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, 2006

                        Commission File Number 333-07953

                           DYNAMIC LEISURE CORPORATION
                     (FORMERLY KNOWN AS DYNECO 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, 2006 were
$5,817,252.

             Aggregate Market Value as of March 29, 2007: $4,340,418

             Common Stock outstanding at March 29, 2007: 12,401,195

                 Common Stock issuable at March 29, 2007: 80,000

    Transitional Small Business Disclosure format (Check one): YES |_| NO |X|

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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............................................  10

Item 3.  Legal Proceedings..................................................  11

Item 4.  Submission of Matters to a Vote of Security Holders................  11

PART II

Item 5.  Market for Common Equity, Related Stockholder Matters and
         Small Business Issuer Purchases of Equity Securities...............  12

Item 6.  Management's Discussion and Analysis or Plan of Operation..........  15

Item 7.  Financial Statements...............................................  36

Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure...........................................  36

Item 8A. Controls and Procedures............................................  36

Item 8B. Other Information..................................................  37

PART III

Item 9.  Directors, Executive Officers, Promoters, and Control Persons,
         Compliance With Section 16(a) of the Exchange Act..................  37

Item 10. Executive Compensation.............................................  41

Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters ........................  42

Item 12. Certain Relationships and Related Transactions.....................  44

Item 13. Exhibits...........................................................  44

Item 14. Principal Accountant Fees and Services.............................  48

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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 and the securities being offered for sale 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 year ended December 31, 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. We have eight travel
consultants and customer service representatives headquartered in our 10,000
square foot facility in Tampa, Florida and six 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.

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.

The Company intends to grow in 2007 by continuing to focus on the leisure travel
markets of the Caribbean and Mexico, by expanding its travel products for
destinations in Florida, Las Vegas, Hawaii, Europe, and Central and Southern
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 financial statements for the fiscal years ended December 31, 2006 and 2005
includes an explanatory paragraph wherein the auditors expressed substantial
doubt about our ability to continue as a going concern. Our financial statements
do not include any adjustments that might result from the outcome of these
uncertainties. Dynamic Leisure Group, Inc. had no revenues and a net loss of
$485,314 for the period from May 16, 2005 (Inception) to December 31, 2005. For
the fiscal year ended December 31, 2006, the Company had revenues of $5,817,252,
a net loss of $11,009,388 and cash used in operations of $2,720,651.

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.
Most recently, in March 2006, we again changed our name to Dynamic Leisure
Corporation.

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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.

In January 2006, we entered into a Stock Exchange Agreement with the former
shareholders of Dynamic Leisure Group, Inc., a privately held Florida
corporation, under which the Company acquired all of the outstanding capital
stock of Dynamic Leisure Group, and Dynamic Leisure Group became a wholly owned
subsidiary of the Company. Dynamic Leisure Group 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 October 5, 2006, we entered into an Assignment and Assumption Agreement with
Buccaneer Exploration, Inc. pursuant to which we agreed to sell, assign and
transfer to Buccaneer Exploration, Inc. all of our right, title and interest in
the Exclusive Worldwide License Agreement with Parker Hannifin Corporation, and
Buccaneer Exploration agreed to assume all of our obligations thereunder,
including repayment of any amounts we expended in association therewith. The
consummation of this transaction is subject to the approval of TRDA, which was
subsequently received. On October 5, 2006, we entered into a second Assignment
and Assumption Agreement with Buccaneer Exploration, Inc. pursuant to which we
agreed to sell, assign and transfer to Buccaneer Exploration, Inc. all of our
right, title and interest in the 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 our obligations under the
Funding Agreement, including payment of our outstanding loan to TRDA. The
consummation of this transaction was subject to the approval of TRDA, which was
subsequently received. On October 5, 2006, we entered into a third Assignment
and Assumption Agreement with Buccaneer Exploration, Inc. pursuant to which we
agreed to sell, assign and transfer to Buccaneer Exploration, Inc. all of our
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 our
obligations under the Edwards Patent Agreement.

A gain on the sale of assets was recognized totaling $235,138 as a result of
these transactions in 2006.

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-along travel related products.

                                     - 5 -
<PAGE>

We have established relationships with leading hotels, car rental agencies and
cruise lines that 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, Alitalia, Continental, SAS, AirJamaica, SwissAir, Iberia, Air Canada;
Air Italia and Lan Chile. 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. 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. Our agreements with leading airlines, allow us to offer
consumers what we believe to be the largest selection of low fares generally
available to the public.

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 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, record-keeping and business tracking, and reduce
operator training and booking time. We have completed the implementation of
TourScape in March 2007.

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 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.

                                     - 6 -
<PAGE>

      o  Implementing strategies to drive traffic to our websites. We currently
         own over one hundred (100) uniform resource locators (URLs), most of
         which have been operating for at least five years. These URLs 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 bulk
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.

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.

                                     - 7 -
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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 intend to enter into private label
agreements to provide fulfillment on all travel purchased on several heavily
trafficked e-commerce websites.

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 not yet established an
affiliate program, although as of December 31, 2006, we had begun the process of
implementing 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.

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.

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.

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Travel Agencies. Travel agencies with an online presence are comprised of both
online companies and established brick-and mortar operations. According to
studies of online travel by such companies and/or publications as PhoCuswright,
Inc., Forrest Research, 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.

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 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. The
sale and distribution of online travel services are currently subject to
regulations in Canada (Canadian Computer Reservations Systems Regulations) and
the European Commission (EC CRS Code of Conduct). 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.

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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,
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 44 full-time and 4 part-time employees. No employee is a party
to a collective bargaining agreement.

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.

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ITEM 3.  LEGAL PROCEEDINGS

The Company has been named as a principal party to proceedings brought in the
name of Raymon Valdes and in the name of Changes In L'Attitudes, Inc. in
Hillsborough County, Florida, Circuit Court. The proceedings began on November
13, 2006. The Company recently received service of the complaint and is
reviewing its contents. The complaint seeks approximately $440,000 on breach of
contract theories relating to the Company's acquisition of Changes In
L'Attitudes. The Company has retained counsel to respond to the complaint and
anticipates issuing additional comment on its legal position after full review
of the matter. An acquisition payable of $440,000 and interest expense totaling
$147,551 has been accrued as of December 31, 2006, relative to this proceeding.
The Company has entered into settlement discussions with Raymon Valdes and has
not yet resolved this matter.

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 has been 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. The Company recently received service of the
complaint and is reviewing its contents. The complaint seeks approximately
$75,500 on the grounds of an alleged breach of consulting agreement. The Company
has responded to this complaint and believes the consultant agreement was
properly terminated in accordance with the terms of the agreement. As of
December 31, 2006, the Company had included $29,333 related to this matter in
accounts payable.

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.

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.

                                     - 11 -
<PAGE>

                                     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 25, 2005 to
December 31, 2006. 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.

                                   PERIOD                HIGH BID       LOW BID
--------------------------------------------------       --------       -------
                                    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
                                    2005
December 31, 2005.................................        $ 2.25         $ 0.30
September 30, 2005................................        $ 3.30         $ 1.35
June 30, 2005.....................................        $ 4.20         $ 2.46
March 31, 2005....................................        $ 6.00         $ 2.43

SHAREHOLDERS OF RECORD

As of March 29, 2007, there were 689 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.

                                     - 12 -
<PAGE>

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        21,667            $3.05                  0*
    1993 Advisors Stock Option Plan          6,667            $3.60                  0*

EQUITY COMPENSATION PLANS NOT
  APPROVED BY SECURITY HOLDERS:
    Options                              1,000,000            $0.70                  0
    Warrants                               200,000            $1.25                  0
    Total                                1,200,000            $0.83                  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 2006.

2001 Equity Incentive Plan

Under the 2001 Equity Incentive Plan, a total of 33,333 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, 2006,
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 25,000 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,
2006, 21,667 options to purchase 21,667 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 6,667 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.

                                     - 13 -
<PAGE>

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.

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.

As of December 31, 2006, 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

On October 12, 2006, the Company sold 10,000 shares of common stock for $10,000
or $1.00 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 12, 2006, the Company recorded the issuance of a total of 29,110
shares of common stock on conversion of a note aggregating $25,000 plus accrued
interest of $1,199, based on a conversion rate of $0.90 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.

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. 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 6, 2006, the Company issued a member of the Board of Directors
200,000 shares of common stock valued at $140,000 or $0.70 per share (based on
the closing price of the Company's common stock on the date of issuance). The
shares are subject to a repurchase right in favor of the Company which right
lapses as to 50,000 shares each quarter beginning 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.

                                     - 14 -
<PAGE>

On November 6, 2006, the Company granted Mark E. Crone, a then Director of the
Company, an option to purchase 200,000 shares of the Company's common stock at a
purchase price of $0.70 per share, the closing price of the Company's common
stock on the date of grant and an expiration date of November 6, 2011. 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 6, 2006, the Company granted options to purchase 800,000 shares of
its common stock at an exercise price of $0.70 per share, the closing price of
the Company's common stock on the date of grant and an expiration date of
November 6, 2011 to its attorneys as compensation for professional fees. 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 December 1, 2006, the Company issued a member of the Board of Directors
200,000 shares of common stock valued at $110,000 or $0.55 per share (based on
the closing price of the Company's common stock on the date of issuance). The
shares are subject to a repurchase right in favor of the Company which right
lapses as to 50,000 shares each quarter beginning 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 January 8, 2007, the Company's Board of Directors granted to a member of the
Board of Directors 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. Fifty-thousand shares subject
to the option vested immediately and an additional 50,000 shares subject to the
option vest each quarter thereafter. The stock options have an expiration date
of January 8, 2012. 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.

ITEM 6.  MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following analysis of our consolidated financial condition and results of
operations for the years ended December 31, 2006 and 2005 should be read in
conjunction with the Consolidated Financial Statements and other information
presented elsewhere in this Prospectus. However, as our business plan changed
significantly in January 2006, investors should review the Company's financial
statement for the fiscal year ended 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.

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.

                                     - 15 -
<PAGE>

In February and March 2006 the Company acquired Changes in L'Attitudes, Inc., 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.

CRITICAL ACCOUNTING 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 2006. Terms and prices are
determined by the compensation committee or the board. An aggregate of 83,333
shares of common stock are reserved for issuance under these plans. At December
31, 2006, options exercisable for 101,206 shares of common stock were
outstanding.

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.

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
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.

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, 2006.

                                     - 16 -
<PAGE>

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.

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.

                                     - 17 -
<PAGE>

The valuation of these liabilities are 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.

RESULTS OF OPERATIONS

As a result of the recapitalization on January 13, 2006, Dynamic Leisure Group,
Inc., now known as Dynamic Leisure Group North America, Inc., became the
accounting acquirer of DynEco Corporation. DynEco then changed its name to
Dynamic Leisure Corporation. Therefore, the discussion below is focused on the
Dynamic Leisure Group North America, Inc. (the operating subsidiary) in 2005 and
Dynamic Leisure Corporation in 2006.

Period From May 16, 2005 (Inception) to December 31, 2005

During the period from May 16, 2005, to December 31, 2005, Dynamic Leisure Group
North America did not produce any revenue or have any cost of product. The
Company was focused on the identification of acquisition targets, the purchase
of the TourScape system, the identification and securing of short term and long
term financing and implementing a corporate structure. In the pursuit of these
activities the Company incurred $455,954 of expenses, including salaries of
$276,233, professional fees of $78,114 and travel of $59,218.

In addition, the Company incurred $29,360 in interest expense related to
outstanding promissory notes resulting in a loss of $485,314 or $0.47 per share.

Period From January 1, 2006 to December 31, 2006

Because Dynamic Leisure Group was founded in May 2005, there existed limited
operating activity in 2005. The comparable 2005 results begin at our inception
date of May 16, 2005.

REVENUE

Revenues for 2006 were derived from DLG, CIL and IRT/ITR as we began to expand
in the leisure travel market. Operating expenses for the fiscal year ended
December 31, 2006, are a combination of the operating expenses of DLG, CIL and
IRT/ITR and expenses incurred to establish the corporate infrastructure,
technology, and operational functions of the Company as a whole to support the
planned growth of the business.

Revenues for the fiscal year ended December 31, 2006 were $5,817,252. Our
revenue was derived primarily from the sale of vacation packages, the sale of
airline tickets, recorded on a net revenue basis, and certain fees or
commissions earned. Revenues from the sale of vacation packages was $4,850,334
and revenues from the sale of airline tickets and other fees and commissions
earned was $894,937. Revenues also include fees of $71,981 generated during 2006
from the Company's General Service Agreement acquired by the Company on January
3, 2006.

                                     - 18 -
<PAGE>

COST OF REVENUE

Cost of revenues for the fiscal year ended December 31, 2006 was $4,336,889,
including $4,098,660 for vacation packages revenues or 81.7% of related revenues
and $238,229 for the sale of airline tickets, recorded on a net revenue basis,
consisting of commissions payable to independent travel agents and certain third
party processing fees or 26.6% of related revenues. 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.

GROSS PROFIT

Gross profit for fiscal year 2006 was $1,480,363. Gross profit from the sale of
vacation packages totaled $751,674 or 18.3% of related revenues. Gross profit
from the sale of airline tickets, recorded on a net revenue basis, and certain
fees and commissions totaled $656,708 or 275% of related revenue, with costs of
revenue consisting of commissions payable to independent travel agents and
certain third-party processing fees. The remaining gross profit of $71,981 is
from revenues generated from our General Service Agreement.

OPERATING EXPENSES

Operating expenses for the fiscal year ended December 31, 2006 were $7,040,989
compared to $455,954 for the fiscal year ended December 31, 2005. These expenses
increased as a result of the Company's acquisition of two businesses, costs of
integrating these acquisitions, hiring of new employees, establishment of a
corporate infrastructure required to execute our business plan, efforts toward
implementing our Tourscape software system, the conversion from three privately
held companies to a single fully reporting, publicly held enterprise,
recruitment of independent board members, efforts to raise capital and
establishment of a market for our common stock. The Company 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 2006 included $2,028,976 in stock-based
compensation representing the fair value of grants to common stock, warrants and
options to these parties as compared to $7,500 in stock-based compensation
granted to consultants in 2005.

During the year ended December 31, 2006, the Company's operating expenses
included employee compensation of $1,362,290 as compared to $255,780 in 2005;
business and financial consulting fees of $798,042 including $694,776 in
stock-based compensation as compared to $72,500 in 2005 including $7,500 in
stock-based compensation; legal expense of $719,951 including $524,000 in
stock-based compensation; depreciation of $51,966; intangible asset amortization
of $444,409; debt issuance cost amortization of $208,351; outsourced internal
accounting expenses and audit fees aggregating $613,588; director fees of
$496,000 consisting of $496,000 in stock-based compensation and investor
relations services of $314,200 consisting of $314,200 in stock-based
compensation. 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 general and administrative expenses for the year ended December 31, 2006
were $2,032,192 as compared to $114,560 for the prior year. In 2005, the Company
was in the development stage and its expenses were limited primarily to fund
raising and business acquisition activities. The Company exited the development
stage and commenced operations in Tampa, Florida and New York City marketing,
selling and distributing vacation packages on a wholesale basis to travel
agencies and other travel resellers and on a retail basis directly to consumers
and certain stand-alone travel products on an agency basis with it business
acquisitions that occurred in February and March 2006. We expect our other
general and administrative expenses to increase as a result of having a full
year 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.

                                     - 19 -
<PAGE>

OTHER INCOME / EXPENSE

Interest expense for the fiscal year ended December 31, 2006 was $5,034,861.
This amount consists of interest expense accrued on outstanding loans of
$693,874 and interest recorded on acquisitions purchase price payables of
$147,551 plus non-cash interest expense items consisting of the amortization of
debt discount of $3,888,418 and common stock valued at $305,018 and issued as
consideration for the modification of debt agreements.

During the year ended December 31, 2006, the Company sold its interest in a
technology funding agreement as well as other related agreements. In exchange,
the buyer assumed our obligation under a related royalty agreement. The
assumption of this liability of $235,138 resulted in the recognition of a gain
on sale of assets of $235,138. This gain was partly offset by a loss on disposal
of other assets of $42,667.

The Company recorded a non-cash loss on extinguishment of debt of $208,442
during 2006. The 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 valuated at $233,227
on the modification date.

The warrant and option valuation for the fiscal year ended December 31, 2006
resulted in income of $249,662 due to the reduction of the trading value of the
Company's common stock and its related volatility. On September 30, 2006, the
Company determined that the period for measuring the volatility of the Company's
stock should be revised to begin on January 13, 2006, the recapitalization date.
Formerly, the measurement period included years prior to the recapitalization.
As a result, volatility was reduced from 271% as of June 30, 2006 to 142% as of
September 30, 2006. This remeasurement has been recorded as a change in estimate
during 2006. The volatility percentage of the Company's common stock at December
31, 2006 was 166%. The valuation of the warrant and option liability is a
non-cash income or expense to the Company.

The embedded conversion option valuation for the fiscal year ended December 31,
2006 resulted in expense of $667,076. This expense is the result primarily of
the initial recognition of the embedded conversion option liability associated
with the issuance of convertible notes totaling $600,000 with a conversion price
at a 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 LOSS

Net loss in the fiscal year ended December 31, 2006 was $11,009,388 as compared
to $485,314 in the fiscal year ended December 31, 2005. The net loss includes
non-cash general and administrative expenses of $2,028,976 from stock-based
compensation, depreciation and amortization expense of $704,726, and non-cash
loss on extinguishment of debt of $208,452 and non-cash interest expense of
$4,196,436 attributed to the issuance of securities and related amortization of
the resulting debt discount.

LIQUIDITY AND CAPITAL RESOURCES

Period From May 16, 2005 (Inception) to December 31, 2005

During the period of May 16, 2005 to December 31, 2005, the Company was able to
raise $987,500 in financing by issuing $847,500 of convertible notes and
$140,000 of term notes payable. The Company paid most of the term notes off with
the $2,000,000 MMA financing on January 13, 2006. Most of the convertible notes
are expected to be converted into common stock; however, there is no assurance
that these notes will be converted. The Company used the proceeds from these
notes to purchase the TourScape system for $641,347 with the remainder used to
fund ongoing operations.

                                     - 20 -
<PAGE>

Period from January 1, 2006 to December 31, 2006

During the year ended December 31, 2006, the Company acquired proprietary
software technology, proprietary engineering technology, and operations in the
wholesale leisure travel market. Our financial condition relies on continuing
debt and equity investment until the Company is able to achieve profitability in
our wholesale leisure travel business. During the year ended December 31, 2006,
travel revenue and income from operations was not enough to offset financing
expenses related to the Company's recapitalization, subsequent financing
expenses related to an investment by MMA Capital, acquisition costs for CIL and
IRT/ITR, professional fees and increased administrative costs.

During the year ended December 31, 2006, the Company's main sources of liquidity
were from the issuance of convertible promissory notes and the sale of shares of
its common stock. During the year ended December 31, 2006, the Company issued
convertible promissory notes for total proceeds of $2,910,000. During this
period net proceeds from sales of the Company's common stock were $983,136. The
primary use of these proceeds was to fund the Company's cash operating deficit
of $2,720,651, to repay debt of $345,158, to pay debt issuance costs of $302,373
and to purchase equipment, software and technical services used to support and
implement the TourScape software system of $325,937. As a result of our
financing activities, the Company's cash increased by $184,348 at December 31,
2006.

For the year ended December 31, 2006, the Company used cash in operating
activities of $2,720,651. Cash was used to fund a net loss of $11,009,388 that
was then offset by non-cash expenses consisting of general and administrative
expenses of $2,028,976 from stock-based compensation, depreciation and
amortization expense of $704,726 and non-cash interest expense of $4,196,436
attributed to the issuance of securities and related amortization of the
resulting debt discount. Cash used for operations included an increase in
prepaid customer travel costs of $318,106 and other assets of $73,508. Cash was
generated from operations by decreasing accounts receivable by $318,106 and
increasing current liabilities by $876,476.

As of December 31, 2006, our primary source of liquidity was $203,911 of cash
and $139,321 of accounts receivable. At December 31, 2006, the Company had a
working capital deficit of $14,671,189, primarily due to warrant and option
liability of $5,419,729, acquisitions payable of $1,440,000, convertible notes
payable of $5,162,658 partially offset by debt discount of $891,142, and
convertible notes payable - related party of $350,000. The convertible notes
payable and convertible notes payable to a related party consist of promissory
notes convertible into approximately 5,513,695 shares of the Company's common
stock. 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, 2006, the Company has outstanding warrants, non-plan and plan
options to purchase 9,854,550, 1,000,000 and 101,206 shares of the Company's
common stock with weighted average exercise prices of $1.00, $0.70 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.

At December 31, 2006, the Company had total assets of $9,544,452, of which
long-term assets of $7,403,458 consisted of goodwill of $2,902,196, intangible
assets of $4,307,505, deposits of $99,735, debt issue cost of $94,022 and
$1,076,669 of property and equipment, including $920,097 relating to the
purchase and implementation of our TourScape software. Total liabilities were
$15,809,305, including long term liabilities of $2,649,120. Total shareholders'
deficit was $6,264,853.

We were formerly in default on $2,155,158 in notes payable. On August 16, 2006,
we entered into a modification of the $2,000,000 MMA note, which deferred the
interest payments until January 13, 2007. In return for this deferral, MMA was
granted 100,000 shares of the Company's common stock and the interest rate was
increased retroactively from 8% to 10%. The Company is accruing the default
interest rate of 10% on notes from March 2005 pursuant to a financing undertaken
by DynEco, with the aggregate outstanding balance at December 31, 2006 of
$155,158.

                                     - 21 -
<PAGE>

We are also in default of the repayment terms on unsecured notes payable
aggregating $35,000 at December 31, 2006, initially issued by DynEco prior to
the January 13, 2006 recapitalization. No extension has been granted by the debt
holders. We had anticipated settling the balance owing on these notes payable
through issuance of common stock; however, as of December 31, 2006, this had not
yet occurred nor is there any assurance that this will take place.

Five convertible notes totaling $132,500 were due on June 30, 2006 and were not
paid on that date. One note holder subsequently converted a $25,000 note and the
Company is currently in discussions with the remaining note holders to convert
the remaining past due notes to common stock. There were repayments during 2006
of $345,158 of convertible promissory notes. There were total conversions to
common stock of promissory notes and related accrued interest totaling $812,851
during 2006.

We have limited historical results, and only a limited time of combined
operations with Dynamic, DLG, CIL, and IRT/ITR. We have relied upon equity
financing in order to fund operations. During 2006, there were limited
activities or resources to provide cash flow in excess of immediately needed
funding. 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.

As of December 31, 2006, our sources of internal and external financing are
limited. Additionally, as part of the acquisitions of CIL and IRT/ITR, we issued
1,040,000 shares of the Company's common stock, agreed to pay up to $1,440,000
in additional cash, and issued $2,050,000 of secured Convertible Notes payable.
While we anticipate all of the Convertible Notes Payable 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 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.

                                     - 22 -
<PAGE>

OFF BALANCE SHEET ARRANGEMENTS

The Company has no off balance sheet arrangements.

RISK FACTORS

You should carefully consider the risks, uncertainties and other factors
described below because they could materially and adversely affect our business,
financial condition, operating results and prospects and could negatively affect
the market price of our Common Stock. Also, you should be aware that the risks
and uncertainties described below are not the only ones facing us. Additional
risks and uncertainties that we do not yet know of, or that we currently believe
are immaterial, may also impair our business operations and financial results.
Our business, financial condition or results of operations could be harmed by
any of these risks. The trading price of our Common Stock could decline due to
any of these risks, and you may lose all or part of your investment.

In assessing these risks you should also refer to the other information
contained in or incorporated by reference to this Annual Report on Form 10-KSB,
including our financial statements and the related notes.

RISKS RELATED TO OUR BUSINESS

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM HAS RAISED SUBSTANTIAL DOUBT
OVER OUR CONTINUED EXISTENCE AS A GOING CONCERN.

We have incurred substantial operating and net losses, as well as negative
operating cash flow, since our inception. As a result, we continue to have
significant working capital and stockholders' deficits including a substantial
working capital and accumulated deficit at December 31, 2006. In recognition of
such, our independent registered public accounting firm has included an
explanatory paragraph in its report on our consolidated financial statements for
the fiscal years ended December 31, 2006 and December 31, 2005 that expressed
substantial doubt regarding our ability to continue as a going concern.

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

As of December 31, 2006, the Company experienced net losses of $11,009,388 as
compared to $485,314 in the fiscal year ended December 31, 2005. Cash used in
operations during 2006 was $2,720,651. 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.

The Company has a net loss of $11,009,388 for the fiscal year ended December 31,
2006 and net cash used in operations of $2,720,651 for the fiscal year ended
December 31, 2006, and a working capital deficiency of $12,095,860 and a
stockholders' deficiency of $6,264,853 at December 31, 2006. 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 2007,
additional capital investment will be necessary to develop and sustain the
Company's operations.

                                     - 23 -
<PAGE>

WE HAVE BEEN HISTORICALLY 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 approximately $983,136
during 2006 and obtained bridge financing of approximately $910,000 through
December 2006, 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.

THERE IS NO SIGNIFICANT ACTIVE TRADING MARKET FOR OUR SHARES, AND IF AN ACTIVE
TRADING MARKET DOES NOT DEVELOP, PURCHASERS OF OUR SHARES MAY BE UNABLE TO SELL
THEM PUBLICLY.

There is no significant active trading market for our shares and we do not know
if an active trading market will develop. An active market will not develop
unless broker-dealers develop interest in trading our shares, and we may be
unable to generate interest in our shares among broker-dealers until we generate
meaningful revenues and profits from operations. Until that time occurs, if it
does at all, purchasers of our shares may be unable to sell them publicly. In
the absence of an active trading market:

      o  Investors may have difficulty buying and selling our shares or
         obtaining market quotations;

      o  Market visibility for our common stock may be limited; and

      o  A lack of visibility for our common stock may depress the market price
         for our shares.

IN THE EVENT THAT WE ISSUE ADDITIONAL SHARES, CONVERTIBLE PROMISSORY NOTES,
WARRANTS AND OPTIONS, THE MARKET PRICE FOR OUR SHARES MAY BE ADVERSELY AFFECTED.

As of December 31, 2006, we have executed convertible promissory notes, granted
options, issued warrants to the same promissory note holders and others and
reserved shares for employment contracts and options to be granted upon
formation of a stock option plan to purchase an aggregate of 16,469,451 shares
of our common stock. The options are exercisable at prices ranging from $0.70
per share to $11.40 per share, and the warrants are exercisable ranging from
$0.68 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 options, to the financiers and
shareholders of target companies. To the extent that additional shares are
issued, notes are converted, and 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. The existence of options
and options that are exercisable at below market may have a depressive effect on
the market price for our common stock.

                                     - 24 -
<PAGE>

WE MAY BE EXPOSED TO POTENTIAL RISKS RELATING TO OUR INTERNAL CONTROLS OVER
FINANCIAL REPORTING AND OUR ABILITY TO HAVE THOSE CONTROLS ATTESTED TO BY OUR
INDEPENDENT AUDITORS.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX 404"), the
Securities and Exchange Commission adopted rules requiring public companies to
include a report of management on the company's internal controls over financial
reporting in their annual reports, including Form 10-KSB. In addition, the
independent registered public accounting firm auditing a company's financial
statements must also attest to and report on management's assessment of the
effectiveness of the company's internal controls over financial reporting as
well as the operating effectiveness of the company's internal controls. We were
not subject to these requirements for the fiscal year ended December 31, 2005.
We are evaluating our internal control systems in order to allow our management
to report on, and our independent registered public accounting firm to attest
to, our internal controls, as a required part of our Annual Report on Form
10-KSB beginning with our reports for the fiscal year ended December 31, 2007
and December 31, 2008, respectively. While we expect to expend significant
resources in developing the necessary documentation and testing procedures
required by SOX 404, there is a risk that we will not comply with all of the
requirements imposed thereby. At present, there is no precedent available with
which to measure compliance adequacy. Accordingly, there can be no positive
assurance that we will receive a positive attestation from our independent
auditors. In the event that we identify significant deficiencies or material
weaknesses in our internal controls that we cannot remediate in a timely manner
or are unable to receive a positive attestation from our independent auditors
with respect to our internal controls, investors and others may lose confidence
in the reliability of our financial statements, and our ability to obtain equity
or debt financing could suffer.

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

We must comply with laws and regulations applicable to online commerce.
Increased regulation of the Internet or different application 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 and/or international, regarding the privacy
of our users' personally identifiable information may impose on us additional
costs and operational constraints.

BECAUSE THE TRAVEL MARKET IS SEASONAL, OUR QUARTERLY RESULTS MAY FLUCTUATE.

Our business experiences seasonal fluctuations, reflecting seasonal trends for
the products offered by our websites, as well as Internet services generally.
For example, traditional leisure travel bookings in America 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. Although we are endeavoring to expand our markets to
customers who book travel in other times of the year, travel booking tendencies
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.

                                     - 25 -
<PAGE>

WE OPERATE IN THE HIGHLY COMPETITIVE TRAVEL MARKET, AND WE MAY NOT BE ABLE TO
COMPETE EFFECTIVELY.

The market for travel product is intensely competitive. We compete with a
variety of companies with respect to each product or service we offer.

      o  We compete with online travel retailers including Expedia, Orbitz,
         Travelocity, and many smaller companies in providing online travel
         products.

      o  We compete with airlines, hotels, rental car companies, cruise
         operators and other travel service providers, whether working
         individually or collectively, some of which are suppliers to our
         websites.

      o  We compete with local, regional, national and international traditional
         travel agencies.

      o  We compete with consolidators and wholesalers of airline tickets,
         lodging and other travel products, including Cheaptickets.com,
         Priceline.com, Hotwire, Hotels.com, and TravelWeb.

      o  We compete with operators of global distribution systems (GDS), which
         are third party information platforms (software and data) that
         distribute airline data to the Company and to our competitors,
         including price and flight availability, and permit flight reservations
         and ticketing.

      o  We compete with operators of travel industry reservation databases.

Our competitors have longer operating histories, larger customer bases, greater
brand recognition, and significantly greater financial, marketing and other
resources than we have. Some of our competitors also benefit from vertical
integration with GDS's, such that a competitor's ownership of a GDS allows the
competitor reduced or eliminated transaction costs, guaranteed continued
utilization of the GDS, and more efficient interface with the GDS. Consequently,
we may not be able to compete effectively in the market.

IF WE FAIL TO CREATE AND INCREASE OUR BRAND RECOGNITION AMONG CONSUMERS, WE MAY
NOT BE ABLE TO ATTRACT AND EXPAND ONLINE TRAVEL SALES.

We believe that creating, maintaining and enhancing our brands are critical
aspects of our efforts to attract and expand our online traffic. The number of
Internet sites that offer competing services increases the importance of
creating brand recognition of the new "Dynamic Leisure" and "eCasual" brands
(scheduled to be launched in the first quarter of 2007), 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. Currently, our Changes.com website enjoys favorable
organic placement with respect to "Caribbean vacations" in Google and other
search engines. For example, throughout 2006 such a search consistently resulted
in returning Changes.com as one of the first five (5) relevant websites, without
any marketing expenditure on our part. Although we do not control how search
results are achieved in various search engines, we believe that this kind of
search result provides a material advantage in terms of sales opportunities. We
hold dozens of other URLs, but these sites do not have similar search priority.
Promotion of our brands will depend largely on our success in providing a
high-quality online experience supported by a high level of customer service. In
addition, we intend to spend substantial amounts on marketing and advertising
with the intention of continuing to expand our brand recognition to attract and
retain online users and to respond to competitive pressures. However, we cannot
assure you that these expenditures will be effective in promoting our brands or
that our marketing efforts will achieve our goals.

                                     - 26 -
<PAGE>

THE SUCCESS OF OUR BUSINESS DEPENDS ON CONTINUED GROWTH OF ONLINE TRAVEL
COMMERCE.

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 IS EXPOSED TO RISKS ASSOCIATED WITH ONLINE COMMERCE SECURITY AND
CREDIT CARD FRAUD.

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. Furthermore, our servers and those of
our service providers may be vulnerable to viruses or other harmful code or
activity transmitted over the Internet. While we proactively check for
intrusions into our infrastructure, a virus or other harmful activity could
cause a service disruption. In addition, we bear financial risk from
reservations placed 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 operation history, we cannot assure you that our anti-fraud measures are
sufficient to prevent material financial loss.

WE DEPEND ON OUR RELATIONSHIPS WITH TRAVEL SUPPLIERS AND COMPUTER RESERVATION
SYSTEMS, AND CHANGES IN THESE RELATIONSHIPS COULD MATERIALLY AND ADVERSELY
AFFECT OUR BUSINESS.

Our business relies on relationships with travel suppliers, and it would be
negatively affected by adverse changes in these relationships. We depend on
travel suppliers to enable us to offer our customers comprehensive access to
travel services and products. Consistent with industry practices, we currently
have few agreements with our travel suppliers obligating them to sell services
or products through our websites. Our travel suppliers generally can cancel or
modify their agreements with us upon no or relatively short notice. It is
possible that travel suppliers may choose not to make their inventory of
services and products available through online distribution. Travel suppliers
could elect to sell exclusively through other sales and distribution channels or
to restrict our access to their inventory, either of which could significantly
decrease the amount or breadth of our inventory of available travel offerings.
Adverse changes in any of these relationships could reduce the amount of
inventory that we are able to offer through our websites. In addition, any
decline in the quality of travel products and services provided by these
suppliers, or a perception by travelers of such a decline, could adversely
affect our reputation.

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

Our Company holds "net" or "bulk" air contracts with American Airlines, British
Airways, Delta, Air France, US Air, Alitalia, Continental, SAS, Air Jamaica,
SwissAir, Iberia, Air Canada; Air Italia and Lan Chile. These contracts permit
the Company to create and sell air and bundled travel packages that are less
expensive to consumers and more profitable for the Company 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.
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.

                                     - 27 -
<PAGE>

INTERRUPTION IN SERVICE FROM THIRD PARTIES COULD IMPAIR THE QUALITY OF OUR
SERVICE.

We rely on third-party computer systems and third-party providers, including the
computerized central reservation systems of the airline, hotel and car rental
industries, to make airline ticket, hotel room and car rental reservations and
credit card verifications and confirmations. Currently, a majority of our
transactions are processed through Sabre, Inc., a market-dominant global
distribution system (GDS) that distributes airline data to the Company and to
many of our competitors, including price and flight availability, and permits
flight reservations and ticketing. Any interruption or deterioration in these
third-party services or deterioration in their performance could impair the
quality of our service. If our arrangement with any of these third parties is
terminated, or if airlines limit their fare availability offered through Sabre,
we may not find an alternate source of systems support on a timely basis or on
commercially reasonable terms. In particular, any migration from the Sabre
system could require a substantial commitment of time and resources and hurt our
business.

OUR SUCCESS DEPENDS UPON IMPLEMENTING AND INTEGRATING OUR TOURSCAPE TECHNOLOGY.

During 2006, our company acquired three wholesale travel companies, Changes in
L'Attitudes, Inc., Island Resort Tours, Inc. and International Travel and
Resorts, Inc., and plans 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 companies, 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 (executed term sheet). The transactions will require
additional funding that has not been obtained as of this filing. As part of our
business model, the implementation and integration of the TourScape dynamic
packaging technology is vital to increasing these companies' 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 employees of the Company 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 NEW TECHNOLOGY MAY NOT BE SUCCESSFULLY DEVELOPED, INSTALLED OR IMPLEMENTED
WITHOUT DISRUPTING OUR BUSINESS.

We are currently replacing many of our existing computer systems with systems
designed to operate with our websites. There can be no assurance that these new
systems will be successfully developed, installed according to the expected
timeframe or within the anticipated budget, implemented without any disruption
to our business, or result in the intended operational benefits and cost
efficiencies.

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

To remain competitive in the online travel industry, we must continue to enhance
and improve the functionality of and features of our websites. 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 websites, technology and systems may become obsolete. Our future
success will depend on our ability to do the following:

                                     - 28 -
<PAGE>

      o  enhance our existing products;

      o  develop and license new products and technologies which are third party
         owned software platforms that allow us to connect directly with our
         product suppliers to view and import product information into our
         systems; and

      o  respond to technological advances and emerging industry standards and
         practices on a cost-effective and timely basis.

Developing our website and other technology entails significant technical and
business risks. We may use new technologies ineffectively, or we may fail to
adapt our website, transaction processing systems and network infrastructure to
consumer requirements or emerging industry standards. For instance, our website
functionality that allows searches and displays of ticket pricing and travel
itineraries is a critical part of our service, and it may become out-of-date or
insufficient from our customers' perspective and in comparison to the search and
display functionality of our competitors' websites. If we face material delays
in introducing new services, products and enhancements, our customers may forego
the use of our products and use those of our competitors. The technology and
methodologies to attract customers to specific websites is constantly changing.
Customer preferences on which websites to use and the comfort level regarding
reliability, safety of personal information, and ease of use continues to
evolve. If we are unable to attract customers to our website or to achieve
follow-through purchases, our revenues will be adversely affected and we may not
be able to achieve profitability, which could negatively affect our stock price.

OUR COMPUTER SYSTEMS MAY SUFFER FAILURES, CAPACITY CONSTRAINTS AND BUSINESS
INTERRUPTIONS THAT COULD INCREASE OUR OPERATION COSTS AND CAUSE US TO LOSE
CUSTOMERS.

In order to be successful, we must continue to provide reliable, real-time
access to our systems for our customers and suppliers. As our operations
continue to grow in both size and scope, domestically and internationally, we
shall need to improve and upgrade our systems and infrastructure to offer an
increasing number of customers 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 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 have a material adverse effect on our
business, operating results and financial condition. Our operations face the
risk of systems failures. Our systems and operations are vulnerable to damage or
interruption from fire, flood, windstorms, sinkholes, power loss,
telecommunications failure, computer hacking break-ins, earthquake, terrorism
and similar events. The occurrence of natural disaster or unanticipated problems
at our facilities in Tampa Bay, New York or at the locations of key vendors such
as Sabre could cause interruptions or delays in our business, loss of data or
render us unable to process reservations. In addition, the failure of our
computer and communications systems to provide the data communications capacity
required by us, as a result of human error, natural disaster of other occurrence
of any or all of these events could adversely affect our reputation, brand and
business. In these circumstances, our redundant systems or disaster recovery
plans may not be adequate. Business interruption insurance may not adequately
compensate us for losses that may occur. Similarly, although many of our
contracts with our service providers require them to have disaster recovery
plans, we cannot be certain that these will be adequate or implemented properly.
In addition, our business interruption insurance may not adequately compensate
us for losses that may occur.

                                     - 29 -
<PAGE>

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

If appropriate opportunities present themselves, we may acquire businesses,
products or technologies that we believe are strategic. Although we have
completed acquisition term sheets with two other travel companies, we do not
currently have any finalized understanding, commitments or agreements with
respect to any acquisition. We may not be able to identify, negotiate or finance
any future acquisition successfully. Even if we do succeed in acquiring a
business, product or technology, we have only limited experience in integrating
an acquisition into our business; the process of integration may produce
unforeseen operating difficulties and expenditures and may absorb significant
attention of our management that would otherwise be available for the ongoing
development of our business. If we complete future acquisitions, we undoubtedly
will issue shares of stock that dilute other stockholders, expend cash, incur
debt, assume contingent liabilities or create additional expenses related to
amortizing other intangible assets with estimable useful lives, any of which
might harm our business, financial condition or results of operations.

OUR PLANNED GROWTH INVOLVES A NUMBER OF RISKS THAT COULD HAVE A NEGATIVE IMPACT
ON OPERATIONS.

Our management group has been assembled only recently and, as a result, our
management group may be unable to manage effectively our organization and/or
implement our Internet-business based strategy. In addition, the ongoing
transition of our current business to an Internet-based model has placed, and
will continue to place, additional strain on our personnel, accounting,
management information, technology and corporate support systems. Any inadequacy
in these systems to manage the increased size and scope of operations resulting
from our transition and any future growth, or our inability to integrate
successfully any future acquisition, could materially adversely affect our
business, financial condition and results of operations.

WE MAY BE UNABLE TO MAKE ATTRACTIVE ACQUISITIONS OR INTEGRATE ACQUIRED
COMPANIES, WHICH COULD SEVERELY DISRUPT OUR OPERATIONS AND ONGOING BUSINESS.

We plan to acquire or make investments in complementary businesses, products,
services or technologies; however, we cannot assure you that we shall be able to
identify suitable acquisition or investment candidates. Even if we do identify
suitable candidates, we cannot assure you that we will be able to make
acquisitions or investments on commercially acceptable terms. If we buy a
business, we could have difficulty in assimilating that company's personnel,
operations, products, services or technologies into our operations. We have
experienced such difficulties in the past. If we encounter these difficulties in
the future, there will be disruptions in our ongoing business, distractions to
our management and employees, and increases in our expenses, all of which will
adversely affect our results of operations.

ANY FUTURE ACQUISITIONS WE MAKE MAY NOT BE PROFITABLE.

Part of our Internet business strategy is to identify and acquire travel-related
Internet organizations in the travel services industry. Future acquisitions may
involve a number of risks that could adversely affect our business, results of
operations and financial condition. These could include adverse short-term
effects on our reported operating results such as those caused by severance
payments to employees of acquired companies, difficulties in eliminating
duplicative costs, restructuring charges associated with the acquisitions and
other expenses associated with the change of control, as well as non-recurring
acquisition costs. Acquisitions may also divert management's attention, create
difficulties with retention, hiring and training of key personnel, raise risks
associated with unanticipated problems or legal liabilities, and require
non-cash accounting charges associated with the amortization of acquired
intangible assets. Furthermore, although we conduct due diligence and generally
require representations, warranties and indemnification from the former owners
of acquired companies, those former owners may not accurately represent the
financial and operating conditions of their companies and may not have the means
to satisfy their indemnification obligations. If an acquired company's financial
or operating results were misrepresented, the acquisition could have a material
adverse affect on our business, financial condition and results of operations.

                                     - 30 -
<PAGE>

FINANCING OF FUTURE ACQUISITIONS WILL DILUTE EXISTING STOCKHOLDER OWNERSHIP.

We intend to finance future acquisitions by using shares of our common stock or
preferred stock for a substantial portion of the consideration to be paid. This
reliance upon the use of common stock or preferred stock as consideration will
dilute shareholders' interests in the Company.

OUR SUCCESS DEPENDS ON MAINTAINING THE INTEGRITY OF OUR SYSTEMS AND
INFRASTRUCTURE.

In order to be successful, we must continue to provide reliable, real-time
access to our systems for our customers and suppliers. As our operations
continue to grow in both size and scope, domestically and internationally, we
shall need to improve and upgrade our systems and infrastructure to offer an
increasing number of customers 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 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 have a material adverse effect on our
business, operating results and financial condition.

THE SUCCESS OF OUR BUSINESS DEPENDS UPON THE CONTINUING CONTRIBUTION OF OUR KEY
PERSONNEL, 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.

THE TRAVEL INDUSTRY IS SUBJECT TO NUMEROUS AND UNIQUE RISKS THAT MAY ALSO AFFECT
OUR BUSINESS, FINANCIAL CONDITION, AND OPERATIONS.

Our results of operations will depend upon factors affecting the vacation
industry in general. Our revenues and earnings are especially sensitive to
events that affect domestic and international air travel and the level of car
rentals and hotel reservations. A number of factors could result in a temporary
or long-term overall decline and demand for packaged vacations, including the
following examples:

      o  International Terrorism: The September 11, 2001 attacks against the
         United States halted airline travel and changed forever the
         government's security measures and consumers' views concerning travel
         safety. The July 2005 bombings in the London Underground similarly
         heightened safety awareness in Europe.

      o  Extreme Weather Conditions: In March 2006, forty-one days of rain on
         the Hawaiian islands caused flash floods, landslides, mudslides, and a
         dam break on the island of Kauai. In August 2005, Hurricane Katrina
         laid waste to substantial portions of the United States, including New
         Orleans, Louisiana; Biloxi and Gulfport; Mississippi, and Mobile,
         Alabama.

                                     - 31 -
<PAGE>

      o  Hurricanes Emily and Wilma both caused significant damage to Cozumel,
         Mexico, in July and October 2005. In December 2004, a tsunami in the
         Indian Ocean devastated areas of India, Indonesia, Kenya, Malaysia, the
         Maldives, Myanmar, the Seychelles, Somalia, Sri Lanka, Thailand, and
         the United Republic of Tanzania. For the nine months ended September
         30, 2006, substantially all of the Company's travel products were for
         destinations in the Caribbean and Mexico. This concentration
         potentially exposes us to both political and weather risks of this
         region.

      o  Political Instability, Security Issues, and Labor Disturbances: In
         2006, rioting in France led to street clashes with police, the shutdown
         of major tourist attractions, and labor strikes. In May 2005, the
         disappearance of Natalee Holloway in Aruba, and the follow-up criminal
         investigation, cast concerns over the safety of travelers in Aruba. The
         United States State Department issues travel warnings recommending that
         Americans avoid certain countries. As of April 9, 2006, warnings were
         issued for Uzbekistan, Pakistan, Bosnia Herzegovina, Liberia, the Ivory
         Coast, Israel, Nigeria, Algeria, Sudan, Colombia, Afghanistan, Kenya,
         Iran, Iraq, Saudi Arabia, Nepal, Indonesia, Zimbabwe, Lebanon, Yemen,
         Burundi, Somalia, the Central African Republic, and the Philippines.

      o  Illnesses: The Avian Influenza (Bird Flu) currently causes significant
         concern in Asia and Europe. The Severe Acute Respiratory Syndrome
         (SARS) was first reported in Asia in 2003, but spread to more than two
         dozen countries in North America, South America, Europe, and Asia
         before the global outbreak was contained. In November 2003, a stomach
         illness struck dozens of passengers and crew members aboard a cruise
         ship. Nearly every month illnesses are reported on multiple cruise
         ships.

      o  Air and Sea Disasters: Cruise ships have reported missing passengers,
         presumably lost overboard, as follows: four lost through early April
         2006; thirteen lost in 2005; eleven lost in 2004; and nine lost in
         2003. In addition, cruise ships often strike land or run aground, often
         with fatal results. In March 2006, a fatal fire broke out on a cruise
         ship in the Caribbean. In December 2005, two fatal commercial air
         crashes occurred, in Miami and Nigeria. In November 2005, pirates
         attempted to overtake a cruise ship in Somalia. In October 2005,
         another fatal aircraft crash occurred near Lissa, Nigeria. In September
         2005, a commercial aircraft crashed in Medan, Indonesia. In August
         2005, fatal air crashes occurred in Peru, Venezuela, Greece and Italy.

RISK RELATED TO HOLDING OUR SECURITIES

THERE ARE A LARGE NUMBER OF SHARES UNDERLYING OUR CALLABLE SECURED CONVERTIBLE
NOTES, AND WARRANTS 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, 2006, we had callable secured convertible notes outstanding
or an obligation to issue callable secured convertible notes that may be
converted into an estimated 5,513,695 shares of our Common Stock at current
market prices, and outstanding warrants or an obligation to issue warrants to
purchase 9,854,550 shares of our 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.

                                     - 32 -
<PAGE>

IF THERE IS AN EVENT OF DEFAULT, THE CONTINUOUSLY ADJUSTABLE CONVERSION PRICE
FEATURE OF OUR CALLABLE SECURED CONVERTIBLE NOTES BECOME APPLICABLE, WHICH COULD
HAVE A DEPRESSIVE EFFECT ON THE PRICE OF OUR COMMON STOCK.

Upon an event of default, the callable secured convertible notes become
immediately due and payable and we will pay an amount equal to the greater of
(i) 140% times the sum of (w) the then outstanding principal amount of such note
plus (x) accrued and unpaid interest on the unpaid principal amount of such note
to the Mandatory Prepayment Date plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and/or (x) plus (z) the Default Sum; or (ii)
the Parity Value of the Default Sum to be repaid. The significant downward
pressure on the price of our Common Stock as the selling stockholder converts
and sells material amounts could have an adverse effect 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.

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.

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.

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 is
due and payable with interest on January 13, 2007. In February and March 2006 we
issued convertible promissory notes in the aggregate principal amount of
$2,050,000. These notes bear interest at the rate of 9% and are due and payable
with interest in February and March 2007. On September 20, 2006, the Company
modified its $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
and stock purchase warrants exercisable for 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. At December 31, 2006, we had $600,000 callable
secured convertible notes outstanding pursuant to this financing, and we issued
additional callable secured convertible notes in the aggregate amount of
$400,000 in January 2007.

                                     - 33 -
<PAGE>

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.

On November 13, 2006, the Company was named as a principal party to proceedings
brought in the name of Raymon Valdes seeking approximately $440,000 on breach of
contract theories and declaring the Company in default under the convertible
promissory notes issued in connection with its acquisition of Changes In
L'Attitudes. 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. 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.

OUR COMMON STOCK COULD BE CONSIDERED A "PENNY STOCK."

Our common stock is considered to be a "penny stock" because it meets one or
more of the definitions in Rules 15g-2 through 15g-6 promulgated under Section
15(g) of the Securities Exchange Act of 1934, as amended. These include but are
not limited to, the following: (i) the stock trades at a price less than $5.00
per share; (ii) it is not traded on a "recognized" national exchange; (iii) it
is not quoted on The Nasdaq Stock Market, or even if quoted, has a price less
than $5.00 per share; or (iv) is issued by a company with net tangible assets
less than $2.0 million, if in business more than a continuous three years, or
with average revenues of less than $6.0 million for the past three years. The
principal result or effect of being designated a "penny stock" is that
securities broker-dealers cannot recommend the stock but must trade it on an
unsolicited basis.

BROKER-DEALER REQUIREMENTS MAY AFFECT TRADING AND LIQUIDITY.

Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2
promulgated thereunder by the SEC require broker-dealers dealing in penny stocks
to provide potential investors with a document disclosing the risks of penny
stocks and to obtain a manually signed and dated written receipt of the document
before effecting any transaction in a penny stock for the investor's account.
Potential investors in our common stock are urged to obtain and read such
disclosure carefully before purchasing any shares that are deemed to be "penny
stocks." Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve
the account of any investor for transactions in such stocks before selling any
penny stock to that investor. This procedure requires the broker-dealer to (i)
obtain from the investor information concerning his or her financial situation,
investment experience and investment objectives; (ii) reasonably determine,

                                     - 34 -
<PAGE>

based on that information, that transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a
signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult for holders of our common stock to resell their shares to third
parties or to otherwise dispose of them in the market or otherwise.

WE HAVE THE RIGHT TO ISSUE UP TO 20,000,000 SHARES OF "BLANK CHECK" PREFERRED
STOCK, WHICH MAY ADVERSELY AFFECT THE VOTING POWER OF THE HOLDERS OR OTHER OF
OUR SECURITIES AND MAY DETER HOSTILE TAKEOVERS OR DELAY CHANGES IN MANAGEMENT
CONTROL.

We may issue up to 20,000,000 shares of our preferred stock from time to time in
one or more series, and with such rights, preferences and designations as our
board of directors may determinate from time to time. 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 MAY BE VOLATILE, WHICH SUBSTANTIALLY INCREASES THE RISK THAT
YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT OR ABOVE THE PRICE THAT YOU MAY PAY
FOR THE SHARES.

Because of the limited trading market expected to develop for our common stock,
and because of the possible price volatility, you may not be able to sell your
shares of common stock when you desire to do so. The inability to sell your
shares in a rapidly declining market may substantially increase your risk of
loss because of such illiquidity and because the price for our common stock may
suffer greater declines because of its price volatility.

The price of our common stock may be higher or lower than the price you may pay.
Certain factors, some of which are beyond our control, that may cause our share
price to fluctuate significantly include, but are not limited to, the following:

      o  variations in our quarterly operating results;

      o  loss of a key relationship or failure to complete significant
         transactions;

      o  additions or departures of key personnel; and

      o  fluctuations in stock market price and volume.

Additionally, in recent years the stock market in general, and the
over-the-counter markets in particular, have experienced extreme price and
volume fluctuations. In some cases, these fluctuations are unrelated or
disproportionate to the operating performance of the underlying company. These
market and industry factors may materially and adversely affect our stock price,
regardless of our operating performance.

In the past, class action litigation often has been brought against companies
following periods of volatility in the market price of those companies' common
stock. If we become involved in this type of litigation in the future, it could
result in substantial costs and diversion of management attention and resources,
which could have a further negative effect on your investment in our stock.

                                     - 35 -
<PAGE>

MANY OF OUR SHARES OF COMMON STOCK WILL IN THE FUTURE BE AVAILABLE FOR SALE. ANY
SALES OF OUR COMMON STOCK, IF IN SIGNIFICANT AMOUNTS, ARE LIKELY TO DEPRESS THE
MARKET PRICE OF OUR SHARES.

On December 18, 2006, we filed two registration statements to register the sale
of an aggregate of 11,465,167 shares of our common stock by certain of our
stockholders. Assuming all of these shares issued and issuable to the selling
stockholders are sold, we would have 12,865,565 shares that are freely tradable
without the requirement of registration under the Securities Act of 1933.
11,080,797 shares of our currently outstanding and issuable common stock are
"restricted securities" as defined under Rule 144 of the Securities Act of 1933,
and 1,400,398 remaining shares are a part of the public float for a total of
12,481,195 shares. Of these shares, 3,177,777 are owned by our officers and
directors. These individuals may only sell their shares, absent registration, in
accordance with the provisions of Rule 144.

Restricted securities may only be publicly sold pursuant to registration under
the Securities Act of 1933, or pursuant to Rule 144 or some other exemption that
may be available from the registration requirements of the Securities Act of
1933. Rule 144 entitles each person holding restricted securities for a period
of one year, and affiliates who own non-restricted shares of our common stock,
to sell every three months in ordinary brokerage transactions an amount of
shares which does not exceed the greater of 1% of the shares of our common stock
outstanding or, assuming the shares of common stock are then traded on NASDAQ,
the average weekly trading volume during the four calendar weeks prior to said
sale. Any substantial sales pursuant to Rule 144, including the potential sale
of our affiliates' shares of our common stock, may have an adverse effect on the
market price of shares of our common stock, and may hinder our ability to
arrange subsequent equity or debt financing or affect the terms and time of such
financing.

WE HAVE NOT PAID, AND DO NOT INTEND TO PAY, CASH DIVIDENDS IN THE FORESEEABLE
FUTURE.

We have not paid any cash dividends on our common stock and do not intend to pay
cash dividends in the foreseeable future. We intend to retain future earnings,
if any, for reinvestment in the development and expansion of our business.
Dividend payments in the future may also be limited by other loan agreements or
covenants contained in other securities which we may issue. Any future
determination to pay cash dividends will be at the discretion of our board of
directors and depend on our financial condition, results of operations, capital
and legal requirements and such other factors as our board of directors deems
relevant.

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. CONTROLS AND PROCEDURES

The Company's management has concluded its evaluation of the effectiveness of
the design and operation of the Company's disclosure controls and procedures.
Disclosure controls and procedures are controls and procedures designed to
reasonably assure that information required to be disclosed in our reports filed
under the Securities Exchange Act of 1934, such as this Annual Report, is
recorded, processed, summarized and reported within the time periods prescribed
by SEC rules and regulations, and to reasonably assure that such information is
accumulated and communicated to our management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.

                                     - 36 -
<PAGE>

The Company's management, including the Chief Executive Officer and Chief
Financial Officer, does not expect that our disclosure controls and procedures
will prevent all error and all fraud. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that
the control system's objectives will be met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake. The design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions.

As of the evaluation date, the Company's Chief Executive Officer and its Chief
Financial Officer concluded that the Company maintains disclosure controls and
procedures that are effective in providing reasonable assurance that information
required to be disclosed in the Company's reports under the Exchange Act is
recorded, processed, summarized and reported within the time periods prescribed
by SEC rules and regulations, and that such information is accumulated and
communicated to the Company's management, including its Chief Executive Officer
and its Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date.

ITEM 8B. OTHER INFORMATION

None.

                                    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 4 members: Daniel Brandano, Eric
H. Winston, Ben J. Dyer and David Shapiro. Mr. Brandano serves as Chairman of
the Board of Directors.

Set forth below is information regarding our officers and directors as of March
29, 2007:

        NAME          AGE                 POSITION                DIRECTOR SINCE
------------------    ---   -----------------------------------   --------------
Daniel G. Brandano    57    President, Chief Executive Officer,        2006
                            acting Chief Financial Officer and
                            Director

Eric H. Winston...    59    Director                                   2006

Ben J. Dyer.......    58    Director                                   2006

David Shapiro.....    36    Director                                   2007

Nigel P. Osborne..    56    Executive Vice President and Chief
                            Operating Officer

Mark E. Crone.....    42    Secretary

                                     - 37 -
<PAGE>

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 in Lowell,
Massachusetts.

Eric H. Winston has been a Director of the Company since November 6, 2006. In
1985, Mr. Winston founded E. H. Winston & Associates, a management consulting
firm in the areas of operational and financial restructuring, strategic
validation and profitable business growth. Since 1999, Mr. Winston has also
served as the President and Chief Executive Officer of Inisoft Corporation, a
software development company. From 1997 through 1998, Mr. Winston was President
and Chief Executive Officer of Microforum, Inc., an online enterprise solutions
developer. From 1994 through 1996, Mr. Winston was President and Chief Operating
Officer of Sound Source Interactive, Inc., an interactive CD-Rom publisher of
entertainment content. Mr. Winston was President and Chief Executive Officer of
Computer Data Information Systems, Inc., an enterprise software developer, from
1985 to 1991. Mr. Winston received a B.A. in Business Administration from
Memphis State University, Memphis, Tennessee.

Ben J. Dyer has been a Director of the Company since December 1, 2006. Mr. Dyer
is a General Partner of Cordova Intellimedia Ventures, a $41 million seed
capital fund that actively manages nine investments. Mr. Dyer is also the
president of Jackson Capital, LLC, which provides corporate finance services to
early-stage and mid-market companies. Jackson Capital is an affiliate of Jackson
Securities Incorporated. Mr. Dyer is also a General Partner in a related entity,
Southeast Ventures, a co-investment growth fund targeted for minority vendors to
Fortune 1000 companies. He is the president of Innovations Publishing, LLC, a
research firm which catalogs and follows emerging privately-held ventures in the
Southeast. He is also Chairman of Intellimedia Commerce, Inc., which was formed
in January 1996 and is privately held. Intellimedia has engaged in the
businesses of software development and of incubating emerging technology
companies. The genesis of the company's original technical team was Intellimedia
Sports, which Dyer founded in 1992 to create and own the sports instruction
category in the then promising CD-ROM industry. Mr. Dyer was Chairman and CEO of
Comsell, Inc., a pioneering multimedia development firm, from its founding in
1983 until 1988, when Comsell was acquired by Rupert Murdoch's News Corporation.
Mr. Dyer was a founder of Peachtree Software, Inc. and served as its president
from inception in 1977 through September 1983. The company was one of the top
ten PC software companies during his tenure and was sold to Management Science
America in June 1981. After it was later sold to a venture group, Dyer returned
as a director until its April 1994 acquisition by ADP. Mr. Dyer served as
president, chairman, and a director of the de novo Enterprise National Bank
during his interim between Comsell and the creation of Intellimedia Sports. He
is currently on the board of privately held FundRaisingInfo.com. Mr. Dyer has
concentrated his community activities on higher education. He is a past
president of the Georgia Tech Alumni Association, a former director of the
Georgia Tech Foundation, and former chairman of the Alumni Advisory Board for
Georgia Tech's School of Industrial & Systems Engineering. He served a 30-month
term as Chairman of the Georgia Tech Research Corporation. He is currently on
the External Advisory Council of the Georgia Tech Research Institute. In March
2006, he received the Joseph Mayo Petit Alumni Distinguished Service Award,
Georgia Tech's highest honor for its alumni. On October 19, 1998, Mr. Dyer was
inducted as the 14th member of Georgia's Technology Hall of Fame. Mr. Dyer holds
a Bachelor of Industrial Engineering degree with highest honors from Georgia
Tech, and an MBA in finance from Georgia State University, also with highest
honors.

                                     - 38 -
<PAGE>

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.

Nigel P. Osborne, CTC has served as the Company's Executive Vice President and
Chief Operations Officer since October 2006. From April 2002 to October 2005,
Mr. Osborne was the President of Destination Europe, Package Division of Auto
Europe LLC, a travel company specializing in European vacations, where he
spearheaded the launch of a business-to-consumer website. From March 2000 to
April 2002, Mr. Osborne was Vice President - Sales and Marketing for Holland
America Line Westours where he led the company's expansion into Alaska. From
1995 to 2000, Mr. Osborne was the President of Insight International Tours, a
Boston-based tour company. Mr. Osborne received a degree in Hotel Management and
Tourism from Oxford Polytechnic in Oxford, England.

Mark Crone has served as the Secretary of the Company since November 6, 2006.
Mr. Crone has been a partner in the law firm of Crone Rozynko, LLP since July 1,
2004. From January 1, 2001 to June 30, 2004, Mr. Crone was the principal of The
Crone Law Group. He has practiced corporate and securities law since 1995 and is
admitted to practice law in California and Connecticut. Mr. Crone received a
B.A. from Trinity College, Hartford, Connecticut, in 1992 and a J.D. from The
University of Santa Clara School of Law in 1995.

                             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, 2006:

                           DIRECTOR COMPENSATION TABLE

                              STOCK AWARDS         OPTION AWARDS          TOTAL
NAME                               ($)                  ($)                ($)
(A)                              (B) (1)              (C) (2)              (D)
---------------------         ------------         -------------         -------
Eric H. Winston (3) .           $58,333                  --              $58,333
Ben J. Dyer (4)......           $36,667                  --              $36,667
David Shapiro (5)....                --                  --                   --

(1) The amounts in column (b) reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended December 31, 2006, 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, 2006, and included in Part II,
Item 7, Financial Statements of this Annual Report on Form 10-KSB.

(2) No option awards were granted to the directors during the year ended
December 31, 2006.

                                     - 39 -
<PAGE>

(3) As of December 31, 2006, the Company granted Eric H. Winston 200,000 shares
of common stock. The shares are 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.

(4) As of December 31, 2006, the Company granted Ben J. Dyer 200,000 shares of
common stock. The shares are 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.

(5) David Shapiro was appointed to the Board of Directors on January 8, 2007.
The Company 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. 50,000 shares subject to the option vested immediately and 50,000 shares
subject to the option vest each calendar quarter subject to Mr. Shapiro's
service on the Company's Board of Directors.

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
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.

                                     - 40 -
<PAGE>

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.

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 year ended December 31, 2006 and 2005:

NAME AND PRINCIPAL POSITION                      YEAR      SALARY $      TOTAL $
---------------------------                      ----      --------      -------
Daniel G. Brandano, President and
Chief Executive Officer ...................      2006      203,365       203,365
                                                 2005      152,796       152,796
Nigel Osborne, Executive Vice President....      2006      115,153       115,153
Steve Hicks................................      2006      115,788       115,788

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

None of our executive officers were granted or otherwise received any option,
stock or equity incentive plan awards during 2006.

                                     - 41 -
<PAGE>

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 29, 2007 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.

                                               AMOUNT AND NATURE
                                                 OF BENEFICIAL        PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER             OWNERSHIP (1)        CLASS (2)
-----------------------------------------      -----------------      ----------
EXECUTIVE OFFICERS AND DIRECTORS
Daniel G. Brandano (3)...................           2,677,777           17.7%
Eric H. Winston (4)......................             200,000            1.6%
Ben J. Dyer (4)..........................             200,000            1.6%
David Shapiro (5)........................             100,000            0.8%
Nigel P. Osborne.........................                  --              --
All Executive Officers and Directors
 as a  Group (5 persons) (6).............           3,177,777           20.8%

5% HOLDERS
MMA Capital, LLC (7)
456 Montgomery Street, Ste. 2200
San Francisco, CA 94104..................           9,130,000           45.7%
Diversified Acquisition Trust, LLC (8)
50 Braintree Hill Park, Ste. 108
Braintree, MA............................           1,839,506           14.2%
Stephen A. Hicks (9)
300 East 40th Street
New York, NY 10016.......................           1,666,667           12.4%
Thomas W. Busch
11618 Tavernay Parkway
Charlotte, North Carolina................             866,667            7.0%
Raymon Valdes (10)
3080 East Bay Drive
Largo, Florida 33771.....................             740,000            5.8%
Claudale Limited (11)
c/o T&T Management Services Limited
28 Irish Town, Gibraltar.................             693,333            5.6%
AJW Partners, LLC (12) (13)
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millenium Capital Partners, II, LLC..             622,812            4.9%

(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of common stock owned by
such person. The number of shares beneficially owned includes common stock that
such individual has the right to acquire either currently or within 60 days of
March 29, 2007, including through the exercise of an option.

(2) Percentage of beneficial ownership is based upon 12,481,195 shares of common
stock including 12,401,195 shares outstanding and 80,000 shares issuable as of
March 29, 2007. For each named person, this percentage includes common stock
that the person has the right to acquire either currently or within 60 days of
March 29, 2007, including through the exercise of an option; however, such
common stock is not deemed outstanding for the purpose of computing the
percentage owned by any other person.

                                     - 42 -
<PAGE>

(3) Includes (a) 833,333 shares held by Mr. Brandano, (b) 1,066,666 shares 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, and (d) 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.

(4) The shares are subject to a repurchase option in favor of the Company, which
lapses as to 50,000 shares on the grant date and 50,000 shares at the beginning
of each quarter thereafter, subject to continuing service on the Company's Board
of Directors.

(5) Includes stock options to purchase 100,000 shares of common stock
exercisable currently and within 60 days of March 31, 2007.

(6) Includes 388,889 shares issuable upon exercise of the convertible feature of
a note held by Street Venture Partners, LLC, 388,889 shares issuable upon
exercise of currently exercisable warrants, 400,000 shares of restricted common
stock subject to the Company's right of repurchase, and stock options to
purchase 100,000 shares of common stock exercisable currently and within 60 days
of March 31, 2007.

(7) Includes (a) 1,630,000 shares owned by MMA Capital, LLC, (b) 2,250,000
shares issuable upon exercise of the convertible feature of a note and (c)
5,250,000 shares issuable upon exercise of currently exercisable warrants.

(8) 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.

(9) 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.

(10) Consists of (a) 340,000 shares of common stock and (b) 400,000 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.

(11) Claudale Limited is a Gibraltar company which owns 693,333 shares of common
stock. Claudale Limited also manages a family trust for Mr. Daniel Brandano. Mr.
Brandano has no ownership interest in Claudale Limited and disclaims beneficial
ownership or control of any of the Company's shares owned by Claudale Limited.

(12) Consists of 622,812 shares issuable upon conversion of outstanding
convertible promissory notes. The selling 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. Does not include shares issuable upon conversion of accrued
interest, which is convertible at the option of the holder.

                                     - 43 -
<PAGE>

(13) The holders 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.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company entered into a consulting agreement with Innovations Publishing,
LLC, pursuant to which the Company paid consulting fees of $17,500 in 2006. Mr.
Dyer, a 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 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 pays E. H. Winston & Associates a
consulting fee of $10,000 per month plus reimbursement of all reasonable
out-of-pocket expenses.

On November 17, 2006, the Company entered into a 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
Consulting Services Agreement is six months unless earlier terminated by either
party. The Company may terminate this agreement for any reason on 14 days prior
written notice. The Company pays E. H. Winston & Associates a consulting fee of
$10,000 per month plus reimbursement of all reasonable out-of-pocket expenses.
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.

                                     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)

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

                                     - 44 -
<PAGE>

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)

21.1     Subsidiaries of the Registrant (32)

                                     - 45 -
<PAGE>

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.

                                     - 46 -
<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

                                     - 47 -
<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 2006 and 2005, billed us audit fees in the aggregate amounts of
$176,000 and $33,000, 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 2006 and 2005, billed us audit-related fees in the aggregate
amounts of $31,000 and $4,000, respectively. These fees relate primarily to the
auditor's review of registration statements and related consents and audit
related consulting.

                                     - 48 -
<PAGE>

                              FINANCIAL STATEMENTS

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

                                                                            Page
                                                                            ----

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

Consolidated Balance Sheet - December 31, 2006 ............................. F-3

Consolidated Statement of Operations - For the Year Ended
  December 31, 2006 and For the Period From May 16, 2005
  (Inception) to December 31, 2005 ......................................... F-4

Consolidated Statement of Changes in Stockholders' Deficit -
  For the Year Ended December 31, 2006 and For the Period From
  May 16, 2005 (Inception) to December 31, 2005 ............................ F-5

Consolidated Statement of Cash Flows - For the Year Ended
  December 31, 2006 and For the Period From May 16, 2005
  (Inception) to December 31, 2005 ......................................... F-6

Notes to Consolidated Financial Statements ................................. F-7


                                       F-1
<PAGE>

             Report of Independent Registered Public Accounting Firm

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

We have audited the accompanying consolidated balance sheet of Dynamic Leisure
Corporation and subsidiaries as of December 31, 2006 and the related
consolidated statements of operations, changes in stockholders' deficit and cash
flows for the year ended December 31, 2006, and for the period from May 16, 2005
(Inception) to December 31, 2005. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with 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
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly in all material respects, the financial position of Dynamic Leisure
Corporation and subsidiaries as of December 31, 2006, and the results of its
consolidated operations, changes in stockholders' deficit and cash flows for the
year ended December 31, 2006 and for the period from May 16, 2005 (Inception) to
December 31, 2005, 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 $11,009,388,
net cash used in operations of $2,720,651 for the year ended December 31, 2006,
and a working capital deficiency and stockholders deficit of $12,095,860 and
$6,264,853, respectively, at December 31, 2006. In addition, the Company is in
default on convertible promissory notes totaling $107,500 at December 31, 2006,
and $2,157,500 as of March 6, 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.


SALBERG & COMPANY, P.A.
Boca Raton, Florida
March 30, 2007

                                       F-2
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                             As of December 31, 2006

                                     ASSETS
Current Assets
  Cash ..........................................................  $    203,911
  Investments, restricted .......................................       127,842
  Accounts receivable, net of an allowance of $5,551 ............       139,321
  Prepaid travel ................................................       515,061
  Other current assets ..........................................        78,190
                                                                   ------------
    Total Current Assets ........................................     1,064,325
                                                                   ------------

Property and equipment, net .....................................     1,076,669
                                                                   ------------
Other Assets
  Goodwill ......................................................     2,902,196
  Intangible assets, net ........................................     4,307,505
  Deposits ......................................................        99,735
  Debt issue costs, net .........................................        94,022
                                                                   ------------
    Total Other Assets ..........................................     7,403,458
                                                                   ------------

    Total Assets ................................................  $  9,544,452
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
  Convertible promissory notes, net of discount of $266,471 .....  $  2,046,187
  Notes payable, current portion ................................       386,245
  Acquisition payable ...........................................     1,440,000
  Accounts payable ..............................................       752,152
  Accounts payable to related parties ...........................        65,930
  Accrued compensation ..........................................        74,707
  Accrued interest ..............................................       652,823
  Other accrued liabilities .....................................       294,271
  Capital lease obligation ......................................        34,152
  Deferred revenue ..............................................       673,936
  Customer deposit ..............................................       602,977
  Due to employee ...............................................        50,000
  Warrant and option liability ..................................     5,419,729
  Embedded conversion option liability ..........................       667,076
                                                                   ------------

    Total Current Liabilities ...................................    13,160,185
                                                                   ------------
Long-Term Liabilities
  Convertible promissory notes, net of current portion,
    net of discount of $624,671 .................................     2,225,329
  Convertible promissory note to related party ..................       350,000
  Notes payable, net of current portion .........................           343
  Capital lease obligation, net of current portion ..............        73,448
                                                                   ------------
    Total Long-Term Liabilities .................................     2,649,120
                                                                   ------------

    Total Liabilities ...........................................  $ 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,
    12,101,195 issued and outstanding ...........................       121,012
 Common stock issuable, at par value (130,000 shares) ...........         1,300
 Additional paid-in capital, net of deferred consulting fees
    of $397,200 .................................................     5,107,537

 Accumulated deficit ............................................   (11,494,702)
                                                                   ------------
    Total Stockholders' Deficit .................................    (6,264,853)
                                                                   ------------

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

         See accompanying notes to the consolidated financial statements

                                       F-3
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                       FROM
                                                     FOR THE       MAY 16, 2005
                                                    YEAR ENDED    (Inception) to
                                                   DECEMBER 31,    DECEMBER 31,
                                                       2006            2005
                                                   ------------   --------------

Total revenues .................................   $  5,817,252    $          -

Cost of revenues ...............................      4,336,889               -
                                                   ------------    ------------

  Gross Profit .................................      1,480,363               -

Operating Expenses
  Employee Compensation ........................      1,362,290         255,780
  Financial consulting, includes $694,776 stock
    based compensation .........................        798,042          72,500
  Legal expense, includes $524,000 stock based
    compensation ...............................        719,951               -
  Depreciation and amortization expense ........        704,726               -
  Internal accounting and external auditing
    expense ....................................        613,588               -
  Director fees, includes $496,000 stock based
    compensation ...............................        496,000               -
  Investor relations, includes $314,200 stock
    based compensation .........................        314,200               -
  Other general and administrative expenses ....      2,032,192         114,560
                                                   ------------    ------------

    Total Operating Expenses ...................      7,040,989         455,954
                                                   ------------    ------------

    Loss from Operations .......................     (5,560,626)       (455,954)

Other Income (Expense)
  Interest income ..............................         19,494               -
  Interest expense .............................     (5,034,861)        (29,360)
  Gain on disposal of assets, net ..............        192,471               -
  Loss on extinguishment of debt ...............       (208,452)              -
  Warrant and option valuation income ..........        249,662               -
  Embedded conversion option valuation expense .       (667,076)              -
                                                   ------------    ------------

    Total Other Expense, net ...................     (5,448,762)        (29,360)
                                                   ------------    ------------

    Net Loss ...................................   $(11,009,388)       (485,314)
                                                   ============    ============

Net Loss Per Share - Basic and Diluted .........   $      (1.08)   $      (0.47)
                                                   ============    ============

Weighted average number of shares outstanding
  during the period - basic and diluted ........     10,154,497       1,033,625
                                                   ============    ============

         See accompanying notes to the consolidated financial statements

                                       F-4
<PAGE>
<TABLE>
                                       DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                                CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                               For the Period May 16, 2005 (Inception) to December 31, 2005
                                           and the Year Ended December 31, 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
  MAY 16, 2005 ....           -   $      -         -   $    -      $    -      $         -   $          -   $          -

Common stock issued
  to founders .....   5,966,667     59,666         -        -        (537)         (59,129)             -              -

Common stock issued
  for services ....     600,000      6,000         -        -           -            1,500              -          7,500

Net loss,
  December 31, 2005           -          -         -        -           -                -       (485,314)      (485,314)
                     ----------   --------   -------   ------      ------      -----------   ------------   ------------

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 .........            -          -         -        -           -                -    (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)
                     ==========   ========   =======   ======      ======      ===========   ============   ============

                             See accompanying notes to the consolidated financial statements

                                                           F-5
</TABLE>
<PAGE>
<TABLE>
                                 DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                                                                    FROM
                                                                               FOR THE          MAY 16, 2005
                                                                              YEAR ENDED       (Inception) to
                                                                             DECEMBER 31,       DECEMBER 31,
                                                                                 2006               2005
                                                                             ------------      --------------
<S>                                                                          <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ............................................................      $(11,009,388)      $   (485,314)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
      Change in accounts receivable allowance .........................             5,551                  -
      Depreciation ....................................................            51,966                774
      Amortization of intangible assets ...............................           444,408                  -
      Amortization of debt issue costs ................................           208,351                  -
      Loss on extinguishment of debt ..................................           208,452                  -
      Amortization of debt discount to interest expense ...............         4,358,733                  -
      Common stock and warrants for services ..........................         1,903,976              7,500
      Embedded conversion option valuation expense ....................           667,076                  -
      Warrant and option valuation expense (income) ...................          (249,662)                 -
      Loss (gain) on disposal of assets ...............................          (192,471)                 -
    (Increase) decrease in assets and liabilities:
      Accounts receivable .............................................           318,106                  -
      Prepaid assets ..................................................          (275,933)           (19,136)
      Other  assets ...................................................           (73,508)            (1,760)
      Accounts payable ................................................           250,747             81,347
      Accrued expenses ................................................           719,113             96,139
      Deferred revenue ................................................           (13,203)                 -
      Customer deposit ................................................           (42,965)                 -
                                                                             ------------       ------------
      Net Cash Used In Operating Activities ...........................        (2,720,651)          (320,450)
                                                                             ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Change in investments ...............................................            25,348                  -
  Acquisition of property and equipment ...............................          (325,937)          (647,487)
  Acquisition of business .............................................           (41,077)                 -
                                                                             ------------       ------------
      Net Cash Used In Investing Activities ...........................          (341,666)          (647,487)
                                                                             ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from convertible promissory notes ..........................         2,910,000            987,500
  Repayment of convertible promissory notes ...........................          (345,158)                 -
  Proceeds from notes payable and line of credit ......................            10,000                  -
  Debt issue costs ....................................................          (302,373)                 -
  Repayment of capital leases .........................................            (8,940)                 -
  Proceeds from common stock issuance .................................           983,136                  -
                                                                             ------------       ------------
      Net Cash Provided By Financing Activities .......................         3,246,665            987,500
                                                                             ------------       ------------

Net Increase in Cash ..................................................           184,348             19,563

Cash at Beginning of Period ...........................................            19,563                  -
                                                                             ------------       ------------
Cash at End of Period .................................................      $    203,911       $     19,563
                                                                             ============       ============

Supplemental disclosure of cash flow information:

  Cash paid during the period for income taxes ........................      $          -       $          -
                                                                             ============       ============
  Cash paid during the period for interest ............................      $     91,943       $          -
                                                                             ============       ============

Supplemental Disclosure of non-cash investing and financing activities:

  Debt and stock issue in acquisitions ................................      $  6,173,980       $          -
                                                                             ============       ============
  Notes payable and accrued interest converted to common stock ........      $    812,851       $          -
                                                                             ============       ============
  Assets purchased under Capital Lease ................................      $    116,540       $          -
                                                                             ============       ============
  Purchase of GSA agreement and deposits for note payable .............      $    350,000       $          -
                                                                             ============       ============
  Discount on promissory notes ........................................      $  2,630,202       $          -
                                                                             ============       ============
  Conversion liability related to promissory note .....................      $  1,954,950       $          -
                                                                             ============       ============

                       See accompanying notes to the consolidated financial statements

                                                     F-6
</TABLE>
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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 fiscal year ended December 31, 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")(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 2005 financial statements have been reclassified
to conform with the 2006 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 2006 include the valuation of accounts receivable,
valuation of goodwill, valuation and amortization of intangible assets,
valuation of stock based transactions, valuation of derivatives, estimates of
allowances for customer refunds and the estimate of the valuation allowance on
deferred tax assets.

                                      F-7
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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 a cash equivalent as
they are considered deposits in transit. Credit card receivables included in
cash and cash equivalents at December 31, 2006 were $20,769. The Company places
its cash with a financial institution and, at times, such deposits may be in
excess of the FDIC insurance limit. The Company has not experienced any losses
on such accounts.

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 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. No impairment
was recognized during the year ended December 31, 2006.

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, 2006.

Surety Bond and Restricted Investments

         At December 31, 2006, the Company had outstanding a surety bond for
approximately $75,000 in favor of the Airlines Reporting Corporation (ARC),
which allows the Company to purchase airline tickets through the ARC's
computerized ticket system. The terms of the surety bond agreement with the ARC
requires 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 restricted investments at
December 31, 2006 of $127,842 related to its ARC agreement.

                                      F-8
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

Letters of Credit

         At December 31, 2006, the Company had two outstanding letters of credit
totaling approximately $112,000 payable to the ARC to allow the Company to
purchase airline tickets through the 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.

Deferred Revenue

         Deferred revenue 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, 2006, the Company's advertising expense totaled $36,917.

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.

                                      F-9
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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 during 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.

         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 year. 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, 2006, there were outstanding
warrants, options, third-party debt and related-party debt convertible into
9,854,550, 1,101,206, 5,124,806 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 periods ending December 31, 2006 and 2005 due to the
Company reporting a net loss and the exercise or conversion of common stock
equivalents would have been anti-dilutive.

                                      F-10
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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

         SFAS No. 153, "Exchanges of Nonmonetary Assets" ("SFAS 153"): In
December 2004, the FASB issued this Statement which addresses the measurement of
exchanges of nonmonetary assets and is effective for nonmonetary asset exchanges
occurring in fiscal years beginning after June 15, 2005. The adoption of SFAS
153 has not had a material effect on the Company's financial position or results
of operations.

         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 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.

         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.

         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.

                                      F-11
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         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
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.

         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.


NOTE 3   GOING CONCERN

         For the year ended December 31, 2006, the Company had a net loss of
$11,009,388, used net cash in operations of $2,720,651, a working capital
deficiency of $12,095,860, and a stockholders' deficiency of $6,264,853. In
addition, the Company is in default on convertible promissory notes totaling
$107,500 at December 31,2006, and $2,157,500 as of March 6, 2007. These matters
raise substantial doubt about its 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 2007, additional capital investment will be necessary to develop
and sustain the Company's operations.

         As of December 31, 2006, the Company had $5,162,658 in outstanding
Convertible Notes payable to third parties (including the notes in default as
described above), which are convertible into 5,124,806 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, 2006 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, 2007, although there is no assurance regarding this belief or that the
Company will be successful in these efforts. The 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, 2006, the Company
received proceeds from the issuance of a $400,000 convertible promissory note
and extended the January 11, 2007 maturity date on its $2,250,000 convertible
promissory note to March 5, 2008.

                                      F-12
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

NOTE 4   PROPERTY AND EQUIPMENT

         Property and equipment consisted of the following at December 31, 2006:

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

         During 2006, the Company entered into $116,540 of capital lease
commitments for computer and telephone equipment. Depreciation expense was
$51,966 for 2006.

         Software in Development 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 in March 2007.

         Per the terms of the purchase agreement for the Tourscape software, the
Company agreed not to sell or license the Tourscape software to any unaffiliated
third party until approximately June 30, 2006 without the prior written consent
of the seller. 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
                                         ==========     =========     ==========

         Amortization expense for the year ended December 31, 2006 totaled
$444,408. Amortization of intangible assets in future years is expected to be as
follows:

         2007          $   746,496
         2008          $   607,132
         2009          $   607,132
         2010          $   607,132
         2011          $   607,132
         Thereafter    $ 1,132,481

                                      F-13
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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 ....................       $ 5,162,658       $   891,142       $ 4,271,516
                                 ===========       ===========       ===========

                                      F-14
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         Terms and Original Debt Discount Assumptions:
<TABLE>
<CAPTION>
                                                                                Original Warrant and Option Liability
                    Convertible Promissory Notes                                 Black-Scholes Valuation Assumptions
----------------------------------------------------------------------   ---------------------------------------------------
Interest    Balance     Unamortized   Maturity              Conversion               Exercise   Expected   Vola-    Discount
  Rate     12/31/2006     Discount      Date     Payments      Price      Shares      Price     Life(Yr)   tility     Rate
--------   ----------   -----------   --------   --------   ----------   ---------   --------   --------   ------   --------
<C>        <C>          <C>           <C>        <C>        <C>          <C>         <C>        <C>        <C>      <C>
9%  (S)    $1,450,000    $215,183       3/6/07      (A)        $1.50             -        -         -         -          -
9%  (S)       600,000      51,288       2/8/07      (B)         1.50             -        -         -         -          -
10% (S)     2,250,000      67,411       3/5/08      (C)         1.00     2,000,000     1.00       3.0       271%      5.07%
 -   -           -              -                   (D)         1.00       250,000     1.00       2.25      142%      5.03%
10% (U)       155,158           -      6/30/07      (E)          .75       304,000      .90       3.0       354%      3.96%
10% (U)        10,000           -      6/30/06      (F)          .90             -        -         -         -          -
10% (U)        75,000           -      6/30/06      (F)          .90             -        -         -         -          -
10% (U)        10,000           -      6/30/06      (F)          .90             -        -         -         -          -
10% (U)        12,500           -      6/30/06      (F)          .90             -        -         -         -          -
 6% (S)       600,000     557,260     10/25/09      (G)          (G)     5,000,000     1.50       3.0       154%      4.58%
           ----------    --------
           $5,162,658    $891,142
           ==========    ========
</TABLE>
(A) - This note went into default for nonpayment on its maturity date.

(B) - This note went into default for nonpayment on its maturity date. A second
      cash payment representing down payment was due 6/6/2006 totaling $440,000.
      No payment was made on the $440,000 (see Note 16).

(C) - Maturity date of note was extended on March 5, 2007 to March 5, 2008.

(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) - Monthly principal payments of $29,700 were to commence 6/1/2006. No
      payments have been made and the loan is in default.

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

(G) - Balance is due on the maturity date plus all accrued interest. The debt is
      convertible at a 45% discount to market or $.3575 per share at December
      31, 2006.

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

         In total as of December 31, 2006 and as of March 6, 2007, the Company
was in default on third-party convertible promissory notes of $107,500 and
$2,157,500, respectively.

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, 2006, the Note had an outstanding
balance of $350,000 (see Note 11 and 13).

                                      F-15
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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 as of December 31, 2006:

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

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

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

         At December 31, 2006, the Company was in default of the repayment terms
on certain 5% to 15% unsecured notes aggregating $35,000. This amount is
included in notes payable, current portion on the accompanying consolidated
balance sheet at December 31, 2006.

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

         During 2006, the Company entered into capital equipment leases with an
aggregate gross value of $116,540. The terms of the leases range from three to
five years, with interest rates ranging from 4.99% to 11.44%.

         As of December 31, 2006 the Company's capital leases consisted of the
following:

         Total Capital Leases ..........................     $ 107,600
         Less Current Capital Leases ...................       (34,152)
                                                             ---------
            Long-term portion of Capital Leases ........     $  73,448
                                                             =========

                                      F-16
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         Future maturities of capital lease obligations are as follows:

              2007         $34,619
              2008         $37,958
              2009         $20,998
              2010         $11,897
              2011         $ 2,128

MMA Capital, LLC Financings
---------------------------

         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 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.

                                      F-17
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         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.

         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.

         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.

                                      F-18
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         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
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, 2006. Therefore, there was no effect of implementing this standard.

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

         On January 13, 2006, the Company and Alpha Capital Aktiengesellschaft,
JM Investors, LLC, Libra Finance, S.A. and RG Prager Corporation entered into a
Modification and Waiver Agreement 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 were amended to provide that interest on these Notes
at the rate of 5% per annum would be paid quarterly, commencing March 31, 2006.
Monthly principal amortization payments of approximately $29,700 were to
commence on June 1, 2006. As of December 31, 2006, the Company is in default of
the terms of the Modification and Waiver Agreement. Accordingly, the Company has
accrued default interest at the rate of 10% from the date of default of June 1,
2006.

         As consideration for the 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 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 of December 31,
2006, there was $155,158 in outstanding principal remaining on these notes.

                                      F-19
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         As additional consideration to induce the note holders to enter into
the 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.

         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
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 Company must 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. As of this filing, the note holders have not
taken any action on this deficiency and the Company has accrued $41,012 as of
December 31, 2006, in liquidated damages recorded as an operating expense.

         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 $.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.

                                      F-20
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

Convertible Promissory Notes with Variable Conversion Price
-----------------------------------------------------------

         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 to be
funded in two tranches ($600,000 on November 9, 2006, and $400,000 upon the
filing of a Registration Statement registering the sale of the shares underlying
the Notes). 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 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.

         The Company has an obligation to register shares of its common stock
pursuant to the terms of a Registration Rights Agreement with the note holders.
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. The proceeds of the offering will be used to repay certain
indebtedness and for working capital.

         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.

         On January 5, 2007, the Company entered into a Securities Purchase
Agreement for the second tranche in an aggregate amount of $400,000 (see Note
16).

                                      F-21
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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. 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.

         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 are as follows:
<TABLE>
<CAPTION>
                                                      11/9/06                                      Warrant
                         3/2/05                      Variable       All Other        Total       and Option
                      Convertible                   Conversion      Warrants        Warrant       Valuation
                         Note            MMA           Price           and        and Option       (Income)
                        Holders        Capital         Notes         Options       Liability       Expense
                      -----------    -----------    -----------    -----------    -----------    -----------
<S>                   <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)
                      ===========    ===========    ===========    ===========    ===========    ===========
</TABLE>

                                      F-22
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

March 31, 2006
--------------
     Warrants ............    304,500    2,000,000
     Exercise price ......       $.90        $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 ......       $.90        $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 ......       $.90        $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    3,000,000   5,000,000         3,300,050
     Exercise price ......       $.90        $1.00       $1.50   $.675 to $11.25
     Market price ........       $.65         $.65        $.65              $.65
     Expected life (years)       2.25          2.0         2.8         .5 to 4.9
     Volatility ..........       166%         166%        166%              166%
     Discount rate .......       4.78         4.78        4.78              4.66

         On September 30, 2006, the Company determined that the period for
measuring the volatility of the Company's stock should be revised to begin on
January 13, 2006, the recapitalization date. Formerly, the measurement period
included years prior to the recapitalization. As a result, volatility was
reduced from 271% as of June 30, 2006 to 142% as of September 30, 2006. As of
December 31, 2006, volatility was 166%. Any change in the warranty and option
liability as a result of the change in the period used to measure volatility was
recorded as a change in estimate and charged to earnings in the third quarter of
2006.


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.
Such variable conversion prices require liability treatment for embedded
conversion option consisting of a conversion price equal to a 45% discount to
the market price of the Company's common stock as of December 31, 2006. 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.

                                      F-23
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         The Company's embedded conversion option liability and related
revaluation assumptions are as follows:

                                      11/9/06          Total
                                     Variable        Embedded         Conversion
                                    Conversion       Conversion         Option
                                      Price            Option          (Income)
                                      Notes          Liability         Expense
                                    ---------        ----------       ----------
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
                                    =========        =========        =========

November 9, 2006
----------------
     Principal ...........        $600,000
     Shares upon conversion        566,188
     Exercise price ......            $.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 ......          $.2925
     Market price ........            $.65
     Expected life (years)             2.8
     Volatility ..........            166%
     Discount rate .......            4.79


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.

                                      F-24
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

Modification and Waiver Agreement
---------------------------------

         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.

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 issuance, recorded as common
stock issuable at the common stock's par value and charged to operations as
consulting expense.

         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

                                      F-25
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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 warrants are exercisable for a period of five (5) years from the date of
issuance.

         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 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.

Common Stock Issued in Conversion of Convertible Notes Payable
--------------------------------------------------------------

         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 $.90 per share. The Company
expensed any remaining unamortized debt discount related to these notes upon
conversion.

         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 $.90 per share.

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
amortized value of $250,000 of this agreement at December 31, 2006 has been
charged to operations as an expense and the remaining balance recorded as
deferred consulting fees treated as a reduction in additional paid-in capital.

                                      F-26
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         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 has been charged to operations as an expense and the remaining balance
recorded as deferred consulting fees treated as a reduction in additional
paid-in capital.

         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 has been
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.

         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.

         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.

                                      F-27
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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

         As of December 31, 2006, the Company had outstanding warrants and
options exercisable for a total of 9,854,550 and 1,101,206 shares of common
stock, respectively.

         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. From January 13, 2006, the merger date, to June 30, 2006, the Company
used pre-merger and post merger stock prices for estimating volatility.
Beginning in the quarter ended September 30, 2006, the Company calculated
volatility by excluding stock prices prior to the merger date as the Company
believes the post merger period of January 13, 2006 to the period end is now a
representative period for measuring post merger volatility.

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     0.00        0.00           -
Granted .........................   200,000     1.25        5.00           -
Exercised .......................         0     0.00           -           -
Forfeited or expired ............         0        -           -           -
Outstanding at December 31, 2006    200,000     1.25        5.00           -
Exercisable at December 31, 2006    200,000     1.25        5.00           -

         The weighted-average grant-date fair value of warrants granted to
non-employees during the year ended December 31, 2006 was $185,976.

         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
were determined based on the following assumptions: an exercise price of $1.25,
an expected term equal to the warrant exercise period of 5 years, an expected
volatility of 335%, no expected dividends and a risk free rate of 4.07. 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.

                                      F-28
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

Warrants Issued for Cash
------------------------

         The following is a summary of warrant activity for warrants sold for
cash:

                                                          Weighted
                                              Weighted     Average
                                              Average     Remaining    Aggregate
                                              Exercise   Contractual   Intrinsic
Warrants Issued for Cash            Shares     Price        Term         Value
------------------------           ---------  --------   -----------   ---------
May 15, 2005 (Inception) ........          -       -           -            -
Granted .........................  1,104,923    0.68        4.00            -
Exercised .......................          -       -           -            -
Forfeited or expired ............          -       -           -            -
                                   ---------    ----        ----         ----

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            -
                                   =========    ====        ====         ====
Exercisable at December 31, 2006   9,654,550    1.00        3.22            -
                                   =========    ====        ====         ====

         The weighted average valuation assumptions for grants other than with
the sale of common stock for cash during 2006 are as follows:

Expected volatility .............     191%
Weighted average volatility .....     191%
Expected dividends ..............        0
Expected term (in years) ........        3
Risk-free rate ..................    4.71%

         On January 3, 2006, pursuant to the agreement with Street Venture
Partners, LLC, a related party (see Note 13), the Company issued warrants
exercisable for 388,889 shares of its common stock, at an exercise price of
$0.90 per share.

         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).

         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.

                                      F-29
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         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).

         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.

Non-Plan Common Stock Options to Non-Employees
----------------------------------------------

         At December 31, 2006, the Company had the following non-plan options
outstanding and exercisable:

                     Outstanding Options                 Exercisable Options
           ---------------------------------------    --------------------------
               Number         Weighted    Weighted        Number        Weighted
Range of   Outstanding at     Average     Average     Exercisable at    Average
Exercise    December 31,     Remaining    Exercise     December 31,     Exercise
 Price          2006            Life       Price           2006          Price
--------   --------------    ---------    --------    --------------    --------
 $ .70       1,000,000       4.8 Years     $ .70         1,000,000       $ .70
             =========                                   =========

         A summary of the changes in non-plan stock options outstanding during
2006 is presented below:
                                                                 2006
                                                      --------------------------
                                                                     Weighted
                                                                     Average
                                                       Shares     Exercise Price
                                                      ---------   --------------
Options outstanding at the beginning of the year ..           -      $       -
Options granted ...................................   1,000,000      $     .70
Options exercised .................................           -      $       -
Options forfeited .................................           -      $       -
                                                      ---------      ---------
Non-plan options outstanding at end of the year ...   1,000,000      $     .70
                                                      =========      =========
Weighted average fair value of options granted
  during the year .................................                  $ 655,000
                                                                     =========

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

Expected volatility .............     161%
Weighted average volatility .....     161%
Expected dividends ..............        0
Expected term (in years) ........        5
Risk-free rate ..................    4.82%

                                      F-30
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         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 November 6, 2006, the Company granted Mark E. Crone, a then Director
of the Company, an option to purchase 200,000 shares of the Company's common
stock at a purchase price of $0.70 per share, the closing price of the Company's
common stock on the date of grant and an expiration date of November 6, 2011. An
expense for director fees of $131,000 was recognized based in a Black-Scholes
option pricing model using the following assumptions: stock price $.70, expected
term five years, volatility 161%, zero expected dividends and a 4.82% discount
rate.

         On November 6, 2006, the Company granted options to purchase 800,000
shares of its common stock at an exercise price of $0.70 per share, the closing
price of the Company's common stock on the date of grant and an expiration date
of November 6, 2011 to its attorneys as compensation for professional fees. An
expense of $524,000 was recognized based in a Black-Scholes option pricing model
using the following assumptions: stock price $.70, expected term five years,
volatility 161%, zero expected dividends and a 4.82% discount rate.

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. The Company does not
anticipate issuing any options under the former DynEco non-qualified option
plans and the Company has not adopted any plans during 2006.

         At December 31, 2006, the Company had the following plan options
outstanding and exercisable:

                     Outstanding Options                  Exercisable Options
           ---------------------------------------    --------------------------
               Number         Weighted    Weighted        Number        Weighted
Range of   Outstanding at     Average     Average     Exercisable at    Average
Exercise    December 31,     Remaining    Exercise     December 31,     Exercise
 Price          2006            Life       Price           2006          Price
--------   --------------    ---------    --------    --------------    --------
$   1.50        1,111        0.5 Years    $   1.50         1,111        $   1.50
$  11.40          333        0.4 Years    $  11.40           333        $  11.40
$   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
              -------                                    -------
              101,206                                    101,206
              =======                                    =======

                                      F-31
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         The following is a summary of the changes in plan options outstanding:

                                                                2006
                                                      --------------------------
                                                                     Weighted
                                                                     Average
                                                       Shares     Exercise Price
                                                      ---------   --------------
Options outstanding at December 31, 2005 ..........           -      $       -
Options exchanged in recapitalization .............     124,539      $    7.11
Options granted ...................................           -      $       -
Options exercised .................................           -      $       -
Options forfeited .................................     (23,333)     $    3.00
                                                      ---------      ---------
Plan options outstanding at December 31, 2006 .....     101,206      $    7.25
                                                      =========      =========

Plan options exercisable at December 31, 2006 .....     101,206
                                                      =========

Weighted average fair value of options granted
  during the year .................................                  $       -
                                                                     =========

Former DynEco 2001 Equity Incentive Plan

         Under the 2001 Equity Incentive Plan, DynEco reserved a total of 33,333
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, 2006, options to purchase
22,278 shares have been granted 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
25,000 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.

Former DynEco 1993 Advisors Stock Option Plan

         Under the 1993 Advisors Stock Option Plan, DynEco reserved a total of
6,667 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 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 remain effective
until their termination date on December 31, 2008.

Share-Based Compensation
------------------------

         For the year ended December 31, 2006 and from May 16, 2005 (Inception)
through December 31, 2005, the Company recognized compensation costs for
employees, directors, consultants and others totaling $1,903,976 and $7,500,
respectively. These amounts increased the Company's net operating loss during
these periods.

                                      F-32
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         As of December 31, 2006, the Company has $155,000 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 nine (9)
months. This additional compensation cost will increase the Company's net
operating loss or its taxable income for this period.


NOTE 10  INCOME TAXES

         The effective tax rate varies from the maximum federal statutory rate
as a result of the following items:

                                                           2006        2005
                                                           ----        ----
         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 .......................       0.2          -
         Net (increase) due to various basis
           differences in assets and liabilities: ...       0.0         0.0
             Intangible assets ......................       1.6          -
             Convertible debt discount ..............      14.0          -
             Warrant and option liability ...........      (0.9)         -
             Embedded conversion option liability ...       2.3          -
         Change in valuation allowance ..............      20.3        37.6
                                                           ----        ----

         Income tax provision .......................        -%          -%
                                                           ====        ====

         The tax effect of temporary differences at December 31 were as follows:

                                                       2006           2005
                                                       ----           ----
         Asset:
           Accounts receivable .................   $     3,800    $         -
           Net operating loss ..................     2,394,700        165,007
                                                   -----------    -----------
                                                     2,398,500        165,007
                                                   -----------    -----------

         Net deferred tax asset before valuation
           allowance ...........................   $ 2,398,500    $   165,007
         Less valuation allowance ..............    (2,398,500)      (165,007)
                                                   -----------    -----------

         Net deferred tax asset ................   $         -    $         -
                                                   ===========    ===========

         For financial statement purposes, no tax benefit has been reported in
2006 or 2005 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 approximately $2,233,493 and
$165,007 in 2006 and 2005, respectively. At December 31, 2006, the Company has
net operating losses to offset future taxable income through the following
years:

         2025 ......     $485,314
         2026 ......   $5,883,600

         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.

                                      F-33
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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 paid consulting fees of $17,500
in 2006. Mr. Dyer, a 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 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 pays 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 3, 2006 agreement.

         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 pays 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.

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.

         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 12% of the Company's issued
and outstanding common stock as of December 31, 2006.

         Mr. Eiten was not employed by the Company at any time through December
31, 2006.

                                      F-34
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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, 2006, Street Venture Partners LLC owned 1,066,666 shares or
approximately 9% of the Company's issued and outstanding common stock.

         See Note 13 for purchase of asset from this related party.

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, 2006, Claudale Ltd. owned 693,333 shares or
approximately 5.8% of the Company's issued and outstanding common stock.

Brian J. Brandano
-----------------

         At December 31, 2006, Brian J. Brandano owned 333,333 shares or
approximately 2.8% 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 employed by the Company until July 2006.

Payable to Employee (Stephen A. Hicks)
--------------------------------------

         At December 31, 2006, the Company owed $50,000 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.


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 effected on January 13, 2006.

                                      F-35
<PAGE>

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

         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, 2006, 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.

                                      F-36
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 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 is being amortized over the
term of the debt.

         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.

                                      F-37
<PAGE>

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

         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.

                                      F-38
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         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.

         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.

                                      F-39
<PAGE>

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

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 in 2005 DLG was a development-stage company 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.

                                      F-40
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

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.

         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.

MANAGEMENT OF THE COMPANY
-------------------------

         In connection with the transactions contemplated by the Stock Exchange
Agreement dated January 13, 2006 described elsewhere in this Note, Thomas C.
Edwards resigned as an officer (President and Chief Executive Officer) and
director of DynEco Corporation, and Kevin Hooper resigned as a director of
DynEco Corporation. In accordance with the terms of the Stock Exchange
Agreement, Leonard Sculler, who served as a director of DynEco Corporation since
June 2003, continued to serve as a director of the Company until his resignation
on November 6, 2006. George R. Schell, who served as a director of DynEco since
1998, confirmed in a January 2006 telephone conversation with the Company's
General Counsel that he had informally resigned as a director of DynEco
Corporation, and was not re-elected at a January 31, 2006 Meeting of
Shareholders.

         At the Meeting of Shareholders, the following persons were elected to
serve as directors of the Company until the next annual meeting of shareholders
and until their successors are duly elected and qualified:

         Daniel G. Brandano
         Thomas W. Busch
         Robert A.G. LeVine
         Leonard Sculler

                                      F-41
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         In connection with the transactions contemplated by the Stock Exchange
Agreement dated January 13, 2006 described elsewhere in this Report, the
following persons were appointed to serve as officers of the Company, in the
capacities indicated, until the next annual meeting of the board of directors
and until their successors are duly elected and qualified:

         Daniel G. Brandano - President
         Thomas W. Busch - Vice President and Treasurer
         Robert A.G. LeVine - Secretary

         On June 5, 2006, Thomas W. Busch resigned as Director, Vice President,
Treasurer and Chief Financial Officer of Dynamic Leisure Corporation. Daniel G.
Brandano assumed the responsibilities of treasurer and chief financial officer.
On November 6, 2006, Len Sculler and Robert LeVine submitted their resignations,
effective immediately, from the Board of Directors of the Company. The
resignations were not as a result of any disagreement with the Company on any
matter relating to its operations, policies or practices. On November 6, 2006,
the Company's Board appointed Mark E. Crone and Eric H. Winston to fill the
Board vacancies created by the resignations of Mr. Sculler and Mr. LeVine. On
December 1, 2006, the Board appointed Ben J. Dyer as a director. On January 8,
2007, Mark E. Crone resigned from the Board and David Shapiro was appointed by
the Board to fill the vacancy left by Mr. Crone's resignation.

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.

                                      F-42
<PAGE>

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

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, 2006.

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 years ending December 31,
2006 and 2005 were $268,143 and $18,465, respectively.

         Future lease obligations are as follows as of December 31, 2006:

         2007 .....   $302,304
         2008 .....   $210,270
         2009 .....   $163,798
         2010 .....   $163,798
         2011 .....   $ 95,549

Legal Proceedings
-----------------

         The Company has been 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. The
complaint seeks approximately $440,000 on breach of contract damages relating to
the Company's acquisition of Changes in L'Attitudes. An acquisition payable of
$440,000 and interest expense totaling $147,551 has been accrued as of December
31, 2006, relative to this claim. The Company has entered into settlement
discussions with Raymon Valdes and has not yet resolved this matter.

         The Company has been 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-43
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         The Company has been 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. The complaint seeks approximately
$75,500 on the grounds of an alleged breach of consulting agreement. The Company
has responded to this complaint and believes the consultant agreement was
properly terminated in accordance with the terms of the agreement. As of
December 31, 2006, the Company had included $29,333 related to this matter in
accounts payable.

         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.

         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 AND CONTINGENCIES

         On January 5, 2007, 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". This is the second tranche in the
aggregate amount of $400,000 related 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 Notes
mature and all unpaid principal and accrued interest is due on January 5, 2010.
The Notes were 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 (i) 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. The Registration was filed on December 18,
2006; however, the purchasers waived the original filing deadline because of
delays beyond the Company's control. As of December 31, 2006, the Notes were
convertible at a 45% discount.

                                      F-44
<PAGE>

                  DYNAMIC LEISURE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

         The conversion of the Notes is subject to an effective Registration
Statement pursuant to the terms of a Registration Rights Agreement. 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. The
proceeds of the offering will be used to repay certain indebtedness and for
working capital.

         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.

         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. The
stock options have an expiration date of January 8, 2012. An expense for
director fees of approximately $92,000 will be recognized 25% on January 8, 2008
with the balance recognized over the remaining vesting period based in a
Black-Scholes option pricing model using the following assumptions: stock price
$.485, expected term five (5) years, volatility 166%, zero expected dividends
and a 4.78% discount rate.

         On March 5, 2007, the Company settled legal proceeding brought by MMA
Capital, LLC (see Note 15).


                                      F-45
<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 2, 2007.


                                       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 2, 2007.


/s/  Daniel G. Brandano       President and Chief Executive        April 2, 2007
-----------------------            Officer and Director
DANIEL G. BRANDANO


/s/ Eric H. Winston                      Director                  April 2, 2007
-----------------------
ERIC H. WINSTON


/s/ Ben J. Dyer                          Director                  April 2, 2007
-----------------------
BEN J. DYER


/s/ David Shapiro                        Director                  April 2, 2007
-----------------------
DAVID SHAPIRO