----

| Maryland                                                            |   | 73-0629975                                |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |   | (I.R.S.      Employer Identification No.) |
|                                                                |   |                                      |
| 325      N Kirkwood Rd, Ste 300, St Louis, MO                       |   | 63122                                     |
| (Address      of principal executive offices)                       |   | (Zip      Code)                           |
|                                                                |   |                                      |
| 314-822-3163                                                        |
| (Registrant’s      telephone number, including areacode)      |

| Large      accelerated filer [  ]                                            | Accelerated      filer [  ]  |
|----------------------------------------------------------------------------------------|---------------------------------------------|
| Non-accelerated      filer [ ] (Do      not check if a smaller reporting company) | Smaller      reporting company [X]          |

----

|                                                                                                                     | Page   |
|--------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                     |   |
| PART      I  FINANCIAL INFORMATION                                                                             |   |
|                                                                                                                     |   |
| Item      1.  Unaudited Financial Statements                                                                   |   |
|                                                                                                                     |   |
| Consolidated      Balance Sheets, March 31, 2008 and December 31, 2007                                                   | 3      |
| Consolidated      Statements of Operations, Three Months Ended March 31, 2008 and      2007                         | 4      |
| Consolidated      Statements of Stockholders’ Equity, Three Months Ended      March 31, 2008 and 2007    | 5      |
| Consolidated      Statements of Cash Flows, Three Months Ended March 31, 2008 and      2007                    | 6      |
| Notes      to Unaudited Consolidated Financial Statements                                                                | 7      |
|                                                                                                                     |   |
| Item      2.  Management’s Discussion and Analysis of Financial Condition      and Results of Operations | 13     |
|                                                                                                                     |   |
| Item      4.  Controls and Procedures                                                                          | 17     |
|                                                                                                                     |   |
| PART      II  OTHER INFORMATION                                                                                |   |
|                                                                                                                     |   |
| Item      1A.  Risk Factors                                                                                    | 18     |
|                                                                                                                     |   |
| Item      3.  Defaults Upon Senior Securities                                                                  | 18     |
|                                                                                                                     |   |
| Item      6.  Exhibits                                                                                         | 18     |
|                                                                                                                     |   |
| SIGNATURES                                                                                                               | 19     |
|                                                                                                                     |   |
| INDEX      TO EXHIBITS                                                                                                   | 20     |

----

|                                                                                                                                          |   | (Unaudited)    |      |   |              |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                                                                                                                          |   | March      31, |      |   | December      31, |   |
|                                                                                                                                          |   | 2008           |      |   | 2007              |   |
| Assets                                                                                                                                        |   |           |      |   |              |   |
| Current      Assets                                                                                                                           |   |           |      |   |              |   |
| Cash                                                                                                                                          |   | $              | 367,077   |   |              | $      | 217,843 |   |
| Accounts      receivable, net                                                                                                                 |   |           | 688,318   |   |              |   | 557,388 |   |
| Inventories,      net                                                                                                                         |   |           | 245,301   |   |              |   | 209,420 |   |
| Prepaid      expenses                                                                                                                         |   |           | 82,756    |   |              |   | 77,551 |   |
| Total      Current Assets                                                                                                                     |   |           | 1,383,452 |   |              |   | 1,062,202 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Property      and Equipment, Net                                                                                                              |   |           | 80,668    |   |              |   | 95,151 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Long-term      Note Receivable                                                                                                                |   |           | 151,833   |   |              |   | 151,908 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Capitalized      Software, Net                                                                                                                |   |           | 2,088,315 |   |              |   | 2,133,048 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Goodwill                                                                                                                                      |   |           | 1,045,015 |   |              |   | 1,045,015 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Other      Assets                                                                                                                             |   |           | 21,112    |   |              |   | 20,720 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Total      Assets                                                                                                                             |   | $              | 4,770,395 |   |              | $      | 4,508,044 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Liabilities      and Stockholders' Equity                                                                                                     |   |           |      |   |              |   |   |   |
| Current      Liabilities                                                                                                                      |   |           |      |   |              |   |   |   |
| Current      portion of term loan                                                                                                             |   | $              | 709,198   |   |              | $      | 103,125 |   |
| Line of      credit                                                                                                                           |   |           | 1,500,000 |   |              |   | — |   |
| Current      portion of subordinated debt (related party)                                                                                     |   |           | 210,693   |   |              |   | — |   |
| Accounts      payable                                                                                                                         |   |           | 444,792   |   |              |   | 235,637 |   |
| Accrued      expenses                                                                                                                         |   |           | 306,246   |   |              |   | 266,634 |   |
| Deferred      revenue                                                                                                                         |   |           | 83,621    |   |              |   | 106,330 |   |
| Interest      payable                                                                                                                         |   |           | 10,726    |   |              |   | 15,068 |   |
| Total      Current Liabilities                                                                                                                |   |           | 3,265,276 |   |              |   | 726,794 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Long-Term      Liabilities                                                                                                                    |   |           |      |   |              |   |   |   |
| Line of      credit                                                                                                                           |   |           | —   |   |              |   | 1,075,000 |   |
| Long-term      portion of term loan                                                                                                           |   |           | —   |   |              |   | 652,784 |   |
| Subordinated      debt (related party)                                                                                                        |   |           | —   |   |              |   | 202,391 |   |
| Other      long-term liabilities                                                                                                              |   |           | 54,400    |   |              |   | 54,400 |   |
| Total      Long-Term Liabilities                                                                                                              |   |           | 54,400    |   |              |   | 1,984,575 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Commitments      and Contingencies                                                                                                            |   |           |      |   |              |   |   |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Stockholders'      Equity                                                                                                                     |   |           |      |   |              |   |   |   |
| Common      stock:                                                                                                                            |   |           |      |   |              |   |   |   |
| Authorized      100,000,000 shares at $0.10 par value; issued and                                                                             |   |           |      |   |              |   |   |   |
| outstanding      16,920,419 at March 31, 2008 and December 31, 2007                                                                           |   |           | 1,692,042 |   |              |   | 1,692,042 |   |
| Additional      paid-in capital                                                                                                               |   |           | 80,742    |   |              |   | 77,600 |   |
| Retained      earnings (deficit)                                                                                                              |   |           | (322,065  | )      |              |   | 27,033 |   |
| Total      Stockholders' Equity                                                                                                               |   |           | 1,450,719 |   |              |   | 1,796,675 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Total      Liabilities and Stockholders' Equity                                                                                               |   | $              | 4,770,395 |   |              | $      | 4,508,044 |   |
|                                                                                                                                          |   |           |      |   |              |   |   |   |
| Note: The      balance sheet at December 31, 2007 has been derived from the audited      consolidated financial statements at that date. |   |
| See      accompanying notes to unaudited consolidated financial      statements.                                                              |   |           |      |   |              |

----

|                                                      |   | For      the Three Months Ended March 31, |       |
|-----------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                      |   | 2008                                      |       |   | 2007 |   |
|                                                      |   |                                      |       |   |   |   |
| Revenues                                                  |   | $                                         | 1,238,243  |   |   | $ | 1,187,083 |   |
|                                                      |   |                                      |       |   |   |   |   |   |
| Cost      of Product Sales                                |   |                                      | 421,599    |   |   |   | 427,874 |   |
|                                                      |   |                                      |       |   |   |   |   |   |
| Gross      Profit                                         |   |                                      | 816,644    |   |   |   | 759,209 |   |
|                                                      |   |                                      |       |   |   |   |   |   |
| Selling,      General and                                 |   |                                      |       |   |   |   |   |   |
|   Administrative      Expenses                  |   |                                      | 1,128,038  |   |   |   | 1,092,878 |   |
|                                                      |   |                                      |       |   |   |   |   |   |
| Loss      from operations                                 |   |                                      | (311,394   | ) |   |   | (333,669 | ) |
|                                                      |   |                                      |       |   |   |   |   |   |
| Other      Income (Expense)                               |   |                                      |       |   |   |   |   |   |
|   Interest      expense, net                    |   |                                      | (37,704    | ) |   |   | (51,960 | ) |
|     Total      Other Expense          |   |                                      | (37,704    | ) |   |   | (51,960 | ) |
|                                                      |   |                                      |       |   |   |   |   |   |
| Loss      before income taxes                             |   |                                      | (349,098   | ) |   |   | (385,629 | ) |
|                                                      |   |                                      |       |   |   |   |   |   |
| Income      Tax Benefit                                   |   |                                      | —    |   |   |   | 136,000 |   |
|                                                      |   |                                      |       |   |   |   |   |   |
|  Net      loss                                       |   | $                                         | (349,098   | ) |   | $ | (249,629 | ) |
|                                                      |   |                                      |       |   |   |   |   |   |
| Loss      per share, basic and diluted                    |   | $                                         | (0.02      | ) |   | $ | (0.01 | ) |
|                                                      |   |                                      |       |   |   |   |   |   |
| Weighted      average number of shares, basic and diluted |   |                                      | 16,920,419 |   |   |   | 16,920,419 |   |
|                                                      |   |                                      |       |   |   |   |   |   |

| Note: Basic      loss per share is computed using the weighted average number of common      shares                 |   |
|---------------------------------------------------------------------------------------------------------------------|--------|
| outstanding      during the period. For the three months ended March 31, 2008 and      2007, all stock options |   |
| and warrants      were excluded from the computations of diluted income per share and      totaled 2,295,660        |   |
| and      2,766,560, respectively, as their effect would be      anti-dilutive.                                      |   |   |   |   |   |   |   |   |
|                                                                                                                |   |   |   |   |   |   |   |   |
| See      accompanying notes to unaudited consolidated financial      statements.                                    |   |   |   |   |   |   |   |   |

----

|                                         |   | For      the Three Months Ended |      |
|----------------------------------------------|--------|---------------------------------|-----------|
|                                         |   | March      31,                  |      |
|                                         |   | 2008                            |      |   | 2007 |   |
|                                         |   |                            |      |   |   |   |
| COMMON      STOCK                            |   |                            |      |   |   |   |
| Balance at      the beginning of the period  |   | $                               | 1,692,042 |   |   | $ | 1,692,042 |   |
|                                         |   |                            |      |   |   |   |   |   |
| Balance at      the end of the period        |   | $                               | 1,692,042 |   |   | $ | 1,692,042 |   |
|                                         |   |                            |      |   |   |   |   |   |
| ADDITIONAL      PAID-IN CAPITAL              |   |                            |      |   |   |   |   |   |
| Balance at      the beginning of the period  |   | $                               | 77,600    |   |   | $ | 38,296 |   |
| Stock-based      compensation expense        |   |                            | 3,142     |   |   |   | 4,395 |   |
| Issuance of      warrants to related parties |   |                            | —   |   |   |   | 22,741 |   |
|                                         |   |                            |      |   |   |   |   |   |
| Balance at      the end of the period        |   | $                               | 80,742    |   |   | $ | 65,432 |   |
|                                         |   |                            |      |   |   |   |   |   |
| RETAINED      EARNINGS (DEFICIT)             |   |                            |      |   |   |   |   |   |
| Balance at      the beginning of the period  |   | $                               | 27,033    |   |   | $ | 945,709 |   |
| Cumulative      effect of adoption of FIN 48 |   |                            | —   |   |   |   | (65,000 | ) |
| Net      loss                                |   |                            | (349,098  | ) |   |   | (249,629 | ) |
|                                         |   |                            |      |   |   |   |   |   |
| Balance at      the end of the period        |   | $                               | (322,065  | ) |   | $ | 631,080 |   |
|                                         |   |                            |      |   |   |   |   |   |
| STOCKHOLDERS'      EQUITY AT END OF PERIOD   |   | $                               | 1,450,719 |   |   | $ | 2,388,554 |   |
|                                         |   |                            |      |   |   |   |   |   |
|                                         |   |                            |      |   |   |   |   |   |

| See      accompanying notes to unaudited consolidated financial      statements. |   |   |   |   |   |
|----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|

----

|                                                            |   | For      the Three Months Ended |     |
|-----------------------------------------------------------------|--------|---------------------------------|----------|
|                                                            |   | March      31,                  |     |
|                                                            |   | 2008                            |     |   | 2007 |   |
| Cash      Flows From Operating Activities                       |   |                            |     |   |   |   |
| Net      loss                                                   |   | $                               | (349,098 | ) |   | $ | (249,629 | ) |
| Adjustments      to reconcile net loss to net cash              |   |                            |     |   |   |   |   |   |
| provided by      (used in) operating activities:                |   |                            |     |   |   |   |   |   |
| Depreciation                                                    |   |                            | 14,483   |   |   |   | 29,272 |   |
| Amortization                                                    |   |                            | 213,689  |   |   |   | 210,357 |   |
| Interest paid      "in-kind" related to subordinated debt       |   |                            | 5,467    |   |   |   | — |   |
| Amortization      of subordinated debt costs                    |   |                            | 3,632    |   |   |   | 399 |   |
| Deferred      income taxes                                      |   |                            | —  |   |   |   | (136,000 | ) |
| Stock-based      compensation expense                           |   |                            | 3,142    |   |   |   | 4,395 |   |
| Abandonment      of software development in process             |   |                            | —  |   |   |   | 11,404 |   |
| Allowance for      doubtful accounts, sales credits and returns |   |                            | 3,857    |   |   |   | 9,456 |   |
| Reserve for      obsolescence of inventory                      |   |                            | 5,497    |   |   |   | 4,500 |   |
| Change in      assets and liabilities:                          |   |                            |     |   |   |   |   |   |
| Accounts and      note receivable                               |   |                            | (134,712 | ) |   |   | 314,077 |   |
| Inventories                                                     |   |                            | (41,378  | ) |   |   | (330 | ) |
| Prepaid      expenses and other assets                          |   |                            | (6,394   | ) |   |   | 8,049 |   |
| Accounts      payable, accrued expenses                         |   |                            |     |   |   |   |   |   |
|   and      deferred revenue                           |   |                            | 221,716  |   |   |   | 13,488 |   |
| Net      Cash Provided By (Used In) Operating Activities        |   |                            | (60,099  | ) |   |   | 219,438 |   |
|                                                            |   |                            |     |   |   |   |   |   |
| Cash      Flows From Investing Activities                       |   |                            |     |   |   |   |   |   |
| Payments for      equipment                                     |   |                            | —  |   |   |   | (2,983 | ) |
| Payments for      software development costs                    |   |                            | (168,956 | ) |   |   | (168,103 | ) |
| Net      Cash Used In Investing Activities                      |   |                            | (168,956 | ) |   |   | (171,086 | ) |
|                                                            |   |                            |     |   |   |   |   |   |
| Cash      Flows From Financing Activities                       |   |                            |     |   |   |   |   |   |
| Proceeds      (payments) on line of credit                      |   |                            | 425,000  |   |   |   | (100,000 | ) |
| Principal      payments on term loan                            |   |                            | (46,711  | ) |   |   | — |   |
| Proceeds from      issuance of related party                    |   |                            |     |   |   |   |   |   |
|   subordinated      debt and warrants                 |   |                            | —  |   |   |   | 200,000 |   |
| Net      Cash Provided By Financing Activities                  |   |                            | 378,289  |   |   |   | 100,000 |   |
|                                                            |   |                            |     |   |   |   |   |   |
| Change      In Cash                                             |   |                            | 149,234  |   |   |   | 148,352 |   |
|                                                            |   |                            |     |   |   |   |   |   |
| Cash      - Beginning of Period                                 |   |                            | 217,843  |   |   |   | 226,486 |   |
|                                                            |   |                            |     |   |   |   |   |   |
| Cash      - End of Period                                       |   | $                               | 367,077  |   |   | $ | 374,838 |   |

|                                                                             |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| See      accompanying notes to unaudited consolidated financial      statements. |   |   |   |   |   |

----

|   | · | Eliminated      costs of approximately $1,000,000 over the next 12  months. |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | Refinanced      our bank debt in March 2008 that extended the maturity from April 1, 2008      to January 1, 2009. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Developed      and released PracticePlanet in late 2007 which we believe is positioned to      generate a recurring revenue stream as well as open opportunities to      cross-sell our Orchard Software®. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Aggressively      pursued new sales channels which can fill gaps in our current distribution      network. |
|--------|--------|------------------------------------------------------------------------------------------------------------|

----

----

|                                                      | March      31,                              | December      31,                           |
|-----------------------------------------------------------|---------------------------------------------|---------------------------------------------|
|                                                      | 2008                                        | 2007                                        |
| Accounts      receivable:                                 |                                        |                                        |
|   Trade      accounts receivable                | $      732,781                              | $      622,578                              |
|   Current      portion of note receivable       | 14,542                                      | 14,545                                      |
|   Amount      due from coal processor           | 28,000                                      | 11,245                                      |
|   Allowance      for doubtful accounts, sales   |                                        |                                        |
|     credits      and returns          | (87,005)                                    | (90,980)                                    |
|                                                      | $      688,318                              | $      557,388                              |
|                                                      |                                        |                                        |
| Inventories:                                              |                                        |                                        |
|   Finished      goods                           | $      147,034                              | $      137,981                              |
|   Raw      materials                            | 151,267                                     | 147,019                                     |
|   Reserve      for obsolescence                 | (53,000)                                    | (75,580)                                    |
|                                                      | $      245,301                              | $      209,420                              |
|                                                      |                                        |                                        |
| Property      and equipment:                              |                                        |                                        |
|   Leasehold      improvements                   | $      85,891 | $      85,891 |
|   Office      equipment, furniture and fixtures | 1,125,814                                   | 1,125,814                                   |
|   Machinery      and equipment                  | 444,477                                     | 444,477                                     |
|                                                      | 1,656,182                                   | 1,656,182                                   |
|   Accumulated      depreciation                 | (1,575,514)                                 | (1,561,031)                                 |
|                                                      | $      80,668 | $      95,151 |
| Accrued      expenses:                                    |                                        |                                        |
|   Compensation      and benefits                | $      237,344                              | $      190,130                              |
|   Royalties                                     | 61,985                                      | 59,341                                      |
|   Deposit      from collaborator                | 2,639                                       | 14,821                                      |
|   Other                                         | 4,278                                       | 2,342                                       |
|                                                      | $      306,246                              | $      266,634                              |

|                                        | March      31,                   | December      31,                |
|---------------------------------------------|----------------------------------|----------------------------------|
|                                        | 2008                             | 2007                             |
|                                        |                             |                             |
| Software      development in progress       | $    301,608 | $    160,121 |
| Capitalized      software development costs | 6,073,742                        | 6,046,273                        |
| Accumulated      amortization               | (4,287,035)                      | (4,073,376)                      |
|                                        | $      2,088,315                 | $      2,133,048                 |

----

| We      have a $1,500,000 revolving line of credit agreement with our bank with an      outstanding balance of $1,500,000 as of March 31, 2008.  As of      December 31, 2007 we owed $1,075,000 on the line of  credit. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In      addition, we owed $709,198 and $755,909 as of March 31, 2008 and December      31, 2007, respectively under a term loan with our  bank. |
|-------------------------------------------------------------------------------------------------------------------------------------------------|

| Both      the line of credit and the term loan require us to pay interest monthly on      the outstanding balance at our bank’s prime rate which was 5.25% as of      March 31, 2008.  Accounts receivable, inventory, property and      equipment are pledged ascollateral. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| We      entered into a new debt agreement in March 2008 with our bank to extend      the due dates from April 1, 2008 to January 1,  2009. |
|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      interest rate on the line of credit and term loan remained at our bank’s      prime rate. |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | The      quarterly principal payments of $28,125 on the term loan was changed to a      schedule of monthly principal payments of $9,375 beginning May 1, 2008      with the remaining principal due in full January 1,      2009.  Under |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | the      renewal we are obligated to make principal payments of $103,125 during      2008 with the remaining balance due January 1,  2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      $1,500,000 line of credit was extended through January 1,      2009.  The outstanding balance on the line is due on January 1,      2009. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      agreed to achieve minimum earnings before interest, taxes, depreciation      and amortization, which will be tested  quarterly. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      covenant to maintain minimum stockholders’ equity plus subordinated debt      of $2,700,000 was eliminated as of April 2,  2008. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      covenant to not exceed a ratio of 1.25:1.00 of liabilities as a ratio of      stockholders’ equity plus subordinated debt was eliminated as of April 2,      2008. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| As      of March 31, 2008, our bank debt had the following terms that were      specified in our March 2007renewal: |
|---------------------------------------------------------------------------------------------------------------------|

|   | · | We      were required to make quarterly principal payments of $28,125 on the term      loan starting July 1, 2007 with the remaining principal due April 1,      2008. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      line of credit was extended to April 1, 2008 when the outstanding balance      was due. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Our      stockholders’ equity plus subordinated debt was to be at least $2,300,000      as of March 31, 2007 and $2,700,000 as of June 30, 2007, and each      quarter-end thereafter. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our      ratio of liabilities to stockholders’ equity plus subordinated debt must      be less than 1.50:1.00 as of March 31, 2007 and 1.25:1.00 as of June 30,      2007, and each quarter-endthereafter. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      were required to obtain $200,000 of subordinated debt which was provided      by two of our Directors.  (See Note 9 “Related Party      Subordinated Debt”.) |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| If      we breach any term or condition in the agreements, as amended, our bank      has the option to declare the loans due and  payable. |
|--------------------------------------------------------------------------------------------------------------------------------------------|

| As      of March 31, 2008, we did not comply with the financial covenants      specified in our bank credit agreement.  Under the credit      agreement, the financial covenants are measured at the end of each      quarter.  We are to achieve minimum earnings before interest,      taxes, depreciation and amortization of $1,075; we had a loss of      $83,885.  We are to maintain a ratio of liabilities to      stockholders’ equity plus subordinated debt no greater than      1.25:1.00.  Our ratio as of March 31, 2008 was      2.00:1.00.  We are to maintain a net worth, plus subordinated      debt, of not less than $2,700,000; our net worth plus subordinated debt      was $1,661,412 as of March 31, 2008.  We have obtained a waiver      for this non-compliance as of March 31, 2008.  Although we      continue to be out of compliance with these financial covenants as of the      date of this filing, we do not anticipate that the bank will exercise its      right to declare the notes due and payable.  However, we can      provide no assurance that we will be able to obtain a waiver from the bank      of future non-compliance with these or any other financial      covenants. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In      conjunction with the issuance of the waiver for our non-compliance with      the financial covenants as of March 31, 2008, we agreed with our bank in      May 2008 to add a loan payoff fee to our bank loan.  When we      repay in full our line of credit and term loan, we will be required to pay      our bank a fee equal to 50 basis points on the outstanding bank debt at      repayment. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In      accordance with SFAS No. 6, Classification of Short-Term      Obligations Expected to Be Refinanced, at December 31, 2007, we      classified our line of credit and a portion of our term loan as a      long-term liability based upon the terms of the debt agreements that we      entered into with our bank in March2008. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                  |   | For      the Three Months Ended |   |
|-------------------------------------------------------|--------|---------------------------------|--------|
|                                                  |   | March      31,                  |   |
|                                                  |   | 2008                            |   |   | 2007 |   |
|                                                  |   |                            |   |   |   |   |
| Interest      expense on subordinated debt            |   | $                               | 5,467  |   |   | $ | 556 |   |
| Amortization      of original issuance discount       |   |                            | 2,835  |   |   |   | 312 |   |
|   Total      related party interest expense |   | $                               | 8,302  |   |   | $ | 868 |   |
|                                                  |   |                            |   |   |   |   |   |   |
| Debt      issuance costs amortized to selling,        |   |                            |   |   |   |   |   |   |
|   general      and administrative costs     |   | $                               | 797    |   |   | $ | 87 |   |

|                                                                        |   | For      the Three Months Ended |    |
|-----------------------------------------------------------------------------|--------|---------------------------------|---------|
|                                                                        |   | March      31,                  |    |
|                                                                        |   | 2008                            |    |   | 2007 |   |
|                                                                        |   |                            |    |   |   |   |
| Interest      paid                                                          |   | $                               | 36,106  |   |   | $ | 54,132 |   |
| Income      taxes paid, net                                                 |   | $                               | 4,043   |   |   | $ |  427 |   |
|                                                                        |   |                            |    |   |   |   |   |   |
| Non-cash      financing transactions related to the                         |   |                            |    |   |   |   |   |   |
|   related      party subordinated debt issuance:                  |   |                            |    |   |   |   |   |   |
|     Warrant      recorded as original issuance discount |   | $                               | — |   |   | $ | 22,741 |   |
|     Accrual      of debt issuance costs                 |   | $                               | — |   |   | $ | 6,400 |   |
|                                                                        |   |                            |    |   |   |   |   |   |

----

|   | · | Orchard      Software® for Your State(“Orchard”) |
|--------|--------|-------------------------------------------------------------------|

|   | · | GAMCO      Educational Software |
|--------|--------|---------------------------------|

|   | · | Educational      Activities Software |
|--------|--------|--------------------------------------|

|   | · | PracticePlanetTM |
|--------|--------|-----------------------|

----

----

----

|   | · | Eliminated      costs of approximately $1,000,000 over the next 12  months. |
|--------|--------|-----------------------------------------------------------------------------|

----

|   | · | Refinanced      our bank debt in March 2008 that extended the maturity from April 1, 2008      to January 1, 2009. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Developed      and released PracticePlanet in late 2007 which we believe is positioned to      generate a recurring revenue stream as well as open opportunities to      cross-sell our Orchard Software®. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Aggressively      pursued new sales channels which can fill gaps in our current distribution      network. |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | The      interest rate on the line of credit and term loan remained at our bank’s      prime rate. |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | The      quarterly principal payments on the term loan of $28,125 was changed to a      schedule of monthly principal payments of $9,375 beginning May 1, 2008      with the remaining principal due in full January 1, 2009.  Under      the renewal we are obligated to make principal payments of $103,125 during      2008 with the remaining balance due January 1,  2009. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      $1,500,000 line of credit was extended through January 1,      2009.  The outstanding balance on the line is due on January 1,      2009. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      agreed to achieve a minimum earnings before interest, taxes, depreciation      and amortization, which will be tested  quarterly. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      covenant to maintain minimum stockholders’ equity plus subordinated debt      of $2,700,000 was eliminated as of April 2,  2008. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      covenant to not exceed a ratio of 1.25:1.00 of liabilities as a percent of      stockholders’ equity plus subordinated debt was eliminated as of April 2,      2008. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In      conjunction with the issuance of the waiver for our non-compliance with      the financial covenants as of March 31, 2008, we agreed with our bank in      May 2008 to add a loan payoff fee to our bank loan.  When we      repay in full our line of credit and term loan, we will be required to pay      our bank a fee equal to 50 basis points on the outstanding bank debt at      repayment. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Risks      associated with our ability to access capital to finance our business      including our ability to meet our obligations under our bank      loans. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Risks      related to our customers’ dependence on government funding to purchase our      products. |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | Risks      associated with our ability to compete with well-established and      well-funded competitors. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Risks      associated with the constant changes in the technologies used to build and      deliver our products. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Our      ability to retain key personnel. |
|--------|--------|-------------------------------------------|

|   | · | Our      ability to motivate our independent dealer representatives to sell our      products. |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Changes      in market acceptance and demand for curriculum-based educational software,      including the effects of possible changes to NCLB      requirements. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Risks      associated with acceptance of statistical  studies. |
|--------|--------|----------------------------------------------------------------|

|   | · | Risks      associated with the launch of our new PracticePlanetTM online test practice      product. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Risks      associated with our ability to comply with the requirements of Section      404(a) of the Sarbanes-Oxley Act of2002. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | Risks      that we may not receive payments from our natural resources      interests. |
|--------|--------|----------------------------------------------------------------------------------------|

| As      of March 31, 2008, we did not comply with the financial covenants      specified in our bank credit agreement.  Under the credit      agreement, the financial covenants are measured at the end of each      quarter.  We are to achieve minimum earnings before interest,      taxes, depreciation and amortization of $1,075; we had a loss of      $83,885.  We are to maintain a ratio of liabilities to      stockholders’ equity plus subordinated debt no greater than      1.25:1.00.  Our ratio as of March 31, 2008 was      2.00:1.00.  We are to maintain a net worth, plus subordinated      debt, of not less than $2,700,000; our net worth plus subordinated debt      was $1,661,412 as of March 31, 2008.  We have obtained a waiver      for this non-compliance as of March 31, 2008.  Although we      continue to be out of compliance with these financial covenants as of the      date of this filing, we do not anticipate that the bank will exercise its      right to declare the notes due and payable.  However, we can      provide no assurance that we will be able to obtain a waiver from the bank      of future non-compliance with these or any other financial      covenants. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In      conjunction with the issuance of the waiver for our non-compliance with      the financial covenants as of March 31, 2008, we agreed with our bank in      May 2008 to add a loan payoff fee to our bank loan.  When we      repay in full our line of credit and term loan, we will be required to pay      our bank a fee equal to 50 basis points on the outstanding bank debt at      repayment. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | SIBONEY      CORPORATION                                                                |
|--------|-----------------------------------------------------------------------------------------|
|   |                                                                                    |
|   | By:                                                                                     |
|   |                                                                                    |
|   | /s/ William D.      Edwards, Jr.                                                        |
|   | William      D. Edwards, Jr.                                                            |
|   | Executive      Vice President, Chief Operating Officer and Chief Financial      Officer |
|   | (Authorized      officer and principal financialofficer)                                |

----

| 10.1   | Letter      Agreement between Southwest Bank, an M&I Bank and Siboney Learning      Group, Inc. and Siboney Corporation dated April 2, 2008, incorporated by      reference to Exhibit 10(i) to the Company’s Annual Report on Form 10-K for      the year ended December 31, 2007.            |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                     |
| 10.2   | Promissory      Note executed in favor of Southwest Bank, an M&I Bank by Siboney      Learning Group, Inc. and Siboney Corporation dated April 2, 2008,      incorporated by reference to Exhibit 10(j) to the Company’s Annual Report      on Form 10-K for the year ended December 31, 2007. |
|   |                                                                                                                                                                                                                                                                                                     |
| 10.3   | Promissory      Note executed in favor of Southwest Bank, an M&I Bank by Siboney      Learning Group, Inc. and Siboney Corporation dated April 2, 2008,      incorporated by reference to Exhibit 10(k) to the Company’s Annual Report      on Form 10-K for the year ended December 31, 2007. |
|   |                                                                                                                                                                                                                                                                                                     |
| 31.1   | Certification      by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                     |
| 31.2   | Certification      by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                     |
| 32.1   | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                     |
| 32.2   | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002                                                                                                                                                                         |