##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-QSB





(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended: March 31, 2008



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from  to

Commission File Number: 000-52029





PLATINUM RESEARCH
ORGANIZATION, INC.

(Exact name of small business issuer as specified in its charter)







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 20-2842514                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



|                                                |  |           
|----------------------------------------------- |  | ----------
|2777 Stemmons Freeway, Suite 1440, Dallas Texas |  | 75207     
|(Address of principal executive offices)        |  | (Zip code)

Issuers telephone number: (214) 271-9503





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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                             
|-------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer   ̈        
|Non-accelerated filer   ̈   |  | Smaller reporting company  x

(Do not check if a smaller reporting company)

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

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

75,000,000 shares of common stock issued and outstanding
as of May 15, 2008









---

##### Table of Contents

TABLE OF CONTENTS



|                                           |  |                       |  |                                                                                                 |  |         
|------------------------------------------ |  | --------------------- |  | ----------------------------------------------------------------------------------------------- |  | --------
|                                           |  |                       |  |                                                                                                 |  | Page No.
|NOTE REGARDING FORWARD-LOOKING INFORMATION |  | 1                    
|                                           |  |                      
|PART I:                                    |  | FINANCIAL INFORMATION |  | 1                                                                                              
|                                           |  | Item 1.               |  | Financial Statements                                                                            |  | 1       
|                                           |  |                       |  | Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007                          |  | 2       
|                                           |  |                       |  | Consolidated Statements of Operations for the Three-Month Periods Ended March 31, 2008 and 2007 |  | 3       
|                                           |  |                       |  | Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2008 and 2007 |  | 4       
|                                           |  |                       |  | Consolidated Statements of Changes in Shareholders Deficit                                     |  | 5       
|                                           |  |                       |  | Notes to Consolidated Financial Statements                                                      |  | 6       
|                                           |  | Item 2.               |  | Managements Discussion and Analysis or Plan of Operation                                       |  | 23      
|                                           |  | Item 3.               |  | Controls and Procedures                                                                         |  | 30      
|                                           |  |                      
|PART II:                                   |  | OTHER INFORMATION     |  | 30                                                                                             
|                                           |  | Item 6.               |  | Exhibits                                                                                        |  | 30      
|                                           | 
|SIGNATURES                                 |  | 31                   
|EXHIBIT INDEX                              |  | 32                   



---

##### Table of Contents

NOTE CONCERNING FORWARD-LOOKING INFORMATION

The statements contained in this Form 10-QSB that are not purely
historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include statements about our expectations, beliefs, intentions or
strategies for the future, which are indicated by words or phrases such as anticipate, expect, intend, plan, will, believe, management believes and similar words or
phrases. The forward-looking statements are based on our current expectations and are subject to certain risks, uncertainties and assumptions. Our actual results could differ materially from results anticipated in these forward-looking statements.
All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.

PART I - FINANCIAL INFORMATION



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

The interim financial
statements included herein are unaudited but reflect, in managements opinion, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of financial position and the results of our operations for the
interim periods presented.

The interim financial statements should be read in conjunction with the financial statements of Platinum
Research Organization, Inc. (the Company) and the notes thereto contained in the Companys audited financial statements for the year ended December 31, 2007 presented in the Annual Report on Form 10-KSB that was filed with the
Securities and Exchange Commission (the SEC) on April 15, 2008.

Interim results are not necessarily indicative of results
for the full fiscal year.



1



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Balance Sheets



|                                                              |  |               |            |   |                  |   |            |  
|------------------------------------------------------------- |  | ------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                              |  | March 31,2008 |            |   | December 31,2007 |  
|                                                              |  | (Unaudited)   |            |   |                  |  
|Assets                                                        |  |               |            |   |                  |   |            |  
|                                                              |  |              
|Current Assets                                                |  |               |            |   |                  |   |            |  
|Cash and Cash Equivalentsunrestricted                        |  | $             | 446,511    |   |                  | $ | 251,859    |  
|Cashrestricted                                               |  |               | 1,413,442  |   |                  |   | 1,604,339  |  
|                                                              |  |               |            |   |                  |   |            |  
|Total Cash and Cash Equivalents                               |  |               | 1,859,953  |   |                  |   | 1,856,198  |  
|Short-term Investments in Marketable Securities               |  |               | 900,000    |   |                  |   | 1,200,000  |  
|Accounts Receivable                                           |  |               | 4,104      |   |                  |   | 4,941      |  
|Inventory                                                     |  |               | 48,104     |   |                  |   | 48,104     |  
|                                                              |  |               |            |   |                  |   |            |  
|Total Current Assets                                          |  |               | 2,812,161  |   |                  |   | 3,109,243  |  
|                                                              |  |              
|Property, Plant and Equipmentnet of accumulated depreciation |  |               | 128,711    |   |                  |   | 133,735    |  
|                                                              |  |              
|Other Assets                                                  |  |               |            |   |                  |   |            |  
|Loan Issuance Costsnet of accumulated amortization           |  |               | 117,446    |   |                  |   | 156,565    |  
|Intellectual Propertynet of accumulated amortization         |  |               | 3,452,238  |   |                  |   | 3,482,536  |  
|Intellectual Propertynon-amortizable                         |  |               | 256,635    |   |                  |   | 231,272    |  
|                                                              |  |               |            |   |                  |   |            |  
|Total Other Assets                                            |  |               | 3,826,319  |   |                  |   | 3,870,373  |  
|                                                              |  |               |            |   |                  |   |            |  
|Total Assets                                                  |  | $             | 6,767,191  |   |                  | $ | 7,113,351  |  
|                                                              |  |               |            |   |                  |   |            |  
|Liabilities and Shareholders' Deficit                         |  |               |            |   |                  |   |            |  
|                                                              |  |              
|Current Liabilities                                           |  |               |            |   |                  |   |            |  
|Accounts Payable                                              |  | $             | 247,559    |   |                  | $ | 240,618    |  
|Accrued Interest                                              |  |               | 70,000     |   |                  |   | 70,000     |  
|Note Payable                                                  |  |               | 450,000    |   |                  |   |           |  
|Preferred Dividend Payable                                    |  |               | 431,199    |   |                  |   | 318,699    |  
|                                                              |  |               |            |   |                  |   |            |  
|Total Current Liabilities                                     |  |               | 1,198,758  |   |                  |   | 629,317    |  
|                                                              |  |              
|Long Term Debt                                                |  |               | 6,000,000  |   |                  |   | 6,000,000  |  
|                                                              |  |              
|Long Term Liabilities                                         |  |               |            |   |                  |   |            |  
|Mandatorily Redeemable Preferred Stock                        |  |               | 4,500,000  |   |                  |   | 4,500,000  |  
|Preferred Stock, Beneficial Conversion Discount               |  |               | (3,639,453 | ) |                  |   | (3,866,302 | )
|Preferred Stock, Discount on Convertible Liability            |  |               | 171,740    |   |                  |   | 126,740    |  
|                                                              |  |               |            |   |                  |   |            |  
|Total Long Term Liabilities                                   |  |               | 1,032,287  |   |                  |   | 760,438    |  
|                                                              |  |              
|Shareholders' Deficit                                         |  |               | (1,463,854 | ) |                  |   | (276,404   | )
|                                                              |  |               |            |   |                  |   |            |  
|Total Liabilities and Shareholders' Deficit                   |  | $             | 6,767,191  |   |                  | $ | 7,113,351  |  
|                                                              |  |               |            |   |                  |   |            |  

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



2



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)



|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|------------------------------------------------------------------------------------ |  | ------------------ | ----------- | - | ------------- | - | ---------- | ----------------------- |  | - | ------------- | - |  | - | ----------- | -
|                                                                                     |  | Three Months Ended |             |   |               |   |            | Date ofInceptionthrough | 
|                                                                                     |  | March 31,2008      |             |   | March 31,2007 |   |            | Incr/(Decr)             |  |   | March 31,2008 |  
|Sales                                                                                |  | $                  |            |   |               | $ |           |                         |  | $ |              |   |  | $ |            |  
|Cost of Sales                                                                        |  |                    |            |   |               |   |           |                         |  |   |              |   |  |   |            |  
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Gross Profit                                                                         |  |                    |            |   |               |   |           |                         |  |   |              |   |  |   |            |  
|                                                                                     |  |                    |             |  
|Selling, General and Administrative Expenses                                         |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Salaries                                                                             |  |                    | 334,118     |   |               |   | 122,290    |                         |  |   | 211,828       |   |  |   | 2,314,611   |  
|Travel                                                                               |  |                    | 14,048      |   |               |   | 29,159     |                         |  |   | (15,111       | ) |  |   | 364,664     |  
|Production Evaluation/Technical Support                                              |  |                    | 37,872      |   |               |   | 52,418     |                         |  |   | (14,546       | ) |  |   | 832,610     |  
|Outside Legal and Professional Fees                                                  |  |                    | 215,589     |   |               |   | 130,627    |                         |  |   | 84,962        |   |  |   | 2,192,396   |  
|Contribution Agreement                                                               |  |                    |            |   |               |   | 139,466    |                         |  |   | (139,466      | ) |  |   | 339,783     |  
|Insurance                                                                            |  |                    | 19,156      |   |               |   | 16,598     |                         |  |   | 2,558         |   |  |   | 305,003     |  
|Rent                                                                                 |  |                    | 15,791      |   |               |   | 8,977      |                         |  |   | 6,814         |   |  |   | 128,359     |  
|Other                                                                                |  |                    | 22,644      |   |               |   | 13,760     |                         |  |   | 8,884         |   |  |   | 215,635     |  
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Total Selling, General and Administrative Expenses                                   |  |                    | 659,218     |   |               |   | 513,295    |                         |  |   | 145,923       |   |  |   | 6,693,061   |  
|                                                                                     |  |                    |             |  
|Depreciation and Amortization                                                        |  |                    | 122,010     |   |               |   | 122,475    |                         |  |   | (465          | ) |  |   | 1,785,579   |  
|                                                                                     |  |                    |             |  
|Other Income                                                                         |  |                    | 27,341      |   |               |   | 28,086     |                         |  |   | (745          | ) |  |   | 489,500     |  
|Interest Expense                                                                     |  |                    | 482,081     |   |               |   | 210,000    |                         |  |   | 272,081       |   |  |   | 4,333,047   |  
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Net Loss Before Taxes                                                                |  |                    | (1,235,968  | ) |               |   | (817,684   | )                       |  |   | (418,284      | ) |  |   | (12,322,187 | )
|                                                                                     |  |                    |             |  
|Income TaxCurrent                                                                   |  |                    |            |   |               |   |           |                         |  |   |              |   |  |   |            |  
|Income TaxDeferred                                                                  |  |                    |            |   |               |   |           |                         |  |   |              |   |  |   |            |  
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Net Loss                                                                             |  |                    | (1,235,968  | ) |               |   | (817,684   | )                       |  |   | (418,284      | ) |  |   | (12,322,187 | )
|                                                                                     |  |                    |             |  
|Dividends Declared on Preferred Stock                                                |  |                    | (112,500    | ) |               |   |           |                         |  |   | (112,500      | ) |  |   | (431,199    | )
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Net Loss Attributed to Common Shareholders                                           |  | $                  | (1,348,468  | ) |               | $ | (817,684   | )                       |  | $ | (530,784      | ) |  | $ | (12,753,386 | )
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Per Share Amounts                                                                    |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Net Loss                                                                             |  | $                  | (0.01       | ) |               | $ | (0.02      | )                       |  |   |               |   |  | $ | (0.27       | )
|Dividends Declared on Preferred Stock                                                |  |                    |            |   |               |   |           |                         |  |   |               |   |  |   | (0.01       | )
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Net Loss Attributed to Common Shareholders                                           |  | $                  | (0.01       | ) |               | $ | (0.02      | )                       |  |   |               |   |  | $ | (0.28       | )
|                                                                                     |  |                    |             |   |               |   |            |                         |  |   |               |   |  |   |             |  
|Weighted Average Number of Shares used in per share calculations  Basic and Diluted |  |                    | 102,500,000 |   |               |   | 38,277,778 |                         |  |   |               |   |  |   | 45,088,974  |  

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



3



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|---------------------------------------------------------------------------- |  | ------------------ | ---------- | - | ----------------------- | - | --------- | ------------- |  | - | ----------- | -
|                                                                             |  | Three Months Ended |            |   | Date ofInceptionthrough |  
|                                                                             |  | March 31,2008      |            |   | March 31,2007           |   |           | March 31,2008 | 
|Cash Flow from Operating Activities                                          |  |                    |            |   |                         |   |           |               |  |   |             |  
|Net Loss for the Period                                                      |  | $                  | (1,235,968 | ) |                         | $ | (817,684  | )             |  | $ | (12,322,187 | )
|Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities   |  |                    |            |   |                         |   |           |               |  |   |             |  
|Depreciation and Amortization                                                |  |                    | 122,008    |   |                         |   | 122,475   |               |  |   | 1,785,578   |  
|Option Expense                                                               |  |                    | 161,580    |   |                         |   | 36,359    |               |  |   | 749,830     |  
|Interest ExpensePreferred Stock                                             |  |                    | 271,849    |   |                         |   |          |               |  |   | 1,032,287   |  
|Changes in Assets and Liabilities                                            |  |                    |            |   |                         |   |           |               |  |   |             |  
|(Increase) / Decrease in Accounts Receivable                                 |  |                    | 837        |   |                         |   |          |               |  |   | (2,370      | )
|(Increase) / Decrease in Inventory                                           |  |                    |           |   |                         |   |          |               |  |   | (48,104     | )
|Increase / (Decrease) in Accounts Payable                                    |  |                    | 6,941      |   |                         |   | 79,332    |               |  |   | 246,945     |  
|Increase / (Decrease) in Accrued Interest                                    |  |                    |           |   |                         |   |          |               |  |   | 547,681     |  
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Net Cash Used in Operating Activities                                        |  |                    | (672,753   | ) |                         |   | (579,518  | )             |  |   | (8,010,340  | )
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Cash Flow From Investing Activities                                          |  |                    |            |   |                         |   |           |               |  |   |             |  
|Proceeds From (Purchases of) Short-Term Investments in Marketable Securities |  |                    | 300,000    |   |                         |   |          |               |  |   | (900,000    | )
|Purchase of Property, Plant and Equipment                                    |  |                    |           |   |                         |   |          |               |  |   | (140,455    | )
|Investment in Intellectual Property                                          |  |                    | (72,930    | ) |                         |   | (28,723   | )             |  |   | (478,349    | )
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Net Cash Provided By (Used in) Investing Activities                          |  |                    | 227,070    |   |                         |   | (28,723   | )             |  |   | (1,518,804  | )
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Cash Flow From Financing Activities                                          |  |                    |            |   |                         |   |           |               |  |   |             |  
|Net ProceedsLong Term Debt                                                  |  |                    |           |   |                         |   |           |               |  |   | 6,170,000   |  
|Net ProceedsNote Payable                                                    |  |                    | 450,000    |   |                         |   | 1,000,000 |               |  |   | 450,000     |  
|Preferred Shares Issued for Cash                                             |  |                    |           |   |                         |   |           |               |  |   | 4,500,000   |  
|Funds Received From Previously Controlled Entity                             |  |                    |           |   |                         |   |           |               |  |   | 500,000     |  
|Capital Contributions                                                        |  |                    | (562       | ) |                         |   |           |               |  |   | 6,946       |  
|Distributions                                                                |  |                    |           |   |                         |   |           |               |  |   | (4,960      | )
|Loan Issuance Costs/Other                                                    |  |                    |           |   |                         |   |           |               |  |   | (232,889    | )
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Net Cash Provided by Financing Activities                                    |  |                    | 449,438    |   |                         |   | 1,000,000 |               |  |   | 11,389,097  |  
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Increase in Cash and Cash Equivalents                                        |  |                    | 3,755      |   |                         |   | 391,759   |               |  |   | 1,859,953   |  
|                                                                             |  |                    |           
|Cash and Cash Equivalents Beginning of Period                               |  |                    | 1,856,198  |   |                         |   | 1,739,167 |               |  |   |            |  
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Cash and Cash EquivalentsEnd of Period                                      |  | $                  | 1,859,953  |   |                         | $ | 2,130,926 |               |  | $ | 1,859,953   |  
|                                                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Supplemental Disclosures:                                                    |  |                    |            |   |                         |   |           |               |  |   |             |  
|Cash Paid During the Period for:                                             |  |                    |            |   |                         |   |           |               |  |   |             |  
|Interest                                                                     |  |                    | 210,000    |   |                         |   | 210,000   |               |  |   | 2,754,794   |  
|Income Tax                                                                   |  |                    |           |   |                         |   |          |               |  |   |            |  
|Non-Cash Items                                                               |  |                    |            |   |                         |   |           |               |  |   |             |  
|Purchase of Intellectual Property Through the Assumption of Debt             |  |                    |           |   |                         |   |          |               |  |   | 4,475,789   |  
|Partners Capital Contribution Resulting from the Forgiveness of Debt         |  |                    |           |   |                         |   |          |               |  |   | 5,536,597   |  
|Preferred Stock Dividends                                                    |  |                    | 112,500    |   |                         |   |          |               |  |   | 431,199     |  
|Loan Costs Netted Against Proceeds of Loan                                   |  |                    |           |   |                         |   |          |               |  |   | 450,000     |  
|Interest Expense                                                             |  |                    | 271,849    |   |                         |   |          |               |  |   | 1,032,287   |  

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



4



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Changes in Shareholders Deficit



|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|------------------------------------------------------- |  | ------------------------ |  | --------------------------- |  | ----------------------- |  | ------------- |  | --------------- |  | --------------------------------- |  | --------------------- |  | --------- |  | ------------------- |  | -------------------
|                                                        |  | NumberCommonSharesIssued |  | NumberPreferredSharesIssued |  | Number ofWarrantsIssued |  | CapitalStock$ |  | PreferredStock$ |  | Paid in Capitaland Distributions$ |  | SubscriptionsPayable$ |  | Warrants$ |  | AccumulatedDeficit$ |  | ShareholdersEquity$
|Balance at April 28, 2004  Date of Inception           |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Forgiveness of Debt (Note 14)                           |  |                          |  |                             |  |                         |  |               |  |                 |  | 5,536,597                         |  |                       |  |           |  |                     |  | 5,536,597          
|Capital Contributions  Cash                            |  |                          |  |                             |  |                         |  |               |  |                 |  | 4,484                             |  |                       |  |           |  |                     |  | 4,484              
|Distributions                                           |  |                          |  |                             |  |                         |  |               |  |                 |  | -145                              |  |                       |  |           |  |                     |  | -145               
|Net Loss                                                |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -1,347,794          |  | -1,347,794         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at December 31, 2004                            |  |                          |  |                             |  |                         |  |               |  |                 |  | 5,540,936                         |  |                       |  |           |  | -1,347,794          |  | 4,193,142          
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Capital Contributions  Cash                            |  |                          |  |                             |  |                         |  |               |  |                 |  | 1,938                             |  |                       |  |           |  |                     |  | 1,938              
|Distributions                                           |  |                          |  |                             |  |                         |  |               |  |                 |  | -4,740                            |  |                       |  |           |  |                     |  | -4,740             
|Net Loss                                                |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -2,147,610          |  | -2,147,610         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at December 31, 2005                            |  |                          |  |                             |  |                         |  |               |  |                 |  | 5,538,134                         |  |                       |  |           |  | -3,495,404          |  | 2,042,730          
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Capital Contributions  Cash                            |  |                          |  |                             |  |                         |  |               |  |                 |  | 1,086                             |  |                       |  |           |  |                     |  | 1,086              
|Distribution                                            |  |                          |  |                             |  |                         |  |               |  |                 |  | -75                               |  |                       |  |           |  |                     |  | -75                
|Net Loss for period                                     |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -2,345,107          |  | -2,345,107         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at December 31, 2006                            |  |                          |  |                             |  |                         |  |               |  |                 |  | 5,539,145                         |  |                       |  |           |  | -5,840,511          |  | -301,366           
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Capital ContributionCash                               |  |                          |  |                             |  |                         |  |               |  |                 |  | 268                               |  |                       |  |           |  |                     |  | 268                
|Earnings Charge for options expense (Note 6)            |  |                          |  |                             |  |                         |  |               |  |                 |  | 36,359                            |  |                       |  |           |  |                     |  | 36,359             
|Net Loss for period                                     |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -817,684            |  | -817,684           
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at March 31, 2007                               |  |                          |  |                             |  |                         |  |               |  |                 |  | 5,575,772                         |  |                       |  |           |  | -6,658,195          |  | -1,082,423         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Capital contributionsCash                              |  |                          |  |                             |  |                         |  |               |  |                 |  | 269                               |  |                       |  |           |  |                     |  | 269                
|Shares Issued to PRO Transferors (Note 5)               |  | 55,000,000               |  |                             |  |                         |  | 55,000        |  |                 |  | -55,000                           |  |                       |  |           |  |                     |  |                    
|Preferred Equity raised (Note 7)                        |  |                          |  | 5,000,000                   |  |                         |  |               |  |                |  |                                   |  |                       |  |          |  |                     |  |                    
|Warrants Issued to Investa/Pineda (Note 5)              |  |                          |  |                             |  | 2,500,000               |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Earnings charge for options expense (Note 6)            |  |                          |  |                             |  |                         |  |               |  |                 |  | 136,484                           |  |                       |  |           |  |                     |  | 136,484            
|Preferred dividends payable                             |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  | -93,700               |  |           |  |                     |  | -93,700            
|Net Loss for Period                                     |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -1,548,669          |  | -1,548,669         
|Beneficial conversion option  Preferred Stock (Note 4) |  |                          |  |                             |  |                         |  |               |  |                 |  | 4,500,000                         |  |                       |  |           |  |                     |  | 4,500,000          
|Equity of PRO Inc. at 3/31/2007                         |  | 42,500,000               |  |                             |  |                         |  | 42,500        |  |                 |  | 435,097                           |  |                       |  |           |  |                     |  | 477,597            
|Change in PRO Inc. Equity 3/31-4/18/2007                |  | -22,500,000              |  |                             |  |                         |  | -22,500       |  |                 |  | 44,904                            |  |                       |  |           |  |                     |  | 22,404             
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Equity of PRO Inc at 4/18/2007                          |  | 20,000,000               |  |                             |  |                         |  | 20,000        |  |                 |  | 480,001                           |  |                       |  |           |  |                     |  | 500,001            
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at June 30, 2007                                |  | 75,000,000               |  | 5,000,000                   |  | 2,500,000               |  | 75,000        |  |                |  | 10,637,526                        |  | -93,700               |  |          |  | -8,206,864          |  | 2,411,962          
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Capital Contributions                                   |  |                          |  |                             |  |                         |  |               |  |                 |  | -6                                |  |                       |  |           |  |                     |  | -6                 
|Preferred Dividend payable                              |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  | -112,500              |  |           |  |                     |  | -112,500           
|Earnings charge for options expense (Note 6)            |  |                          |  |                             |  |                         |  |               |  |                 |  | 191,955                           |  |                       |  |           |  |                     |  | 191,955            
|Net Loss for period                                     |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -1,344,930          |  | -1,344,930         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at September 30, 2007                           |  | 75,000,000               |  | 5,000,000                   |  | 2,500,000               |  | 75,000        |  |                |  | 10,829,475                        |  | -206,200              |  |          |  | -9,551,794          |  | 1,146,481          
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Capital Contributions                                   |  |                          |  |                             |  |                         |  |               |  |                 |  | 588                               |  |                       |  |           |  |                     |  | 588                
|Preferred Dividend payable                              |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  | -112,500              |  |           |  |                     |  | -112,500           
|Earnings charge for options expense (Note 6)            |  |                          |  |                             |  |                         |  |               |  |                 |  | 223,452                           |  |                       |  |           |  |                     |  | 223,452            
|Net Loss for period                                     |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -1,534,425          |  | -1,534,425         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at December 31, 2007                            |  | 75,000,000               |  | 5,000,000                   |  | 2,500,000               |  | 75,000        |  |                |  | 11,053,515                        |  | -318,700              |  |          |  | -11,086,219         |  | -276,404           
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Capital Contributions                                   |  |                          |  |                             |  |                         |  |               |  |                 |  | -562                              |  |                       |  |           |  |                     |  | -562               
|Preferred Dividend payable                              |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  | -112,500              |  |           |  |                     |  | -112,500           
|Earnings charge for options expense (Note 6)            |  |                          |  |                             |  |                         |  |               |  |                 |  | 161,580                           |  |                       |  |           |  |                     |  | 161,580            
|Net Loss for period                                     |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  | -1,235,968          |  | -1,235,968         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    
|Balance at March 31, 2008                               |  | 75,000,000               |  | 5,000,000                   |  | 2,500,000               |  | 75,000        |  |                |  | 11,214,533                        |  | -431,200              |  |          |  | -12,322,187         |  | -1,463,854         
|                                                        |  |                          |  |                             |  |                         |  |               |  |                 |  |                                   |  |                       |  |           |  |                     |  |                    

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



5



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2008





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

Platinum
Research Organization, Inc. (the Company) was incorporated in the State of Nevada on May 13, 2005, under the name NorthTech Corporation. The Company was originally formed to develop, expand and market two web-based
database programs for small business and community sports. The Company completed its initial public offering in March 2006. Efforts to implement this business plan were pursued, but ultimately the web-based software development business was
abandoned.

Management reviewed various strategic alternatives, and on October 26, 2006, the Company entered into a Contribution
Agreement with Platinum Research Organization L.P., a Texas limited partnership (Platinum LP), Lubrication Partners, a joint venture and sole shareholder of Platinum IP Management, Inc., the general partner of Platinum LP, each holding a
limited partnership interest in Platinum LP, and Cork Jaeger as the representative of all former owners of Platinum LP and Steve Drayton as the representative of certain individual private placement investors in the Company.

The Company, at the time being NorthTech Corporation, merged with its wholly-owned subsidiary Platinum Research Organization, Inc., a Nevada
corporation (NV Sub), on October 31, 2006, in order to amend its charter documents, change its name to Platinum Research Organization, Inc. and effect a 5-for-1 forward split of its outstanding common stock. On
April 13, 2007, the Company completed another merger with its wholly-owned subsidiary, Platinum Research Organization, Inc., a Delaware corporation (DE Sub), to reincorporate the Company in Delaware. The name of the surviving
company remained Platinum Research Organization, Inc., and the certificate of incorporation and bylaws of DE Sub became the certificate of incorporation and bylaws of the Company. Both NV Sub and DE Sub were formed by the Company for the
sole purpose of effecting the aforementioned transactions in preparation for the consummation of the transactions contemplated by the Contribution Agreement. On April 18, 2007, the Company closed the Contribution Agreement (Note 7), which
resulted in our acquisition of Platinum LP and the appointment of a new slate of directors. As a result of our acquisition of Platinum LP, the Companys new business focus is the design, development and commercialization of patented
high-performance lubricants and coatings.

The acquisition of Platinum LP has been accounted for as a reverse acquisition application of the
purchase method of accounting by the Company (formerly known as NorthTech), with Platinum LP treated as the accounting acquirer. Accordingly, the assets and liabilities of the Company (formerly known as NorthTech) have been recorded at their
respective historical costs and added to those of Platinum LP, and the reported results of operations of the Company reflect the historical results of operations of Platinum LP.

The Companys products will be marketed under the trade name TechroBond for automotive, aviation, and industrial aftermarkets. TechroBond
is one of a series of product applications Platinum LP developed based on its patented processes and technologies relating to a fluorinated thiophosphate and a new technique to react zinc dialkyl dithiophosphate (ZDDP) and poly tetra
fluroethylene to yield new proprietary compounds that enhance the anti-wear and extreme pressure capabilities of lubricants and coatings (individually and collectively, the PRO Technology). The resulting compounds have yielded
significantly enhanced anti-wear and extreme pressure capabilities when measured in bench laboratory tests at the University of Texas at Arlington, and, more importantly, suggest that the PRO Technology may be a replacement for ZDDP in engine and
lubricating oils. Management believes that this new technology will position the Company to penetrate several large, global markets for lubricants should the Company be successful in bringing its products that rely upon this new technology to
market.



6



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





The Company is a development stage enterprise, as defined in the Statements of Financial Accounting
Standards (SFAS) No. 7, Accounting and Reporting by Development Stage Enterprises. The Company is currently devoting all of its present efforts to commercialization of its products and technologies. Accordingly, no revenue has been
realized to date.

The Companys financial statements at March 31, 2008 and for the unaudited three-month period then ended have
been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company incurred a loss of $1,235,968 for the three months ended
March 31, 2008 and had unrestricted cash of $446,511 at March 31, 2008.

Management cannot provide assurance that the Company will
ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Companys capital resources should be adequate to continue operating and maintaining its
business strategy for the next two to three months. However, if the Company is unable to realize revenue from the commercialization of its products or is unable to raise additional capital in the future, management expects that the Company will need
to seek additional capital on less favorable terms and/or pursue other remedial measures. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as a going concern.



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

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

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared as of March 31, 2008, and for the three month periods ended
March 31, 2008 and 2007 in accordance with accounting principles generally accepted in the United States of America (GAAP) relating to the preparation of financial statements for interim periods. Accordingly, they do not include all
the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three-month period ended March 31, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.

These interim financial statements follow the same accounting policies and methods of their application as the most recent annual financial statements.
These interim financial statements should be read in conjunction with the audited financial statements of the Company as at December 31, 2007, as contained in the Companys Form Annual Report on 10-KSB filed with the Securities and
Exchange Commission on April 15, 2008.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and, Platinum Research Organization, L.P. and Platinum Intellectual Property,
L.P., its wholly-owned subsidiaries. All material intercompany accounts and transactions are eliminated in consolidation.



7



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





Cash and Cash Equivalents

The Company considers all short term, highly liquid investments, which include short-term deposits with original maturities of three months or less from
the date of purchase, and readily convertible into known amounts of cash, to be cash equivalents.

Restricted Cash

The Companys long-term debt agreement pursuant to a note with the Seattle City Employees Retirement System (SCERS) (see Note 4)
requires a minimum restricted cash balance of $1,410,000. The total amount of restricted cash at March 31, 2008 and December 31, 2007 was $1,413,442 and $1,604,339, respectively. Pursuant to the terms of the escrow agreement entered into
in connection with the long-term debt agreement with SCERS, the restricted cash will be released from escrow upon payment in full of principal and interest on the long-term debt.

Investments in Marketable Securities

The investments in short-term marketable securities are accounted for in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. Management determines the appropriate classification of
marketable securities at the time of purchase. At March 31, 2008 and December 31, 2007, all marketable securities are classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and
losses reported in other comprehensive income. Our marketable securities are reviewed each reporting period for declines in value that are considered to be other-than-temporary and, if appropriate, written down to their estimated fair value. Any
realized gains or losses or declines in value judged to be other-than-temporary on available-for-sale securities are included in other non-operating (income) expense in the consolidated statements of operations. The cost of securities sold is based
on the specific identification method. Interest on securities classified as available-for-sale is included in interest income in the consolidated statements of operations.

Short-term investments in marketable securities consist of high credit quality (AAA) auction rate securities. Auction rate securities are variable rate bonds tied to short-term interest rates with maturities on the
face of the securities in excess of 90 days and have interest rate resets through a modified Dutch auction, at predetermined short-term intervals, usually every 7, 28 or 35 days. Auction rate securities generally trade at par and are callable at par
on any interest payment date at the option of the issuer. Interest received during a given period is based upon the interest rate determined through the auction process. Although these securities are issued and rated as long term bonds,
they are priced and traded as short-term instruments because of the liquidity provided through the interest rate reset. All short-term marketable securities either (1) have original maturities greater than 90 days but less than one year or
(2) are auction rate securities expected to be liquidated within one year, are classified as available-for-sale and are recorded at fair value with changes in fair value reflected in other comprehensive income. All proceeds were from the
maturity of the securities or sales of auction rate securities at par value. Accordingly, we have not recognized any realized gains or losses.



8



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





The summary of our investment in marketable securities at March 31, 2008 and December 31,
2007 is as follows:



|                                                      |  |                |         |                       |   |               |  |            |         |                       |   |               |  |   |   |  |   |          
|----------------------------------------------------- |  | -------------- | ------- | --------------------- | - | ------------- |  | ---------- | ------- | --------------------- | - | ------------- |  | - | - |  | - | ---------
|                                                      |  | March 31, 2008 |         | December 31, 2007    
|                                                      |  | Cost Basis     |         | UnrealizedGain/(Loss) |   | CarryingValue |  | Cost Basis |         | UnrealizedGain/(Loss) |   | CarryingValue
|Auction rate securities                               |  | $              | 900,000 |                       | $ |              |  | $          | 900,000 |                       | $ | 1,200,000     |  | $ |  |  | $ | 1,200,000
|                                                      |  |                |         |                       |   |               |  |            |         |                       |   |               |  |   |   |  |   |          
|Total Short-Term Investments in Marketable Securities |  | $              | 900,000 |                       | $ |              |  | $          | 900,000 |                       | $ | 1,200,000     |  | $ |  |  | $ | 1,200,000
|                                                      |  |                |         |                       |   |               |  |            |         |                       |   |               |  |   |   |  |   |          

Accounts Receivable

In the normal course of business, the Company extends credit to its customers with payment terms generally at prevailing market rates and terms.
Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customers financial condition, credit history and current economic conditions. Trade receivables are written
off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. In the event of complete nonperformance by the Companys customers, the maximum exposure to the Company is the outstanding
accounts receivable balance at the date of nonperformance. Due to the Company being in the development stage, accounts receivable are minimal.

Inventories

Inventories are valued at the lower of cost or market, determined on a first-in, first-out basis, and includes
the cost of raw materials. We continually evaluate the carrying value of our inventories and when, in the opinion of Management, factors indicate that impairment has occurred, either a reserve is established against the inventories carrying
value or the inventories are completely written off. We base these decisions on the level of inventories on hand in relation to our estimated forecast of product demand.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation.
Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives by both accelerated and straight line methods.

Major repairs or replacements of property and equipment are capitalized. Maintenance, repairs and minor replacements are charged to operations as
incurred. When units of property are retired or otherwise disposed of, their cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in operations.

Property and equipment consisted of the following at March 31, 2008 and December 31, 2007.



|                               |  |                      |  |               |         |   |                  |   |         |  
|------------------------------ |  | -------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                               |  | EstimatedUseful Life |  | March 31,2008 |         |   | December 31,2007 |  
|Furniture and Equipment        |  | 5-7 years            |  | $             | 140,456 |   |                  | $ | 140,456 |  
|Less: Accumulated Depreciation |  |                      |  |               | (11,745 | ) |                  |   | (6,721  | )
|                               |  |                      |  |               |         |   |                  |   |         |  
|                               |  |                      |  | $             | 128,711 |   |                  | $ | 133,735 |  
|                               |  |                      |  |               |         |   |                  |   |         |  



9



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





Depreciation expense was $5,025 and $124 for the three months ended March 31, 2008 and 2007,
respectively.

Loan Issuance Costs

Loan issuance costs are amortized over the term of the loan agreement on a straight-line basis and are shown net of accumulated amortization.

Loan issuance costs consisted of the following at March 31, 2008 and December 31, 2007.



|                               |  |               |          |   |                  |   |          |  
|------------------------------ |  | ------------- | -------- | - | ---------------- | - | -------- | -
|                               |  | March 31,2008 |          |   | December 31,2007 |  
|Loan Issuance Costs            |  | $             | 682,888  |   |                  | $ | 682,888  |  
|Less: Accumulated Amortization |  |               | (565,442 | ) |                  |   | (526,323 | )
|                               |  |               |          |   |                  |   |          |  
|                               |  | $             | 117,446  |   |                  | $ | 156,565  |  
|                               |  |               |          |   |                  |   |          |  

Future amortization costs for loan issuance costs are as follows for the years ended
December 31:



|     |  |   |        
|---- |  | - | -------
|2008 |  | $ | 117,356
|2009 |  |   | 90     
|2010 |  |   |       
|2011 |  |   |       
|     |  |   |        
|     |  | $ | 117,446
|     |  |   |        

Amortization expense relating to loan costs was $39,119 and $42,674 for the three months ended
March 31, 2008 and 2007, respectively.

Intellectual Property

Intellectual property consists of amortizable and non-amortizable patents, trademarks and patent applications. Patents, trademarks and patent applications
are recorded at cost and amortized over the remaining life of the intellectual property once the patient or trademark is issued. Prior to the issuance of patents and trademarks, the accumulated costs are carried at cost and evaluated for impairment.
If the patent or trademark is denied or abandoned, the associated costs are written off. Legal costs of obtaining and defending intellectual property are capitalized and amortized once the patent for the intellectual property is issued. Research and
development costs for internally developed intellectual property are expensed when incurred.

The Companys impairment testing
methodology involves managements annual testing of the carrying amount of its intellectual property assets compared to the undiscounted cash flows from the Companys estimated operations (excluding interest).

At December 31, 2007, the Companys impairment testing revealed that the sum of the undiscounted cash flows for the applicable testing period
exceeded the carrying values of amortizable intellectual property. Based on this analysis, the Company expected that sufficient profit will be realized from these sales to recover the balance of intellectual property on its books, and therefore did
not believe that any impairment of its intellectual property existed at December 31, 2007. As such, no impairment adjustment was recorded. During the three months ended March 31, 2008, no event occurred which would impact the impairment
analysis performed as of December 31, 2007.

On April 29, 2004, the Company entered into an agreement with Platinum Research
Development, L.L.C. (a non-related entity) to purchase substantially all of its assets by assuming $3,000,000 in outstanding debt along



10



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





with $1,475,789 in accrued interest owed to Lubrication Partners, Joint Venture, one of the Companys largest stockholders. The Company valued the
intellectual property at April 29, 2004 at the value of the outstanding principal and accrued interest on the note assumed.

Amortizable Intellectual Property.At March 31, 2008, the Company had $3,452,238 in net amortizable intellectual property that consisted principally of capitalized patent costs related to the Companys five patents. These
patents are being amortized over their useful remaining life and have a weighted average amortization period of 15 years.

Non-amortizable Intellectual Property.At March 31, 2008, the Company had $256,635 in non-amortizable intellectual property that consisted of capitalized trademark costs and pending patent costs.

Intellectual Property consisted of the following at March 31, 2008 and December 31, 2007.



|                                      |  |                    |  |               |            |   |                  |   |            |  
|------------------------------------- |  | ------------------ |  | ------------- | ---------- | - | ---------------- | - | ---------- | -
|                                      |  | AmortizationPeriod |  | March 31,2008 |            |   | December 31,2007 |  
|Amortizable intellectual property     |  | 15 years           |  | $             | 4,660,629  |   |                  | $ | 4,613,062  |  
|Less: accumulated amortization        |  |                    |  |               | (1,208,392 | ) |                  |   | (1,130,526 | )
|                                      |  |                    |  |               |            |   |                  |   |            |  
|                                      |  |                    |  | $             | 3,452,238  |   |                  | $ | 3,482,536  |  
|Non-amortizable intellectual property |  |                    |  |               | 256,635    |   |                  |   | 231,272    |  
|                                      |  |                    |  |               |            |   |                  |   |            |  
|                                      |  |                    |  | $             | 3,708,873  |   |                  | $ | 3,713,808  |  
|                                      |  |                    |  |               |            |   |                  |   |            |  

Future amortization costs for intellectual property are as follows for the years ended
December 31:



|       |  |   |          
|------ |  | - | ---------
|2008   |  | $ | 385,792  
|2009   |  |   | 307,317  
|2010   |  |   | 307,317  
|2011   |  |   | 307,317  
|2012   |  |   | 307,317  
|beyond |  |   | 1,837,178
|       |  |   |          
|       |  | $ | 3,452,238
|       |  |   |          

Amortization expense relating to intellectual property was $77,865 and $79,667 for the three
months ended March 31, 2008 and 2007, respectively.

The Companys success will depend, in part, on its ability to obtain and
enforce intellectual property protection for its technology in both the United States and other countries. The Company has filed patent applications in the United States Patent and Trademark Office and international counterparts of applications in
the United States Receiving Office under the Patent Cooperation Treaty. The Company cannot provide any assurance that patents will issue from these applications or that, with respect to any patents, issued or pending, the claims allowed are, or will
be, sufficiently broad to protect the key aspects of the Companys technology, or that the patent laws will provide effective legal or injunctive remedies to stop any infringement of the Companys patents. In addition, the Company cannot
provide any assurance that any owned patent rights will not be challenged invalidated or circumvented, that the rights granted under patents will provide competitive advantages, or that competitors will not independently develop or patent
technologies that are substantially equivalent or superior to the Companys technology. The Company has acquired patent protection insurance from Gotham Insurance Company. The Company cannot provide any assurance that such protection will
withstand all challenges. Furthermore, if an action is brought, a court may find that the Company has infringed on the patents owned by others. The Company may have to go to court to defend its patents, to prosecute infringements, or to defend
infringement claims made by others.



11



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





Accounts Payable and Accrued Liabilities

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

Note Payable

At March 31, 2008,
the Company has borrowed $450,000 against the Companys investments in marketable securities. Interest on this note is payable monthly at the Federal Funds Rate plus .5% ( 3.5% at March 31, 2008). This note is payable to Citi SmithBarney,
the investment advisor servicing the investments in marketable securities, and is secured by 50% of the securities held in the Companys investment account.

Revenue Recognition

The Company has not yet recognized any revenues. Revenues will be recognized
once they are earned, specifically when: (a) services are provided or products are delivered to customers; (b) there is clear evidence that the arrangement exists; (c) amounts receivable by the Company are fixed or can be determined;
and (d) the Companys ability to collect such amounts is reasonably assured.

Financial instruments

The carrying value of cash, accounts receivable, accounts payable and accrued liabilities, approximates their fair value because of the short maturity of
these instruments. Our investments in short-term marketable securities are recorded at fair value. Prior to April 2007, the Companys operations were located in Canada, and virtually all of its assets and liabilities gave rise to significant
exposure to market risks from changes in foreign currency rates. The Companys financial risk was the risk that arose from fluctuations in foreign exchange rates and the degree of volatility of these rates. Subsequent to March 2007, the
Companys operations are located in the United States, and foreign currency transactions are not prevalent. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

Derivative financial instruments

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

Research and Development

The Companys research and development efforts are conducted primarily
by the University of Texas at Arlington. All such expenses are expensed as incurred. Research and development expenditures consist primarily of researcher salaries and materials consumed in the testing and evaluation process. The Companys
research and development expenditures for the three months ended March 31, 2008 and 2007 were $37,872 and $52,418, respectively. Research and development expenses are included in the Product Evaluation and Technical Support line item of
Selling, General and Administrative expenses.

Income taxes

Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for
income tax purposes in accordance with SFAS No. 109, Accounting for Income Taxes, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future
tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary



12



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary
differences and carry-forwards when realization is more likely than not. As of March 31, 2008 and December 31, 2007, the net deferred tax asset has been offset by a valuation allowance.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are
subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all
available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other
positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The
portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and
penalties that would be payable to the taxing authorities upon examination. The liability for unrecognized tax benefits is zero at March 31, 2008 and December 31, 2007.

Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of income.

Basic and diluted net loss per share

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

Comprehensive loss

SFAS No. 130, Reporting Comprehensive Income, establishes standards
for the reporting and display of comprehensive income (loss) and its components in the financial statements. As of March 31, 2008, the Company had no items that represented a comprehensive income (loss) and, therefore, has not included a
schedule of comprehensive income (loss) in the financial statements.

Segments of an enterprise and related information

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



13



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





Start-up expenses

The Company has adopted Statement of Position No. 98-5, Reporting the Costs of Start-up Activities, which requires that costs associated with
start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Companys formation have been included in the Companys expenses for the period from the date of inception on April 28, 2004 to
March 31, 2008.

Use of estimates

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

Advertising Costs

Advertising costs are expensed in the period incurred. Advertising expense was $(3,168) and $11,478 for the three months ended March 31, 2008 and 2007, respectively.

Recent accounting pronouncements

In
February 2007, the Financial Accounting Standards Board (the FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 allows the Company to choose
to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after
November 15, 2007. After reviewing SFAS 159 and 157, the Company has elected not to measure financial assets and liabilities at fair value.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement (SFAS 157). The Statement provides guidance for using fair value to measure assets and liabilities. The Statement also expands disclosures
about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurement on earnings. This Statement applies under other accounting pronouncements that
require or permit fair value measurements. This Statement does not expand the use of fair value measurements in any new circumstances. Under this Statement, fair value refers to the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants in the market in which the entity transacts. SFAS 157 is effective for the Company for fair value measurements and disclosures made by the Company in its fiscal year beginning on
January 1, 2008. After reviewing SFAS 159 and 157, the Company has elected not to measure financial assets and liabilities at fair value.

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

In July 2006, the FASB issued FASB interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (FIN 48). FIN 48 provides guidance on the financial statement



14



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 requires that we recognize in the financial statements
the impact of a tax position if that position more likely than not will be sustained on an audit, based on the technical merits of the position. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosures and transition provisions. The transition adjustment recognized on the date of adoption is recorded as an adjustment to retained earnings as of the beginning of the adoption period. After reviewing FASB 48, the Company
does not believe that adoption of FASB 48 will have a material impact on the companys financial statements.

Comparative
figures

Certain comparative figures have been adjusted to conform to the current periods presentation.

Accounting for Equity Based Compensation

Effective January 1, 2006, the company adopted SFAS No. 123R, Share-Based Payment, which requires entities to recognize the cost of employee services in exchange for awards of equity instruments based on the grant-date fair
value of those awards (with limited exceptions). That cost, based on the estimated number of awards that are expected to vest, will be recognized over the period during which the employee is required to provide the service in exchange for the award.
No compensation cost is recognized for awards for which employees do not render the requisite service. Upon adoption, the grant-date fair value of employee equity options and similar instruments was estimated using the Black-Scholes valuation model.



|3. | Long Term Liabilities
|-- | ---------------------

On April 18, 2007, the
Company issued a total of 5,000,000 authorized shares designated as Series A Convertible Preferred Stock (Series A Preferred), which are convertible into shares of the Companys common stock at a rate of five common shares for each
share of Series A Preferred at any time by the holder or by the Company under certain conditions. The Series A Preferred is also subject to mandatory conversion on the last day of any period of twenty consecutive trading days ending on or after the
sale of the underlying shares of common stock are registered with the Securities and Exchange Commission in which the volume weighted average of the daily market price of the Companys common stock equals or exceeds 200% of the adjusted
conversion price of the Series A Preferred. The Series A Preferred is also subject to mandatory redemption upon the occurrence of certain redemption events at the redemption amounts specified in the agreement.

The terms of the Series A Preferred entitle the holder to annual cumulative dividends of $0.09 per share, payable quarterly at the discretion of the
Companys Board of Directors in cash, common shares or both. The annual cumulative dividend will be reduced to $0.045 per share upon the Company entering into a commercial agreement(s) that increases the Companys aggregate revenues to
$40,000,000 per annum and to $0.018 per share upon the Company recording net revenues equal to or greater than $1,000,000 per quarter. So long as any Series A Preferred are outstanding, dividends, distributions of cash or other property are
restricted unless full cumulative dividends have been authorized, declared and paid on the Series A Preferred.

In the event of liquidation,
dissolution or winding up of the Company, the Series A Preferred shareholders are entitled to receive $.90 per share plus an amount equal to all dividends accumulated, accrued and unpaid.

The Company has initially reserved 25,000,000 shares of its authorized but unissued common stock for issuance upon conversion of the Series A Preferred.
The reserved amount shall at all times be sufficient to provide for the full conversion of all of the Series A Preferred (including and dividends payable) outstanding.



15



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





The Series A Preferred has a maturity date of five years from the date of closing of the Contribution
Agreement (please see Note 7) and is subject to mandatory redemption on the maturity date. The holders of the Series A Preferred are entitled to vote on an as converted basis on all matters submitted to a vote of the shareholders of the
Company and have rights that may restrict the Companys ability to take corporate actions.

At March 31, 2008 the Company had
5,000,000 shares of Series A Convertible Preferred outstanding. The shares were issued at $0.90 per share. The Certificate of Designation for the Series A Preferred includes a mandatory redemption requirement on the maturity date of April 18,
2012 that requires the Company to redeem all of the outstanding shares of its Series A Preferred, to the extent it has funds legally available at the time, and to the extent that the shares of Series A Preferred have not been converted to common
shares, at a redemption price of $1.08 per share. As a result of the mandatory redemption requirement, these Series A Preferred shares have been classified as a long-term liability pursuant to SFAS 150. Additionally, the $0.18 per share discount
(redemption price of $1.08 less issued price of $0.90) will be recorded as interest expense of $900,000 ($0.18 x 5,000,000 shares) over the five-year period from April 18, 2007 to April 18, 2012. Accordingly, $45,370 has been recorded as
interest expense in the three months ended March 31, 2008. This item is a non-cash item.

The Series A Preferred shares are convertible
to common shares at a value of $0.18 per common share at the option of the holder. This price was less than the fair market value of the underlying common stock when the Series A Preferred shares were issued on April 18, 2007. The conversion
price is subject to adjustments by the Company under certain conditions. In accordance with EITF 98-5, this price differential generated a Beneficial Conversion Feature that is recognized as a discount against the long term liability and an increase
to additional paid in capital, since the conversion would be accomplished through the issuance of shares of common stock. The amount of the discount is limited to the proceeds received from the issuance of the Series A Preferred shares ($4,500,000).
In accordance with EITF 00-27, the discount will be accreted to interest expense over the five-year period from the issuance date to the mandatory redemption date of the Series A Preferred shares. For the three months ended March 31, 2008,
$226,849 accretion of the discount was recognized as additional interest expense. No accretion occurred in the three months ended March 31, 2007.



|4. | Long Term Debt
|-- | --------------

As of March 31, 2008 and
December 31, 2007, the Company had $6,000,000 in long term debt due under a note with SCERS. The principal amount outstanding under this note bears interest at a fixed rate equal to 14% per annum, which will increase to 19% per annum
following any event of default under the note. Accrued interest on the outstanding principal is payable on a quarterly basis, and all outstanding principal and interest is due and payable on February 28, 2011, extended from an original due date
of December 4, 2008 on January 9, 2007. As additional consideration for making the loan, SCERS will receive quarterly participation payments at the end of each fiscal quarter that are equal to the greater of (i) 5% of the
Companys gross revenues on a consolidated basis, or (ii) 20% of the Companys consolidated net income, for such quarter. The participation payments will continue until SCERS is paid all of the principal and accrued interest under the
note, plus an aggregate $6,000,000 in participation payments. SCERS has received no participation payments through March 31, 2008. The note is secured by all of the assets of the Company.

As amended, the term loan is subject to certain financial covenants and restrictions, including limitations on incurring indebtedness or granting liens,
mergers or consolidations, distributions, expenditures in excess of budgeted amounts, leases, compensation of management, sale of assets and capital expenditures, which apply equally to the Company and Platinum Inc. If PIP LP issues or sells any new
promissory note while the term loan is outstanding, which are on terms that are more favorable than those under the term loan, as determined



16



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





in SCERSs sole discretion, then the term loan will automatically be amended such that those more favorable terms will apply to the term loan to the
same extent as they are to apply under the new promissory note. PIP LP may issue one or more new promissory notes having an aggregate principal amount of no more than $9,000,000, and SCERS will take any actions that are necessary in order to permit
the purchasers of such notes to have a security interest and lien that is equal with SCERS interests in the collateral securing the term loan. Any amounts borrowed by the PIP LP that are in excess of the $9,000,000 limit shall be subordinate to the
term loan.



|5. | Capital Stock
|-- | -------------

Authorized

As of December 31, 2007, the Companys total authorized capital was 400,000,000 common shares, with a par value of $0.001 per common share, and
100,000,000 preferred shares, with a par value of $0.001 per preferred share. The Company has designated 5,000,000 preferred shares as Series A Preferred shares.

Issued and Outstanding

Under the terms of the Contribution Agreement (please see Note 7), on
April 18, 2007, the Company:

a) issued to the former owners of Platinum LP 55,000,000 unregistered shares of Company common stock;

b) issued to the certain outside investors 5,000,000 shares of Series A Preferred;

c) issued to Investa Corporation and Ms. Cecelia Pineda 2,500,000 warrants to purchase shares of common stock at a price of $0.26 per share; and

d) cancelled 22,500,000 shares of Company common stock held by Ms. Pineda.

As of March 31, 2008, the Companys total issued and outstanding capital stock consisted of 75,000,000 common shares, 5,000,000 shares of Series
A Preferred and warrants to acquire 2,500,000 common shares.

On February 8, 2007, the Company issued 10,000,000 common shares upon the
exercise of previously outstanding share purchase warrants at a price of $0.05 per share issued March 30, 2006. As of December 31, 2007, no share purchase warrants in this series were outstanding.

On March 30, 2006, 10,000,000 Units (the Units) of the Company were issued for cash proceeds of $100,000. Each Unit consisted of one
common share of the Company and one fifth of one purchase warrant share. Each full purchase warrant share entitled the holder to purchase an additional five common shares of the Company at a price of $0.25 per common share expiring March 30,
2009.

Warrants

The
following is a summary of warrant activities for the periods ended March 31, 2008.



17



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





|                                                  |  |                   |   |  |                               |     
|------------------------------------------------- |  | ----------------- | - |  | ----------------------------- | ----
|                                                  |  | Number ofwarrants |   |  | Weightedaverageexercise price
|Outstanding and exercisable at December 31, 2006  |  | 2,000,000         |   |  | $                             | 0.25
|Exercised                                         |  | (2,000,000        | ) |  | $                             | 0.25
|                                                  |  |                   |   |  |                               |     
|Outstanding and exercisable at March 31, 2007     |  |                  |   |  |                               |    
|                                                  |  |                   |   |  |                               |     
|Granted                                           |  | 2,500,000         |   |  | $                             | 0.26
|                                                  |  |                   |   |  |                               |     
|Outstanding and exercisable at June 30, 2007      |  | 2,500,000         |   |  | $                             | 0.26
|                                                  |  |                   |   |  |                               |     
|Outstanding and exercisable at September 30, 2007 |  | 2,500,000         |   |  | $                             | 0.26
|                                                  |  |                   |   |  |                               |     
|Outstanding and exercisable at December 31, 2007  |  | 2,500,000         |   |  | $                             | 0.26
|                                                  |  |                   |   |  |                               |     
|Outstanding and exercisable at March 31, 2008     |  | 2,500,000         |   |  | $                             | 0.26
|                                                  |  |                   |   |  |                               |     



|6. | Equity
|-- | ------

Effective January 1, 2006, the Company
adopted SFAS No. 123R, Share Based Payment, under the modified prospective method described therein. Compensation expense recognized in the three months ended March 31, 2008 and 2007 includes compensation expense for all stock-based
payments granted, modified or vested since adoption of SFAS No. 123R based on the grant date fair value. Stock-based compensation expense recognized in the three months ended March 31, 2008 was included in Selling, General and
Administrative Expenses and totaled $161,580. No stock-based compensation was recognized in the three months ended March 31, 2007.

Prior to the consummation of the transactions contemplated by the Contribution Agreement (see Note 7), Platinum LP had issued to key executive officers and consultants, options to acquire up to 18.685% of the limited partnership partner
interests in Platinum LP. Following the completion of the transactions contemplated in the Contribution, the Company issued options to acquire 23,292,184 shares of common stock to holders of the Platinum LP options, in substitution for, and
following the cancellation of, the Platinum LP options. The substitution of the Company options for the Platinum LP options complied with Sections 409A and 424 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations proposed
and issued thereunder. Accordingly, and in addition to the satisfaction of other requirements under these provisions, the ratio of the exercise price to the fair market value of the shares subject to the Company options issued in substitution of the
Platinum LP options immediately following the consummation of the transactions contemplated by the Contribution Agreement was not greater than the ratio of the exercise price to the fair market value of the canceled Platinum LP options immediately
prior to the transaction. Additionally, the excess of the fair market value of the Company options issued in substitution of the Platinum LP options over their respective strike prices did not exceed the fair market value of the Platinum options
over their respective strike prices.



|7. | Contribution Agreement
|-- | ----------------------

On October 26, 2006,
the Company entered into a contribution agreement (the Contribution Agreement) with Platinum LP, Lubrication Partners, joint venture (GP Transferor) and sole shareholder of Platinum IP Management, Inc., the general partner of
Platinum LP (PRO GP), each holding a limited partnership interest in Platinum LP (each, a Limited Partner and collectively, the PRO Transferors) and John T. (Cork) Jaeger as the representative of all PRO
Transferors (the PRO Transferor Representative), and Steve Drayton as the representative (the Investor Representative) of all certain individuals who invested in the Company (other than the PRO Transferors) (the
Investors) in a private placement completed in conjunction with the Contribution Agreement.

Under the terms of the Contribution
Agreement, GP Transferor contributed to the Company all of the capital stock of PRO GP, each Limited Partner contributed to the Company all of the outstanding limited partner partnership interests of Platinum LP, and the Investors contributed to the
Company an aggregate minimum cash amount of $4,500,000.



18



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





At the Companys Special Meeting held on April 12, 2007, stockholders approved the
completion of the proposed Contribution Agreement transaction with Platinum LP et al. The closing of the Contribution Agreement transaction became effective April 18, 2007.

In connection with the Contribution Agreement, the Company completed the following:



| | a) | Issued to the PRO Transferors 55,000,000 unregistered shares of common stock of the Company;
| | -- | --------------------------------------------------------------------------------------------



| | b) | Issued to the Investors 5,000,000 shares Series A Preferred and 2,500,000 share purchase warrants (the Warrants). Each Warrant is exercisable for one common share of the
Company at an exercise price of $0.26 per share for a three-year period from date of closing; and
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | Entered into a bridge loan agreement (the Loan Agreement) with Platinum LP, pursuant to which the Company loaned Platinum LP $1,000,000 (the Platinum LP
Note). The Platinum LP Note bore regular interest at an annual rate of 10% per annum, was due and payable six months from the date of issuance, and was secured by a second lien on all of the assets of Platinum LP. On January 17,
2007, the Company advanced $1,000,000 to Platinum LP under the terms of the Loan Agreement. The Loan Agreement was satisfied on the April 18, 2007 closing date upon the conversion of the promissory note evidencing the loan into shares of Series
A Preferred. All interest incurred under this borrowing was eliminated in consolidation.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During the second quarter of fiscal
2007, the Company also entered into an amending agreement whereby the Company assumed certain general security obligations upon closing of the Contribution Agreement.



|8. | Commitments
|-- | -----------

Leases

On June 20, 2007, the Company signed a five-year lease for new office space at a rate of approximately $60,000 per year, effective September 1,
2007. The Company had previously leased office space from EFO Holdings, a related party to Lubrication Partners, L.P. and Lubrication Partners Joint Venture, our two largest stockholders.

Letter of Credit

On July 3,
2007, the Company entered into a $60,000 standby letter of credit agreement with Crescent Real Estate Funding VIII LP as a condition of an office lease, also with Crescent Real Estate Funding VIII LP, entered into on June 20, 2007.

Long-Term Debt Monitoring Fee

As
part of the long-term debt agreement with SCERS, the Company agreed to pay Newlight Capital LLC (Newlight), a quarterly monitoring fee over the term of the note. In consideration for those services, Newlight receives $120,000 in annual
monitoring fees. Newlight received options for 1,909,938 shares of the Companys common stock. Newlight also serves as a consultant to the Company in connection with its intellectual property commercialization efforts as well as in raising
additional capital. Newlight receives a percentage of the total additional capital raised or revenues generated from intellectual property commercialization as compensation for such consulting services.



19



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





Participation Payments

The Company has agreed that pursuant to any and all license agreements, royalty agreements, customer contracts or other revenue generating contracts to
which the Company shall become a party in connection with its intellectual property commercialization, it shall pay to SCERS a participation payment payable quarterly. Such payment accrues to SCERS as follows: (i) two-thirds of all net
royalties received by the Company until SCERS has been paid an aggregate of $3,000,000 (the First Tranche); and (ii) two percent of all additional net royalties until SCERS has been paid an additional $2,000,000 (the Second
Tranche) in aggregate. If the Company sells one or more promissory notes, then SCERSs right to receive Second Tranche payments shall not accrue until aggregate net royalties exceed $5,000,000 plus the aggregate principal amount of such
promissory notes.

Major Supplier

The Company currently contracts with a single, outside specialty chemical manufacturing company for the production and supply of 100% of its product needs. The Company is thus exposed to product supply disruptions
caused by adverse business circumstances with this supplier, raw material shortages, plant breakdowns and other situations affecting the supply of products from this supplier.



|9. | Credit Risk
|-- | -----------

Financial instruments which
potentially subject the Company to a concentration of credit risk principally consist of cash , cash equivalents, and short-term investments in marketable securities. In the normal course of business, the Company maintains cash balances at financial
institutions located in the Dallas, Texas and Shrewsbury, New Jersey areas. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation up to $100,000. The Company has not experienced any losses in such accounts
and believes it is not exposed to significant credit risk on cash and cash equivalents.

We also invest cash in excess of immediate
requirements in money market accounts and auction rate securities with high quality (AAA) ratings. These investments are not held for trading or other speculative purposes. We are exposed to credit risk in the event of default by these entities.



|10. | Stock Based Incentive Plan
|--- | --------------------------

The Platinum Research
Organization, Inc. Stock Incentive Plan (the Plan), which was approved by the Companys stockholders on April 12, 2007, is an unfunded Plan which provides for the granting of incentive stock options, nonstatutory stock options,
stock appreciation rights and restricted shares to employees, directors and consultants of the Company.

The Company uses the Black-Scholes
option pricing model to determine the fair value of all stock option grants. No stock option grants were issued in the three months ended March 31, 2008. The Company recognized compensation expense of $161,580 for the three months ended
March 31, 2008. There was no stock based compensation expense recognized in the three months ended March 31, 2007.

The status of
our stock options are as follows:



|                                 |  |            |  |                          |      |        |   |                          |   |  
|-------------------------------- |  | ---------- |  | ------------------------ | ---- | ------ | - | ------------------------ | - | -
|                                 |  | 2008       |  | 2007                    
|                                 |  | Shares     |  | WeightedAvgExercisePrice |      | Shares |   | WeightedAvgExercisePrice
|Outstanding at beginning of year |  | 27,722,879 |  | $                        | 0.19 |        |  |                          | $ | 
|Options substituted              |  |           |  |                          |     |        |  |                          | $ | 
|Grants                           |  |           |  |                          |     |        |  |                          | $ | 
|Cancelled                        |  |           |  |                          |     |        |   |                          |   |  
|Exercised                        |  |           |  |                          |     |        |  |                          | $ | 
|Forfeited                        |  |           |  |                          |     |        |  |                          | $ | 
|                                 |  |            |  |                          |      |        |   |                          |   |  
|Outstanding at March 31,         |  | 27,722,879 |  | $                        | 0.19 |        |  |                          | $ | 

Our outstanding options as of March 31, 2007 are as follows:



|                         |  |                                                   |  |                                                 |  |                          |       |                                                   |           |                            |   |      
|------------------------ |  | ------------------------------------------------- |  | ----------------------------------------------- |  | ------------------------ | ----- | ------------------------------------------------- | --------- | -------------------------- | - | -----
|                         |  | Options Outstanding                               |  | Options Outstanding                            
|Range of Exercise Prices |  | SharesUnderlyingOptionsOutstanding atMar 31, 2007 |  | Weighted AvgRemainingContractual Life(in years) |  | WeightedAvgExercisePrice |       | SharesUnderlyingOptionsExercisable atMar 31, 2007 |           | Weighted AvgExercise Price
|$0.07 - $0.099           |  | 12,465,712                                        |  | 8.50                                            |  | $                        | 0.070 |                                                   | 2,077,619 |                            | $ | 0.07 
|$0.10 - $0.129           |  | 10,801,542                                        |  | 7.89                                            |  | $                        | 0.110 |                                                   | 4,431,541 |                            | $ | 0.110
|$0.13 - $0.16            |  | 24,931                                            |  | 9.34                                            |  | $                        | 0.154 |                                                   | 8,310     |                            | $ | 0.154
|$0.57                    |  | 1,289,335                                         |  | 9.45                                            |  | $                        | 0.570 |                                                   | 0         |                            |   |     
|$0.79                    |  | 3,141,359                                         |  | 9.34                                            |  | $                        | 0.79  |                                                   | 0         |                            |   |     
|                         |  |                                                   |  |                                                 |  |                          |       |                                                   |           |                            |   |      
|                         |  | 27,722,879                                        |  | 8.11                                            |  | $                        | 0.191 |                                                   | 6,517,470 |                            | $ | 0.097

Restricted Stock

We may also grant restricted stock to compensate certain employees under the Plan. As of December 31, 2007, there were no restricted shares
outstanding.



20



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





|11. | Earnings Per Share
|--- | ------------------

Basic earnings per share are
computed by dividing net earnings less dividends on Series A Preferred Stock by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed similarly to basic earnings per share, except the
denominator is increased by including the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. This Diluted Earnings per Share calculation is not done for periods with a Net Loss,
as this would be antidilutive. Shares underlying options at March 31, 2008 were excluded as their effect would be antidilutive.



|                                             |  |                    |             |   |               |   |            |                                                         |  |   |             |  
|-------------------------------------------- |  | ------------------ | ----------- | - | ------------- | - | ---------- | ------------------------------------------------------- |  | - | ----------- | -
|                                             |  | Three Months Ended |             |   |               |  
|                                             |  | March 31,2008      |             |   | March 31,2007 |   |            | For the Periodfrom Date ofInceptionthroughMarch 31,2008 | 
|Numerator                                    |  |                    |             |   |               |   |            |                                                         |  |   |             |  
|Net Loss                                     |  | $                  | (1,235,968  | ) |               | $ | (817,684   | )                                                       |  | $ | (12,322,187 | )
|Dividends Declared on Preferred Stock        |  |                    | (112,500    | ) |               |   |           |                                                         |  |   | (431,199    | )
|                                             |  |                    |             |   |               |   |            |                                                         |  |   |             |  
|Net Loss Attributable to Common Shareholders |  |                    | (1,348,468  | ) |               |   | (817,684   | )                                                       |  |   | (12,753,386 | )
|                                             |  |                    |            
|Denominator                                  |  |                    |             |   |               |   |            |                                                         |  |   |             |  
|Basic Weighted Average Shares Outstanding    |  |                    | 102,500,000 |   |               |   | 38,277,778 |                                                         |  |   | 45,088,974  |  
|                                             |  |                    |            
|Basic Earnings per Share                     |  | $                  | (0.01       | ) |               | $ | (0.02      | )                                                       |  | $ | (0.27       | )



|12. | Liquidity and Capital Resources
|--- | -------------------------------

The Company is a
development stage company, and since inception, the Company has incurred significant net losses. The Company has reported a net loss of $12,322,187 from the date of inception on April 28, 2004 through March 31, 2008. For the fiscal year
ended December 31, 2007, and the three months ended March 31, 2008, the Company reported net losses of $5,245,708 and $1,235,968, respectively. The Company expects to continue to incur net losses and negative cash flow in the near future.
The size of these losses will depend, in large part, on the Companys ability to realize product sales revenue from marketing its products. To date, the Company has not had any operating revenue from the sale of its products. The Companys
ability to generate revenues will be dependent upon, among other things, the successful negotiation of marketing and distribution agreements, conclusive and definitive test results demonstrating the benefits of the Companys products and the
acceptance of the Companys technology and products by potential customers. Because the Company does not yet have a material, recurring revenue stream resulting from product sales, there can be no assurance that the Company will be successful
in its sales efforts. The Company expects its operating expenses to increase, reflecting increased testing and marketing expenses in the short term which will necessitate higher levels of revenue for profitability when and if the Company begins to
generate recurring revenues. Should the Company achieve profitability, there is no assurance the Company can maintain or increase profitability levels in the future.



21



---

##### Table of Contents

Platinum Research Organization, Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial
Statements

March 31, 2008





While the Company believes it has sufficient funds available to provide resources for operations
through the second quarter of 2008, failure to achieve significant, sustained sales and revenues from the Companys TechroBond 280 product in the industrial grease market by the end of such period will require the Company to seek additional
financing. While management is currently seeking third party financing, it can give no assurances that they will be successful in these efforts. The Companys budget for the next twelve months emphasizes the continued development and marketing
of its products. Cash needs during the next twelve-month period are expected to average approximately $275,000 per month. In addition, changes may occur in the Companys current operations that would use available cash resources sooner than
anticipated. If the anticipated product sales do not materialize, or are significantly less than anticipated, the Company will have to raise additional funds to continue product development and commercialization activities. If this future financing
is not available, investors may lose a substantial portion, or all, of their investment, and the Companys business may fail. The Company currently has no immediate means for obtaining any additional financing. Consequently, the Company cannot
assure that additional financing, if necessary, will be available to the Company on acceptable terms, or at all.

The Companys ability
to generate sufficient cash flow from operations to make scheduled payments on its debt depends on a range of economic, competitive and business factors, many of which are outside its control. Based on an average interest rate of 14% at
March 31, 2008, and outstanding borrowings at that date of $6,000,000, the Companys annual interest expense would be $840,000. The Companys business may not generate sufficient cash flow from operations to service its debt
obligations, particularly if projected sales and revenues are not realized on schedule or at all. If the Company is unable to service its debt obligations, the Company may need to refinance all or a portion of its indebtedness on or before maturity,
reduce or delay capital expenditures, sell assets or raise additional equity. The Company may not be able to refinance any of its indebtedness, sell assets or raise additional equity on commercially reasonable terms or at all, which could cause it
to default on its obligations and impair its liquidity. The Companys inability to generate sufficient cash flow to satisfy its debt obligations, or to refinance its obligations on commercially reasonable terms, could have a material adverse
effect on the Companys business and financial condition.



22



---

##### Table of Contents

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

All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of
management for future operations, are considered to be forward-looking statements. We express our expectations, beliefs and projections in good faith and believe our expectations reflected in these forward-looking statements are based on reasonable
assumptions; however, we cannot assure you that these expectations, beliefs or projections will prove to have been correct.

Readers are
referred to the caption Risk Factors appearing at the end of Item 1 of our latest Annual Report on Form 10-KSB for additional factors that may affect our forward-looking statements. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this report might not occur. We undertake no obligation to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise.

Plan of Operation

On April 18, 2007, the
Company closed the Contribution Agreement, which resulted in the acquisition of Platinum LP and the appointment of a new slate of directors. Under the terms of the Contribution Agreement:



| |  |  | Lubrication Partners, joint venture (GP Transferor) contributed all of the capital stock of Platinum IP Management, Inc., the general partner of
Platinum LP (PRO GP) (the PRO GP Capital Stock), free and clear of all liens, to the Company;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | each limited partner of Platinum LP contributed all of the outstanding limited partner partnership interests of Platinum LP (collectively, the Partnership
Interests) held by such limited partner, free and clear of all liens, to the Company; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | certain individuals who invested in the Company (the Investors) contributed $4,500,000 in new capital by way of private placement to the Company. This
private placement included the conversion of the convertible promissory notes totaling $1,000,000 held by two Investors.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In return, the Company issued the aggregate total of:



| |  |  | 55,000,000 unregistered shares of its common stock to GP Transferor for the PRO GP Capital Stock and for the Partnership Interests;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | 5,000,000 unregistered shares of Series A Preferred to the Investors; and
| | - |  | -------------------------------------------------------------------------



| |  |  | 2,500,000 unregistered common stock share purchase warrants to Investa Corporation and Ms. Cecelia Pineda.
| | - |  | ----------------------------------------------------------------------------------------------------------

Concurrent with the closing of the Contribution Agreement, Ms. Pineda returned to the Companys treasury 22,500,000 shares of common stock of
the Company held in her name.

The Companys acquisition of Platinum LP has been accounted for as a reverse acquisition application of
the purchase method of accounting by the Company, with Platinum LP being treated as the accounting acquirer. Accordingly, the assets and liabilities of the Predecessor were recorded at their respective historical costs and added to those of Platinum
LP, and the reported results of operations of the Company now and going forward reflect the historical financial and operating results of Platinum LP.

As a result of the foregoing transactions, the Pro Transferors now own 73.33% of the issued and outstanding shares of common stock of the Company on a non-diluted basis and 53.66% of the Companys common stock on
a fully-diluted basis.



23



---

##### Table of Contents

As a result of our acquisition of Platinum LP, the
Companys new business focus is the design, development and commercialization of patented high-performance lubricants and coatings. The Companys products will be marketed under the trade name TechroBond for automotive, aviation,
industrial and consumer aftermarkets. TechroBondTMis one of a series of product applications Platinum LP developed based on its patented processes
and technologies relating to a fluorinated thiophosphate and a new technique to react zinc dialkyl dithiophosphate (ZDDP) and poly tetra fluroethylene to yield new proprietary compounds that enhance the anti-wear and extreme pressure
capabilities of lubricants and coatings (individually and collectively, the PRO Technology). The resulting compounds have yielded significantly enhanced anti-wear and extreme pressure capabilities when measured in bench laboratory tests
at the University of Texas at Arlington, and, more importantly, suggest that the PRO Technology may be a replacement for ZDDP in engine and lubricating oils. Management believes that this new technology will position the Company to penetrate several
large, global markets for lubricants should the Company be successful in bringing its products that rely upon this new technology to market.

The Companys intellectual property, including its patents, licenses and trademarks, is an important component of its business. The Company actively protects its inventions, new technologies and product developments by filing patent
applications or maintaining trade secrets. The Companys research and development efforts have resulted in proprietary formulations and processes protected by five issued U.S. patents, four U.S. patent applications pending, five U.S.
continuation-in-part applications and several trade secrets. The Company has filed these patents or patent applications in key jurisdictions in the international market, and the U.S. patent applications are protected under patent, copyright and
trademark filings. These proprietary formulations and processes use specific chemical compounds that can act as a catalyst, a reactant or both to provide surface and substrate modification in both liquid and solid lubricants to wear surfaces such as
iron, steel and aluminum.

The Company intends to develop three primary product lines within the lubricant additive industry, including
greases, industrial oils and engine oils, as well as to develop specialty coatings. A more detailed description of the business of the Company and associated risk factors is contained in the Annual Report on Form 10-KSB that was filed with the SEC
on April 15, 2008.

Results of Operations

Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007

Net Sales and Gross Profit. Net
sales and gross profit for both the three-month periods ended March 31, 2008 and March 31, 2007 were $0. The Company is a development stage company and continues to focus its efforts on the marketing and commercialization of the
Companys products and technologies, the registration of its products with the Environmental Protection Agency (the EPA), in Europe, Japan and the Far East and on further developing its relationships with key business partners in
the Engine Oil, Grease, Industrial Oil and Coatings markets.

Selling, General and Administrative Expenses.The Companys total SG&A
expenses for the three-month period ended March 31, 2008 were $659,218, an increase of $145,923 over total SG&A expenses of $513,295 for the three-month period ended March 31, 2007. Total SG&A expenses are composed of outside legal
and professional fees, salaries, insurance costs, product evaluation and technical support and other SG&A expenses.

The Companys
outside legal and professional fees for the three-month period ended March 31, 2008 were $215,589, an increase of $84,963 over outside legal and professional fees of $130,627 for the three-month period ended March 31, 2007. This increase
was due to: increased product and technology consultancy costs; increased public and investor relations costs; and increased public company compliance costs associated with SEC filings and the filing of a registration statement to register the
shares of common stock underlying the Series A Preferred.

The Companys salaries expense for the three-month period ended
March 31, 2008 was $334,118, an increase of $211,828 over salaries expense of $122,290 for the three-month period ended March 31, 2007. This increase was primarily due to non-cash expenses incurred relating to the expensing of stock
options pursuant to SFAS 123R. Of the total salaries increase, $161,580 was related to expensing of stock options.



24



---

##### Table of Contents

The Companys insurance costs for the three-month period ended March 31, 2008 were $19,156, an
increase of $2,558 over insurance costs of $16,598 for the three-month period ended March 31, 2007. This increase was principally due principally to higher insurance costs associated with patents and intellectual property.

Product evaluation and technical support expenses for the three-month period ended March 31, 2008 were $37,872, a decrease of $14,546 over product
evaluation and technical support expenses of $52,418 for the three-month period ended March 31, 2007. This decrease was due to a change in the timing of invoicing for testing and research efforts conducted at the University of
TexasArlington related to the Companys products and technologies and costs associated with registering the companys products in foreign countries.

Other SG&A expenses for the three-month period ended March 31, 2008 were $22,644, an increase of $8,884 over other SG&A expenses of $13,760 for the three-month period ended March 31, 2007. This
increase was due to increased office support costs and Board of Director related costs.

Depreciation and Amortization.Depreciation for the
three-month period ended March 31, 2008 was $122,010, a decrease of $465 over depreciation of $122,476 for the three-month period ended March 31, 2007 and relates principally to the amortization of loan issuance costs for debt with the
Seattle City Employees Retirement System (SCERS), the amortization of capitalized patent expenses and the depreciation of office and testing equipment.

Interest Expense.Interest expense for the three-month period ended March 31, 2008 was $482,081, an increase of $272,081 compared to interest expense of $210,000 for the three-month period ended
March 31, 2007. Interest expense for the three-month period of 2008 was comprised of $210,000 of interest related to $6,000,000 of long-term debt with SCERS and $271,849 of interest related to the amortization of a beneficial conversion
discount and the amortization of a mandatory redemption premium, both of which are related to the Companys Series A Preferred. Both items are non-cash items (please see Note 4 to the Companys Consolidated Financial Statements under
Item 1).

Other Income. Other income for the three-month period ended March 31, 2008 was $27,341, a decrease of $745 from other income of
$28,086 for the three-month period ended March 31, 2007. This decrease was due primarily to interest income from decreased cash on hand.

Research
and Development

The Companys R&D expenditures for the period ended March 31, 2008 were $37,872 compared to $52,418 for
the three months ended March 31, 2007. The R&D expenditures are comprised of research staff salaries and materials consumed in the testing and evaluation process. The Company has established an alliance with the University of Texas at
Arlington to collaborate on research, development, testing and commercialization efforts. The number of personnel for each project is reviewed and agreed upon annually by the Company and the University of Texas at Arlington as a part of the
budgeting process. The Company is then billed monthly per the budgeting contract. The Company expenses all such R&D expenditures as incurred. Historically, the Company has not tracked R&D costs by project, though, as the majority of R&D
expenditures for each project are comprised of salaries for research personnel and materials consumed in testing and evaluation, the information necessary to do so is available to the Company. Management is working with the University of Texas at
Arlington to organize R&D cost data so that R&D costs can be tracked by project going forward. The Company also utilizes a number of mechanical testing laboratories equipped with a variety of gasoline and diesel engines, driveline and other
mechanical equipment to evaluate the performance of additives for lubricants and fuels.

For the calendar year of 2008, there are five key
projects, as identified and described below, that comprise the Companys R&D budget. All of the listed projects are currently active and have research personnel assigned. Company management reviews the project progress on a monthly basis.
All of the identified key projects are in progress, and are expected to continue for the next 9-15 months. As such, the Company is unable to estimate completion dates with any reasonable certainty. The Companys inability to successfully
complete, fund these projects, or attract a development partner could have a material adverse impact on the Companys ability to execute its business plan.



25



---

##### Table of Contents

Grease

The Companys Grease project consists of research into anti-wear and extreme pressure
enhancements for lubrication greases. Product development for the Companys original Grease product, TechroBondTM280, is complete. As
TechroBondTM280 utilizes existing registered materials in its composition, no additional product registration is necessary. The suppliers of raw
materials and a contract manufacturer for manufacturing the material have been contracted by the Company. The Companys ongoing research and development in the Grease project is focused on enhancing the existing TechroBondTM280 product and ensuring its compatibility with customers products.

Coatings

The Companys Coatings project consists of research into anti-fouling paints
and anti-corrosion coatings and testing of products to be used in anti-graffiti or other anti-fouling media applications. Product development for this project is still in the early stages, and no registration of the product or product approvals from
regulatory agencies has occurred. Proof of concept testing is currently underway, using a variety of approaches and materials. The early results of the Companys product testing are promising, but no marketable product has been developed, and
there is no assurance that the products can be developed into a marketable product.

Engine Oil (Use of ZDDP in HD Oil Applications)

The Companys Engine Oil ZDDP Applications project consists of testing the use of fluorinated ZDDP in heavy duty engine oil
applications. Product development for this project is in the intermediate stages, and registration of the base materials is currently underway. Product testing is currently focused on bench wear testing as part of defining the proper blend to be
used in a marketable product.

Engine Oil (Improved Lubrication in Engine Oils)

The Companys Engine Oil Improved Lubrication project consists of research into improved
lubrication in engine oils. Product development for this projects product, TechroBondTM240, is in the final stages of development, and the
products materials have been registered with the EPA and are currently undergoing testing for registration in the European Union, which is expected to be completed in the third quarter of 2008. Following European Union registration, further
registration will be conducted in additional international jurisdictions. Manufacturing processes have been defined, and a contract manufacturer has been identified for the manufacture of the product. Actual engine tests utilizing the product are
currently being scheduled, and should be completed during the first half of 2008.

Testing of Interaction of Anti-Oxidants with F-ZDDP

This project consists of testing the interaction of anti-oxidants and F-ZDDP, as its name suggests. Product development in this
project is in the intermediate stages, with registration of the base materials currently underway (see the Engine Oil (Improved Lubrication in Engine Oils) project description above). This projects product is currently undergoing bench
oxidation tests to determine interactions and compatibility with existing engine oil additive packages.

Liquidity and Capital Resources

As of March 31, 2008, the Company had total cash on hand and short-term investments of marketable securities of $2,759,593, of which $1,413,442
was restricted cash and $900,000 was available-for-sale securities. Cash needs during the next twelve months are expected to average approximately $275,000 per month. As of March 31, 2008, the Company believed it had sufficient funds available
to fund operations for approximately the next two to three months.



26



---

##### Table of Contents

Cash flows used in operating activities for the three month period ended March 31, 2008 were
$673,753, compared to $579,518 used in operating activities for the three month period ended March 31, 2007.

Net cash provided by investing activities consists primarily of the sale of $300,000 of short-term investments in marketable securities. Short-term investments in marketable securities consist of high credit quality
(AAA) auction rate securities, which are variable rate bonds tied to short-term interest rates with maturities on the face of the securities in excess of 90 days and have interest rate resets through a modified Dutch auction, at predetermined
short-term intervals, usually every 7, 28 or 35 days. As of March 31, 2008, the Company did not have any material commitments for capital expenditures. Capital expenditure requirements, which are principally comprised of manufacturing related
capital expenditures, for the next five years are estimated by the Company to be $1 million for 2008, $2 million in 2009, $0 in 2010, $4 million in 2011 and $4 million in 2012. The Company is currently working with a manufacturer in Tulsa, Oklahoma
to evaluate the manufacturing process and required capital to produce TechroBondTM240.

Net cash provided by financing activities was $449,438 for the three months ended March 31, 2008, consisting primarily of the borrowings secured by
the Companys investment in marketable securities.

Contribution Agreeement

Immediately following the closing of the Contribution Agreement, Platinum LP became the sole operating subsidiary of the Company, holding substantially
all of the Companys operating assets, other than (i) the intellectual property used by the Company, which is held by Platinum Intellectual Property L.P. (PIP), a wholly-owned subsidiary of Platinum LP, and (ii) the
proceeds of the Series A Preferred offering completed as part of the Contribution Agreement, which are held by the Company directly. On December 3, 2004, the Company and PIP entered into a secured note purchase agreement, which provided for PIP
to obtain a $6.0 million term loan from SCERS (the Seattle Loan).

In connection with the Contribution Agreement, SCERS, the
Company, Platinum LP, PIP, Newlight Capital LLC (Newlight) and JPMorgan Chase Bank, N.A. entered into an amendment of the Seattle Loan on January 9, 2007, which became effective upon the closing of the Contribution Agreement on
April 18, 2007. The Seattle Loan is governed by a senior secured note issued by PIP to SCERS. The principal amount outstanding under the Seattle Loan will continue to bear interest at a fixed rate equal to 14% per annum, which will
increase to 19% per annum following any event of default under the senior secured note. Accrued interest on the outstanding principal is payable on a quarterly basis, and all outstanding principal and interest is due and payable on
February 28, 2011. As additional consideration for making the loan, SCERS will receive quarterly participation payments at the end of each fiscal quarter that are equal to the greater of (i) 5% of the Companys gross revenues on a
consolidated basis, or (ii) 20% of the Companys consolidated net income, for such quarter. The participation payments will continue until SCERS is paid all of the principal and accrued interest under the Seattle Loan, plus an aggregate
$6.0 million in participation payments. SCERS has received no participation payments through December 31, 2007.

PIPs
performance under the Seattle Loan is secured by all of the assets of PIP, including all of the registered intellectual property used in the Companys business. In addition, approximately $1.4 million of the loan proceeds were placed in escrow,
representing 18 months of estimated interest expense, in the amount of $1.25 million, and $150,000 of certain estimated fees that are payable in connection with the Seattle Loan.



27



---

##### Table of Contents

As amended, the Seattle Loan is subject to certain financial covenants and restrictions, including
limitations on incurring indebtedness or granting liens, mergers or consolidations, distributions, expenditures in excess of budgeted amounts, leases, compensation of management, sale of assets and capital expenditures, which apply equally to PIP,
Platinum LP and the Company. If PIP issues or sells any new promissory note while the Seattle Loan is outstanding that are on terms that are more favorable than those under the Seattle Loan, as determined in SCERSs sole discretion, then the
Seattle Loan will automatically be amended such that those more favorable terms will apply to the Seattle Loan to the same extent as they are to apply under the new promissory note. PIP may issue one or more new promissory notes having an aggregate
principal amount of no more than $9.0 million, and SCERS will take any actions that are necessary in order to permit the purchasers of such notes to have a security interest and lien that is pari passu with SCERS interests in the collateral securing
the Seattle Loan. Any amounts borrowed by PIP that are in excess of the $9.0 million limit shall be subordinate to the Seattle Loan.

Newlight serves as the monitoring agent on behalf of SCERS. In consideration for those services, Newlight received a placement fee of $450,000 at the initial funding and continues to receive $120,000 in annual monitoring fees after the
closing of the Contribution Agreement. Newlight received substitution options for 1,909,938 shares of the Companys common stock upon closing of the Contribution Agreement, representing approximately 1.50% of the Companys outstanding
shares, on a fully-diluted basis, after the closing of the Contribution Agreement. Newlight also serves as a consultant to the Company in connection with its intellectual property commercialization efforts as well as in raising additional capital.
Newlight receives a percentage of the total additional capital raised or revenues generated from intellectual property commercialization as compensation for such consulting services.

Registration Rights Agreement

In connection with the transactions contemplated by the
Contribution Agreement, on April 18, 2007 the Company entered into a Registration Rights Agreement with the selling stockholders whereby the Company agreed to file the registration statement on Form S-1 of which this prospectus is a part to
register for resale the shares of common stock underlying the Series A Preferred and the warrants following the closing date. Under the terms of the Registration Rights Agreement, warrants to acquire common stock are issuable by the Company to the
holders of the Series A Preferred as the sole remedy under certain circumstances, including the failure of the Company to have the registration statement registering the resale of the underlying shares of common stock declared effective within 180
days after the closing date of April 18, 2007 (i.e., October 15, 2007) and remain effective through the expiration of the Registration Period, as defined in the Registration Rights Agreement. Penalty warrants accruing pursuant
to this provision of the Registration Rights Agreement would not begin to be issued until the end of the first 30-day period occurring after 180 days from the issuance date of the Series A Preferred. The issuance of penalty warrants would have been
issued at the end of each 30-day period through the end of the Registration Period, which expired on April 18, 2008 pursuant to the provisions of the Registration Rights Agreement due to the provisions of Rule 144 of the Securities
Act of 1933.

At the end of each 30-day period, 500,000 warrants (5,000,000 shares of Series A Preferred * 5 to 1 conversion ratio * 2%
penalty rate) could be issued under the terms of the Registration Rights Agreement. The aggregate value of such warrants, if issued, would be as follows:



|             |  |                 |  |               |      |                  |   |           
|------------ |  | --------------- |  | ------------- | ---- | ---------------- | - | ----------
|Warrant Date |  | PenaltyWarrants |  | ExercisePrice |      | Value ofWarrants
|14-Nov-07    |  | 500,000         |  | $             | 0.24 |                  | $ | 77,684.79 
|14-Dec-07    |  | 500,000         |  | $             | 0.24 |                  | $ | 120,566.76
|13-Jan-08    |  | 500,000         |  | $             | 0.24 |                  | $ | 92,788.64 
|12-Feb-08    |  | 500,000         |  | $             | 0.24 |                  | $ | 79,141.90 
|13-Mar-08    |  | 500,000         |  | $             | 0.24 |                  | $ | 21,014.05 
|12-Apr-08    |  | 500,000         |  | $             | 0.24 |                  | $ | 23,334.36 
|             |  |                 |  |               |      |                  |   |           
|TOTAL        |  | 3,000,000       |  |               |      |                  | $ | 414,530.50
|             |  |                 |  |               |      |                  |   |           



28



---

##### Table of Contents

The Company does not believe the issuance of the above penalty warrants to be probable, since there were
delays occurring in the registration process caused by delays on the part of the selling stockholders in delivering to the Company information necessary to prepare the registration statement and prospectus, which was a condition precedent to the
Companys obligations under the Registration Rights Agreement.

Capital Requirements

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt
and/or equity capital. Management believes that the Companys capital resources should be adequate to continue operating and maintaining its business strategy for the next two to three months. However, if the Company is unable to realize
revenue from the commercialization of its products or is unable to raise additional capital in the future, management expects that the Company will need to seek additional capital on less favorable terms and/or pursue other remedial measures. The
financial statements included in this Quarterly Report on Form 10-QSB do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

Accounting Policies  Intangible Assets

The Company evaluates annually the carrying value of its intellectual property for recoverability by analyzing the expected sales and profits of its
products in the grease, engine oil and industrial oil markets over the next five years. In conducting its impairment analysis, the Company only tests intellectual property being amortized per SFAS 144; non-amortizable intellectual property is
excluded. Net amortizable intellectual property was $3,452,238 as of March 31, 2008.

The Companys impairment testing
methodology involves testing the carrying amount of its intellectual property assets compared to the undiscounted cash flows from the Companys estimated operations (excluding interest) for the years 2008 through 2012. While the Company
recognizes that the useful lives of its patents extend beyond 2012 and in some case to the year 2020, the Companys planning period is five years, and data is not available for years beyond 2012.

At December 31, 2007, the Companys impairment testing revealed that the sum of the undiscounted cash flows for the applicable testing period
exceeded the carrying values of amortizable intellectual property. Based on this analysis, the Company expected that sufficient profit will be realized from these sales to recover the balance of intellectual property on its books, and therefore did
not believe that any impairment of its intellectual property existed at December 31, 2007, and no changes have occurred in the current year which would negatively impact the impairment testing. As such, no impairment adjustment was recorded at
that date and no impairment adjustment has been recorded in the three months ended March 31, 2008.

Critical Accounting Policies and Significant
Judgments and Estimates

There have been no material changes in our critical accounting policies or critical accounting estimates since
the filing of our amended registration statement on Form S-1 on May 13, 2008, nor have we adopted any accounting policy that has or will have a material impact on our consolidated financial statements. For further discussion of our
accounting policies see Note 2, Significant Accounting Policies in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-KSB and the Notes to Consolidated Financial Statements in our Annual Report on Form
10-KSB for the fiscal year ended December 31, 2007.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to its stockholders.



29



---

##### Table of Contents

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

Evaluation of Disclosure Controls
and Procedures

Our CEO and CFO have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act
Rule 13a-15(b) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information that is required to be included in our filings with the SEC is recorded, processed, summarized and
reported within the time periods specified by the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on that
evaluation, they have concluded that our current disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-QSB.

Changes in Internal Control Over Financial Reporting

In March 2008, the Company identified
the need for additional consultative accounting guidance on unusual, infrequent or significant accounting transactions. In response, the Audit Committee of our Board of Directors engaged Saville, Dodgen & Company, P.A., an independent
licensed accounting firm, to provide technical accounting guidance on all financing transactions, equity transactions and other extraordinary transactions consummated by the Company outside of the ordinary course of business. Saville Dodgen will
provide accounting research and guidance to augment the skills of our internal staff on an ongoing basis.

Upon the March 1, 2008
resignation of our Chief Financial Officer, we identified the need to obtain a licensed CPA to fill the role of Chief Financial Officer on an interim basis. In March 2008, the Company appointed Mr. David Hart as Senior Vice President and
Interim Chief Financial Officer to satisfy this need. Mr. Hart has extensive senior management experience with public and private companies, as well as significant experience with public company financial reporting. Mr. Hart is performing
a major role in ensuring the accuracy and completeness of our financial reporting and the effectiveness of our disclosure controls and procedures.

Other than that described above, there has not been any change in our internal control over financial reporting, that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-QSB, that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION



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

A list of the exhibits required by Item 601 of
Regulation S-B and filed as part of this report is set forth in the Index to Exhibits on page 32, which immediately precedes such exhibits.



30



---

##### Table of Contents

SIGNATURES

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



|                   |  |                                      |  |                                                                        
|------------------ |  | ------------------------------------ |  | -----------------------------------------------------------------------
|                   |  | PLATINUM RESEARCH ORGANIZATION, INC.
|                   |  |                                     
|Date: May 20, 2008 |  | By:                                  |  | /s/ John T. Jaeger, Jr.                                                
|                   |  |                                      |  | John T. Jaeger, Jr.                                                    
|                   |  |                                      |  | President, Chief Executive Officer and Member of the Board of Directors
|                   |  |                                     
|Date: May 20, 2008 |  | By:                                  |  | /s/ David A. Hart                                                      
|                   |  |                                      |  | David A. Hart                                                          
|                   |  |                                      |  | Senior Vice President and Interim Chief Financial Officer              



31



---

##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                             
|            | 
|31.1        |  | Certificate of CEO as Required by Rule 13a-14(a)/15d-14.                                                                                                                
|            | 
|31.2        |  | Certificate of CFO as Required by Rule 13a-14(a)/15d-14.                                                                                                                
|            | 
|32.1        |  | Certificate of CEO and CFO as Required by Rule 13a-14(b) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code.





32