**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 Washington,
        D.C. 20549
  **FORM
        10-K**
  x
        Annual Report Pursuant
        to Section 13 or 15(d) of The Securities Exchange Act of 1934
 For
        the
        fiscal year ended **December
        31, 2007** ****
  *Commission
        File Number* **** **333-54822**
  **DEALERADVANCE,
        INC.**
 (Exact
        name of registrant as specified in its charter)
  **Nevada**
              **20-5717448******(State
                  or other jurisdiction of
              (IRS
                  EmployerIncorporation
                  or organization)
              Identification
                  No.)**1801
                  Addison Road, Suite 310, Addison, TX**
              **75001**(Address
                  of Principal Executive offices)
              (Zip
                  Code)
  Registrant's
        telephone number, including area code: **** **(214)
        866-0606**
  Securities
        registered pursuant to Section 12(b) of the Act: **None**
  Securities
        registered pursuant to Section 12(g) of the Act: **Common
        Stock, no par value**
   Indicate
        by check mark if the registrant is a well-known seasoned issuer, as defined
        in
        Rule 405 of the Securities Act. Yes o No x
  Indicate
        by check mark whether the registrant is not required to file reports pursuant
        to
        Section 13 or Section 15(d) of the Act. Yes
x
        No o
  Indicate
        by check mark whether the registrant (1) filed all reports required to be
        filed
        by Section 13 or 15(d) of the Securities
 Exchange
        Act of 1934 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 o
  Indicate
        by check mark if disclosure of delinquent filers in response to Item 405
        of
        Regulation S-K (§229.405 of this Chapter) is not contained herein, and will not
        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-K
        or any amendment to this Form 10-K. Yes o No x
  Indicate
        by check mark if the registrant is a large accelerated filer, an accelerated
        filer, a non-accelerated filer or a smaller reporting company. See the
        definitions of “large accelerated filer,” “accelerated filer,” and “smaller
        reporting company” in Rule 12b-2 of the Exchange Act. Check one: Large
        accelerated filer o Accelerated
        filer o Smaller reporting company
x
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes o No
x
  State
        the
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates by reference to the price at which the common equity was last
        sold, or the average bid and asked price of such common equity, as of the
        last
        business day of the registrant’s most recently completed second fiscal quarter:
        $1,726,354  as
        of
        June 30, 2007.
  Number
        of
        shares outstanding of issuer’s Common Stock, no par value outstanding as of
        March 28, 2008: 490,824,656
  List
        hereunder the following documents if incorporated by reference and the Part
        of
        the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
        incorporated: (1) Any annual report to security holders; (2) Any proxy or
        information statement; and (3) Any prospectus filed pursuant to Rule 414(b)
        or
        (c) under the Securities Act of 1933. The listed documents should be clearly
        described for identification purposes (e.g., annual report to security holders
        for fiscal year ended December 24, 1980). None.
  
 TABLE
                    OF CONTENTS(Omits
                    inapplicable items)PART
                    IItem
                    1.
                Business
                3Item
                    2.
                Property
                4Item
                    3.
                Legal
                    Proceedings
                4PART
                    IIItem
                    5.
                Market
                    for Common Equity and Related Stockholder Matters
                5Item
                    7.
                Management’s
                    Discussion and Analysis of Financial Condition and Results of
                    Operations
                6Item
                    8.
                Financial
                    Statements and Supplementary Data
                8Item
                    9A.
                Controls
                    and Procedures
                8PART
                    IIIItem
                    10.
                Directors
                    and Executive Officers; Corporate Governance
                10Item
                    11.
                Executive
                    Compensation
                11Item
                    12.
                Security
                    Ownership of Certain Beneficial Owners and Management and Related
                    Stockholder Matters
                13Item
                    13.
                Certain
                    Relationships and Related Transactions and Director
                    Independence
                14Item
                    14.
                Principal
                    Accountant Fees and Services
                16PART
                    IVItem
                    15.
                Exhibits
                    and Financial Statement Schedules
                17
 We
        want
        to provide you with more meaningful and useful information. This Annual Report
        on Form 10-K contains certain "forward-looking statements" (as such term
        is
        defined in Section 21E of the Securities Exchange Act of 1934, as amended).
        These statements reflect our current expectations regarding our possible
        future
        results of operations, performance and achievements. These forward-looking
        statements are made pursuant to the safe harbor provisions of the Private
        Securities Litigation Reform Act of 1995.
  Wherever
        possible, we have tried to identify these forward-looking statements by words
        such as “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend” and
        similar expressions. These statements reflect our current beliefs and are
        based
        on information currently available to us. Accordingly, these statements are
        subject to certain risks, uncertainties, and contingencies, which could cause
        our actual results, performance, or achievements to differ materially from
        those
        expressed in, or implied by, such statements. These risks, uncertainties
        and
        contingencies include, without limitation, the factors set forth under Item
        7.
*Management’s Discussion and Analysis of Financial Condition and Results of
        Operations.*
  -2-
 **PART
        I**
  **Item
        1. Business.**
  We
          design, develop, market, sell and install a web-based application software
          and
          database system that manages the auto dealer-customer relationship. In
          January
          2007, we announced the launch of Web DATM, our new web-based version of our
          DealerAdvanceTM software for conventional desktop or laptop computers. To become
          more competitive in the marketplace, we began the development of a version
          of
          Web DATM for small hand-held ultra-mobile personal computers (“UMPC’s”) in March
          2007. This product, introduced in March of this year, will enable any car
          salesperson to complete the entire sales process from virtually anywhere
          using
          any popular UMPC. We are developing our new release, Web DATM 1.5 for
          introduction later this year that incorporates additional features and
          benefits
          to the customer.
 Our
        headquarters in Addison, Texas (near Dallas) houses our executive management,
        financial accounting, software development/technical support, and marketing
        and
        sales operations. We have ten employees: our chief executive officer, our
        chief
        financial officer, our chief information officer and two other employees
        in
        software development/technical support, and five in sales and administration,
        including our vice president of sales and marketing. All are full-time
        employees.
 Our
          suite of Customer Relationship Management ("CRM") software assists auto
          dealerships in collecting customer contact information, follow-up on sales
          prospects, and finalizing sales. Web DATM affords dealerships a quick turn on,
          easy to use, cost effective and accessible CRM system. The software will
          allow
          dealerships to run programs without a significant investment in new hardware,
          which was required with our former product. Now, with the new web based
          technology, users can access Web DATM on any MicrosoftTM Windows Vista Home
          PremiumTM based UMPC from anywhere where there is an Internet connection at
          anytime.
 CRM
        is a
        customer-centric business strategy with the goal of maximizing profitability,
        revenue, and customer satisfaction. To support this strategy, a dealer must
        capture, store and analyze both customer and internal process information.
        Many
        auto dealerships still rely on a paper-based process to capture prospects
        and
        track progress towards the sale. This is difficult to manage due to high
        turnover and the lack of certain skills in the typical sales force. Such
        a
        process does not provide management with adequate tools to determine how
        many
        prospects have been generated and whether they are receiving follow-up after
        leaving the dealership. Our software prompts the salesperson to capture more
        information about each prospect and advises them of the appropriate follow
        up,
        and when a customer is ready to purchase a vehicle, the system aids the
        dealership in completing the sale through features such as inventory search
        and
        forms printing. Management is able to view dealership traffic in real-time,
        by
        salesperson, and can easily pinpoint deficiencies in the capture and follow
        up
        process.
 
 Web
        DATM
allows automobile dealers to capture a customer's contact and vehicle
        information, purchasing requirements, and gives dealership personnel the
        ability
        to search inventory at multiple locations in their Dealer Management System,
        to
        locate a vehicle in stock, and print out the necessary forms to complete
        a sale
        or lease. Through the integrated CRM application, the system sends detailed
        tasks for prospect and customer follow-up on a sales and management level
        that
        increase the likelihood that a customer will become a repeat customer. Web
        DATM
administrators can produce activity and scoreboard reports to measure compliance
        and dealership data. The software allows sales professionals to capture customer
        leads quickly, improve customer follow-up, and reduce administrative
        costs.
  -3-
  In
        addition, we host a web application software system that enables users to
        securely access the system from any web browser after being granted an account
        with a username and password. All data that is entered onto the application
        is
        archived and easily retrieved from the database that we also host as part
        of the
        product offering. All client data is protected and is only accessible by
        their
        selected staff members. Additionally we provide a driver’s license scanning
        station for easy capture of client data.
 
 We
        estimate that the market for our CRM software to be approximately 20,000
        dealerships. Our competitors include the ADP Dealer Services division of
        Automatic Data Processing, Inc., The Cobalt Group, AutoManager, and Autobase,
        Inc., among others. These companies all possess
        financial, technological and human resources far greater than ours ,
        as well
        as established reputations, that afford them a substantial competitive
        advantage. We believe, without assurance, that our unique proprietary technology
        and design features can enable us to become competitive in the
        marketplace.
 Customers
          pay a one-time initial payment and monthly recurring license fees for either
          a
          one, two or three year term. Each installation is expected to generate
          approximately $20,000 per year in revenue. We have thirteen customers,
          including eleven Web
          DATM customers. Additional Web DATM installations are pending. At the end of 2006,
          we had 32 customers, a decline from 83 at the end of 2005. These declines
          resulted from non-renewal of expired contracts for our old non-web based
          product.
 
 We
          are attempting to capture the critical mass necessary to quickly ramp up
          our
          sales. As a result of contacts we made at the 2008 National Auto Dealers
          Convention and Exposition in San Francisco in February 2008 we are extending
          our
          internal sales force with other distribution arrangements. Since then,
          we have
          added a non-exclusive sales representative in Arizona, Colorado, Indiana,
          Michigan, New Mexico and Ohio and we added a non-exclusive North American
          sales
          representative. We are also negotiating a proposed agreement pending with
          a
          software developer in Calgary, Alberta, to bundle Web DATM with its inventory
          systems for auto dealers.
  We
          have a trademark for DealerAdvanceTM and have one patent pending covering the
          system for management of information flow in automotive dealerships using
          hand
          held technology.
 
 We
          were incorporated in Nevada in 2000. Until 2006, we had a wholly owned
          subsidiary, Stronghold Technologies, Inc., a New Jersey Corporation, that
          developed hand held wireless technology for the automotive dealer market.
          The
          subsidiary’s business was unsuccessful, it ceased operations and filed for
          bankruptcy protection under Chapter 7 of the United States Bankruptcy Code.
          The
          assets of the subsidiary were liquidated, and its debts discharged, including
          all court judgments and an arbitration award. The bankruptcy case was closed on January 29, 2008.
 **Item
        1A. Risk Factors.**
 
 No
        Applicable.
 
 **Item
        1B. Unresolved Staff Comments.**
 
 None.
 
 **Item
        2. Property.**
 We
          sublease our offices and equipment on a month-to-month basis for $6,750 per
          month under a turnkey arrangement with a limited liability
          company owned and controlled by our Chief Executive Officer and our Vice
          President - Marketing and Sales. See Item 13. *Certain
          Relationships and Related Transactions and Director Independence - Transactions
          with Directors, Officers and Principal Shareholders.*
 **Item
        3. Legal Proceedings.**
 
 There
        are
        no material pending legal proceedings against us, and no material pending
        legal
        proceedings known to be contemplated by governmental authorities.
  -4-
  **Item
        4. Submission of Matters to a Vote of Security Holders.**
 
 None.
 **PART
        II**
 
 **Item
        5. Market for the Registrant’s Common Equity and Related Stockholder
        Matters.**
 
 *Market
        Prices, Number of Shareholders and Dividends*
 
 Our
        Common Stock is traded on the OTC Bulletin Board under the symbol "DLAV".
        The
        following table sets forth the high and low bid prices of our Common Stock,
        as
        reported by the OTCBB for each quarter since January 1, 2006, per
        Bloomberg.com.
 **Bid
                            Price****Year**
                        
                        **Quarter**
                        
                        **High**
                        
                        **Low**2008
                        
                        First
                        $
                        .00431
                        $
                        .001Second
                            (though April 12, 2008)
                        $
                        .00131
                        $
                        .0012007
                        
                        First
                        $
                        .009
                        $
                        .001Second
                        $
                        .006
                        $
                        .0005Third
                        $
                        .00381
                        $
                        .0005Fourth
                        $
                        .029
                        $
                        .00052006
                        
                        First
                        $
                        .230
                        $
                        .002Second
                        $
                        .025
                        $
                        .011Third
                        $
                        .015
                        $
                        .004Fourth
                        $
                        .013
                        $
                        .00119
 
 We
        have
        approximately 90 shareholders of record and an unknown number that hold shares
        in street name.
  No
        dividends were declared since December 31, 2006. We presently intend to retain
        our earnings to fund development of our business. Decisions concerning dividend
        payments in the future will depend on income and cash requirements. Holders
        of
        common stock are entitled to receive such dividends as may be declared by
        our
        board of directors. There are no contractual restrictions on our ability
        to pay
        dividends to our shareholders.
  *Securities
        authorized for issuance under equity compensation plans.*
  The
        following is provided with respect to compensation plans (including individual
        compensation arrangements) under which equity securities are authorized for
        issuance as of the fiscal year ending December 31, 2007.
 
 **Equity
        Compensation Plan Information**
 **Number
                      of**
                  
                  
                  
                  **Number
                      of securities****securities
                      to be**
                  
                  
                  
                  **remaining
                      available for****issued
                      upon**
                  
                  
                  
                  **future
                      issuance under****exercise
                      of**
                  
                  **Weighted-average**
                  
                  **equity
                      compensation****outstanding**
                  
                  **exercise
                      price of**
                  
                  **plans
                      (excluding****options,
                      warrants**
                  
                  **outstanding
                      options,**
                  
                  **securities
                      reflected in****and
                      rights**
                  
                  **warrants
                      and rights**
                  
                  **column
                      (a)****Plan
                      category**
                  
                  **(a)**
                  
                  **(b)**
                  
                  **(c)**Equity
                      compensationplans
                      approved by
                  
                  24,000,000
                  
                  N/A
                  
                  4,000,000security
                      holdersEquity
                      compensationplans
                      not approved
                  
                  -0-
                  
                  N/A
                  
                  N/Aby
                      security
                      holders**Total**
                  
                  24,000,000
                  
                  N/A
                  
                  -0-
 Figures in the table refer to our 2007 Incentive Stock
          Plan
          and 2007-2 Incentive Stock Plan, under which 20,000,000 shares of Common
          Stock
          have been issued pursuant to stock awards aggregating 18,000,000 shares
          and the
          exercise of 2,000,000 options. Please refer to Item 11. *Executive
          Compensation - Equity Compensation Plans*,
          for
          additional information regarding up to 50,000,000 shares authorized for
          issuance
          under our 2008 Stock Award Plan, of which 11,800,000 shares have been issued
          in
          2008 pursuant to stock awards, and 38,200,000 shares remain available for
          future
          issuance, and 75,000,000 shares awarded in 2008 to our chief executive
          officer.
          Our shareholders have not approved the 2008 Stock Award
          Plan.
  -5-
 
 In
        2008
        we also issued 25,000,000 shares issued for legal services and 50,000,000
        shares
        for business development consulting services in the first quarter of 2008
        to two
        consultants under equity compensation plans that were not approved by security
        holders. There are no shares remaining to be issued under these
        plans.
  *Recent
        Sales of Unregistered Securities*
  In
        2007
        we issued 1,437,392 shares of Common Stock to an investor upon the conversion
        of
        Class D Convertible Preferred Stock that he held.
  As
        of
        April 2, 2008, we have issued 5,971,541 shares of Common Stock to two investors
        upon the conversion of Class D Convertible Preferred Stock that they held,
        and
        75,000,000 shares for services to our Chief Executive Officer as described
        in *Item
        11. Executive Compensation - Compensation and Other Employment-Related
        Agreements with Management* .
  Since
            December 2006 we sold additional convertible notes and warrants to certain
            purchasers in the transactions described in *certain
            Relationships and Related Transactions and Director Independence - Securities
            Purchase Agreements.*
 We
        relied
        on the exemptions form registration afforded by Section (2) of the Securities
        Act of 1933 and Rule 506 of Regulation D of the General Rules and Regulations
        thereunder for the sales of shares to investors and the sale of the convertible
        notes and warrants and the shares issued to pay debt and for services. We
        complied with the manner of sale, access to information and investor
        accreditation requirements of such exemptions.
  **Item
        6. Selected Financial Data.**
  Not
        Applicable.
 
 **Item
        7. Management’s Discussion and Analysis of Financial Condition and Results of
        Operations.**
 
 ***Plan
        of Operation for 2008***
  Our
          operating activities have not yet generated a positive cash flow. We  do
          not expect
          that they will generate a positive cash flow by the end of 2008 because our
          expenses far exceed sales. We will require financing in excess of $1,500,000
          from external sources in 2008 in order to be able to continue in operation
          as a
          going concern and we would like to obtain additional financing for a proposed
          acquisition of a software company to complement our operations. There can
          be no
          assurance that we can attract financing in order to fulfill our requirements.
 -6-
 In
          2004, we entered into an agreement that has to date provided $9,604,807 from
          the sale of convertible notes to an investment group. The proceeds were
          used to
          develop our previous product, our new web-based software, and as working
          capital
          for operating expenses and accounts payable. We do not expect the investment
          group to provide additional financing. As
          of April 2, 2008, the investment group has converted to stock $102,777  of
          the notes. The aggregate outstanding principal amount of the remaining
          convertible notes was $9,502,030  as
          of that date. We
          believe without assurance that the investment group will continue to convert
          the
          rest of the notes to stock. However, the rate of conversion has slowed
          as a
          result of the decrease in our stock price, to which the rate of conversion
          is
          tied. It is not likely that all of the remaining debt will be converted.
          Certain
          notes are past due and in technical default.
 
 In
          the second half of 2006, we relocated to our present officers and new executive,
          financial and sales management was installed. We redirected our development
          and
          marketing efforts to our new web-based application software for conventional
          desktop and laptop computers and, beginning in March 2007, to UMPC’s. For that
          purpose, we added a Chief Information Officer, a development and technical
          support staff, and a marketing and sales staff. That increased our selling,
          general and administrative expenses. Notwithstanding these changes, there
          has
          been a decline in sales. Web DATM has not yet achieved broad market acceptance,
          although we expect that it will in 2008-9. We believe, without assurance,
          that
          we are gaining position with the appropriate product, marketing network
          and
          approach, management, and other personnel to attain a niche in the CRM
          software
          market for auto dealers. Given our vulnerable financial condition, there
          can be
          no assurance that during this turnaround we can retain our key personnel
          ,
          implement our business plan and become profitable.
 Our
        plan
        of operation for the remainder of fiscal 2008 is as follows:
 
 To
        increase sales of Web DATM, in part by supplementing our internal sales force
        with outside distribution arrangements;
 
 To
        complete development of Web DATM 1.5 for release;
 
 To
        acquire other complimentary softare companies; and,
 
 To
        obtain
        additional debt and equity financing to fund our working capital
        deficiency.
 
 To
        date
        our operations have not been self-sustaining. Additional liquidity and capital
        resources will be necessary to defray our ongoing expenses that have risen
        significantly, while revenue decreased in 2007 and for the year to date.
        In the
        event we are unable to refinance our indebtedness, obtain additional liquidity
        through the sale of additional convertible notes or stock, and, ultimately,
        to
        repay, refinance or restructure our indebtedness, we may have to file for
        protection under the federal bankruptcy laws and we may be unable to continue
        in
        operation as a going concern.
 
 Our
        independent registered public accounting firm issued a report to the effect
        that
        certain conditions raise substantial doubt about our ability to continue
        as a
        going concern because we incurred recurring losses and had substantial working
        capital and stockholder’s deficits and negative cash flow from operations. We
        continue to have net losses. Should we be unable to implement our plan of
        operation, our expansion plans may be curtailed, and we may not be able to
        continue in operation.
  ***Financial
        condition at December 31, 2006 and 2007***
 
 *December
        31, 2007.* Stockholders’ deficit was $ 16,950,266
        and we had a working capital deficiency of $12,216,247. Principal sources
        of
        liquidity in 2007 included net proceeds of $1,950,000 from the sale of
        convertible notes and $197,524 in gross profit from operations.
  *December
        31, 2006.* Stockholders’
        deficit was $12,304,159 and working capital deficiency was $7,898,243. Principal
        sources of liquidity in 2006 included the sale of $2,080,000 in convertible
        notes and $408,141 in gross profit from operations.
 
 ***Results
        of operations - December 31, 2006 and 2007***
 
 Loss
        from
        operations decreased to $ 2,095,157
        in 2007 from $2,109,242 in 2006 as a result of decreased revenue and increases
        in general and administrative expenses. Revenue decreased to $232,079 in
        2007
        from $ 479,474
        in 2006. The expiration of contracts for our old non-web based system
        accounted for most of the decrease. Selling, general and administrative expenses
        decreased to $2,226,751 in 2007 from $2,517,383 in 2006. We incurred research
        and development expense of $65,930 in 2007, we did not have this expense
        in
        2006.
  -7-
  Interest
        expense increased to $944,128 in 2007 from $911,721 in 2006. Interest expense
        resulted mainly from the issuance of additional convertible notes and the
        conversion of convertible notes. Overall net loss increased from $4,443,627
        in
        2006 to $4,722,436 in 2007 as a result of the increase in loss from operations
        and the increase in interest expense.
 
 ***Results
        of operations - December 31, 2005 and 2006***
 
 Loss
        from
        operations remained approximately the same: $2,109,242 in 2006 from $2,113,579
        in 2005 as a result of decreased general and administrative expenses that
        offset
        decreased revenue. Revenue decreased to $479,474 in 2006 from $943,735 in
        2005.
        The expiration of contracts for our old non-web based system accounted for
        most of the decrease. Selling, general and administrative expenses decreased
        to
        $2,517,383 in 2006 from $2,732,954 in 2005. We incurred no research and
        development expenses in either 2005 or 2006.
 
 Interest
        expense increased to $911,721 from $747,383. Interest expense resulted mainly
        from the issuance of additional convertible notes and the conversion of
        convertible notes. Overall net loss increased from 3,632,448
        in 2005 to $4,443,627 in 2006as a result of the increase in loss from
        operations and the increase in interest expense.
 
 **Item
        7A. Quantitative and Qualitative Disclosures About Market
        Risk.**
 
 Not
        applicable.
 
 **Item
        8. Financial Statements and Supplementary Data.**
  Attached
        to this report beginning on page F-1.
 
 **Item
        9. Changes in and Disagreements with Accountants on Financial Statement
        Disclosure.**
 
 None.
 
 **Item
        9A. Controls and Procedures.**
 
 *Disclosure
        Controls and Procedures*
 
 The
        Company maintains controls and procedures designed to ensure that it is able
        to
        collect the information it is required to disclose in the reports it files
        with
        the SEC, and to process, summarize and disclose this information within the
        time
        periods specified in the rules of the SEC. The Company's Chief Executive
        and
        Chief Financial Officer are responsible for establishing and maintaining
        these
        procedures and, as required by the rules of the SEC, evaluate their
        effectiveness. Based on their evaluation of the Company's disclosure controls
        and procedures, which took place as of a date within 90 days of the filing
        date
        of this report, the Chief Executive and Chief Financial Officers believe
        that
        these procedures are effective to ensure that the Company is able to collect,
        process and disclose the information it is required to disclose in the reports
        it files with the SEC within the required time periods.
 
 *Internal
        Controls*
 
 The
        Company maintains a system of internal controls designed to provide reasonable
        assurance that: transactions are executed in accordance with management's
        general or specific authorization; transactions are recorded as necessary
        (i) to
        permit preparation of financial statements in conformity with generally accepted
        accounting principles and (ii) to maintain accountability for assets. Access
        to
        assets is permitted only in accordance with management's general or specific
        authorization and the recorded accountability for assets is compared with
        the
        existing assets at reasonable intervals and appropriate action is taken with
        respect to any differences.
  -8-
 Since
        the
        date of the most recent evaluation of the Company's internal controls by
        the
        Chief Executive and Chief Financial Officers, there have been no significant
        changes in such controls or in other factors that could have significantly
        affected those controls, including any corrective actions with regard to
        significant deficiencies and material weaknesses.
  *Management’s
          Report on Internal Control over Financial Reporting*
  Management
          of the Company is responsible for establishing and maintaining adequate
          internal
          control over financial reporting as defined in Rule 13a-15(f) under the
          Securities Exchange Act of 1934.  We have assessed the effectiveness of
          those internal controls as of December 31, 2007, using the Committee of
          Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control -
          Integrated Framework as a basis for our assessment.
  Because
          of inherent limitations, internal control over financial reporting may
          not
          prevent or detect misstatements.  Projections of any evaluation of
          effectiveness to future periods are subject to the risk that controls may
          become
          inadequate because of changes in conditions, or that the degree of compliance
          with the policies and procedures may deteriorate.  All internal control
          systems, no matter how well designed, have inherent limitations. 
Therefore, even those systems determined to be effective can provide only
          reasonable assurance with respect to financial statement preparation and
          presentation.
  A
          material weakness in internal controls is a deficiency in internal control,
          or
          combination of control deficiencies, that adversely affects the Company’s
          ability to initiate, authorize, record, process, or report external financial
          data reliably in accordance with accounting principles generally accepted
          in the
          United States of America such that there is more than a remote likelihood
          that a
          material misstatement of the Company’s annual or interim financial statements
          that is more than inconsequential will not be prevented or detected. In
          the
          course of making our assessment of the effectiveness of internal controls
          over
          financial reporting, we identified one material weakness in our internal
          control
          over financial reporting.  This material weakness consisted of inadequate
          staffing within the accounting operations of our company. The small number
          of
          employees who are responsible for accounting functions (more specifically,
          one)
          prevents us from segregating duties within our internal control system. The
          inadequate segregation of duties is a weakness because it could lead to
          the
          untimely identification and resolution of accounting and disclosure matters
          or
          could lead to a failure to perform timely and effective reviews.
  By
                  the Board of Directors
                  
                  /s/
                    Steven E. Humphries
                  
                  Steven
                    E. Humphries, Director
 
 **Item
        9(B). Other Information.**
 
 Not
        applicable.
  -9-
 
 PART
        III
  **Item
        10. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.**
  ***Directors
        and Executive Officers; Corporate Governance***
 
 Name
              Age
              PositionsSteven
                  E. Humphries
              55
              Chief
                  Executive Officer, Treasurer and DirectorDavid
                  L. Wange
              48
              Chief
                  Financial Officer and SecretaryDavid
                  T. Scaturro
              56
              Vice
                  President Marketing and SalesRajneesh
                  K. Sharma
              37
              Chief
                  Information Officer
  Our
        Board
        of Directors is comprised of one director of one class. Each director is
        elected
        to hold office until the next annual meeting of shareholders and until his
        successor has been elected and qualified. The following is a brief description
        of the background and experience of our director and officers.
  *Steven
          E. Humphries* has been Chief Executive Officer, Treasurer and Director since August 2006.
          During his thirty-year career in the broadcast industry, Mr. Humphries
          gained
          extensive executive experience and has started, managed, operated, and
          consulted
          with numerous radio stations and broadcast groups, specializing in Spanish
          language programming. He has been the chief executive officer and owner
          of
          Humphries Marketing Group, LLC (“HMG”), a full-service automotive boutique
          advertising agency he founded in 2003. He
          attended the University of Oklahoma from 1970 through 1971.
  *David
          L.Wange* has been Chief Financial Officer since May 2007. Prior thereto he was a
          consultant in Dallas, Texas, specializing in Sarbanes-Oxley Act and audit
          consulting. His clients included brokerage firms, private equity firms,
          retail
          merchandizing ,
          certified public accounting firms, and a major consulting firm. From 2003
          through 2005, Mr. Wange was an account executive for RHMHR, Inc., a Dallas
          consulting firm. He has been a certified public accountant in Texas since
          1996,
          and holds a Master of Science in Accounting from the University of Texas
          at
          Dallas, a Master of Arts in Biblical Studies from Dallas Theological Seminary,
          and a Bachelor of Science in Economics from Texas A&M
          University.
  *David
          T. Scaturro* has been Vice President Marketing and Sales since July 2007. He has been
          the
          chief operating officer and co-owner with Mr. Humphries of HMG since 2004.
          From
          1992 through 2003, Mr. Scaturro was employed by Infinity Broadcasting,
          Dallas,
          Texas, as general sales manager for various stations. He attended Southern
          Illinois University, Edwardsville from 1970 through 1972.
 *Rajneesh
        K. Sharma* has been
        Chief Information Officer since July 2007 and has headed our software
        development and technical support team since June 2006. Since 1999, he has
        been
        employed as a software architect and developer with several companies. Mr.
        Sharma earned a Bachelor of Science in Electrical Engineering and Software
        from
        Cogswell Polytechnic in Sunnyvale, California in 2004.
  ***Committees
        of the Board of Directors***
  *Audit
        Committee.* We
        have
        no audit committee of the Board of Directors. We are exempt from the Securities
        and Exchange Commission requirements for a separate audit
        committee.
  *No
        Compensation Committee.* We
        have
        no compensation committee of the Board of Directors. The entire board acts
        as
        our compensation committee. Transactions between Mr. Humphries, HMG, and
        us are
        not conducted at arm's-length. These include their compensation arrangements
        set
        forth in Item 11. *Executive
        Compensation* and the
        transactions set forth in Item 13. *Certain
        Relationships and Related Transactions and Director Independence* below.
        Mr. Humphries, without any independent authorization, review or oversight
        sets
        the terms of these arrangements and transactions. There can be no assurance
        that
        the terms thereof are comparable to those that would be negotiated at
        arm's-length or otherwise fair and reasonable, despite the good faith belief
        of
        Mr. Humphries that they are.
  ***Meetings
        of Directors*** ****
  There
        were no formal meetings of the Board of Directors and no formal meeting of
        committees thereof in 2007. The board acted by unanimous consent five ti mes
        in
        2007. We have adopted a policy that all directors must attend the annual
        meeting
        of directors following the shareholders meeting and two-thirds of all other
        meetings of directors.
  -10-
  ***Codes
        of Ethics***
  During
        2008, we adopted a Code of Business Conduct and Ethics that addresses, among
        other things, conflicts of interest, corporate opportunities, confidentiality,
        fair dealing, protection and use of company assets, compliance with laws
        (including insider trading laws), and reporting of unethical behavior. The
        Code
        of Business Conduct and Ethics is applicable to our directors, officers and
        all
        employees.
  In
        addition, we have adopted a Finance Code of Ethics that requires honest and
        ethical business conduct, full, accurate and timely financial disclosures,
        compliance with all laws, rules and regulations governing our business, and
        prompt internal reporting of any violations of the code. The Finance Code
        of
        Ethics is applicable to our Chief Executive Officer, Chief Financial Officer,
        Controller (there is no Controller at this time) and all finance employees.
        We
        intend to satisfy the disclosure requirements under Item 10 of Form 8-K
        regarding any amendment to or waiver of the Code of Ethics with respect to
        our
        Chief Executive Officer, Chief Financial Officer, Controller, and persons
        performing similar functions, by posting such information on our website.
  ***Compliance
        with Section 16(a) of the Exchange Act***
  Our
        directors and executive officers failed to file on a timely basis reports
        required by Section 16(a), including Forms 3, 4 and 5 during the three most
        recent fiscal years and the year to date. With respect to Mr. Humphries there
        were seven late reports covering four transactions that were not reported
        on a
        timely basis. With respect to Mr. Wange, there were **** three **** late
        reports covering one transaction that was not reported on a timely basis.
        With
        respect to Mr. Scaturro, there were four late reports covering three
        transactions that were not reported on a timely basis. With respect to Mr.
        Sharma, there were four late reports covering two transactions that were
        not
        reported on a timely basis. As of the date hereof, all reports required by
        Section 16(a) have been filed and are available on our web site
        www.dealeradvance.com.
  **Item
        11. Executive Compensation.**
  *Summary
        Compensation Table*
  The
        following table sets forth certain information about the compensation paid
        to
        management during the 2006 through 2007 fiscal years:
 **Annual
                      Compensation**
                  
                  **Long
                      Term Compensation****Name
                      and**
                  
                  
                  
                  
                  
                  **Other
                      annual**
                  
                  
                  
                  
                  
                  
                  
                  **All
                      other****principal**
                  
                  
                  
                  
                  
                  **compensation**
                  
                  
                  
                  
                  
                  
                  
                  **compensation****position**
                  
                  **Year**
                  
                  **Salary
                      ($)**
                  
                  **($)***
                  
                  **Awards**
                  
                  **Payouts**
                  
                  **($)****Restricted**
                  
                  **Securities**
                  
                  **LTIP****stock**
                  
                  **underlying**
                  
                  **payouts****award(s)**
                  
                  **options/SAR**
                  
                  **($)****($)**
                  
                  **(#)**Steven
                        E. Humphries,
                  
                  
                  2007
                  
                  $
                  115,000
                  
                  $
                  20,000
                  
                  $
                  84,400
                  
                  
                  -0-
                  
                  $
                  -0-
                  
                  $
                  -0-Chief
                      Executive Officer,
                  
                  
                  2006
                  
                  $
                  -0-
                  
                  $
                  -0-
                  
                  $
                  -0-
                  
                  
                  666,667
                  
                  $
                  -0-
                  
                  $
                  -0-Treasurer
                      and DirectorDavid
                      L. Wange, Chief
                  
                  
                  2007
                  
                  $
                  47,588
                  
                  $
                  10,500
                  
                  $
                  -0-
                  
                  
                  -0-
                  
                  $
                  -0-
                  
                  $
                  -0-Financial
                      Officer and
                  
                  
                  2006
                  
                  $
                  -0-
                  
                  $
                  -0-
                  
                  $
                  -0-
                  
                  
                  -0-
                  
                  $
                  -0-
                  
                  $
                  -0-SecretaryDavid
                      T. Scaturro, Vice
                  
                  
                  2007
                  
                  $
                  45,000
                  
                  $
                  1,500
                  
                  $
                  -0-
                  
                  
                  -0-
                  
                  $
                  -0-
                  
                  $
                  -0-President
                        Marketing and
                  
                  
                  2006
                  
                  $
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  666,667
                  
                  $
                  -0-
                  
                  $
                  -0-SalesRajneesh
                      K. Sharma,
                  
                  
                  2007
                  
                  $
                  126,550
                  
                  $
                  1,500
                  
                  $
                  -0-
                  
                  
                  -0-
                  
                  $
                  -0-
                  
                  $
                  -0-Chief
                      Information Officer
                  
                  
                  2006
                  
                  $
                  50,726
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  666,667
                  
                  $
                  -0-
                  
                  $
                  -0-
  *
        Consists of cash bonuses.
  -11-
  ***Equity
        Compensation Plan Information***
  On
        March
        4, 2008, the Board of Directors adopted the 2008 Stock Award Plan (the "
        Plan")
        to provide incentive compensation to employees, directors, officers and others
        who serve us. The Plan provides for the granting of up to 50,000,000 shares
        of
        Common Stock to our personnel on such terms as the directors may determine.
        The
        directors may amend the Plan. As of
        the date hereof, we have granted stock awards for 11,800,000 shares. The
        Stock
        Award Plan supercedes all of our previous stock option plans. The directors
        terminated the 2007 Incentive Stock Plan effective December 31,
        2008.
  **Option
        Grants to Management in 2007**
  There
        were no option grants to management during 2007.
  ***Option
        Exercises and Year-End Values***
  The
        following table sets forth certain values with respect to stock options
        exercised and held by management at the end of 2007:
 **Number
                        of****Securities**
                    
                    **Value
                          of****Underlying**
                    
                    **Unexercised****Unexercised**
                    
                    **In-the-Money****Options/SAR’s
                        at**
                    
                    **Options/SAR’s****Share
                        Acquired**
                    
                    
                    
                    **FY-end
                        (#)**
                    
                    **at
                          FY-end (S)****on**
                    
                    **Value**
                    
                    **Exercisable/**
                    
                    **Exercisable/****Name**
                    
                    **Exercise
                        (#)**
                    
                    **Realized**
                    
                    **Unexercisable**
                    
                    **Unexercisable**Steven
                          E. Humphries,
                    
                    
                    -0-
                    
                    
                    N/A
                    
                    
                    666,667
                    
                    
                    $2,000Chief
                        ExecutiveOfficer,
                        Presidentand
                        DirectorDavid
                        L. Wange,
                    
                    
                    -0-
                    
                    
                    N/A
                    
                    
                    -0-
                    
                    
                    N/AChief
                        FinancialOfficer
                        and SecretaryDavid
                        T. Scaturro,
                    
                    
                    -0-
                    
                    
                    N/A
                    
                    
                    666,667
                    
                    
                    $2,000Vice
                        PresidentMarketing
                        and SalesRajneesh
                        K. Sharma,
                    
                    
                    -0-
                    
                    
                    N/A
                    
                    
                    666,667
                    
                    
                    $2,000Chief
                        InformationOfficer
  Each
        of
        these options was exercised for $2,000 in January 2008.
  -12-
  *Employment
        and Other Compensation-Related Agreements with Management*
  On
          November 20, 2007, Mr. Humphries was issued 5,000,000 shares of Common
          Stock in
          consideration of services rendered valued at $84,400. On March 4, 2008,
          Mr.
          Humphries was issued 25,000,000 shares of Common Stock in consideration
          for
          services rendered valued at $50,000. On April 4, 2008, Mr. Humphries was
          issued
          50,000,000 shares in consideration of services rendered valued at
          $56,000. Mr.
          Humphries’ current salary is $20,000 per month.
  On
          March
          4, 2008, Mr. Wange was issued 2,000,000 shares of Common Stock in consideration
          for services rendered valued at $4,000. On April 4, 2008, Mr. Wange was
          issued
          5,000,000 shares in consideration of services rendered valued at $5,600.
          Mr.
          Wage’s current salary is $10,000 per month.
  The
          current annual salary of Mr. Scaturro is $60,000. On March 4, 2008, Mr.
          Scaturro
          was issued 1,000,000 shares of Common Stock in consideration for services
          rendered valued at $2,000. On April 4, 2008, Mr. Scaturro was issued 2,500,000
          shares in consideration of services rendered valued at $2,800.
  On
          March
          4, 2008, Mr. Sharma was issued 1,000,000 shares of Common Stock in consideration
          for services rendered valued at $2,000. Mr.
          Sharma’s current salary is $11,666 per month.
  **Item
          12. Security Ownership of Certain Beneficial Owners and Management and
          Related
          Stockholder Matters**
  The
        following table sets forth information, as of March 28, 2008, with respect
        to
        the beneficial ownership of our common stock by each person known to be the
        beneficial owner of more than five percent of the outstanding common stock,
        and
        by our director and four executive officers, individually and as a group.
  Name
                  and Address
              
              Numbers
                  of Shares
                Beneficially
                  Owned(1)
              
              %StevenE.
                    Humphries,
                  5709
                    Walden Drive,
                Addison,
                  TX 75093
              
              80,666,667(1)
              
              15.43%Christopher
                  J. Carey,
                450
                  Claremont Road
                Bernardville,
                  NJ 07924
              
              26,798,571(2)
              
              5.13%David
                  L. Wange
                2201
                  Rolling Oak Lane,
                Garland,
                  TX 75044
              
              7,000,000(3)
              
              1.34%David
                  T. Scaturro
                6301
                  Thorn Branch Drive
                Plano,
                  TX 75093
              
              4,436,667(1)
              
              0.85%Rajneesh
                  K. Sharma
                5945
                  West Parker Road #1011,
                Plano,
                  Texas 75093
              
              1,666,667
              
              0.32%Directors
                  and Executive Officers
                as
                  a Group (four persons)
              
              93,800,001(1)
                    (3) (3)
              
              17.94%
  ____(1)
              Includes
                  25,000,000 shares issued to Mr. Humphries after March 17,
                  2008.(2)
              Includes
                  3,937,500 shares held by Mr. Carey as joint tenants with his wife
                  Mary
                  Carey, and 218,750 shares held by his son, Christopher Carey, Jr.,
                  who has
                  the same residence address as Mr. Carey.(3)
              Includes
                  5,000,000 shares issued to Mr. Wange after March 28,
                  2008.(4)
              Includes
                  2,500,000 shares issued to Mr. Scaturro after March 28,
                  2008.
  -13-
  **Item
        13. Certain Relationships and Related Transactions and Director
        Independence.**
 
 *Transactions
        with Directors, Officers and Principal Shareholders*
 We
          now
          have an arrangement with HMG to provide us office, space, equipment, and
          marketing and sales support on a turnkey basis in consideration of the
          payment
          of $6,750 per month plus a commission of 20% on sales made by HMG. On April
          30,
          2006, we entered into a three year consulting agreement with HMG to provide
          management services for $15,000 plus a 20% commission on net sales. During
          2007,
          we paid $120,750 to Humphries Marketing Group under the agreement, including
          sales commissions. The
          agreement was terminated effective December 31, 2007.
  On
          December 20, 2006, the Company issued a promissory note in the aggregate
          principal amount of $81,800 to Mr. Humphries. The note bears interest equal
          to
          the prime rate and is due on or before June 30, 2007. As of December 31,
          2007,
          $34,014 was outstanding under the promissory note.
 
 On
          December 20, 2006, the Company issued a promissory note in the aggregate
          principal amount of $32,341 to HMG. The note bears interest equal to the
          prime
          rate and is due on or before June 30, 2007. As of December 31, 2007, $6,787
          was
          outstanding under the promissory note.
  On
          August
          14, 2006, Mr. Carey a former director and officer and a principal shareholder,
          entered into a Settlement Agreement with the Company pursuant to which
          Mr.
          Carey, waived all rights to the following: accrued salary in the amount
          of
          $781,369; a bridge loan in the amount of $262,000; a bridge loan in the
          amount
          of $360,000; auto allowance payable in the amount of $25,600; and, accrued
          interest in the amount of $370,299. In consideration of this waiver, the
          Company
          agreed to pay Mr. Carey $8,000 a month over a period of 15 months, now
          modified
          to $2,150 per month, issue Mr. Carey a convertible note in the amount of
          $661,369 (the "Carey Note") and issue Mr. Carey 5,117 shares of Series
          D
          Convertible Preferred Stock with an aggregate stated value of $1,017,899.
          The
          Carey Note matures on August 13, 2016, bears no interest and is convertible
          at
          the option of Mr. Carey at the market price of the Company's common stock.
          The
          shares of Series D Preferred Stock are convertible by dividing the stated
          value
          by the closing bid price on the day immediately prior to
          conversion.
 
 We
          believe that the terms of all of the above transactions are commercially
          reasonable and no less favorable to us than we could have obtained from
          an
          unaffiliated third party on an arm's length basis. However, the loans violate
          Section 402 of the Sarbanes Oxley Act of 2002. As a result, despite the
          fact
          that a portion of such loans was repaid, we and/or Mr. Humphries and HMG
          may be
          subject to fines, sanctions and/or penalties. At this time, we are unable
          to
          determine the amount of such fines, sanctions and/or penalties that may
          be
          incurred. The purpose of such loan was for personal use and for marketing
          services rendered.
 For
        additional transactions with management, see also Item 11. *Executive
        Compensation – Employment
        and
        Other Compensation-Related Agreements with Management* .
  ***Securities
        Purchase Agreements***
  *2006-2008
        Securities Purchase Agreements*
  Effective
        February 8, 2006, we entered into a series of Securities Purchase Agreement
        (the
“2006-2008 Securities Purchase Agreements”) with AJW Offshore, Ltd., AJW
        Partners, LLC, AJW Qualified Partners, LLC, and New Millennium Capital Partners
        II (the “Investors”) and ancillary agreements. Under the 2006-2008 Securities
        Purchase Agreement, we sold the Investors a total of $5,103,232 in Callable
        Secured Convertible Notes (the "2006-2008 Convertible Notes") due in two
        years,
        respectively, with 8% annual interest payable quarterly. The Investors may
        convert the 2006-2008 Convertible Notes into shares at the lower of $.05
        per
        share or 15% of the three lowest intraday trading prices during the twenty
        trading days prior to conversion. We issued the Investors for no additional
        cash
        consideration Stock Purchase Warrants (the "2006-2008 Warrants") to purchase
        an
        aggregate of 26,773,260 shares at $.0001 per share. The 2006-2008 Warrants
        expire seven years from the date issued.
  -14-
  $5,103,232
        of the proceeds from the 2006-2008 Convertible Notes was used for working
        capital and expenses.
  As
        of
        April 2, 2008, the Investors have converted $102,777 of the 2006 Convertible
        Notes into 335,767,803 shares of Common Stock. Based on the conversion price
        of
        $.00016 on April 2, 2008 the remaining principal amount of 2006-2008 Convertible
        Notes can be converted into a minimum of 59,387,687,500 shares. Additional
        shares may be issued if accrued interest is converted. Management believes
        that
        the actual conversion price may be lower and more than the minimum number
        of
        shares may be issued when the Convertible Notes are converted.
  *2004
        Securities Purchase Agreement*
  Effective
        June 18, 2004, we entered into a Securities Purchase Agreement (the “2004
        Securities Purchase Agreement”) with the Investors and ancillary agreements.
        Under the 2004 Securities Purchase Agreement, we sold the Investors a total
        of
        $3,000,000 in Callable Secured Convertible Notes (the "2004 Convertible Notes")
        due beginning June 18, 2006 with 12% annual interest payable quarterly, the
        first four months interest to be prepaid from proceeds of the Convertible
        Notes.
        The 2004 Convertible Notes are past due, and they are in technical default.
        The
        Investors may convert the Convertible Notes into shares at the lower of $.70
        per
        share or 50% of the three lowest intraday trading prices during the twenty
        trading days prior to conversion.
  We
        agreed
        to issue to the Investors for no additional cash consideration 3,000,000
        Stock
        Purchase Warrants (the "2004 Warrants") to purchase one share at $.57 per
        share
        for each one dollar of Convertible Notes purchased by the Investors. The
        2004
        Warrants expire five years from the date issued.
  To
        date,
        the Investors have not converted any of the 2004 Convertible Notes into shares.
        Additional shares may be issued if accrued interest is converted. Management
        believes that the actual conversion price may be lower and more than the
        minimum
        number of shares may be issued when the Convertible Notes are
        converted.
  The
        proceeds from the Convertible Notes were used for working capital and general
        business expenses. We also used the proceeds to repay principal and interest
        on
        other outstanding notes and accounts payable, fees, and business development
        purposes, including development of WebDATM.
  *Common
        Provisions of the Transaction Agreements*
  The
          Investors will be entitled to exercise the Warrants on a cashless basis
          if the
          shares of common stock underlying the Warrants are not then registered
          pursuant
          to an effective registration statement. In the event that an Investor exercises
          the Warrants on a cashless basis, then we will not receive any proceeds.
          In
          addition, the exercise price of the Warrants will be adjusted in the event
          we
          issue common stock at a price below market, with the exception of any securities
          issued as of the date of the Warrant or issued in connection with the
          Convertible Notes issued pursuant to the Securities Purchase Agreement.
          Upon the
          issuance of shares of common stock below the market price, the exercise
          price of
          the Warrants will be reduced accordingly. The market price is determined
          by
          averaging the last reported sale prices for our shares of common stock
          for the
          five trading days immediately preceding such issuance as set forth on our
          principal trading market. The exercise price shall be determined by multiplying
          the exercise price in effect immediately prior to the dilutive issuance
          by a
          fraction. The numerator of the fraction is equal to the sum of the number
          of
          shares outstanding immediately prior to the offering plus the quotient
          of the
          amount of consideration received by us in connection with the issuance
          divided
          by the market price in effect immediately prior to the issuance. The denominator
          of such issuance shall be equal to the number of shares outstanding after
          the
          dilutive issuance.
 -15-
  In
          addition, the conversion price of the Convertible Notes and the exercise
          price
          of the Warrants will be adjusted in the event that we issue common stock
          at a
          price below the fixed conversion price or below market price, with the
          exception
          of any securities issued in connection with the Securities Purchase Agreement.
          The conversion price of the Convertible Notes and the exercise price of
          the
          Warrants may be adjusted in certain circumstances such as if we pay a stock
          dividend, subdivide or combine outstanding shares of common stock into
          a greater
          or lesser number of shares, or take such other actions as would otherwise
          result
          in dilution of the Investors’ positions.
 Payment
        of the Convertible Notes is secured by all of our assets pursuant to a Security
        Agreement and an Intellectual Property Security Agreement.
  Pursuant
        to a Registration Rights Agreement we agreed to file a registration statement
        to
        register on request by the Investors the shares underlying the Notes and
        Warrants. We will be subject to the payment of certain penalties and damages
        in
        the event we do not satisfy our obligations under the Transaction Agreements
        including those with respect to registration of the shares underlying the
        Convertible Notes and Warrants.
  **Item
        14. Principal Accountant Fees and Services.**
  The
        following table presents fees for professional services rendered by Paritz
&
Company, P.A. to us for 2007 and 2006:
  Year
                      Ended
                  
                  Year
                      EndedTypes
                      of Fees
                  
                  December
                      31, 2007
                  
                  December
                      31, 2006Audit
                      Fees (a)
                  
                  $
                  17,525
                  
                  $
                  18,200Tax
                      Fees (b)
                  
                  $
                  -0-
                  
                  $
                  -0-Other
                      Fees (c)
                  
                  $
                  3,039
                  
                  $
                  3,750
  To
        safeguard the continued independence of the independent auditors, the Board
        has
        adopted a policy that expands our existing policy preventing our independent
        auditors from providing services to us that are prohibited under Section
        10A(g)
        of the Securities Exchange Act of 1934, as amended. This policy also provides
        that independent auditors are only permitted to provide services to the Company
        that have been pre-approved by the Board of Directors. Pursuant to the policy,
        all audit services require advance approval by the directors. All other services
        by the independent auditors that fall within certain designated dollar
        thresholds, both per engagement as well as annual aggregate, have been
        pre-approved under the policy. Different dollar thresholds apply to the three
        categories of pre-approved services specified in the policy (Audit Related
        services, Tax services and other services). The directors must approve all
        services that exceed the dollar thresholds in advance.
  -16-
  **PART
        IV**
  **Item
        15. Exhibits, Financial Statement Schedules.**
  3.1
                  Articles
                      of Incorporation, as amended (1)3.2
                  Bylaws
                      (1)4.1
                  Form
                      of Securities Purchase Agreement, Callable Secured Convertible
                      Note,
                      Security Agreement, Intellectual Property Security Agreement,
                      Subsidiary
                      Guaranty, Registration Rights Agreement, and Common Stock Purchase
                      Warrant
                      by and among or, issued by the Registrant to, the Investors
                      (2)23.1
                  Consent
                      of Paritz & Company, P.A. dated April15,
                      2008 (1)31.1
                  Certification
                      of Periodic Report - Steven E. Humphries (1)31.2
                  Certification
                      of Periodic Report - David L. Wange (1)32.1
                  Certifications
                      Pursuant to 18 U.S.C. Section 1350 - Steven E. Humphries (1)32.2
                  Certifications
                      Pursuant to 18 U.S.C. Section 1350 - David L. Wange (1)
 _____________
  (1)
              Filed
                  herewith.(2)
              Incorporated
                  by reference to the Registrant’s Form 10-QSB filed with the Securities and
                  Exchange Commission on November 22,
                  2004.
  -17-
  **SIGNATURES**
  Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of
        1934, the registrant has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto duly authorized.
  April
                  14, 2008DealerAdvance,
                  Inc.By:
              /s/**Steven*E. Humphries*Steven
                  E. Humphries, Chief ExecutiveOfficer,
                  President and Director
  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 dates indicated.
  April
                  14, 2008By:
              /s/*Steven E. Humphries*Stephen
                  E. Humphries, Chief Executive Officer, President and
                  DirectorApril
                  14, 2008By:
              /s/*David L. Wange***David
                  L. Wange, Chief Financial Officer, Treasurer and Director (Principal
Accounting
                  and Financial Officer)
  -18-




**REPORT
        OF INDEPENDENT REGISTERED ACCOUNTING FIRM**
   Board
          of
          Directors
 Dealer
          Advance, Inc. and subsidiary
  We
          have
          audited the accompanying consolidated balance sheets of Dealer Advance
          Inc. and
          Subsidiary as of December 31, 2007 and the related consolidated statements
          of
          operations, changes in stockholders’ deficit
          and cash flows for the years ended December 31, 2007 and 2006. These
          consolidated financial statements are the responsibility of the Company's
          management. Our responsibility is to express an opinion on these financial
          statements based on our audit.
  We
          conducted our audit in accordance with auditing standards of the Public
          Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit to obtain reasonable assurance about whether the
          financial
          statements are free of material misstatement. An audit includes examining,
          on a
          test basis, evidence supporting the amounts and disclosures in the financial
          statements. An audit also includes assessing the accounting principles
          used and
          significant estimates made by management, as well as evaluating the overall
          financial statement presentation. We believe that our audit provides a
          reasonable basis for our opinion.
  The
          accompanying financial statements have been prepared assuming that the
          Company
          will continue as a going concern. As shown on the accompanying financial
          statements, the Company has incurred a net loss of $4,722,436 and has negative
          cash flows from operations of $2,050,747 and has a working capital deficit
          of
          $12,216,247 as of December 31, 2007 and a stockholders ’ deficit
          of $16,950,266 These circumstances, among others, raise substantial doubt
          about
          its ability to continue as a going concern. The financial statements do
          not
          include any adjustments that might result from the outcome of this
          uncertainty.
  In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the financial position of Dealer Advance Inc.
          and
          Subsidiaries as of December 31, 2007, and the results of its operations
          and its
          cash flows for the years ended December 31, 2007 and 2006 in conformity
          with
          accounting principles generally accepted in the United States.
   /s/
          Paritz & Company, P.A.
  Hackensack,
          New Jersey
 April
          11,
          2008
 F-1
 **DEALERADVANCE,
        INC. AND SUBSIDIARY**
 **formerly
        Stronghold Technologies, Inc.**
  **CONSOLIDATED
          BALANCE SHEET**
  **December
                    31, 2007****ASSETS****Current
                    Assets**Cash
                
                $
                5,809Accounts
                    receivable
                
                
                2,700Notes
                    receivable, related party
                
                
                40,801Prepaid
                    expenses
                
                
                44,544Total
                    Current Assets
                
                
                93,854**Property
                    and equipment, net**
                
                
                3,947$
                97,801**LIABILITIES
                    AND STOCKHOLDERS' DEFICIT****Current
                    liabilities**Accounts
                    payable
                
                $
                464,089Interest
                    payable, stockholders
                
                
                1,548,299Notes
                    payable, stockholders, current portion
                
                
                875,000Callable
                    secured convertible notes, current portion
                
                
                4,446,845Liquidated
                    damages payable
                
                
                3,674,740Accrued
                    expenses and other current liabilities
                
                
                1,301,128Total
                    current liabilities
                
                
                12,310,101**Long-term
                    liabilities**Notes
                    payable, stockholders, convertible debt, net of imputed interest
                    of
                    $585,222
                
                
                216,765Callable
                    secured convertible notes, less current portion
                
                
                4,521,201Total
                    long term liabilities
                
                
                4,737,966**Commitments
                    and contingencies****Stockholders'
                    deficit**Preferred
                    stock, Series A, $.0001 par value; authorized 5,000,000 shares,
                    2,002,750
                    issued and outstanding (aggregate liquidation preference of $3,004,125)
                    and preferred stock, Series B, $.0001 par value; 2,444,444 shares
                    authorized, issued and outstanding (aggregate liquidation preference
                    $2,200,000) and preferred stock, Series D, $.01 par value; authorized
                    10,000 shares authorized, issued and outstanding (aggregate liquidation
                    preference $1,989,200)
                
                
                545Common
                    stock, $.0001 par value, authorized 8,500,000,000 shares, 237,669,715
                    issued and outstanding
                
                
                23,767Additional
                    paid-in capital
                
                
                10,910,196Accumulated
                    deficit
                
                
                (27,884,774
                )Total
                    stockholders' deficit
                
                
                (16,950,266
                )$
                97,801
  F-2
  DEALERADVANCE,
          INC. AND
          SUBSIDIARY
 **formerly
              Stronghold Technologies, Inc.**
 **CONSOLIDATED
            STATEMENTS OF OPERATIONS**
 **Year
                    End**
                
                **Year
                    End****December
                    31, 2007**
                
                **December
                    31, 2006****Sales**
                
                $
                232,079
                
                $
                479,474**Cost
                    of sales**
                
                
                34,555
                
                
                71,333**Gross
                    profit**
                
                
                197,524
                
                
                408,141**Selling,
                    general and administrative**
                
                
                2,226,751
                
                
                2,517,383**Research
                    and development**
                
                
                65,930
                
                
                —**Loss
                    from operations**
                
                
                (2,095,157
                )
                
                (2,109,242
                )**Interest
                    expense**
                
                
                944,128
                
                
                911,721**Net
                    loss from Operations**
                
                
                (3,039,285
                )
                
                (3,020,963
                )**Settlement
                    of Litigation**
                
                
                —
                
                
                334,294**Liquidated
                    damages**
                
                
                1,683,151
                
                
                1,088,370**Net
                    loss applicable to common stockholders**
                
                $
                (4,722,436
                )
                $
                (4,443,627
                )**Basic
                    and diluted loss per common share**
                
                $
                (0.07
                )
                $
                (0.12
                )**Weighted
                    average number of common shares outstanding**
                
                
                72,237,234
                
                
                37,452,451
  F-3
  DEALERADVANCE,
          INC. AND
          SUBSIDIARY
 **formerly
                Stronghold Technologies, Inc.**
 **CONSOLIDATED
            STATEMENTS OF CASH FLOWS**
 **Year
                      End**
                
                **Year
                      End****December
                    31, 2007**
                
                **December
                    31, 2006****Cash
                    flows from operating activities**Net
                    loss
                
                
                ($4,722,436
                )
                
                ($4,443,627
                )Adjustments
                    to reconcile net loss to net cash used in operating
                    activities:Allowance
                    for returns and doubtful accounts
                
                
                —
                
                
                (60,000
                )Depreciation
                    and amortization
                
                
                11,506
                
                
                533,971Accrued
                    interest to notes payable, stockholders
                
                
                948,675
                
                
                772,955Stock
                    issued for services
                
                
                23,000Liquidated
                    damages payable
                
                
                1,683,151
                
                
                1,088,368Changes
                    in operating assets and liabilities:Accounts
                    receivable
                
                
                3,581
                
                
                97,156Inventories
                
                
                —
                
                
                18,095Prepaid
                    expenses
                
                
                24,565
                
                
                (42,071
                )Accounts
                    payable
                
                
                82,837
                
                
                (126,807
                )Accrued
                    expenses and other current liabilities
                
                
                (20,061
                )
                
                402,843Deferred
                    Revenue
                
                
                (94,056
                )
                
                (264,676
                )Other
                    Assets
                
                
                8,491
                
                
                (16,711
                )**Net
                    cash used in operating activities**
                
                
                (2,050,747
                )
                
                (2,040,504
                )Proceeds
                    from notes payable, convertible debt
                
                
                1,950,000
                
                
                2,080,000**Net
                    cash provided by financing activities**
                
                
                1,950,000
                
                
                2,080,000**Net
                    increase / (decrease) in cash**
                
                
                (100,747
                )
                
                39,496**Cash,
                    beginning of period**
                
                
                106,556
                
                
                67,060**Cash,
                    end of period**
                
                $
                5,809
                
                $
                106,556
  F-4
  DEALERADVANCE,
          INC. AND
          SUBSIDIARY
 **formerly
                Stronghold Technologies, Inc.**
 **CONSOLIDATED
            STATEMENTS OF STOCKHOLDERS’DEFICIT**
  **Years
                        Ended December 31, 2007 and 2006****Preferred
                        Stock**
                    
                    **Preferred
                        Stock**
                    
                    **Preferred
                        Stock**
                    
                    
                    
                    
                    
                    **Additional**
                    
                    
                    
                    **Total****Series
                        A**
                    
                    **Series
                        B**
                    
                    **Series
                        D**
                    
                    **Common
                        Stock**
                    
                    **Paid-in**
                    
                    **Accumulated**
                    
                    **Stockholders'****Shares**
                    
                    **Amount**
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Capital**
                    
                    **Deficit**
                    
                    **Deficit****Balances**,
                        December 31, 2005
                    
                    
                    2,002,750
                    
                    
                    201
                    
                    
                    2,444,444
                    
                    
                    244
                    
                    
                    —
                    
                    
                    —
                    
                    
                    17,460,222
                    
                    
                    1,746
                    
                    
                    8,004,389
                    
                    
                    (18,718,711
                    )
                    $
                    (10,712,131
                    )**Warrants
                        issued with debt**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    85,884
                    
                    
                    —
                    
                    $
                    85,884**Conversion
                        of convertible notes****to
                        common stock**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    4,698,600
                    
                    
                    470
                    
                    
                    880
                    
                    
                    —
                    
                    $
                    1,350**Conversion
                        of stockholder notes****to
                        preferred stock**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    10,000
                    
                    
                    100
                    
                    
                    —
                    
                    
                    —
                    
                    
                    1,989,083
                    
                    
                    —
                    
                    $
                    1,989,183**Stock
                        issued for compensation**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    21,428,571
                    
                    
                    2,143
                    
                    
                    147,857
                    
                    
                    —
                    
                    $
                    150,000**Imputed
                        interest from noninterest****bearing
                        notes**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    625,182
                    
                    
                    —
                    
                    $
                    625,182**Net
                        loss**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    (4,443,627
                    )
                    
                    (4,443,627
                    )**Balances**,
                        December 31, 2006
                    
                    
                    2,002,750
                    
                    
                    201
                    
                    
                    2,444,444
                    
                    
                    244
                    
                    
                    10,000
                    
                    
                    100
                    
                    
                    43,587,393
                    
                    
                    4,359
                    
                    
                    10,853,275
                    
                    
                    (23,162,338
                    )
                    $
                    (12,304,159
                    )**Warrants
                        issued with debt**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    $
                    —**Conversion
                        of convertible****notes
                        to common stock**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    178,644,930
                    
                    
                    17,864
                    
                    
                    30,543
                    
                    
                    —
                    
                    $
                    48,407**Conversion
                        of stockholder****loan
                        to common stock**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    1,437,392
                    
                    
                    144
                    
                    
                    4,779
                    
                    
                    —
                    
                    $
                    4,922**Stock
                        Issued for interest due**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    9,000,000
                    
                    
                    900
                    
                    
                    14,600
                    
                    
                    —
                    
                    $
                    15,500**Stock
                        Issued for compensation**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    5,000,000
                    
                    
                    500
                    
                    
                    7,000
                    
                    
                    —
                    
                    $
                    7,500**Net
                        loss**
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    (4,722,436
                    )
                    $
                    (4,722,436
                    )**Balances**,
                        December 31, 2007
                    
                    
                    2,002,750
                    
                    $
                    201
                    
                    
                    2,444,444
                    
                    $
                    244
                    
                    
                    10,000
                    
                    
                    100
                    
                    
                    237,669,715
                    
                    $
                    23,767
                    
                    $
                    10,910,196
                    
                    
                    (27,884,774
                    )
                    
                    (16,950,266
                    )
 F-5
  **NOTES
        TO** **CONSOLIDATED** **** **FINANCIAL
        STATEMENTS**
 
 **1.**
              **NATURE
                  OF OPERATIONS**
 
 The
        Company designs, develops, markets, sells and installs a web-based application
        software and database system that manages the auto dealer-customer relationship.
        In January 2007, the Company announced the launch of Web DATM, the new web-based
        version of its DealerAdvanceTM software for conventional desktop or laptop
        computers. The Company began the development of a version of Web DATM for small
        hand-held ultra-mobile personal computers (“UMPC’s”) in March 2007. This product
        will enable any car salesperson to complete the entire sales process from
        virtually anywhere.
  **2.**
              **GOING
                  CONCERN**
  The
        accompanying consolidated financial statements have been prepared assuming
        that
        the Company will continue as a going concern. Since the beginning of the
        fiscal
        year, the Company has incurred a net loss of $4,722,436 and has negative
        cash
        flows from operations of $2,050,747 and has a working capital deficit of
        $12,216,247 and a stockholders’ deficit of $16,950,266 as of December 31, 2007.
        These conditions raise substantial doubt about the Company’s ability to continue
        as a going concern. During 2007, management of the Company will rely on raising
        additional capital to fund its future operations. If the Company is unable
        to
        generate sufficient revenues or raise sufficient additional capital, there
        could
        be a material adverse effect on the consolidated financial position, results
        of
        operations and cash flows of the Company. The accompanying consolidated
        financial statements do not include any adjustments that might be necessary
        if
        the Company is unable to continue as a going concern.
  **3.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING
                  POLICIES**
 
 ***Principles
        of Consolidation***
 The
        consolidated financial statements include the accounts of the Company and
        its
        wholly owned subsidiary. All significant intercompany balances and transactions
        have been eliminated in consolidation.
  ***Property
        and Equipment***
 Property
        and equipment are recorded at cost. Depreciation for equipment, software
        and
        furniture is provided for financial reporting and tax purposes using
        straight-line balance methods.
 
 F-6
 
 Maintenance,
        repairs and minor renewals are charged to expenses when incurred. Replacements
        and major renewals are capitalized.
 
 ***Accounts
        Receivable***
 The
        Company carries its accounts receivable at cost. On a periodic basis, the
        Company evaluates its accounts receivable and establishes an allowance for
        doubtful accounts, based on a history of past write-offs and collections
        and
        current credit conditions. Accounts are written off as uncollectible at the
        discretion of management.
 ***Software Development
        Costs***
 Capitalized
        software development costs, including significant product enhancements, incurred
        subsequent to establishing technological feasibility in the process of software
        development and production, are capitalized according to Statement of Financial
        Accounting Standards (SFAS) No. 86, “Accounting for the Costs of Computer
        Software to Be Sold, Leased, or Otherwise Marketed.” Costs incurred prior to the
        establishment of technological feasibility are charged to research and
        development expenses. The capitalized software is amortized over a three
        year
        period using the straight-line method. As of December 31, 2006, all capitalized
        software development costs were fully amortized. All subsequent research
        and
        development costs during fiscal year 2007 have been immaterial and were expensed
        as incurred.
  ***Fair
        Value of Financial Instruments***
 Financial
        instruments held by the Company include cash, accounts receivable, notes
        payable
        and accounts payable. The book value of cash, accounts receivable and accounts
        payable are considered to be representative of fair value because of the
        short
        maturity of these instruments. The fair values of the notes payable approximate
        book values primarily because the contractual interest rates approximate
        prevailing market rates.
  ***Impairment
        of Long-Lived Assets***
 The
        Company periodically assesses the recoverability of the carrying amounts
        of
        long-lived assets, including intangible assets. A loss is recognized when
        expected undiscounted future cash flows are less than the carrying amount
        of the
        asset. The impairment loss is the difference by which the carrying amount
        of the
        asset exceeds its fair value.
  ***Retirement
        Plan***
 The
        Company has a retirement plan under Section 401(k) of the Internal Revenue
        Code
        (“the Plan”), which covers all eligible employees. The Plan provides for
        voluntary deduction of the employee’s salary, subject to Internal Revenue Code
        limitations. The Company can make a matching contribution to the Plan, which
        is
        at the discretion of the Company and is determined annually. There were no
        matching contributions for the years ended December 31, 2007.
  ***Income
        Taxes***
 The
        Company complies with SFAS No. 109, “Accounting for Income Taxes,” which
        requires an asset and liability approach to financial accounting and reporting
        for income
 
 F-7
 
 taxes.
        Deferred income tax assets and liabilities are computed for differences between
        the financial statement and tax bases of assets and liabilities that will
        result
        in future taxable or deductible amounts, based on enacted tax laws and 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.
 
 ***Stock-Based
        Compensation***
 ** In
        December 2004, the FASB issued SFAS No. 123(R), *Share-Based
        Payment* ,
        which
        is a revision of SFAS No. 123, *Accounting
        for Stock-Based Compensation* .
        SFAS
        No. 123(R) requires all share-based payments to employees and directors,
        including grants of stock options, to be recognized in the financial statements
        based on their fair values. We adopted SFAS No. 123(R) on January 1, 2006,
        under
        the modified prospective method, in which the requirements of SFAS No. 123(R)
        are to be applied to new awards and to previously granted awards that are
        not
        fully vested on the effective date. The modified prospective method does
        not
        require restatement of previous years’ financial statements.
 
 The
        fair
        value of the Company’s stock options was estimated using the Black-Scholes
        option pricing model. Prior
        to
        the adoption of SFAS No. 123(R), we accounted for share-based compensation
        using
        the intrinsic value-based method of accounting in accordance with Accounting
        Principles Board Opinion No. 25, *Accounting
        for Stock Issued to Employees* .
        The
        fair value of issued stock options is estimated on the date of grant using
        the
        Black-Scholes option-pricing model including the following assumptions: expected
        volatility of approximately 50.6%, expected dividend yield rate of 0%, expected
        life of 10 years, and a risk-free interest rate of 4.49% for the years ended
        December 31, 2007 and 2007.
 
 No
        stock
        options were exercised in 2007.
 
 The
        President and Chief Executive Officer was awarded 5,000,000 million shares
        in
        November 2007.
 
 ***Revenue
        Recognition***
 Since
        revenue for the WebDA software is based upon either initial set-up fees and
        monthly subscription fees, revenue is recognized on the accrual basis when
        earned. In the case of customers that have pre-paid balances from the
        predecessor company, revenue is recognized as deferred revenue earned, and
        is
        recognized monthly as accrued revenue.
 
 All
        sales
        agreements with clients do not require significant production, modification,
        or
        customization of software, additionally all the functionality of the product
        is
        made available upon delivery, therefore the Company recognizes revenue in
        accordance with Paragraph 8 of 97-2 when:
 
 1.
              Persuasive
                  evidence of an arrangement exists as evidenced by a signed
                  contract;
 2.
              Delivery
                  has occurred, please note that DealerAdvance, Inc. does not recognize
                  revenue prior to delivery;
  F-8
  3.
              The
                  price of either the DA or WebDaA systems are fixed and determinable
                  as
                  evidenced by the contract; and,
 4.
              Collection
                  of revenues is highly probable.
 
 ***Deferred
        Revenue***
 Deferred
        revenue was recorded by the predecessor company as a liability when the Company
        received a three year maintenance contact in an a one-time advance payment.
        The
        Company then recognized the revenue from the maintenance portion of the contract
        on a pro rata basis over the term of the contract.
 
 ***Use
        of Estimates***
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the date
        of
        the financial statements and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those estimates.
 
 ***Loss
        Per Common Share***
 Loss
        per
        common share is based on the weighted average number of common shares
        outstanding. The Company complies with SFAS No. 128, “Earnings Per Share,” which
        requires dual presentation of basic and diluted earnings (loss) per share.
        Basic
        earnings (loss) per share exclude dilutions and are computed by dividing
        net
        loss applicable to common stockholders by the weighted average number of
        common
        shares outstanding for the year. Diluted earnings (loss) per share reflects
        the
        potential dilution that could occur if securities or
 
 Other
        contracts to issue common stock were exercised or converted into common stock
        or
        resulted in the issuance of common stock that then shared in the earnings
        of the
        entity. Since the effect of the outstanding options and warrants are
        anti-dilutive, they have been excluded from the Company’s computation of loss
        per common share.
 
 ***Liquidated
        Damages Payable***
 Pursuant
        to the callable secured convertible notes and as a result certain registration
        rights granted to investors, the Company incurred damages due to its failure
        to
        have sufficient issuable shares of common stock registered in accordance
        with
        the terms of the agreement. Liquidated damages associated with the Convertible
        Notes increased from $1,088,370 in the year ended December 31, 2006 to
        $1,683,151 in the year ended December 31, 2007. The $594,781 increase is
        due to
        an approximate $2.4 million increase in Convertible Notes issued and subject
        to
        liquidated damages during 2007.
  ***Deferred
        income taxes***
 The
        Company accounts for income taxes in accordance with Statement of Financial
        Accounting Standards No. 109 ( A SFAS
        109") which requires that deferred tax assets and liabilities be recognized
        for
        future tax consequences attributable to differences between financial statement
        carrying amounts of existing assets and liabilities and their
        respective
  F-9
  tax
        bases. In addition, SFAS 109 requires recognition of future tax benefits,
        such
        as carry forwards, to the extent that realization of such benefits is more
        likely than not and that a valuation allowance be provided when it is more
        likely than not that some portion of the deferred tax asset will not be
        realized.
  At
        December 31, 2007, the Company had net operating loss carry forward of
        approximately $21,000,000 which expire between 2009 and 2025.
  The
        Company has a deferred tax asset of approximately $7,150,000 resulting from
        available net operating loss carry forward for which a 100% valuation allowance
        has been applied.
 
 ***New
        Accounting Pronouncements***
 In
        July
        2006, the FASB issued Interpretation No. 48, “ *Accounting
        for Uncertainty in Income Taxes, an interpretation of FASB Statement No.
        109,”* (“FIN
        48”), which seeks to reduce the diversity in practice associated with the
        accounting and reporting for uncertainty in income tax positions. This
        interpretation prescribes a comprehensive model for the financial statement
        recognition, measurement, presentation and disclosure of uncertain tax positions
        taken or expected to be taken in income tax returns. An uncertain tax position
        will be recognized if it is determined that it is more likely than not to
        be
        sustained upon examination. The tax position is measured as the largest amount
        of benefit that is greater than fifty percent likely of being realized upon
        ultimate settlement.
  The
        cumulative effect of applying the provisions of this interpretation is to
        be
        reported as a separate adjustment to the opening balance of retained earnings
        in
        the year of adoption. FIN 48 is effective for fiscal years beginning after
        December 15, 2006.
  In
        September 2006, the FASB issued SFAS No. 157, “ *Fair
        Value Measurements* ”.
        The
        objective of SFAS 157 is to increase consistency and comparability in fair
        value
        measurements and to expand disclosures about fair value measurements. SFAS
        157
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. SFAS 157 applies under other accounting pronouncements
        that
        require or permit fair value measurements and does not require any new fair
        value measurements. The provisions of SFAS No. 157 are effective for fair
        value
        measurements made in fiscal years beginning after November 15, 2007. The
        adoption of this statement is not expected to have a material effect on the
        Company's future reported financial position or results of
        operations.
  In
        February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        159, “ *The
        Fair Value Option for Financial Assets and Financial Liabilities - Including
        an
        Amendment of FASB Statement No. 115* ”.
        This
        statement permits entities to choose to measure many financial instruments
        and
        certain other items at fair value. Most of the provisions of SFAS No. 159
        apply
        only to entities that elect the fair value option. However, the amendment
        to
        SFAS No. 115 “ *Accounting
        for Certain Investments in Debt and Equity Securities”* applies
        to all entities with available-for-sale and trading securities. SFAS No.
        159 is
        effective as of the beginning of an entity’s first fiscal year that begins after
        November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
        year that begins on or before November 15, 2007, provided the entity also
        elects
        to apply the
  F-10
 
 provision
        of SFAS No. 157, *“Fair
        Value Measurements* ”.
        The
        adoption of this statement did not have a material effect on the Company's
        financial statements.
 
 In
        December 2007, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        160, “ *Non-controlling
        Interests in Consolidated Financial Statements - an amendment of ARB No.
        51* ”.
        This
        statement improves the relevance, comparability, and transparency of the
        financial information that a reporting entity provides in its consolidated
        financial statements by establishing accounting and reporting standards that
        require the ownership interests in subsidiaries held by parties other than
        the
        parent and the amount of consolidated net income attributable to the parent
        and
        to the non-controlling interest be clearly identified and presented on the
        face
        of the consolidated statement of income, changes in a parent’s ownership
        interest while the parent retains its controlling financial interest in its
        subsidiary be accounted for consistently, when a subsidiary is deconsolidated,
        any retained non-controlling equity investment in the former subsidiary be
        initially measured at fair value, entities provide sufficient disclosures
        that
        clearly identify and distinguish between the interests of the parent and
        the
        interests of the non-controlling owners. SFAS No. 160 affects those entities
        that have an outstanding non-controlling interest in one or more subsidiaries
        or
        that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years,
        and
        interim periods within those fiscal years, beginning on or after December
        15,
        2008. Early adoption is prohibited. The adoption of this statement is not
        expected to have a material effect on the Company's financial
        statements.
  **4.**
              **ACCRUED
                  EXPENSES AND OTHER CURRENT
                  LIABILITIES**
  Accrued
        expenses and other current liabilities consist of the following at December
        31,
        2007:
  **Accrued
                  expenses and other current liabilities:**
              
              **DealerAdvance,
                  Inc.**
              
              **Stronghold
                  Technologies, Inc.**
              
              **Consolidated**Sales
                  Taxes Payable
              
              $
              0
              
              $
              106,524
              
              $
              106,524Accrued
                  Paid-Time-Off
              
              
              13,880
              
              
              0
              
              
              13,880Payroll
                  Taxes Payable
              
              
              12,571
              
              
              425,037
              
              
              437,608Accrued
                  Employee Compensation
              
              
              0
              
              
              46,135
              
              
              46,135Accrued
                  Commissions
              
              
              5,191
              
              
              109,786
              
              
              114,977Accrued
                  Officer's Compensation
              
              
              19,380
              
              
              0
              
              
              19,380Other
                  Accrued Expense
              
              
              124,127
              
              
              375,106
              
              
              499,233Accrued
                  Interest
              
              
              0
              
              
              63,391
              
              
              63,391**TOTAL**
              
              **$**
              **175,149**
              
              **$**
              **1,125,979**
              
              **$**
              **1,301,128**
 
 ***Payroll
        Tax Payment Agreement with IRS***
 On
        April
        30, 2004, the Company’s predecessor, Stronghold Technologies, Inc., (the
“Subsidiary”) a New Jersey corporation and a wholly owned subsidiary of Dealer
        Advance, Inc., entered into an installment agreement with the United States
        Internal Revenue Service (“IRS”) to pay overdue payroll taxes and penalties of
        totaling $1,233,101 under the terms of which the Company will pay a minimum
        of
        $35,000 each month, commencing June 28, 2004, until it has paid the withholding
        taxes due in full, to
  F-11
 
 be
        completed in thirty-six month period by April 30, 2007. If the Subsidiary
        is
        unable to fulfill this agreement, the IRS would revert the amount owed to
        the
        original unpaid balance and could take possession of the Subsidiary’s assets.
        The Subsidiary defaulted on the agreement in September, 2006 with an unpaid
        balance of $388,931.
 
 DealerAdvance,
        Inc. owes approximately $12,000 in overdue payroll taxes, which were paid
        in
        full April 3, 2008.
  **5.**
              **NOTES
                  PAYABLE, STOCKHOLDERS**
  At
        December 31, 2007, notes payable, stockholders consists of the
        following:
  **Notes
                  payable, stockholders:**Notes
                  payable bearing interest at 8%
              
              $
              875,000Non-interest
                  bearing convertible notes payable, net of interest imputed at 15%
                  per
                  annum of $593,331
              
              
              216,7651,091,765Less:
                  current portion
              
              
              (875,000
              )**Long-term
                  portion**
              
              **$**
              **216,765**
  The
        8%
        interest bearing notes due in May 2007 are currently in default.
  The
        convertible notes mature on August 13, 2016 and are convertible at the option
        of
        the stockholder at the market price of the company’s common stock on the day of
        the conversion.
  ***Callable
                  Secured Convertible Notes***Callable
                  secured convertible notes bear interest at a rate ranging from
                  8% to 12%
                  (weighted average 10.93%) and are due at various dates through
                  December
                  15, 2009. The notes are secured by the company's assets.
              
              $
              8,968,046Less:
                  Current position
              
              
              4,446,845**Long-term
                  portion**
              
              **$**
              **4,521,201**
 
 The
        notes
        are convertible into our common stock, at the investors’ option, at a conversion
        price, equal to the lower of (i) $0.05 or (ii) 25% of the average of the
        three
        lowest intraday trading prices for our common stock during the 20 trading
        days
        before, but not including, the conversion date.
 
 On
        December 15, 2006 the Company entered into an agreement with a group of
        investors for the sale of $900,000 of callable secured convertible notes
        and
        5,071,833 common stock purchase warrants in 2007. As of December 31, 2007,
        the
        Company has sold a total of $1,793,232 of additional notes, issuing an
        additional 9,594,981 common stock purchase warrants, for a total of $2,693,232
        and issued 14,666,814 warrants.
 
 F-12
 
 On
        August
        14, 2006, the former company CEO, Mr. Christopher Carey, entered into a
        Settlement Agreement with the Company pursuant to which Mr. Carey waived
        of
        certain rights. In consideration of this waiver, the Company had agreed to
        pay
        Mr. Carey $8,000 a month over a period of 15 months, issue Mr. Carey a
        convertible note in the amount of $661,369 (the "Carey Note") and issue Mr.
        Carey 5,117 shares of Series D Convertible Preferred Stock with an aggregate
        stated value of $1,017,899. The Carey Note matures on August 13, 2016, bears
        no
        interest and is convertible at the option of Mr. Carey at the market price
        of
        the Company's common stock. The shares of Series D Preferred Stock are
        convertible by dividing the stated value by the closing bid price on the
        day
        immediately prior to conversion.
  **6.**
              **STOCK
                  OPTION PLANS**
 
 The
        Company adopted an incentive stock option plan (“Plan”) in 2006 providing for
        incentive stock options (“ISOs”) for specific employees in 2007. The Company has
        reserved 3,666,668 shares of common stock for issuance upon the exercise
        of
        stock options granted under the Plan. The exercise price of an ISO will not
        be
        less than 100% of the fair market value of the Company’s common stock at the
        date of the grant. The exercise price of an ISO granted to an employee owning
        greater than 10% of the Company’s common stock will not be less than 110% of the
        fair market value of the Company’s common stock at the date of the grant. The
        Plans further provide that the maximum period in which stock options may
        be
        exercised will be determined by the board of directors, except that they
        may not
        be exercisable after ten years from the date of grant. All of the stock option
        plans vest when granted, and may be exercised not earlier than one year from
        the
        grant date, but will expire 90 days following the termination of an employee
        with the Company if the options were not exercised. As of the end of fiscal
        year
        2007, no options were exercised. Additionally, 833,333 ISOs expired due to
        termination, and 666,667 ISOs, for Karen Jackson, were converted to stock
        options under agreement as a consultant upon her termination with the company
        with the same terms, except that the exercise price was changed to the market
        price per share of the company stock as of the close of trading on June 1,
        2007,
        or $.00137 per share.
 
 The
        remaining ISOs were exercised in January 2008 for issuance of 2,000,001shares
        of
        the company stock. The only ISOs remaining unexercised are 166,667
        options.
  **7.**
              **BANKRUPTCY
                  OF SUBSIDIARY**
  Until
        2006, the Company had a wholly owned subsidiary, Stronghold Technologies,
        Inc.,
        a New Jersey Corporation, that developed hand held wireless technology for
        the
        automotive dealer market. The subsidiary’s business was unsuccessful, it ceased
        operations and filed for bankruptcy protection under Chapter 7 of the United
        States Bankruptcy Code. The assets of the subsidiary were liquidated during
        2007. The bankruptcy case was closed on January 29, 2008.
  F-13
  **8.**
              **RELATED
                  PARTY TRANSACTIONS**
  Transactions
        with Officers and Directors of DealerAdvance, Inc.
  The
        Company and/or the Company’s director and Chief Executive Officer may be subject
        to fines, sanctions and/or penalties of an indeterminable nature as a result
        of
        violations of the Sarbanes Oxley Act of 2002 in connection with loans made
        to
        the Chief Executive Officer and director.
  The
        balance of these loans outstanding as of December 31, 2007 are $34,014 related
        to the Chief Executive Officer and director, and $6,787 related to the company
        controlled by the Chief Executive Officer and director.
 
 **9.**
              **SUBSEQUENT
                  EVENTS**
 
 In
        connection with the callable secured convertible notes (see note 7 above),
        in
        February 2008 and in April 2008 the company sold an additional $508,000 of
        notes
        and issued 3,286,667 warrants to purchase common stock.
 
 Since
        the
        beginning of 2008, we have issued 152,251,400shares of common stock to four
        investors upon the conversion of convertible notes at an aggregate conversion
        price of $48,047.
 
 The
        case
        related to the wholly
        owned subsidiary, Stronghold Technologies, Inc., that filed
        for
        bankruptcy protection under Chapter 7 of the United States Bankruptcy Code
        in
        2006, was closed as of January 29, 2008. The assets of the subsidiary have
        been
        segregated and were liquidated, and its debts discharged, including all court
        judgments and an arbitration award.
 
 In
        the
        first quarter of 2008 the Company also issued 25,000,000 of common shares
        for
        legal services and 50,000,000 shares for business development consulting
        services to two consultants under equity compensation plans. An additional
        5,971,541 shares of common stock was issued to two investors upon the conversion
        of Class D Convertible Preferred Stock that they held, and 75,000,000 common
        shares for services to our Chief Executive Officer.
 
 On
        March
        4, 2008, the Board of Directors adopted the 2008 Stock Award Plan (the "
        Plan")
        to provide incentive compensation to employees, directors, officers and others
        who serve us. The Plan provides for the granting of up to 50,000,000 shares
        of
        Common Stock to our personnel on such terms as the directors may determine.
        The
        directors may amend the Plan. As of
        the date hereof, we have granted stock awards for 11,800,000 shares. The
        Stock
        Award Plan supersedes all of our previous stock option plans. The directors
        terminated the 2007 Incentive Stock Plan effective December 31,
        2008.
 
 Since
        the
        beginning of 2008, the Company has a new arrangement with a limited liability
        company owned and controlled by our director and another one of our officers
        to
        provide us office, space, equipment, and marketing and sales support on a
        turnkey basis in consideration of the payment of $6,750 per month plus a
        commission of 20% on sales made by HMG. Our prior consulting agreement with
        the
        company was terminated.
  F-14