**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**FORM
      10-KSB**




(Mark
      One)




x Annual
      Report Pursuant To Section 13 or 15(d) Of the Securities Exchange Act Of
      1934




For
      the
      fiscal year end **June
      30, 2007**




 ̈ Transition
      Report under Section 13 or 15(d) Of the Securities Exchange Act Of 1934




For
      the
      transition period from _____ to _____




**COMMISSION
      FILE NUMBER** **033-24138-D**




**BRENDAN
      TECHNOLOGIES, INC.**


(Name
      of
      small business issuer in our charter)




**NEVADA**
            
            **38-3378963**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)**2236
                Rutherford Rd., Suite 107****Carlsbad,
                California**
            
            **92008**(Address
                of principal executive offices)
            
            (Zip
                Code)




Issuer's
      telephone number **(760)
      929-7500**




Securities
      registered under Section 12(b) of the Exchange Act: **NONE.** ****




Securities
      registered under Section 12(g) of the Exchange Act:




**COMMON
      STOCK, $0.004995 PAR VALUE PER SHARE.** ****




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act  ̈




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




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




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




Revenues
      for the fiscal year ended June 30, 2007 were **:
      $521,330.**




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold as of **September
      25, 2007**  **was**  **$2,975,405** . ****




State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date. **As
      of September 25, 2007 the issuer had 23,705,594**  **shares
      of Common Stock outstanding.**




Transitional
      Small Business Disclosure Format (Check one): Yes  ̈  **** No **** **x**







**Annual
      Report on Form 10-KSB**


**for
      the Year Ended June 30, 2007**




**TABLE
                  OF CONTENTS**PagePART
                  IITEM
                  1.
              Description
                  of Business
              3ITEM
                  2.
              Description
                  of Property
              6ITEM
                  3.
              Legal
                  Proceedings
              6ITEM
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              7PART
                  IIITEM
                  5.
              Market
                  for Common Equity, Related Stockholder Matters and SmallBusiness
                  Issuer Purchases of Equity Securities
              7ITEM
                  6
              Management's
                  Discussion and Analysis or Plan of Operation
              8ITEM
                  7.
              Financial
                  Statements
              17ITEM
                  8.
              Changes
                  in and Disagreements with Accountants on
                Accounting
                  and Financial DisclosureITEM
                  8A
              Controls
                  and Procedures
              18ITEM
                  8B.
              Other
                  Information
              18PART
                  IIIITEM
                  9.
              Directors,
                  Executive Officers, Promoters and Control Persons; Compliance with
                  Section
                  16(a) of the Exchange Act
              18ITEM
                  10.
              Executive
                  Compensation
              20ITEM
                  11.
              Security
                  Ownership of Certain Beneficial Owners and Management
                and
                  Related Stockholder Matters
              22ITEM
                  12.
              Certain
                  Relationships and Related Transactions
              24ITEM
                  13.
              Exhibits
              24ITEM
                  14.
              Principal
                  Accountant Fees and Services
              27




2




**DISCLOSURE
      REGARDING FORWARD-LOOKING STATEMENTS**




Certain
      statements contained in this Annual Report on Form 10-KSB constitute
      "forward-looking statements". These statements, identified by words such as
      “plan”, "anticipate", "believe", "estimate", "should," "expect" and similar
      expressions, include our expectations and objectives regarding our future
      financial position, operating results and business strategy. These statements
      reflect the current views of management with respect to future events and are
      subject to risks, uncertainties and other factors that may cause our actual
      results, performance or achievements, or industry results, to be materially
      different from those described in the forward-looking statements. Such risks
      and
      uncertainties include those set forth under the caption "Management's Discussion
      and Analysis or Plan of Operation" and elsewhere in this Form 10-KSB. We advise
      you to carefully review the reports and documents we file from time to time
      with
      the Securities and Exchange Commission (“SEC”), particularly our quarterly
      reports on Form 10-QSB and our current reports on Form 8-K.




As
      used
      in this annual report, the terms "we", "us", "our", Brendan”, and the “Company”
mean Brendan Technologies, Inc., unless otherwise indicated.




**PART
      I**




**ITEM
      1.     DESCRIPTION OF
      BUSINESS.**




**The
      Company**





On
      September 15, 2006, we changed our name to Brendan Technologies, Inc., a Nevada
      corporation (“Brendan”) from Omni U.S.A., Inc., a Nevada corporation (“Omni”).
      On December 29, 2005, Omni merged with Brendan Technologies, Inc., a Michigan
      corporation formed
      on
      October 31, 1997 doing business as Brendan Scientific Corporation (“Brendan Sub”). Brendan Sub became the surviving corporation in the merger and
      a wholly-owned subsidiary of Omni. Brendan Sub continues its corporate existence
      under the laws of the State of Michigan and is Brendan’s only subsidiary.




Concurrently
      with the merger, 4,754,709 shares
      of
      Brendan Sub common stock outstanding immediately before the merger were
      converted into 19,018,836 shares
      of
      Brendan, a four for one ratio. Also concurrently with the merger, (i) 4,352,879 shares
      of
      Brendan common stock were issued to the holders of Brendan Sub Senior and Bridge
      Notes totaling $ 2,654,198 in
      aggregate principal and interest, a conversion rate of 1.64 shares per $1.00
      under such debt; and (ii) 900,000 shares of Brendan common stock was issued
      to
      individuals who participated in the arrangement of the merger.




Common
      stock options and warrants exercisable into 973,500 shares
      of
      Brendan Sub before the merger became exercisable into 3,894,000 common
      shares of Brendan after the merger. The exercise price of the Brendan stock
      options and warrants was adjusted to 25% of the exercise price of the Brendan
      Sub stock options and warrants.




We
      are a
      software company that designs, develops and markets computational analytical
      software products for the laboratory testing industry. Brendan’s laboratory
      workflow and analysis software platform manages the raw, computed and analytical
      data in testing laboratories and in manufacturing.




Brendan
      evolved from the initial work of our founder John R. Dunn II, Ph.D., now our
      Chairman, President, Chief Executive Officer and Chief Technical Officer.
      Brendan’s first commercialized product is StatLIA®, software designed
      specifically for immunoassay testing. Since Dr. Dunn’s early work on StatLIA®
over ten years ago, StatLIA® has been developed with software engineers,
      mathematicians and laboratory professionals who specialize in laboratory
      testing. Over the years, StatLIA® has been used in laboratories, undergoing
      numerous revisions and additions to develop the product.




3




There
      can
      be no assurance that we can achieve profitable operations, and we will need
      additional financial resources during the next twelve months.




**StatLIA®**




Immunoassays,
      one of the world’s largest and fastest growing testing technologies, is used to
      test for metabolites found in AIDS, hepatitis, cancer, environmental pollutants,
      side effects of new drugs and thousands of other biological and environmental
      substances. Immunoassays are a broadly applicable technology allowing low cost,
      rapid analysis through high throughput testing. Immunoassays are used
      extensively in pharmaceutical, hospital, clinical reference, academic and
      industrial research, environmental, agricultural, food processing and
      veterinarian laboratories throughout the world.





StatLIA®
      uses comprehensive statistics to directly or indirectly analyze the performance
      of each of the nine immunoassay components (label, tracer, antibody, buffer,
      incubation, separation, standards, controls and unknowns). StatLIA® stores a
      fixed set of stable reference assays which are statistically compared to a
      single assay or multiple assays to detect changes in reagents or incubation
      conditions. With a reference set of at least two assays, standard curve and
      control specimen parameters in the current assay are statistically compared
      to
      the same parameter in the reference assays to identify any statistically
      significant differences.





StatLIA®
      is intended to address the following:





·  *Insufficient
      Quality* - Error
      rates in Immunoassay testing is estimated to be as high as 4%. Testing errors
      and the inability to directly locate error sources is costly and time consuming.
      We believe that StatLIA® will reduce the error rates and enhance the tester’s
      ability to locate the error source.





·  *Lack
      of Automation* -
      Immunoassay testing is very labor intensive due to many manual steps in the
      processing, tracking and analysis of the data produced. With high throughput
      testing becoming the industry norm, the data needs to be managed with even
      greater efficiency. We believe that StatLIA® will reduce such labor costs.





·  *Regulatory
      Compliance* -
      Federal regulations are placing increasing demands for compliance with the
      Food
      and Drug Administration’s (“ **FDA** ”)
      quality assurance regulations. We believe that StatLIA® will meet the growing
      need for automated software that can assist laboratories in complying with
      the
      regulations.





·  *Need
      for Better Data Management* -
      Improved technologies have allowed greater automation in Immunoassay testing,
      increasing throughput volumes but requiring better connectivity and
      standardization for the management of the data generated. We believe that
      StatLIA® will address the need for greater connectivity and
      standardization.





Brendan
      first targeted the immunoassay market with StatLIA® because it is a fragmented
      and large market that may allow Brendan to sell our software to testing
      equipment distributors and original equipment manufacturers (“ **OEM** s”),
      and
      earn a share of business from large organizations.





Users
      of
      StatLIA® include device and reagent manufacturers, pharmaceutical companies,
      clinical diagnostic centers and government testing laboratories. Distributors
      of
      StatLIA® include device and reagent manufacturers and their distributors, as
      well as Brendan’s direct sales force.





**Customer
      Base**





We
      have
      used most of our capital to date in the development of StatLIA® and the
      expansion of the program to encompass all of the differing immunoassay
      technologies and workflow configurations found in research and clinical
      laboratories. Existing customers who have used StatLIA® in laboratories
      include several large pharmaceutical companies, clinical diagnostic
      organizations, reagent manufacturers and research entities. This client base
      also serves as a source of revenue for additional instruments and workstations,
      and support and maintenance renewal fees.




4




Many
      of
      our institutional clients operate under rigorous FDA regulations, or the
      European equivalent, and the FDA requires that new software products be
      validated.




**Strategy**





*Industry
      Analysis*





Using
      data obtained from Morgan Stanley Dean Witter, Global Industry Analysts, and
      other published industry and marketing reports, and instrument manufacturer
      sales figures, we estimate this market to represent over $1 billion in
      revenue and does not include the food processing, agricultural, veterinarian,
      or
      the rapidly expanding environmental immunoassay markets. This also does not
      include software applications for other technologies. According to the Health
      Industry Manufacturer’s Association, more than $50 billion in medical devices,
      diagnostic products and health information systems are currently purchased
      annually in the United States and more than $120 billion worldwide. This
      represents only the clinical market segment and not pharmaceutical, research,
      environmental and other segments.





Conventional
      laboratory software falls into two primary areas: laboratory management or
      instrumentation. Laboratory management software handles billing, report
      generation, and other administrative tasks. The software is not designed for
      complex technical computation. Software for the testing instruments operates
      as
      dedicated systems and is basically designed only to generate results. It is
      not
      designed for the complete statistical analysis and data management and record
      keeping requirements for pharmaceutical, clinical or research labs, nor is
      it
      designed to exist in a cooperative environment with other immunoassay
      instruments.





StatLIA®
      was introduced to meet this need, which we believe no other commercial software
      available meets. By using StatLIA® for their assay validation and documentation
      as well as standardizing on it as one uniform system throughout their
      organization, pharmaceutical companies may save substantial time and resources
      supplying the necessary documentation to get new drugs to market and clinical
      laboratories may increase productivity and reliability while reducing costs.





*Market*





We
      believe that through Brendan we have the opportunity to introduce a product
      to
      serve an under-served niche market: the software used in biomedical and
      non-biomedical testing laboratories. The testing industry generates more than
      $100 billion in revenues each year to run tests for drug development, medical
      diagnostics and treatments, water and soil samples, infectious disease research,
      food contaminants, and numerous other health and industry-critical applications.





Brendan
      has focused on the analytical segment of the market. This is the computation,
      storage and analysis of the raw signal data generated by a testing instrument.
      However, the majority of the software used to analyze these tests is a part
      of
      the instrument software that is provided by the instrument manufacturer. These
      routines do not provide all of the capabilities and are not as extensive as
      the
      data currently computed by StatLIA®.





StatLIA®
      allows laboratories to interface all of their immunoassay testing instruments
      into one uniform system. As one system, as compared to the more common
      configurations consisting of isolated testing instruments, the StatLIA® system
      can be easily interfaced to our customer’s main database for reporting patient
      results and recording clinical trial data, among other processes. The system
      also integrates into a laboratory’s network, so that multiple computers can be
      used to prepare, compute, analyze and report all assay data, thereby increasing
      workflow. StatLIA®’s superior quality control process not only determines the
      accuracy of the test more reliably than other software currently available,
      but
      also pinpoints the specific cause of a problem in a bad test, dramatically
      reducing laboratory downtime and reagent costs.




5




*Competition*





Almost
      all immunoassay software is produced and sold by manufacturers bundled with
      their instruments. The software is included to stimulate sales of their
      instruments and is not usually marketed as a stand-alone product.
      Conventional laboratory software falls into two primary areas: laboratory
      management or instrumentation functionality. Laboratory management software
      handles billing, report generation and other administrative tasks. The software
      is not designed for complex technical computation. On the other hand, software
      for testing instruments operates as a dedicated system and is designed primarily
      to generate testing data. This software has limitations meeting the complete
      statistical analysis, data management, data utilization and record keeping
      demands of pharmaceutical, clinical or research labs, nor is it designed to
      exist in a cooperative environment with other testing instruments.





Prior
      to
      Brendan, we believe that no company has focused as extensively on the gap
      between instrument operational software and administrative LIM software. Brendan
      has worked with several industry-leading labs to develop StatLIA® and we believe
      that StatLIA® is a unique software product that surpasses any software currently
      available for this market.





To
      date,
      the majority of StatLIA® sales have been replacing existing OEM software on
      testing equipment. This software, bundled with the instruments, is Brendan’s
      current main competition. Existing equipment-specific software include Softmax,
      used for Molecular Device’s microplate readers and Gen5 used for BioTek
      Instrument’s microplate readers. We believe instrument manufacturers are
      excellent prospects for distribution agreements to incorporate or bundle our
      software with their instruments.




**Intellectual
      Property**





We
      attempt to protect the proprietary aspects of our products with copyrights,
      trade secret law and internal nondisclosure safeguards. The source code for
      the
      software contained in our products is considered proprietary and we do not
      furnish source code to our customers. We have also entered into confidentiality
      agreements with our employees. Despite these restrictions, it may be possible
      for competitors or users to copy aspects of our products or to obtain
      information that we regard as a trade secret.





There
      is
      a rapid pace of technological change in the software industry, which in turn
      compels us to continually enhance and extend our product lines. We believe
      that
      patent, trade secret and copyright protection is less significant to our
      competitive position than factors such as the knowledge, ability and experience
      of our personnel, new product development, frequent product enhancements, name
      recognition and ongoing, reliable product maintenance and support.




**Employees**




Brendan
      currently has 14 full time employees and two part time consultants. Brendan
      has
      entered into employment agreements with certain of our employees.




**ITEM
      2.**  **DESCRIPTION
      OF PROPERTY.**




We
      conduct our corporate functions and manufacturing, product development, sales
      and marketing activities in Carlsbad, California. We rent 3,988 square feet
      of
      office space at 2236 Rutherford Road, Suite 107, Carlsbad, California 92008
      under a two-year lease ending May 31, 2008 for a monthly rent ranging from
      $4,825 for the first year increasing to $4,985 for the second year. The average
      monthly rent for the two-year period is $4,905. This space is adequate to meet
      our foreseeable future needs.




**ITEM
      3.     LEGAL PROCEEDINGS.**




None.




6




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




None.




**PART
      II**




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




Our
      Common Stock is traded in the over-the-counter market and is quoted on the
      NASD
      OTC Bulletin Board system maintained by the National Association of Securities
      Dealers, Inc. Prices reported represent prices between dealers, do not include
      markups, markdowns or commissions and do not necessarily represent actual
      transactions. The market for our shares has been sporadic and at times very
      limited.





The
      following table sets forth the high and low closing price for the Common Stock
      for the fiscal years ended June 30, 2007 and 2006. Closing prices previous
      to
      the reverse merger date of December 29, 2005, are reflective of the closing
      prices for the predecessor corporation.




**Closing
                  Price****High**
              
              **Low**Fiscal
                  Year Ended June 30, 2007First
                  Quarter
              
              $
              0.50
              
              $
              0.21Second
                  Quarter
              
              $
              1.01
              
              $
              0.40Third
                  Quarter
              
              $
              0.60
              
              $
              0.35Fourth
                  Quarter
              
              $
              0.51
              
              $
              0.37Fiscal
                  Year Ended June 30, 2006First
                  Quarter
              
              $
              1.85
              
              $
              1.36Second
                  Quarter
              
              $
              1.75
              
              $
              1.10Third
                  Quarter
              
              $
              1.20
              
              $
              0.60Fourth
                  Quarter
              
              $
              0.68
              
              $
              0.25




We
      had
      approximately 715 shareholders of record as of September 25, 2007. Because
      most
      of our common stock is held by brokers and other institutions on behalf of
      stockholders, we are unable to estimate the total number of beneficial owners
      represented by these record holders. We have never paid a cash dividend on
      our
      common stock and do not expect to pay one in the foreseeable
      future.




**Recent
      Sale of Unregistered Securities**





During
      June 2007, we sold to and received cash from a group of investors 8% Convertible
      Debentures for an aggregate $175,000 and common stock purchase warrants to
      purchase up to 700,000 common shares.




7


Issuance
              
              
              
              Number
                  of Shares
              
              Maturity8%
                  Convertible Debentures
              
              Date
                  of
              
              Amount
                  of
              
              May
                  Be Converted
              
              Date
                  ofDebenture
                  holder
              
              Debenture
              
              Debenture
              
              Into
              
              DebentureDerek
                  Duchein, IRA Account
              
              
              6/6/2007
              
              $
              90,000
              
              
              180,000
              
              
              6/6/2009Julie
                  Duchien, IRA Account
              
              
              6/6/2007
              
              $
              60,000
              
              
              120,000
              
              
              6/6/2009Bryan
                  Holland
              
              
              6/11/2007
              
              $
              25,000
              
              
              50,000
              
              
              6/11/2009$
              175,000
              
              
              350,000Common
                  Stock Purchase WarrantsName
              
              
              Date
                  of Issuance
              
              
              Number
                  of Shares
              
              
              Exercise
                  Price
              
              
              Expiraton
                  DateDerek
                  Duchein, IRA Account
              
              
              6/6/2007
              
              
              180,000
              
              $
              0.60
              
              
              6/6/2012
              
              
              DebentureJulie
                  Duchien, IRA Account
              
              
              6/6/2007
              
              
              120,000
              
              $
              0.60
              
              
              6/6/2012
              
              
              DebentureBryan
                  Holland
              
              
              6/11/2007
              
              
              50,000
              
              $
              0.60
              
              
              6/11/2012
              
              
              DebentureDerek
                  Duchein, IRA Account
              
              
              6/6/2007
              
              
              180,000
              
              $
              1.00
              
              
              6/6/2008
              
              
              DebentureJulie
                  Duchien, IRA Account
              
              
              6/6/2007
              
              
              120,000
              
              $
              1.00
              
              
              6/6/2008
              
              
              DebentureBryan
                  Holland
              
              
              6/11/2007
              
              
              50,000
              
              $
              1.00
              
              
              6/11/2008
              
              
              Debenture700,000




With
      respect to the above securities issuances, the Registrant relied on exemptions
      provided by Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”) and Rule 506 under the Securities Act. No advertising or
      general solicitation was employed in offering the securities. The securities
      were issued to a limited number of persons all of whom were accredited investors
      as that term is defined in Rule 501 of Regulation D under the
      Securities Act. All were capable of analyzing the merits and risks of their
      investment, acknowledged in writing that they were acquiring the securities
      for
      investment and not with a view toward distribution or resale, and understood
      the
      speculative nature of their investment. All securities issued contained a
      restrictive legend prohibiting transfer of the shares except in accordance
      with
      federal securities laws.




**ITEM
      6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.**




**Overview**




Brendan
      completed a reverse merger transaction on December 29, 2005 with Brendan Sub,
      a
      Michigan corporation formed in October 1997. Prior to the merger, Omni, through
      its wholly-owned subsidiary, Omni U.S.A., Inc., a Washington corporation
      ("Omni-Washington") and Omni-Washington's wholly-owned subsidiary, Omni
      Resources, Ltd., a Hong Kong company ("Omni Resources"), through its
      wholly-owned manufacturing facility, Shanghai Omni Gear Co., Ltd.("Shanghai
      Omni
      Gear"), designed, developed, manufactured and distributed power transmissions
      (also known as "gearboxes" or "enclosed gear drives") for use in agricultural,
      industrial, "off-highway" and construction equipment. Omni, through another
      wholly-owned subsidiary, Butler Products Corporation, designed, developed,
      manufactured and distributed trailer and implement jacks and couplers, which
      included light and heavy-duty jacks and couplers used in a variety of trailers.
      Immediately following the closing of the merger, the subsidiaries of Omni were
      sold to its founders and Brendan Sub became the only wholly owned subsidiary
      of
      Omni, the public company which was renamed Brendan Technologies, Inc, a Nevada
      corporation, in September 2006. Brendan Sub continues to be the only operating
      subsidiary of Brendan Technologies, Inc.





**Critical
      Accounting Policies and Estimates**





The
      preparation of consolidated financial statements in accordance with accounting
      principles generally accepted in the United States requires us to make estimates
      and judgments that affect the reported amounts of assets, liabilities, revenues
      and expenses, and related disclosure of contingent assets and
      liabilities.





On
      an
      ongoing basis, we evaluate our estimates, including those related to our product
      returns, bad debts, intangible assets, long-lived assets and contingencies
      and
      litigation. We base our estimates on historical experience and on various other
      assumptions that are believed to be reasonable under the circumstances, the
      results of which form the basis for making judgments about the carrying values
      of assets and liabilities that are not readily apparent from other sources.
      Actual results may differ from these estimates under different assumptions
      or
      conditions.




8




We
      have
      identified two accounting policies that we believe are key to an understanding
      of our financial statements. These important accounting policies require
      management's most difficult, subjective judgments .





*1.
      Revenue Recognition*


We
      recognize revenues related to software licenses and software maintenance in
      accordance with the American Institute of Certified Public Accountants (“AICPA”)
      Statements of Position (“SOP”) No. 97-2, “Software Revenue Recognition,” as
      amended by SOP No. 94-4 and SOP No. 98-9. We follow the guidance established
      by
      the SEC in Staff Accounting Bulletin No. 104, as well as generally accepted
      criteria for revenue recognition, which require that, before revenue is
      recorded, there is persuasive evidence of an arrangement, the fee is fixed
      or
      determinable, collection is reasonably assured, and delivery to our customer
      has
      occurred. In addition, our invoices may include multiple elements that identify
      vendor specific objective evidence of fair value for each of those elements.
      We
      recognize revenue as follows:





Software-
      our software is sold with an indefinite license period, and as such, product
      revenue is recorded at the time of the customer’s acceptance (generally 30 days
      after shipment which allows for a 30 day return guarantee if the customer is
      not
      satisfied with the product), net of estimated allowances and returns.





Post-contract
      customer support- (“PCS”) obligations are generally for annual services and are
      recognized over the period of service. Revenues for which payment has been
      received are treated as deferred revenue until services are provided and
      revenues have been earned.





Training
      and service calls- recognized at the time training or service calls are
      provided.





Royalties-
      we recognize revenue from royalties only after the cash has been collected
      (typically 30 days after the end of the quarter on which the royalty payment
      is
      based.)





Licensing-
      we also derive license revenue from fees for the transfer of proven and reusable
      intellectual property components. Generally, these payments will include a
      nonrefundable technology license fee, which will be payable upon the transfer
      of
      intellectual property. License fees will be recognized upon the execution of
      the
      license agreement and transfer of intellectual property provided no further
      significant performance obligations exist and collectibility is deemed probable.





Customization
      revenue- fees related to software service contracts to aid customers in adapting
      such intellectual property to their particular instruments, which will be
      performed on a best efforts basis and for which we will receive periodic
      milestone payments, will be recognized as revenue over the estimated development
      period, using a cost-based percentage of completion method.





*2.
      Going Concern*


The
      financial statements have been prepared on a going concern basis. However,
      during the years ended June 30, 2007 and 2006, we incurred net losses of
      $2,110,698 and $845,393, respectively, and had an accumulated deficit of
      $8,352,407 and $6,241,709, at June 30, 2007 and 2006, respectively. In addition,
      at June 30, 2007, we had a working capital deficit of $1,679,643 and are in
      default on $225,382 of debt and interest. Our ability to continue as a going
      concern is dependent upon our ability to generate profitable operations in
      the
      future and/or to obtain the necessary financing to meet our obligations and
      repay our liabilities arising from normal business operations when they come
      due. The outcome of these matters cannot be predicted with any certainty at
      this
      time and as such raise substantial doubt as to our ability to continue as a
      going concern. Since inception, we have satisfied our capital needs through
      debt
      and equity financings and expect to continue to fund from these sources until
      profitability is achieved. There can be no assurance that funds will be
      available at terms favorable to us or that future profitability can be
      achieved.




**Results
      of Operations**




On
      December 29, 2005, we completed the acquisition of substantially all the assets
      of Brendan Sub pursuant to the Merger Agreement and completed the disposition
      of
      substantially all the assets of Omni-Washington and Butler pursuant to the
      Stock
      Purchase Agreement. As a result of these transactions and the issuance of common
      stock to the shareholders, noteholders and individuals who assisted in the
      merger, Brendan Sub, a now wholly-owned subsidiary of ours, became the
      accounting acquirer and the transaction was accounted for as a reverse merger
      acquisition.




9




*Year
      Ended June 30, 2007 Compared to the year ended June 30, 2006*




**Selected
      Financial Information**




Year
                Ended
            
            Year
                Ended
            
            IncreaseJune
                30, 2007
            
            June
                30, 2006
            
            (Decrease)%
            
            %Statements
                of OperationsRevenues
            
            $
            521,330
            
            $
            681,337
            
            $
            (160,007
            )
            
            -23.5
            %Selling
                expenses
            
            
            101,296
            
            
            103,190
            
            
            (1,894
            )
            
            -1.8
            %General
                and administrativeexpenses
            
            
            2,115,310
            
            
            1,215,966
            
            
            899,344
            
            
            74.0
            %Other
                income
            
            
            (38,121
            )
            
            -
            
            
            (38,121
            )
            
            NMInterest
                expense
            
            
            453,543
            
            
            207,574
            
            
            245,969
            
            
            118.5
            %Total
                expenses
            
            
            2,632,028
            
            
            1,526,730
            
            
            1,105,298
            
            
            72.4
            %Net
                (loss)
            
            $
            (2,110,698
            )
            $
            (845,393
            )
            $
            (1,265,305
            )
            
            149.7
            %Net
                (loss) per basic anddiluted
                share
            
            $
            (0.09
            )
            $
            (0.06
            )
            $
            (0.03
            )
            
            50.0
            %




Revenue




Revenue
      for the year ended June 30, 2007 decreased $160,007, 23.5%, to $521,330 compared
      to $681,337 for the year ended June 30, 2006. The primary reason for the sales
      decrease was during the year ended June 30, 2006 we received a pre-release
      order
      amounting to approximately $127,000 for a minor segment of our upgraded version
      of the StatLIA® software. No similar licenses were received during the current
      fiscal year. In addition, revenue has been negatively impacted due to our
      customers waiting for the release of our upgraded version of StatLIA®. The
      upgraded version of StatLIA® is scheduled to be released during the first half
      of fiscal year 2008.




Selling
      Expenses




Selling
      expenses for the year ended June 30, 2007 remained stable at $101,296 compared
      to $103,190 for the year ended June 30, 2006.




General
      and Administrative Expenses




General
      and administrative expenses increased by $899,344, 74.0%, to $2,115,310 for
      the
      year ended June 30, 2007 from $1,215,966 for the year ended June 30, 2006.
      The
      primary reasons for the increase were approximately $673,000 related to an
      increase in personnel, approximately $45,000 related to increasing the
      infrastructure to upgrade our StatLIA® software, approximately $113,000 related
      to our investor relations program and approximately $39,000 increase in travel
      and trade show costs.




Interest
        Expense
  Interest
        expense increased by $245,969, 118.5%, to $453,543 for the year ended June
        30,
        2007 from $207,574 for the year ended June 30, 2006. The primary reason for
        the
        increase was the increase in interest expense related to convertible
        debentures.
  10




**Capital
      Resources**




As
                  of
              
              IncreaseJune
                  30, 2007
              
              June
                  30, 2006
              
              (Decrease)Working
                  CapitalCurrent
                  assets
              
              $
              250,218
              
              $
              205,920
              
              $
              44,298Current
                  liabilities
              
              
              1,929,861
              
              
              1,765,729
              
              
              164,132Working
                  capital deficit
              
              $
              (1,679,643
              )
              $
              (1,559,809
              )
              $
              119,834Long-term
                  debt
              
              $
              1,381,629
              
              $
              117,650
              
              $
              1,263,979Stockholders'
                  deficit
              
              $
              (2,875,965
              )
              $
              (1,596,529
              )
              $
              1,279,436
  Year
                  Ended
              
              
              Year
                  Ended
              
              
              IncreaseJune
                  30, 007
              
              
              June
                  30, 2006
              
              
              (Decrease
              )Statements
                  of Cash Flows Select Information


Net
                  cash provided (used) by:Operating
                  activities
              
              $
              (1,804,748
              )
              $
              (508,818
              )
              $
              (1,295,930
              )Investing
                  activities
              
              $
              (130,805
              )
              $
              (67,351
              )
              $
              (63,454
              )Financing
                  activities
              
              $
              1,871,057
              
              $
              693,177
              
              $
              1,177,880




As
                  of
              
              IncreaseJune
                  30, 2007
              
              June
                  30, 2006
              
              (Decrease)Balance
                  Sheet Select InformationCash
                  and cash equivalents
              
              $
              85,016
              
              $
              149,512
              
              $
              (64,496
              )Accounts
                  receivable
              
              $
              75,283
              
              $
              56,107
              
              $
              19,176Accounts
                  payable and accrued expenses
              
              $
              1,382,875
              
              $
              1,348,419
              
              $
              34,456




**Liquidity**




We
      have
      historically financed our operations through debt and equity financings. At
      June
      30, 2007, we had cash holdings of $85,016, a decrease of $64,496 compared to
      June 30, 2006. Our net working capital deficit at June 30, 2007, was $1,679,643
      compared to $1,559,809 as of June 30, 2006.





These
      financial statements have been prepared on a going concern basis. However,
      during the years ended June 30, 2007 and June 30, 2006, we incurred net losses
      of $2,110,698 and $845,393, respectively, and had an accumulated deficit of
      $8,352,407 and $6,241,709, at June 30, 2007 and 2006, respectively. Our ability
      to continue as a going concern is dependent upon our ability to generate
      profitable operations in the future and/or to obtain the necessary financing
      to
      meet our obligations and repay our liabilities arising from normal business
      operations when they come due. The outcome of these matters cannot be predicted
      with any certainty at this time. Since inception, we have satisfied our capital
      needs through debt and equity financings.





We
      will
      need to seek additional financing to meet our liquidity requirements.





Management
      plans to continue to provide for our capital needs during the twelve months
      ending June 30, 2008, by increasing sales through the continued development
      of
      our products and by debt and/or equity financings. These financial statements
      do
      not include any adjustments to the amounts and classification of assets and
      liabilities that may be necessary should we be unable to continue as a going
      concern.





11




**New
      Accounting Pronouncements**





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities”. This Statement permits entities 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 No. 159 is effective for fiscal years
      beginning after November 15, 2007. We are currently assessing the impact of
      SFAS No. 159 on our financial position and results of operations.





In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans.” This Statement requires an
      employer to recognize the over funded or under funded status of a defined
      benefit post retirement plan (other than a multiemployer plan) as an asset
      or
      liability in its statement of financial position, and to recognize changes
      in
      that funded status in the year in which the changes occur through comprehensive
      income.  SFAS No. 158 is effective for fiscal years ending after December
      15, 2006. The adoption of SFAS No. 158 had no impact on our financial position
      and results of operations.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measures”.
      This Statement defines fair value, establishes a framework for measuring fair
      value under GAAP, expands disclosures about fair value measurements, and applies
      under other accounting pronouncements that require or permit fair value
      measurements. SFAS No. 157 does not require any new fair value
      measurements. However, the FASB anticipates that for some entities, the
      application of SFAS No. 157 will change current practice. SFAS No. 157
      is effective for financial statements issued for fiscal years beginning after
      November 15, 2007, which for us would be the fiscal year beginning April 1,
      2008. We are currently evaluating the impact of SFAS No. 157 but do
      not expect that it will have a material impact on our financial statements.





In
      September 2006, the SEC issued Staff Accounting Bulletin
      (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements
      when Quantifying Misstatements in Current Year Financial Statements.” SAB
      No. 108 addresses how the effects of prior year uncorrected misstatements
      should be considered when quantifying misstatements in current year financial
      statements. SAB No. 108 requires companies to quantify misstatements using
      a balance sheet and income statement approach and to evaluate whether either
      approach results in quantifying an error that is material in light of relevant
      quantitative and qualitative factors. SAB No. 108 is effective for periods
      ending after November 15, 2006.  The adoption of SAB No. 108 had no
      impact on our financial position and results of operations.





In
      June
      2006, the FASB issued FASB Interpretation Number 48, "Accounting for Uncertainty
      in Income Taxes - an interpretation of FASB Statement No. 109."  This
      Interpretation clarifies the accounting for uncertainty in income taxes
      recognized in an enterprise's financial statements in accordance with FASB
      Statement No. 109, "Accounting for Income Taxes."  This Interpretation is
      effective for fiscal years beginning after December 15, 2006. We are currently
      assessing the effect of this Interpretation on our financial
      statements.




**Risk
      Factors**




You
      should consider the following discussion of risks as well as other information
      regarding our common stock. The risks and uncertainties described below are
      not
      the only ones. Additional risks and uncertainties not presently known to us
      or
      that we currently deem immaterial also may impair our business operations.
      If
      any of the following risks actually occur, our business could be harmed.




**We
      have a limited operating history** .




We
      commenced operations in November, 1997 and have a limited operating history.
      Our
      success will be dependent upon our ability to successfully exploit our unique
      proprietary technology. Our success will depend in large part on our ability
      to
      deal with the problems, expenses, and delays frequently associated with
      developing and marketing our software technology. Losses are likely to continue
      before our operations will become profitable. There is no assurance that our
      operations will prove profitable.




12




**We
      depend on new products and development to generate
      revenues.**




Substantially
      all of our revenues have been derived, and substantially all of our future
      revenues are expected to be derived, from the license of the software and sale
      of our associated services, and the development and sale of future products.
      Accordingly, broad acceptance of our software products and services by customers
      is critical to our future success as is our ability to design, develop, test
      and
      support new software products and enhancements on a timely basis that meet
      changing customer needs and respond to technological developments in emerging
      industry standards. There can be no assurance that we will be successful in
      developing and marketing new software products and enhancements that meet
      changing customer needs and respond to such technological changes or evolving
      industry standards.




**Our
      success depends upon developing distribution channels.**




Our
      distribution strategy is to develop multiple distribution channels. We have
      historically sold our products only through direct sales, Internet sales, and
      original equipment manufacturers (“OEMs”). We expect to increasingly utilize
      OEMs and independent sales representatives, and to pursue utilizing systems
      integrators, value added resellers (“VARs”), and software retailers. There can
      be no assurances that these distribution channels will be effective sales
      channels.




**Our
      success is dependent on our founders and other key
      personnel.**




Our
      performance is substantially dependent upon the performance of our executive
      officers and key employees, particularly that of Dr. John R. Dunn, II. Dr.
      Dunn
      was responsible for creation of the software and the scientific principles
      incorporated therein. As a result, Dr. Dunn is the single most knowledgeable
      person with regard to the software. It would be difficult for us to find an
      adequate replacement for Dr. Dunn in the immediate future.




Given
      our
      early stage of development, we are further dependent upon our ability to retain
      and motivate high quality personnel, especially our management and highly
      skilled development teams. We do not have key person life insurance policies
      on
      any of our employees. The loss of the services of any of our executive officers
      or other key employees could have a materially adverse effect on our business,
      operating results or financial condition. We intend to purchase key man life
      insurance when management decides funds are available.




Our
      future success also depends on our continuing ability to identify, hire, train,
      and retain other highly qualified technical and managerial personnel.
      Competition for such personnel is intense and there can be no assurance that
      we
      will be able to attract, hire or retain other highly qualified technical and
      managerial personnel in the future. The inability to attract and retain the
      necessary technical and managerial personnel could have a materially adverse
      effect upon our business operating results or financial condition.




**Our
      success will depend, in part, on the continuing and growing interest in quality
      control and quality assurance regarding reliable laboratory and manufacturing
      testing results among the markets targeted by our products.**




An
      additional factor which we believe will be critical to the acceptance of our
      products is a continuing need in our targeted markets for more powerful
      solutions for instrument connectivity, networking, and data
      management.




No
      governmental or regulatory agency must approve the production or sale of any
      of
      our products at this time. However, we intend to voluntarily pursue the
      acknowledgment and approval of certain federal agencies to gain further
      awareness and acceptance for our new statistical methodologies. There can be
      no
      assurance that the interest in quality control and quality assurance will
      continue among the testing industry, general public or governmental and
      regulatory agencies.




**We
      have worker’s compensation and general liability insurance but do not have
      professional liability insurance at this time.**




We
      do
      intend to purchase such insurance when funds become available if management
      concludes that the benefit of having such a policy outweighs our cost. Any
      professional liability claims made prior to acquiring such insurance or for
      amounts exceeding the coverage after the insurance is purchased, could have
      an
      adverse material effect on us. In addition, we will purchase a key man life
      insurance policy naming Dr. John Dunn II as the insured and we as the
      beneficiary if management concludes that the benefit of having such a policy
      outweighs our cost. We further intend to purchase director and officer liability
      insurance when management decides that funds are available in order to attract
      additional directors and officers.




13




**We
      are subject to the risks and uncertainties inherent in new
      businesses.**




We
      are
      subject to the risks and uncertainties inherent in new businesses, including
      the
      following:




·  We
      may
      not be able to raise enough money to develop our services and bring them to
      market;





·  Our
      projected capital needs may be inaccurate, and we may not have enough money
      to
      develop our services and bring them to market;





·  We
      may
      experience unanticipated development or marketing expenses, which may make
      it
      more difficult to develop our services and bring them to market;





·  Even
      if
      we are able to develop our services and bring them to market, we may not earn
      enough revenues from the sales of our services to cover the costs of operating
      our business.





·  If
      we are
      unsuccessful in our development efforts, we are not likely to ever become
      profitable.







**We
      have never paid cash dividends on our Common Stock, and do not anticipate that
      we will pay cash dividends in the foreseeable future.**




The
      payment of dividends by us will depend on our earnings, financial condition
      and
      such other factors as our Board of Directors may consider relevant. We currently
      plan to retain any earnings to provide for our development and
      growth.




**We
      will need additional financing.**




Our
      ability to continue as a going concern is dependent upon our ability to generate
      profitable operations in the future and/or to obtain the necessary financing
      to
      meet our obligations and repay our liabilities arising from normal business
      operations when they come due. The outcome of these matters cannot be predicted
      with any certainty at this time. Since inception, we have satisfied our capital
      needs through debt and equity financings. We will need to seek additional
      financing to meet our liquidity requirements. There is no assurance that
      financings can be obtained in amounts and at terms acceptable to us. If capital
      is not available, we may be required to curtail our operations.




**The
      market for our products is unproven and acceptance of our products is
      crucial.**




The
      market for our software and services has only recently begun to develop, is
      rapidly evolving and could be subject to an increasing number of competitive
      market entries. While we believe that our software products offer significant
      advantages for quality assurance, regulatory compliance and reliability in
      the
      clinical, pharmaceutical, environmental, and manufacturing industries, there
      can
      be no assurance that our products will become widely adopted for use in those
      industries.




Because
      a
      market for our products and services is new and evolving, it is difficult to
      predict the future growth rate, if any, and size of this market. There can
      be no
      assurance that the market for our products and services will develop or that
      our
      products and services will be used in the marketplace. If the market fails
      to
      develop, develops more slowly than expected, or becomes saturated with
      competitors, or if our products do not achieve market acceptance, our business,
      operating results and financial condition will be materially adversely
      affected.




14




**We
      compete with companies that have substantially greater
      resources.**




Our
      management believes that over 90% of our current competitors are instrument
      manufacturers. These manufacturers primarily develop and market their software
      programs to be used with only their instruments and not as stand-alone programs
      (which could be used with competing manufacturers’ instruments or even earlier
      models of their own instruments). The level of interoperability of such software
      with the instruments sold by their competitors or with laboratory computer
      systems is minimal or nonexistent. This market is splintered into many fragments
      and no one or few of these instrument manufacturers hold a commanding percentage
      of market share. To our knowledge, no commercial product available in the world
      today offers the quality control and quality assurance capabilities or many
      of
      the advanced computational features found in StatLIA®. However, we believe that
      at some point in the future, many of our competitors will use quality assurance
      methodologies similar to, or as effective as, those incorporated in StatLIA®.
      Some of these competitors may be of greater size and have greater financial
      resources than ours. We believe that most instrument manufacturers currently
      marketing immunoassay software will remain focused on instrumentation and not
      develop software as complex as StatLIA® for the limited market share held by any
      one of these manufacturers. We believe that most of our future competition
      will
      be from software companies but we can give no assurances. Because our products
      are either newly-developed or in the process of being developed, no guarantees
      can be given as to how commercially viable such new products will be in the
      marketplace.




We
      intend
      to interface StatLIA® with all immunoassay testing instruments which are capable
      of exporting unprocessed raw data. Although we has been able to receive, decode
      and process data from all instruments attempted to date, there can be no
      assurance that we will be able to collect data from all immunoassay instruments
      manufactured.




Although
      device manufacturers are currently the largest competitors, we believe that
      OEM’s will soon serve as ideal partners as equipment makers seek to remove
      themselves from software development and partner with more powerful programs.
      We
      will focus on OEM’s as a primary sales channel.




We
      believes that the statistical quality control and quality assurance principles
      and the connectivity and data management methodologies incorporated in StatLIA®
can be applied in new products for other disciplines and technologies. We have
      outlined other programs in addition to StatLIA® to be developed in the next
      three years for application in testing laboratories and manufacturing. However,
      the statistical quality control and quality assurance principles and methodology
      have been tested only in the immunoassay field for which StatLIA® was designed,
      and to a lesser extent, in steel tensile testing and chromatography. There
      can
      be no assurances that we will be able to successfully develop and market all
      of
      our intended products.




**Our
      success and ability to compete is dependent in part upon our proprietary
      technology.**




While
      we
      rely on trademark, trade secret and copyright law to protect our technology,
      we
      believe that factors such as the technological and creative skills of our
      personnel, new product developments, frequent product enhancements, name
      recognition and reliable product maintenance are more essential to establishing
      and maintaining a technology leadership position. We do not presently have
      any
      patents or patent applications pending. There can be no assurance that others
      will not develop technologies that are similar or superior to our technology.
      The source code for our proprietary software is protected both as a trade secret
      and as a copyrighted work. We generally enter into confidentiality or license
      agreements with our employees, consultants and vendors, and generally control
      further access to and distribution of our software, documentation and other
      proprietary information. Despite these precautions, it may be possible for
      a
      third party to copy or otherwise obtain and use our products or technology
      without authorization, or to develop similar technology independently. Despite
      our efforts to protect our proprietary rights, unauthorized parties may attempt
      to copy aspects of our products or to obtain and use information that we regard
      as proprietary. Policing unauthorized use of our products is difficult. There
      can be no assurance that the steps taken by us will prevent misappropriation
      of
      our technology or that such agreements will be enforceable.




Vigorous
      protection and pursuit of intellectual property rights or positions characterize
      the fiercely competitive software industry, which has resulted in significant
      and often protracted and expensive litigation. Therefore, our competitors may
      assert that our technologies or products infringe on their patents or
      proprietary rights. Problems with patents or other rights could increase the
      cost of our products or delay or preclude new product development and
      commercialization by us. If infringement claims against us are deemed valid,
      we
      may not be able to obtain appropriate licenses on acceptable terms or at all.
      Litigation could be costly and time-consuming but may be necessary
      to protect our future patent and/or technology license positions or to defend
      against infringement claims.





15




**We
      may be effected by changes in Securities Laws and
      Regulations**





We
      have
      made, and will need to continue to make, changes in our corporate governance
      and
      securities disclosure and compliance practices as a result of the Sarbanes-Oxley
      Act of 2002. The SEC and the NASD have enacted, and we expect will continue
      to
      enact, new rules on a variety of subjects as a result of the Sarbanes-Oxley
      Act
      of 2002. While we believe that we can ultimately comply with the new legislated
      requirements associated with being a public company, compliance with the
      Sarbanes-Oxley Act of 2002 will increase our costs and may present new
      challenges and risks. These developments could also possibly make it more
      difficult and more expensive to obtain director and officer liability insurance.
      We may be required to accept reduced coverage or incur substantially higher
      costs to obtain coverage for our officers and directors, which may make it
      more
      difficult for us to attract and retain qualified board members or executive
      officers. We are currently evaluating and monitoring regulatory developments
      and
      cannot estimate the timing or magnitude of additional costs that may be incurred
      as a result of the Sarbanes-Oxley Act of 2002.





We
      will
      be required to implement an internal control structure and procedures for
      financial reporting, including those contemplated by Section 404 of the
      Sarbanes-Oxley Act, designed to enable management to contest to the
      effectiveness of our internal controls during the initial year, our year ending
      June 30, 2008, and our registered public accounting firm to opine to the
      effectiveness of our internal controls subsequent to the initial year, our
      year
      ending June 30, 2009. To comply with these requirements, we expect that we
      may
      need to hire additional accounting and finance staff and implement new financial
      systems and procedures. There can be no assurance that we will be able to
      implement such controls in a timely fashion and, therefore, we may not be able
      to contest to or receive an opinion from independent sources that our internal
      controls are effective.





**Shares
      of our common stock which are eligible for sale by our stockholders
      may decrease the price of our common stock.**





We
      have
      23,705,594 common shares outstanding of which 1,227,079 are freely tradable
      and
      22,478,515 are saleable under Rule 144. We also may have up to 17,690,667
      additional shares which could be outstanding following conversions of
      debentures, exercise of warrants and exercise of stock options. If our
      stockholders sell substantial amounts of our common stock, the market price
      of
      our common stock could decrease.





**There
      is a limited but potentially volatile trading market in our common stock, which
      may adversely affect our stock price.**





Our
      common stock trades on the OTC Bulletin Board. The Bulletin Board tends to
      be
      highly illiquid, in part because there is no national quotation system by which
      potential investors can track the market price of shares except through
      information received or generated by a limited number of broker-dealers that
      make a market in particular stocks. There is a greater chance of market
      volatility for securities that trade on the Bulletin Board as opposed to a
      national exchange or quotation system. This volatility may be caused by a
      variety of factors, including:


·
            The
                lack of readily available price quotations;





·
            The
                absence of consistent administrative supervision of “bid” and “ask”
                quotations;





·
            Lower
                trading volume; and





·
            Market
                conditions.





There
      could be wide fluctuations in the market price of our common stock. These
      fluctuations may have an extremely negative effect on the market price of our
      securities.




**Because
      our common stock is classified as “penny stock,” trading in it could be limited,
      and our stock price could decline.**





Our
      common stock falls under the definition of “penny stock.” “Penny stocks” are
      equity securities with a market price below $5.00 per share, other than a
      security that is registered on a national exchange or included for quotation
      on
      the NASDAQ system, unless the issuer has net tangible assets of more than
      $2,000,000 and has been in continuous operation for greater than three years.
      Issuers who have been in operation for less than three years must have net
      tangible assets of at least $5,000,000. As a result, trading in our common
      stock
      is limited because broker-dealers are required to provide their customers with
      disclosure documents prior to allowing them to participate in transactions
      involving our common stock. These disclosure requirements are burdensome to
      broker-dealers and may discourage them from allowing their customers to
      participate in transactions involving our common stock.




16




Rules promulgated
      by the Securities and Exchange Commission under Section 15(g) of the
      Exchange Act require broker-dealers engaging in transactions in penny stocks,
      to
      first provide to their customers a series of disclosures and documents,
      including:





·
            A
                standardized risk disclosure document identifying the risks inherent
                in
                investment in penny stocks;





·
            All
                compensation received by the broker-dealer in connection with the
                transaction;





·
            Current
                quotation prices and other relevant market data; and





·
            Monthly
                account statements reflecting the fair market value of the securities.
                In
                addition, these rules require that a broker-dealer obtain financial
                and
                other information from a customer, determine that transactions in
                penny
                stocks are suitable for such customer and deliver a written statement
                to
                such customer setting forth the basis for this determination.




**ITEM
      7.     FINANCIAL STATEMENTS.**




The
      financial statements required by this item begin on page F-1 with the index
      to
      consolidated financial statements.




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




On
      December 29, 2005, Omni completed the acquisition of substantially all the
      assets of Brendan Sub pursuant to the Merger Agreement and completed the
      disposition of substantially all the assets of Omni-Washington and Butler
      pursuant to the Stock Purchase Agreement. On December 29, 2005, Omni provided
      notice to Harper & Pearson Company (“ **Harper
      & Pearson** ”)
      that
      they would no longer be retained as Omni’s independent registered accounting
      firm. Harper & Pearson’s reports on the consolidated financial statements of
      Omni and Omni’s subsidiaries for the two fiscal years ended June 30, 2005, did
      not contain any adverse opinion or disclaimer of opinion, nor were they
      qualified or modified as to uncertainty, audit scope, or accounting principles.




On
      December 29, 2005, the Board of Directors of Omni elected to engage Farber
      Hass
      Hurley McEwen LLP (“ **FHHM** ”)
      to
      serve as Omni’s independent registered accounting firm.




On
      December 29, 2005, Omni was informed that it had been accepted as a client
      of
      FHHM.




During
      our two fiscal years ended June 30, 2005 and the subsequent interim period
      through December 29, 2005, there were no disagreements between Omni and Harper
      & Pearson on any matter of accounting principles or practices, financial
      statement disclosure, or auditing scope or procedure, which disagreements,
      if
      not resolved to Harper & Pearson's satisfaction, would have caused them to
      make reference to the subject matter of the disagreement in their reports on
      the
      financial statements for such years.




Omni
      authorized Harper & Pearson to respond fully to the inquiries of FHHM
      concerning the subject matter of the reportable event and provided Harper &
Pearson with a copy of the foregoing disclosures. Attached as Exhibit 99.3
      to
      our Current Report on Form 8-K filed on January 5, 2006 is a copy of Harper
      & Pearson's letter, dated January 4, 2006, stating its agreement with the
      statements made in the filing.




During
      Omni's two fiscal years ended June 30, 2005, and the subsequent interim period
      through December 29, 2005, Omni did not consult FHHM with respect to the
      application of accounting principles to a specific transaction, either completed
      or contemplated, or the type of audit opinion that might be rendered on Omni’s
      consolidated financial statements, or any other matters of reportable events
      as
      set forth in Items 304(a)(2)(i) and (ii) of Regulation S-B.




17




**ITEM
      8A.     CONTROLS AND PROCEDURES.**




**Evaluation
      of Disclosure Controls and Procedures**




As
      a
      result of the enactment of the Sarbanes-Oxley Act of 2002, issuers such as
      Brendan that file periodic reports under the Securities Exchange Act of 1934
      (the “Act”) are required to include in those reports certain information
      concerning the issuer’s controls and procedures for complying with the
      disclosure requirements of the federal securities laws pursuant to Exchange
      Act
      Rules 13a-15(b) and 15d-15(b). These disclosure controls and procedures
      include, without limitation, controls and procedures designed to ensure that
      information required to be disclosed by an issuer in the reports it files or
      submits under the Act, is communicated to the issuer’s management, including its
      principal executive officer and principal financial officer, or persons
      performing similar functions, as appropriate to allow timely decisions regarding
      required disclosure. A control system can provide only reasonable, not absolute,
      assurance that the objectives of the control system are met.




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of the design and operation of our disclosure controls and
      procedures, as such term is defined under Rules 13a-14(c) and 15d-14(c)
      promulgated under the Act, within 90 days prior to the filing date of this
      report. Based on that evaluation, our principal executive officer and our
      principal financial officer concluded that the design and operation of our
      disclosure controls and procedures were effective in timely alerting them to
      material information required to be included in our periodic reports filed
      with
      the SEC under the Act. The design of any system of controls is based in part
      upon certain assumptions about the likelihood of future events, and there can
      be
      no assurance that any design will succeed in achieving our stated goals under
      all potential future conditions, regardless of how remote.





**Change
      in Internal Controls.**





There
      have been no significant changes made in the internal controls and there were
      no
      other factors that could significantly affect our internal controls during
      the
      fourth quarter of the fiscal year covered by this report.




**ITEM
      8B.**  **OTHER
      INFORMATION.**




None.




**PART
      III**






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




The
      following table and biographical summaries set forth information, including
      principal occupations and business experience, about our directors and the
      executive officers at June 30, 2007:





**Directors
      and Executive Officers**





Our
      directors and executive officers are as follows:


**Name**
            
            **Age**
            
            **Position**John
                R. Dunn II
            
            56
            
            Chairman,
                Chief Executive Officer, President, and DirectorGeorge
                Dunn
            
            50
            
            Secretary,
                Chief Operating OfficerLowell
                W. Giffhorn
            
            60
            
            Chief
                Financial Officer and DirectorTheo
                Vermaelen
            
            53
            
            DirectorStephen
                Eisold
            
            60
            
            DirectorJason
                Booth
            
            41
            
            Director




18




The
      business experience of each of our executive officers and directors is set
      forth
      below.




John
      R.
      Dunn II is the founder of Brendan and has served as the Chairman, Chief
      Executive Officer, President and Director of Brendan since 1997. Dr. Dunn has
      had extensive experience in hospital and clinical laboratories, including
      bio-science laboratories. He has set up and run a reference laboratory
      specializing in immunoassays and been a consultant in immunoassay development
      and statistics for several clinical and hospital laboratories. Dr. Dunn obtained
      a Ph.D. in Biology from Wayne State University, Detroit, MI, in 1987 and he
      obtained a B.S. in Biology from Wayne State University in 1974.




George
      Dunn has served as the Secretary and Chief Operating Officer of Brendan since
      1997. Mr. Dunn has extensive experience in marketing and sales and the
      implementation of strategic plans, market segment analysis, promotions, sales
      and sales support development. Mr. Dunn received his B.A. in Communication
      Arts
      from Michigan State University in 1981.




Lowell
      W.
      Giffhorn has served as our Chief Financial Officer since October 2005. Since
      July 2005, Mr. Giffhorn also serves as the Chief Financial Officer of
      Imagenetix, Inc., a publicly held nutritional supplement company. Mr. Giffhorn
      was the Chief Financial Officer of Patriot Scientific Corp., a publicly held
      semiconductor and intellectual property company, from May 1997 to June 2005
      and
      was a member of its Board of Directors from August 1999 to April 2006. From
      June
      1992 to August 1996 and from September 1987 to June 1990 he was the CFO of
      Sym-Tek Systems, Inc. and Vice President of Finance for its successor, Sym-Tek
      Inc., a supplier of capital equipment to the semiconductor industry. Mr.
      Giffhorn obtained a M.B.A. degree from National University in 1976 and he
      obtained a B.S. in Accountancy from the University of Illinois in 1969. Mr.
      Giffhorn is also a director and chairman of the audit committee of DND
      Technologies, Inc., a publicly held company. Mr. Giffhorn devotes approximately
      50% of his time to our affairs.




Theo
      Vermaelen has served as a Director since December 2005. Since 2001, Dr.
      Vermaelen has been the Schroders Chaired Professor of International Finance
      and
      Asset Management at INSEAD, a business school with campuses in Fontainebleau,
      France and Singapore. From 1998 to 2003, Dr. Vermaelen was portfolio manager
      of
      the KBC equity buyback fund. Dr. Vermaelen has taught at the University of
      British Columbia, the Catholic University of Leuven, London Business School,
      UCLA, the University of Chicago, and Maastricht University. He is the co-editor
      of the Journal of Empirical Finance. He is also a consultant to various
      corporations and government agencies and Program Director of the Amsterdam
      Institute of Finance, a training institute for investment bankers and other
      financial professionals. Dr. Vermaelen obtained his M.B.A. in 1976 and Ph.D.
      in
      Finance in 1980 from the Graduate School of Business, University of Chicago.




Stephen
      C. Eisold has served as a Director since December 2005. From February 2001
      to
      November 2005, Mr. Eisold was the Chief Executive Officer of Brendan. From
      1998
      to 2001, Mr. Eisold was the Chief Executive Officer at Axiom Biotechnologies,
      Inc. From 1996 to 1998, Mr. Eisold was the Executive Vice President and Chief
      Operating Officer at Cypros Pharmaceutical. Previously Mr. Eisold was the
      General Manager of North America Pharmaceuticals for Gensia and before which
      he
      held various marketing and business development positions with Marion
      Laboratories. Mr. Eisold obtained a M.B.A. degree from Rockhurst College, Kansas
      City, MO, in 1981 and a B.S. in Biology from Springfield College, Springfield,
      MA, in 1968.




Jason
      Booth has served as a Director since August 2006. Since 1999, Mr. Booth has
      been
      the owner of Booth Publications, Inc., which focuses on sales and marketing
      campaigns primarily for the pharmaceutical industry. For the five years previous
      to that, Mr. Booth provided executive recruiting and retention consulting
      services for large and small company human resource departments as an Account
      Manager for Pro Staff Personnel Services. Mr. Booth is also on the board of
      directors of the Potawatomi Business Development Corporation, who in July 2006,
      purchased from us a $1 million 8% convertible debenture with attached common
      stock purchase warrants. He is also a tribal member of the Turtle Mountain
      Band
      of Chippewa Indians. Mr. Booth obtained a B.S. in English from the University
      of
      Minnesota in 1989.




John
      R.
      Dunn II and George Dunn are brothers.




19




Except
      for Dr. Dunn and Mr. Giffhorn, all of our directors are independent directors,
      as defined by current NASDAQ listing standards and the rules and regulations
      of
      the SEC.




**Committees
      of the Board of Directors**




Our
      Board
      has a standing Audit Committee. The entire Board serves as the Compensation
      Committee.




***Audit
      Committee.*** **** The
      Audit
      Committee is responsible for: (1) selection and oversight of our independent
      accountant; (2) establishing procedures for the receipt, retention and treatment
      of complaints regarding accounting, internal controls and auditing matters;
      (3)
      establishing procedures for the confidential, anonymous submission of concerns
      regarding accounting and auditing matters; (4) engaging outside advisors; and,
      (5) funding for the outside auditors and any outside advisors engaged by the
      audit committee. The Audit Committee, which met four times during fiscal year
      2007, is composed of one employee director and one other director, who was
      determined by the Board to be an independent director. During 2007, the Audit
      Committee consisted of Dr. Vermaelen (Chairman) and Mr. Giffhorn.




The
      Board
      of Directors has determined that Dr. Vermaelen is an audit committee financial
      expert as defined in Item 401 of Regulation S-B promulgated by the Securities
      and Exchange Commission. The Board's conclusions regarding the qualifications
      of
      Dr. Vermaelen as an audit committee financial expert were based on his
      experience at financial and educational institutions and his doctoral degree
      in
      finance.




**Code
      of Ethics**




We
      have
      set forth our policy on ethical behavior in a document called "Code of Business
      Conduct and Ethics." This policy applies to the members of our Board of
      Directors and all employees, including (but not limited to) our principal
      executive officer, principal financial officer, principal accounting officer
      or
      controller and persons performing similar functions. This policy comprises
      written standards that are reasonably designed to deter wrongdoing and to
      promote the behavior described in Item 406 of Regulation S-B promulgated by
      the Securities and Exchange Commission. No waivers of the Code were granted
      in
      2007.




**Compliance
      with Section 16(a) of the Securities Exchange Act**




Section
      16(a) of the Exchange Act requires our directors, executive officers and persons
      who beneficially own 10% or more of a class of securities registered under
      Section 12 of the Exchange Act to file reports of beneficial ownership and
      changes in beneficial ownership with the SEC. Directors, executive officers
      and
      greater than 10% shareholders are required by the rules and regulations of
      the
      Commission to furnish us with copies of all reports filed by them in compliance
      with Section 16(a).





Based
      solely on our review of copies of the reports we received from persons required
      to make such filings and our own records, we believe that from the period July
      1, 2006 through June 30, 2007 that all such forms were timely filed with the
      SEC.




**ITEM
      10.**  **EXECUTIVE
      COMPENSATION.**




There
      is
      shown below information concerning the compensation of our principal executive
      officer and the most highly compensated executive officers whose total
      compensation exceeded $100,000 (each a “Named Officer”) for the fiscal years
      ended June 30, 2007 and 2006.




20




**SUMMARY
      COMPENSATION TABLE**




Name
                  and
              
              Fiscal
              
              
              
              OptionPrincipal
                  Position
              
              Year
              
              Salary
                  ($)
              
              Awards
                  ($)
              
              Total
                  ($)[a]
              
              [b]
              
              [c]
              
              [f]
              
              [j]John
                  R. Dunn II
              
              
              2007
              
              $
              108,000
              
              $
              5,071
              
              $
              113,071President,
                  CEO and
              
              
              2006
              
              $
              108,000
              
              $
              27,427
              
              $
              135,427DirectorGeorge
                  Dunn
              
              
              2007
              
              $
              108,000
              
              $
              5,071
              
              $
              113,071VP,
                  Secretary and
              
              
              2006
              
              $
              102,000
              
              $
              24,565
              
              $
              126,565COO







We
      estimate the fair value of the options issued at the issuance date by using
      the
      Black-Scholes option-pricing model with the following weighted-average
      assumptions used for those options issued during the year ended:


June
                  30, 2007
              June
                  30, 2006Dividend
                  yield
              0%
              0%Volatility
              42%
              1%-30%Risk-free
                  interest rates
              5.10%
              2.76%-4.84%Expected
                  life
              5
                  years
              5
                  years****





**OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END**


Name
              
              Number
              
              Option
              
              Optionof
              
              Exercise
              
              ExpirationSecurities
              
              Price
              
              DateUnderlying
              
              ($)UnexercisedOptions(#)Exercisable[a]
              
              [b]
              
              [e]
              
              [f]John
                  R. Dunn II
              
              
              40,000
              
              
              $0.75
              
              
              April
                  6, 2011President,
                  CEO and
              
              
              60,000
              
              
              $0.64
              
              
              April
                  6, 2011Director
              
              
              50,000
              
              
              $0.64
              
              
              June
                  15, 2012George
                  Dunn
              
              
              400,000
              
              
              $0.125
              
              
              April
                  6, 2011VP,
                  Secretary and
              
              
              400,000
              
              
              $0.025
              
              
              April
                  6, 2011COO
              
              
              60,000
              
              
              $0.64
              
              
              April
                  6, 201150,000
              
              
              $0.64
              
              
              June
                  15, 2012


**Employment
      Contracts**





In
      November 2004, we entered into an employment agreement with our Chairman,
      President and Chief Executive Officer, Dr. John Dunn II, which expires on
      November 1, 2011. The employment agreement provides for an annual salary of
      $108,000. The agreement also provides that we may terminate the agreement with
      30 days written notice if termination is without cause. Our obligation would
      be
      to pay Dr. Dunn monthly payments equal to his base salary for 24 months. In
      addition, all of Dr. Dunn’s options would immediately vest. The agreement also
      provides that Dr. Dunn can terminate employment if we merge with or consolidate
      with another entity, or we are subject in any way to a transfer of a substantial
      amount of our assets, resulting in the assets, business or operations of ours
      being controlled by an entity or individual other than Brendan.




21




In
      November 2004, we entered into an employment agreement with our Vice President
      of Marketing and Chief Operating Officer, George Dunn, which expires on November
      1, 2011. The employment agreement provides for an annual salary of $96,000.
      The
      annual salary was increased to $108,000 as of January 1, 2006. The agreement
      also provides that we may terminate the agreement with 30 days written notice
      if
      termination is without cause. Our obligation would be to pay Mr. Dunn monthly
      payments equal to his base salary for 24 months. In addition, all of Mr. Dunn’s
      options would immediately vest. The agreement also provides that Mr. Dunn can
      terminate employment if we merge with or consolidate with another entity, or
      we
      are subject in any way to a transfer of a substantial amount of our assets,
      resulting in the assets, business or operations of ours being controlled by
      an
      entity or individual other than Brendan.




**DIRECTOR
      COMPENSATION**


Name
              Fees
              Option
              All
                  Other
              TotalEarned
              Awards
              Compensation
              ($)or
              ($)
              ($)Paid
                  InCash($)[a]
              [b]
              [d]
              [g]
              [h]Lowell
                  W. Giffhorn
              -
              $5,071
              $75,000
              $80,071Theo
                  Vermaelen
              -
              $5,071
              -
              $5,071Stephen
                  Eisold
              -
              $5,071
              -
              $5,071Jason
                  Booth
              -
              $9,043
              -
              $9,043




Mr.
      Giffhorn is our Chief Financial Officer and one of our directors. The amount
      reflected as other compensation is the amount he was paid as our Chief Financial
      Officer. He received no compensation for being a director.





We
      reimburse our directors for any travel related expenses incurred in performing
      their duties as directors. In addition, we granted stock options to each of
      Messrs. Dunn, Giffhorn, Vermaelen, and Eisold in the amounts of 50,000 and
      100,000 shares and to Mr. Booth in the amount of none and 100,000 shares during
      the years ended June 30, 2007 and 2006, respectively.




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





The
      following table sets forth certain information concerning our common stock
      ownership as of September 25, 2007, by (1) each person who is known by us to
      be
      the beneficial owner of more than five percent of our common stock; (2) each
      of
      our executive officers and directors; and (3) all of our directors and executive
      officers as a group. The address of each such stockholder is in care of us
      at
      2236 Rutherford Road, Suite 107, Carlsbad, California 92008.




22




Shares
                  of Common
              
              PercentageStock
                  Beneficially
              
              of
                  OutstandingName
              
              Postion
                  with the Company
              
              Owned
                  (1) (2)
              
              SharesExecutive
                  Officers andDirectorsJohn
                  R. Dunn II (3)
              
              Chairman
                  of the Board,
                  Chief
                    Executive Officer,
                    Chief
                      Technical Officer and
                      Director
              
              5,005,000
              
              21.0%George
                  Dunn (4)
              
              Vice
                  President, Secretary
                  and
                    Chief Operating Officer
              
              2,301,000
              
              9.4%Lowell
                  W. Giffhorn (5)
              
              Vice
                  President, Chief
                  Financial
                    Officer and Director
              
              645,000
              
              2.7%Theo
                  Vermaelen (6)
              
              Director
              
              859,359
              
              3.6%Steven
                  Eisold (7)
              
              Director
              
              724,494
              
              3.0%Jason
                  Booth (8)
              
              Director
              
              75,000
              
              *All
                      Exective Officers andDirectors as a Group(6
                  persons) (9)
              
              
              
              9,609,853
              
              37.3%Greater
                  than 5% OwnersPotawatomi
                  Business
                Development
                  Corp.
              
              
              
              4,000,000
              
              Note
                  10Robert
                  Tabor
              
              
              
              4,730,589
              
              20.0%Massoud
                  Kharrazian
              
              
              
              1,487,136
              
              6.3%*
                  Less than 1%




(1)
      Reflects amounts as to which the beneficial owner has sole voting power and
      sole
      investment power.


(2)
      Includes stock options, common stock purchase warrants and convertible
      debentures exercisable within 60


days
      from the date
      hereof.


(3)  Comprised
      of 4,880,000 shares and 125,000 stock options.


(4)  Comprised
      of 1,416,000 shares and 885,000 stock options.


(5)  Comprised
      of 20,000 shares, 125,000 stock options, 300,000 common stock purchase warrants
      and 200,000


shares
      issuable on the
      conversion of a debenture.


(6)
      Comprised of 654,359 shares, 125,000 stock options, 40,000 common stock purchase
      warrants and 40,000


shares
      issuable on the
      conversion of a debenture.


(7)
      Comprised of 599,494 shares and 125,000 stock options.


(8)
      Comprised of 75,000 stock options.


(9)
      Comprised of 7,549,853 shares, 1,460,000 stock options, 340,000 common stock
      purchase warrants and


240,000
      shares issuable
      on the conversion of a debenture.


10)The
      shares issuable to Potawatomi Business Development Corp. (PBDC) on the
      conversion of debentures or the exercise of warrants


would
      not be deemed beneficially
      owned (due to exercise restrictions within the debentures and warrants) within
      the meaning of


Sections
      13(d) and 13(g)
      of the Exchange Act to the extent that their acquisition in a debenture
      conversion or a warrant exercise by


PBDC
      would cause PBDC to
      own in excess of 4.99% of our outstanding common stock immediately following
      such conversion or


exercise.
      By the terms of
      the debentures and warrants, the 4.99% limitation may be increased to a maximum
      of 9.99% if we accept a tender


offer
      and a change in
      control takes place. Therefore, it is expected that PBDC will not beneficially
      own more than 9.99% of our


outstanding
      common stock
      at any time. Carol Leese has ultimate voting and/or investment control over
      the
      securities owned by PBDC.




23




**Equity
      Compensation Plan Information**


**Number
                  of securities****remaining
                  available****Number
                  of securities**
              
              
              
              **for
                  issuance under****to
                  be issued upon**
              
              **Weighted
                  average**
              
              **equity
                  compensaton****exercise
                  of**
              
              **exercise
                  price of**
              
              **plans
                  (excluding****outstanding
                  options,**
              
              **outstanding
                  options,**
              
              **securities
                  reflected in****warrants
                  and rights**
              
              **warrants
                  and rights**
              
              **column
                  (a))****Plan
                  Category**
              
              **(a)**
              
              **(b)**
              
              **(c)**Equity
                  compensationplans
                  approved byshareholders
              
              
              4,975,000
              
              
              $0.41
              
              
              2,525,000Equity
                  compensationplans
                  not approvedby
                  shareholders
              
              
              8,660,667
              
              
              $0.88
              
              
              -Total
              
              
              13,635,667
              
              
              $0.71
              
              
              2,525,000




Common
      shares issuable on the exercise of common stock warrants have not been approved
      by the shareholders and, accordingly, have been segregated in the above
      table.




**ITEM
      12.     CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS.**




In
      June
      and December 2006 we entered into 8% Convertible Debentures with attached common
      stock purchase warrants with Mr. Giffhorn, an executive officer and director,
      and Dr. Vermaelen, a director, aggregating $120,000. The Convertible Debentures
      mature in two years and the common stock purchase warrants are exercisable
      from
      1 to 5 years with exercise prices ranging form $0.60 to $1.00.





We
      believe that the above transactions were fair, reasonable and upon terms at
      least as favorable to us as those we might have obtained from unaffiliated
      third
      parties.





One
      of
      our directors, Jason Booth, is also a director for the Potawatomi Business
      Development Corporation.




**ITEM
      13.****EXHIBITS**




(a)  The
      following documents are filed as a part of this Report:





1.  Financial
      Statements. The following consolidated financial statements and Report of


Independent
      Registered Certified Public Accounting Firm is included in Part II of this
      Report:





Report
      of
      Farber Hass Hurley & McEwen LLP, Independent Registered Public Accounting
      Firm





Consolidated
      Balance Sheets- As of June 30, 2007 and 2006





Consolidated
      Statements of Operation- Years Ended June 30, 2007 and 2006





Consolidated
      Statement of Stockholders' Equity- Years Ended June 30, 2007 and 2006





Consolidated
      Statements of Cash Flows- Years Ended June 30, 2007 and 2006




24





Notes
      to
      Consolidated Financial Statements





2.  Exhibits.
      The following Exhibits are filed as part of, or incorporated by reference into,


this
      Report:


Exhibit
                  No.
              
              Document**3.0**
              
              **Articles
                  of Incorporation and Bylaws**3.1
              
              Amended
                  and Restated Articles of the Company, as amended November
              
              (1)30,
                  1994, incorporated by reference to Exhibit 3.1 to Amendment No.
                  1
                  toRegistration
                  Statement on Form SB-2 dated December 22, 19943.2
              
              Certificate
                  of Designation of Series A Redeemable Convertible
                  Preferred
              
              (1)Stock
                  incorporated by reference to Exhibit 3.2 to Registration Statement
                  onForm
                  SB-2 dated October 12, 19943.3
              
              Certificate
                  of Designation of Series B Redeemable Convertible
                  Preferred
              
              (1)Stock
                  incorporated by reference to Exhibit 3.2 to Registration Statement
                  onForm
                  SB-2 dated October 12, 19943.4
              
              Bylaws
                  of the Company incorporated by reference to Exhibit 3.4 to
              
              (1)Registration
                  Statement on Form SB-2 dated October 12, 19943.5
              
              Certificate
                  of Amendment of Articles of Incorporation dated May 16,
                  2006
              
              (1)incorporated
                  by reference to Exhibit 3.5 to Form 10-KSB for year ended June
                  30,
                  2006**4.0**
              
              **Instruments
                  Defining the Rights of Security Holders, Including
                  Debentures**4.1
              
              Agreement
                  and Plan of Merger among Omni U.S.A., Inc., Omni Merger Sub, Inc.,
              
              (1)Edward
                  Daniel, Jeffrey Daniel and Brendan Technologies, Inc. dated as
                  ofDecember
                  29, 2005 incorporated by reference to Exhibit 4.1 to Current Reporton
                  Form 8-K dated January 5, 20064.2
              
              Stock
                  Purchase Agreement by and among Jeffrey K. Daniel, Craig L. Daniel,
                  and
              
              (1)Edward
                  Daniel, as the Purchases, and Omni U.S.A., Inc., as the Seller,
                  dated asof
                  December 29, 2005 incorporated by reference to Exhibit 4.2 to Current
                  Reporton
                  Form 8-K dated January 5, 20064.3
              
              Amendment
                  to Loan and Related Agreements and Waiver of Default
                  (PACCAR)
              
              (1)incorporated
                  by reference to Exhibit 4.3 to Current Report on Form 8-K
                  datedJanuary
                  5, 2006




25




Exhibit
                  No.
              
              Document4.4
              
              Amendment
                  to Loan and Related Agreements and Waiver of Default
                  (Textron)
              
              (1)incorporated
                  by reference to Exhibit 4.4 to Current Report on Form 8-K
                  datedJanuary
                  5, 20064.5
              
              Promissory
                  Note between Jeffrey K. Daniel, Craig L. Daniel, and Edward
                  Daniel,
              
              (1)collectively
                  the Borrowers, and Omni U.S.A., Inc. with a maturity date ofDecember
                  29, 2008 incorporated by reference to Exhibit 4.5 to Current
                  Reporton
                  Form 8-K dated January 5, 20064.6
              
              2006
                  Equity Incentive Plan incorporated by reference to Exhibit 4.6
                  to
              
              (1)Registration
                  Statement on Form S-8 dated June 15, 20064.7
              
              Form
                  of Securities Purchase Agreement incorporated by reference to Exhibit
                  4.7
              
              (1)to
                  Current Report on Form 8-K dated July 18, 20064.8
              
              Form
                  of 8% Convertible Debenture incorporated by reference to Exhibit
                  4.8
              
              (1)to
                  Current Report on Form 8-K dated July 18, 20064.9
              
              Form
                  of Registration Rights Agreement incorporated by referecne to Exhibit
                  4.9
              
              (1)to
                  Current Report on Form 8-K dated July 18, 20064.10
              
              Form
                  of Warrant incorporated by reference to Exhibit 4.10 to Current
                  Report
                  on
              
              (1)Form
                  8-K dated July 18, 20064.11
              
              Form
                  of Loan and Security Agreement incorporated by reference to Exhibit
                  4.11
              
              (1)to
                  Current Report on Form 8-K dated July 18, 20074.12
              
              Form
                  of 15% Secured Promissory Note incorporated by referecne to Exhibit
                  4.12
              
              (1)to
                  Current Report on Form 8-K dated July 18, 20074.13
              
              Form
                  of Warrant incorporated by reference to Exhibit 4.13 to Current
                  Report
                  on
              
              (1)Form
                  8-K dated July 18, 2007**10.0**
              
              **Material
                  Contracts**10.1
              
              John
                  R. Dunn II Employment Contract dated November 1, 2004 incorporated
                  by
              
              (1)reference
                  to Exhibit 10.1 to Current Report on Form 8-K dated January 5,
                  200610.2
              
              George
                  Dunn Employment Contract dated November 1, 2004 incorporated
                  by
              
              (1)reference
                  to Exhibit 10.2 to Current Report on Form 8-K dated January 5,
                  2006**14.0**
              
              **Code
                  of Ethics**14.1
              
              Code
                  of Ethics incorporated by reference to Exhibit 14.1 to Form 10-KSB
                  for
                  year
              
              (1)ended
                  June 30, 2006




26


Exhibit
                  No.
              
              Document**21.0**
              
              **Subsidiaries
                  of the small business issuer**21.1
              
              Subsidiaries
                  of the small business issuer incorporated by reference to Exhibit
                  21.1
              
              (1)to
                  Form 10-KSB for the year ended June 30, 2006**31.0**
              
              **Rule
                  13a-14(a)/15d-14(a) Certifications**31.1
              
              302
                  Certification of John R. Dunn II
              
              (2)31.2
              
              302
                  Certification of Lowell W. Giffhorn
              
              (2)**32.0**
              
              **Section
                  1350 Certifications**32.1
              
              906
                  Certification of John R. Dunn II
              
              (2)32.2
              
              906
                  Certification of Lowell W. Giffhorn
              
              (2)(1)
                  Previously filed in indicated registration statement or
                  report(2)
                  Exhibit filed herewith


**ITEM
      14.**  **PRINCIPAL
      ACCOUNTANT FEES AND SERVICES.**




The
      following is a summary of the fees billed to Brendan by our principal accountant
      for the fiscal years ended June 30, 2007 and 2006:




Farber
                  Hass Hurley & McEwen LLPFee
                  category
              
              2007
              
              2006Audit
                  fees
              
              $
              82,794
              
              $
              16,250Audit-related
                  fees
              
              $
              1,400
              
              $
              -Tax
                  fees
              
              $
              -
              
              $
              -All
                  other fees
              
              $
              -
              
              $
              -Total
                  fees
              
              $
              84,194
              
              $
              16,250




Audit
      fees. Consists of fees for professional services rendered by our principal
      accountants for the audit of our annual financial statements and the review
      of
      financial statements included in our Forms 10-QSB or services that are normally
      provided by our principal accountants in connection with statutory and
      regulatory filings or engagements.





Audit-related
      fees. Consists of fees for assurance and related services by our principal
      accountants that are reasonably related to the performance of the audit or
      review of our financial statements and are not reported under "Audit fees."





Tax
      fees.
      Consists of fees for professional services rendered by our principal accountants
      for tax compliance, tax advice and tax planning.





All
      other
      fees. Consists of fees for products and services provided by our principal
      accountants, other than the services reported under "Audit fees," "Audit-related
      fees" and "Tax fees" above.




27




**Pre-Approval
      Policies and Procedures**





All
      services provided by our independent registered public accounting firm, Farber
      Hass Hurley & McEwen LLP (“FHHM”) are subject to pre-approval by our Audit
      Committee. The Audit Committee has authorized each of our members to approve
      services by FHHM in the event there is a need for such approval prior to the
      next full Audit Committee meeting. The Audit Committee has also adopted policies
      and procedures that are detailed as to the particular service and that do not
      include delegation of the Audit Committee’s responsibilities to management under
      which management may engage FHHM to render audit or non-audit services. Any
      interim approval given by an Audit Committee member and any such engagement
      by
      management must be reported to the Audit Committee no later than our next
      scheduled meeting. Before granting any approval, the Audit Committee (or a
      committee member if applicable) gives due consideration to whether approval
      of
      the proposed service will have a detrimental impact on FHHM’s independence. The
      full Audit Committee pre-approved all services provided by FHHM in fiscal 2007
      and 2006.





Based
      upon the Audit Committee's discussion with management and the independent
      auditors and the Audit Committee review of the representations of management
      and
      the report of the independent accountants to the Audit Committee, the Audit
      Committee approved that the Board of Directors include our audited financial
      statements in our Annual Report on Form 10-KSB for the years ended June 30,
      2007
      and 2006 filed with the Securities and Exchange Commission.





28




**Index
      to Consolidated Financial Statements**


**Index
                  to Consolidated Financial Statements**Report
                  of Independent Registered Public Accounting Firm
              F-2Consolidated
                  Balance Sheets, June 30, 2007 and 2006
              F-3Consolidated
                  Statements of Operation, for the years endedJune
                  30, 2007 and 2006
              F-4Consolidated
                  Statement of Stockholders' Deficit, for the years endedJune
                  30, 2007 and 2006
              F-5Consolidated
                  Statements of Cash Flows, for the years ended June 30,2007
                  and 2006
              F-6Notes
                  to Consolidated Financial Statements
              F-7-F-22


F-1




**Report
      of Independent Registered Public Accounting Firm**





To
      the
      Board of Directors


Brendan
      Technologies, Inc.


Carlsbad,
      California





We
      have
      audited the accompanying consolidated balance sheets of Brendan Technologies,
      Inc. ("the Company") as of June 30, 2007 and 2006, and the related consolidated
      statements of operations, stockholders’ equity (deficit) and cash flows for the
      years ended June 30, 2007 and 2006. These consolidated financial statements
      are
      the responsibility of the Company's management. Our responsibility is to express
      an opinion on these consolidated financial statements based on our
      audits.





We
      conducted our audits in accordance with
      the
      standards of the Public Company Accounting Oversight Board (United
      States). Those
      standards require that we plan and perform the audits to obtain reasonable
      assurance about whether the consolidated financial statements are free of
      material misstatement.  The
      Company is not required to have, nor were we engaged to perform, an audit of
      its
      internal control over financial reporting. Our audits 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.An audit includes examining, on a test
      basis, evidence supporting the amounts and disclosures in the consolidated
      financial statements. An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall consolidated financial statement presentation. We believe that our
      audits provide a reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of Brendan
      Technologies, Inc. as of June 30, 2007 and 2006, and the results of their
      operations and their cash flows for the years ended June 30, 2007 and 2006,
      in
      conformity with a ccounting
      principles generally accepted in the United States.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in the notes to
      the
      financial statements, the Company has incurred a loss of approximately
      $2,111,000 in the current year, has negative working capital of approximately
      $1,680,000, and is in default on two of its notes payable. These matters raise
      substantial doubt about its ability to continue as a going concern. Management's
      plans concerning these matters are also described in the notes to the
      consolidated financial statements. The consolidated financial statements do
      not
      include any adjustments that might result from the outcome of this uncertainty.






Farber Hass Hurley McEwen LLP/s/
              Farber Hass
              Hurley McEwen LLP


Camarillo,
      California


August
      26, 2007




F-2




**Brendan
                  Technologies, Inc.****Consolidated
                  Balance Sheets**June
                  30,
              
              2007
              
              2006ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              85,016
              
              $
              149,512Accounts
                  receivable, net
              
              
              75,283
              
              
              56,107Prepaid
                  expenses
              
              
              89,919
              
              
              301Total
                  current assets
              
              
              250,218
              
              
              205,920Property
                  and equipment, net
              
              
              157,356
              
              
              72,740Other
                  assets
              
              
              27,951
              
              
              8,190$
              435,525
              
              $
              286,850LIABILITIES
                  AND STOCKHOLDERS' DEFICITCurrent
                  liabilities:Convertible
                  notes payable in default
              
              $
              130,000
              
              $
              255,000Accrued
                  interest in default
              
              
              95,382
              
              
              78,217Note
                  payable
              
              
              100,000
              
              
              -Accounts
                  payable
              
              
              12,916
              
              
              161,430Accrued
                  wages and vacation
              
              
              842,525
              
              
              772,030Accrued
                  interest
              
              
              527,434
              
              
              414,959Deferred
                  revenue
              
              
              98,394
              
              
              77,651Current
                  portion of lease obligations
              
              
              7,388
              
              
              6,442Current
                  portion 8% convertible debentures net of debt discount
              
              
              24,010
              
              
              -Current
                  portion 8% convertible debentures net of debt discount-related
                  parties
              
              
              91,812
              
              
              -Total
                  current liabilities
              
              
              1,929,861
              
              
              1,765,729Long
                  term portion of lease obligations
              
              
              3,607
              
              
              10,9968%
                  Convertible debentures net of debt discount
              
              
              1,343,868
              
              
              23,0028%
                  Convertible debentures net of debt discount - related
                  parties
              
              
              34,154
              
              
              83,652Total
                  liabilities
              
              
              3,311,490
              
              
              1,883,379Stockholders'
                  deficitPreferred
                  stock, $.004995 par value; 5,000,000 sharesauthorized:
                  none outstanding
              
              
              -
              
              
              -Common
                  stock, $.004995 par value; 50,000,000 sharesauthorized:
                  23,705,594 and 25,498,794 issued andoutstanding
                  at June 30, 2007 and 2006, respectively
              
              
              118,409
              
              
              127,366Additional
                  paid in capital
              
              
              5,358,033
              
              
              4,517,814Accumulated
                  deficit
              
              
              (8,352,407
              )
              
              (6,241,709
              )Total
                  stockholders' deficit
              
              
              (2,875,965
              )
              
              (1,596,529
              )$
              435,525
              
              $
              286,850


*See
                  accompanying report of independent registered public accounting
                  firm,
                  summary of accounting policies**and
                  notes to consolidated financial
                  statements.*




F-3


**Brendan
                  Technologies, Inc.****Consolidated
                  Statements of Operation***Year
                  Ended June 30,*
              
              2007
              
              2006Revenue
              
              $
              521,330
              
              $
              681,337Selling
                  expenses
              
              
              101,296
              
              
              103,190General
                  and administrative expenses
              
              
              2,115,310
              
              
              1,215,9662,216,606
              
              
              1,319,156Income
                  (loss) from operations
              
              
              (1,695,276
              )
              
              (637,819
              )Other
                  income (expense)Other
                  income
              
              
              38,121
              
              
              -Interest
                  expense
              
              
              (453,543
              )
              
              (207,574
              )Loss
                  before provision for income taxes
              
              
              (2,110,698
              )
              
              (845,393
              )Provision
                  for income taxes
              
              
              -
              
              
              -Net
                  loss
              
              $
              (2,110,698
              )
              $
              (845,393
              )Basic
                  and diluted loss per share
              
              $
              (0.09
              )
              $
              (0.06
              )Basic
                  and diluted weighted averagecommon
                  shares outstanding
              
              
              23,710,507
              
              
              15,146,106*See
                  accompanying report of independent registered public accounting
                  firm,
                  summary of accounting*




F-4


**Brendan
                  Technologies, Inc.****Consolidated
                  Statements of Stockholders' Deficit***Years
                  Ended June 30, 2007 and 2006*Common
                  Stock
              
              Additional
                  Paid
              
              Retained
                  Earnings
              
              Stockholders'Shares
              
              Amount
              
              in
                  Capital
              
              (Deficit)
              
              (Deficit)Balance,
                  July 1, 2005
              
              
              4,687,209
              
              $
              23,413
              
              $
              1,161,948
              
              $
              (5,396,316
              )
              $
              (4,210,955
              )Issuance
                  of common stock at $3.00per
                  share
              
              
              67,500
              
              
              337
              
              
              202,163
              
              
              -
              
              
              202,500Offering
                  costs paid in cash
              
              
              
              
              
              
              
              
              (31,875
              )
              
              -
              
              
              (31,875
              )Brendan
                  shares converted to Omni at 4 to 1
              
              
              14,264,127
              
              
              71,248
              
              
              (71,248
              )
              
              -
              
              
              -Brendan
                  notes payable and accrued interestconverted
                  to Omni stock
              
              
              4,352,879
              
              
              21,743
              
              
              2,632,455
              
              
              -
              
              
              2,654,198Omni
                  common shares issued in payment ofBrendan
                  accounts payable related to merger
              
              
              100,000
              
              
              500
              
              
              34,500
              
              
              -
              
              
              35,000Omni
                  common shares issued to anindividual
                  as costs of the merger
              
              
              800,000
              
              
              3,996
              
              
              (3,996
              )
              
              -
              
              
              -Omni
                  shares previously outstandingrecapitalized
                  due to the merger
              
              
              1,227,079
              
              
              6,129
              
              
              (6,129
              )
              
              -
              
              
              -Sale
                  of previous Omni operating subsidiariestreated
                  as contributed capital
              
              
              -
              
              
              -
              
              
              498,000
              
              
              -
              
              
              498,000Value
                  of warrants and stock options issued
              
              
              -
              
              
              -
              
              
              101,996
              
              
              -
              
              
              101,996Net
                  (loss) for the year endedJune
                  30, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              (845,393
              )
              
              (845,393
              )Balance,
                  June 30, 2006
              
              
              25,498,794
              
              $
              127,366
              
              $
              4,517,814
              
              $
              (6,241,709
              )
              $
              (1,596,529
              )Cancellation
                  of shares
              
              
              (1,793,200
              )
              
              (8,957
              )
              
              8,957
              
              
              -
              
              
              -Warrant
                  valuation related to financing costs
              
              
              -
              
              
              
              
              
              40,403
              
              
              -
              
              
              40,403Warrant
                  valuation as result of services provided
              
              
              -
              
              
              
              
              
              30,390
              
              
              -
              
              
              30,390Non
                  cash issuance of stock options
              
              
              -
              
              
              
              
              
              80,208
              
              
              -
              
              
              80,208Non
                  cash debt discount on issuance of8%
                  convertible debentures, net of amortization
              
              
              -
              
              
              
              
              
              680,261
              
              
              -
              
              
              680,261Net
                  (loss) for the year ended June 30, 2007
              
              
              -
              
              
              
              
              
              -
              
              
              (2,110,698
              )
              
              (2,110,698
              )Balance,
                  June 30, 2007
              
              
              23,705,594
              
              $
              118,409
              
              $
              5,358,033
              
              $
              (8,352,407
              )
              $
              (2,875,965
              )*See
                  accompanying report of independent registered public accounting
                  firm,
                  summary of accounting policies**and
                  notes to consolidated financial
                  statements.*


F-5


**Brendan
                    Technologies, Inc.****Consolidated
                    Statements of Cash Flows***Year
                    Ended June 30,*
                
                2007
                
                2006Operating
                    activities:Net
                    loss
                
                $
                (2,110,698
                )
                $
                (845,393
                )Adjustments
                    to reconcile net lossto
                    cash provided by operating activities:Amortization
                    and depreciation
                
                
                46,189
                
                
                14,858Provision
                    for uncollectible receivables
                
                
                1,000
                
                
                -Stock
                    option compensation
                
                
                80,208
                
                
                83,650Amortization
                    of debt discount
                
                
                164,951
                
                
                -Amortization
                    of financing costs
                
                
                17,398
                
                
                -Amortization
                    of warrant valuation issued for services
                
                
                11,397
                
                
                -Other
                    non cash items
                
                
                (38,122
                )
                
                98,000Changes
                    in assets and liabilities:(Increase)
                    decrease in accounts receivable
                
                
                (20,176
                )
                
                15,644(Increase)
                    decrease in prepaid expense and other assets
                
                
                (67,381
                )
                
                29Increase
                    (decrease) in accounts payable
                
                
                (110,392
                )
                
                48,773Increase
                    (decrease) in accrued liabilities
                
                
                200,135
                
                
                60,967Increase
                    (decrease) in deferred revenue
                
                
                20,743
                
                
                14,654Net
                    cash (used in) operating activities
                
                
                (1,804,748
                )
                
                (508,818
                )Investing
                    activities:Purchase
                    of property and equipment
                
                
                (130,805
                )
                
                (67,351
                )Net
                    cash (used in) investing activities
                
                
                (130,805
                )
                
                (67,351
                )Financing
                    activities:Principal
                    payments of lease obligations
                
                
                (6,443
                )
                
                (2,448
                )Principal
                    payments on notes payable in default
                
                
                (125,000
                )
                
                -Proceeds
                    from notes receivable on sale of Omni divisions
                
                
                -
                
                
                400,000Proceeds
                    from issuance of 8% convertible debentures
                
                
                1,902,500
                
                
                125,000Proceeds
                    from issuance of short term note payable
                
                
                100,000
                
                
                -Proceeds
                    from issuance of common stock, net of cashpaid
                    for costs
                
                
                -
                
                
                170,625Net
                    cash provided by financing activities
                
                
                1,871,057
                
                
                693,177Net
                    increase (decrease) in cash and cash equivalents
                
                
                (64,496
                )
                
                117,008Cash
                    and cash equivalents, beginning of year
                
                
                149,512
                
                
                32,504Cash
                    and cash equivalents, end of year
                
                $
                85,016
                
                $
                149,512Supplemental
                    Disclosure of Cash Flow Information:Cash
                    paid during the period for:Interest
                
                $
                88,306
                
                $
                17,708Income
                    taxes
                
                $
                -
                
                $
                -Non
                    Cash Investing and Financing Activities:Debt
                    discount on 8% convertible debentures
                
                $
                680,261
                
                $
                18,346Financing
                    costs related to debentures and notes
                
                $
                40,403
                
                $
                -Valuation
                    of warrants issued for services
                
                $
                30,390
                
                $
                -Property
                    and equipment acquired through lease
                
                $
                -
                
                $
                7,886Conversion
                    of Brendan notes payable into common stock
                
                $
                -
                
                $
                1,692,972Conversion
                    of Brendan accrued interest into common stock
                
                $
                -
                
                $
                961,226Issuance
                    of common stock in payment of accounts payable
                
                $
                -
                
                $
                35,000
 *See
          accompanying reports of independent registered public accounting firms,
          summary
          of accounting policies*
 *and
          notes to consolidated financial statements.*
 
 F-6




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements





**Note
      1 -**  **Business**





Nature
      of Business





Brendan
      Technologies, Inc., a Nevada corporation ( **“we”** or **“Brendan”** )
      provides software solutions to improve the accuracy, quality control, workflow,
      and regulatory compliance of immunoassay testing in laboratories in the
      biopharmaceutical, clinical, research, veterinarian and agricultural industries.





Name
      Change and Merger of Brendan Technologies, Inc. into Omni, U.S.A.,
      Inc.





On
      September 15, 2006, Omni changed its name to Brendan Technologies, Inc. On
      December 29, 2005, Omni U.S.A., Inc., a Nevada corporation ( **“Omni”** ),
      Omni’s
      wholly-owned subsidiary Omni Merger Sub, Inc., a Michigan corporation
      (“ **Merger
      Sub** ”)
      entered into an Agreement and Plan of Merger (the “ **Merger
      Agreement** ”)
      with
      Brendan Technologies, Inc., a Michigan corporation (“ **Brendan
      Sub** ”),
      pursuant to which Merger Sub was merged with and into Brendan Sub and Brendan
      Sub became the surviving corporation in the merger and a wholly-owned subsidiary
      of Omni. Brendan Sub continues its corporate existence under the laws of the
      State of Michigan. Concurrently with the merger, 4,754,709 shares
      of
      Brendan Sub common stock outstanding immediately before the merger were
      converted into 19,018,836 shares
      of
      Omni common stock, a four for one ratio. Also concurrently with the merger,
      (i) 4,352,879 shares
      of
      Omni common stock were issued to the holders of Brendan Sub Senior and Bridge
      Notes totaling $ 2,654,198 in
      aggregate principal and interest, a conversion rate of 1.64 shares per $1.00
      under such debt; (ii) 900,000 shares of Omni common stock was issued to
      individuals who participated in the arrangement of the merger.




Common
      stock options and warrants exercisable into 973,500 shares
      of
      Brendan Sub before the merger became exercisable into 3,894,000 common
      shares of Omni after the merger. The exercise price of the Omni stock options
      and warrants were adjusted to 25% of the exercise price of the Brendan Sub
      stock
      options and warrants.




Following
      the transactions effected by the Merger Agreement, Brendan Sub is now our sole
      wholly-owned subsidiary and we conduct all our operations through Brendan
      Sub.




**Note
      2- Going Concern**





Going
      Concern





These
      financial statements have been prepared on a going concern basis. However,
      during the years ended June 30, 2007 and 2006, we incurred net losses of
      $2,110,698 and $845,393, respectively, and had an accumulated deficit of
      $8,352,407 and $6,241,709, at June 30, 2007 and 2006, respectively. In addition,
      at June 30, 2007, we had a working capital deficit of $1,679,643 and are in
      default on $225,382 of debt and interest. Our ability to continue as a going
      concern is dependent upon our ability to generate profitable operations in
      the
      future and/or to obtain the necessary financing to meet our obligations and
      repay our liabilities arising from normal business
      operations when they come due. The outcome of these matters cannot be predicted
      with any certainty at this time and as such raise substantial doubt as to our
      ability to continue as a going concern. Since inception, we have satisfied
      our
      capital needs through debt and equity financings and expect to continue to
      fund
      our operations from these sources until profitability is achieved. There can
      be
      no assurance that funds will be available at terms favorable to us or that
      future profitability can be achieved. The consolidated financial statements
      do
      not include any adjustments relating to the recoverability and classification
      of
      recorded asset amounts or the amounts and classification of liabilities that
      might be necessary should we be unable to continue as a going
      concern.




F-7




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





business
      operations when they come due. The outcome of these matters cannot be predicted
      with any certainty at this time and as such raise substantial doubt as to our
      ability to continue as a going concern. Since inception, we have satisfied
      our
      capital needs through debt and equity financings and expect to continue to
      fund
      our operations from these sources until profitability is achieved. There can
      be
      no assurance that funds will be available at terms favorable to us or that
      future profitability can be achieved. The consolidated financial statements
      do
      not include any adjustments relating to the recoverability and classification
      of
      recorded asset amounts or the amounts and classification of liabilities that
      might be necessary should we be unable to continue as a going
      concern.





Management’s
      Plans





Management's
      plans to eliminate the going concern situation include, but are not limited
      to,
      the following:





·  Obtain
      additional equity or debt financing from investors. Subsequent to June 30,
      2007,
      we received net


proceeds of $555,000
      from the issuance of a bridge loan to a group of five investors.





·  Increase
      revenue from the sale of our software. We are anticipating releasing an upgraded
      version of our


software
      during the next twelve months that will address customer enterprise level
      requirements.





· If
      necessary, we will initiate cost cutting programs that would reduce cash
      requirements.




**Note
      3 -**  **Summary
      of Significant Accounting Policies**





Consolidation
      Policy





The
      foregoing financial information has been prepared from the books and records
      of
      Brendan. Brendan’s consolidated financial statements include the accounts of our
      wholly-owned subsidiary, Brendan Sub. All significant intercompany balances
      and
      transactions have been eliminated in consolidation. In the opinion of
      management, the financial information reflects all adjustments necessary for
      a
      fair presentation of the financial condition, results of operations and cash
      flows of ours in conformity with accounting principles generally accepted in
      the
      United States.





Cash
      and cash Equivalents





Cash
      and
      cash equivalents include cash, funds invested in money market funds and cash
      invested temporarily in various instruments with maturities of three months
      or
      less at the time of purchase.





Trade
      Accounts Receivable





We
      provide for the possible inability to collect accounts receivable by recording
      an allowance for
      doubtful accounts. We write off an account when it is considered to be
      uncollectible.




F-8




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued) .





Property
      and Equipment





Property
      and equipment are stated at cost. Expenditures for major renewals and
      betterments that extend the useful lives of property and equipment are
      capitalized, upon being placed in service. Expenditures for maintenance and
      repairs are charged to expense as incurred. Depreciation is computed over the
      estimated useful life of three years, except leasehold improvements which are
      depreciated over the lesser of the remaining lease life or the life of the
      asset, using the straight-line method. We follow the provisions of the Financial
      Accounting Standards Board ("FASB") Statement of Financial Accounting Standards
      ("SFAS") No. 144, "Accounting for the Impairment of Long-lived Assets."
      Long-lived assets and certain identifiable intangibles to be held and used
      by us
      are reviewed for impairment whenever events or changes in circumstances indicate
      that the carrying amount of an asset may not be recoverable. We periodically
      evaluate the recoverability of our long-lived assets based on estimated future
      cash flows and the estimated fair value of such long-lived assets, and provide
      for impairment if such undiscounted cash flows are insufficient to recover
      the
      carrying amount of the long-lived asset.





Revenue
      Recognition





We
      recognize revenues related to software licenses and software maintenance in
      accordance with the American Institute of Certified Public Accountants (“AICPA”)
      Statements of Position (“SOP”) No. 97-2, “Software Revenue Recognition,” as
      amended by SOP No. 94-4 and SOP No. 98-9. We follow the guidance established
      by
      the SEC in Staff Accounting Bulletin No. 104, as well as generally accepted
      criteria for revenue recognition, which require that, before revenue is
      recorded, there is persuasive evidence of an arrangement, the fee is fixed
      or
      determinable, collection is reasonably assured, and delivery to our customer
      has
      occurred. In addition, our invoices may include multiple elements that identify
      vendor specific objective evidence of fair value for each of those elements.
      We
      recognize revenue as follows:





Software-
      our software is sold with an indefinite license period, and as such, product
      revenue is recorded at the time of the customer’s acceptance (generally 30 days
      after shipment which allows for a 30 day return guarantee if the customer is
      not
      satisfied with the product), net of estimated allowances and returns.





Post-contract
      customer support- (“PCS”) obligations are generally for annual services and are
      recognized over the period of service. Revenues for which payment has been
      received are treated as deferred revenue until services are provided and
      revenues have been earned.





Training
      and service calls- recognized at the time training or service calls are
      provided.





Royalties-
      we recognize revenue from royalties only after the cash has been collected
      (typically 30 days after the end of the quarter on which the royalty payment
      is
      based.)





Licensing-
      we also derive license revenue from fees for the transfer of proven and reusable
      intellectual property components. Generally, these payments will include a
      nonrefundable technology license fee, which will be payable upon the transfer
      of
      intellectual property.




F-9




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





License
      fees will be recognized upon the execution of the license agreement and transfer
      of intellectual property provided no further significant performance obligations
      exist and collectibility is deemed probable.





Customization
      revenue- fees related to software service contracts to aid customers in adapting
      such intellectual property to their particular instruments, which will be
      performed on a best efforts basis and for which we will receive periodic
      milestone payments, will be recognized as revenue over the estimated development
      period, using a cost-based percentage of completion method.





Software
      Development Costs





Costs
      associated with the development and enhancement of proprietary software for
      sale
      is expensed as incurred. The costs incurred between the time when our products
      reach technological feasibility and when they are available for general release
      to the public are


capitalized
      and amortized over their estimated useful lives. When such assets have been
      capitalized, they are reviewed each period to determine if the value of the
      asset has been impaired. We currently have no capitalized and unamortized
      software development costs.





Research
      and Development





We
      account for research and development costs in accordance with several accounting
      pronouncements, including SFAS No. 2, *Accounting
      for Research and Development Costs* ,
      and
      SFAS No. 86, *Accounting
      for the Costs of Computer Software to be Sold, Leased, or Otherwise
      Marketed.* Costs to
      maintain and upgrade our software after initial release to our customers are
      expensed when incurred. Research and development costs were immaterial during
      each period.





Stock
      Based Compensation





Effective
      January 1, 2006, we adopted FASB Statement No. 123R, “Accounting for Stock-Based
      Compensation” (“SFAS 123R”). SFAS 123R requires all share-based payments to
      employees, including grants of employee stock options and restricted stock,
      to
      be recognized in the financial statements based on their fair values. Under
      SFAS
      123R, the pro forma disclosures previously permitted under APB 25 are no longer
      an alternative for financial statement reporting purposes.




F-10




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)


We
        have
        selected the Black-Scholes method of valuation for share-based compensation
        and
        have adopted the modified prospective transition method under SFAS 123R,
        which
        requires that compensation cost be recorded, as earned, for all unvested
        stock
        options outstanding at the beginning of the first quarter of adoption of
        SFAS
        123R. As permitted by SFAS 123R, prior periods have not been restated. The
        charge is being recognized in non cash compensation, which
        is
        included in stock-based compensation expense, on a straight-line basis over
        the
        remaining service period after the adoption date based on the options’ original
        estimate of fair value. Prior to the adoption of SFAS 123R, the Company applied
        the intrinsic-value-based method of accounting prescribed by Accounting
        Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to
        Employees.” Under this method, compensation cost was recorded only if the market
        price of the underlying stock on the grant date exceeded the exercise price.
        As
        permitted by SFAS 123, the Company elected the disclosure only requirements
        of
        SFAS 123. The fair-value based method used to determine historical pro forma
        amounts under SFAS 123 was similar in most respects to the method used to
        determine stock-based compensation expense under SFAS 123R.




The
      following table illustrates the pro forma effect on our net loss and net loss
      per share as if we had adopted the fair value based method of accounting for
      stock-based compensations under the provisions of SFAS 123R at the beginning
      of
      the year ended June 30, 2006:


Year
                  Ended June 30,2006Net
                  income (loss), as reported
              
              $
              (845,393
              )Stock-based
                  employee compensation,net
                  of tax effects
              
              $
              (57,078
              )Proforma
                  net income (loss)
              
              $
              (902,471
              )Net
                  income (loss) per share:Basic
                  and diluted- as reported
              
              $
              (0.06
              )Basic
                  and diluted- proforma
              
              $
              (0.06
              )




For
      purposes of computing the pro forma disclosures required by SFAS No. 123, the
      fair value of each option granted to employees and directors is estimated using
      the Black-Scholes option-pricing model.





Stock
      options to purchase up to 695,000 and 460,000 shares of common stock were
      granted to employees and directors during the years ended June 30, 2007 and
      2006
      and $80,208 and $83,650 was charged to expense for the years ended June 30,
      2007
      and 2006. The stock options were valued using the Black-Scholes option-pricing
      model with the following weighted-average assumptions used for the years ended
      June 30:


2007
              2006Dividend
                  yield
              None
              NoneInterest
                  rate
              4.62%
                  to 5.10%
              4.84%Expected
                  lives
              5
                  Years
              5
                  yearsVolatility
              39%
                  to 43%
              37%Forfeitures
                  (estimated)
              0
                  %
              0%





We
      apply
      SFAS No. 123 in valuing options granted to consultants and estimate the fair
      value of such options using the Black-Scholes option-pricing model. The fair
      value is recorded as consulting
      expense and included in general and administrative expenses as services are
      provided. Options granted to consultants for which vesting is contingent based
      on future performance are measured at their then current fair value at each
      period end, until vested.




F-11




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)




Loss
      Per Share





We
      utilize SFAS No. 128, “Earnings per Share.” Basic loss per share is computed by
      dividing loss available to common shareholders by the weighted-average number
      of
      common shares outstanding. Diluted loss per share is computed similar to basic
      loss per share except that the denominator is increased to include the number
      of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      Common equivalent shares are excluded from the computation if their effect
      is
      anti-dilutive.





For
      the
      years ended June 30, 2007 and 2006, the following common equivalent shares
      were
      excluded from the computation of loss per share since their effects are
      anti-dilutive.


June
                  30,2007
              
              2006Convertible
                  debentures
              
              
              4,055,000
              
              
              250,000Options
              
              
              4,975,000
              
              
              4,622,334Warrants
              
              
              8,660,667
              
              
              720,667Total
              
              
              17,690,667
              
              
              5,593,001




Fair
      Value of Financial Instruments





Our
      financial instruments include accounts receivable, notes receivable, accounts
      payable, notes payable and accrued wages. The book value of all financial
      instruments is representative of their fair values.





Income
      Taxes





We
      utilize SFAS No. 109, “Accounting for Income Taxes,” which requires the
      recognition of deferred tax assets and liabilities for the expected future
      tax
      consequences of events that have been included in the financial statements
      or
      tax returns. Under this method, deferred income taxes are recognized for the
      tax
      consequences in future years of differences between the tax bases of assets
      and
      liabilities and their financial reporting amounts at each period-end based
      on
      enacted tax laws and statutory tax rates applicable to the periods in which
      the
      differences are expected to affect taxable income. Valuation allowances are
      established, when necessary, to reduce deferred tax assets to the amount
      expected to be realized.





Estimates





The
      preparation of financial statements 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. Actual results could differ from those estimates.




F-12




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





Concentrations
      of Credit Risk





Financial
      instruments which potentially subject us to credit risk are
      primarily accounts receivable. Credit risk concentration with respect to
      receivables is limited due to the geographic dispersion of our customer base.
      We
      conduct ongoing credit evaluations but do not obtain collateral or other forms
      of security. We believe our credit policies do not result in significant adverse
      risk and historically have not experienced significant credit-related losses.
      We
      had two customers whose balances due at June 30, 2007 exceeded 10% of gross
      accounts receivable (12% and 10%). At June 30, 2006, we had two customers which
      accounted for 29% and 18% of our accounts receivable balance.





We
      have
      several customers which accounted for greater than 10% of our sales. Two
      customers accounted for 24% and 12% of our sales for the year ended June 30,
      2007 and one customer accounted for 42% of our sales for the year ended June
      30,
      2006.





Recently
      Enacted Accounting Standards





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities”. This Statement permits entities 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 No. 159 is effective for fiscal years
      beginning after November 15, 2007. We are currently assessing the impact of
      SFAS No. 159 on our financial position and results of operations.





In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans.” This Statement requires an
      employer to recognize the over funded or under funded status of a defined
      benefit post retirement plan (other than a multiemployer plan) as an asset
      or
      liability in its statement of financial position, and to recognize changes
      in
      that funded status in the year in which the changes occur through comprehensive
      income.  SFAS No. 158 is effective for fiscal years ending after December
      15, 2006. The adoption of SFAS No. 158 had no impact on our financial position
      and results of operations.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measures”.
      This Statement defines fair value, establishes a framework for measuring fair
      value under GAAP, expands disclosures about fair value measurements, and applies
      under other accounting pronouncements that require or permit fair value
      measurements. SFAS No. 157 does not require any new fair value
      measurements. However, the FASB anticipates that for some entities, the
      application of SFAS No. 157 will change current practice. SFAS No. 157
      is effective for financial statements issued for fiscal years beginning after
      November 15, 2007, which for us would be the fiscal year beginning April 1,
      2008. We are currently evaluating the impact of SFAS No. 157 but do
      not expect that it will have a material impact on our financial statements.





F-13




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





In
      September 2006, the SEC issued Staff Accounting Bulletin
      (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements
      when Quantifying Misstatements in Current Year Financial Statements.” SAB
      No. 108 addresses how the effects of prior year uncorrected misstatements should
      be
      considered when quantifying misstatements in current year financial statements.
      SAB No. 108 requires companies to quantify misstatements using a balance
      sheet and income statement approach and to evaluate whether either approach
      results in quantifying an error that is material in light of relevant
      quantitative and qualitative factors. SAB No. 108 is effective for periods
      ending after November 15, 2006.  The adoption of SAB No. 108 had no
      impact on our financial position and results of operations.





In
      June
      2006, the FASB issued FASB Interpretation Number 48, "Accounting for Uncertainty
      in Income Taxes - an interpretation of FASB Statement No. 109."  This
      Interpretation clarifies the accounting for uncertainty in income taxes
      recognized in an enterprise's financial statements in accordance with FASB
      Statement No. 109, "Accounting for Income Taxes."  This Interpretation is
      effective for fiscal years beginning after December 15, 2006. We are currently
      assessing the effect of this Interpretation on our financial
      statements.





**Note
      4-**  **Accounts
      Receivable**





Accounts
      receivable are carried at the expected realizable value. Accounts receivable
      consisted of the following:


June
                  30,2007
              
              2006Accounts
                  receivable - trade
              
              $
              81,283
              
              $
              61,107Allowance
                  for doubtful accounts
              
              
              (6,000
              )
              
              (5,000
              )Accounts
                  receivable, net
              
              $
              75,283
              
              $
              56,107




**Note
      5-  Property and Equipment**





The
      following is a summary of equipment, at cost, less accumulated
      depreciation:


June
                  30,2007
              
              2006Computer
                  equipment
              
              $
              214,131
              
              $
              95,047Furniture
                  and fixtures
              
              
              115,982
              
              
              104,261330,113
              
              
              199,308Less
                  accumulated depreciation
              
              
              172,757
              
              
              126,568$
              157,356
              
              $
              72,740




Depreciation
      expense for the years ended June 30, 2007 and 2006 was $46,189 and $14,858,
      respectively.




F-14




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





**Note
      6-  Accrued Wages and Accrued Interest**





From
      1999
      through 2004, employees deferred a portion of their wages accumulating $687,527.
      This amount plus employee taxes payable thereon remains outstanding at June
      30,
      2007 and 2006.
      The
      outstanding balance accrues interest at the rate of 12% per annum. The amount
      of
      accrued interest payable related to the deferred wages equaled $455,974 and
      $414,723 at June 30, 2007 and 2006, respectively. We anticipate paying the
      accrued wages and interest either in cash or by allowing the employees to
      convert to common stock. Two of the employees with accumulated wages payable
      of
      $352,455 and accrued interest payable of $231,367 and $210,221 at June 30,
      2007
      and 2006, respectively, are affiliates of ours.





**Note
      7- Convertible Notes Payable in Default**





Three
      of
      53 convertible notes payable were not converted into common stock of Brendan
      at
      the time of its merger with Omni. One of these notes was paid in July 2006
      and
      the remaining two are outstanding and, therefore, remain in default at June
      30,
      2007 and consist of the following:




June
                  30,
              
              June
                  30,2007
              
              2006Two
                  convertible, unsecured, senior subordinatednotes
                  payable, due on various dates on or beforeSeptember
                  2004, bearing interest at 8% per annum.
              
              $
              130,000
              
              $
              130,000Unsecured,
                  convertible note payable for $125,000,with
                  an interest rate of 12% per annum.
              
              
              -
              
              
              125,000$
              130,000
              
              $
              255,000




**Note
      8 - 8% Convertible Debentures**





*Overview* .
      From
      June 2006 through June 2007, we sold an aggregate of $2,027,500 of 8%
      convertible debentures to a group of 24 investors, two of which are affiliates
      of ours. The convertible debentures entitle the debenture holder to convert
      the
      principal into our common stock for two years from the date of closing. Interest
      on the debentures is payable, at the election of the debenture holder, either
      quarterly in cash or in common stock at the earlier of the conversion or
      maturity of the debenture.





*Number
      of Shares Debentures May Be Converted Into* .
      The
      debentures can be converted into a number of our common shares at a conversion
      price equal to $0.50 per share.





*Warrants.* Concurrent with the issuance of the convertible debentures, we issued two
      warrants to each debenture holder to purchase shares of our common stock. One
      warrant is exercisable at $0.60 per share within five years of issuance while
      the other warrant is exercisable at $1.00 per share within one year of
      issuance.





*Right
      of First Refusal* .
      The
      debenture holders have a right of first refusal to purchase or participate
      in
      any equity securities offered by us in any private transaction which closes
      on
      or prior to the date that is two years after the issue date of each
      debenture.




F-15




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





*Registration
      Rights* .
      We are
      responsible for registering the resale of the shares of our common stock which
      will be issued on the conversion of the debentures.





*Restrictions
      on Use of Funds* .
      We may
      not pay any cash dividends without the debenture holders’ prior written
      approval.





The
      following table presents the status, as of June 30, 2007 and 2006, of
      our


convertible
      debentures:


As
                  ofJune
                  30, 2007
              
              June
                  30, 2006Convertible
                  debentures issued
              
              $
              2,027,500
              
              $
              125,000Less
                  debt discount
              
              
              (533,656
              )
              
              (18,346
              )1,493,844
              
              
              106,654Less
                  current portion
              
              
              (115,822
              )
              
              -Long
                  term portion
              
              $
              1,378,022
              
              $
              106,654Current
                  issued to related parties
              
              $
              91,812
              
              $
              -Long
                  term issued to related parties
              
              $
              34,154
              
              $
              83,652Maturity
                  dates of outstandingconvertible
                  debenturesJune
                  2008
              
              $
              125,000
              
              $
              125,000June
                  2009
              
              
              1,902,500
              
              
              -$
              2,027,500
              
              $
              125,000




**Note
      9-  Lease Obligations**





Operating
      Lease





We
      have
      entered into a two-year building lease for our office commencing in June 2006
      and expiring in May 2008 with a one year option to renew. Lease expense for
      the
      years ended June 30, 2007 and 2006 amounted to $73,854 and $71,076,
      respectively. The following is a schedule of minimum annual rental payments
      for
      the next five years.


Years
                  ending June 30,2008
              
              $
              54,835Total
                  minimum lease payments
              
              $
              54,835





F-16




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





**Note
      10- Capital Stock**





Preferred
      Stock





We
      have
      authorized 5,000,000 shares of preferred stock, $.004995 par value, with such
      rights, preferences and designations and to be issued in such series as
      determined by the Board of Directors. No shares are issued and outstanding
      at
      June 30, 2007.





Common
      Stock





We
      have
      authorized 50,000,000 shares of common stock at $.004995 par value. At June
      30,
      2007, we had 23,705,594 shares of common stock issued and
      outstanding.





During
      the year ended June 30, 2006, we issued 67,500 shares of common stock for
      proceeds of $202,500 less offering costs of $31,875; reflected 14,264,127 shares
      to affect a 4 for 1 reverse merger with shareholders of Brendan Sub, issued
      4,352,879 shares in exchange for notes payable and accrued expenses to note
      holders of Brendan Sub, and issued 900,000 shares to individuals who
      participated in the reverse merger. At the conclusion of the reverse merger,
      the
      shareholders of the predecessor corporation held 1,227,079 shares of common
      stock. Of the 14,264,127 shares discussed above, 12,470,927 have been issued
      and
      1,793,200 are for an individual and relate to a 1999 agreement with an
      investment banking firm in which the individual was a principal. The individual
      was obligated to use his best efforts to secure private placement financings
      and
      the investment banking firm was to underwrite an initial public offering for
      us.
      Although outstanding on the records as of June 30, 2006, the individual was
      not
      entitled to these shares and we had not issued the shares as of June 30, 2006.
      The 1,793,200 shares were cancelled during the year ended June 30,
      2007.





Warrants





During
      the year ended June 30, 2007, we issued 7,610,000 common stock purchase warrants
      to a group of 21 investors, one of which is our affiliate, related to the
      issuance of 8% convertible debentures. In addition, we issued a common stock
      purchase warrant for the purchase of 240,000 common shares to one individual
      who
      assisted us in raising funds, a warrant to one individual for the purchase
      of
      240,000 common shares related to our investor relations program and a warrant
      to
      one investor for 100,000 common shares related to a short term note. During
      the
      year, one year warrants issued in conjunction with the 8% convertible debentures
      representing 250,000 common shares expired. A warrant to purchase up to 166,667
      common shares remains outstanding which was issued by the predecessor company
      as
      a result of their financings with an institutional investor.





During
      the year ended June 30, 2006, we issued 500,000 common stock purchase warrants
      to a group of five individual investors, two of which are our affiliates,
      related to the issuance of 8% convertible debentures. In addition, we issued
      a
      common stock purchase warrant for the purchase of 54,000 post-merger shares
      to
      one individual who assisted us in raising funds. In addition, a warrant
      exercisable into up to 358,400 post merger shares expired during the year ended
      June 30, 2006.





F-17





**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





A
      summary
      of the status of the warrants granted under various agreements at June 30,
      2007
      and


2006,
      and
      changes during the years then ended is presented below:


WarrantsWeightedAverageExerciseShares
              
              PriceOutstanding,
                  June 30, 2005
              
              
              89,600
              
              
              2.25Post
                  Merger warrants at 4 for 1
              
              
              358,400
              
              
              0.56Predecessor
                  warrants outstanding
              
              
              166,667
              
              
              6.00Granted
              
              
              554,000
              
              
              0.80Cancelled
              
              
              (358,400
              )
              
              0.56Outstanding,
                  June 30, 2006
              
              
              720,667
              
              
              2.00Granted
              
              
              8,190,000
              
              
              0.79Cancelled
              
              
              (250,000
              )
              
              1.00Outstanding,
                  June 30, 2007
              
              
              8,660,667
              
              $
              0.88Exercisable,
                  June 30, 2006
              
              
              720,667
              
              $
              2.00Exercisable,
                  June 30, 2007
              
              
              8,660,667
              
              $
              0.88




The
      weighted average grant date fair value of warrants issued during the year ended
      June 30, 2007 was $0.08.





We
      estimate the fair value of each warrant at the issuance date by using the
      Black-Scholes option-pricing model with the following weighted-average
      assumptions used for the year ended June 30, 2007: dividend yield of zero
      percent; expected volatility of 39% to 43%, risk-free interest rates of 4.57%
      to
      5.20%; and expected lives of 1 to 5 years and for the year ended June 30, 2006:
      dividend yield of zero percent, expected volatility of 37%, risk-free interest
      rates of 5.13% to 5.28%, and expected lives of 1 to 5 years.





F-18




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)


Outstanding
              
              ExercisableWeightedAverage
              
              Weighted
              
              
              
              WeightedRange
                  of
              
              
              
              Remaining
              
              Average
              
              
              
              AverageExercise
              
              Number
              
              Contractual
              
              Exercise
              
              Number
              
              ExercisePrices
              
              Outstanding
              
              Life
              
              Price
              
              Exercisable
              
              Price***Warrants***$ 0.60
              
              
              4,635,000
              
              
              4.31
              
              $
              0.60
              
              
              4,635,000
              
              $
              0.60$ 0.75
              
              
              54,000
              
              
              3.13
              
              $
              0.75
              
              
              54,000
              
              $
              0.75$ 1.00
              
              
              3,805,000
              
              
              0.33
              
              $
              1.00
              
              
              3,805,000
              
              $
              0.33$ 6.00
              
              
              166,667
              
              
              2.01
              
              $
              6.00
              
              
              166,667
              
              $
              6.008,660,667
              
              
              2.51
              
              $
              0.88
              
              
              8,660,667
              
              $
              0.88




Stock
      Option Plan




In
      April 2006 we adopted a Stock Option Plan, which we refer to as the "Plan,"
      which provides for the grant of stock options intended to qualify as "incentive
      stock options" and "nonqualified stock options" (collectively "stock options")
      within the meaning of Section 422 of the United States Internal Revenue
      Code of 1986 (the "Code"). Stock options may be issued to any of our officers,
      directors, key employees or consultants.




Under
      the
      Plan, we have reserved 7.5 million shares underlying stock options for
      issuance, of which 4,950,000 options are issued and outstanding to executive
      officers, employees and consultants at prices ranging from $0.025 to $0.75
      per
      share. The Plan is administered by the full Board of Directors, who determine
      which individuals shall receive stock options, the time period during which
      the
      stock options may be exercised, the number of shares of common stock that may
      be
      purchased under each stock option and the stock option price.




The
      per
      share exercise price of incentive stock options may not be less than the fair
      market value of the common stock on the date the option is granted. The
      aggregate fair market value (determined as of the date the stock option is
      granted) of the common stock that any person may purchase under an incentive
      stock option in any calendar year pursuant to the exercise of incentive stock
      options will not exceed $100,000. No person who owns, directly or indirectly,
      at
      the time of the granting of an incentive stock option, more than 10% of the
      total combined voting power of all classes of our stock is eligible to receive
      incentive stock options under the Plan unless the stock option price is at
      least
      110% of the fair market value of the common stock subject to the stock option
      on
      the date of grant.




No
      incentive stock options may be transferred by an optionee other than by will
      or
      the laws of descent and distribution, and, during the lifetime of an optionee,
      the stock option may only be exercisable by the optionee. Except as otherwise
      determined by the Board of Directors, stock options may be exercised only if
      the
      stock option holder remains continuously associated with us from the date of
      grant to the date of exercise. The exercise date of a stock option granted
      under
      the Plan may not be later than ten years from the date of grant. Any stock
      options that expire unexercised or that terminate upon an optionee's ceasing
      to
      be employed by us will become available once again for issuance. Shares issued
      upon exercise of a stock option will rank equally with other shares then
      outstanding. No stock options will be granted by us at an exercise price less
      than 85% of the fair market value of the stock underlying the option on the
      date
      the option is granted. During the years ended June 30, 2007 and 2006, there
      were
      options granted to purchase up to 695,000 and 460,000 shares of common
      stock.




F-19




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)




There
      also remain outstanding stock options inherited from another stock option plan
      of the predecessor company which were issued to employees, directors and
      consultants of the predecessor company. The number of stock options outstanding
      at June 30, 2007 from the predecessor company’s plan is 25,000 with exercise
      prices ranging from $3.56 to $6.75 per share.





A
      summary
      of the status of the options granted under the stock option plan and other
      agreements at June 30, 2007, are presented in the table below:


OptionsWeightedAverageExerciseShares
              
              PriceOutstanding,
                  June 30, 2005
              
              
              960,000
              
              $
              1.25Post
                  Merger options at 4 for 1
              
              
              3,840,000
              
              
              0.31Granted
              
              
              460,000
              
              
              0.68Predecessor
                  options outstanding
              
              
              322,334
              
              
              3.13Outstanding,
                  June 30, 2006
              
              
              4,622,334
              
              
              0.55Granted
              
              
              695,000
              
              
              0.64Cancelled
              
              
              (342,334
              )
              
              2.69Outstanding,
                  June 30, 2007
              
              
              4,975,000
              
              
              0.41Exercisable,
                  June 30, 2006
              
              
              4,472,334
              
              $
              0.54Exercisable,
                  June 30, 2007
              
              
              4,559,500
              
              $
              0.36





The
      weighted average grant date fair value of options granted during the year ended
      June 30, 2007 was $0.15.





As
      of
      June 30, 2007 and 2006, the number of unvested shares equaled 415,500 and
      150,000 shares, respectively. As
      of
      June 30, 2007, the unamortized portion of stock compensation expense on all
      existing stock options was $56,471.  This cost is expected to be
      recognized over a weighted average period of 1.2 years.





The
      aggregate pre-tax intrinsic value of outstanding options, based on the closing
      price of $0.38 as of June 30, 2007, was $774,200 and there was no intrinsic
      value for options granted during the year ended June 30, 2007.





The
      total
      fair value of options vested during the year ended June 30, 2007 was
      approximately $80,208 and for June 30, 2006 was $83,650.





F-20





**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)




Outstanding
              
              ExercisableWeightedAverage
              
              Weighted
              
              
              
              WeightedRange
                  of
              
              
              
              Remaining
              
              Average
              
              
              
              AverageExercise
              
              Number
              
              Contractual
              
              Exercise
              
              Number
              
              ExercisePrices
              
              Outstanding
              
              Life
              
              Price
              
              Exercisable
              
              Price***Options***$
              0.025
              
              
              1,520,000
              
              
              3.77
              
              $
              0.03
              
              
              1,520,000
              
              $
              0.03$
              0.125
              
              
              920,000
              
              
              3.77
              
              $
              0.13
              
              
              920,000
              
              $
              0.13$
              0.64-0.65
              
              
              950,000
              
              
              4.36
              
              $
              0.64
              
              
              534,500
              
              $
              0.64$
              0.75
              
              
              1,560,000
              
              
              3.77
              
              $
              0.75
              
              
              1,560,000
              
              $
              0.75$
              3.00-6.75
              
              
              25,000
              
              
              2.20
              
              $
              4.73
              
              
              25,000
              
              $
              4.734,975,000
              
              
              3.87
              
              $
              0.41
              
              
              4,559,500
              
              $
              0.36




**Note
      11- Income Taxes**





We
      account for income taxes in accordance with Statement of Financial Accounting
      Standards No. 109. SFAS No. 109 requires us to provide a net deferred tax asset
      or liability equal to the expected future tax benefit or expense of temporary
      reporting differences between book and tax accounting and any available
      operating loss or tax credit carryforwards.





The
      temporary differences gave rise to the following deferred tax asset
      (liability):




June
                  30,2007
              
              2006Allowance
                  for bad debts
              
              $
              2,000
              
              $
              2,000Valuation
                  of stock options and warrants
              
              
              96,000
              
              
              33,000Accrued
                  wages
              
              
              274,000
              
              
              274,000Accrued
                  vacation
              
              
              27,000
              
              
              -Deferred
                  income
              
              
              39,000
              
              
              31,000Net
                  operating loss carryforwards
              
              
              2,888,000
              
              
              2,146,000Valuation
                  allowance
              
              
              (3,326,000
              )
              
              (2,486,000
              )Net
                  deferred tax asset
              
              $
              -
              
              $
              -





As
      of
      June 30, 2007, a valuation allowance equal to the net deferred tax asset
      recognized has been recorded, as Management has not determined that it is more
      likely than not that the deferred tax asset
      will be realized. No current tax provision was recorded for the years ended
      June
      30, 2007 and 2006 due to reported losses. The valuation allowance increased
      $840,000 from the prior period.





At
      June
      30, 2007, we have federal net operating loss carryforwards of approximately
      $7,251,000 that expire from 2017 through 2025 and are subject to certain
      limitations under the Internal Revenue Code of 1986, as amended, and state
      net
      operating loss carryforwards of approximately $6,800,000 that expire from 2010
      through 2015.




F-21




**BRENDAN
      TECHNOLOGIES, INC.**


Notes
      to
      the Consolidated Financial Statements (Continued)





**Note
      12- Subsequent Events**





In
      July
      2007 we issued a 15% bridge loan with attached common stock purchase warrants
      for $600,000 ($555,000 net of costs) to five investors. The bridge loan will
      mature in nine months and the interest is payable monthly. The attached common
      stock purchase warrants have exercise prices of $0.60 per share for 600,000
      shares which expire in five years.





F-22




**SIGNATURES**






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





BRENDAN
      TECHNOLOGIES., INC.


a
      Nevada
      corporation




By:
              /s/
                  JOHN R. DUNN II
              
              Dated:
                  September 28, 2007John
                  R. Dunn IIChief
                  Executive Officer
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been
        signed below by the following persons on behalf of the Registrant and in
        the
        capacities and on the dates indicated:




Signature
              Title
              Date/s/
                  JOHN R. DUNN II
              Chief
                  Executive Officer,
              September
                  28, 2007John
                  R. Dunn II
              President
                  and Director/s/
                  GEORGE DUNN
              Chief
                  Operating Officer and Secretary
              September
                  28, 2007George
                  Dunn/s/
                  LOWELL W. GIFFHORN
              Chief
                  Financial Officer (PrincipalLowell
                  W. Giffhorn
              Accounting
                  Officer) and Director
              September
                  28, 2007/s/
                  THEO VERMAELEN
              Director
              September
                  28, 2007Theo
                  Vermaelen/s/
                  STEPHEN EISOLD
              Director
              September
                  28, 2007Stephen
                  Eisold/s/
                  JASON BOOTH
              Director
              September
                  28, 2007Jason
                  Booth