**UNITED
        STATES SECURITIES & EXCHANGE COMMISSION**
 Washington,
        D.C. 20549
 
 **FORM
        10-QSB**
 
 **x
        Quarterly Report under
        Section 13 OR 15(d) of the Security and Exchange Act of
        1934**
 For
        the quarterly period ended June 30, 2007
 
 **o
        Transition Report
        pursuant to Section 13 or 15(d) of the Securities Exchange**
 **Act
        of 1934**
 File
        Number 0-29711
 **Subjex
        Corporation**
 (Exact
        name of issuer as specified in its charter)
 
 Minnesota
              
              41-1596056(State
                  or jurisdiction of incorporation or organization)
              
              (IRS
                  Employer IdentificationNumber)
 
 3245
        Hennepin Ave S, Suite 1, Minneapolis, MN 55408
 (Address
        of Principal Executive Offices)
 
 
 (612)
        827-2203
 (Issuer’s
        telephone number)
 
 Former
        Name, Former Address and Former Fiscal Year if Changed Since Last
        Report
 
 Securities
        registered pursuant to Section 12(b) of the Exchange
        Act:****None
  Securities
        registered pursuant to Section 12(g) of the Exchange
        Act:****None
  Common
        Stock, no par value
  
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Securities and Exchange Act of 1934 during the past 12 months
        (or
        for such shorter period that the issuer 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 whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes oNo
x
  The
        aggregate market value of the common stock of the issuer held by non-affiliates
        of the issuer on August 10, 2007 based on the closing price of the common
        stock
        as reported on the OTC Bulletin Board on such date was $5,2022,367.
  As
        of
        August 10, 2007 there were 80,034,411outstandingshares
        of
        common stock, no par value.
  Traditional
        Small Business Disclosure Format: Yes o No x
  
 1
  SUBJEXCORPORATION
  **ITEM**
              **INDEX**
              **PAGE****PART
                  I - FINANCIAL INFORMATION**ITEM
                  1. **FINANCIAL STATEMENTS**Balance
                  Sheets as of June 30, 2007 (unaudited) and December 31,
                  2006 (audited)
              3Statements
                  of Operations for the Three and Six Months Ended
                  June 30, 2007 and June 30, 2006
              4Statements
                  of Cash Flows for the Six Months Ended June 30, 2007
                  and June 30, 2006
              5Notes
                  to the Financial Statements
              6ITEM
                    2. **MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
                    C****ONDITION AND RESULTS
                    OF
                    OPERATIONS**
              7ITEM
                  3. **CONTROLS AND
                  PROCEDURES**
              10**PART
                  II – OTHER INFORMATION**
              10ITEM
                  1. LEGAL PROCEEDINGS
              10ITEM
                  2. CHANGE IN SECURITIES AND USE OF
                  PROCEEDS
              10ITEM
                  3. DEFAULTS UPON SENIOR SECURITIES
              10ITEM
                  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                  HOLDERS
              10ITEM
                  5. OTHER INFORMATION
              10ITEM
                  6.  EXHIBITS AND REPORTS ON FORM
                  8-K
              10**CERTIFICATION
                  PURSUANT TO SECTION 06 OF THE SARBANES-OXLEY ACT OF
                  2002**
              27**CERTIFICATIONS****SIGNATURES**
              26
  2
 *Index*
 
 SUBJEX
        CORPORATION
 BALANCE
        SHEETS
 
 30-Jun
              
              
              31-Dec2007
              
              
              2006(Unaudited)
              
              
              (Audited)ASSETSCurrent
                  Assets:Cash
              
              $
              1,217
              
              
              $
              96,835Accounts
                  receivable
              
              
              38,596
              
              
              
              -Advances
              
              
              22,779
              
              
              
              -Prepaid
                  expenses
              
              
              47,750
              
              
              
              8,395Total
                  current assets
              
              
              110,342
              
              
              
              105,230Property
                  and equipment, net
              
              
              24,222
              
              
              
              13,676Other
                  Assets, net
              
              
              9,101
              
              
              
              8,101Total
                  assets
              
              $
              143,665
              
              
              $
              127,007LIABILITIES
                  AND STOCKHOLDERS' DEFICITCurrent
                  Liabilities:Short-term
                  notes payable
              
              
              36,634
              
              
              
              58,634Subordinated
                  convertible notes payable
              
              
              23,000
              
              
              
              23,000Accounts
                  payable
              
              
              91,382
              
              
              
              77,985Accrued
                  expenses:Payroll
                  and payroll taxes
              
              
              13,477
              
              
              
              11,226Interest
              
              
              22,220
              
              
              
              20,783Total
                  current liabilities
              
              
              186,713
              
              
              
              191,628Long-term
                  debt:Long-term
                  debt, less current portion
              
              
              87,913
              
              
              
              -Total
                  liabilities
              
              
              274,626
              
              
              
              191,628Stockholders'
                  deficit:Common
                  stock, no par or stated value;100,000,000
                  shares authorized: 69,834,411 and 64,051,737 shares issued and
                  outstanding
                  at June 30, 2007 and December 31, 2006 respectively
              
              
              5,802,255
              
              
              
              5,216,155Subscription
                  received
              
              
              20,000
              
              
              
              -Accumulated
                  deficit
              
              
              (5,953,216
              )
              
              
              (5,280,776
              )Stockholders'
                  deficit
              
              
              (130,961
              )
              
              
              (64,621
              )Total
                  liabilities and stockholders’ deficit
              
              $
              143,665
              
              
              $
              127,007
  The
        accompanying notes are an integral part of these financial
        statements.
  3
 *Index*
  SUBJEX
        CORPORTION
 STATEMENTS
        OF OPERATIONS
 (Unaudited)
 
 Three
                  Months Ended June 30,
              
              
              Six
                  Months Ended June 30,2007
              
              
              2006
              
              
              2007
              
              
              2006Revenues
              
              $
              40,746
              
              
              $
              13,771
              
              
              $
              81,120
              
              
              $
              102,497Refund
                  of revenue from previous years
              
              
              -
              
              
              
              -
              
              
              
              -82,000
              
              
              
              0Total
                  revenues
              
              
              40,746
              
              
              
              13,771
              
              
              
              -880
              
              
              
              102,497Expenses:Selling,
                  general and administrative
              
              
              450,153
              
              
              
              64,740
              
              
              
              668,607
              
              
              
              198,152Total
                  operating expense
              
              
              450,153
              
              
              
              64,740
              
              
              
              668,607
              
              
              
              198,152Operating
                  loss
              
              
              (409,407
              )
              
              
              (50,969
              )
              
              
              (669,487
              )
              
              
              (95,655
              )Other
                  income (expense)Interest
                  expense
              
              
              (2,952
              )
              
              
              (1,558
              )
              
              
              (2,952
              )
              
              
              (2,277
              )Net
                  loss
              
              $
              (412,359
              )
              
              $
              (52,527
              )
              
              $
              (672,439
              )
              
              $
              (97,932
              )Net
                  loss per basic and diluted common share
              
              $
              (0.001
              )
              
              $
              (0.001
              )
              
              $
              (0.001
              )
              
              $
              (0.001
              )Weighted
                  average common shares outstanding - basic and diluted
              
              
              68,394,711
              
              
              
              49,355,648
              
              
              
              69,834,411
              
              
              
              49,355,648
  The
        accompanying notes are an integral part of these financial
        statements.
  4
 *Index*
  SUBJEX
        CORPORTION
 STATEMENTS
        OF CASH FLOWS
 (Unaudited)
 
 Six
                  Months Ended June 30,2007
              
              
              2006Cash
                  flow from operating activities:Net
                  loss
              
              $
              (672,439
              )
              
              $
              (97,932
              )Adjustments
                  to reconcile net loss to net cash flows used in operating
                  activities:Depreciation
              
              
              5,537
              
              
              
              3,953Non
                  cash stock compensation expenses
              
              
              230,349
              
              
              
              -Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (38,596
              )
              
              
              150Prepaid
                  expenses
              
              
              (39,355
              )
              
              
              19,045Advances
              
              
              (22,778
              )Accounts
                  payable
              
              
              13,397
              
              
              
              23,606Accrued
                  expenses:Payroll
                  and payroll taxes
              
              
              2,251
              
              
              
              3,720Accrued
                  interest
              
              
              1,437
              
              
              
              1,437Other
                  accrued expenses
              
              
              65,912
              
              
              
              -Net
                  cash used in operating activities
              
              
              (454,285
              )
              
              
              (46,021
              )Cash
                  flow from investing activities:Purchase
                  of property and equipment
              
              
              (17,083
              )
              
              
              (525
              )Cash
                  flow from financing activities:Proceeds
                  from issuance of capital stock
              
              
              355,750
              
              
              
              9,500Proceeds
                  from stock subscriptions
              
              
              20,000
              
              
              
              -Proceeds
                  from issuance of notes payable
              
              
              -
              
              
              
              38,075Principal
                  payments on long-term debt
              
              
              -
              
              
              
              (2,484
              )Net
                  cash provided by financing activities
              
              
              375,750
              
              
              
              45,091Decrease
                  in cash
              
              
              (95,618
              )
              
              
              (1,455
              )Cash
                  at beginning of period
              
              
              96,835
              
              
              
              2,215Cash
                  at end of period
              
              $
              1,217
              
              
              $
              760Supplemental
                  cash flow information:Cash
                  paid for interest
              
              $
              -
              
              
              $
              -Cash
                  paid for income taxes
              
              $
              -
              
              
              $
              -
  The
        accompanying notes are an integral part of these financial
        statements.
  5
 *Index*
  Notes
        tothe Financial Statements (unaudited)
 
 
 Note
        1.  Basis of Presentation
 
 The
        accompanying unaudited condensed financial statements of Subjex Corporation
        (the
        Company) have been prepared in accordance with generally accepted accounting
        principles for interim financial information and with the instructions to
        Item
        310(b) of Regulation S-B. Accordingly, they do not include all of the
        information and footnotes required by accounting principles generally accepted
        in the United States of America for complete financial statements. All
        adjustments which, in the opinion of management, are considered necessary
        for a
        fair presentation of the results of operations for the periods shown are
        of a
        normal recurring nature and have been reflected in the unaudited condensed
        financial statements. There are no additional material subsequent events
        or
        material contingencies that require disclosure. The results of operations
        for
        the periods presented are not necessarily indicative of the results expected
        for
        the full fiscal year or for any future period. The information included in
        these
        unaudited condensed financial statements should be read in conjunction with
        Management’s Discussion and Analysis  contained in this reportand
        with the financial statements and accompanying notes included in the Annual
        Report on Form 10-KSB for the year ended December 31, 2006.
  Note
        2.
        Acquisition of Assets
  None
 
 Note
        3.  Going Concern
 
 Historically
        the financial performance and operational data for the Company’s “SubjexFMS”
product generates an average of 6% per month. Based upon the current level
        of
        funds mirroring the FMS program, FMS needs to generate only 6.2557% in the
        third
        quarter to continue as a going concern and to operate without the intention
        or
        threat of liquidation. It is management’s assertion based upon the operational
        performance of FMS that the Company can in fact survive on current FMS
        performance revenues on a going forward basis; will continue in operation
        for
        the foreseeable future and will be able to realize assets and discharge
        liabilities in the normal course of operations.
 
 This
        basis of accounting contemplates the realization of assets and the satisfaction
        of its liabilities and commitments in the normal course of operations. Since
        inception, the Company has incurred losses of $5,953,216 and has a working
        capital deficit of $412,359 as of June 30, 2007.  The Company had a
        working capital deficit and recurring net losses from operations in 2006
        also.
        These factors had previously created doubt in 2006 about the Company's ability
        to continue as a going concern. Second quarter FMS results generated 3.786%
        for the quarter and based upon the current level of funds mirroring the FMS
        program this was not the 6.2557% necessary to cover expenses. However the
        company expects to generate FMS percentage gains more in line with its
        historical gains which would put it at 10-15% for the 3rd quarter
        07. This
        is expected to be more than expenses for the quarter, which will result in
        a
        profitable quarter for the Company.
 
 In
        the
        last quarter of 2006 and the first quarter of 2007 the Company substantially
        paid down most of its outstanding debt, leaving only necessary operational
        expenses of approximately $25,000 per month. With revenues generated from
        its
“FMS product” at the current and historical audited run/performance rate, the
        Company is currently generating more revenue necessary to cover its operational
        expenditures. This earnings ramp is expected to continue to grow at its current
        rate for foreseeable future. No assurance however can be given that this
        performance will continue, despite management’s confidence that it will
        continue.  To further illustrate the changes which have taken place in
        2007, the Company began the year of 2007 with funds of $784,443 operating
        under
        FMS and closed the first quarter of 2007 with $2.6 millionutilizing FMS.
        As of
        June 30, 2007 there were approximately $5 million in funds utilizing FMS.
        Further, the Company expects that the current growth rate in FMS will not
        slow
        down and every reason to expect it to continue to grow as fast or faster
        in the
        current and future quarters.  No assurance however can be given that
        this performance will continue, despite management’s confidence that it will
        continue.  This growth contains certain risks and
        consideration.
  6
 *Index*
  The
        Company also keeps all idle cash on hand and profits in its own FMS
        implementation with Rydex. The Company therefore receives 100% of the proceeds
        on this implementation, as apposed to receiving only 25% of the gains from
        its
        client’s implementations of FMS. The results of these profits accounted for
        17% of the Company revenue in the first quarter of 2007. Management does
        not plan to sell equity securities or obtain debt financing to fund its ongoing
        operations; however, the Company does plan on considering these options for
        further funding its own FMS implementation due to the increased net
        profit.
 
 Note
        4.  Payroll and Payroll Taxes
 
 The
        Company is working with the IRS to determine a resolution for final payment
        of
        approximately $2,290 for 2005 payroll taxes outstanding.
 
 Note
        5.
        Stockholders’ Deficit
 
 During
        the Second quarter ending June 30, 2007, the Company issued 1,289,700 shares
        of
        common stock. Of these shares issued 659,700 were issued for compensation
        575,000 shares for cash and 50,000 shares to settle debt. Also there was
        an
        adjustment made in the Second quarter to the outstanding shares of the Company
        by the transfer agent. 150,000 shares were added due to shares issued in
        prior
        years but not accounted for properly by our previous transfer
        agent.
   **ITEM
        2.  Management’s Discussion and
        Analysis**
 
 CAUTIONARY
        STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
        LITIGATION REFORM ACT OF 1995
 
 Statements
        in this discussion which are not historical facts may be considered "forward
        looking statements" within the meaning of Section 21E of the Securities Act
        of
        1934, as amended. The words "believe", "expect", "anticipate", "estimate",
        and
        similar expressions identify forward looking statements. Any forward looking
        statement involves risks and uncertainties that could cause actual events
        or
        results to differ, perhaps materially, from the events described in the forward
        looking statements. Readers are cautioned not to place undue reliance on
        these
        forward looking statements. The Company undertakes no obligation to publicly
        update or revise any forward looking statement, whether as a result of new
        information, future events or otherwise. The risks associated with the Company's
        forward looking statements include, but are not limited to, risks associated
        with the Company's history of losses and uncertain profitability, sales and
        marketing strategies, competition, general economic conditions, reliance
        on key
        management and production people, current and future capital needs, dilution,
        effects of outstanding notes and convertible debentures, limited public market
        for the Company’s capital stock, low stock price, and lack of
        liquidity.
  7
 *Index*
  The
        following discussion and analysis should be read in conjunction with the
        Financial Statements, related notes and other information included in this
        report.
 
 Description
        of Business
 
 Overview
 
 Subjex
        Corporation, a Minnesota corporation formed in 1999, is an innovative developer
        and marketing company of artificial intelligence software products for the
        capital markets and e-commerce. The Company flagship product, SubjexFMS
        (“Forecast Market Software”) is a software product that attempts to forecast the
        DJIA, the XAU, the DJT , NASDAQ and the US Dollar Index so that subscribers,
        when "plugged into" the software, can find capital appreciation with a third
        party investment account. The forecasting engines' objective is to provide
        accurate next day forecasts, long or short, allowing clients to take market
        neutral profits via short term trades. SubjexFMS is not a mutual fund or
        a
        brokerage service; it is software that clients subscribe to and use for their
        own trading activity in their own trading account. SubjexFMS is based upon
        a
        proprietary artificial intelligence forecasting algorithm invented by Andrew
        D.
        Hyder prior to the existence of the Company. The company licensed the core
        technology from Mr. Hyder in an exclusive agreement, with the goal to bring
        value to the Company client base while providing revenue and profit growth
        for
        the investor base.
 
 Trademarks
        and Patents
 
 The
        Company holds trademarks and patent protection for most of its business that
        management feels are relevant to protect the company interests.
 
 Environmental
        Compliance
 
 The
        Company believes it is in compliance with all current federal and state
        environmental laws.
 
 Employees
 
 The
        Company had three full-time employees on June 30, 2007.  The Company's
        employees are not represented by any labor unions.  The Company
        considers its relations with its employees to be very good.
 
 Competition
 
 The
        Company is aware of other companies selling solutions that appear to be similar
        to Subjex; however management is not aware of any companies that are selling
        the
        same solution as we have designed.
  8
 *Index*
  Recent
        Developments
  In
        October 2006 the Company announced the software product called SubjexFMS
        that it
        had been testing since Feb 2006. SubjexFMS has proven to be successful in
        terms
        of meeting its objectives for its clients. The Company has recently contracted
        with individual investors and clients to use SubjexFMS and to introduce the
        FMS
        software to other prospective customers. While the performance of SubjexFMS
        has
        been exceptional in terms of percentage return for clients, new client growth
        has been slow due to marketing financial constraints. These constraints are
        due
        to management's unwillingness to dilute the Company with the sale of stock
        for
        large operational costs. Instead, management has elected to grow the business
        model with revenues. With many cost saving measures in place since 2002,
        and our
        increase in revenues in 2007, management feels that the Company will be
        profitable on a going forward basis and will remain so. Management believes
        it
        has sufficient access to funds along with revenues for not only operations,
        but
        for continued moderated growth of the Company business model.
  The
        Company continues to seek legitimate strategic partners for its other software
        products such as SubjexCSR.
   **Item
        3 – Controls and Procedures**
  **Evaluation
        of Disclosure Controls and Procedures**
  Based
        on
        their most recent review, as of the end of the period covered by this report,
        the Company’s principal executive officer has concluded that the Company’s
        disclosure controls and procedures are effective to ensure that information
        required to be disclosed by the Company in the reports that it files or submits
        under the Securities Exchange Act of 1934, as amended, is accumulated and
        communicated to the Company’s management as appropriate to allow timely
        decisions regarding required disclosure and are effective to ensure that
        such
        information is recorded, processed, summarized and reported within the time
        periods specified in the SEC’s rules and forms. There were no significant
        changes in the Company’s internal controls or in other factors that could
        significantly affect those controls subsequent to the date of their
        evaluation.
 
 **Limitations
        on the Effectiveness of Controls**
 
 Our
        management does not expect that our disclosure controls and internal controls
        will prevent all error and all fraud.  A control system, no matter how
        well conceived and operated, can provide only reasonable, not absolute,
        assurance that the objectives of the control system are met.  Further,
        the design of a control system must reflect the fact that there are resource
        constraints, and the benefits of controls must be considered relative to
        their
        costs.  Because of the inherent limitations in all control systems, no
        evaluation of controls can provide absolute assurance that all control issues
        and instances of fraud, if any, within the Company have been
        detected.  These inherent limitations include the realities that
        judgments in decision-making can be faulty, and that breakdowns can occur
        because of simple error or mistake.  Additionally, controls can be
        circumvented by the individual acts of some persons, by collusion of two
        or more
        people, or by management or board override of the control.  The design
        of any system of controls also is based in part upon certain assumptions
        about
        the likelihood of future events, and there can be no assurance that any design
        will succeed in achieving its stated goals under all potential future
        conditions; over time, control may become inadequate because of changes in
        conditions, or the degree of compliance with the policies or procedures may
        deteriorate.  Because of the inherent limitations in a cost-effective
        control system, misstatements due to error or fraud may occur and not be
        detected.
  9
 *Index*
 
 **PART
        II – OTHER INFORMATION**
  **Item
        1. - Legal Proceedings**
  On
        April
        27, 2007, FarSuperior Management, LLC, an Arizona limited liability company,
        ("Far S.") commenced litigation in Hennepin County District Court for the
        State
        of Minnesota against the Company and Andrew Hyder, the Company's Chief Executive
        Officer.
 
 On
        May
        23, 2007 the Company filed a counter claim in Federal Court against Far Superior
        Management, LLC. On May 24, 2007 the Company filed an Amended Notice of Motion
        for Leave to join additional defendants, Wayne Warrington and Howard
        Walsh.
  See
        Item
        6 Exhibits and reports on form 8-K
  **Item
        2 - Changes in Securities and Use of
        Proceeds**
  None.
  **Item
        3 - Defaults on Senior Securities**
  None.
  **Item
        4 - Submission of Matters to a Vote of Security
        Holders**
  It
        is
        acknowledged that any sale or substantial restructuring of the Company will
        require a stockholders vote. No matters were submitted to the vote of the
        Company’s stockholders in this quarter.
  **Item
        5 - OtherInformation**
  None.
  **Item
        6 – Exhibits and reports on form 8-K**
 
 On
        April 26, 2007 an
        event occurred which was not made in the ordinary course of Subjex Corporation
        business thus prompting an 8k filing with the SEC. .
 
 The
        Company received verification of the SubjexFMS system performance results
        for
        the period January 1, 2007 to March 31, 2007 in accordance with Global
        Investment Performance Standards (“GIPS”) for the purpose of determining whether
        any material modifications should be made to our trading activity gain
        calculations in order for it to conform with GIPS.
  10
 *Index*
  On
        May 23, 2007 an event
        occurred which was not made in the ordinary course of Subjex Corporation
        business thus prompting an 8k filing with the SEC. Also on May 24, 2007 an
        event
        occurred which was not made in the ordinary course of Subjex Corporation
        business and is also included in this filing.
 
 On
        May
        23, 2007 the Company filed a counter claim in Federal Court against Far Superior
        Management, LLC. On May 24, 2007 the Company filed an Amended Notice of Motion
        for Leave to join additional defendants, Wayne Warrington and Howard
        Walsh.  The entire filings are included in this 8-K
        report.
 
 DN:
        321682
 **UNITED
        STATES DISTRICT COURT**
 **DISTRICT
        OF MINNESOTA**
 FarSuperior
        Management, LLC, an Arizona
 Limited
        Liability Company
 Plaintiff,
 v.
 Subjex
        Corporation, “SBJX.OB” a
 Minnesota
        Corporation; Andrew Dean
 Hyder,
        an
        individual, married man and
 resident
        of Hennepin County; Jane Does 1-
 10,
        and
        John Does 1- 10,
 Defendants.
 Court
        File No.: 07-cv-2324 DSD/SRN
 **DEFENDANTS
        SUBJEX**
 **CORPORATION
        AND ANDREW**
 **DEAN
        HYDER’S ANSWER**
 **AND
        COUNTERCLAIM**
 Defendants
        Subjex Corporation (“Subjex”) and Andrew Dean Hyder (“Hyder”),
 for
        their
        Answer to the Complaint, admit, deny, and allege as follows:
 1.
        Admit
        FarSuperior Management, LLC, (“FS”) is a limited liability company located in
        the state of Arizona; and lack knowledge or information sufficient to admit
        or
        deny the remaining allegations in paragraph 1 and therefore deny the
        same.
 2.
        Admit
        the allegations in paragraph 2.
 3.
        Admit
        that Hyder is a Minnesota resident and the CEO of Subjex; and deny that Hyder
        is
        the sole board member of Subjex.
 4.
        Admit
        the allegations in paragraph 4.
 5.
        Deny
        the allegations in paragraph 5.
 6.
        With
        respect to the allegations in paragraph 6, admit that Subjex had certain
        debts;
        and deny the remaining allegations.
 DN:
        321682 2
 7.
        Deny
        the allegations in paragraph 7, which misstate paragraph 6(b) of the
        Agreement.
 8.
        With
        respect to the allegations in paragraph 8, admit that Subjex agreed to provide
        FS with certain compensation in return for FS delivering to Subjex certain
        FS
        assets; and allege that FS breached terms of the Binding Letter of Intent
        (“Agreement”) upon which this commitment was based because such assets were
        never delivered to Subjex.
 9.
        With
        respect to the allegations in paragraph 9, admit that Subjex delivered to
        FS a
        warrant for 3,030,303 shares of Subjex stock on or about January 12, 2006;
        deny
        the remaining allegations, and allege that FS never exercised the warrant
        which
        has been canceled as a result of FS’s breach of the Agreement.
  11
 *Index*
  10.
        With
        respect to the allegations in paragraph 10, admit that Subjex and FS entered
        into an Exclusive Management Contract (“EMC”) on January 12, 2006, and that
        under this contract, FS and Wayne Warrington agreed to perform certain duties
        and services on behalf of Subjex, and allege that FS and Warrington breached
        the
        terms of the EMC and never performed the duties and services.
 11.
        With
        respect to the allegations in paragraph 11, admit that Subjex is an innovative
        developer of artificial intelligence software products and that Hyder is
        an
        expert in programming over six software languages; and deny the remaining
        allegations.
 12.
        Deny
        the allegations in paragraph 12.
 13.
        Deny
        the allegations in paragraph 13.
 14.
        Deny
        the allegations in paragraph 14.
 DN:
        321682 3
 15.
        Deny
        the allegations in paragraph 15.
 16.
        Deny
        the allegations in paragraph 16.
 17.
        Deny
        the allegations in paragraph 17.
 18.
        Deny
        the allegations in paragraph 18.
 19.
        Deny
        the allegations in paragraph 19.
 20.
        With
        respect to the allegations in paragraph 20, admit that Subjex has canceled
        the
        warrants granted to FS; and deny the remaining allegations.
 21.
        Deny
        the allegations in paragraph 21.
 22.
        Deny
        the allegations in paragraph 22.
 23.
        Deny
        the allegations in paragraph 23.
 24.
        Deny
        the allegations in paragraph 24.
 25.
        With
        respect to the allegations in paragraph 25, admit that after Subjex informed
        FS
        that it had canceled the warrants and would no longer do business with FS,
        FS
        made certain proposals to Subjex; deny that Subjex refused to engage in
        mediation or that it has breached any of the agreements between the parties
        or
        that FS had no choice but to commence this litigation, and lack knowledge
        or
        information sufficient to admit or deny that FS retained counsel in Minnesota
        in
        October of 2006, or that FS realized the dispute between the parties could
        not
        be resolved without mediation and therefore deny the same.
 26.
        Deny
        the allegations in paragraph 26.
 27.
        With
        respect to the allegations in paragraph 27, restate their answers to the
        allegations in paragraphs 1 – 26; and deny the remaining
        allegations.
 DN:
        321682 4
 28.
        With
        respect to the allegations in paragraph 28, restate their answers to the
        allegations in paragraphs 1 – 27; and deny the remaining
        allegations.
 29.
        With
        respect to the allegations in paragraph 29, restate their answers to the
        allegations in paragraphs 1 – 28; and deny the remaining
        allegations.
 30.
        With
        respect to the allegations in paragraph 30, restate their answers to the
        allegations in paragraphs 1 – 29; and deny the remaining
        allegations.
 31.
        With
        respect to the allegations in paragraph 31, restate their answers to the
        allegations in paragraphs 1 – 30; and deny the remaining
        allegations.
 32.
        Deny
        each and every other allegation in the Complaint which has not previously
        been
        admitted or denied.
 
 **AFFIRMATIVE
        DEFENSES**
 33.
        The
        Complaint fails to state a claim upon which relief can be
        granted.
  12
 *Index*
  34.
        The
        Complaint fails to allege and state with sufficient particularity the facts
        and
        elements necessary to state a claim for fraudulent conversion upon which
        relief
        can be granted.
 35.
        The
        Complaint fails to allege and state with sufficient particularity the facts
        and
        elements necessary to state a claim under Section 10(b) of the Securities
        and
        Exchange Act (15 U.S.C. § 78j(b)), Rule 10(b)-5 (17 C.F.R. § 240.10b-5), and
        Section 17(a) of the Securities and Exchange Act (15 U.S.C. § 77q(a)) upon which
        relief can be granted.
 DN:
        321682 5
 36.
        Plaintiff is not entitled to relief under the doctrine of unclean hands.
        Plaintiff engaged in illegal, inequitable, and fraudulent conduct which relates
        directly to the subject matter of this litigation.
 37.
        Plaintiff is estopped by its own acts from claiming relief to the detriment
        of
        Subjex who was entitled to rely upon such acts and act accordingly. Plaintiff
        made misleading statements and false representations that Subjex actually
        believed and relied upon and was therefore misled to its injury and
        prejudice.
 38.
        Plaintiff breached the agreement and thus the conditions precedent to Subjex
        obligation under the Agreement did not occur.
 39.
        The
        Agreement was impossible of performance given plaintiff’s unilateral actions
        that destroyed the fundamental premise of the Agreement and made it impossible
        for Subjex to incorporate the FS business.
 40.
        The
        Complaint fails under the frustration of purpose doctrine. The objectives
        of the
        Agreement were defeated by plaintiff’s acts or omissions after the formation of
        the Agreement.
 41.
        Plaintiff, through neglect, failure or refusal, failed to comply with the
        terms
        of the Agreement in respect to the acts agreed upon.
 42.
        The
        claims in the Complaint may be barred by plaintiff’s failure to mitigate its
        damages.
 43.
        Plaintiff's claims may be barred, in whole or in part, by all other affirmative
        defenses permitted by law, including those contemplated by Rule 8(c) of the
        Federal Rules of Civil Procedure, which cannot be ascertained at this time
        without the benefit of DN: 321682 6 investigation and discovery. Defendants
        reserve the right to assert such defenses at the appropriate time, as
        necessary.
 
 **COUNTERCLAIM**
 1.
        Defendants and counter-plaintiffs incorporate by reference their Answers
        to
        paragraphs 1 through 31 above.
 **Jurisdiction**
 2.
        This
        Court has original jurisdiction over the entire action pursuant to 28 U.S.C.
§
1332(a) because there is complete diversity between the parties and the amount
        in controversy exceeds $75,000.
 **Summary
        of Facts**
 3.
        In
        2005, Wayne Warrington contacted Andrew Hyder, Subjex’s CEO. He represented to
        Hyder that he had developed a business directory website, FarSuperior.com,
        where
        consumers could shop for certain services on the internet. He claimed to
        have
        developed software to operate the FarSuperior.com business. He convinced
        Hyder
        that the FarSuperior.com business could be integrated with Subjex’s product,
        SubjexCSR. As a result of his representations, on January 12, 2006, Subjex
        acquired the FarSuperior.com business along with all domain names, and other
        FS
        assets under a performance-based warrant agreement. After the acquisition,
        FS
        failed to deliver any of the assets to Subjex, including the software necessary
        to integrate the FS business with the Subjex business. As a result, Subjex
        had
        to reimburse customers for payments it had received for the FS business.
        As a
        result of FS’s breach of the Agreement, Subjex has suffered damages and harm to
        its reputation.
 DN:
        321682 7
  13
 *Index*
  **Factual
        Allegations**
 4.
        Andrew
        Hyder is the founder of Subjex Corporation, which develops artificial
        intelligence software products. He is Subjex’s CEO and is on the Board of
        Directors.
 5.
        In
        2000, Hyder began to develop the SubjexCSR software. SubjexCSR is an online
        service and support tool that uses an artificial intelligence engine to support
        every function of the customer service process. Through text-based interaction,
        a virtual representative who is an expert in a particular topic and has business
        expertise can converse concurrently with a limitless number of clients for
        a
        fraction of the cost of just one live operator. This can drastically lower
        costs
        for companies with websites or large distributor networks. The system can
        also
        increase sales by recommending ideal products for a specific
        individual.
 6.
        In mid
        2005, Warrington, the founder of FS, approached Hyder with a business
        proposition. He claimed to have developed a zip-code based on-line business
        directory, FarSuperior.com, where a business could advertise itself to visitors.
        Users of the website could comment on the businesses on the site and earn
        revenue by recommending new businesses for inclusion on the site. The website
        acted as an advanced form of a search engine where a visitor would have direct
        access to the top local businesses providing certain services. Warrington
        represented that he had developed the software necessary to operate the business
        and that the business was already profitable. However, none of the code and
        functionality actually existed to operate this business. It still does not
        exist
        today.
 DN:
        321682 8
 7.
        Warrington represented to Hyder that he had developed software for
        FarSuperior.com which could be successfully meshed with the software for
        the
        SubjexCSR sales system. He convinced Hyder that Subjex should enter into
        a
        business relationship with FS to integrate and market the two systems. He
        represented that he could produce significant revenue for Subjex from the
        FarSuperior.com business. In fact, he talked to Hyder about FarSuperior.com’s
        ability to generate millions of dollars of revenue.
 8.
        Based
        on FS and Warrington’s representations, Hyder concluded that FS had a viable,
        functioning business, and Subjex and FS entered into a binding Letter of
        Intent
        on November 9, 2005, referred to in the Complaint as the “Agreement.” (*See*Exhibit “A” to the Complaint.) The Agreement was signed on behalf of Subjex
        by Hyder, its CEO. It was signed on behalf of FS by Howard Walsh, its
        President.
 9.
        Under
        the terms of the Agreement, Subjex acquired “the business called FarSuperior.com
        and the business model you designed for its Top Ten Directory and FarSuperior
        Experts.” Subjex also acquired “Related Assets” described as
        follows:
 a.
        The
        domain names of FarSuperior.com, FarSuperior.net, FarSuperior.org,
        FarSuperior.info, FarSuperior.Biz, FarSuperior.name, FarSuperior.us and
        FarSuperior.ws along with any and all trade names[sic] trademarks, and goodwill
        associated with said names.
 b.
        The
        innovative and unique business and marketing plan developed by the Seller,
        along
        with binding noncompete agreements with each of Seller’s managers and members,
        for the period of four (4) years from the date of the COE.
  14
 *Index*
  c.
        All
        national and local advertising contracts, vendor contracts and affiliate
        agreements put into place or executed DN: 321682 9 on or before the COE must
        be
        approved by buyer in advance of the COE. Such contracts include those with
        America onHold, LostMoney.com, the Epicurean Club, et al.
 d.
        All
        programming code, scripts, database files and records that have been designed
        for the day to day operation of the FarSuperior websites.
 e.
        All
        custom designed sales automation programs, databases, marketing and sales
        materials, logos, trade names, trademarks directly associated with the day
        to
        day operation of FarSuperior.com.
 10.
        In
        the Agreement, FS made the following representation: “The Seller [FS] promises
        and agrees to convey good, clear and marketable title to all the property
        to be
        sold hereunder, the same to be free and clear of all liens and
        encumbrances.”
 11.
        Shortly after the acquisition was finalized on January 12, 2006, it became
        apparent that FS could not deliver the assets purchased by Subjex under the
        Agreement. To date, none of the Related Assets have been delivered to
        Subjex.
 12.
        Ownership of the domain names identified in the Agreement has never been
        transferred to Subjex, and, in fact, it appears that most, if not all, of
        the
        domain names were never owned by FS.
 13.
        FS
        never delivered an innovative and unique business and marketing plan or
        noncompete agreements to Subjex.
 14.
        While
        the Agreement provided that Subjex must approve all national and local
        advertising contracts, vendor contracts, and affiliate agreements put into
        place
        or executed on or before January 12, 2006, no such contracts were ever provided
        to Subjex DN: 321682 10 for review. And the contracts were never delivered
        to
        Subjex as provided in the Agreement.
 15.
        The
        programming code, scripts, database files and records designed for the day
        to
        day operation of the FarSuperior websites were not delivered as promised.
        While
        Warrington had represented the code was complete, functioning in a “test mode,”
and already generating revenue, when the code, along with the database, was
        provided to Subjex, it was incomplete, undocumented, and poorly
        constructed.
 16.
        All
        of Subjex’s technical staff reviewed the code and agreed it was unusable. It
        appeared to have been written to be intentionally cryptic, using various
        names
        that had no meaning. Subjex could not use it for any purpose in integrating
        or
        migrating the FarSuperior business. Although Subjex requested a flowchart
        that
        may provide guidance on the code, none was ever received.
 17.
        To
        date, there has been no delivery of custom designed sales automation programs,
        databases, marketing and sales materials, logos, trade names, or trademarks
        associated with the day to day operation of FarSuperior.com.
 18.
        As a
        result, it was not possible for Subjex to integrate its CSR service model
        into
        FS’s “Team of FarSuperior Experts section of the website,” a condition precedent
        to any of Subjex’s commitments under the Agreement. To date, there has been no
        integration of the two systems.
 19.
        In
        the Agreement, Subjex agreed to compensate FS for the business and Related
        Assets by (a) complying with certain vendor contracts, (b) agreeing to pay
        FS
        management a declining percentage of revenues generated from sales that it
        generated DN: 321682 11 over a four year period, and (c) agreeing to grant
        FS
        certain warrant options. The percentage of revenues and warrants were based
        on
        performance of the FarSuperior business with the exception that Subjex agreed
        to
        deliver to FS stock warrants for 3,030,303 shares at the close of escrow
        on
        January 12, 2006. FS never exercised on the warrant which has since been
        canceled.
  15
 *Index*
  20.
        Subjex’s commitment’s under the Agreement were “based in part on the integration
        of our CSR service model into your Team of FarSuperior Experts section within
        the website, as well as your agreement to continue to work with and assist
        us
        with the expansion and development of the business after acquisition.” Neither
        of these conditions occurred. Integration of the two systems was impossible
        because FS never delivered usable software capable of integration with Subjex’s
        system.
 21.
        As
        for FS’s agreement to work on the business development of the FarSuperior Expert
        directory, this commitment was further secured through an Exclusive Management
        Contract (“EMC”), also entered into on November 9, 2005. The EMC was signed on
        behalf of Subjex by Hyder and on behalf of FS by Warrington. Both FS and
        Warrington breached the EMC. Because FS failed to provide anything to Subjex
        other than a concept, there was no product that could be marketed or
        sold.
 22.
        Under
        the EMC, Warrington agreed to work full time on the oversight and management
        of
        the sales, marketing, and business development of the FarSuperior.com business
        model for one year. The services he performed were to be documented and reported
        to Subjex’s CEO on a monthly reporting basis. Warrington failed to provide the
        DN: 321682 12 services contemplated under the EMC and never provided reports
        to
        Subjex’s CEO on a monthly basis.
 23.
        In
        January and February 2006, Warrington sold the FarSuperior “Experts” product to
        four customers. He described the product by promising it could perform as
        contemplated by the successful integration of the SubjexCSR software and
        FarSuperior.com directory business. However, FS and Warrington never delivered
        usable code or the other necessary elements to Subjex for the FarSuperior.com
        business and thus it could not be integrated into Subjex’s systems. As a result,
        Subjex had to refund the payments it had received from the four customers.
        FS
        was paid a commission on the sales as provided under the Agreement. Those
        commissions were never returned to Subjex.
 24.
        In
        fact, the revenues FS and Warrington promised to generate never materialized.
        FarSuperior.com was not functional and thus FS did not have a product to
        sell.
        FS and Warrington had falsely represented that FS had a legitimate, profitable
        business in FarSuperior.com.
 25.
        The
        EMC was incorporated into the Agreement, which provided in paragraph 9 that
        in
        the event either party to the Agreement found one of its provisions to be
        in
        conflict with the EMC, the provision of the EMC replaced the conflicting
        provision in the Agreement.
 26.
        This
        is important because paragraph 7 of the EMC contains a definition of the
        term
“Business” missing from the Agreement. It states: DN: 321682 13 Subjex has
        entered into the purchase of FS’s business model. This business model includes:
        FarSuperior.com and its other related trade named domains. FarSuperior.com
        is a
        business directory that represents the top ten businesses in a wide range
        of
        categories. The FarSuperior directory includes a section referred to as
        FarSuperior Experts. This section also is a part of the FarSuperior business
        model and is designed to enhance the sales revenue model. The FarSuperior
        directory is designed as a marketing vehicle and sales vehicle for companies
        both nationally and locally. National companies are able to secure a top
        ten
        position for the same annual payment as a local company, however the national
        company will also be required to pay a “per lead, or per sale” fee for new
        business delivered by the FarSuperior site to the company. Each national
        company
        will be secured through a minimum of an annual contract with FarSuperior.com.
        (*See*Exhibit “A” attached hereto.) As noted above, no such “Business”
was ever delivered to Subjex by FS. Warrington’s representation to Subjex that
        he had developed software for this business that would be delivered to Subjex
        after the closing was false. The software eventually provided by FS was not
        usable and essentially gibberish.
  16
 *Index*
  27.
        On
        January 12, 2006, the parties also signed a Warranty Bill of Sale “Business”
(“Bill of Sale”). The Bill of Sale states: BE IT KNOWN, that for good
        consideration, and in payment of $500,000, through the issuance of common
        stock
        warrants at the strike price of 3.3 cent per share, the receipt and sufficiency
        of which is acknowledged, the undersigned Howard Walsh of FarSuperior
        Management, LLC (“Seller”) hereby sells and transfers to Subjex Corporation
        (“SBJX.OB”), a Minnesota corporation (“Buyer”) and its successors and assigns
        forever, the following described chattels, business property, domains and
        personal property: FarSuperior.com, FarSuperior.net along with all additional
        FarSuperior domain names with various extensions owned by the Seller. DN:
        321682
        14 All programs, client lists, business contracts with vendors, and advertisers
        as detailed with the party’s November 9th, 2005, binding letter of intent.
        (*See*Exhibit “B” attached hereto.)
 28.
        Neither FS nor Walsh ever delivered the domain names, programs, client lists,
        or
        business contracts with vendors and advertisers as provided in the Bill of
        Sale.
 29.
        On
        January 12, 2006, in reliance on the representations made by FS that it had
        a
        viable business with software code necessary to support the day to day
        operations of the business, Subjex provided to FS a Warrant to Purchase Common
        Stock for 3,030,303 shares of common stock at the exercise price of 3.3 cents
        per share as provided in the Agreement signed on November 9, 2005. FS never
        exercised the warrant. On information and belief, FS does not now own and
        has
        never owned any Subjex stock. 30. In August 2006, FS and Warrington were
        notified that Subjex would no longer do business with either of them under
        the
        existing Agreement, that the issuance of the Warrant provided to FS on January
        12, 2006, was procured by fraud, and that Subjex intended to cancel the Warrant.
        As a result of FS’s, Warrington’s, and Walsh’s misrepresentations to Subjex and
        Hyder which induced them to enter into the agreements and FS’s, Warrington’s,
        and Walsh’s breach of the agreements, the warrants have been
        canceled.
 31.
        Following the notification to FS and Warrington that Subjex considered the
        Agreements entered into by the parties to have been breached by FS and
        Warrington, FS, Warrington, and Walsh established a FAQ page on their website
        intended to damage the DN: 321682 15 reputation of Subjex and lower the value
        of
        its stock. The following are comments made in the FAQ page. Subjex has made
        the
        statement below through the public filing within its 10QSB on November 9th,
        2006. The statement refers to a breach of the parties’ agreements. It is
        FarSuperior’s position that the breach was Subjex’s inability to perform as
        called for within the parties’ ongoing sales agreements dealing with Subjex’s
        core CSR software programming and the support of the sales produced by
        FarSuperior. These breaches by Subjex, while effectively eliminating additional
        sales by FarSuperior, did not create an event where the consideration already
        paid to FarSuperior Management could be canceled or recalled. No such provisions
        existed within the parties’ Binding Letter of Intent or the Bill of Sale.
        FarSuperior delivered in good faith its assets and cash flow, as acknowledged
        by
        Subjex within various press releases. These FarSuperior assets and cash flow
        allowed Subjex to continue operations, further develop its core programming
        which is being used today with the company’s FMS program and grow into the base
        of business it is pursuing today. As reported within Subjex 10QSB in May,
        the
        first quarter revenues following the acquisition were attributed to FarSuperior,
        and allowed Subjex to significantly upgrade its software as well as
        client/prospect retention methods. When you review each of the quarterly
        filings
        for Subjex, from 2002 through the most recent filing, the assets and business
        model provided by FarSuperior represent the single largest source of revenue
        for
        the company, all of which dealing with the new sales of Subjex core program
        to
        FarSuperior clients through the business model created by FarSuperior
        Management.
  17
 *Index*
  32.
        Subjex has not breached any of the agreements entered into by the parties.
        All
        breaches have been on the part of FS, Warrington and Walsh. FS did not deliver
        assets or provide cash to Subjex “in good faith.” As a result, the FarSuperior
        product could not be integrated with Subjex’s systems. Subjex was entitled to
        cancel the warrants DN: 321682 16 because the conditions provided for in
        the
        Agreements were not met and FS, Warrington and Walsh failed to meet their
        obligations under the Agreements.
 33.
        The
        statement that the assets and business model “provided by FarSuperior represent
        the single largest source of revenue for the company” is false. Although
        Warrington made sales of SubjexCRS to four customers in early 2006, because
        of
        FS’s failure to deliver any of the assets purchased by Subjex, the product he
        marketed to such customers could not be delivered and Subjex had to return
        all
        monies paid to it by the customers. The statements in the FAQ page are false
        and
        misrepresent the facts concerning the agreements and relationship between
        the
        parties.
 
 **COUNTERCLAIM
        I: Breach of the Agreement**
 34.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 - 33 above.
 35.
        The
        Binding Letter of Intent formed a contract between Subjex and FS for the
        purchase by Subjex of the business called FarSuperior.com and Related Assets
        which are identified in the contract.
  18
 *Index*
  36.
        FS
        breached the contract by failing to deliver to Subjex the business called
        FarSuperior.com and the Related Assets.
 37.
        FS’
breach of the contract has caused damages to Subjex in an amount in excess
        of
        $75,000.
 
 **COUNTERCLAIM
        II: Breach of the Exclusive Management Contract**
 38.
        Defendants and co-plaintiffs incorporate by reference the allegations in
        paragraphs 1 – 37 above. DN: 321682 17
 39.
        FS
        and Warrington breached the terms of the Exclusive Management Contract. Under
        the contract, FS and Warrington agreed to use their best efforts in the
        development of the FarSuperior business and to use their best efforts to
        protect
        and enhance the mutual financial benefits they anticipated through their
        agreements with Subjex. Neither FS nor Warrington used best efforts to develop
        the FarSuperior business.
 40.
        FS’
and Warrington’s breach of the Exclusive Management Contract has caused damages
        to Subjex in an amount in excess of $75,000.
 
 **COUNTERCLAIM
        III: Breach of the Warranty Bill of Sale**
 41.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 - 40 above.
 42.
        Under
        the Warranty Bill of Sale, FS and Walsh agreed to sell and transfer to Subjex
        Corporation all FarSuperior domain names, programs, client lists, and business
        contracts with vendors and advertisers. None of these assets have ever been
        delivered to Subjex as provided in this contract.
 43.
        FS’
and Walsh’s breach of the Warranty Bill of Sale have caused damages to Subjex in
        an amount in excess of $75,000.
 
 **COUNTERCLAIM
        IV: Defamation**
 44.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 - 43 above.
 45.
        FS,
        Warrington, and Walsh have published false statements on the FarSuperior
        and
        Raging Bull websites which attack the integrity of Subjex and impute fraud,
        deceit, dishonesty or reprehensible conduct in business. DN: 321682
        18
 46.
        The
        false statements that they have made have harmed the reputation of Subjex
        and
        Hyder, lowering both Subjex and Hyder’s esteem in the community, injuring their
        character, and deterring third persons from associating or dealing with
        them.
 47.
        Such
        false statements were made by FS, Walsh and Warrington intentionally for
        the
        purpose of communicating statements of a defamatory nature and to harm the
        reputation of Subjex and Hyder and the value of Subjex stock.
 48.
        The
        actions of FS, Walsh and Warrington have caused damage to Subjex and Hyder’s
        reputation in the community, economic loss, and lost opportunity, and have
        caused Hyder emotional distress, humiliation, and embarrassment.
 
 **COUNTERCLAIM
        V: Breach of Duty of Good Faith and Fair Dealing**
 49.
        Defendants and counter-claimants incorporate by reference the allegations
        in
        paragraphs 1 - 48 above.
 50.
        FS
        and Warrington had a duty to act in good faith under the agreements, including
        the Exclusive Management Contract, and not to unjustifiably hinder the other
        party’s performance of the contract.
 51.
        FS
        and Warrington did not act in good faith under the agreements, and failed
        to use
        commercially reasonable efforts to perform the agreements.
 52.
        FS
        and Warrington’s actions have caused damages to Subjex in an amount in excess of
        $75,000.
  19
 *Index*
  **COUNTERCLAIM
        VI: Misrepresentation and Fraud**
 53.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 – 52 above. DN: 321682 19
 54.
        FS,
        Warrington and Walsh falsely represented material facts to Subjex, including
        that they had developed a business called FarSuperior.com, including programming
        code, scripts, database files and records to support the day-to-day operation
        of
        the business, that through use of the software FS had developed, the FarSuperior
        business could be successfully integrated with SubjexCSR, and that the
        FarSuperior business would generate significant revenues for
        Subjex.
 55.
        At
        the time the false representations were made, FS, Warrington and Walsh knew
        the
        representations were false and that no usable software had been developed
        for
        the FarSuperior.com business.
 56.
        The
        false representations were made by FS, Warrington and Walsh intending that
        Subjex and Hyder would rely on them.
 57.
        Subjex and Hyder in fact relied and acted on the false representations, entering
        into the Binding Letter of Intent and other agreements based on the
        representations.
 58.
        Subjex and Hyder were harmed as a direct result of relying on the false
        representations of FS, Warrington and Walsh.
 59.
        As a
        result of the misrepresentation and fraud, Subjex and Hyder have been damaged
        in
        an amount in excess of $75, 000.
 
 **COUNTERCLAIM
        VII: Negligent Misrepresentation**
 60.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 – 59 above. DN: 321682 20
 61.
        FS,
        Warrington, and Walsh made the false representations described in paragraph
        54
        to Subjex and Hyder in the course of conducting business transactions in
        which
        FS, Warrington, and Walsh had a financial interest.
 62.
        FS,
        Warrington, and Walsh supplied the false information to Subjex and Hyder
        to
        guide Subjex and Hyder in conducting their own business
        transactions.
 63.
        FS,
        Warrington, and Walsh failed to use reasonable care or competence in
        communicating the information to Subjex and Hyder.
 64.
        Subjex and Hyder relied on the false information supplied by FS, Warrington,
        and
        Walsh, including that they possessed a business called FarSuperior.com and
        the
        programming code, scripts, database files and records necessary for the
        day-today operation of the business, and entered into agreements with
        them.
 65.
        Subjex and Hyder were justified in relying on this information.
 66.
        Subjex and Hyder were financially harmed by relying on the information in
        an
        amount in excess of $75,000.
 
 **COUNTERCLAIM
        VIII: Interference with Prospective Advantage**
 67.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 – 66 above.
  20
 *Index*
  68.
        After
        Subjex informed FS that it would no longer continue to do business with it
        and
        that it was cancelling the warrants, Subjex, Warrington, and Walsh improperly
        interfered with Subjex’ prospective relationship with shareholders by inducing
        or causing such shareholders to sell their shares in Subjex.
 DN:
        321682 21
 69.
        Subjex is informed and believes and therefore alleges that FS, Warrington
        and
        Walsh are contacting Subjex shareholders and potential shareholders and making
        false and defamatory statements to them about Subjex.
 70.
        This
        interference has caused injury to Subjex through the loss of benefits of
        the
        prospective relationship and relationships with shareholders.
 71.
        As a
        result of the interference, Subjex has been damaged in an amount in excess
        of
        $75,000.
 
 **COUNTERCLAIM
        IX: Unjust Enrichment**
 72.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 – 71 above.
 73.
        FS,
        Warrington, and Walsh have been unjustly enriched by their improper conduct
        at
        the expense of and to the detriment of Subjex and Hyder.
 
 **COUNTERCLAIM
        X: Equitable Relief**
 74.
        Defendants and counter-plaintiffs incorporate by reference the allegations
        in
        paragraphs 1 – 73 above.
 75.
        As a
        direct and proximate consequence of the acts of FS, Warrington, and Walsh,
        Subjex has suffered and will suffer damage and injury to its business; and
        FS,
        Warrington, and Walsh have been and will be unjustly enriched at the expense
        of
        Subjex. Unless restrained, defendants will continue to commit the acts
        complained of herein.
 76.
        Subjex has no claim, speedy or adequate remedy at law and requires the aid
        of a
        court of equity so that FS, Warrington, and Walsh may be enjoined and restrained
        DN: 321682 22 from continuing to engage in illegal acts harmful to Subjex.
        Unless FS, Warrington, and Walsh are enjoined, Subjex will be irreparably
        harmed. WHEREFORE, Subjex and Hyder pray that the Court enter judgment as
        follows:
 1.
        FarSuperior Management, LLC’s Complaint be dismissed with
        prejudice;
 2.
        a
        preliminary and permanent injunction be entered prohibiting FarSuperior
        Management, LLC, Warrington, or Walsh or any of their affiliates, agents,
        or
        representatives from defaming or disparaging Subjex, its products, or Andrew
        Hyder or taking other actions to harm the business or reputation of Subjex
        or
        Hyder;
 3.
        for
        damages sustained by Subjex by reason of FarSuperior Management, LLC,
        Warrington, and Walsh’s wrongful acts;
 4.
        for an
        award of attorneys fees;
 5.
        for an
        award of costs and disbursements; and
 6.
        for
        such other relief as the Court deems just and reasonable.
 Dated:
        May 23, 2007 HALLELAND LEWIS NILAN & JOHNSON, P.A.
 By:
        s/
        Karna A. Berg
 Karna
        A.
        Berg - Reg. No. 198432
 U.S.
        Bank
        Center South, Suite 600
 220
        South
        Sixth Street
 Minneapolis,
        MN 55402
 Telephone:
        (612) 338-1838
 Attorneys
        for Defendants Subjex Corporation and
        Andrew Hyder
  21
 *Index*
  UNITED
        STATES DISTRICT COURT
 DISTRICT
        OF MINNESOTA
 FarSuperior
        Management, LLC, an Arizona
 Limited
        Liability Company
 Plaintiff,
 v.
 Subjex
        Corporation, “SBJX.OB” a
 Minnesota
        Corporation; Andrew Dean
 Hyder,
        an
        individual, married man and
 resident
        of Hennepin County; Jane Does 1-
 10,
        and
        John Does 1- 10,
 Defendants.
 Court
        File No.: 07-cv-2324 DSD/SRN
 **AMENDED
        NOTICE**
 **OF
        MOTION FOR LEAVE**
 **TO
        JOIN ADDITIONAL**
 **DEFENDANTS**
 TO:
        Plaintiff FarSuperior Management, LLC and its attorney Jeffrey H.
        Butwinick,
 1595
        Bohland Avenue, St. Paul, MN 55116.
 
 **PLEASE
        TAKE NOTICE**that pursuant to Rules 13(h) and 20(a) of the Federal Rules
        of Civil Procedure, on Friday, July 6, 2007, at 2:00 p.m., in Courtroom 9E
        of
        the U.S. Courthouse, 300 South 4th Street, Minneapolis, Minnesota, Defendants
        Subjex Corporation and Andrew Dean Hyder, by and through counsel, will move
        the
        Court for leave to join as additional defendants Wayne Warrington and Howard
        Walsh.
 Dated:
        May 24, 2007 HALLELAND LEWIS NILAN & JOHNSON, P.A.
 By:
        s/
        Karna A. Berg
 Karna
        A.
        Berg – Reg. No. 198432
 Courtney
        Rogers Reid – Reg. No. 323317
 U.S.
        Bank
        Center South, Suite 600
 220
        South
        Sixth Street
 Minneapolis,
        MN 55402
 Telephone:
        (612) 338-1838
 Attorneys
        for Defendants Subjex Corporation
 and
        Andrew Hyder
 
 This
        filing completes Subjex Corporations obligations as it relates to the filing
        requirements of an 8-K filing as defined by the SEC.
 
 On
        July 1, 2007 a
        material event occurred which was not made in the ordinary course of Subjex
        Corporation business thus prompting an 8k filing with the SEC. It was announced
        that Ronald N. Silberstein, CPA, PLLC. 30201 Orchard Lake Road, Suite 150,
        Farmington Hills, Michigan 48334
 has
        merged with Maddox Ungar, PPL forming a new accounting firm. The name of
        the
        newly formed firm is Maddox Ungar Silberstein, PLLC as a result becoming
        Subjex
        Corporation’s new independent auditor and certifying accountant.
 
 An
        amended 8-KA was filed on July 6, 2007 to include the additional following
        information:
  22
 *Index*
  **RONALD
        N. SILBERSTEIN, C.P.A., P.L.L.C.**
 30201
        ORCHARDLAKEROAD,
SUITE
        150
 FARMINGTONHILLS,MICHIGAN48334
 TEL:(248)
        330-6226  ●   FAX:(248) 479-0578
 Internet:
        www.ronscpa.com
 ­­­
 July
        6,
        2007
 
 Securities
        and Exchange Commission
 450
        Fifth
        St., N.W.
 Washington,
        DC 20549
 
 RE:
        Subjex Corp.
 
 Ladies
        and Gentlemen:
 
 We
        have
        read the statements made by Subjex Corp. in Item 4.01 of the accompanying
        Form
        8-K filed with the Securities and Exchange Commission.  We agree with
        the statements contained herein concerning our firm.
 
 Very
        Truly Yours,
 
 /s/
        Ronald N. Silberstein, C.P.A., P.L.L.C.
 Ronald
        N.
        Silberstein, C.P.A., P.L.L.C.
 Farmington
        Hills, Michigan
  On
        July 9th, 2007 an
        event occurred which was not made in the ordinary course of Subjex Corporation
        business thus prompting an 8k filing with the SEC.
  On
        July
        9th, 2007 the Company signed in exclusive licensing agreement with Beard
        Creek
        Inc. a private Nevada Corporation for the licensing of software algorithms
        upon
        which the SubjexFMS software product has been tested and built around. 
Beard Creek, (“BC”) is owned by Andrew D Hyder. BC is the owner of, or has
        acquired the rights to, software, algorithms, documentation and intellectual
        property rights of certain inventions by Andrew Dean Hyder called Forecast
        Market Software, (“FMS”) along with a Money Management System (“MMS”) invented
        by Mr. Hyder prior to the founding and formation of SBJX and or BC. This
        Software and intellectual property is identified as algorithms, systems and
        methodologies which enable the forecasting of markets and or securities.
        This
        software and intellectual property identified as a money management system
        for
        hedging, cost averaging and minimizing loss and maximizing gains in situations
        in the markets and in situations of chance; all of which will herein
        collectively be called the “Software”.
  In
        early
        2006, BC in good faith allowed SBJX to examine the Software for possible
        use as
        a SBJX product. In August 2006 BC allowed SBJX to perform a non-obligatory
        voluntary test of the “Software” systems, to determine if a business model could
        be built around the “Software” and to determine its fitness for use and market
        acceptance. BC was not compensated for this test in lieu of a setup fee upon
        acceptance of the licensing agreement by SBJX. Because of the overwhelming
        success of the tests made by SBJX with the “Software” both parties have now
        entered into a long term exclusive licensing agreement.
  23
 *Index*
  The
        intent of the agreement is for BC to exclusively license the “Software” to SBJX
        for a 10 year term which will auto-renew every 10 years.  Included for the
        benefit of the Subjex Corporation shareholders is a strict termination clause
        in
        the agreement which limits termination to unique events such as the removal
        of
        the board of directors, Subjex management or any hostel take over that should
        befall Subjex Corporation.
  A
        Summary
        of the Consideration of the Agreement:
  (1)
        BC
        shall receive a One-Hundred Thousand dollar ($100,000.00) one time set up
        and
        delivery fee from SBJX upon execution of this agreement or at some future
        date
        as directed by BC. (2) BC shall receive 10% of all revenues generated as
        a
        result of SBJX usage of the “Software” paid on a quarterly basis. (3) BC shall
        receive ten million (10,000,000) shares of common stock of SBJX payable upon
        execution of this agreement or at some future date as directed by BC.  (4)
        BC shall receive one free SubjexFMS account for the personal use of Mr. Hyder.
        (5) If this Agreement is terminated by Subjex Corporation as outlined in
        the
        agreement and the “Software” is sold or in any way re-licensed by BC to another
        party, SBJX will be entitled to 10% of the transaction value.
  This
        filing completes Subjex Corporations obligations as it relates to the filing
        requirements of an 8-K filing as defined by the SEC.
  **Merger
        Involving Independent Accountants**
 
 On
        July 1, 2007,Subjex
        Corporation (the “Company”) was informed by Ronald N. Silberstein, CPA, PLLC
        ("RNS"), the independent registered public accounting firm for the Company,
        as
        follows:
 
 1.
              RNS
                  has consummated a merger (the “Merger”) with Maddox Unger, PLLC ("MU").
                  The name of the post-merger firm is Maddox Ungar Silberstein, PLLC
                  ("RNS +
                  MU"), which is registered with the Public Company Accounting Oversight
                  Board (United States); and
 
 2.
              The
                  Company is required to file this Form 8-K as notification that
                  RNS + MU
                  succeeds RNS as the Company’s independent registered
                  auditor.
  **Changes
        in Registrant’s Certifying Accountants**
 
 As
        a
        result of the Merger described above, on July 1, 2007, RNS resigned as the
        Company’s independent registered auditor.  The Company has engaged RNS
        + MU as its independent registered auditor effective July 1,
        2007.  The decision to change auditors was approved by the Company’s
        board of directors.  The Company did not consult with RNS + MU on any
        matters prior to retaining such firm as its independent registered
        auditor.
 
 The
        Company retained RNS on September 1, 2006.  RNS’s audit reports on the
        financial statements of the Company for the periods from September 30, 2007
        to
        March 31, 2007 contained no adverse opinion or disclaimer of opinion, nor
        were
        they qualified or modified as to uncertainty, audit scope or accounting
        principles.
 
 From
        the
        periods from September 30, 2006 to March 31, 2007, and through the interim
        period ended July 1, 2007, there were no disagreements with RNS on any matter
        of
        accounting principles or practices, financial statement disclosure, or auditing
        scope or procedures, which disagreements if not resolved to the satisfaction
        of
        RNS would have caused them to make reference thereto in their reports on
        the
        financial statements for such periods.
 
 From
        the
        periods from September 30, 2006 and to March 31, 2007, and through the interim
        period ended July 1, 2007,  RNS did not advise the Company with
        respect to any of the matters described in paragraphs (a)(1)(iv)(A) and (B)
        of
        Item 304 of Regulation S-B.
 
 On
        July
        17, 2007, the Company provided RNS with its disclosures in this Form 8-K
        disclosing the resignation of RNS and requested in writing that RNS furnish
        the
        Company with a letter addressed to the Securities and Exchange Commission
        stating whether or not they agree with such disclosures. RNS’s response is filed
        as an exhibit to this Current Report on Form 8-K.
  24
 *Index*
  16.1
        Letter from Former Accountant
 
 
 **RONALD
        N. SILBERSTEIN, C.P.A., P.L.L.C.**
 30201
        ORCHARDLAKEROAD,
SUITE
        150
 FARMINGTONHILLS,MICHIGAN48334
 TEL:(248)
        330-6226  ●   FAX:(248) 479-0578
 Internet:
        www.ronscpa.com
 ­­­
 
 July
        18,
        2007
 
 Securities
        and Exchange Commission
 450
        Fifth
        St., N.W.
 Washington,
        DC 20549
 
 RE:
        Subjex Corp.
 
 Ladies
        and Gentlemen:
 
 We
        have
        read the statements made by Subjex Corp. in Item 4.01 of the accompanying
        Form
        8-K filed with the Securities and Exchange Commission.  We agree with
        the statements contained herein concerning our firm.
 
 Very
        Truly Yours,
 
 /s/
        Ronald N. Silberstein, C.P.A., P.L.L.C.
 Ronald
        N.
        Silberstein, C.P.A., P.L.L.C.
 Farmington
        Hills, Michigan
  This
        filing completes Subjex Corporations obligations as it relates to the filing
        requirements of an 8K filing as defined by the SEC.
  25
 *Index*
  **SIGNATURES**
 
 Pursuant
        to the requirements of Section 13 or 15(d) of the Securities and Exchange
        Act of
        1934, the Issuer has duly caused this report to be signed on its behalf by
        the
        undersigned officers and/or Directors, there unto duly authorized.
 
 **Subjex
        Corporation**
 Date: 
        August 14, 2007
 
 **NAME**
              
              **TITLE**/s/ Andrew
                  D. Hyder
              
              President
                  and Chief Executive Officer,
 
 
 Exhibit
        Index
 Exhibit
                  31.1
              
              Certificate
                  pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002Exhibit
                  32.1
              
              Certificate
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002
   26