derivative is marked-to-market each balance sheet date and recorded as
a liability. If the fair value is recorded as a liability, the change in fair
value is recorded in the consolidated statement of operations as other income or
expense. Upon conversion or exercise of a derivative instrument, the instrument
is marked to fair value at the conversion date and its fair value is
reclassified to equity. Equity instruments that are initially classified as
equity that become subject to reclassification under SFAS 133 are reclassified
to liability at the fair value of the instrument on the reclassification date.

Stock-Based Compensation

         On January 1, 2006, the Company implemented Statement of Financial
Accounting Standard 123 (revised 2004) ("SFAS 123(R)"), "Share-Based Payment"
which replaced SFAS 123 "Accounting for Stock-Based Compensation" and superseded
APB Opinion No. 25 "Accounting for Stock Issued to Employees." SFAS 123(R)
requires the fair value of all stock-based employee compensation awarded to
employees to be recorded as an expense over the related vesting period. The
statement also requires the recognition of compensation expense for the fair
value of any unvested stock option awards outstanding at the date of adoption.
The Company had no unvested stock option awards on January 1, 2006. In adopting
SFAS 123(R), the Company used the modified prospective application ("MPA"). MPA
requires us to account for all new stock compensation to employees using fair
value. There was no cumulative effect of applying SFAS 123(R) at January 1,
2006.

Concentration of Credit Risk and Other Concentrations

         Nearly all of the Company's travel products sold year-to-date in 2007
and in 2006 were for destinations in the Caribbean and Mexico. This
concentration potentially exposes us to both political and weather risks of this
region.

         The Company has a diverse US customer base, including consumers
purchasing products through travel agencies and purchasing directly via the
Internet.

         The Company has very little credit risk since the vast majority of its
travel products are paid for in advance.

                                      F-10
<PAGE>

         The Company has negotiated contracts with airlines that allow the
Company to price certain products more favorably than its competitors. The loss
of such contracts could have a negative effect on the Company.

Income Taxes

         The Company accounts for income taxes under the Financial Accounting
Standards No. 109 "Accounting for Income Taxes" ("Statement 109"). Under
Statement 109, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period, which includes the enactment date.

Basic and Diluted Net Income (Loss) Per Share

         Basic net income (loss) per common share (Basic EPS) excludes dilution
and is computed by dividing net income (loss) by the weighted average number of
common shares outstanding during the period. Diluted net income per share
(Diluted EPS) reflects the potential dilution that could occur if stock options
or other contracts to issue common stock, such as convertible notes, were
exercised or converted into common stock. At December 31, 2007, there were
outstanding warrants, options, third-party debt and related-party debt
convertible into 39,485,775, 1,149,762, 60,091,756 and 388,889 common shares,
respectively, which may dilute future earnings per share. There is no
calculation of fully diluted earnings per share for the period ending December
31, 2007 and 2006, due to the Company reporting a net loss and the exercise or
conversion of common stock equivalents would have been anti-dilutive.

Fair Value of Financial Instruments

         Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments," requires disclosures of information about
the fair value of certain financial instruments for which it is practicable to
estimate the value. For purpose of this disclosure, the fair value of a
financial instrument is the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced sale or
liquidation.

         The Company's financial instruments include cash, accounts receivable,
accounts payable, accrued liabilities, notes payable and capital leases. The
fair values of cash, accounts receivable, accounts payable and accrued
liabilities approximated carrying values due to the short-term nature of these
instruments. Fair values for notes payable and capital leases are not readily
available, but the carrying values are believed to approximate fair value.

Recent Accounting Pronouncements

         Staff Accounting Bulletin No. 108, "Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements" ("SAB 108"): In September 2006, the Securities and Exchange
Commission issued SAB 108 which provides guidance on consideration of the
effects of prior year misstatements in quantifying current year misstatements
for the purpose of a materiality assessment. SAB 108 was effective for fiscal
years ending after November 15, 2006. The adoption of SAB 108 did not have an
impact on our consolidated financial statements.

         FASB Statement No. 141(R),"Business Combinations" ("SFAS 141(R)"): In
December 2007, the FASB issued No. 141R which will change the accounting for and
reporting of business combination transactions. The most significant changes in
the accounting for business combinations under SFAS 141(R) include: (1)
valuation of any acquirer shares issued as purchase consideration will be
measured at fair value as of the acquisition date; (2) contingent purchase

                                      F-11
<PAGE>

consideration, if any, will generally be measured and recorded at the
acquisition date, at fair value, with any subsequent change in fair value
reflected in earnings rather than through an adjustment to the purchase price
allocation; (3) acquired in-process research and development costs, which have
historically been expensed immediately upon acquisition, will now be capitalized
at their acquisition date fair values, measured for impairment over the
remaining development period and, upon completion of a successful development
project, amortized to expense over the asset's estimated useful life; (4)
acquisition related costs will be expensed as incurred rather than capitalized
as part of the purchase price allocation; and (5) acquisition related
restructuring cost accruals will be reflected within the acquisition accounting
only if certain specific criteria are met as of the acquisition date; the prior
accounting convention, which permitted an acquirer to record restructuring
accruals within the purchase price allocation as long as certain, broad criteria
had been met, generally around formulating, finalizing and communicating certain
exit activities, will no longer be permitted. SFAS 141(R) is effective for
reporting periods beginning on or after December 15, 2008. Earlier adoption is
not permitted. The Company anticipates that adoption of this pronouncement will
significantly impact how the Company accounts for business combination
transactions consummated after the effective date, in the various areas outlined
above.

         FASB Statement No. 156, "Accounting for Servicing of Financial Assets
-- an amendment of FASB Statement No. 140" ("FASB Statement No. 156"): In March
2006, the FASB issued Statement No. 156 which amends FASB Statement No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," with respect to the accounting for separately recognized
servicing assets and servicing liabilities. FASB Statement No. 156 was effective
for years beginning after September 15, 2006. The Company does not believe FASB
Statement No. 156 will have a material effect on the Company's financial
statements.

         FASB Statement No. 157, "Fair Value Measurements" ("FASB Statement No.
157"): In September 2006, the FASB issued FASB Statement No. 157 which defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. FASB Statement No. 157 applies under other accounting
pronouncements that require or permit fair value measurements, the FASB having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements.

         SFAS No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("SFAS 159"): In February 2007, the FASB issued SFAS 159 which
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at fair
value. SFAS 159 will be effective for us on January 1, 2008. We are currently
evaluating the impact of adopting SFAS 159 on our financial position, cash
flows, and results of operations.

         SFAS No. 160, "Non-Controlling Interests in Consolidated Financial
Statements" ("SFAS 160"): In December 2007, the FASB issued SFAS No. 160, this
Statement amends Accounting Research Bulletin No. 51, "Consolidated Financial
Statements" to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS 160 is required to be adopted simultaneously with SFAS 141(R)
and is effective for reporting periods on or after December 15, 2008. An earlier
adoption is not permitted. Currently, the Company does not have any
non-controlling interest in our subsidiary and accordingly, the adoption of SFAS
160 is not expected to have a material impact on our consolidated financial
position, cash flows or results of operations.

         FASB Staff Position EITF 00-19-2, "Accounting for Registration Payment
Arrangements" ("FSP EITF 00-19-2"): In December 2006, the FASB issued FSP EITF
00-19-2 which specifies that the contingent obligation to make future payments
or otherwise transfer consideration under a registration payment arrangement,

                                      F-12
<PAGE>

whether issued as a separate agreement or included as a provision of a financial
instrument or other agreement, should be separately recognized and measured in
accordance with FASB Statement No. 5, "Accounting for Contingencies." A
registration payment arrangement is defined in FSP EITF 00-19-2 as an
arrangement with both of the following characteristics: (1) the arrangement
specifies that the issuer will endeavor (a) to file a registration statement for
the resale of specified financial instruments and/or for the resale of equity
shares that are issuable upon exercise or conversion of specified financial
instruments and for that registration statement to be declared effective by the
US SEC within a specified grace period, and/or (b) to maintain the effectiveness
of the registration statement for a specified period of time (or in perpetuity);
and (2) the arrangement requires the issuer to transfer consideration to the
counterparty if the registration statement for the resale of the financial
instrument or instruments subject to the arrangement is not declared effective
or if effectiveness of the registration statement is not maintained. FSP EITF
00-19-2 was effective for registration payment arrangements and the financial
instruments subject to those arrangements that are entered into or modified
subsequent to December 21, 2006. For registration payment arrangements and
financial instruments subject to those arrangements that were entered into prior
to the issuance of FSP EITF 00-19-2, this guidance is effective for financial
statements issued for fiscal years beginning after December 15, 2006, and
interim periods within those fiscal years. We do not expect the adoption of FSP
EITF 00-19-2 to have a material impact on our consolidated financial statements.

In June 2007, the FASB ratified EITF Issue No. 07-03, "Accounting for
Nonrefundable Advance Payments for Goods and Services Received for Use in Future
Research and Development Activities." EITF 07-03 requires companies to defer
nonrefundable advance payments for goods and services and to expense such
advance payments as the goods are delivered or services are rendered. If the
Company does not expect to have the goods delivered or services performed, the
advance should be expensed. EITF 07-03 is effective for fiscal years beginning
after December 15, 2007. We do not expect the adoption of EITF Issue No. 07-03
to have a material impact on our consolidated financial statements.

NOTE 3   GOING CONCERN

         For the year ended December 31, 2007, the Company had a net loss of
$5,674,960, used net cash in operations of $1,658,698 and had a working capital
deficiency of $15,888,284, and a stockholders' deficiency of $9,330,508 at
December 31, 2007. In addition, the Company was in default on convertible
promissory notes totaling $4,150,792 and unsecured promissory notes of $156,434
as of March 31, 2008 ($1,900,792 at December 31, 2007). These matters raise
substantial doubt about our ability to continue as a going concern. Because the
Company has not yet achieved or acquired sufficient operating capital and given
these financial results along with the Company's expected cash requirements in
2008, additional capital investment will be necessary to develop and sustain the
Company's operations.

         As of December 31, 2007, the Company had $6,660,792 in outstanding
Convertible Notes payable to third parties (see Note 6) including the notes in
default as described above, which are convertible into 60,091,756 shares of the
Company's common stock. While the Company expects substantially all of these
note holders to convert the Notes into shares of the Company's common stock,
there is no guarantee that this will occur. As of December 31, 2007, the Company
did not have adequate working capital to meet these obligations with cash
payments.

         Management believes that its plans to raise additional capital will
allow for adequate funding of the Company's cash requirements through December
31, 2008, although there is no assurance regarding this belief or that the
Company will be successful in these efforts. The consolidated financial
statements do not contain any adjustments, which might be necessary if the
Company is unable to continue as a going concern. Subsequent to December 31,
2007, the Company received gross proceeds from the issuance of a $1,000,000
convertible promissory note.

                                      F-13
<PAGE>

NOTE 4   PROPERTY AND EQUIPMENT

         Property and equipment consisted of the following:

                                      Estimated
                                     Useful Life    December 31,    December 31,
                                      in Years          2007            2006
                                     -----------    ------------    ------------
Office furniture and equipment ..        3-5        $   165,770     $   165,770
Software ........................        5-7            957,850          37,753
Software in development .........                             -         920,097
                                                    -----------     -----------
Total property and equipment ....                   $ 1,123,620     $ 1,123,620
Less accumulated depreciation ...                      (201,592)        (46,951)
                                                    -----------     -----------
Property and equipment, net .....                   $   922,028     $ 1,076,669
                                                    ===========     ===========

         Depreciation expense was $154,640 and $51,966 for the years ended
December 31, 2007 and 2006, respectively.

         During 2006, the Company entered into $116,540 of capital lease
commitments for computer and telephone equipment.

         Software in Development at December 31, 2006, consists of the purchase
of worldwide rights and source code to TourScape, proprietary software for use
in the wholesale travel industry, for $500,000 and the purchase of third party
database software and related implementation costs of $420,097. The software was
fully operational upon purchase and accordingly is capitalizable as internal use
software pursuant to Statement of Position 98-1 "Accounting for Costs of
Computer Software Developed or Obtained for Internal Use" (SOP 98-1). The
Company completed its implementation of the software and placed it in service on
March 31, 2007, and reclassified the $920,097 in the above table into the
"software" category. The Company amortizes this software over seven years.

         If the Company determines at a future date to sell or license the
software, proceeds received from the license of the software, net of direct
incremental costs of marketing, will be applied against the carrying value of
the software in accordance with SOP 98-1.

NOTE 5   INTANGIBLE ASSETS

         Intangible assets at December 31, 2006, are as follows:

                                                       Accumulated     Net Book
                                 Life        Cost      Amortization     Value
----------------------------   --------   ----------  -------------   ----------
Airline contracts ..........     7 yrs.   $2,820,000    $ 233,797     $2,586,203
Hotel contracts ............     7 yrs.      422,500       16,628        405,872
URLs .......................    10 yrs.    1,011,000       55,789        955,211
Mailing list ...............     3 yrs.      150,000        4,018        145,982
General service agreement ..   2.5 yrs.      348,413      134,176        214,237
                                           ---------    ---------     ----------
                                          $4,751,913    $ 444,408     $4,307,505
                                          ==========    =========     ==========

                                      F-14
<PAGE>

         Intangible assets at December 31, 2007, are as follows:

                                                       Accumulated     Net Book
                                 Life        Cost      Amortization      Value
----------------------------   --------   ----------   ------------   ----------
Airline contracts ..........     7 yrs.   $2,820,000    $  653,185    $2,166,815
Hotel contracts ............     7 yrs.      422,500        83,140       339,360
URLs .......................    10 yrs.    1,011,000       160,949       850,051
Mailing list ...............     3 yrs.      150,000        20,090       129,910
General service agreement ..   2.5 yrs.      348,413       269,464        78,949
                                          ----------    ----------    ----------
                                          $4,751,913    $1,186,828    $3,565,085
                                          ==========    ==========    ==========

         Amortization expense for the years ended December 31, 2007 and 2006,
totaled $742,420 and $444,408, respectively.

Amortization of intangible assets in future years is expected to be as follows:

                           2008          $ 607,132
                           2009          $ 607,132
                           2010          $ 607,132
                           2011          $ 607,132
                           2012          $ 607,132
                           Thereafter    $ 529,425

         The Company reviews other long-lived assets and certain identifiable
assets related to those assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying amounts may
not be recoverable. If the undiscounted future cash flows of the long-lived
assets are less than their carrying amounts, their carrying amounts are reduced
to fair value and an impairment loss is recognized. The Company conducted a test
of impairment as of December 31, 2007, as a result of losses incurred by the
Company as a whole during 2007 and 2006.

         The impairment test noted that the loss before interest, taxes,
amortization and depreciation for Company's core travel products business for
2007 and 2006 was approximately $172,000 and $157,000, respectively, exclusive
of corporate overhead associated with administrating corporate operations and
the Company's public company status, capital raising activities and non-cash
expenditures. Also, revenues in 2007 increased over the prior two years. The
impairment test was performed assuming the Company continues as a going concern
and experiences modest increases in revenues and gross margins. Based upon these
assumptions, the Company measured the undiscounted projected future cash flows
from its airline contacts based upon the estimated incremental increase in gross
profit from purchasing airline tickets under wholesale bulk airline contracts
compared to published fares plus an estimated terminal value based upon a one
times multiple of the average of the two prior years' projected cash flow. The
Company further measured the undiscounted projected future cash flows of
revenues generated from its hotel contracts, URLs, mailing lists, car rental,
general service agreement and terminal value equal to two times multiple the
prior year cash flow. The undiscounted projected future cash flows exceeded the
carrying amount of the intangible assets. No impairment was recognized during
the year ended December 31, 2007.

                                      F-15
<PAGE>

NOTE 6   CONVERTIBLE NOTES PAYABLE WITH WARRANTS, NOTES PAYABLE, LOANS PAYABLE
         AND CAPITAL LEASES PAYABLE

Convertible Promissory Notes
----------------------------

         Convertible notes consisted of the following at December 31, 2006:
<TABLE>
<CAPTION>
                                                                Original Debt Discount Components
                                                               ------------------------------------    Cumulative
                                                               Beneficial                             Amortization
Interest    Original      Notes        Note        Balance     Conversion    Warrant                     As Of
 Rate      Principal    Converted   Repayments   12/31/2006     Feature     Liability      Total       12/31/2006
--------   ----------   ---------   ----------   -----------   ----------   ----------   ----------   ------------
<S>        <C>          <C>         <C>          <C>           <C>          <C>          <C>          <C>
 9%  (S)   $1,450,000   $       -   $       -    $ 1,450,000   $1,208,332            -   $1,208,332   $   993,149
 9%  (S)      600,000           -           -        600,000      480,000            -      480,000       428,712
10%  (S)    2,250,000           -           -      2,250,000      206,618    2,030,202    2,236,820     2,169,409
10%  (U)      310,316           -    (155,158)       155,158       77,372      232,944      310,316       310,316
10%  (U)       50,000     (50,000)          -              -       50,000            -       50,000        50,000
10%  (U)       10,000           -           -         10,000            -            -            -             -
10%  (U)      100,000    (100,000)          -              -            -            -            -             -
 5%  (U)       50,000           -     (50,000)             -            -            -            -             -
10%  (U)       75,000     (75,000)          -              -            -            -            -             -
10%  (U)       25,000     (25,000)          -              -            -            -            -             -
10%  (U)       25,000     (25,000)          -              -            -            -            -             -
10%  (U)       50,000     (50,000)          -              -            -            -            -             -
10%  (U)       25,000     (25,000)          -              -       10,000            -       10,000        10,000
10%  (U)       75,000           -           -         75,000            -            -            -             -
10%  (U)       10,000           -           -         10,000            -            -            -             -
10%  (U)       30,000           -     (30,000)             -            -            -            -             -
10%  (U)       50,000           -     (50,000)             -            -            -            -             -
10%  (U)       12,500           -           -         12,500            -            -            -             -
10%  (U)       25,000           -     (25,000)             -            -            -            -             -
10%  (U)       10,000           -     (10,000)             -            -            -            -             -
10%  (U)       25,000           -     (25,000)             -            -            -            -             -
 6%  (S)      600,000           -           -        600,000            -      600,000      600,000        42,740
           ----------   ---------   ---------    -----------   ----------   ----------   ----------   -----------
           $5,857,816   $(350,000)  $(345,158)   $ 5,162,658   $2,032,322   $2,863,146   $4,895,468   $ 4,004,326
           ==========   =========   =========    ===========   ==========   ==========   ==========   ===========
(S) - Secured
(U) - Unsecured
</TABLE>
                                                   Unamortized         Net Book
                                  Principal          Discount           Value
                                 -----------       -----------       -----------
Current maturities .......       $ 2,312,658       $   266,471       $ 2,046,187
Long-term portion ........         2,850,000           624,671         2,225,329
                                 -----------       -----------       -----------
Total at December 31, 2006       $ 5,162,658       $   891,142       $ 4,271,516
                                 ===========       ===========       ===========

                                      F-16
<PAGE>

         Convertible notes consisted of the following at December 31, 2007:
<TABLE>
<CAPTION>
                                                               Original Debt Discount Components
                                                              ------------------------------------    Cumulative
                                                              Beneficial                             Amortization
Interest    Balance       Notes                   Balance     Conversion    Warrant                     as of
  Rate     12/31/2006   Converted   Borrowings   12/31/2007     Feature     Liability      Total      12/31/2007
--------   ----------   ---------   ----------   ----------   ----------   ----------   ----------   ------------
<S>        <C>          <C>         <C>          <C>          <C>          <C>          <C>          <C>
 9%  (S)   $1,450,000   $       -   $        -   $1,450,000   $1,208,332   $        -   $1,208,332   $  1,208,332
 9%  (S)      600,000    (600,000)           -            -      480,000            -      480,000        480,000
10%  (S)    2,250,000           -            -    2,250,000      206,618    3,296,324    3,502,942      3,291,920
 5%  (U)      155,158    (150,000)     268,134      273,292       77,372      232,944      310,316        310,316
10%  (U)       10,000           -            -       10,000            -            -            -              -
10%  (U)       75,000     (75,000)           -            -            -            -            -              -
10%  (U)       10,000           -            -       10,000       50,000            -       50,000         50,000
10%  (U)       12,500           -            -       12,500            -            -            -              -
 6%  (S)      600,000      (5,000)     400,000      995,000      400,000      600,000    1,000,000        542,744
 8%  (U)            -           -      150,000      150,000            -       73,500       73,500         73,500
10%  (U)            -           -       50,000       50,000       50,000            -       50,000         50,000
10%  (U)            -           -      150,000      150,000      150,000            -      150,000        150,000
12%  (S)            -           -    1,310,000    1,310,000            -    1,127,500    1,127,500        238,214
           ----------   ---------   ----------   ----------   ----------   ----------   ----------   ------------
           $5,162,658   $(830,000)  $2,328,134   $6,660,792   $2,622,322   $5,330,268   $7,952,590   $  6,395,026
           ==========   =========   ==========   ==========   ==========   ==========   ==========   ============

(S) - Secured
(U) - Unsecured
</TABLE>
                                                   Unamortized         Net Book
                                  Principal          Discount           Value
                                 -----------       -----------       -----------
Current maturities .......       $ 4,150,792       $   211,022       $ 3,939,770
Long-term portion ........         2,510,000         1,346,542         1,163,458
                                 -----------       -----------       -----------
Total at December 31, 2007       $ 6,660,792       $ 1,557,564       $ 5,103,228
                                 ===========       ===========       ===========

         Terms and original debt discount assumptions for convertible notes
outstanding at December 31, 2007:
<TABLE>
<CAPTION>
                                                                                Original Warrant and Option Liability
                    Convertible Promissory Notes                                 Black-Scholes Valuation Assumptions
----------------------------------------------------------------------   --------------------------------------------------
Interest     Balance    Unamortized   Maturity              Conversion               Exercise   Expected   Vola-   Discount
  Rate     12/31/2007     Discount      Date     Payments      Price      Shares      Price     Life(Yr)   tility    Rate
--------   ----------   -----------   --------   --------   ----------   ---------   --------   --------   ------  --------
<S>        <C>          <C>           <C>        <C>        <C>          <C>         <C>        <C>        <C>     <C>
 9%  (S)   $1,450,000   $         -     3/6/07      (A)        $1.50             -    $   -         -          -         -
10%  (S)    2,250,000       211,022     3/5/08      (C)         0.128    2,000,000     1.00       3.0       271%     5.07%
 -    -             -             -          -      (D)         1.00       250,000     1.00       2.25      142%     5.03%
 -    -             -             -          -      (E)         1.00     3,000,000     1.50       3.0       190%     4.60%
 5%  (U)      273,292             -    12/4/07      (F)         0.75       304,000     0.90       3.0       354%     3.96%
10%  (U)       10,000             -    6/30/06      (G)         0.90             -        -         -         -          -
10%  (U)       10,000             -    6/30/06      (G)         0.90             -        -         -         -          -
10%  (U)       12,500             -    6/30/06      (G)         0.90             -        -         -         -          -
 6%  (S)      995,000       457,256   10/25/09      (H)          (H)     5,000,000     1.50       3.0       154%     4.58%
 8%  (U)      150,000             -   12/31/07      (I)          (I)             -        -         -         -          -
10%  (U)       50,000             -    6/29/09      (J)          (J)       132,979     0.376      0.3       218%     4.94%
10%  (U)      150,000             -    6/29/09      (J)          (J)       398,936     0.376      0.3       218%     4.94%
12%  (S)    1,310,000       889,286    6/29/09      (K)          (K)     3,000,000     0.85       2.0       218%     4.89%
           ----------   -----------
           $6,660,792   $ 1,557,564
           ==========   ===========
</TABLE>
                                      F-17
<PAGE>

(A)   - This note went into default for nonpayment on its maturity date.

(B)   - Not used.

(C)   - Maturity date of note was extended on March 5, 2007 to March 5, 2008.
      Conversion price was reset to $0.128 from $1.00 related to anti-dilution
      provisions effective November 8, 2007.

(D)   - Relates to $250,000 additional borrowings from MMA on 9/20/2006 and part
      of the original $2,000,000 convertible note payable.

(E)   - Relates to Note Modification Agreement for issuance of warrants to
      purchase 3,000,000 shares of the Company's common stock.

(F)   - This note was modified on June 4, 2007, whereby the note's maturity date
      was extended to December 4, 2007, interest rate reduced to 5% per annum,
      all accrued interest was added to the principal balance and $150,000 of
      the note balance was converted into 200,000 shares of common stock.

(G)   - Balance is past due and loan is in default. The Company is in
      negotiations to extend the maturity date or have the note converted.

(H)   - Balance is due on the maturity date plus all accrued interest. The debt
      is convertible at a 45% discount to market or $0.06 per share as of
      December 31, 2007.

(I)   - The Company extended the maturity date of this debt to December 31,
      2007. The conversion price was reset to a variable price on June 15, 2007,
      and June 29, 2007, based upon terms set forth in the convertible debenture
      agreement. As of December 31, 2007, the debt is convertible at the lower
      of $0.23 per share or 80% of the lowest daily closing bid price of the
      Company's common stock for five (5) trading days immediately prior to
      conversion.

(J)   - Balance is due at maturity plus all accrued interest. The debt is
      convertible at the lower of $0.23 per share or 80% of the lowest daily
      closing bid price of the Company's common stock for five (5) trading days
      immediately prior to conversion.

(K)   - Balance is due at maturity plus all accrued interest. The debt is
      convertible at the lower of $0.23 per share or 80% of the lowest daily
      closing bid price of the Company's common stock for five (5) trading days
      immediately prior to conversion.

         All debt discounts are amortized over the terms of the respective
Notes. The amortization of the debt discount was $2,400,700 and $3,888,418 for
the year ended December 31, 2007 and 2006, respectively, and was included in
interest expense in the accompanying consolidated financial statements.

         In total as of March 31, 2008, the Company was in default on
third-party convertible promissory notes of $4,150,792.

April 2007 - Miller Note
------------------------

         On April 16, 2007, the Company issued unsecured convertible promissory
notes in the principal amount totaling $150,000 to Miller Investments, LLC. The
notes bear interest at 8% per annum and matured on August 13, 2007.

         On October 25, 2007, the Company entered into an agreement with Miller
Investments to extend the maturity date on the Note from August 15, 2007 to
December 15, 2007. In consideration for this loan extension, the Company agreed
to issue Miller Investments 150,000 shares of the Company's common stock valued
at $34,500 or $0.23 per share (the closing market price of the Company's common
stock on the day of issuance). This value will be recorded as debt discount and
amortized to interest expense over the extended term of the loan.

                                      F-18
<PAGE>

         On December 1, 2007, the Company entered into an agreement with Miller
Investments to extend the maturity date on the Note to December 31, 2007. In
consideration for this loan extension, the Company agreed to issue Miller
Investments 300,000 shares of the Company's common stock valued at $39,000 or
$0.13 per share (the closing market price of the Company's common stock on the
day of issuance). This value was recorded as debt discount and is being
amortized to interest expense over the extended term of the loan.

         At the option of the holder, the notes are convertible at any time into
shares of the Company's common stock at the lesser of (i) $1.00 per share or
(ii) the price per share paid by investors in the Company's next financing
transaction. The qualifying financing occurred on June 29, 2007, wherein the
Company consummated a financing with Trafalgar Capital Specialized Investment
Fund, Luxembourg ("Trafalgar"), that was later amended on August 1, 2007. As a
result, the conversion price of the Miller unsecured convertible promissory note
was to conform to a conversion price in Trafalgar debentures which was the
lesser of (a) $0.23 per share or (b) an amount equal to 80% of the lowest daily
closing bid price of the Company's common stock, as quoted by Bloomberg, LP, for
the five (5) trading days immediately prior to conversion. The Holder is
entitled to piggyback registration rights, subject to certain limitations as
described in the notes. In addition, the Company has granted the holder the
right to purchase additional notes from the Company in the principal amount of
$150,000 on the same terms and conditions within thirty (30) days after the date
of the notes. The fair value of the embedded conversion option associated with
this debt was not material as of December 31, 2007, and has not been recorded in
the embedded conversion option liability account on the accompanying balance
sheet.

June 2007 - Pisani and Seaside Capital Notes
--------------------------------------------

         On June 15, 2007, the Company issued unsecured convertible promissory
notes in the principal amount totaling $50,000 and $150,000 to Michael Pisani
and Seaside Capital II, LLC, respectively.

         The terms of these notes were structured so that if in the event the
Company consummated an equity or debt financing, prior to the maturity date of
October 15, 2007, pursuant to which it sells shares of its common stock (or
securities convertible into or exercisable for shares of its common stock) with
an aggregate sales price of not less than $1,000,000, excluding these notes (a
"Qualified Financing"), then the outstanding principal amount of and all accrued
interest under these notes shall automatically convert into securities identical
to and at the same price and on the same terms as the securities issued in the
Qualified Financing. On July 11, 2007, the Company consummated a Qualified
Financing with Trafalgar Capital Specialized Investment Fund, Luxembourg
("Trafalgar"), and the Qualified Financing was later amended on August 1, 2007.
As a result, the terms of these notes are identical to the convertible
debentures issued to Trafalgar, as amended.

         Due to the variable conversion price, the secured convertible term
notes were bifurcated and recorded as two liability instruments--a debt
instrument and an embedded conversion option liability at fair value.

         The notes, as conformed to the Trafalgar debentures, mature on June 29,
2009, bear interest at 12% per annum, compounded monthly (9.5% after
effectiveness of a Registration Statement required under the Trafalgar
agreement) and are convertible into common stock at the lesser of (a) $0.23 per
share or (b) an amount equal to 80% of the lowest daily closing bid price of the
Company's common stock, as quoted by Bloomberg, LP, for the five (5) trading
days immediately prior to conversion. The Company has the right to redeem the
debenture at 120% of principal and accrued and unpaid interest.

                                      F-19
<PAGE>

MMA Capital, LLC Convertible Debt
---------------------------------

         On January 13, 2006, the Company issued a Secured Convertible
Promissory Note with the principal balance of $2,000,000 to MMA Capital, LLC
("MMA"). As described below, on September 20, 2006, the parties amended this
Note to increase the principal amount by $250,000 to a total of $2,250,000.

         On August 16, 2006, the Company entered into an agreement with MMA to
defer interest payments due on the Note each quarter until January 11, 2007, the
maturity date of the loan. On March 5, 2007, the maturity date of this note was
extended to March 5, 2008.

         In consideration for this August 16, 2006 deferral, the Company agreed
to increase the interest rate retroactively from 8% to 10% and to issue MMA
100,000 shares of the Company's common stock. In accordance with EITF 96-19,
this transaction was treated as a modification of debt since the extra
consideration given in the agreement did not amount to more than a ten percent
change in the present value of the amount due to MMA over the life of the
promissory note. As a result, the increase in interest rate and the additional
consideration will be accounted for prospectively from the date of the
modification.

         At the option of the holder, the outstanding principal amount of the
Note and accrued but unpaid interest may be converted into shares of the
Company's common stock at the conversion rate of $1.00 per share, subject to
adjustment in the event the Company issues shares for a consideration less than
$1.00 per share and to reflect the occurrence of forward or reverse stock
splits, corporate reorganizations or certain other corporate events. In
connection with this transaction, the Company agreed to file a registration
statement under the Securities Act of 1933, as amended, (the "Act") to register
the shares issuable upon conversion of the Note. It constitutes an event of
default under the Note and subjects the Company to liquidated damages if the
Company does not complete an effective registration statement within 180 days of
the effective date of the execution of a common stock subscription agreement,
which would be executed when the lender provides notice of conversion of all or
a portion of the debt, and if the Company does not maintain that effective
registration statement for at least 90 days. For each week of non-compliance,
liquidated damages are 2% of the product of (a) the sum of the holder's shares
of stock not registered on a timely basis and (b) the weekly average closing
price of the shares of the Company's common stock. The Company's obligations
under the promissory note are collateralized by a security interest in
substantially all of the Company's assets.

         In connection with the transaction, the Company issued to MMA a warrant
to purchase up to 2,000,000 shares of the Company's common stock at an exercise
price of $1.00 per share. The warrant is exercisable for a period of three years
and the number of warrant shares and the exercise price are subject to
adjustment in the event the Company issues or sells shares for a consideration
less than $1.00 per share and to reflect the occurrence of forward or reverse
stock splits, corporate reorganizations or certain other corporate events. If,
at the time of exercise, there is not an effective registration statement
covering the sale of the shares issuable upon exercise of the warrant, the
warrant holder may exercise the warrant on a cashless basis, whereby the holder
surrenders a portion of the warrants in lieu of paying the exercise price in
cash.

         A finder's fee equal to 8% of the proceeds ($160,000) was paid in cash
to Forte Capital Partners LLC, in connection with the transaction. The
transaction was exempt from the registration requirements of the Act by reason
of Section 4(2) as a transaction by an issuer not involving any public offering.
The $160,000 was recorded as a deferred debt issuance cost asset and is being
amortized over the debt term.

                                      F-20
<PAGE>

         On September 20, 2006, the Company and MMA entered into a Second
Modification of Secured Convertible Promissory Note, pursuant to which the
principal of the Note was increased by $250,000 to $2,250,000. Further, on
September 20, 2006, the Company and MMA entered into a Modification of Warrant
to Purchase Shares of Common Stock, pursuant to which the number of warrant
shares was increased by 250,000 shares to 2,250,000 shares.

         On March 5, 2007, the Company entered into a Settlement Agreement with
MMA pursuant to which in consideration for the Company's issuance to MMA of a
warrant exercisable for 3,000,000 shares of the Company's Common Stock with an
exercise price of $1.50 per share (the "MMA Warrant"), MMA agreed to (i) extend
the maturity date of the Company's outstanding promissory note payable to MMA to
March 5, 2008; and (ii) to dismiss its action against the Company filed on
November 22, 2006 in the United States District Court for the Northern District
of California entitled MMA Capital, LLC v. Dynamic Leisure Corporation, Case No.
C 06 7263 CRB (the "Action") with prejudice and to fully and finally waive all
contract breaches alleged in the Action. The fair value of the warrant to
purchase 3,000,000 shares of the Company's common stock of $1,266,122 was
recorded as debt discount and warrant liability on the Company's consolidated
balance sheet and the debt discount is being amortized over the remaining term
of the promissory note.

         In addition, with respect to the registration statement on Form SB-2
filed with the Commission on December 18, 2006 (Commission File No. 333-139438)
(the "MMA Registration Statement"), the Company agreed to use its commercially
reasonable efforts to respond to any comments issued by the Staff of the
Commission within ten (10) business days and to file any required amendments
within five business days of receiving notice from the Commission that the
Post-Effective Amendment to Registration Statement on Form SB-2 (Commission File
No. 333-124283) is effective. In addition, the Company agreed not to withdraw
the MMA Registration Statement without first obtaining written approval from
MMA, to use commercially reasonable efforts to cause the MMA Registration
Statement to become effective, and to maintain the effectiveness of the MMA
Registration Statement, subject to certain exceptions, until the earlier of (i)
one year; (ii) the date on which all securities covered by the MMA Registration
Statement as amended from time to time, have been sold; or (iii) the date on
which all the securities covered by the MMA Registration Statement as amended
from time to time, can be sold in any three-month period without registration in
compliance with Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act").

         The Company's failure to comply with the provisions of Settlement
Agreement shall be deemed to be an event of default, which if not cured within
fifteen (15) days after receipt of written notice of such event of default,
entitles MMA to nominate one person to the Company's Board of Directors (the
"First MMA Nominee") and the Company is required to appoint MMA's nominee to its
Board of Directors within two days thereafter. MMA is entitled to nominate one
additional person to the Company's Board of Directors and the Company is
required to appoint such nominee to its Board of Directors within two days
thereafter, if an event of default is not cured by the Company within fifteen
(15) days of the date the First MMA Nominee is nominated. The maximum number of
nominees that MMA is entitled to under this provision is two.

         The MMA Warrant is exercisable for a term of three years for up to
3,000,000 shares of the Company's Common Stock at an initial exercise price of
$1.50 per share. The exercise price and number of shares of Common Stock
issuable upon exercise of the Warrant (the "Warrant Shares") are subject to
adjustment for stock splits, stock combinations and certain reorganizations. The
Warrant exercise price, but not the number of Warrant Shares is subject to a
"full-ratchet" adjustment upon the issuance by the Company of shares of Common
Stock for no consideration or for a consideration per share less than the
Warrant exercise price, subject to certain enumerated exceptions. The Company
has agreed to register the sale of the Warrant Shares on a registration
statement pursuant to the Securities Act. The MMA Warrant was issued in a

                                      F-21
<PAGE>

private placement transaction, exempt from registration under the Securities
Act, pursuant to Section 4(2) of the Securities Act and Regulation D promulgated
thereunder.

         Per SFAS 133 and EITF 00-19 and related interpretations, the
convertible note at the January 13, 2006 issuance date was classified as one
financial instrument as it is considered conventional convertible debt. In
addition, the warrant was classified as a liability ("warrant liability") (see
Note 7) due to the liquidated damages provision in the registration rights
agreement at its initial fair value with a corresponding charge to debt
discount. The beneficial conversion value associated with the convertible debt
is recorded as a debt discount and additional paid in capital.

         In accordance with SFAS 133, the warrants underlying the warrant
liability were and are revalued quarterly based on assumptions in effect on that
date using the Black-Scholes model. See Note 7 for the assumptions related to
the revaluation and the related effect on the warrant liability and warrant
valuation income (expense) during the period.

         In December 2006, the FASB issued FSP EITF 00-19-2, "Accounting for
Registration Payments" which was effective immediately. This FSP amends EITF
00-19 to require potential registration payment arrangements be treated as a
contingency pursuant to FASB Statement 5 rather than at fair value. We
considered the effect of this standard on the above warrant classification as a
liability and determined that the accounting may have changed as a result of
this standard; however, due to the new financing that occurred on November 9,
2006 as discussed below, the warrants must remain classified as a liability at
December 31, 2007; therefore, there was no effect of implementing this standard.

         On November 8, 2007, the Company issued common stock pursuant to the
conversion of a convertible debenture held by another investor at a conversion
price of $0.128 per share. As a result, the conversion price of the MMA
convertible debentures decreased to a fixed conversion price of $0.128, and the
shares of common stock purchasable under the MMA warrants for 2,250,000 shares
increased to 17,578,125 shares, and the warrant exercise price decreased to
$0.128 per share. There is no accounting effect related to the reset of the
conversion price of the convertible debentures. The reset of the shares and
exercise price related to the warrants was accounted for as a change in the fair
value of warrants recorded in the warrant and option liability account with a
decrease in the warrant and option liability income account.

DynEco March 2, 2005 Convertible Notes and Modification and Waiver Agreements
-----------------------------------------------------------------------------

         On January 13, 2006, and June 4, 2007, the Company and Alpha Capital
Aktiengesellschaft, JM Investors, LLC, Libra Finance, S.A. and RG Prager
Corporation entered into Modification and Waiver Agreements pursuant to which
Convertible Promissory Notes issued by the Company to these parties in the
aggregate principal balance of $327,000 on March 2, 2005. Pursuant to the
January 13, 2006 Modification and Waiver Agreement, interest on these Notes at
the rate of 5% per annum was to be paid quarterly, commencing March 31, 2006,
and monthly principal amortization payments of approximately $29,700 were to
commence on June 1, 2006.

         The Company was in default of the terms of this Modification and Waiver
Agreement for nonpayment of its quarterly interest payments. Accordingly, the
Company began accruing default interest at the rate of 10% from the date of
default of June 1, 2006.

         As consideration for the January 13, 2006, Modification and Waiver
Agreement, the Company paid these noteholders a total of $232,210, consisting of
$154,632 in principal payments and a premium in the amount of $77,578. The
Company recorded the premium as additional expense in the fourth quarter of
2005. The notes are convertible at the conversion rate of $0.75 per share,
subject to adjustments, including anti-dilution adjustments and an adjustment if

                                      F-22
<PAGE>

the Company issues common stock or rights to purchase common stock at a price
below $0.75 per share. As part of the terms of the Financing Transaction, the
note holders released their security interest in the Company's assets.

         As additional consideration to induce the note holders to enter into
the January 13, 2006, Modification and Waiver Agreement, the Company issued the
investors an aggregate of 200,000 shares of its common stock. Pursuant to the
terms of the Modification and Waiver Agreement (a) those provisions of the
transaction documents dated March 2, 2005 providing exceptions to the adjustment
provisions of the notes and warrants were eliminated, (b) the exercise price of
the warrants to purchase up to 259,000 shares of the Company's common stock
issued under the March 2, 2005 transaction documents was changed to $1.00 per
share and the warrants are exercisable for three years from January 23, 2006 and
(c) the number of shares issuable upon exercise of these warrants cannot be
reduced to less than 300,000 shares, resulting in an issuance of 45,000
additional warrants. Under the Modification and Waiver Agreement, under certain
circumstances, the Company may require the investors to exercise the warrants in
full. The Company may prepay the remaining principal balance of the notes at
150% of the principle, plus interests and other amounts due, through the
redemption date but only if an effective registration statement exists.

         During the first quarter of 2006, the Company recorded a non-cash loss
relating to (i) the extinguishment of debt of $208,442, (ii) the value of the
200,000 shares of common stock issued (valued at $0.90 per share on the date of
the Modification and Waiver Agreement, based on the closing price of common
stock), (iii) issuance of additional warrants, and (iv) the write-off of
deferred debt issue costs. The Company treated the modification as a
cancellation of warrants (which resulted in a reclassification of $240,592 of
warrant liability to equity) and issuance of new warrants. The new warrants were
valued at $232,944 at the modification date.

         In accordance with SFAS 133, the warrants underlying the warrant
liability are revalued quarterly based on assumptions in effect on that date
using the Black-Scholes model. See Note 7 for the assumptions related to the
revaluation and the related effect on the warrant liability and warrant
valuation income (expense) during the period.

         On January 13, 2006, the Company agreed to file an amendment to the
existing registration statement covering the sale of the shares issuable upon
conversion of these notes and exercise of the warrants. Such registration
statement was required to be filed on or before April 13, 2006 and become
effective not later than 60 days after the date of filing, or the Company would
be subject to the payment of liquidated damages to the note holders. The
registration statement was filed on April 12, 2006 and was required to become
effective by June 13, 2006. In addition, the Company agreed to file a new
registration statement covering the sale of the shares issuable pursuant to the
Modification and Waiver Agreement the sale of which was not covered by the
existing registration statement. Such additional registration statement was
required to be filed by May 13, 2006 and become effective not later than 60 days
after the date of filing, or the Company would be subject to the payment of
liquidated damages. The registration statement was filed on May 12, 2006 and was
required to become effective by July 13, 2006. A Form 8-K/A, including the
audited financial statements of the Company was filed on March 29, 2006, prior
to April 5, 2006 as required. The post-effective amended registration statement
and the additional registration statement did not become effective in the
required 60 days due to comments received from the SEC with respect to the
registration statement. The January 13, 2006, Modification and Waiver Agreement
provides for liquidated damages payable to the note holders of an amount equal
to two percent (2%) of the Purchase Price of the Notes remaining unconverted for
each thirty (30) days or part thereof, that a registration statement is not
effective. The Modification and Waiver Agreement required the Company pay the
liquidated damages in cash. The liquidated damages must be paid within ten (10)
days after the end of each thirty (30) day period or shorter part thereof for
which liquidated damages are payable.

                                      F-23
<PAGE>

         On June 4, 2007, the Company entered into a second Modification and
Waiver Agreement with the note holders that combined all accrued interest and
penalties on these notes as of June 4, 2007, aggregating $268,134 with the
outstanding principal amount of the Notes of $155,158 and provided that interest
would accrue on the new principal amount at the rate of 5% per annum beginning
June 4, 2007. Penalties of $142,236 were recorded as interest expense on the
settlement date. Interest is payable on any conversion date or on the maturity
dates of the Notes, which have been extended to December 4, 2007. All principal
and accrued interest is convertible at any time into shares of the Company's
common stock at a fixed conversion price of $0.75, subject to adjustment. As
long as the Notes are outstanding, if the Company issues any Common Stock, other
than for certain enumerated exceptions as set forth in the Modification and
Waiver Agreement, prior to the complete conversion of the Notes for a
consideration less than $0.485 per share, the conversion price shall be reduced
to such other lower issue price. In addition, the purchase price of the warrants
is subject to adjustment if the Company issues any Common Stock other than for
certain enumerated exceptions set forth in the Modification and Waiver
Agreement, for a consideration less than $0.485 per share. In connection with
the June 4, 2007 Modification and Waiver Agreement, the investors agreed to
convert an aggregate of $150,000 due and payable under the Notes into 200,000
shares of the Company's common stock effective as of June 4, 2007. The notes
were not paid on the maturity date and are in default.

AJW - November 9, 2006 Convertible Term Notes
---------------------------------------------

         On November 9, 2006, the Company entered into a Securities Purchase
Agreement with AJW Partners, LLC. ("Partners"), AJW Offshore, Ltd. ("Offshore"),
AJW Qualified Partners, LLC ("Qualified") and New Millenium Capital Partners,
II, LLC ("Millenium"). Partners, Offshore, Qualified and Millenium are
collectively referred to as the "Purchasers", whereby the Company sold to the
Purchasers Secured Convertible Term Notes (the "Notes") in the aggregate
principal amount of One Million Dollars ($1,000,000). The $1,000,000 was funded
in two tranches ($600,000 on November 9, 2006, and $400,000 on January 5, 2007).
The offering was made pursuant to Section 4(2) of the Act, as amended. The Notes
bear interest at 6% per annum, unless the common stock of the Company is greater
than $1.25 per share for each trading day of a month, in which event no interest
is payable during such month. The Company's obligations under the Notes are
collateralized by a security interest in substantially all of the Company's
assets. The proceeds of the offering were used to repay certain indebtedness and
for working capital.

         The Notes are convertible into common stock of the Company at a 50%
discount to the average of the three lowest trading prices of the common stock
during the 20 trading day period prior to conversion; provided, however, that
the Notes are convertible into common stock of the Company at a 45% discount in
the event that the Registration Statement covering the resale of securities
underlying the Notes ("Registration Statement"), is filed on or before December
11, 2006; and (ii) a 40% discount in the event that the Registration Statement
becomes effective on or before March 9, 2007. In connection with the offering,
the Company issued an aggregate of 5,000,000 warrants to purchase common stock
at a price of $1.50 per share ("Warrants"). The Warrants are exercisable for a
period of seven years. The number of shares subject to the Warrant and the
exercise price are subject to adjustment for stock splits, stock combinations
and certain dilutive issuances, including the issuance of shares of Common Stock
for no consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances in
connection therewith) less than the 5-day average of the last reported sales of
the Company's Common Stock. In addition, in certain circumstances the warrant
exercise price will be adjusted if after the Registration Statement is declared
effective, the closing price for the Company's Common Stock closes below $1.00.

         Due to the variable conversion price, the secured convertible term
notes were bifurcated and recorded as two liability instruments, a debt
instrument and an embedded conversion option liability at fair value.

                                      F-24
<PAGE>

         The Company had an obligation to register shares of its common stock
pursuant to the terms of a Registration Rights Agreement with the note holders.
The Company believes that it no longer has an obligation to register these
shares as a result of the July 31, 2007 settlement described below and the
acquisition of Notes by Trafalgar Capital Specialized Investment Fund as
described below. The Company has the right to redeem the Notes under certain
circumstances, as well as the right to pay monthly cash payments to prevent any
conversion of the Notes during such month. The Notes are secured by all of the
Company's assets pursuant to the terms of a Security Agreement and Intellectual
Property Security Agreement.

         On July 31, 2007, the Company entered into a settlement agreement with
AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New
Millenium Capital Partners, II, LLC, (collectively, the "Subscribers"). Pursuant
to the settlement agreement, the Company agreed to pay $1,200,000 and to issue
an aggregate of 500,000 shares of the Company's common stock to the Subscribers,
in full satisfaction of all of the Company's obligations under the Securities
Purchase Agreement, Security Agreement, Intellectual Property Security Agreement
and Registration Rights Agreement dated November 9, 2006, by and between the
Company and the Subscribers and secured convertible term notes in the aggregate
principal amount of $1,000,000 issued by the Company in favor of the
Subscribers. In addition, pursuant to the settlement agreement, the Company
amended and restated the stock purchase warrants issued to the Subscribers
pursuant to the warrant purchase agreement as follows: a) to remove the
Company's obligation to secure the listing of the shares of common stock
issuable upon the exercise of up to 5,000,000 warrants with a national
securities exchange or automated quotation system upon which the Company common
stock is then listed, b) to remove the anti-dilution provision c) to provide the
holders of the warrants the right to receive securities or assets which may be
issued or payable upon a consolidation, merger or sale of the Company, d) to
provide the holders of the warrants the right to receive distribution of assets
of the Company, including cash and e) to remove the cashless exercise option.

         On August 1, 2007, the Company amended an agreement with another
investor related to the sale of convertible debt and warrants resulting in
lowering the maximum conversion price of that convertible debt to $0.23 per
share. As a result, the shares of common stock purchasable under the warrant for
5,000,000 shares increased to 6,929,812 shares and the exercise price decreased
to $1.0823 per share. The reset of the shares and exercise price was accounted
for as a change in the fair value of warrants recorded in the warrant and option
liability account with a decrease in the warrant and option liability income
account.

         On August 18, 2007, Trafalgar Capital Specialized Investment Fund,
Luxembourg acquired the notes held by the Subscribers rather than the Company
repaying the notes directly as agreed to in the Company's July 31, 2007
settlement agreement with the Subscribers. On August 6, 2007,the Company issued
the Subscribers 500,000 shares of its common stock valued at $140,000 or $0.28
per share (the closing market price of the Company's common stock on the day of
issuance) as provided for in the settlement agreement and on August 18, 2007
paid the Subscribers $210,000 in cash from proceeds from the issuance of a
convertible debenture to Trafalgar in settlement of all accrued interest due the
Subscribers and claims arising from the Notes. The value of the common stock and
cash consideration totaled $350,000, and $43,160 was applied to accrued interest
and the balance related to settlement charges recorded as interest expense
totaling $306,840 recorded in August 2007.

Trafalgar - July 11, 2007 Secured Convertible Debentures
--------------------------------------------------------

         The Company entered into a Securities Purchase Agreement (the
"Agreement") with Trafalgar Capital Specialized Investment Fund, Luxembourg
("Trafalgar") with respect to the purchase by Trafalgar of up to $2,400,000 of
secured convertible debentures to be funded in three tranches with all
outstanding principal and accrued interest due two years from the date each
tranch is funded. On July 11, 2007, the Company closed on the first portion of

                                      F-25
<PAGE>

the funding and issued a two-year $700,000 convertible debenture to Trafalgar.
On August 18, 2007, the Company closed on the remaining funding, issued two-year
convertible debentures aggregating $610,000 to Trafalgar and, as dicussed above,
Trafalgar acquired the secured convertible debentures formerly held by AJW
Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millenium
Capital Partners, II, LLC. The debentures bear interest at 12% per annum,
compounded monthly (9.5% after effectiveness of a Registration Statement
required under the agreement; see below), and is convertible into common stock
at the lesser of (a) an amount equal to 100% of the Volume Weighted Average
Price ("VWAP") as quoted by Bloomberg LP as of June 29, 2007 (the "Fixed
Conversion Price"), or (b) an amount equal to 80% of the lowest daily closing
bid price of the Company's Common Stock, as quoted by Bloomberg, LP, for the
five (5) trading days immediately prior to conversion. The Company has the right
to redeem the debenture at 120% of principal and accrued and unpaid interest.
The funding is subject to customary commitment and other fees approximating an
aggregate 10% of the funded amount, as defined in the agreement. In connection
with the offering, the Company issued an aggregate of 3,000,000 warrants to
purchase common stock at a price of 85% of the Fixed Conversion Price component
of the convertible debentures, per share. The warrants are exercisable for a
period of five years. The number of shares subject to the warrant and the
exercise price are subject to adjustment for stock splits, stock combinations
and certain dilutive issuances, including the issuance of shares of Common Stock
for no consideration or for a consideration per share less than warrant price in
effect immediately prior to such issuance. In connection with the Agreement, the
Company entered into a registration rights agreement requiring the Company to
register the securities underlying the convertible debentures and warrants. The
Company must file within 55 days of June 29, 2007 and the registration statement
must be effective within 90 days of June 29, 2007. If the filing or
effectiveness dates are not complied with, or maintenance of effectiveness or
other defaults occur, as defined in the Registration Rights Agreement, the
Company will incur liquidated damages of 2% of the outstanding debenture value
for each 30 days the default remains uncured. The registration was not effective
as of December 31, 2007, and the Company has accrued liquidated damages on these
notes totaling approximately $79,000 at December 31, 2007, which is included in
other accrued liabilities on the accompanying balance sheet.

         On August 1, 2007, the Company entered into an Amendment to Securities
Purchase Agreement, Secured Convertible Debenture and Security Agreement with
Trafalgar under which (i) the exercise price of the Warrants issued to Trafalgar
pursuant to the convertible debt financing which closed on July 11, 2007 (the
"Financing") was reduced to $0.23 per share, provided, however, that if after
registration of the shares issuable upon exercise of the Warrants, shares of the
Company's common stock trade above $0.75 per share for 30 consecutive trading
days, the exercise price of the Warrants will be increased to $0.50 per share;
(ii) the Company agreed to issue to Trafalgar a warrant exercisable for an
additional 5 million shares at $0.23 per share, provided, however, that if after
registration of the shares issuable upon exercise of the Warrants, shares of the
Company's common stock trade above $0.75 per share for 30 consecutive trading
days, the exercise price of this Warrant will be increased to $0.646 per share
and the number of shares exercisable pursuant to the Warrant will be reduced to
2 million; and (iii) the Fixed Price component of the variable conversion price
discussed above of the Convertible Debenture was reduced to $0.23.

Convertible Promissory Note, Related Party
------------------------------------------

         On January 3, 2006, the Company issued a Convertible Promissory Note
with an annual interest rate of 10% in the principal amount of $350,000 to
Street Venture Partners, LLC, a related party, in conjunction with the purchase
of the Casual Car General Service Agreement (GSA). The Note went into default
for nonpayment on January 3, 2007, and the maturity date was extended on March
30, 2007 to July 1, 2008. As of December 31, 2007, the Note had an outstanding
balance of $350,000.

                                      F-26
<PAGE>

Loan Payable - TRDA
-------------------

Technological Research and Development Authority Funding Agreement:

         In November 2002, the Company entered into an agreement with the
Florida Technological Research and Development Authority (TRDA), which provides
for up to $150,000 in funding for the development and commercialization of
DynEco's UniVane(R) compressors and hydrogen circulators for fuel cell
applications. The terms of the agreement require the Company to make royalty
payments to TRDA equal to five percent of future UniVane(R)-related sales up to
an amount equal to three times the amount DynEco receives from TRDA.

         During 2003, the Company received the entire $150,000 funding
commitment. The agreement expires in November 2012. Pursuant to EITF No. 88-18
"Sale of Future Revenues", the Company recorded the funding as a current
liability and in connection with APB No. 21 "Interest on Receivables and
Payables," accretes interest to the maximum value of $450,000 through the
November 2012 expiration date. The accreted balance due as of September 30, 2006
was $235,138. This loan was assumed by Buccaneer Exploration, Inc. on October 5,
2006 as part of an Assignment and Assumption Agreement, a transaction
subsequently approved by TRDA. A gain on sale of assets was recorded in 2006
totaling $235,138 as a result of this transaction and is included in gain on
disposal of assets in the consolidated statement of operations.

Other Notes Payable
-------------------

         Notes payable consisted of the following:

                                                     DECEMBER 31,   DECEMBER 31,
                                                         2007           2006
                                                     ------------   ------------
         Notes Payable - Bearing interest at rates
          ranging from 5% to 15% unsecured and due
          at various dates through August 2007 ...     $ 156,434      $ 156,434

         Notes payable assumed from DynEco .......        20,154         20,154

         Line of credit - IRT/ITR ................       210,000        210,000
                                                       ---------      ---------
                                                       $ 386,588      $ 386,588
         Less current portion ....................      (386,588)      (386,245)
                                                       ---------      ---------
             Notes payable, net of current portion     $       -      $     343
                                                       =========      =========

         At December 31, 2007, the Company was in default of the repayment terms
on certain 5% to 15% unsecured notes aggregating $156,434. This amount is
included in notes payable, current portion on the accompanying consolidated
balance sheet at December 31, 2007.

Capital Lease Obligation
------------------------

         The Company's capital leases consisted of the following:

                                                     DECEMBER 31,   DECEMBER 31,
                                                         2007           2006
                                                     ------------   ------------
         Total Capital Leases ....................     $  77,634      $ 107,600
         Less Current Capital Leases .............       (37,852)       (34,152)
                                                       ---------      ---------
            Long-term portion of Capital Leases ..     $  39,782      $  73,448
                                                       =========      =========

                                      F-27
<PAGE>

         Future maturities of capital lease obligations as of December 31, 2007,
are as follows:

         2008         $37,852
         2009         $20,998
         2010         $11,897
         2011         $ 6,887

NOTE 7   WARRANT AND OPTION LIABILITY

         The Company recorded a warrant liability related to Convertible Notes
in connection with the Modification and Waiver Agreement of January 13, 2006 and
the MMA Capital LLC financing due to the liquidated damages provision in the
registration rights agreement requiring liability treatment under EITF 00-19
(see Note 6 and discussion within FSP EITF 00-19-2). The Company also recorded
warrant and option liability related to the Convertible Notes with a variable
conversion price issued on November 9, 2006 and July 11, 2007. EITF 00-19
requires liability treatment for all outstanding warrants and non-employee
options as a result of the variable conversion price provision contained in
these Convertible Notes. As a result, warrants for 5,000,000 shares of common
stock were recorded as warrant liability and warrants for 2,300,050 shares and
non-employee options for 1,000,000 shares of the Company's common stock were
reclassified from equity and recorded as liabilities on the Company's
consolidated balance sheet on November 9, 2006, the issuance date of the
convertible notes with the variable conversion price.

         On November 8, 2007, the Company issued common stock pursuant to the
conversion of a convertible debenture at a conversion price of $0.128 per share.
The issuance of this common stock resulted in shares of common stock purchasable
under warrants held by certain investors to increase by 18,961,062 shares, and
the exercise price of these warrants to decrease to $0.128 per share in
accordance with anti-dilution provisions contained in related warrant
agreements. The reset of the shares and exercise price was accounted for as a
change in the fair value of warrants recorded in the warrant and option
liability account with a decrease in the warrant and option liability income
account.

         During the year ended December 31, 2007, the warrant and option
liability was increased for the fair value of options granted to a director to
purchase 200,000 shares of the common stock that vested during the period,
warrants to purchase 3,000,000 shares of common stock granted on March 5, 2007
pursuant to the MMA Capital, LLC note modification agreement, warrants to
purchase 3,000,000 and 5,000,000 shares of common stock granted on July 11,
2007, and August 1, 2007, respectively, pursuant to the Trafalgar financing and
warrants to purchase 108,000 shares of common stock related to consulting
services. During the same period, the fair value of warrants exercised and
options forfeited were reclassified to equity.

         The remaining warrant and option liability will continue to be revalued
until the expiration date of the debt or at such time EITF 00-19 and related
interpretations provide for the reclassification of these financial instruments
to equity, with any changes in valuation recorded as warrant and option
valuation income or expense.

         The Company's warrant and option liability and related revaluation
assumptions for the years ended December 31, 2007 and 2006, are as follows:

                                      F-28
<PAGE>
<TABLE>
<CAPTION>


                                                    11/9/06                                                Warrant
                         3/2/05                    Variable                   All Other       Total      and Option
                      Convertible                 Conversion     Trafalgar    Warrants       Warrant      Valuation
                          Note          MMA          Price        Capital        and       and Option      (Income)
                        Holders       Capital        Notes         Notes       Options      Liability      Expense
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
<S>                   <C>           <C>           <C>           <C>          <C>           <C>           <C>
Balance 12/31/2005    $   232,944   $         -   $         -   $        -   $         -   $   232,944   $         -

MMA transaction ...             -     1,793,382             -            -             -     1,793,382             -
Change in value ...       337,851     1,882,191             -                          -     2,220,042     2,220,042
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
Balance 3/31/06 ...       570,795     3,675,573             -            -             -     4,246,368     2,220,042

Change in value ...      (198,044)   (1,243,447)            -            -             -    (1,441,491)   (1,441,491)
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
Balance at 6/30/06        372,751     2,432,126             -                          -     2,804,877       778,551

MMA transaction ...             -       236,820             -            -             -       236,820             -
Change in value ...      (100,248)     (716,853)            -            -             -      (817,101)     (817,101)
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
Balance at 9/30/06        272,503     1,952,093             -            -             -     2,224,596       (38,550)

Variable Conversion
 Price Notes ......             -             -     4,756,496            -             -     4,756,496    (4,156,496)

Reclassification
 from Equity ......             -             -             -            -     2,806,245     2,806,245             -

Change in Value ...      (124,216)     (905,323)   (2,257,918)           -    (1,080,151)   (4,367,608)    4,367,608
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
                      $   148,287   $ 1,046,770   $ 2,498,578   $        -   $ 1,726,094   $ 5,419,729   $  (249,662)
                      ===========   ===========   ===========   ==========   ===========   ===========   ===========
Balance at
  12/31/2006 ......   $   148,287   $ 1,046,770   $ 2,498,578   $        -   $ 1,726,094   $ 5,419,729   $   249,662
                      ===========   ===========   ===========   ==========   ===========   ===========   ===========

                                                     (continued)
                                                        F-29
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                     (continued)

                                                    11/9/06                                                Warrant
                         3/2/05                    Variable                   All Other       Total      and Option
                      Convertible                 Conversion     Trafalgar    Warrants       Warrant      Valuation
                          Note          MMA          Price        Capital        and       and Option      (Income)
                        Holders       Capital        Notes         Notes       Options      Liability      Expense
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
<S>                   <C>           <C>           <C>           <C>          <C>           <C>           <C>
Value of options
  granted for
  compensation ....             -             -             -            -        24,116        24,116             -

Value of warrants
  granted in Note
  Modification
  Agreement .......             -     1,266,122             -            -             -     1,266,122             -

Reclassification
  to equity value
  of exercised
  warrants and
  forfeited options             -             -             -            -       (85,447)      (85,447)            -

Change in Value ...       (71,203)     (938,953)   (1,172,922)           -      (790,927)   (2,974,005)   (2,974,005)
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
Balance at
  3/31/2007 .......   $    77,084   $ 1,373,939   $ 1,325,656   $        -   $   873,836   $ 3,650,515   $(2,974,005)

Value of options
  granted for
  compensation ....             -             -             -            -        24,116        24,116             -

Change in Value ...       114,922     2,012,665     1,945,304            -     1,163,229     5,236,120     5,236,120
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
Balance at
  6/30/2007 .......   $   192,006   $ 3,386,604   $ 3,270,960   $        -   $ 2,061,181   $ 8,910,751   $ 2,262,115

Value of options
  granted for
  compensation ....             -             -             -            -        24,116        24,116             -

Value of warrants
  granted with
  debt issuance ...             -             -             -    2,371,981             -     2,371,981     1,244,481

Change in Value ...      (163,339)   (2,854,267)   (2,718,720)  (1,187,008)  (1,686,470)    (8,609,804)   (8,609,804)
                      -----------   -----------   -----------   ----------   -----------   -----------   -----------
Balance at
  9/30/2007 .......   $    28,667   $   532,337   $   552,240   $1,184,973   $   398,827   $ 2,697,044   $(5,103,208)

Value of warrants
  granted for
  compensation ....   $         -             -             -            -         4,838         4,838             -

Increase
  related to
  anti-dilution
  provisions ......             -       872,122       119,222            -       133,442     1,124,896     1,124,786

Change in Value ...       (17,049)     (299,739)     (294,386)    (553,876)     (186,508)   (1,351,556)   (1,351,556)
                      -----------   -----------   -----------    ---------   -----------   -----------   -----------
Balance at
  12/31/2007 .......  $    11,618   $ 1,104,720   $   377,076   $  631,097   $   350,599   $ 2,475,112   $(5,329,977)
                      ===========   ===========   ===========   ==========   ===========   ===========   ===========


                                                        F-30
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                                   11/9/06
                               3/2/05                              Variable                           All Other
                             Convertible                          Conversion       Trafalgar          Warrants
                                 Note               MMA              Price           Capital             and
                               Holders            Capital            Notes            Notes            Options
                             -----------      --------------      -----------      ----------      ----------------
<S>                          <C>              <C>                 <C>              <C>             <C>
March 31, 2006
--------------
  Warrants ............          304,500           2,000,000
  Exercise price ......            $1.00               $1.00
  Market price ........            $1.85               $1.85
  Expected life (years)              3.0                2.75
  Volatility ..........             354%                354%
  Discount rate .......            4.29%               4.29%

June 30, 2006
-------------
  Warrants ............          304,500           2,000,000
  Exercise price ......            $1.00               $1.00
  Market price ........            $1.25               $1.25
  Expected life (years)             2.75                 2.5
  Volatility ..........             271%                271%
  Discount rate .......            5.07%               5.07%

September 30, 2006
------------------
  Warrants ............          304,500           2,250,000
  Exercise price ......            $1.00               $1.00
  Market price ........            $1.16               $1.16
  Expected life (years)              2.5                2.25
  Volatility ..........             142%                142%
  Discount rate .......            5.03%               5.03%

December 31, 2006
-----------------
  Warrants/options ....          304,500           2,250,000        5,000,000                             3,300,050
  Exercise price ......            $1.00               $1.00            $1.50                      $0.675 to $11.25
  Market price ........            $0.65               $0.65            $0.65                                 $0.65
  Expected life (years)             2.25                 2.0              2.8                            0.5 to 4.9
  Volatility ..........             166%                166%             166%                                  166%
  Discount rate .......            4.78%               4.78%            4.78%                                 4.66%

March 5, 2007 - Note Modification Agreement
-------------------------------------------
  Warrants/options ....                            3,000,000
  Exercise price ......                                $1.50
  Market price ........                                $0.50
  Expected life (years)                                  3.0
  Volatility ..........                                 190%
  Discount rate .......                                4.60%

                                                     (continued)
                                                        F-31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                    (continued)

                                                                   11/9/06
                               3/2/05                              Variable                           All Other
                             Convertible                          Conversion       Trafalgar          Warrants
                                 Note               MMA              Price           Capital             and
                               Holders            Capital            Notes            Notes            Options
                             -----------      --------------      -----------      ----------      ----------------
<S>                          <C>              <C>                 <C>              <C>             <C>
March 31, 2007
--------------
  Warrants/options ....          304,500           5,250,000        5,000,000                             3,166,717
  Exercise price ......            $1.00      $1.00 to $1.50            $1.50                      $0.485 to $11.25
  Market price ........            $0.65               $0.65            $0.65                                 $0.65
  Expected life (years)             2.25          1.7 to 2.9              2.5                            0.2 to 4.3
  Volatility ..........             190%                190%             190%                                  190%
  Discount rate .......            4.65%               4.67%            4.60%                                 4.90%

June 30, 2007
-------------
  Warrants/options ....          304,500           5,250,000        5,000,000                             2,812,213
  Exercise price ......            $1.00      $1.00 to $1.50            $1.50                      $0.485 to $11.25
  Market price ........            $0.76               $0.76            $0.76                                 $0.76
  Expected life (years)              2.0          1.4 to 2.6              2.2                            1.2 to 4.0
  Volatility ..........           218.2%              218.2%           218.2%                                218.2%
  Discount rate .......            4.65%               4.87%            4.89%                                 4.89%

July 11, 2007 Debt Issuance and August 1, 2007 Debt Modification
----------------------------------------------------------------
  Warrants/options ....                                                             8,000,000
  Exercise price ......                                                                 $0.23
  Market price ........                                                                 $0.30
  Expected life (years)                                                                   5.0
  Volatility ..........                                                                  218%
  Discount rate .......                                                                 4.89%

September 30, 2007
------------------
  Warrants/options ....          304,500           5,250,000        5,000,000       8,000,000             2,862,213
  Exercise price ......            $1.00      $1.00 to $1.50            $1.50           $0.23      $0.485 to $11.25
  Market price ........            $0.15               $0.15            $0.15           $0.15                 $0.15
  Expected life (years)              1.4          1.1 to 2.2              2.0             4.8            1.0 to 3.7
  Volatility ..........             232%                232%             232%            232%                  232%
  Discount rate .......             3.9%                3.9%            4.01%            4.2%                 4.01%

December 31, 2007 (including issuance of warrant for 108,000 shares and
18,961,062 warrants for reset provisions)
-----------------------------------------------------------------------
  Warrants/options ....          304,500          20,578,125        6,929,812       8,000,000             4,723,338
  Exercise price ......            $1.00      $1.00 to $1.50            $1.50           $0.23      $0.485 to $11.25
  Market price ........            $0.08               $0.08            $0.08           $0.08                 $0.08
  Expected life (years)              1.1          0.9 to 1.9              1.7             4.5            0.8 to 3.4
  Volatility ..........             245%                245%             245%            245%                  245%
  Discount rate .......             2.7%                2.7%             2.4%            2.9%                  2.5%

                                                        F-32
</TABLE>
<PAGE>

NOTE 8   EMBEDDED CONVERSION OPTION LIABILITY

         The Company recorded an embedded conversion option liability related to
Convertible Notes with variable conversion prices issued on November 9, 2006,
June 15, 2007, July 11, 2007, and August 18, 2007. Such variable conversion
prices require liability treatment for embedded conversion option consisting of
conversion prices equal to a 20% to 45% discount to the market price of the
Company's common stock as of the end of each accounting period. The remaining
embedded conversion option liability will continue to be revalued until the
expiration date of the debt with any changes in valuation recorded as conversion
option valuation income or expense.

         The Company's embedded conversion option liability and related
revaluation assumptions are as follows:
<TABLE>
<CAPTION>
                                                                   Trafalgar
                              11/9/06      1/5/07       6/15/07     Capital       Total
                             Variable     Variable     Variable     Variable     Embedded    Conversion
                            Conversion   Conversion   Conversion   Conversion   Conversion     Option
                              Price        Price        Option       Price        Option      (Income)
                               Note         Note         Note        Notes       Liability     Expense
                            ----------   ----------   ----------   ----------   ----------   ----------
<S>                         <C>          <C>          <C>          <C>          <C>          <C>
FISCAL YEAR 2006

Debt issued 11/9/2006 ..    $  679,426   $        -   $        -   $        -      679,426      679,426

Change in Value ........       (12,350)           -            -            -      (12,350)     (12,350)
                            ----------   ----------   ----------   ----------   ----------   ----------
Balance at 12/31/2006 ..    $  667,076   $        -   $        -   $        -   $  667,076   $  667,076
                                                                                             ==========

FISCAL YEAR 2007

Debt issued 1/5/2007 ...             -      440,293            -            -      440,293       40,293

Change in Value ........       (13,926)     (11,088)           -            -      (25,014)     (25,014)
                            ----------   ----------   ----------   ----------   ----------   ----------
Balance at 3/31/2007 ...    $  653,150   $  429,205   $        -   $        -   $1,082,355   $   15,279

Debt issued 6/15/07 ....             -            -      349,792            -      349,792      149,792

Change in Value ........       305,316      220,413     (107,617)           -      418,112      418,112
                            ----------   ----------   ----------   ----------   ----------   ----------
Balance at 6/30/2007 ...    $  958,466   $  649,618   $  242,175   $        -   $1,850,259   $  583,183

Debt issued to
   Trafalgar ...........    $        -   $        -   $        -   $1,869,351   $1,869,351   $1,869,351

Change in Value ........    $  (64,971)  $  (53,954)  $   17,322   $ (159,116)  $ (260,719)  $ (260,719)
                            ----------   ----------   ----------   ----------   ----------   ----------
Balance at 9/30/2007 ...    $  893,495   $  595,664   $  259,497   $1,710,235   $3,458,891   $2,191,815

Change in Value ........    $  (90,069)  $  (60,046)  $   (5,006)  $  (30,793)  $ (185,914)  $ (185,914)
                            ----------   ----------   ----------   ----------   ----------   ----------
Balance at 12/31/2007 ..    $  803,426   $  535,618   $  254,491   $1,679,442   $3,272,977   $2,005,901
                            ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>
                                      F-33
<PAGE>
<TABLE>
<CAPTION>


                                                                                    Trafalgar
                              11/9/06           1/5/07            6/15/07            Capital
                             Variable          Variable          Variable            Variable
                            Conversion        Conversion        Conversion          Conversion
                              Price             Price             Option              Price
                               Note              Note              Note               Notes
                            ----------        ----------        ----------        --------------
<S>                         <C>               <C>               <C>               <C>
November 9, 2006
----------------
  Principal ............      $600,000
  Shares upon conversion       566,188
  Exercise price .......         $0.60
  Market price .........         $1.20
  Expected life (years)            3.0
  Volatility ...........          154%
  Discount rate ........         4.58%

December 31, 2006
-----------------
  Principal ............      $600,000
  Shares upon conversion     1,026,271
  Exercise price .......       $0.2925
  Market price .........         $0.65
  Expected life (years)            2.8
  Volatility ...........          166%
  Discount rate ........         4.79%

January 5, 2007 - Debt Issued
-----------------------------
  Principal ............                        $400,000
  Shares upon conversion                         863,320
  Exercise price .......                         $0.2295
  Market price .........                           $0.51
  Expected life (years)                              3.0
  Volatility ...........                            166%
  Discount rate ........                           4.79%

March 31, 2007
--------------
  Principal ............      $600,000          $400,000
  Shares upon conversion     1,484,432           975,465
  Exercise price .......        $0.242            $0.242
  Market price .........         $0.44             $0.44
  Expected life (years)            2.5               2.8
  Volatility ...........          190%              190%
  Discount rate ........         4.60%             4.60%

June 15, 2007
-------------
  Principal ............                                          $200,000
  Shares upon conversion                                           531,915
  Exercise price .......                                            $0.376
  Market price .........                                             $0.94
  Expected life (years)                                                0.3
  Volatility ...........                                            218.2%
  Discount rate ........                                             4.94%

                                           (continued)
                                              F-34
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           (continued)

                                                                                    Trafalgar
                              11/9/06           1/5/07            6/15/07            Capital
                             Variable          Variable          Variable            Variable
                            Conversion        Conversion        Conversion          Conversion
                              Price             Price             Option              Price
                               Note              Note              Note               Notes
                            ----------        ----------        ----------        --------------
<S>                         <C>               <C>               <C>               <C>
June 30, 2007
-------------
  Principal ............      $600,000          $400,000          $200,000
  Shares upon conversion       802,506           527,467           500,000
  Exercise price .......         $0.44             $0.44             $0.40
  Market price .........         $0.76             $0.76             $0.76
  Expected life (years)            2.2               2.5               0.3
  Volatility ...........        218.2%            218.2%            218.2%
  Discount rate ........         4.89%             4.89%             4.94%

August 2007 Issued and Amended
------------------------------
  Principal ............                                                              $1,310,000
  Shares upon conversion                                                               8,583,333
  Exercise price .......                                                          $0.12 to $0.20
  Market price .........                                                          $0.20 to $0.30
  Expected life (years)                                                                      2.0
  Volatility ...........                                                                    218%
  Discount rate ........                                                                   4.94%

September 30, 2007
------------------
  Principal ............      $600,000          $400,000          $200,000            $1,310,000
  Shares upon conversion     6,417,112         4,278,075         1,923,077            12,596,154
  Exercise price .......         $0.09             $0.09             $0.10                 $0.10
  Market price .........         $0.15             $0.15             $0.15                 $0.15
  Expected life (years)            2.0               2.0               1.8                   1.8
  Volatility ...........          232%              232%              232%                  232%
  Discount rate ........         4.01%             4.01%             4.01%                  4.1%

December 31, 2007
-----------------
  Principal ............      $595,000          $400,000          $200,000            $1,310,000
  Shares upon conversion    10,909,091         7,272,727         3,571,428            23,392,857
  Exercise price .......         $0.08             $0.08             $0.08                 $0.08
  Market price .........         $0.05             $0.05             $0.06                 $0.06
  Expected life (years)            1.8               1.8               1.5                   1.6
  Volatility ...........          245%              245%              245%                  245%
  Discount rate ........         2.48%             2.48%             2.71%                 2.71%


                                              F-35
</TABLE>
<PAGE>

NOTE 9   STOCKHOLDERS' DEFICIT

Common Stock Issued Pursuant to Recapitalization
------------------------------------------------

         The Company is deemed to have issued 1,157,951 shares of common stock
to the shareholders of DynEco and warrants and options to purchase 859,337 and
124,539 shares of the Company's common stock to holders of DynEco warrants and
DynEco non-qualified plan options, respectively, as part of the Stock Exchange
Agreement. In addition, the Company assumed liabilities of $933,282 (see Note
12).

Common Stock Issued in Acquisitions
-----------------------------------

         On March 6, 2006, the Company issued 340,000 shares of its common stock
to Raymon Valdes, pursuant to the acquisition of Changes in L'Attitudes, Inc.
The shares were valued at $2.50 per share (the average closing price of the
Company's stock on the 5 days before and 5 days after the acquisition period)
for an aggregate value of $850,680.

         On March 6, 2006, the Company issued 700,000 shares of its common stock
to Stephen A. Hicks, pursuant to the acquisition of IRT/ITR. The shares were
valued at $2.62 per share (the average closing price of the Company's stock on
the 5 days before and 5 days after the acquisition period) for an aggregate
value of $1,833,300.

Common Stock Issued Pursuant to Warrant Exercise
------------------------------------------------

         On March 15, 2006, the Company issued 133,332 shares of its common
stock pursuant to the exercise of common stock warrants at an exercise price of
$0.675 per share for an aggregate exercise price of $90,000.

         On April 14, 2006, the Company issued 66,600 shares of its common stock
pursuant to the exercise of common stock warrants at an exercise price of $0.675
per share for an aggregate exercise price of $45,000.

         On March 6, 2007, the Company issued 33,300 shares of its common stock
pursuant to the exercise of common stock warrants at an exercise price of $0.675
per share for an aggregate exercise price of $22,500.

Common Stock Issued For Services
--------------------------------

         On July 1, 2006, the Company entered into an agreement with Redwood
Consultants LLC to provide investor relation services to the Company. Pursuant
to this agreement, the Company issued Redwood Consultants 400,000 vested shares
of the Company's common stock valued at $500,000 or $1.25 per share determined
using the market stock price as of the date of the agreement. The fair value of
$500,000 will be amortized over the one year term of the agreement. The value of
this agreement was charged to operations, 50% in 2006 and 50% in 2007. The
unamortized balance at December 31, 2006, was recorded as deferred consulting
fees treated as a reduction in additional paid-in capital on that date.

         On July 11, 2006, the Company entered into an agreement with The
Research Works, LLC to provide equity research about the Company. Pursuant to
the Agreement, the Company issued The Research Works 80,000 vested shares of the
Company's common stock valued at $128,000 or $1.60 per share determined using
the market stock price as of the date of the agreement. The fair value of
$128,000 will be amortized over the term of the agreement from July 11, 2006 to
August 1, 2007. The amortized value of $64,200 of this agreement at December 31,
2006 was charged to operations as an expense in 2006 and the remaining balance
recorded as deferred consulting fees treated as a reduction in additional
paid-in capital. In 2007, the remaining balance was charged to operations.

                                      F-36
<PAGE>

         On August 21, 2006, the Company issued 30,000 shares of its common
stock to MMA Capital as payment for consulting services valued at $36,900 or
$1.23 per share determined using the market stock price as of issuance. The
value of these shares was expensed upon issuance.

         On August 29, 2006, the Company issued 170,000 shares of its common
stock to Forte Capital as payment for consulting services valued at $212,500 or
$1.25 per share determined using the market stock price as of issuance. The
value of these shares was expensed upon issuance.

         On September 1, 2006, the Company issued 200,000 shares of its common
stock to Len Sculler, a former director of the Company valued at $270,000 or
$1.35 per share determined using the market stock price as of issuance. The
value of these shares was expensed as director fees upon issuance.

         On September 20, 2006, the Company issued 100,000 shares of its common
stock to IMS-GA, LLC, an entity affiliated through common management with MMA,
as payment for consulting services valued at $125,000 or $1.25 per share
determined using the market stock price as of issuance. The fair value of the
$125,000 will be amortized over the one year term of the agreement. The
amortized value of this agreement of $41,600 as of December 31, 2006 was
recorded as equity and charged to operations as an expense and the remaining
balance recorded as deferred consulting fees treated as a reduction in
additional paid-in capital. In 2007, the remaining balance was charged to
operations.

         On November 6, 2006, the Company's Board of Directors appointed Eric H.
Winston as a Board member. The Company granted Eric H. Winston 200,000 shares of
common stock valued at $140,000 or $.70 per share (based on the closing price of
the Company's common stock on the date of issuance). The shares vest 25% upon
issuance and 25% every quarter thereafter. As of December 31, 2006, 50,000
shares had vested and were recorded as issued and outstanding. The fair value of
$140,000 will be recognized pro rata over the vesting period, and as of December
31, 2006, $58,333 has been recorded as equity and charged to operations as an
expense. In 2007, the remaining balance was recorded as equity and charged to
operations.

         On December 1, 2006, the Company's Board of Directors appointed Ben J.
Dyer as a Board member. The Company granted Ben J. Dyer 200,000 shares of common
stock valued at $110,000 or $.55 per share (based on the closing price of the
Company's common stock on the date of issuance). The shares vest 25% upon
issuance and 25% every quarter thereafter. As of December 31, 2006, 50,000
shares had vested and were recorded as issued and outstanding. The fair value of
$140,000 will be recognized pro rata over the vesting period, and as of December
31, 2006, $36,667 has been recorded as equity and charged to operations as an
expense. In 2007, the remaining balance was recorded as equity and charged to
operations.

         During the year ended December 31, 2007, a total of $155,000 was
recorded as equity and charged to operations as an expense.

         On March 15, 2007, the Company entered into an agreement with Uptick
Capital, LLC to provide financial consulting services pursuant to a consulting
agreement with a 14-day advance notice termination provision. Shares to be
granted under this agreement vested at the end of each 30-day period. On May 18,
2007, the Company gave written notice of its termination of the consulting
agreement and the agreement terminated June 1, 2007. Pursuant to the terms of
this agreement, the Company issued Uptick Capital 20,000 shares of vested common
stock valued at $7,000 or $0.35 per share determined using the market stock
price as of the date the shares became vested under this agreement. The fair
value of these shares was charged to operations.

         On April 1, 2007, the Company entered into an agreement with Peter H.
Clark to provide financial and management consulting services to the Company.

                                      F-37
<PAGE>

Pursuant to this agreement, the Company issued Peter H. Clark 300,000 vested
shares of the Company's common stock valued at $135,000 or $0.45 per share
determined using the market stock price as of the date of the agreement. The
agreement is for a term of three months and is renewable at the option of the
Company. The fair value of $135,000 was amortized to operating expenses over the
three-month term of the agreement.

         On April 1, 2007, the Company entered into an agreement with Brett Gold
to provide financial and management consulting services to the Company. Pursuant
to this agreement, the Company issued Brett Gold 100,000 vested shares of the
Company's common stock valued at $45,000 or $0.45 per share determined using the
market stock price as of the date of the agreement. The agreement is for a term
of three months and is renewable at the option of the Company. The fair value of
$45,000 was amortized to operating expenses over the three-month term of the
agreement.

         On May 1, 2007, the Company entered into an agreement with Pro345, LLC
to provide financial and management consulting services to the Company. Pursuant
to this agreement, the Company issued Pro345, LLC 150,000 vested shares of the
Company's common stock valued at $127,500 or $0.85 per share determined using
the market stock price as of the date of the agreement. The agreement is for a
term of six months and is renewable at the option of either party. The fair
value of $42,500 was amortized to operating expenses during the year ended
December 31, 2007.

         On June 6, 2007, the Company transferred 200,000 shares of the
Company's common stock to an escrow account of Crone Rozynko, LLP. Pursuant to
an Escrow Agreement, the shares are to remain in the escrow account until
granted by the Company's Board of Directors to Crone Rozynko for payment of
legal fees, and any unissued shares remaining in the escrow account on June 15,
2009, are to be returned to the Company. These shares are not considered issued
and outstanding in the accompanying consolidated financial statements.

         On June 30, 2007, the Company issued 50,000 shares of its common stock
from its 2007 Stock Option/Stock Issuance Plan with a fair value on the date of
grant of $38,000 or $0.76 per share in settlement of a legal dispute with MBN
Consulting, LLC. The Company has previously accrued $29,333 related to this
matter and charged an additional $8,667 to operations on June 30, 2007.

         On July 15, 2007, the Company issued Dana Salvo 100,000 vested shares
of the Company's common stock valued at $51,000 or $0.51 per share determined
using the market stock price as of the date of the grant for consulting services
rendered to the Company. The fair value of $51,000 was charged to consulting
fees on July 15, 2007.

         On July 20, 2007, the Company entered into an agreement with Brett Gold
to provide financial and management consulting services to the Company. Pursuant
to this agreement, the Company issued Brett Gold 100,000 vested shares of the
Company's common stock valued at $53,000 or $0.53 per share determined using the
market stock price as of the date of the agreement. The agreement is for a term
of six months commencing July 1, 2007, and is renewable at the option of the
Company. The fair value of $53,000 was amortized to operating expenses over the
six-month term of the agreement.

         On October 1, 2007, the Company entered into a six-month consulting
agreement with Pro345, LLC to provide financial and management consulting
services to the Company. Pursuant to this agreement, the Company issued Pro345,
LLC 350,000 vested shares of the Company's common stock valued at $52,500 or
$0.15 per share determined using the market stock price as of the date of the
agreement. The agreement is for a term of six months and is renewable at the
option of either party. The fair value of $52,500 is being amortized to
operating expenses over the six-month term of the agreement beginning October 1,
2007.

                                      F-38
<PAGE>

         On October 15, 2007, the Company issued director David Shapiro 100,000
shares of the Company's common stock valued at $17,000 or $0.17 per share
determined using the market stock price as of the date of grant for past
professional services rendered to the Company. The fair value of $17,000 was
charged to operating expenses.

         On October 16, 2007, the Company's Board of Directors granted 200,000
fully vested shares of the Company's common stock to Dan Brandano, Chairman and
Chief Executive Officer, pursuant to an employment agreement. The common stock
was valued at $18,000 or $0.18 per share (the closing market price of the
Company's common stock on the day of issuance). This value was charged to
director fees in October 2007 for prior service.

         On December 31, 2007, two former directors returned and the Company
cancelled a total of 300,000 vested shares of the Company's common stock that
had been granted to them in 2006 and vested during 2007. The Company had
previously charged director fees for the value of the shares on the date of
grant. In addition, 80,000 shares of common stock previously issuable to a
consultant were cancelled. The common stock and common stock issuable accounts
were decreased and additional paid in capital account was increased by the par
value of the common stock cancelled.

Common Stock Issued For Debt Modification and Waiver Agreements
---------------------------------------------------------------

         On January 13, 2006, the Company issued 200,000 shares of its common
stock to convertible note holders pursuant to the Modification and Waiver
Agreement (see Note 6). The shares were valued at $.90 per share for an
aggregate value of $180,018 based on contemporaneous cash sales of Company
common stock.

         On August 8, 2006, the Company entered into an agreement with MMA to
defer interest payments due each quarter until January 11, 2007, the maturity
date of the Notes. In consideration for this deferral the Company agreed to
increase the interest rate retroactively from 8% to 10% and to issue MMA 100,000
shares of its common stock. The stock was valued at $1.25 per share for an
aggregate value of $125,000 based on contemporaneous cash sales of Company
common stock. In accordance with EITF 96-19, this transaction was treated as a
modification of debt since the consideration given in the agreement did not
amount to more than a ten percent change in the present value of the amount due
to MMA over the life of the promissory note. As a result, the increase in
interest rate and the additional consideration will be accounted for
prospectively from the date of the modification. The value of the shares was
recognized immediately as a modification expense. The retroactive portion of the
increase in interest of $22,685 was also recognized immediately.

         On July 31, 2007, the Company entered into a settlement agreement with
AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New
Millenium Capital Partners, II, LLC, (collectively, the "Subscribers"). Pursuant
to which the Company issued an aggregate of 500,000 shares of the Company's
common stock to the Subscribers as further described in Note 6. These shares
were valued at $140,000 or $0.28 per share (the closing market price of the
Company's common stock on the day of issuance) and this value was charged to
interest expense on July 31, 2007.

         On October 25, 2007 and December 1, 2007, the Company entered into
agreements with Miller Investments that extended the maturity date of a $150,000
unsecured promissory note as further described in Note 6. In consideration for
this note extension, the Company issued Miller Investments 150,000 and 300,000
shares of its common stock valued at $34,500 or $0.23 per share and $39,000 or
$0.13 per share, respectively (the closing market price of the Company's common
stock on the day of issuance). This value was recorded as debt discount and will
be amortized to interest expense over the extended term of the loan which
matured on December 31, 2007.

                                      F-39
<PAGE>

Common Stock Issued for Cash
----------------------------

         On April 25, 2006, the Company issued and sold 50,000 shares of its
common stock for $1.00 per share and issued a warrant to purchase an additional
50,000 shares of the Company's common stock at an exercise price of $1.00 per
share.

         On May 31, 2006, the Company issued and sold 10,000 shares of its
common stock for $1.00 per share and issued a warrant to purchase an additional
10,000 shares of the Company's common stock at an exercise price of $1.00 per
share.

         On June 29, 2006, the Company issued 100,000 shares of its common stock
for $1.00 per share to MMA Capital. In connection with this transaction, the
Company paid a finder's fee of $9,800 in cash and 80,000 shares of its common
stock to Forte Capital. The 80,000 shares were valued at $82,000 or $1.16 per
share determined using the market stock price as of the issuance date and
recorded as common stock issuable at the common stock's par value and charged to
operations as consulting expense. These shares were removed from issuable in
2007.

         On June 29, 2006, the Company issued and sold 15,000 shares of its
common stock for $1.00 per share and issued a warrant to purchase an additional
15,000 shares of the Company's common stock at an exercise price of $1.00 per
share. The warrants are exercisable for a period of five (5) years from the date
of issuance.

         On July 10, 2006, the Company issued and sold 400,000 shares of its
common stock for $1.00 per share to MMA Capital. In connection with this
transaction, the Company paid a finder's fee of $49,000 in cash to Forte
Capital, LLC. In connection with this transaction, the Company agreed to file a
new registration statement covering the sale of these shares on or before
October 2, 2006, or within thirty (30) days of the effective date of the
Company's pending post-effective amendment(s), whichever comes first, and to
cause the registration statement to become effective within sixty (60) days of
its filing with the SEC. The Company is subject to liquidated damages if the
registration statement is not timely filed or should the registration statement
not be declared effective within the above-stated time period, of two percent
(2%) of the committed capital investment, in cash or common stock of the Company
at current market price, at the Purchaser's discretion, for each one (1)
calendar month of delay in either filing or effectiveness, or both. This
late-filing/late-effectiveness provision also applies to the Common Stock
Purchase Agreement between MMA Capital and the Company dated June 29, 2006 as
set forth in the Company's Current Report on Form 8-K filed with the SEC on July
6, 2006. As of November 17, 2006, the Company has not filed a registration
statement to register these shares, and all liquidated damages were subsequently
waived by MMA.

         On July 28, 2006, the Company issued and sold 250,000 shares of its
common stock to Miller Investments, LLC for $1.00 per share and warrants to
purchase 250,000 shares of common stock at an exercise price of $1.00 per share.
The stock subscription agreement related to the common stock sold contained
anti-dilution provisions providing a reset of the number of shares issued if the
Company subsequently sold any convertible debt, preferred or common stock for
less than $1.00. On August 1, 2007, the Company amended an agreement with
another investor related to the sale of convertible debt and lowered the maximum
conversion price of that convertible debt to $0.23 per share. As a result, the
Company has recorded 836,957 shares of common stock as issuable with a charge to
additional paid-in capital for the shares' par value of $8,370. The warrants are
exercisable for a period of five (5) years from the date of issuance. The
warrant agreement contained anti-dilution provisions providing for a reset of
the exercise price and number of shares under the warrants if the Company issues
or sells common stock for less than $1.00. On November 8, 2007, the Company
issued common stock pursuant to the conversion of a convertible debenture at a

                                      F-40
<PAGE>

conversion price of $0.128 per share. As a result, the shares of common stock
purchasable under the warrant increased to 1,953,125 shares and the exercise
price decreased to $0.128 per share. The reset of the shares and exercise price
was accounted for as a change in the fair value of warrants recorded in the
warrant and option liability account with a decrease in the warrant and option
liability income account.

         On August 9, 2006, the Company issued and sold 20,000 shares of its
common stock for $1.00 per share and warrants to purchase an additional 10,000
shares at an exercise price of $1.00 per share.

         On October 12, 2006, the Company sold 10,000 shares of common stock for
$10,000 or $1.00 per share.

         On October 25, 2006, the Company received proceeds of $50,000 towards
the purchase of 50,000 shares of the Company's common stock for $1.00 per share.
These shares are recorded as issuable common stock at December 31, 2006.

Common Stock Issued Upon Conversion of Debt
-------------------------------------------

         On September 5, 2006, the Company issued 488,400 shares of its common
stock pursuant to the conversion of a related-party convertible promissory note
in the principal amount of $400,000 plus accrued interest of $39,560, at a
conversion rate of $0.90 per share.

         For the year ended December 31, 2006, the Company issued a total of
413,245 shares of its common stock pursuant to the conversion of six convertible
promissory notes in the aggregate principal amount of $350,000 plus accrued
interest of $23,291, at a conversion rate of $0.90 per share. The Company
expensed any remaining unamortized debt discount related to these notes upon
conversion.

         On April 12, 2007, the Company issued a total of 120,000 shares of its
common stock on conversion of a convertible promissory note aggregating $75,000,
accrued interest of $10,870 and damages totaling $34,130, based on a conversion
rate of $1.00 per share or total consideration of $120,000.

         On April 13, 2007, the Company settled a dispute with Raymond Valdes
and issued a total of 770,000 shares of common stock on conversion of a
convertible note aggregating $600,000, and accrued interest of $61,730. The
additional stock consideration of 328,847 shares, after considering the original
note conversion terms of $1.50 per share, was valued at $245,235 based on the
$0.75 quoted trading price on the settlement date and resulted in a loss on
settlement of $76,635. The aggregate value of this settlement was $908,365.

         On June 4, 2007, holders of 5% convertible promissory notes converted
$150,000 of these notes into 200,000 shares the Company's common stock at a
conversion rate of $0.75 per share.

         On November 11, 2007, Trafalgar converted $5,000 of secured convertible
term notes it acquired on August 18, 2007 into 39,062 shares of the Company's
common stock at a conversion rate of $0.128 per share.

Common Stock Warrants, Options and Valuation
--------------------------------------------

         The Company had outstanding vested and unvested warrants and options as
follows:

                                         DECEMBER 31,
         Exercisable Securities             2007
         ----------------------          ------------
         Warrants .............           39,485,775
         Options ..............            1,149,762

                                      F-41
<PAGE>

         The Company estimates the value of awards of share-based payments using
the Black-Scholes option pricing method that uses assumptions in effect on the
date of grant. The assumptions of volatility are based on historical volatility
since the Company does not have traded options on which to base any estimate of
implied volatility. The assumptions of expected term are based on the
contractual term since the Company has no reliable history to measure the
expected term. The risk-free rate for periods within the expected term of the
option is based on the U.S. treasury yield curve in effect at the time of the
grant.

Common Stock Warrants Issued to Non-Employees
---------------------------------------------

         The following is a summary of warrant activity:

                                                          Weighted
                                               Weighted    Average
                                               Average    Remaining   Aggregate
                                               Exercise  Contractual  Intrinsic
Non-Employee Warrants                Shares      Price      Term        Value
---------------------              ----------  --------  -----------  ---------

Outstanding at January 1, 2006 ..           -   $    -      0.00           -
Granted .........................     200,000   $ 1.25      5.00           -
Exercised .......................           -   $ 0.00         -           -
Forfeited or expired ............           -   $    -         -           -
Outstanding at December 31, 2006      200,000   $ 1.25      5.00           -


Outstanding at January 1, 2007 ..     200,000   $ 1.25      3.05           -
Granted .........................     108,000   $ 1.00      1.59           -
Exercised .......................           -   $    -         -           -
Forfeited or expired ............           -   $    -         -           -
                                   ----------   ------      ----        ----

Outstanding at December 31, 2007      308,000   $ 1.16      1.83           -
                                   ==========   ======      ====        ====
Exercisable at December 31, 2007      308,000   $ 1.16      1.83           -
                                   ==========   ======      ====        ====

         The weighted average valuation assumptions for grants during 2007 and
2006 are as follows:

                                  2007      2006
                                 ------    ------
Expected volatility ..........    245%      335%
Weighted average volatility ..    245%      335%
Expected dividends ...........       0         0
Expected term (in years) .....     1.6       5.0
Risk-free rate ...............   2.75%     4.07%

         The Company estimates the value of awards of share-based payments using
the Black-Scholes option pricing method that uses assumptions in effect on the
date of grant. The assumptions of volatility are based on historical volatility
since the Company does not have traded options or warrants on which to base any
estimate of implied volatility. The assumptions of expected term are based on
the contractual term since the Company has no reliable history to measure the
expected term. The risk-free rate for periods within the expected term of the
warrants are based on the U.S. treasury yield curve in effect at the time of the
grant.

                                      F-42
<PAGE>

         Effective January 16, 2006, the Company granted warrants exercisable
for 200,000 shares of its common stock valued at $185,976 to MBN Consulting, LLC
as payment for consulting services. The consulting agreement had a term of two
years and contained termination provisions, including the Company's right to
terminate the agreement upon 60 days' written notice. The value of the warrants
of $185,976 was being amortized over the two-year life of the consulting
agreement. On July 18, 2006, the Company issued a written notice of termination
and the consulting agreement was terminated on September 17, 2006. The remaining
unamortized consulting fee was charged to operations upon termination.

         Effective as of December 31, 2007, pursuant to a consulting agreement
with Forte Partners, LLC, the Company issued warrants exercisable for 108,000
shares of its common stock at an exercise price of $1.00 per share for past
services. The value of the warrants total $4,838 related to deferred loan costs
and was charged to operations on December 31, 2007 as amortization expense. The
warrants expire on dates ranging from January 31, 2009 to June 15, 2010.

Warrants Issued for Cash or Related to Debt
-------------------------------------------

         The following is a summary of warrant activity for warrants sold for
cash or related to debt:

                                                          Weighted
                                               Weighted    Average
                                               Average    Remaining   Aggregate
                                               Exercise  Contractual  Intrinsic
Warrants Issued for Cash             Shares     Price       Term        Value
------------------------           ----------  --------  -----------  ---------

Outstanding at January 1, 2006 ..   1,104,923   $ 0.70      3.74           -
Granted .........................   8,069,389   $ 0.59      3.66           -
Issued in recapitalization ......     859,337   $ 4.95      2.81           -
Exercised .......................    (199,932)  $ 0.68         -           -
Forfeited or expired ............    (179,167)  $ 4.64         -           -
                                   ----------   ------      ----        ----

Outstanding at December 31, 2006    9,654,550   $ 1.00      3.22           -
Granted .........................  11,000,000   $ 0.58      3.00           -
Increase related to
  anti-dilution provisions ......  18,961,062   $ 0.23      2.10           -
Exercised .......................     (33,300)  $ 0.68         -           -
Forfeited or expired ............    (404,537)  $ 0.68         -           -
                                   ----------   ------      ----        ----

Outstanding at December 31, 2007   39,177,775   $ 0.58      2.80           -
                                   ==========   ======      ====        ====
Exercisable at December 31, 2007   39,177,775   $ 0.58      2.80           -
                                   ==========   ======      ====        ====

         The weighted average valuation assumptions for grants with the sale of
common stock or issuance of debt for cash during 2007 and 2006 are as follows:

                                  2007      2006
                                 ------    ------
Expected volatility ..........    232%      191%
Weighted average volatility ..    232%      191%
Expected dividends ...........       0         0
Expected term (in years) .....     2.7       3.0
Risk-free rate ...............   3.35%     4.70%

         On January 3, 2006, pursuant to the agreement with Street Venture
Partners, LLC, a related party (see Note 11), the Company issued warrants
exercisable for 388,889 shares of its common stock, at an exercise price of
$0.90 per share.

                                      F-43
<PAGE>

         On January 13, 2006, the Company issued warrants exercisable for
859,337 shares of its common stock at exercise prices ranging from $3.00 to
$11.25 per share to the original shareholders of DynEco Corporation as part of
the Company's recapitalization.

         On January 13, 2006, pursuant to the Modification and Waiver Agreement,
the Company issued warrants to purchase an aggregate of 45,500 shares of common
stock at $1.00 per share. The warrants are exercisable for a period of three (3)
years from the date of issuance (see Note 6).

         On January 13, 2006 and September 20, 2006, pursuant to the Company's
agreements with MMA Capital, the Company issued warrants exercisable for
2,000,000 and 250,000 shares of its common stock, respectively, at the exercise
price of $1.00 per share (see Note 6). The value of the warrants was recorded as
debt discount and is being amortized over the remaining term of the MMA
convertible notes payable (see Notes 6 and 7). The warrant agreement contained
anti-dilution provisions providing for a reset of the exercise price and number
of shares under the warrants if the Company issues or sells common stock for
less than $1.00. On November 8, 2007, the Company issued common stock pursuant
to the conversion of a convertible debenture held by another investor at a
conversion price of $0.128 per share. As a result, the shares of common stock
purchasable under the above warrants increased to 17,578,125 shares, and the
exercise price decreased to $0.128 per share.

         On July 28, 2006, pursuant to the Company's agreement with Miller
Investments, LLC, the Company issued warrants exercisable for 250,000 shares of
its common stock at an exercise price of $1.00 per share issued. The warrants
are exercisable for a period of five (5) years from the date of issuance. The
warrant agreement contained anti-dilution provisions providing for a reset of
the exercise price and number of shares under the warrants if the Company issues
or sells common stock for less than $1.00. On November 8, 2007, the Company
issued common stock pursuant to the conversion of a convertible debenture at a
conversion price of $0.128 per share. As a result, the shares of common stock
purchasable under the warrant increased to 1,953,125 shares, and the exercise
price decreased to $0.128 per share.

         On July 15, 2006, pursuant to the sale of shares of its common stock,
the Company issued warrants exercisable for 15,000 shares of its common stock at
an exercise price of $1.00 per share. The warrants are exercisable for a period
of five (5) years from the date of issuance.

         On November 9, 2006, pursuant to the sale of convertible promissory
notes with variable conversion prices aggregating $600,000, the Company issued
warrants to purchase an aggregate of 5,000,000 shares of the Company's common
stock at $1.50 per share. The warrants are exercisable for a period of seven (7)
years from the date of issuance (see Note 6). On August 1, 2007, the Company
amended an agreement with another investor related to the sale of convertible
debt and warrants resulting in lowering the maximum conversion price of that
convertible debt to $0.23 per share. As a result, the shares of common stock
purchasable under the warrant to purchase 5,000,000 shares of common stock
increased to 6,929,812 shares, and the exercise price decreased to $1.0823 per
share.

         During the year ended December 31, 2006, pursuant to the conversion of
outstanding promissory notes, the Company issued warrants exercisable for
120,000 shares of its common stock at exercise prices ranging from $.75 to $1.00
per share.

         On March 5, 2007, pursuant to the modification of the MMA Capital, LLC
convertible promissory note, the Company issued warrants exercisable for
3,000,000 shares of its common stock at an exercise price of $1.50 per share.
The warrant has an expiration date of March 5, 2010.

         On July 11, 2007, pursuant to Trafalgar Capital Specialized Investment
Fund, Luxembourg's purchase of secured convertible debentures, the Company
issued an aggregate of 3,000,000 warrants to purchase common stock at a price of

                                      F-44
<PAGE>

85% of the Fixed Conversion Price component of the convertible debentures, per
share. The warrants are exercisable for a period of five years. The number of
shares subject to the warrant and the exercise price are subject to adjustment
for stock splits, stock combinations and certain dilutive issuances, including
the issuance of shares of Common Stock for no consideration or for a
consideration per share less than warrant price in effect immediately prior to
such issuance.

         On August 1, 2007, the Company entered into an Amendment to Securities
Purchase Agreement, Secured Convertible Debenture and Security Agreement with
Trafalgar Capital Specialized Investment Fund, Luxembourg ("Trafalgar") under
which (i) the exercise price of the Warrants issued to Trafalgar pursuant to the
convertible debt financing which closed on July 11, 2007 (the "Financing") was
reduced to $0.23 per share, provided, however, that if after registration of the
shares issuable upon exercise of the Warrants, shares of the Company's common
stock trade above $0.75 per share for 30 consecutive trading days, the exercise
price of the Warrants will be increased to $0.50 per share; (ii) the Company
agreed to issue to Trafalgar a warrant exercisable for an additional 5 million
shares at $0.23 per share, provided, however, that if after registration of the
shares issuable upon exercise of the Warrants, shares of the Company's common
stock trade above $0.75 per share for 30 consecutive trading days, the exercise
price of this Warrant will be increased to $0.646 per share and the number of
shares exercisable pursuant to the Warrant will be reduced to 2 million; and
(iii) the Fixed Price component of the variable conversion price discussed above
of the Convertible Debenture was reduced to $0.23.

Non-Plan Common Stock Options to Non-Employees
----------------------------------------------

         At December 31, 2007 and 2006, the Company had the following non-plan
options outstanding and exercisable:
<TABLE>
<CAPTION>
                                      Outstanding Options          Exercisable Options
                               --------------------------------  ----------------------
                                            Weighted   Weighted               Weighted
                Range of                     Average    Average                Average
                Exercise          Number    Remaining  Exercise    Number     Exercise
December 31,     Price         Outstanding    Life       Price   Exercisable    Price
------------  ---------------  -----------  ---------  --------  -----------  --------
<S>           <C>              <C>          <C>        <C>       <C>           <C>
   2007       $0.485 to $0.70    1,050,000  3.7 Years  $  0.66     1,050,000  $  0.66
   2006                 $0.70    1,000,000  4.8 Years  $  0.70     1,000,000  $  0.70
</TABLE>
         A summary of the changes in non-plan stock options outstanding is
presented below:
                                                                     Weighted
                                                                      Average
                                                       Shares     Exercise Price
                                                      ---------   --------------
Options outstanding as of January 1, 2006 .........           -      $      -
Options granted ...................................   1,000,000      $   0.70
Options exercised .................................           -      $      -
Options forfeited .................................           -      $      -
                                                      ---------      --------
Options outstanding as of January 1, 2007 .........   1,000,000      $   0.70
Options granted ...................................     200,000      $   0.48
Options exercised .................................           -      $      -
Options cancelled .................................           -      $   0.48
Options forfeited .................................    (150,000)     $   0.70
                                                      ---------      --------
Non-plan options outstanding at December 31, 2007     1,050,000      $   0.66
                                                      =========      ========
Weighted average fair value of options granted
  during the year ended December 31, 2007 .........                  $   0.48
                                                                     ========

                                      F-45
<PAGE>

         The weighted average valuation assumptions for grants during 2007 and
2006 are as follows:

                                           2007      2006
                                          ------    ------
         Expected volatility ..........    166%      161%
         Weighted average volatility ..    166%      161%
         Expected dividends ...........       0         0
         Expected term (in years) .....     5.0       5.0
         Risk-free rate ...............   4.75%     4.82%

         The Company estimates the value of awards of share-based payments using
the Black-Scholes option pricing method that uses assumptions in effect on the
date of grant. The assumptions of volatility are based on historical volatility
since the Company does not have traded options on which to base any estimate of
implied volatility. The assumptions of expected term are based on the
contractual term since the Company has no reliable history to measure the
expected term. The risk free rate for periods within the expected term of the
option are based on the U.S. treasury yield curve in effect at the time of the
grant.

         On January 8, 2007, the Company's Board of Directors appointed David
Shapiro as a Board member. The Company granted David Shapiro an option to
purchase 200,000 shares of the Company's common stock at a purchase price of
$0.485 per share, the average of the opening and closing price of the stock on
the date of grant. 50,000 shares subject to the option vested immediately and an
additional 50,000 shares subject to the option vest each quarter thereafter. An
expense for director fees of $96,464 was recognized 25% on January 8, 2007 with
the balance (excluding the $24,226 related to cancelled options) recognized over
the remaining vesting period based in a Black-Scholes option pricing model using
the following assumptions: stock price $0.485, expected term five (5) years,
volatility 166%, zero expected dividends and a 4.75% discount rate. Options to
purchase a total of 200,000 shares were vested as of December 31, 2007.

Stock-Based Compensation Plans
------------------------------

         On January 13, 2006, in conjunction with the recapitalization, the
Company assumed DynEco's obligations under DynEco's outstanding non-qualified
option plans consisting of the 2001 Equity Incentive Plan and two expired plans,
the 1993 Corporate Stock Option Plan and the 1993 Advisors Stock Option Plan.
There were no grants under these plans during 2006 or year-to-date 2007. The
Company does not anticipate issuing any options under the former DynEco
non-qualified option plans.

         In May 2007, the Company's Board of Directors approved the 2007 Stock
Option/Stock Issuance Plan. No grants of options have been made from this plan
as of December 31, 2007; however, 1,050,000 shares of common stock have been
granted under this plan as of this period end.

         At December 31, 2007, the Company had the following plan options
outstanding and exercisable:

                      Outstanding Options                 Exercisable Options
              ------------------------------------      -----------------------
                             Weighted     Weighted                     Weighted
Range of                      Average      Average                      Average
Exercise        Number       Remaining    Exercise         Number      Exercise
 Price        Outstanding      Life        Price        Exercisable     Price
--------      -----------    ---------    --------      -----------    --------
$   3.00         42,500      1.3 Years    $   3.00         42,500      $   3.00
$  11.40         50,595      1.9 Years    $  11.40         50,595      $  11.40
$   3.60          6,667      2.0 Years    $   3.60          6,667      $   3.60
                -------                                   -------
                 99,762                                    99,762
                =======                                   =======

                                      F-46
<PAGE>

         The following is a summary of the changes in plan options outstanding:

                                                                     Weighted
                                                                      Average
                                                       Shares     Exercise Price
                                                      ---------   --------------
Options outstanding at January 1, 2006   ..........           -      $      -
Options exchanged in recapitalization .............     124,539      $   7.11
Options granted ...................................           -      $      -
Options exercised .................................           -      $      -
Options forfeited .................................     (23,333)     $   3.00
                                                      ---------      --------
Options outstanding at December 31, 2006 ..........     101,206      $   7.25
Options exchanged in recapitalization .............           -      $      -
Options granted ...................................           -      $      -
Options exercised .................................           -      $      -
Options forfeited .................................      (1,444)     $   2.63
                                                      ---------      --------
Plan options outstanding at December 31, 2007 .....      99,762      $   7.30
                                                      =========      ========
Plan options exercisable at December 31, 2007 .....      99,762
                                                      =========
Weighted average fair value of options granted
  during the period ...............................                  $      -
                                                                     ========

Former DynEco 2001 Equity Incentive Plan

         Under the 2001 Equity Incentive Plan, DynEco reserved a total of
1,000,000 shares of our common stock for issuance upon exercise of incentive and
non-qualified stock options, stock bonuses and rights to purchase awarded from
time-to-time, to our officers, directors, employees and consultants. Absent
registration under the Securities Act of 1933, as amended, or the availability
of an applicable exemption therefrom, shares of common stock issued upon the
exercise of options or as restricted stock awards will be subject to
restrictions on sale or transfer. As of December 31, 2007, options to purchase
22,278 shares are outstanding under the 2001 Equity Incentive Plan.

Former DynEco 1993 Corporate Stock Option Plan

         Under the 1993 Corporate Stock Option Plan, DynEco reserved a total of
750,000 shares of our common stock for issuance upon exercise of stock options
granted, from time-to-time, to our officers, directors, and employees. This
Corporate Stock Option Plan has expired. As of December 31, 2007, options to
purchase 70,817 shares are outstanding under the 1993 Corporate Stock Option
Plan.

Former DynEco 1993 Advisors Stock Option Plan

         Under the 1993 Advisors Stock Option Plan, DynEco reserved a total of
750,000 shares of our common stock for issuance upon exercise of stock options
granted, from time-to-time, to our advisors and consultants.

         Absent registration under the Securities Act of 1933, as amended, or
the availability of an applicable exemption therefrom, shares of common stock
issued under the above plans upon the exercise of options are subject to
restrictions on sale or transfer. As of the date of this report, options to
purchase 6,667 shares had been granted and are outstanding under the 1993
Advisors Stock Option Plan. The 1993 Advisors Stock Option Plan has terminated,
and no further awards may be made thereunder; however, outstanding awards of
6,667 shares are outstanding under this plan until their termination date on
December 31, 2008.

         In May 2007, the Company's Board of Directors approved the 2007 Stock
Option/Stock Issuance Plan and reserved a total of 5,500,000 shares of common

                                      F-47
<PAGE>

stock for issuance under this plan. On May 23, 2007, the Company filed a Form S8
registering the shares issuable under this plan with the Securities and Exchange
Commission. The plan allows the issuance of stock options and outright grants of
common stock, from time-to-time, to its officers, directors, employees and
independent contractors who provide services to the Company. As of December 31,
2007, a total of 1,050,000 shares of common stock have been granted to
independent contractors/consultants and accounted for as described in Note 9
above. No grants of options have been made from the Plan as of December 31,
2007.

Share-Based Compensation
------------------------

         For the years ended December 31, 2007 and 2006, the Company recognized
compensation costs for employees, directors, consultants and others totaling
$1,130,930 and $1,903,976, respectively. These amounts increased the Company's
operating expenses and equity during these periods.

         As of December 31, 2007, the Company has $33,822 in compensation costs
related to nonvested share-based awards not yet recognized as expense, and the
weighted average period the Company expects to recognize these costs is three
(3) months. These costs included $51,536 related to consulting agreements. This
additional compensation cost will increase the Company's operating expenses in
future periods.

NOTE 10  INCOME TAXES

         The effective tax rate varies from the maximum federal statutory rate
as a result of the following items:

                                                           2007        2006
                                                          ------      ------
         Tax benefit computed at the maximum
           Federal statutory rate ...................     (34.0%)     (34.0%)
         State taxes, net of Federal tax benefit ....      (3.6)       (3.6)
         Non-deductible items .......................       0.1         0.2
         Net (increase) due to various basis
           differences in assets and liabilities: ...
             Intangible assets ......................       4.9         1.6
             Convertible debt discount ..............      15.9        14.0
             Warrant and option liability ...........     (35.3)       (0.9)
             Embedded conversion option liability ...      13.3         2.3
         Change in valuation allowance ..............      38.7        20.3
                                                          ------      ------
         Income tax provision .......................         -%          -%
                                                          ======      ======

         The tax effect of temporary differences at December 31 were as follows:

                                                        2007         2006
                                                       ------       ------
         Asset:
           Accounts receivable .................   $     3,800   $     3,800
           Net operating loss ..................     4,680,200     2,394,700
                                                   -----------   -----------
                                                     4,684,000     2,398,500
                                                   -----------   -----------
         Net deferred tax asset before valuation
           allowance ...........................   $ 4,684,000   $ 2,398,500
         Less valuation allowance ..............    (4,684,000)   (2,398,500)
                                                   -----------   -----------
         Net deferred tax asset ................   $         -   $         -
                                                   ===========   ===========

                                      F-48
<PAGE>

         For financial statement purposes, no tax benefit has been reported in
2007 or 2006 as the Company has had a net operating loss since inception and
realization of the tax benefits is uncertain. Accordingly, a valuation allowance
has been established for the full amount of the deferred tax asset. The change
in the valuation allowance was an increase of $2,285,500 and $2,233,493 in 2007
and 2006, respectively. At December 31, 2007, the Company has net operating
losses to offset future taxable income through the following years:

         2025 ......   $  485,314
         2026 ......   $6,110,253
         2027 ......   $5,856,000

         The utilization of the carryforward is dependent upon the ability to
generate sufficient taxable income during the carryforward period. In addition,
utilization of the carryforward may be limited due to ownership changes as
defined in the Internal Revenue Code.

         The Company adopted FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109" ("FIN
48") on January 1, 2007. The Company has identified its federal income tax
return and state income tax returns in Florida and New York as "major" tax
jurisdictions, as defined. The periods subject to examination for our federal
and state income tax returns are the tax years ended December 31, 2004, and
thereafter. The Company believes its income tax filing positions and deductions
will be sustained on audit and does not anticipate any adjustments that would
result in a material change to its financial position; therefore, no reserves
for uncertain income tax positions have been recorded pursuant to FIN 48, and no
cumulative effect adjustment was recorded related to the adoption of FIN 48. The
Company's policy for recording interest and penalties associated with audits, if
any, is to record such items as a component of income (loss) before taxes. If
applicable, penalties and interest paid are recorded in interest and other
expense and interest received is recorded in interest income in the statement of
operations.

NOTE 11  RELATED PARTIES AND SIGNIFICANT SHAREHOLDERS

Consulting Contracts with Directors
-----------------------------------

         The Company entered into a consulting agreement with Innovations
Publishing, LLC, pursuant to which the Company has recognized consulting fee
expense of $5,000 for the year ended December 31, 2007. Mr. Dyer, a former
member of the Company's Board of Directors, owns 75% of Innovations Publishing.

         On November 3, 2006, the Company entered into a consulting agreement
with E. H. Winston & Associates, pursuant to which Mr. Winston, a former
director of the Company, provides the Company with general business consulting
services and advice. The initial term of the consulting agreement was three
months. On February 5, 2007, the parties extended the agreement until June 5,
2007. The Company was to pay E. H. Winston & Associates a consulting fee of
$10,000 per month plus reimbursement of all reasonable out-of-pocket expenses.
The Company has recorded $60,000 in professional fees related to the agreement
during fiscal year 2007.

         On November 17, 2006, the Company entered into another consulting
services agreement with E. H. Winston & Associates pursuant to which Mr. Winston
would identify and introduce the Company to prospective investors and would
assist the Company in preparing introductory materials in connection therewith.
The term of this agreement is six months unless terminated earlier by either
party. The Company may terminate this agreement for any reason on 14 days' prior
written notice. The Company was to pay E. H. Winston & Associates a consulting
fee of $10,000 per month plus reimbursement of all reasonable out-of-pocket
expenses related to this November 17, 2006 agreement. In addition, if the

                                      F-49
<PAGE>

Company enters into a financial commitment with any prospective investor
introduced by E. H. Winston & Associates, the Company will pay an additional fee
of $8,000 for each $100,000 of financial commitment or part thereof. In
addition, if the Company issues warrants in connection with such financial
commitment, the Company will issue to E. H. Winston & Associates a warrant
exercisable for a number of shares equal to 10% of the warrants issued by the
Company in connection with such financial commitment. The Company has recorded
$50,000 in expenses related to this agreement during fiscal year 2007.

Street Venture Partners, LLC
----------------------------

         Street Venture Partners, LLC is a privately-held company owned equally
by Daniel G. Brandano, the Company's CEO and Chairman, and his spouse. As of
December 31, 2007, Street Venture Partners LLC owned 1,066,666 shares or
approximately 6.8% of the Company's issued and outstanding common stock.

Claudale Ltd.
------------

         Claudale Limited is a Gibraltar-based company that manages a family
trust (which owns no shares of the Company's common stock) for Mr. Daniel G.
Brandano, the Company's CEO and Chairman. Mr. Brandano has no ownership interest
in Claudale Limited and disclaims beneficial ownership or control of any shares
of the Company's common stock owned by Claudale Limited.

         At December 31, 2007, Claudale Ltd. owned 693,333 shares or
approximately 4.4% of the Company's issued and outstanding common stock.

Brian J. Brandano
-----------------

         On October 1, 2007, the Company entered into a month-to-month
consulting agreement with Brian J. Brandano for management services as directed
by the corporate controller for which the Company pays $1,500 per week.

         At December 31, 2007, Brian J. Brandano owned 292,243 shares or
approximately 1.9% of the Company's issued and outstanding common stock. Brian
J. Brandano is the son of Daniel G. Brandano, the Company's CEO and Chairman,
and was formerly employed by the Company until July 2006.

Payable to Employee (Stephen A. Hicks)
--------------------------------------

         At December 31, 2007, the Company owed $160,000 to Stephen A. Hicks,
the former 100% shareholder of IRT/ITR, for advances made to IRT/ITR prior to
its acquisition by the Company. There is currently no interest being charged for
the use of the advance, nor is any interest anticipated to be paid.

Diversified Acquisition Trust, LLC
----------------------------------

         Geoffrey J. Eiten is the sole beneficial owner of Diversified
Acquisition Trust, LLC ("DAT"). Mr. Eiten, through the Trustee, exercises sole
investment and voting powers over the Trust. On September 5, 2005, the Company
issued the Trust a convertible promissory note in the principal amount of
$400,000. The Note bears interest at 10% per annum and is convertible into
shares of the Company's common stock at a conversion rate of $0.68 per share. In
connection with this transaction, the Company also issued a warrant exercisable
for shares of its common stock at the exercise price of $0.68 per share. On
September 5, 2006, the convertible promissory note and all accrued interest were
converted into 488,400 shares of the Company's common stock.

                                      F-50
<PAGE>

         DAT also held unsecured promissory notes in the amounts of $10,000,
$30,000, and $25,000 all with a maturity date of February 28, 2006, and bearing
an annual interest rate of 10.0%. The loans were repaid during the first quarter
of 2006.

         DAT owns 1,395,066 shares or approximately 8.9% of the Company's issued
and outstanding common stock as of December 31, 2007 and 2006.

         Mr. Eiten was not employed by the Company at any time through December
31, 2007.

NOTE 12  RECAPITALIZATION OF DYNAMIC LEISURE GROUP

         On January 13, 2006, DynEco entered into an agreement with the former
shareholders of DLG, pursuant to which DynEco acquired all of the outstanding
capital stock of DLG, and DLG became a wholly-owned subsidiary of DynEco.

         As consideration for its acquisition of the outstanding capital stock
of DLG, DynEco issued an aggregate of 197,000 shares of its Series A Preferred
Stock to the former shareholders of DLG.

         Issuance of the Series A Preferred Stock in exchange for the
outstanding capital stock of DLG pursuant to the Stock Exchange Agreement
resulted in a change in control of DynEco where (a) the former shareholders of
DLG acquired approximately 83% of the currently outstanding voting securities of
DynEco, and (b) the designees of the former shareholders of DLG were appointed
as the executive officers and a majority of the board of directors of DynEco.
The Series A Preferred Stock converted into 6,566,667 shares of common stock of
the Company when the Company's Articles of Incorporation were amended to
increase the number of authorized shares of the Company's common stock
sufficient to permit full conversion of the Series A Preferred Stock. DynEco
also agreed that the currently outstanding options and warrants of DLG would be
exchanged for options and warrants to purchase an aggregate of 1,493,887
post-reverse shares of common stock of DynEco, and that the then-outstanding
convertible promissory notes of DLG would become convertible into 1,386,111
post-reverse shares of common stock of DynEco (after taking into account the
Company's 1 for 30 reverse stock split affected on January 13, 2006).

         The transaction was exempt from the registration requirements of the
Act by reason of Section 4(2) thereunder as a transaction by an issuer not
involving any public offering.

         The transaction is treated as a recapitalization of DLG. Accordingly,
the financial statements of the Company subsequent to the recapitalization
consists of the balance sheets of both companies at historical cost, the
historical operations of DLG, and the operations of DynEco from the
recapitalization date.

NOTE 13  BUSINESS ACQUISITIONS AND ACQUISITION LIABILITIES

Casual Car General Service Agreement
------------------------------------

         On January 3, 2006, Street Venture Partners, LLC (see Note 9), sold the
U.S. rights to the Casual Car General Service Agreement ("GSA") to DLG for an
unsecured convertible Promissory Note in the amount of $350,000, and a warrant
to purchase 388,889 shares of common stock at a fixed price of $.90 per share.
The Promissory Note is convertible into the Company's common stock at $.90 per
share and bears interest at 10% per annum. The agreement was recorded as an
Intangible Asset at a value of $348,413, and a short term deposit of $1,587 and
will be amortized over 2.5 years when it is placed in service. The GSA allows
the Company to sell car rental products to leisure travelers primarily in Europe
and the United Kingdom, through Skycars International Rent a Car, Middlesex,
United Kingdom.

                                      F-51
<PAGE>

         The Company plans to continue with the Casual Car GSA, selling direct
to the final consumer via the Internet, under the Casual Car rental brand. The
Casual Car GSA allows the Company to establish a foundation in certain desired
leisure travel markets with multiple product offerings.

Changes in L'Attitudes, Inc.
----------------------------

         On February 8, 2006, the Company consummated the purchase of all of the
issued and outstanding capital stock of Changes in L'Attitudes, Inc. ("CIL"),
for a purchase price of $2,090,680. The purchase price included the acquisition
of intangible assets and goodwill related to CIL's position in the travel
industry as a specialist in providing resort destination travel packages to the
Caribbean and Eastern Mexico, its web based assets consisting of CIL's websites,
URL's, and search engine optimization abilities that drive inquiries to the
Company, and its management team and trained workforce. Almost all of its
business originates via the Internet. CIL is located in Largo, Florida. It has
since been integrated into the Company's corporate headquarters in Tampa,
Florida. The purchase price consisted of a combination of cash ($640,000),
340,000 shares of the Company's common stock, valued at $2.50 per share (the
average closing price of the Company's common stock during the acquisition
period ($850,680)), and a one-year secured Convertible Promissory Note in the
principal amount of $600,000 convertible into shares of the Company's common
stock at $1.50 per share. The cash portion of the purchase price was payable in
two tranches, $200,000 delivered at closing, with the balance to be delivered on
or before June 9, 2006, following completion of audits of the financial
statements of CIL for the years ended December 31, 2004, and December 31, 2005.
As of December 31, 2007, the remaining cash portion of the purchase price has
not been paid.

         Additional shares of common stock may be issued if the Company, as part
of any subsequent business acquisitions on or before December 31, 2006, issues
to the acquiree/seller Dynamic's common stock at a rate of less than $1.50 per
share. The issuance of any additional shares will not result in a change to the
recorded value of this acquisition because the issuance of additional shares is
contingent upon a change in security price. The Company agreed to include the
sale of the shares issued and those issuable upon conversion of the Note in the
next registration statement filed by the Company. That registration statement
was filed with the SEC on May 12, 2006.

         The Convertible Promissory Note bears interest at the rate of 9% per
annum, and matures on February 7, 2007. The Note is convertible into shares of
the Company's common stock, on or before the maturity date, at the conversion
rate of $1.50 per share. The conversion rate may be adjusted downward if the
Company, in subsequent acquisitions on or before December 31, 2006, provides
consideration that includes convertible securities with a conversion rate of
less than $1.50 per share. In the event of any such adjustment, the conversion
rate will be adjusted to the most favorable rate offered, but no lower than
$1.00 per share. Subsequent to the Closing Date, if the Company obtains
cumulative net external financing of $2,500,000 or more, early repayment of 50%
of the outstanding balance on the Note may be required. If the Company receives
in excess of $5,000,000 in cumulative net external financing, an early repayment
of the full outstanding balance on the Note may be required. The Company has
agreed to include the sale of the shares issued, and those issuable upon
conversion of the Note in the next registration statement filed by the Company.
The Note is secured by a lien on the assets of CIL. A beneficial conversion
value of $480,000 was calculated by multiplying the expected number of shares to
be issued upon conversion of the debt by the difference between the conversion
price of $1.50 per share and the market value of the common stock on the debt
issuance date of $2.70 per share. The debt discount was fully amortized at
December 31, 2007.

                                      F-52
<PAGE>

         The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition as adjusted for the
final purchase allocation as of December 31, 2006:

                                                    February 8, 2006
                                                    ----------------
         Current assets .......................        $  836,330
         Other assets .........................            53,011
         Intangible assets.....................         1,486,000
         Goodwill .............................           714,336
                                                       ----------
         Total assets .........................         3,089,677
         Current liabilities ..................           998,997
                                                       ----------
         Net assets acquired ..................        $2,090,680
                                                       ==========

         The Company's acquisition of CIL provided Dynamic with a quick entrance
to the travel market, access to a trained workforce in place, a critical mass of
existing business allowing the Company to pursue hotel contracts not already
held by CIL and a distribution channel to sell packaged airline tickets
purchased under wholesale bulk airline contracts expected to be secured through
the IRT/ITR acquisition. These factors contributed to the Company's agreement to
a purchase price that resulted in recognition of goodwill. Goodwill was
recognized in an amount greater than originally anticipated because the trading
price of the Company's common stock increased between the date the number of
shares to be exchanged was agreed upon by the parties and the acquisition date.
Intangible assets acquired included hotel contracts with a history of renewal,
web-based assets consisting of CIL's internet presence through its URLs,
websites and search engine optimization abilities that drive inquiries to the
Company and a mailing list created through opt-in features on CIL's websites.

         The allocation of the purchase price was refined during 2006 with
adjustments being made at June 30, 2006 and December 31, 2006. The final
purchase price allocation involved the reallocation of costs from goodwill to
identifiable intangible assets totaling $896,000. The resulting change in
amortization was treated as a change in accounting estimate as of October 1,
2006.

         The allocated cost and the estimated amortizable life of intangible
assets acquired are as follows:

                                            Amortization         Allocated
         Classification:                        Life                Cost
         ---------------                    ------------         ----------
         Hotel contracts ..............         7 years          $  325,000
         URLs and web-based assets ....        10 years          $1,011,000
         Mailing list .................         3 years          $  150,000
         Total ........................                          $1,486,000
         Weighted average life ........       8.6 years

         Hotel contracts were valued based upon replacement cost including
labor, travel and administrative costs that would have otherwise been required
to obtain the contracts. These contracts are generally renewable annually in the
ordinary course of business. CIL has a history of renewing its contracts and
therefore a seven (7) year amortization life was established for this asset. The
Company acquired over 100 URLs and related websites and these assets were valued
using two methods. The first method determined the present value of advertising
costs the Company would expect to incur if it was required to purchase search
engine page placements being achieved by CIL. The second method determined the
present value of historical gross profits earned by CIL projected into the
future, less the value assigned to hotel contracts. The Company's URLs are
renewable annually at its option for a nominal cost and, as a result, a ten (10)
year amortization life has been established for the related intangible asset.
The mailing list acquired was valued based upon estimated replacement cost of an
opt-in mailing list targeted at pre-qualified customers. The useful life of this
mailing list was estimated at three (3) years.

                                      F-53
<PAGE>

         Goodwill of $714,336 is expected to be deductible over 15 years for tax
purposes.

         The results of CIL operations are included in the consolidated
financial statements beginning with the date of acquisition.

Island Resort Tours, Inc. and International Travel and Resorts, Inc.
--------------------------------------------------------------------

         On March 6, 2006, the Company purchased all of the issued and
outstanding capital stock of Island Resort Tours, Inc. ("IRT") and International
Travel and Resorts, Inc. ("ITR"), for a purchase price of $4,783,300. The
purchase price included the acquisition of intangible assets and goodwill. IRT
and ITR are both located in New York, New York.

         The purchase price consisted of a combination of cash ($1,500,000),
700,000 shares of the Company's common stock valued at $2.62 per share (the
average closing price of the Company's common stock during the acquisition
period ($1,833,300)), and a one-year secured Convertible Promissory Note in the
principal amount of $1,450,000. The cash portion of the purchase price is
payable in two tranches, $500,000 delivered at closing, with the balance to be
delivered on or before May 5, 2006, following completion of audits of the
financial statements of IRT and ITR for the years ended December 31, 2004 and
2005. The Company is currently in discussion with the former owner of IRT/ITR to
reduce the cash portion of the payment. The agreed upon amount will be paid when
an agreement is reached and the reduction in the amount payable, if any, would
result in a reduction in goodwill recognized in this transaction.

         Additional shares of the Company's common stock may be issued if the
Company, as part of any subsequent business acquisitions on or before December
31, 2006, issues shares of its common stock at a rate less than $1.50 per share.
The issuance of any additional shares will not result in a change to the
recorded value of this acquisition because the issuance of additional shares is
contingent upon a change in security price. In such event, additional shares may
be issued equivalent to the most favorable rate, but in no event at a rate less
than $1.00 per share. Up to an additional 350,000 shares of the Company's common
stock could be issued as a result of this adjustment provision.

         The Convertible Promissory Note bears interest at the rate of 9% per
annum and matures on March 6, 2007. The Note is convertible into shares of the
Company's common stock on or before the maturity date at a rate of $1.50 per
share. The conversion rate may be adjusted downward if the Company, in
subsequent acquisitions on or before December 31, 2006, provides consideration
that includes convertible securities with a conversion rate of less than $1.50
per share. In the event of any such adjustment, the conversion rate will be
adjusted to the most favorable rate offered, but no lower than $1.00 per share.
A beneficial value of $1,208,334 was calculated by multiplying the expected
number of shares to be issued upon conversion of the debt by the difference
between the conversion price of $1.50 per share and the market value of the
common stock on the debt issuance date of $2.70 per share. The debt discount is
being amortized over the term of the Note.

         Subsequent to the Closing Date, if the Company obtains cumulative net
external financing of $3,500,000 or more prior to the maturity date, early
repayment of 50% of the outstanding balance on the Note may be required. If the
Company receives in excess of $7,000,000 in cumulative net external financing
prior to the maturity date, an early repayment of the full outstanding balance
on the Note may be required. The Company agreed to include the sale of the
shares issued and those issuable upon conversion of the Note in the next
registration statement filed by the Company. That registration statement was
filed with the SEC on May 12, 2006.

         The Note is secured by a lien on assets of IRT and ITR.

                                      F-54
<PAGE>

         The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition as adjusted for the
final purchase price allocation as of December 31, 2006:

                                                           March 6, 2006
                                                           -------------
         Current assets ............................         $  708,167
         Other assets ..............................             80,236
         Intangible ................................          2,917,500
         Goodwill ..................................          2,187,860
                                                             ----------
         Total assets ..............................          5,893,763
         Current liabilities .......................          1,110,463
                                                             ----------
         Net assets acquired .......................         $4,783,300
                                                             ==========

         The Company's acquisition of IRT/ITR provided Dynamic further access to
the travel market, access to a trained workforce in place, access to wholesale
bulk airline contracts not previously available to CIL and a critical mass of
existing business, therefore allowing the Company to pursue wholesale bulk
airline contracts with other national and international carriers. These factors
contributed to the Company's agreement to a purchase price that resulted in
recognition of goodwill. Goodwill was recognized in an amount greater than
originally anticipated because the trading price of the Company's common stock
increased between the date the number of shares to be exchanged was agreed upon
by the parties and the actual acquisition date. Intangible assets acquired
included airline and hotel contracts with a history of renewal.

         The allocation of the purchase price was refined during 2006 with
adjustments being made at June 30, 2006 and December 31, 2006. The final
purchase price allocation involved the reallocation of costs from goodwill to
identifiable intangible assets totaling $1,317,500. The resulting change in
amortization was treated as a change in accounting estimate as of October 1,
2006.

         The allocated cost and the estimated amortizable life of intangible
assets acquired are as follows:

                                            Amortization         Allocated
         Classification:                        Life                Cost
         ---------------                    ------------         ----------
         Airline contracts ............        7 years           $2,820,000
         Hotel contracts ..............        7 years           $   97,500
         Total ........................                          $2,917,500
         Weighted average life ........        7 years

         Airline contracts were valued based upon the present value of the
estimated incremental increase in gross profit from purchasing airline tickets
under wholesale bulk airline contracts as compared to published fares. Airline
contracts are renewable annually in the ordinary course of business. IRT/ITR had
an 18+ year history of renewing its main airline contract and an eight (8) year
history of renewing its other airline contracts and, therefore, a seven (7) year
amortization life was established for this asset. Hotel contracts were valued
based on replacement cost, including labor, travel and administrative costs that
would have otherwise been required to obtain the contracts, after eliminating
any hotel contracts that were duplicates of those held by CIL. These contracts
are generally renewable annually in the ordinary course of business. IRT/ITR has
a history of renewing its contracts and, therefore, a seven (7) year
amortization life was established for this asset.

         Goodwill of $2,187,860 is expected to be deductible over 15 years.

         The results of IRT/ITR operations are included in the consolidated
financial statements beginning with the date of acquisition.

                                      F-55
<PAGE>

Unaudited Pro Forma Financial Information
-----------------------------------------

         The table below summarizes the unaudited pro forma financial
information of the consolidated results of operations for the years ended
December 31, 2006 and 2005 as though the CIL and IRT/ITR business combinations
had been completed as of the beginning of the period reported on:

                                          2006                2005
                                      ------------        ------------
         Revenues .............       $  6,732,351        $  8,317,049
         Cost of Revenue ......         (4,871,009)         (6,220,089)
         Gross Profit .........          1,861,342           2,096,960
         Operating Expenses ...         (7,738,000)         (4,111,148)
         Operating Loss .......         (5,876,658)         (2,014,188)
         Other Expenses .......         (4,484,010)         (1,492,667)
         Net Loss .............        (10,360,668)         (3,506,855)
         Net Loss per share ...       $      (1.02)       $      (0.40)

         The main difference in the net loss between 2006 and 2005 is due to the
fact that DLG was a development-stage company in 2005 with minimal expenses. In
2006, expenses were incurred as a result of acquisitions, organizational costs
relating to establishing a corporate structure, expenditures related to being a
public company, and the building of a corporate staff.

NOTE 14  OTHER MATTERS

Separation Agreement dated January 13, 2006
-------------------------------------------

         In connection with the transactions contemplated by the Stock Exchange
Agreement described elsewhere in this Report, DynEco and Dr. Thomas Edwards
entered into a Separation Agreement dated January 13, 2006 under which:

         o  The Employment Agreement dated as of January 1, 2004 by and between
            DynEco Corporation and Dr. Edwards was terminated;

         o  Dr. Edwards irrevocably waived, forfeited and relinquished any right
            to receive any accrued or deferred compensation in connection with
            his prior services rendered to Dynamic. As of March 31, 2006,
            $283,625 in deferred compensation payable to Dr. Edwards was
            accrued;

         o  The parties confirmed that they entered into a modification
            agreement relating to the Exclusive Patent License and Know-How
            Agreement dated February 4, 2004;

         o  DynEco irrevocably waived, forfeited and relinquished any right,
            title or interest in any intellectual property created by Dr.
            Edwards during the course of his services to DynEco, other than the
            intellectual property covered by the Exclusive Patent License and
            Know-How Agreement dated February 4, 2004;

         o  DynEco transferred and assigned to Dr. Edwards, all of DynEco's
            right, title and interest in the lease covering Dynamic's facilities
            in Rockledge, Florida, and Dr. Edwards assumed all of Dynamic's
            obligations thereunder; and

         o  DynEco transferred and assigned to Dr. Edwards, all of DynEco's
            right, title and interest in the furniture, property and equipment
            located at DynEco's facilities in Rockledge, Florida, and Dr.
            Edwards has assumed all of DynEco's obligations thereunder.

                                      F-56
<PAGE>

         The Separation Agreement resulted in the forfeiture of accrued
compensation of $283,625 by Dr. Edwards in 2006, and the transfer to him of
$33,418 recorded net value of fixed assets, both of these items were written off
the balance sheet of DynEco prior to the recapitalization that occurred on
January 13, 2006.

EXCLUSIVE PATENT AND KNOW-HOW LICENSE AGREEMENT DATED JANUARY 12, 2006
----------------------------------------------------------------------

         On January 12, 2006, DynEco and Dr. Thomas C. Edwards, the Company's
then CEO entered into an Exclusive Patent and Know-How License Agreement that
amended and superseded the Exclusive Patent and Know-How License Agreement dated
February 4, 2004, by and between DynEco and Dr. Edwards. The 1994 Agreement
granted DynEco the exclusive license to use certain patented technology owned by
Dr. Edwards, in return for a royalty payment to Dr. Edwards based upon a
percentage of revenues generated from sales of products incorporating the
licensed technology. The Company subsequently granted the Parker-Hannifin
Corporation an exclusive license to use the technology covered by 1994 License
Agreement in UniVane(R) products developed by Parker-Hannifin.

         Under the January 12, 2006 Exclusive Patent and Know-How License
Agreement, Dr. Edwards has relinquished any entitlement to royalty payments
under the Exclusive Patent and Know-How License Agreement dated February 4, 2004
and has assigned and transferred to DynEco all of his right, title and interest
under the Exclusive Patent and Know-How License Agreement dated February 4,
2004. The Company acquired the right, title and interest as part of the Stock
Exchange Agreement.

         On October 5, 2006, the Company entered into an Assignment and
Assumption Agreement, with Buccaneer Exploration, Inc. pursuant to which the
Company agreed to sell, assign and transfer to Buccaneers Exploration, Inc. all
of the Company's right, title and interest in the Exclusive Worldwide License
Agreement between the Company and Parker Hannifin Corporation dated May 1, 2003,
and Buccaneer Exploration agreed to assume all of the Company's obligations
under the License Agreement, including repayment of any amounts the Company
expended in association with the License Agreement. The consummation of this
transaction was subject to the approval of TRDA which was subsequently received.

         On October 5, 2006, the Company entered into a second Assignment and
Assumption Agreement with Buccaneer Exploration, Inc. pursuant to which the
Company agreed to sell, assign and transfer to Buccaneer Exploration, Inc. all
of the Company's right, title and interest in the TRDA Funding Agreement dated
November 20, 2002 with the Technology Research Development Authority of the
State of Florida ("TRDA"), and Buccaneer Exploration has agreed to assume all of
the Company's obligations under the Funding Agreement, including payment of the
Company's TRDA loan payable - TRDA. The consummation of this transaction was
subject to the approval of TRDA, which was subsequently received. A gain on sale
of assets was recognized totaling $235,138 as a result of this transaction in
2006.

         On October 5, 2006, the Company entered into a third Assignment and
Assumption Agreement with Buccaneer Exploration, Inc. pursuant to which the
Company agreed to sell, assign and transfer to Buccaneer Exploration, Inc. all
of the Company's right, title and interest in the Exclusive Patent and Know-How
License Agreement dated January 12, 2006, by and between DynEco Corporation
(n/k/a Dynamic) and Dr. Thomas C. Edwards, and Buccaneer Exploration agreed to
assume all of the Company's obligations under the Edwards Patent Agreement.

                                      F-57
<PAGE>

ARTICLES OF CORRECTION TO CHANGE DYNECO CORPORATION'S NAME
----------------------------------------------------------

         On February 28, 2006, DynEco filed Articles of Correction with the
Secretary of State of Minnesota, to change DynEco's name to Dynamic Leisure
Corporation. These Articles were effective in the State of Minnesota at the
close of business on March 3, 2006.

         There was no financial effect related to this filing.

NOTE 15  COMMITMENTS AND CONTINGENCIES

         Neither the Company nor its subsidiaries have material commitments or
contingencies for purchasing goods or services that are not reported in the
Company's consolidated financial statements, notes, or other disclosures at
December 31, 2007.

Operating Leases
----------------

         The Company currently leases office space in its Tampa, Florida, and
New York City locations. Monthly rent expense under the Tampa, Florida lease is
approximately $13,700 per month, and the lease expires June 2011. Monthly rent
expense under the New York City lease is approximately $11,500 per month, and
the lease expires April 2008. Rent expense for the year ending December 31, 2007
and 2006 was $345,624 and $268,143, respectively.

         Future lease obligations are as follows as of December 31, 2007:

         2008 .....   $210,270
         2009 .....   $163,798
         2010 .....   $163,798
         2011 .....   $ 95,549

Legal Proceedings
-----------------

         The Company was named as a principal party to proceedings brought by
Raymon Valdes and Changes in L'Attitudes, Inc. in Hillsborough County, Florida,
Circuit Court. The proceedings began on November 13, 2006. This matter was
resolved on April 13, 2007 when the parties entered into a Settlement Agreement
pursuant to which (i) Mr. Valdes agreed to convert the outstanding $600,000
convertible promissory note issued by the Company pursuant to the acquisition by
the Company of Changes in L'Attitudes, Inc. into 600,000 shares of the Company's
common stock; (ii) the Company agreed to pay the remaining approximately
$411,000 owed to Mr. Valdes in 52 weekly installments commencing on the earlier
to occur of 75 days from the settlement date or the receipt by the Company of
outside financing in a minimum amount of $750,000; and (iii) the Company agreed
to issue to Mr. Valdes an additional 170,000 shares of its common stock. On
April 13, 2007, the Company issued 770,000 shares of common stock for the
conversion of the $600,000 promissory note and settlement of all accrued
interest.

         The Company was named as a principal party to proceedings brought by
MMA Capital, LLC in United States District Court for the Northern District of
California. The proceedings began on November 22, 2006. The matter was resolved
on March 5, 2007 when the parties entered into a Settlement Agreement that
provided for the issuance of a warrant to MMA and MMA agreed to (i) extend the
maturity date of the Company's outstanding promissory note payable to MMA to
March 5, 2008; and (ii) to dismiss its action against the Company. Note 6
further describes the terms of settlement.

                                      F-58
<PAGE>

         The Company was named as a principal party to proceedings brought by
MBN Consulting, LLC in Hillsborough County, Florida, Circuit Court. The
proceedings began on November 22, 2006. On June 30, 2007, this matter was
resolved and the Company issued 50,000 shares of its common stock with a fair
value on the date of grant of $38,000 or $0.76 per share in settlement of this
dispute. The Company has previously accrued $29,333 related to this matter and
charged an additional $8,667 to operations on June 30, 2007.

         The Company filed a lawsuit in Hillsborough County, Florida, Circuit
Court on March 2, 2007 against Stephen Hicks. The complaint seeks recovery of
damages or alternative relief arising from breach of a contract under which the
Company acquired IRT/ITR. The complaint alleges non-compliance with certain
terms and conditions providing for integration of the companies.

         On March 5, 2007, counsel for Stephen Hicks notified the registrant
that it was allegedly in breach of a convertible debenture payable under the
March 6, 2006 Purchase Agreement between the registrant and Hicks (the
"Agreement") that provided for the registrant's acquisition of IRT/ITR. The
Agreement calls for payment of a convertible debenture in the amount of
$1,450,000 as of March 6, 2007. In the event of any failure to pay on the
convertible debenture, the Agreement provides for a continuing obligation to pay
interest at a nine percent annual rate. On October 30, 2007, Stephen Hicks filed
an answer and counterclaim to the Company's complaint filed March 2, 2007,
alleging breach of the Agreement regarding the convertible debenture payable and
other financial matters pursuant to the Agreement. The Company has classified
the convertible debenture as a current liability and has recorded accrued
interest of $237,045 related to this obligation on its consolidated balance
sheet as of December 31, 2007. The Company believes it has recorded all other
financial obligations due under the Agreement.

         The Company is currently in discussions with Mr. Hicks regarding the
settlement of the matters arising on March 2, 2007 and October 30, 2007.

         In January 2008, the Company has been named as a principal party to
proceedings brought in the name of MMA Capital, LLC ("MMA") in United States
District Court for the Northern District of California alleging breach of the
Secured Convertible Promissory Note and Security Agreement executed by the
parties on or about January 11, 2006. The complaint also alleges breach of the
Confidential Settlement Agreement executed by the parties on or about March 5,
2007. On February 23, 2008, the Company filed a counter claim against MMA
Capital, LLC in United States District Court for the Northern District of
California alleging breach of the Secured Convertible Promissory Note, Security
Agreement and Confidential Settlement Agreement. Section 6 of the Confidential
Settlement Agreement encouraged the Company to obtain additional or alternative
financing and that if the Company obtained additional or alternative financing
from any lender, which exceeded $3,000,000, MMA would subordinate its security
position in the collateral to the security position of the other lender. The
Company alleges MMA breached the Agreements by attempting to prevent and
interfere with its efforts to obtain additional financing with Trafalgar, by MMA
refusing to agree to subordinate its security interest in the collateral to the
security interest of Trafalgar despite Trafalgar already lending or investing
more than $3,000,000 to the Company. The Company also alleges MMA's interference
by, among other things, attempting to dissuade Trafalgar from providing
additional financing or investment and filing a bad faith temporary restraining
order that interfered with the Company's prospective economic advantage by
preventing the Company from obtaining all or more financing and/or investment
from Trafalgar and other investors or lenders. As a direct and proximate result
of MMA's alleged interference, the Company has been damaged in an amount in
excess of $2,500,000. The Counterclaim alleges MMA's actions were wanton,
willful and despicable, entitling the Company to punitive damages also. The
parties are in discussions to settle this matter.

                                      F-59
<PAGE>

         In January 2008, the Company has been named as a principal party to
proceedings brought in the name of Bay West Tampa Investors, LLC in Hillsborough
County, Florida, Circuit Court seeking collection of payments under the
corporate office real estate lease. This matter was settled on February 6, 2008,
and full payment of obligations under the real estate lease was made on March
14, 2008.

         From time to time, we may become subject to proceedings, lawsuits and
unasserted claims in the ordinary course of business. Such matters are subject
to many uncertainties, and outcomes are not predictable with assurance. As of
the date of this report, we do not believe that any of these matters would be
material to the Company's financial condition or operation.

NOTE 16  SUBSEQUENT EVENTS

         On January 22, 2008, the Company entered into an agreement (the
"Purchase Agreement") with Trafalgar Capital Specialized Investment Fund,
Luxembourg ("Trafalgar") with respect to the purchase by Trafalgar of $1,200,000
of secured convertible debentures and the issuance of related warrants. On
January 24, 2008, the Company issued two (2) 42-month convertible debentures to
Trafalgar aggregating $1,200,000. The debentures bear interest at twelve percent
(12%) per annum, compounded monthly, and are convertible into common stock at
the lesser of (a) an amount equal to ten cents ($0.10) per share (the "Fixed
Conversion Price"), or (b) an amount equal to eighty-five percent (85%) of the
lowest daily closing bid price of the Company's common stock, as quoted by
Bloomberg, LP, for the five (5) trading days immediately prior to conversion
with each debenture subject to current exchange rate protection. In no event is
Trafalgar entitled to convert the debentures or accrued interest into an amount
of shares that would cause Trafalgar's ownership in the Company to exceed 4.99%.
The $1,000,000 debenture requires interest-only payments for the first six (6)
months from the closing date after which this debenture is to be redeemed over
the remaining twenty-four (24) months through monthly principal and interest at
a ten percent (10%) redemption premium. The $200,000 debenture requires
redemption over twelve (12) months after closing through monthly principal and
interest at a ten percent (10%) redemption premium. Should the Company raise in
excess of $500,000 during the life of the debentures, it shall be required to
redeem thirty percent (30%) of the outstanding principal balance of the
debentures. Interest is payable in cash or common stock at a value equal to the
closing bid price on the date the interest is due or when the interest is paid
at the option of Trafalgar.

         The Purchase Agreement requires the Company to use proceeds from the
$200,000 debenture for the purpose of acquiring a travel company based in the
United Kingdom. Conditions to the Trafalgar purchase of the debentures included
provisions whereby the Company shall a) cause each of its other lenders to file
a Form UCC-3 within sixty (60) days of the date of the Purchase Agreement and
the Company shall file a form UCC-1 or such other forms as may be required to
perfect Trafalgar's interest in the pledged collateral as detailed in the
related security agreement, providing Trafalgar with a senior lien on all of the
Company's assets and intellectual property and provided proof of such filing to
Trafalgar, b) establish a stock option plan for senior executives, including its
Chief Executive Officer which shall allow the Company to grant to such employees
options to acquire an aggregate of up to ten million (10,000,000) shares of the
Company's common stock, provided that an option to acquire no less than seven
million (7,000,000) of such shares is granted to the Company's Chief Executive
Officer, c) take all necessary steps such that Trafalgar shall have the ability
to appoint one member to the Company's Board of Directors and d) shall reduce
the fixed conversion price to ten cents ($0.10) on all currently executed
convertible debentures held by Trafalgar and the exercise price to ten cents
($0.10) on all currently executed warrants held by Trafalgar. As of April 11,
2008, no purchase agreement as been entered into by the Company to acquire a
travel company based in the United Kingdom and the $200,000 is being held in
escrow by Trafalgar.

                                      F-60
<PAGE>

         Due to the variable conversion price, the secured convertible term
notes will be bifurcated and recorded as two liability instruments - a debt
instrument and an embedded conversion option liability at fair value.

         In connection with the offering, the Company issued a warrant to
purchase fifteen million (15,000,000) shares of the Company's common stock at
one tenth of one cent ($0.001) per share ("Warrant"). The Warrant is exercisable
for a period of five (5) years. The number of shares subject to the Warrant and
the exercise price are subject to adjustment for stock splits, stock
combinations and certain dilutive issuances, including the issuance of shares of
common stock for no consideration or for a consideration per share less than
warrant price in effect immediately prior to such issuance. In no event is
Trafalgar entitled to acquire common stock through the exercise of this warrant
in an amount of shares that would cause Trafalgar's ownership in the Company to
exceed 4.99%.

         The Company entered into an Investor Registration Rights Agreement that
requires the Company to prepare and file no later than April 10, 2008
("Scheduled Filing Deadline") with the SEC a registration statement under the
1933 Act and have this registration statement declared effective no later ninety
(90) days ("Scheduled Effective Date") after the Scheduled Filing Deadline. In
the event the Company fails to file or obtain effectiveness of the registration
statement as agreed, the Company shall pay Trafalgar liquidated damages equal to
two percent (2%) of the liquidated value of the debentures outstanding for each
thirty (30) day period (or any part thereof) after the Scheduled Filing Deadline
or the Scheduled Effective Date. The liquidated damages are capped at fifteen
percent (15%). As of April 11, 2008, the Company has not filed with the SEC a
registration statement covering these securities.

         On January 22, 2008, the Company recorded 1,086,957 shares of common
stock as issuable with a charge to additional paid-in capital for the shares'
par value of $10,870. The shares are issuable to Miller Investments pursuant to
a 2006 stock subscription agreement with anti-dilution provisions invoked by the
January 22, 2008, sale of convertible debenture to Trafalgar.

         On March 6, 2008, the Company granted its Directors Daniel Brandano,
David Shapiro and Jay Vahl 240,000, 340,000 and 200,000 shares of fully vested
common stock, respectively, for services as board members valued at $78,000 in
the aggregate. For accounting purposes, the shares were valued at $46,800 or
$0.06 per share (based on the closing price of the Company's common stock on the
date of grant). The fair value of $32,000 was recorded as accrued expenses to
related parties and charged to operations as of December 31, 2007 for services
provided through that date.

         On March 6, 2008, Trafalgar converted $15,000 of secured convertible
term notes it acquired on August 18, 2007 into 375,000 shares of the Company's
common stock at a conversion rate of $0.04 per share (80% percent of the lowest
bid price for the five (5) trading days immediately prior to the date of this
conversion notice). As a result, the conversion price of the MMA convertible
debentures deceased to $0.04, and shares of common stock purchasable under
warrant agreements with MMA and Miller Investments increased from 17,578,125 and
1,953,125 to 56,250,000 and 6,250,000 shares, respectively, and the exercise
price of these warrants decreased from $0.128 to $0.04 per share. Additionally,
shares of common stock purchasable under warrant agreements with AJW Partners,
LLC and affiliates increased from 6,929,812 to 8,256,255 shares, and the
exercise prices of these warrants decreased from approximately $1.08 to
approximately $0.91 per share. There is no accounting effect related to the
reset of the conversion price of the convertible debentures. The reset of the
shares and exercise price related to the warrants was accounted for as a change
in the fair value of warrants recorded in the warrant and option liability
account with a charge to the warrant and option liability expense account on
March 8, 2008.

                                      F-61