EXHIBIT 99.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public Accounting Firm......................F-1

Consolidated Balance Sheet as of December 31, 2005...........................F-2

Consolidated Statements of Operations for the Years Ended December 31,
2005 and 2004................................................................F-4

Consolidated Statements of Stockholders' Equity/(Deficiency) for the
Years Ended December 31, 2005 and 2004.......................................F-5

Consolidated Statements of Cash Flows for the Years Ended December 31,
2005 and 2004................................................................F-6

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



<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Simtrol, Inc.

We have audited the accompanying consolidated balance sheet of Simtrol, Inc. and
Subsidiaries as of December 31, 2005, and the related consolidated statements of
operations, stockholders' equity/(deficiency) and cash flows for the years ended
December 31, 2005 and 2004. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Simtrol, Inc. and
Subsidiaries as of December 31, 2005, and the consolidated results of their
operations and their cash flows for the years ended December 31, 2005 and 2004,
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has not achieved a sufficient
level of revenues to support its business and has suffered recurring losses from
operations. These factors raise substantial doubt about the Company's ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


/s/ Marcum & Kliegman LLP

New York, New York
February 17, 2006
Except for footnote 11, to which the date is February 23, 2006


                                       F-1
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2005

                                     ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                          $  297,751
   Accounts receivable                                                     2,893
   Prepaid expenses and other current assets                              16,630
                                                                      ----------

      Total Current Assets                                               317,274

PROPERTY AND EQUIPMENT, net                                               21,364
                                                                      ----------

TOTAL ASSETS                                                          $  338,638
                                                                      ==========

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


                                       F-2
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2005

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
   <S>                                                                <C>
   Accounts payable                                                   $    151,467
   Accrued expenses                                                         55,986
   Dividend payable on default of convertible preferred stock              371,250
   Deferred revenue                                                         19,144
   Affiliate payable                                                        12,000
                                                                      ------------

       Total Current Liabilities                                           609,847
                                                                      ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
   Preferred stock, $.00025 par value; 800,000 shares authorized:
   450,000 shares of Series A Convertible Preferred Stock designated
   issued and outstanding; liquidation value $1,350,000                        113
   Common stock, authorized 40,000,000 shares of
     $.001 par value; 3,755,684 shares issued and outstanding                3,756
   Additional paid-in capital                                           63,641,158
   Accumulated deficit                                                 (63,916,236)
                                                                      ------------

       Total Stockholders' Equity
                                                                          (271,209)
                                                                      ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                        $    338,638
                                                                      ============
</TABLE>

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


                                       F-3
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                           2005            2004
                                                      -------------   -------------
<S>                                                   <C>             <C>
Revenues:
  Software licenses                                   $      67,418   $     473,210
  Service                                                    57,228          92,660
                                                      -------------   -------------
      Total revenues                                        124,646         565,870
                                                      -------------   -------------
Cost of revenues
  Software licenses                                           1,037          84,023
  Service                                                     3,796           2,069
                                                      -------------   -------------
      Total cost of revenues                                  4,833          86,092
                                                      -------------   -------------
      Gross profit                                          119,813         479,778
                                                      -------------   -------------

Operating expenses
   Selling, general and administrative                    1,060,926         936,446
   Research and development                                 437,374         452,002
                                                      -------------   -------------

   Total operating expenses                               1,498,300       1,388,448

     Loss from operations                                (1,378,487)       (908,670)
                                                      -------------   -------------

Other income/(expenses):
  Other income/(expense), primarily finance charges          12,435        (460,789)
  Debt conversion expense                                        --        (245,643)
  Gain on extinguishments of debt                                --         716,299
                                                      -------------   -------------
Total other income/(expense)                                 12,435           9,867

        Net loss                                      $  (1,366,052)  $    (898,803)
        Dividend on covenant default of convertible
        preferred stock                                     371,250              --
        Deemed preferred dividend                           624,918              --
                                                      -------------   -------------
Net loss attributable to common shareholders          $  (2,362,220)  $    (898,803)
                                                      =============   =============
Net loss per common share-basic and diluted           $       (0.63)  $       (0.30)
                                                      =============   =============

Weighted average number of common shares outstanding      3,730,650       3,015,811
                                                      =============   =============
</TABLE>

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


                                       F-4
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIENCY)
                 For the Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                     --------------------------------------------------
                                                                                     Preferred Stock
                                                            Common stock
                                                     --------------------------------------------------
                                                      Number of                 Number of
                                                      Shares(1)    Par value      Shares     Par value
                                                     -----------  -------------------------------------

<S>                                                    <C>        <C>              <C>      <C>
Balance, January 1, 2004                               2,334,118        2,334         --           --

Net Loss for the period
Debt conversion expense
Beneficial conversion feature of convertible debt
Warrants issued with convertible debt
Issuance of common stock in private placements, net      915,104          915
Conversion of convertible debt                           463,692          464
Warrant value issued to placement agent
                                                     -----------  -------------------------------------
Balance, December 31, 2004                             3,712,914  $     3,713         --           --

Net Loss for the period
Issuance of common stock for IR services                  10,000           10
Issuance of convertible preferred stock in private
     placements, net                                                               450,000          113
Dividend payable on covenant default of convertible
     preferred stock
Issuance of common stock to directors                     32,770           33
                                                     -----------  -------------------------------------
Balance, December 31, 2005                             3,755,684  $     3,756      450,000  $       113
                                                     ===========  =====================================

<CAPTION>
                                                       Additional
                                                        Paid-in       Accumulated
                                                        capital         deficit          Total
                                                     -------------   -------------   -------------

<S>                                                  <C>             <C>             <C>
Balance, January 1, 2004                                59,709,692     (61,651,381)     (1,939,355)

Net Loss for the period                                                   (898,803)       (898,803)
Debt conversion expense                                    245,643                         245,643
Beneficial conversion feature of convertible debt           91,202                          91,202
Warrants issued with convertible debt                      127,242                         127,242
Issuance of common stock in private placements, net      1,536,548                       1,537,463
Conversion of convertible debt                           1,003,841                       1,004,305
Warrant value issued to placement agent                    101,400                         101,400
                                                     -------------   -------------   -------------
Balance, December 31, 2004                           $  62,815,568   $ (62,550,184)  $     269,097

Net Loss for the period                                                 (1,366,052)     (1,366,052)
Issuance of common stock for IR services                     7,890                           7,900
Issuance of convertible preferred stock in private
     placements, net                                     1,162,283                       1,162,396
Dividend payable on covenant default of convertible
     preferred stock                                      (371,250)                       (371,250)
Issuance of common stock to directors                       26,667                          26,700
                                                     -------------   -------------   -------------
Balance, December 31, 2005                           $  63,641,158   $ (63,916,236)  $    (271,209)
                                                     =============   =============   =============
</TABLE>

      (1) Restated to reflect the 1:10 reverse stock split effected May 7, 2004.
      The accompanying notes are an integral part of these consolidated
      financial statements.


                                       F-5
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                                                     2005             2004
                                                                                --------------   --------------
Cash flows from operating activities:
<S>                                                                             <C>              <C>
   Net loss                                                                     $   (1,366,052)  $     (898,803)
   Adjustments to reconcile net loss to net cash used in operating activities:
      Depreciation and amortization                                                     36,086          111,782
      Common stock issued to board members                                              26,700             --
      Allowance for uncollectible accounts                                                --            (22,120)
      Interest expense-deferred financing costs                                           --            195,400
      Interest expense-non-cash beneficial conversion feature of
        convertible debt                                                                  --            297,749
      Gain on debt extinguishments                                                        --           (716,299)
      Debt conversion expense                                                             --            245,643
      Changes in operating assets and liabilities:
        Accounts receivable                                                             17,431           51,338
        Prepaid expenses and other current assets                                          235          (16,865)
        Other assets                                                                     2,530           25,657
        Accounts payable                                                               (23,591)        (184,829)
        Accrued expenses                                                                27,247         (542,733)
        Deferred revenue                                                                 2,478           (7,481)
                                                                                --------------   --------------
          Net cash used in operating activities                                     (1,276,936)      (1,461,561)
                                                                                --------------   --------------

Cash flows from/(used in) investing activities
       Purchases of property and equipment                                             (21,660)            --
                                                                                --------------   --------------

Cash flows from financing activities

   Net payments on notes payable                                                          --            (70,000)
   Net payments on short-term credit facilities                                           --             (6,849)
   Common stock issued for investor relations performed                                  7,900             --
   Deposit received in cancelled offering                                               12,000             --
   Proceeds from convertible debt                                                         --            481,000
   Payments of convertible debt                                                           --            (70,000)
   Net proceeds from stock issuances                                                 1,162,396        1,537,463
                                                                                --------------   --------------
          Net cash provided by financing activities                                  1,182,296        1,871,614

Increase/(decrease) in cash and cash equivalents                                      (116,300)         410,053

Cash and cash equivalents, beginning of the year                                       414,051            3,998
                                                                                --------------   --------------
Cash and cash equivalents, end of the year                                      $      297,751   $      414,051
                                                                                ==============   ==============
Supplementary disclosure:
   Interest paid                                                                $         --     $        4,381
                                                                                ==============   ==============
   Income taxes paid                                                            $         --     $         --
                                                                                ==============   ==============
Supplemental schedule of non cash investing and financing activities:
   Non cash investing and financing activities:
     Conversion of debt and accrued interest to common stock                    $                     1,004,305
                                                                                --------------   --------------
Dividend payable on covenant default of convertible preferred stock             $      371,250   $         --
                                                                                --------------   --------------
Capitalization of financing fees                                                $         --     $      101,400
                                                                                --------------   --------------
Beneficial conversion feature of convertible debt                               $         --     $      127,242
                                                                                --------------   --------------
Beneficial conversion feature of preferred stock                                $       24,918   $         --
                                                                                --------------   --------------
Common stock issued for investor relations performed                            $        7,900   $         --
                                                                                --------------   --------------
</TABLE>

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


                                       F-6
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Simtrol, Inc., formerly known as VSI Enterprises, Inc., was incorporated in
Delaware in September 1988 and, together with its wholly-owned subsidiaries (the
"Company"), develops, markets, and supports software based audiovisual control
systems and videoconferencing products that operate on PC platforms. The company
operates at a single facility in Norcross, Georgia and its sales are primarily
in the United States.

On May 7, 2004, the Company effected a 1:10 reverse split of the Company's
common stock. All share amounts have been retroactively adjusted for all periods
presented.

NOTE 2 - GOING CONCERN UNCERTAINTY

As of December 31, 2005, the Company had cash and cash equivalents of $297,751.
The Company may not have sufficient funds for the next twelve months and has
relied on periodic investments in the form of common stock and convertible
preferred stock and convertible debt since the fourth quarter of 2001 to sustain
its operations. The Company currently requires substantial amounts of capital to
fund current operations and for the continued development and deployment of its
ONGOER product line. During 2005, the Company issued $1,350,000 of convertible
preferred stock (see note 6). During 2004, the Company issued $575,000 of
convertible debt (see Note 5) and sold 915,104 shares of its common stock for
aggregate net proceeds of $1,537,463 (see note 6). On February 15, 2006, the
Company sold various patents (see note 11). However, there can be no assurance
that the Company will be successful in its attempts to develop and deploy its
ONGOER and OnGuard product lines, to generate positive cash flows or raise
sufficient capital essential to its survival. To the extent that the Company is
unable to generate or raise the necessary operating capital, it will become
necessary to curtail operations. Additionally, even if the Company does raise
operating capital, there can be no assurance that the net proceeds will be
sufficient to enable it to develop its business to a level where it will
generate profits and positive cash flows.

These matters raise substantial doubt about the Company's ability to continue as
a going concern. However, the accompanying financial statements have been
prepared on a going concern basis, which contemplate the realization of assets
and satisfaction of liabilities in the normal course of business. The financial
statements do not include any adjustments relating to the recoverability of the
recorded assets or the classification of the liabilities that might be necessary
should the Company be unable to continue as a going concern.

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.

Loss Per Share
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share", requires the presentation of basic and diluted earnings per share
("EPS"). Basic EPS is computed by dividing loss available to common stockholders
by the weighted-average number of common shares outstanding for the period.
Diluted EPS includes the potential dilution that could occur if options or other
contracts to issue common stock were exercised or converted. The following
equity securities are not reflected in diluted loss per share because their
effects would be anti-dilutive:

                                         December 31, 2005     December 31, 2004
                                         -----------------     -----------------
Options                                          1,075,775               410,275
Warrants                                         4,937,880             2,792,436
Convertible Preferred Stock                      1,800,000                  --
                                         -----------------     -----------------
Total                                            7,813,655             3,202,711
                                         -----------------     -----------------

Accordingly, basic and diluted loss per share are identical.


                                       F-7
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

Stock-Based Compensation

SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure-an amendment of Financial Accounting Standards Board ("FASB")
Statement No. 123" amends SFAS No. 123, "Accounting for Stock-Based
Compensation", to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, SFAS No. 148 amends the disclosure requirements of
SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based compensation
and the effect of the method used on reported results. The Company continues to
follow the pro-forma disclosures for stock-based compensation as permitted in
SFAS No. 123. The following table illustrates the effect on net loss per share
as if the Company had applied the fair value recognition provisions of SFAS No.
123 to stock-based employee compensation:

                                                       Year Ended December 31,
                                                         2005           2004
                                                    ---------------------------

Net loss attributable to common shareholders,
as reported                                         ($ 2,362,220)  ($   898,803)

Add: stock-based employee compensation expense
determined under the intrinsic value method                 --             --
Less: stock-based employee compensation expense
determined under fair value-based methods for all
awards                                                  (208,308)      (166,285)

                                                    ---------------------------
Pro forma net loss                                  ($ 2,570,528)  ($ 1,065,088)
                                                    ===========================

Net loss per share, as reported                     ($      0.63)  ($      0.30)
Pro forma net loss per share - basic and diluted    ($      0.69)  ($      0.35)

Pro forma Information

      The fair value for the fiscal 2005 and 2004 options issued was estimated
at the date of grant using a Black-Scholes option-pricing using the following
weighted-average assumptions.

Assumptions                                         2005                  2004
                                           -----------------------------------

Risk-free rate                                      3.6%                 4.50%
Annual rate of dividends                               0                     0
Volatility range                                 77-109%                56-86%
Average life                                     5 years               5 years

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. The
Company's employee stock options have characteristics significantly different
from those of traded options and changes in the subjective input assumptions can
materially affect the fair value estimate. During 2005 and 2004, the weighted
average fair value per share of the options granted was $0.56 and $1.27,
respectively.


                                       F-8
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

The following summarizes the stock option transactions for the years ended
December 31, 2005 and 2004:

                                                                       Weighted
                                                                        Average
                                                                       Exercise
                                                        Options          Price
                                                       =========      ==========
Options outstanding at January 1, 2004                   137,525      $    13.20
Granted                                                  280,000      $     2.02
Exercised                                                   --              --
Terminated                                                (7,250)     $     8.22
                                                       =========
Options outstanding at December 31, 2004                 410,275      $     5.66


Granted                                                  690,000      $     0.71
Exercised                                                   --              --
Terminated                                               (24,500)     $     6.85
                                                       ---------
Options outstanding at December 31, 2005               1,075,775      $     2.46
                                                       =========

At December 31, 2005, 227,600 options remain available for grant under the
Company's 2002 Stock Option Plan.

The following table summarizes information about stock options outstanding at
December 31, 2005:

<TABLE>
<CAPTION>
                                              Options Outstanding                       Options Exercisable
                                ------------------------------------------------        -------------------
                                                       Weighted
                                                        Average      Weighted                          Weighted
                  Range of           Number            Remaining      Average          Number           Average
                  Exercise       Outstanding at       Contractual    Exercise      Exercisable at      Exercise
                    Price       December 31, 2005     Life (Years)     Price     December 31, 2005       Price
                 ------------   -----------------  ----------------------------- -----------------     --------
                <S>                <C>                  <C>           <C>               <C>             <C>
                   $0.55-$0.90       690,000            8.66           $0.71            140,000          $0.63
                   $1.10-$2.00       212,000            8.42           $1.96             74,500          $1.97
                   $2.25-$2.50        90,500            8.10           $2.31             82,333          $2.30
                   $3.40-$4.80        37,650            6.35           $4.33             30,890          $4.23
                  $9.10-$28.72        24,575            3.76          $17.29             24,575         $17.29
                $40.00-$147.48        21,050            3.99          $44.88             22,200         $44.88
                                -----------------                                -----------------
                                   1,075,775            8.28           $2.46            373,348          $5.15
                                =================                                =================
</TABLE>

Revenue Recognition

Revenues consist of the sale of software control devices, videoconferencing
systems and related maintenance contracts on these systems. The Company sold two
different products during 2005 and 2004: its PC-based software products, ONGOER
and OnGuard, and its older proprietary hardware and software product, Omega.
Revenue from the sale of hardware and software is recognized upon the transfer
of title when shipped. Revenue on maintenance contracts is recognized over the
term of the related sales contract. As of December 31, 2005, there was $19,144
of deferred revenue.

Cash and Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents. The Company has cash balances in banks in excess of the maximum
amount insured by the FDIC as of December 31, 2005.


                                       F-9
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

Allowance for Doubtful Accounts

The allowance for doubtful accounts  reflects  management's best estimate of the
probable  losses  inherent  in  the  account  receivable   balance.   Management
determines  the  allowance   based  on  known  troubled   accounts,   historical
experience, and other currently available evidence.

Property and Equipment

Property and equipment are stated at cost.  Depreciation  and  amortization  are
provided for in amounts  sufficient to relate the cost of depreciable  assets to
operations  over the shorter of their  estimated  useful  lives or lease  terms,
ranging from 3-10 years on a straight-line basis. Leasehold improvements made in
2002  were  amortized  over 36  months,  the  term of the  initial  lease on the
company's facility.

Software Development Costs

All  software  development  costs are  charged  to  expense  as  incurred  until
technological  feasibility  has  been  established  for  the  product.  Software
development costs incurred after technological  feasibility has been established
are  capitalized  and  amortized,  commencing  with product  release,  using the
greater  of the  income  forecast  method or on a  straight-line  basis over the
useful life of the product. Amortization expense charged to cost of revenues was
$0 and $69,406 for 2005 and 2004.  The Company did not  capitalize  any software
development costs during either 2005 or 2004 and all assets were fully amortized
by December 31, 2005.

Income Taxes

The Company accounts for income taxes using the liability method, which requires
the   determination  of  deferred  tax  assets  and  liabilities  based  on  the
differences  between the financial and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which  differences  are  expected to
reverse. Deferred tax assets are adjusted by a valuation allowance, if, based on
the weight of available  evidence,  it is more likely than not that some portion
or all of the deferred tax assets will not be realized.

At December 31, 2005, the Company has net operating loss carryforwards of
approximately $45,000,000 which expire through 2025. Pursuant to Section 382 of
the Internal Revenue Code regarding substantial changes in ownership,
utilization of these losses may be limited. Based on this and the fact that the
Company has generated operating losses through December 31, 2005, the deferred
tax asset of approximately $17,732,000 has been offset by a full valuation
allowance of $17,732,000.

Fair Value of Financial Instruments

Management believes that the carrying amounts of certain financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable and
accrued expenses approximate their fair values as of each balance sheet date
given the relatively short maturity of each of these instruments. The fair value
of the Company's debt approximates fair value based on borrowing rates currently
available to the Company for borrowings with comparable terms and conditions.

Gain on Debt Extinguishments

A gain of $716,299 was recorded during 2004 to reflect the payoffs of various
liabilities for less than their previously recorded balances. No similar debt
extinguishments took place during 2005.


                                      F-10
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Critical estimates include management's judgments
associated with: determination of an allowance for doubtful accounts receivable,
deferred income tax valuation allowance and the capitalization, depreciation and
amortization of certain long-term assets (primarily software development costs).
Actual results could differ from those estimates.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123R, "Share Based Payment." This statement is a revision of SFAS Statement
No. 123, "Accounting for Stock-Based Compensation" and supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance. SFAS No. 123R addresses all forms of share based payment ("SBP")
awards including shares issued under employee stock purchase plans, stock
options, restricted stock and stock appreciation rights. Under SFAS No. 123R,
SBP awards result in a cost that will be measured at fair value on the awards'
grant date, based on the estimated number of awards that are expected to vest.
Upon issuance, SFAS No. 123R required public companies that file as small
business issuers to apply SFAS No. 123R as of the beginning of the first annual
reporting period that begins after December 15, 2005.

The adoption of SFAS No. 123R will have an impact on the financial statements
whereby we will record a charge to earnings for the fair value of stock options
over the vesting period.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets." This Statement amends APB Opinion 29 to eliminate the exception for
nonmonetary exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. The provisions of SFAS No. 153 are effective for nonmonetary
asset exchanges occurring in fiscal periods beginning after June 15, 2005.
Earlier application is permitted for nonmonetary asset exchanges occurring in
fiscal periods beginning after December 16, 2004. The provisions of SFAS No. 153
should be applied prospectively.

The adoption of this pronouncement did not have a material effect on the
Company's consolidated financial statements.

In June 2005, the FASB issued SFAS No. 154, "Accounting Changes and Errors
Corrections, a replacement of APB Opinion No. 20 and SFAS No. 3." This statement
applies to all voluntary changes in accounting principle, and changes the
requirements for accounting for and reporting of a change in accounting
principle. SFAS No. 154 requires retrospective application to prior periods'
financial statements of a voluntary change in accounting principle unless it is
impractical. APB Opinion No. 20 previously required that most voluntary changes
in accounting principle to be recognized by including in net income of the
period of the change the cumulative effect of changing to the new accounting
principle. SFAS No. 154 improves the financial reporting because its
requirements enhance the consistency of the financial reporting between periods.
During the reporting period, the Company did not have any accounting changes or
error corrections.

In October 2004, the FASB ratified the consensus reached in Emerging Issues Task
Force ("EITF") Issue No. 04-8, "The Effect of Contingently Convertible Debt on
Diluted Earnings Per Share." The EITF states that contingently convertible
instruments, such as contingently convertible debt, contingently convertible
preferred stock, and other such securities should be included in diluted
earnings per share (if dilutive) regardless of whether the market price trigger
has been met. The consensus became effective for reporting periods ending after
December 15, 2004. The adoption of this pronouncement did not have a material
effect on the Company's consolidated financial statements.


                                      F-11
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

EITF Issue No. 05-4 "The Effect of a Liquidated Damages Clause on a Freestanding
Financial Instrument Subject to EITF Issue No. 00-19, "Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock " ("EITS No. 05-4") addresses financial instruments, such as stock
purchase warrants, which are accounted for under EITF 00-19 that may be issued
at the same time and in contemplation of a registration rights agreement that
includes a liquidated damages clause. The consensus for EITF No. 05-4 has not
been finalized. The adoption of this pronouncement is not expected to have an
impact on our Consolidated financial position, results of operations, or cash
flows.

In June 2005, the EITF reached consensus on Issue No. 05-6, "Determining the
Amortization Period for Leasehold Improvements" ("EITF 05-6"). EITF 05-6
provides guidance on determining the amortization period for leasehold
improvements acquired in a business combination or acquired subsequent to lease
inception. The guidance in EITF 05-6 will be applied prospectively and is
effective for periods beginning after June 29, 2005. EITF 05-6 did not have a
material impact on the Company's consolidated financial statements

In September 2005, the FASB ratified the EITF Issue No. 05-7, "Accounting for
Modifications to Conversion Options Embedded in Debt Instruments and Related
Issues.", which addresses whether a modification to a conversion option that
changes its fair value affects the recognition of interest expense for the
associated debt instrument after the modification, and whether a borrower should
recognize a beneficial conversion feature, not a debt extinguishment, if a debt
modification increases the intrinsic value of the debt (for example, the
modification reduces the conversion price of the debt).

In September 2005, the FASB ratified the EITF's Issue No. 05-8, "Income Tax
Consequences of Issuing Convertible Debt with a Beneficial Conversion Feature.",
which discusses whether the issuance of convertible debt with a beneficial
conversion feature results in a basis difference arising from the intrinsic
value of the beneficial conversion feature on the commitment date (which is
treated recorded in stockholder's equity for book purposes, but as a liability
for income tax purposes) and, if so, whether that basis difference is a
temporary difference under FASB Statement No. 109, "Accounting for Income
Taxes." Neither of these Issues have an effect on our consolidated financial
position or results of operations.

In April 2005, the FASB issued FASB Interpretation ("FIN") No. 47, "Accounting
for Conditional Asset Retirement Obligations." FIN No. 47 provides clarification
of certain sections of FASB Statement No. 143, "Accounting for Asset Retirement
Obligations." Specifically, FIN No. 47 clarifies the term conditional asset
retirement obligation used in SFAS No. 143 and also clarifies when an entity
would have sufficient information to reasonably estimate the fair value of an
asset retirement obligation. FIN No. 47 is effective no later than the end of
fiscal years ending after December 31, 2005. Management is currently evaluating
the provisions of FIN No. 47 and does not expect the adoption will have a
material impact on the Company's consolidated financial position, results of
operations or cash flows.

In January 2003, as revised December 2003, the FASB issued FIN 46 "Consolidation
of Variable Interest Entities, an Interpretation of ARB No. 51." FIN 46 requires
certain variable interest entities to be consolidated by the primary beneficiary
of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at the risk for the entity to finance its activities without additional
financial support from other parties. FIN 46 was to be applied to all variable
interest entities by the end of the first reporting period ending after December
31, 2004, for enterprises that are small business issuers. The adoption of this
pronouncement did not have a material effect on the Company's consolidated
financial statements.

On March 3, 2005 the FASB issued FASB Staff Position FIN 46 (R)-5, which
addresses whether a reporting enterprise should consider whether it holds an
implicit variable interest in a variable interest entity ("VIE") or a potential
VIE when specific conditions exist. Management has evaluated FASB Staff Position
FIN 46 (R)-5 and has determined that it has no impact on the Company's
consolidated financial statements.


                                      F-12
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of December 31, 2005:

         Machinery and equipment                            $      362,291
         Furniture and fixtures                                     39,150
         Leasehold improvements                                     21,318
                                                            --------------
                                                                   422,759
         Less accumulated depreciation and amortization           (401,395)
                                                                  --------
                                                            $       21,364
                                                            ==============

Depreciation and amortization expense was $36,086 and $42,376 for the years
ended December 31, 2005 and 2004, respectively, and is included in selling,
general and administrative expense in the accompanying consolidated statements
of operations.

NOTE 5 - CONVERTIBLE DEBT

On February 4, 2004, the Company completed the sale of convertible notes with a
principal balance of $575,000 ("2004 Debt"), in a private placement to a limited
number of accredited investors, including one Board member who purchased
$15,000. The Company raised a net total of $481,000 from the sale (offering fee
of $94,000 was capitalized as financing costs) and the proceeds of the offering
were used to fund current operational and overhead expenses. The interest rate
of the notes is 10% and the conversion price of the notes is $2.00 per share for
all principal and accrued interest. The due date of the notes was August 4, 2004
and the notes were convertible to shares of common stock at any time before that
date.

In conjunction with the issuance of the 2004 Debt, the Company also issued
warrants to the noteholders to purchase an aggregate of 287,500 shares of common
stock with an exercise price of $2.00 per share (fair value of the warrants was
$91,202). Each warrant enables the holder to purchase the same number of shares
as the holder would receive upon conversion of such holder's notes. The Company
also issued 169,000 warrants to Westminster Securities as a placement fee for
the financing (fair value of the Westminster warrants was $101,400). Noteholders
received additional warrants to purchase an aggregate of 575,000 shares of stock
(fair value of $179,789). Each warrant entitles the holder to purchase two
shares of common stock for each share the holder would receive upon conversion
of such holder's notes, but the warrants may only be exercised in the event a
holder actually elects to convert his or her notes into the Company's common
stock. The exercise price of the warrants is $2.00 per share of common stock.

Associated with this debt, a beneficial conversion feature of $127,242 was
recorded to reflect the discount on the 2004 Debt based on the relative fair
values of the warrants and conversion feature of the 2004 Debt.

All the above debt discounts were amortized to financing costs over the term of
the 2004 Debt, except for the $179,789 attributed to the 575,000 warrants that
could be exercised in the event of a conversion of the 2004 Debt. In June 2004,
$525,000 of the 2004 Debt was converted into 271,409 shares of common stock. As
a result, the Company recorded $164,155 of warrant value as debt conversion
expense. A total of $50,000 plus all applicable accrued interest was repaid
during June 2004 with proceeds from the sale of common stock. During 2004,
$219,144 was expensed as financing costs relating to the amortization of the
beneficial conversion feature and warrant value. Additionally, the

$101,400 capitalized as a financing fee for the warrants granted to Westminster
Securities was amortized over the life of the 2004 Debt. Approximately $33,800
of this amount was amortized as a financing expense prior to conversion and the
remaining $67,600 was expensed at the conversion date.



                                      F-13
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

In January 2004, the 2001 Debt was extended to December 31, 2004 and the debt
holders agreed to convert all principal and interest to common stock at the
close of the private placement of equity securities. Additionally, the Company
agreed to issue the debt holders warrants to purchase two shares of stock for
each share of stock created by conversion of the 2001 Debt, contingent upon the
conversion of the principal note and interest to common stock. All the principal
and interest of the 2001 Debt converted to 192,283 shares of common stock on
September 30, 2004. The Debt holders were granted warrants to purchase 384,566
shares of stock on the conversion date of the Debt at an exercise price of $2.00
per share. As a result, the Company recorded $81,488 of warrant value as debt
conversion expense on that date.

NOTE 6 - PRIVATE PLACEMENTS

During 2004, the Company issued 915,104 shares of its common stock for net
proceeds of approximately $1,537,000 (at prices ranging from $1.92-$2.00 per
share). The Company also issued warrants to purchase a total of 915,104 shares
of stock to these investors at exercise prices of $2.00 per share. Offering
costs totaled approximately $292,000.

During 2005, the Company issued 10,000 shares of restricted common stock valued
at $7,900 in exchange for investor relations services performed for the Company
by an investor relations consultant. The Company also issued 32,770 shares of
restricted stock valued at $26,700 to Board Members as compensation during 2005.
All amounts were recorded at the fair value of the stock on the date of the
issuances.

During 2005, the Company issued 450,000 units of securities, with each unit
consisting of: one share of Series A Convertible Preferred Stock, a warrant to
purchase two shares of common stock at an exercise price of $1.00 per common
share expiring in five years, and a warrant to purchase two shares of common
stock at an exercise price of $1.25 per common share expiring in five years, for
total gross proceeds of $1,350,000 (net proceeds of $1,162,396 after offering
costs including placement fees). The Certificate of Designation establishing the
terms of the Series A Convertible Preferred Stock included the following terms:

      o     the Holder may convert one share of the preferred stock into four
            shares of common stock at any time and without limitation; and

      o     without approval of a majority of the Series A Preferred Stock
            Holders, the Company cannot incur debt in excess of an aggregate of
            $1.0 million outside of trade debt in the normal course of business.
            Such debt may only be secured by accounts receivables and shall not
            encumber any copyrights, marketing materials, software code or any
            other proprietary technology, software or product processes, patents
            or patent licenses of the Company; and

      o     beginning the quarter ending December 31, 2005 and for every
            subsequent quarter the Series A Preferred Stock is outstanding, if
            the Company's net working capital (defined as current assets less
            current liabilities) is less than twenty five per cent (25%) of the
            total amount of gross proceeds raised in the Offering (defined as a
            "Quarterly Default"), then for each Quarterly Default, the Holders
            of the Series A Preferred Stock will receive additional shares of
            Series A Preferred Stock equal to 25% of the number of shares of
            Series A Preferred Stock held by the Holder at the time of the
            Quarterly Default. The net working capital will be tested on a
            quarterly basis, based on the Company's most recent Form 10-QSB or
            Form 10-KSB or other appropriate filing. At December 31, 2005, the
            Company failed to meet the net working capital test and a Quarterly
            Default will exist upon filing of this Form 10-KSB. As a result, the
            holders of the Series A Preferred Stock as of December 31, 2005 will
            receive an additional 112,500 shares of Series A Preferred Stock
            and, therefore, the Company recorded a dividend payable on the
            covenant default of convertible preferred stock of $371,250 as of
            December 31, 2005; and

      o     Series A Convertible Preferred shares have full voting rights on an
            "as converted" basis; and


                                      F-14
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

      o     the liquidation value of the Series A Preferred Stock is $3.00 per
            share, and if the Company at any time while the Series A Preferred
            Stock is outstanding, shall offer, sell, grant any option to
            purchase or offer, sell or grant any right to reprice its
            securities, or otherwise dispose of or issue (or announce any offer,
            sale, grant or any option to purchase or other disposition) any
            common stock or common stock equivalents entitling any person to
            acquire shares of common stock, at an effective price per share less
            than the then conversion price of $0.75, then the conversion price
            shall be reduced to equal the subsequent price. Exempt transactions
            for purposes of the repricing provision include the issuance of (a)
            shares of common stock or options to employees, officers or
            directors of the Company pursuant to any stock or option plan duly
            adopted by a majority of the non-employee members of the Board of
            Directors of the Company or a majority of the members of a committee
            of non-employee directors established for such purpose, and (b)
            securities issued pursuant to acquisitions or strategic
            transactions, provided any such issuance shall only be to a person
            which is, itself or through its subsidiaries, an operating company
            in a business synergistic with the business of the Company and in
            which the Company receives benefits in addition to the investment of
            funds, but shall not include a transaction in which the Company is
            issuing securities primarily for the purpose of raising capital or
            to an entity whose primary business is investing in securities.

A registration statement for the common shares that would result from conversion
of the Series A Preferred Stock and the warrants included in the above units was
filed and was declared  effective by the Securities  and Exchange  Commission on
October 3, 2005.  Upon  effectiveness  of that  registration  statement  for the
common shares that result from  conversion of Series A Preferred  Stock,  if the
Company  fails to deliver to the holder  the common  shares  resulting  from the
conversion  within three trading days, the Company shall pay to such holder,  in
cash,  as  liquidated  damages  and not as a penalty,  for each $3,000 of stated
value  of  Series  A  Preferred  Stock  being  converted,  $30 per  trading  day
(increasing  to $100 per trading day after three trading days and  increasing to
$120 per trading day six trading days after such damages begin to accrue).

In connection  with the issuance of the  securities  above,  $498,731 of the net
proceeds  received was  allocated  to the fair value of the warrants  granted to
purchase  1,800,000 shares of common stock, and a beneficial  conversion feature
of $624,918 was recorded to reflect the discount on the common shares that would
result  from the  conversion  of the  Series  A  Preferred  Stock,  based on the
relative  fair values of the  warrants  and  conversion  feature of the Series A
Preferred  Stock.  This  beneficial  conversion  feature is recorded as a deemed
dividend  to  the  preferred  stockholders  in  the  consolidated  statement  of
operations.

On July 15, 2005, the Company issued 345,444 warrants to Westminster Securities
as a placement fee for placing 364,004 units of the above financing. The
exercise price of the warrants is $0.75 per share of common stock and the
warrants have a five-year term.

On July 21, 2005, the Company granted options to purchase 275,000 shares of
stock to employees. On November 8, 2005, the Company granted options to purchase
an additional 275,000 shares of stock to employees. The options have a four-year
vesting period and were granted at exercise prices equal to the fair value of
the Company's common stock on those dates.

On December 29, 2005 the Company received a $12,000 deposit from an investor in
a potential private placement that was canceled. The $12,000 was returned to the
investor in January 2006.


                                      F-15
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

NOTE 7 - STOCK WARRANTS

The Company has stock purchase warrants for 4,937,880 shares of common stock
outstanding at December 31, 2005. A rollforward of the warrant totals for 2005
and 2004 is as follows:

                                                           2005          2004
                                                       ------------------------
Warrants outstanding at beginning of year               2,792,436       303,496
Granted                                                 2,145,444     2,656,311
Exercised                                                    --            --
Terminated                                                   --        (167,371)
                                                       ------------------------
Warrants outstanding at December 31                     4,937,880     2,792,436
                                                       ========================

The range of exercise prices of the warrants was $0.75 to $7.50 and the weighted
average exercise price was approximately $1.49 at December 31, 2005. The range
of exercise prices of the warrants was $2.00 to $7.50 and the weighted average
exercise price was approximately $2.08 at December 31, 2004.

NOTE 8- MAJOR CUSTOMERS

Revenue from two customers of $57,571 and $24,850 comprised approximately 66% of
our consolidated revenues for 2005. At December 31, 2005, related accounts
receivable from these customers comprised 35% of consolidated receivables.

Revenue from one customer totaled $478,533, or approximately 85% of consolidated
revenues for 2004.

Management believes that concentration of credit risk with respect to trade
receivables is minimal due to the composition of the customer base. The end
users for the company's products are primarily large national and multinational
companies and agencies of the U.S. government. Allowances are maintained for
potential credit losses, and such losses have been within management's
expectations.

NOTE 9 - OPERATING LEASES

The Company leases office space and equipment under noncancellable operating
leases expiring at various dates through 2007.

The following is a schedule of future minimum lease payments required under
operating leases that have remaining initial or noncancellable lease terms as of
December 31, 2005:

Year Ending
2006 ................................................  46,184
2007 ................................................   1,862
                                                     --------
Total ...............................................$ 48,046
                                                     ========

Rent expense for the years ended December 31, 2005 and 2004 was $46,822 and
$58,370, respectively.

NOTE 10- LITIGATION


                                      F-16
<PAGE>


                         SIMTROL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2005 and 2004

On May 1, 2003, Citibank (West), FSB, filed suit in San Diego Superior Court,
North County Division, against one of the Company's subsidiaries, Quality
Software Associates, Inc. ("QSA"), and Mark Scovel, the individual from whom we
acquired QSA in March 2001. On June 24, 2003, Mr. Scovel filed a cross-complaint
against QSA and Simtrol, Inc. claiming that Simtrol had assumed the debt in
connection with its acquisition of QSA. In April 2004, the Company and QSA
settled its pending lawsuit with Citibank (West) and Mr. Scovel. The aggregate
claims paid in the settlement were approximately $46,000 and all amounts were
recorded as legal expense in 2004.

The Company is not currently involved in any legal proceedings nor was it
involved in any legal proceedings during 2005.

NOTE 11 - SUBSEQUENT EVENTS

On February 15, 2006 Simtrol formed a joint venture with Integrated Digital
Systems, LLC ("IDS"), a multifaceted integrator based in Livonia, Michigan to
develop and sell a judicial arraignment software solution based on the success
of a deployment in Oakland County, Michigan. The new joint venture, Justice
Digital Solutions L.L.C., a Michigan limited liability company ("JDS"), is
headquartered in Sterling Heights, Michigan, with its development staff and
testing center located in Norcross, Georgia.

Under the JDS operating agreement, IDS and Simtrol each own fifty percent of
JDS. Simtrol Chief Executive Officer Richard Egan and IDS Chief Executive
Officer Robert Deuby will serve as JDS' two Managers. In addition, Mr. Egan will
serve as JDS' initial Chief Executive Officer and Mr. Deuby will serve as JDS'
initial Chief Operating Officer. Stephen Samp, Chief Financial Officer of
Simtrol, will serve as JDS' initial Chief Financial Officer.

IDS will contribute to JDS all of IDS' interest in a software license agreement
between IDS and the County of Oakland, Michigan Constitutional Corporation,
including the exclusive worldwide rights to copy, modify, market, distribute,
and sublicense the software developed pursuant to the software license agreement
(the "OakVideo Software"). Simtrol will contribute to JDS a non-exclusive,
worldwide, royalty-free license to integrate, copy, modify, market, distribute
and sublicense Simtrol's ONGOER and OnGuard software for use with and into the
OakVideo Software, and Simtrol will transfer to JDS any and all exclusive
worldwide rights to copy, modify, market, distribute, and sublicense certain
digital court recording software under development by Simtrol. JDS will
initially launch a judicial arraignment solution based on the integration of
Simtrol's products with the OakVideo Software.

On February 15, 2006, Simtrol, Inc. and Acacia Patent Acquisition Corporation
("Acacia") entered into an agreement pursuant to which Simtrol sold to Acacia
U.S. Patent No(s). 5515099, 5526037, 5528289, 5568183, 5583565, and 5598209 (the
"Patents"). The patents relate primarily to remote control of video cameras and
other devices used in areas such as videoconferencing and surveillance systems.
The uses of the patented technology include improved remote management of video
camera functions such as pan, tilt, and focus, and improved device control in a
networked videoconferencing system.

Under the terms of the agreement, Simtrol will receive an initial payment of
$250,000 thirty days after the date of the agreement and will receive ongoing
royalty payments of twenty percent of the net proceeds received by Acacia in
connection with (i) the licensing by Acacia of the patented technology to third
parties and (ii) any successful patent infringement action commenced by Acacia
with respect to the Patents, provided that Acacia shall be entitled to fully
recoup the initial payment prior to making any royalty payments to Simtrol.

On February 23, 2006, two holders of Company's Series A Preferred Stock elected
to convert 65,334 shares of Series A Preferred Stock to common stock pursuant to
the conversion terms of the Company's Series A Preferred stock. The Company
issued them 261,336 shares of common stock on that date in exchange for their
Series A Preferred Stock.


                                      F-17