**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-K**

| x | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

| o | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|---|-------------------------------------------------------------------------------------------------------------------------------------------|

**BRANDPARTNERS      GROUP, INC.**

| **Delaware**                                     | **13-3236325**                       |
|--------------------------------------------------|--------------------------------------|
| (State                  or Other Jurisdiction of | (I.R.S.                  Employer    |
| Incorporation                  or Organization)  | Identification                  No.) |

**10      Main Street**

**Rochester,      New Hampshire 03839**

**(603)      335-1400**

**Common      Stock, par value $0.01 per share**

----

----

|                    |                   |                                                                             | Page   |
|-------------------------|------------------------|----------------------------------------------------------------------------------|--------|
| PART                I   |                   |                                                                             |
|                    | Item                1  | Business                                                                         | 4      |
|                    |                   |                                                                             |   |
|                    | Item                1A | Risk                Factors                                                      | 8      |
|                    |                   |                                                                             |   |
|                    | Item                1B | Unresolved                Staff Comments                                         | 15     |
|                    |                   |                                                                             |   |
|                    | Item                2  | Property                                                                         | 15     |
|                    |                   |                                                                             |   |
|                    | Item                3  | Legal                Proceedings                                                 | 16     |
|                    |                   |                                                                             |   |
|                    | Item                4  | Submission                of Matters to a Vote of Security Holders               | 16     |
|                    |                   |                                                                             |   |
| PART                II  |                   |                                                                             |
|                    | Item                5  | Market                for Registrant’s Common Equity, Related Stockholder  |   |
|                    |                   | Matters                and Issuer Purchases of Equity Securities                 | 16     |
|                    |                   |                                                                             |   |
|                    | Item                6  | Selected                Financial Data                                           | 17     |
|                    |                   |                                                                             |   |
|                    | Item                7  | Management’s                Discussion and Analysis of Financial Condition |   |
|                    |                   | And                Results of Operations                                         | 18     |
|                    |                   |                                                                             |   |
|                    | Item                7A | Quantitative                and Qualitative Disclosures about Market Risk        | 25     |
|                    |                   |                                                                             |   |
|                    | Item                8  | Financial                Statements and Supplementary Data                       | 26     |
|                    |                   |                                                                             |   |
|                    | Item                9  | Changes                in and Disagreements with Accountants on                  |   |
|                    |                   | Accounting                and Financial Disclosure                               | 26     |
|                    |                   |                                                                             |   |
|                    | Item                9A | Controls                and Procedures                                           | 27     |
|                    |                   |                                                                             |   |
|                    | Item                9B | Other                Information                                                 | 27     |
|                    |                   |                                                                             |   |
| PART                III |                   |                                                                             |
|                    | Item                10 | Directors,                Executive Officers and Corporate Governance            | 28     |
|                    |                   |                                                                             |   |
|                    | Item                11 | Executive                Compensation                                            | 32     |
|                    |                   |                                                                             |   |
|                    | Item                12 | Security                Ownership of Certain Beneficial Owners and Management    |   |
|                    |                   | And                Related Stockholder Matters                                   | 37     |
|                    |                   |                                                                             |   |
|                    | Item                13 | Certain                Relationships and Related Transactions and                |   |
|                    |                   | Director                Independence                                             | 39     |
|                    |                   |                                                                             |   |
|                    | Item                14 | Principal                Accounting Fees and Services                            | 40     |
|                    |                   |                                                                             |   |
| PART                IV  |                   |                                                                             |
|                    | Item                15 | Exhibits,                Financial Statement Schedules                           | 41     |
|                    |                   |                                                                             |   |
| Signatures              |                   | 52                                                                               |

----

**PART      I**

**Item      1. Description of Business**

|   | · | Brand                Retail |
|--------|--------|-----------------------------|

|   | · | Grafico                Incorporated |
|--------|--------|-------------------------------------|

|   | · | Building                Partners, Inc. |
|--------|--------|----------------------------------------|

|   | · | BrandPartners                Europe, Ltd. |
|--------|--------|-------------------------------------------|

*BrandPartners      Products and Services*

----

|   | · | Strategic                market intelligence and branch network                analysis |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Environmental                design, construction, and project management                services |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Traditional                and digital merchandising systems, logistics, distribution, and inventory                management |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | Point-of-sale                communications, brand strategy, sales training and marketing                programs |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | Contract                furniture |
|--------|--------|-----------------------------------|

*BrandPartners      Business Platform*

|   | · | Corporate                Reconnaissance.                Through interviews and discussions with the client and with market                research, we work with the client to understand its history of retail                development, current corporate culture, customer demographics, product                strategy, overall image, and future brand                objectives. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Network                Analysis/Site Analysis/Branch Typing*.*                We                analyze the client’s current retail network. This analysis covers on-site                audits of locations for overall interior fitness, traffic flow, selling                zones, fixture placements and design, point-of-sales messages and                placements, and local demographic analysis. Branch typing helps to                determine what type of products should be recommended for the network.                The                “Brand Blueprint” is a deliberate methodology for developing a successful                brand identity and is crucial to maximizing brand equity. It is a                disciplined plan that creates, designs, and communicates the intended                brand perception. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Point-of-Sale                Communications*.*                We                translate the client’s branding strategy into a well-coordinated written,                verbal, and physical message, which is refined and promoted to the                target                market through in-store communication vehicles,                including: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Point-of-sale                communications |
|--------|---|---------------------------------------------|

|   | o | Digital                merchandising |
|--------|---|--------------------------------------|

|   | o | Marketing                materials |
|--------|---|------------------------------------|

|   | o | Advertising                campaigns |
|--------|---|--------------------------------------|

|   | · | Site                Analysis/Market Intelligence*.*                Site selection is about weighing options and making the right choice                to                protect the significant investment in a new branch. A comprehensive                assessment of the potential of a proposed expansion or current operating                area, focusing on market characteristics most important to success,                is                used to develop a three to five year program by identifying and                prioritizing the most attractive growth markets. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Environmental                Design*.*                BrandPartners’ industry award-winning, architectural design team creates a                design template that translates the attributes of the “model branch” into                a master store design. Retail locations are designed to support the                brand,                maximize the impact of point-of-sale communications, and communicate                with                the customer through the appropriate brand experience. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Project                Management*.*                We                manage the implementation process, including the overall pricing                of all                components of the branch, hiring the subcontractors, and ensuring                that the                project is finished on time and on budget. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Furniture*.*                We                supplement our projects with office furniture systems and case goods,                which are often integrated in innovative ways into our programs. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Logistics,                Distribution and Inventory Management*.*                In                conjunction with our various products and services, we provide logistics,                distribution, warehousing, and inventory management to our clients.                In                many cases, we warehouse client-owned inventory for future acquisitions                or                renovated branches. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Target      Markets*

|   | · | Tier                One Banks*.*                Retail banking organizations, bank holding companies, and thrifts                with                more than 250 branch locations |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Regional                and Community Banks*.*                Banking organizations and bank holding companies with between 25                and 250                branches. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Credit                Unions*.*                Banking organizations with between 1 to 25                branches. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Non-Bank                Financial Services Companies*.*                Companies providing financial service products to consumers and businesses                that are not licensed as banks. These organizations include brokerage                houses, mutual fund companies, asset management companies, insurance                and                mortgage companies, and tax services                companies. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Sub-Prime                Financial Services Companies*.*                This rapidly growing segment of the financial services industry offers                products and services to that portion of the population not regularly                serviced by the financial institutions mentioned                above. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other*.*                Other retail industries and service organizations which can use our                capabilities and expertise in the retail environment, focusing on                industries that have synergies and parallels to our core                industry. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Suppliers/Working      Capital*

*Backlog*

*Significant      Customers*

*Employees*

*Competition*

*Where      to Get More Information*

----

**Item      1A. Risk Factors**

**The      business of providing merchandising, design/build, creative/point of sale,      furniture, and branding/marketing services to financial services institutions      and traditional retailers is highly competitive. If we are not able to compete      effectively, our revenues and profit margins will be adversely      affected**
**.**

**There      can be no assurances that we will be successful in our efforts to expand and      diversity our revenue base or enter into new partnerships to further expand      our      business.**

----

**A      significant or prolonged economic downturn could have a materially adverse      effect on our revenues and profit margin.**

**We      derive a large portion of our revenues from the financial services industry,      which has consolidated in recent years, and if it continues to consolidate,      we      may be adversely affected by a reduction in available market      share.**

**The      profitability of our engagements with clients may not meet our      expectations.**

**The      loss of a significantly large client or several clients could have a materially      adverse effect on our revenues.**

----

**In      order to grow our business, we may need to do so in part by acquisitions which      may be difficult to integrate or manage with our existing businesses, which      may      harm our financial results or reputation in the      marketplace.**

|   | · | Overpaying                for acquired businesses |
|--------|--------|---------------------------------------------------|

|   | · | Facing                integration challenges |
|--------|--------|----------------------------------------------|

|   | · | Having                difficulty in finding appropriate acquisition                candidates |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Diversion                of management attention; |
|--------|--------|---------------------------------------------------|

|   | · | Amortization                and potential impairment of intangible assets, which could adversely                affect our reporting results; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inability                to establish uniform standards, controls, procedures, and                policies; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | Inability                to retain the acquired company’s                clients; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Exposure                to legal claims for activities of the acquired business prior to                acquisition; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | Inability                to effectively integrate the acquired company and its employees into                our                organization. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

**Our      business will be negatively affected if we are not able to keep pace with      marketing changes and the needs of our clients.**

----

**If      our clients or third parties are not satisfied with our services, we may face      damage to our professional reputation, or legal liability and payment      delays.**

**The      nature of our design/build work involves the use of a large number of      subcontractors, which in turn, could have an adverse impact on the profitability      of any given project.**

**The      loss of key employees could damage or result in the loss of client relationships      and adversely affect our business.**

**If      we fail to establish and maintain alliances for developing, marketing, and      delivering our services, our ability to increase our revenues and profitability      may suffer.**

----

**Increases      in labor and material costs could result in a decline in      profitability.**

**An      increase in borrowing costs may have an adverse impact on our core      business.**

**The      Company and the price of our shares may be adversely affected by the public      sale      of a significant number of the shares eligible for future      sale.**

**We      may be required to repurchase certain warrants or underlying warrant      shares.**

----

**We      have incurred losses in the past, and we may incur losses in the      future.**

**We      may require additional financing to sustain our business operations or implement      business initiatives in the future.**

**We      are dependent upon our current credit facility to maintain our      operations.**

**We      are subject to a subordinate financing arrangement that requires quarterly      interest payments and matures in October 2008, at which time we will be required      to make a payment of approximately $6.5 million to the      lender.**

**Shareholders      of our common stock may face dilution of their      holdings.**

----

**Our      common stock is subject to the “penny stock’ rules of the SEC, and the trading      marketing in our securities is limited, which makes transactions in our stock      cumbersome and may reduce the value of an investment in our      stock.**

|   | · | The                bid and offer price quotes in and for the “penny stock” and the number of                shares to which the quoted prices                apply. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                brokerage firm’s compensation for the                trade. |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | The                compensation received by the brokerage firm’s salesperson for the                trade. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | A                monthly account statement that gives an estimate of the value of                each                “penny stock” in the investor’s                account. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                written statement of the investor’s financial situation and investment                goals. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | If                a “penny stock” is sold to an individual in violation of the rights listed                above, or other federal or states securities laws, the person may                be able                to cancel the purchase and receive a                refund |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If                the stocks are sold in a fraudulent manner, the individual may be                able to                sue the persons and firms that caused the fraud for                damages. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If                an arbitration agreement was signed, however, the claim may have                to be                pursued through arbitration. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Our      certificate of incorporation places limitations on the liability of our      directors.**

**Certain      provisions in our certificate of incorporation and by-laws may make it more      difficult to effectuate change in the composition of our      Board.**

**Item      1B. Unresolved Staff Comments**

**Item      2. Description of Property**

|                                         |   |                                    |    |          |   |            |   |
|----------------------------------------------|--------|-----------------------------------------|---------|---------------|--------|-----------------|--------|
| Location                                     |   | ApproximateAnnual                  Rent |    | SquareFootage |   | LeaseExpiration |   |
|                                         |   |                                    |    |          |   |            |   |
| Administrative/sales                  office |   | $                                       | 315,000 |          |   | 82,000          |   |   | August                  2011 |   |
| Warehouse                                    |   |                                    | 290,000 |          |   | 72,000          |   |   | August                  2011 |   |
| NY                  Design Center            |   |                                    | 114,000 |          |   | 3,000           |   |   | January                  2010 |   |
| Grafico                  office              |   |                                    | 24,000  |          |   | 1,635           |   |   | n/a |   |

----

**Item      3. Legal Proceedings**

**Item      4. Submission of Matters to a Vote of Securities Holders**

**PART      II**

**Item      5. Market for Common Equity and Related Stockholder      Matters**

|                                                    |   | **High** |   | **Low** |   |
|---------------------------------------------------------|--------|----------|--------|---------|--------|
| **Calendar                  Year 2005**                 |   |     |   |    |   |
|                                                    |   |     |   |    |   |
| First                  Quarter Ended March 31, 2005     |   | $        | 1.15   |    | $      | 0.90 |   |
| Second                  Quarter Ended June 30, 2005     |   |     | 0.95   |    |   | 0.74 |   |
| Third                  Quarter Ended September 30, 2005 |   |     | 0.91   |    |   | 0.70 |   |
| Fourth                  Quarter Ended December 31, 2005 |   |     | 0.73   |    |   | 0.41 |   |
|                                                    |   |     |   |    |   |   |   |
| **Calendar                  Year 2006**                 |   |     |   |    |   |   |   |
|                                                    |   |     |   |    |   |   |   |
| First                  Quarter Ended March 31, 2006     |   | $        | 0.50   |    | $      | 0.38 |   |
| Second                  Quarter Ended June 30, 2006     |   |     | 0.48   |    |   | 0.19 |   |
| Third                  Quarter Ended September 30, 2006 |   |     | 0.24   |    |   | 0.11 |   |
| Fourth                  Quarter Ended December 31, 2006 |   |     | 0.15   |    |   | 0.09 |   |
|                                                    |   |     |   |    |   |   |   |
| **Calendar                  Year 2007**                 |   |     |   |    |   |   |   |
|                                                    |   |     |   |    |   |   |   |
| First                  Quarter (through March 23, 2007) |   | $        | 0.14   |    | $      | 0.09 |   |

----

| Plan                  Category                                               |   | Number                  of securities to be issued upon exercise of outstanding options                  (a) |      | Weighted-average                  exercise price of outstanding options(b) |   | Number                  of securities remaining available for future issuance under equity                  compensation plans [excluding securities reflected in column                  (a)](                  c) |   |
|------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|-----------|----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                         |   |                                                                                                         |      |                                                                       |   |                                                                                                                                                                                                                |   |
| BrandPartners                  2004 Stock Incentive Plan                     |   |                                                                                                         | 7,802,000 |                                                                       | $      | 0.54                                                                                                                                                                                                                |   |   | 198,000 |   |
|                                                                         |   |                                                                                                         |      |                                                                       |   |                                                                                                                                                                                                                |   |   |   |   |
| Financial                  Performance Corporation 2001 Stock Incentive Plan |   |                                                                                                         | 381,549   |                                                                       | $      | 0.41                                                                                                                                                                                                                |   |   | 4,618,451 |   |
|                                                                         |   |                                                                                                         |      |                                                                       |   |                                                                                                                                                                                                                |   |   |   |   |
| Total                                                                        |   |                                                                                                         | 8,183,549 |                                                                       |   |                                                                                                                                                                                                                |   |   | 4,816,451 |   |

**Item      6. Selected Financial Data**

| *Years                  Ended December 31, 2005, 2004, 2003, 2002 and 2001* |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (in                  thousands except per share data)                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   | 2006   |   | 2005   |   | 2004   |   | 2003   |   | 2002 |   |
| *For                  the Year*                                             |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                    |   | $      | 52,476 |   | $      | 52,036 |   | $      | 50,613 |   | $ | 33,667 |   | $ | 38,879 |   |
| Income                  (Loss) from Continuing Operations                   |   | $      | (823   | )      | $      | 3,586  |   | $      | 5,134  |   | $ | (10,964 | ) | $ | (4,803 | ) |
| Income                  (Loss) Per Share from Continuing Operations*        |   | $      | (0.07  | )      | $      | 0.11   |   | $      | 0.17   |   |   | ($0.59 | ) |   | ($0.26 | ) |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *At                  Year End*                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Assets                                               |   | $      | 36,506 |   | $      | 36,376 |   | $      | 37,306 |   | $ | 35,834 |   | $ | 46,738 |   |
| Long                  Term Debt                                             |   | $      | 6,452  |   | $      | 6,740  |   | $      | 5,784  |   |   | 12,953 |   |   | 12,465 |   |
| Dividends                  Declared Per Share                               |   |   | None   |   |   | None   |   |   | None   |   |   | None |   |   | None |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| **                  Income (loss) per share from continuing operations is based on                  basic                  number of shares and does not include dilution.* |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *The                  financial information for 2004 does not include the gain on forgiveness                  of                  debt.*                                   |   |   |   |   |   |   |   |   |   |

----

**Item      7. Management’s Discussion and Analysis of Results of Operations and Financial      Condition**

----

*Revenue      Recognition*

*Accounts      Receivable*

*Intangible      Assets*

*Income      Taxes*

*Accounting      for Income Taxes*

|   | · | Recognition                of the amount of taxes payable or refundable for the current                year |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | Recognition                of deferred tax liabilities and assets for future tax consequences                of                events that have been recognized in an entity’s financial statements or                tax returns |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Results      of Operations**

**Year      Ended December 31, 2006 Compared to Year Ended December 31,      2005**

*Revenues.*

|   | · | Increased                building activity in community banking                sector |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | Offset                by slow down in investment in capital improvements by larger financial                institutions |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

*Cost      of Revenues.*

*Selling,      General and Administrative Expenses.*

----

|   | · | Decrease                in sales and marketing expenses for Brand Retail and Grafico of                approximately $750,000 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | Decrease                in insurance expense for BrandPartners Group of approximately $100,000 |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Offset                by an increase in general and administrative salaries and wages of                approximately $190,000 |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | Offset                by an increase in consulting expense to BrandPartners Group and Brand                Retail of approximately $180,000 |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Offset                by an increase in depreciation expense for Brand Retail of approximately                $100,000 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | Offset                by an increase in the bad debt accrual expense for Brand Retail and                Grafico of approximately $80,000 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Offset                by an increase in the use of general and administrative temporary                help at                Brand Retail and Grafico of approximately                $50,000 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Offset                by an increase in equipment lease expense at Brand Retail of approximately                $50,000 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | Offset                by an increase in 401(k) fees and matching contributions of approximately                $40,000 due to increased participation by the employees of Brand                Retail |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Interest      Expense.*

*Income      Taxes.*

*Net      Income (Loss).*

|   | · | Decrease                in contract sales |
|--------|--------|-------------------------------------------|

|   | · | Increase                in interest expense |
|--------|--------|---------------------------------------------|

|   | · | Offset                by decrease in sales, general and administrative                expense |
|--------|--------|-----------------------------------------------------------------------------------------------|

**Year      Ended December 31, 2005 Compared to Year Ended December 31,      2004**

*Revenues.*

|   | · | Strength                in industry |
|--------|--------|-------------------------------------|

|   | · | Improved                visibility to BrandPartners product and service                offerings |
|--------|--------|--------------------------------------------------------------------------------------------------|

----

|   | · | Offset                by project delays because of permitting issues, weather conditions,                and                property availability. Completion of certain projects delayed some                revenues to a future fiscal period |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Cost      of Revenues.*

*Selling,      General and Administrative Expenses.*

|   | · | Addition                of sales personnel at Brand Retail, Brand Europe and Grafico for                approximately $791,000, including wages and                travel |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase                in marketing expense of approximately $1.2 million for Brand Retail                and                Brand Europe |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase                in professional service expenses of approximately                $271,000 |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Increase                in depreciation expense for Brand Retail, Brand Europe and Grafico                of                approximately $176,000. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase                in computer expense of approximately $66,000 for Brand Retail and                Grafico. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | Offset                by decrease in salaries and wages of approximately                $724,000 |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Offset                by decrease in corporate travel expenses of approximately                $109,000 |
|--------|--------|---------------------------------------------------------------------------------------------------------|

*Interest      Expense*

|   | · | Restructuring                of credit facility |
|--------|--------|-------------------------------------------------|

|   | · | Offset                by reduction in term loan |
|--------|--------|-------------------------------------------------|

|   | · | Offset                by reduction in line of credit |
|--------|--------|------------------------------------------------------|

*Other      Income (Expense).*

*Income      Taxes.*

*Net      Income.*

|   | · | Increase                in cost of goods as a percentage of revenue, as noted                above |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | Increase                in sales, general and administrative expenses due to the factors                noted                above |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Gain                from forgiveness of debt recognized in 2004. This is discussed in                more                detail in Note F to the financial                statements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity      and Capital Resources**

----

**Recently      Issued Accounting Standards**

*Accounting      for Certain Hybrid Financial Instruments*
*Accounting      for Derivative Instruments and Hedging Activities*
*Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities. *

*Accounting      for Servicing of Financial Assets,*
*Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities - a replacement of FASB Statement No. 125*

*Accounting      for Uncertainty in Income Taxes - an interpretation of FASB Statement No.      109.*
*Accounting      for Income Taxes.*

*Fair      Value Measurements.*
*Disclosures      about Fair Value of Financial Instruments*
*Accounting      for Certain Investments*
*Accounting      for Certain Investments Held by Not-for-Profit Organizations*
*Accounting      for Derivative Instruments and Hedging Activities*

----

*The      Fair Value Option for Financial Assets and Financial Liabilities - Including      an      Amendment of FASB Statement No. 115.*

|   | c. | Employees’                and plans’ obligations for pension benefits, other than postretirement                benefits, post-employment benefits, employee stock option and stock                purchase plans, and other forms of deferred compensation                arrangements. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d. | Financial                assets and financial liabilities recognized under leases as defined                in                FASB Statement No. 13, *Accounting                for Leases.* |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e. | Deposit                liabilities, withdrawable on demand, of banks, savings and loan                associates, credit unions, and other similar depository                institutions |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f. | Financial                instruments that are in whole, or in part, classified by the user                as a                component of shareholders’ equity |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Firm                commitments that would otherwise not be recognized at inception and                that                involve only financial instruments. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Nonfinancial                insurance contracts and warranties that the insurer can settle by                paying a                third party to provide those goods or                services. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Host                financial instruments resulting from separation of an embedded                nonfinancial derivative instrument from a nonfinancial hybrid                instrument. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | May                be applied instrument by instrument, with a few exceptions, such                as                investments otherwise accounted for by the equity                method. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      7A.**
**Qualitative      and Quantitative Disclosures about Market Risk**

|                                       |   | Principal                  Balance |    | Weighted                  Average Interest                  Rate atDecember                  31, 2006 |   |
|--------------------------------------------|--------|------------------------------------|---------|-------------------------------------------------------------------------------------------------------|--------|
|                                       |   |                               |    |                                                                                                  |   |
| Term                  Loan                 |   | $                                  | 944,445 |                                                                                                  |   | 7.85 | % |
| Revolving                  Credit Facility |   | $                                  | 0       |                                                                                                  |   | 8.10 | % |

**Holding      Company and Operating Subsidiaries**

**Stock      Price Fluctuations**

**Inflation**

**Forward-Looking      Statements**

----

|   | · | The                continued services of James Brooks as Chairman of the Board and Chief                Executive Officer of BrandPartners                Group. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our                ability to identify appropriate acquisition candidates, finance and                complete such acquisitions and successfully integrate the acquired                businesses |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes                in our business strategies or development                plans |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | Competition |
|--------|--------|-------------|

|   | · | Our                ability to grow within the financial services                industry |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Our                ability to successfully penetrate other                markets |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | General                economic and business conditions, both nationally and in the regions                in                which we operate |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

**Item      8. Financial Statements**

**Item      9. Changes in and Disagreements with Accountants on Accounting and Financial      Disclosure**

----

**Item      9A. Controls and Procedures.**

*Limitations      on the Effectiveness of Controls*

|   | (b) | Changes                in internal controls |
|--------|-----|---------------------------------------------|

**Item      9B. Other Information**

----

**Part      III**

**Item      10. Directors, Executive Officers of the Registrant and Corporate      Governance**

| Name                                |   | Age    |   | Position                                                                            |   | Expiration |
|-------------------------------------|--------|--------|--------|-------------------------------------------------------------------------------------|--------|------------|
|                                |   |   |   |                                                                                |   |       |
| James                  F. Brooks    |   | 44     |   | Chairman                  of the Board,and                  Chief Executive Officer |   |       |
|                                |   |   |   |                                                                                |   |       |
| Richard                  Levy       |   | 72     |   | Director                                                                            |   | 2008       |
| J.                  Weldon Chitwood |   | 42     |   | Director                                                                            |   | 2008       |
| Clifford                  D. Brune  |   | 53     |   | Director                                                                            |   | 2009       |
|                                |   |   |   |                                                                                |   |       |
| Suzanne                  M. Verrill |   | 60     |   | Chief                  Financial Officer and Secretary                              |   | n/a        |

**James      F. Brooks**
*cum      laude*

**Clifford      D. Brune, C.P.A.**

----

**J.      Weldon Chitwood**

**Richard      Levy **

**SIGNIFICANT      EMPLOYEES WHO ARE NOT DIRECTORS OR DIRECTOR NOMINEES**

**Suzanne      M. Verrill**

**Anthony      J. Cataldo**

**MEETINGS      AND COMMITTEES OF THE BOARD OF DIRECTORS**

**Audit      Committee**

----

**Compensation      Committee**

----

*Compensation      Policy*

**Nominating      Committee**

**Code      of Ethics**

----

**Item      11. Executive Compensation**

| Name                  and Principal Position  |   | Year   |   | Salary($) |   | Bonus($) |   | StockAwards($) |   | OptionAwards($) |   | Non-equity                  incentive plan compensation($) |   | Change                  in peinsion value and non-qualified deferred compensation                  earnings($) |      | All                  other compensation($) |   | Total($) |   |
|-----------------------------------------------|--------|--------|--------|-----------|--------|----------|--------|----------------|--------|-----------------|--------|------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|-----------|--------------------------------------------|--------|----------|--------|
| (a)                                           |   | (b)    |   | (c)       |   | (d)      |   | (e)            |   | (f)             |   | (g)                                                        |   | (h)                                                                                                            |      | (i)                                        |   | (j)      |   |
|                                          |   |   |   |      |   |     |   |           |   |            |   |                                                       |   |                                                                                                           |      |                                       |   |     |   |
| James                  F. Brooks (1)          |   |   | 2006   |      | $      | 360,000  |   | $              | 70,000 |            | $      | -                                                          |   | $                                                                                                              | -         |                                       | $      | -        |   | $ | - |   | $ | 57,922 |   | $ | 487,922 |   |
| Chairman/Chief                  Exec. Officer |   |   | 2005   |      |   | 344,077  |   |           | -      |            |   | -                                                          |   |                                                                                                           | 250,000   |                                       |   | -        |   |   | - |   |   | 47,877 |   |   | 641,954 |   |
|                                          |   |   | 2004   |      |   | 300,000  |   |           | 50,000 |            |   | -                                                          |   |                                                                                                           | 1,040,000 |                                       |   | -        |   |   | - |   |   | 47,070 |   |   | 1,437,070 |   |
|                                          |   |   |   |      |   |     |   |           |   |            |   |                                                       |   |                                                                                                           |      |                                       |   |     |   |   |   |   |   |   |   |   |   |   |
| Suzanne                  M. Verrill (2)       |   |   | 2006   |      |   | 145,000  |   |           | 20,000 |            |   | -                                                          |   |                                                                                                           |      |                                       |   | -        |   |   | - |   |   | 10,751 |   |   | 175,751 |   |
| Chief                  Financial Officer      |   |   | 2005   |      |   | 129,620  |   |           | -      |            |   | -                                                          |   |                                                                                                           |      |                                       |   | -        |   |   | - |   |   | 7,231 |   |   | 136,851 |   |
|                                          |   |   | 2004   |      |   | 99,920   |   |           | 35,000 |            |   | -                                                          |   |                                                                                                           |      |                                       |   | -        |   |   | - |   |   | 6,170 |   |   | 141,090 |   |

----

| No.                  Shares        | Exercise                  Price | Value      | Vesting                  Date      | Expiration                  Date   |
|------------------------------------|---------------------------------|------------|------------------------------------|------------------------------------|
| 100,000                            | $0.15                           | $15,000    | October                  8, 2003   | October                  8, 2008   |
| 500,000                            | $0.20                           | $100,000   | November                  10, 2003 | November                  10, 2008 |
| 175,000                            | $0.26                           | $45,500    | October                  2, 2003   | October                  1, 2008   |
| 500,000                            | $0.30                           | $150,000   | November                  10, 2003 | November                  10, 2008 |
| 500,000                            | $0.50                           | $250,000   | January                  5, 2005   | January                  5, 2010   |
| 1,000,000                          | $0.51                           | $510,000   | February                  20, 2004 | February                  20, 2009 |
| 1,000,000                          | $0.53                           | $530,000   | June                  25, 2004     | June                  25, 2009     |
| 50,000                             | $0.76                           | $38,000    | June                  2, 2003      | June                  2, 2010      |
|                               |                            |       |                               |                               |
| 3,825,000                          |                            | $1,638,500 |                               |                               |
|                               |                            |       |                               |                               |
| 2003                  vesting date |                            | $348,500   |                               |                               |
| 2004                  vesting date |                            | $1,040,000 |                               |                               |
| 2005                  vesting date |                            | $250,000   |                               |                               |
| Total                              |                            | $1,638,500 |                               |                               |

|   | (2) | Ms.                Verrill was appointed Chief Financial Officer in April 2004 and served                in                that capacity pursuant to the terms of an employment agreement through                March 1, 2007. She also served as Chief Financial Officer for                BrandPartners Retail, Inc; Grafico Incorporated; Building Partners,                Inc.;                and BrandPartners Europe, Ltd., the Company’s wholly-owned subsidiaries.                The exercise price of all of Ms. Verrill’s options exceeded                the closing price of the company’s closing stock price as of December 31,                2006 |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Number                  of         | Exercise |    | Vesting                            | Expiration                         |
|------------------------------------|----------|---------|------------------------------------|------------------------------------|
| Shares                             | Price    | Value   | Date                               | Date                               |
| 75,000                             | $0.50    | $37,500 | April                  5, 2005     | April                  5, 2010     |
| 20,000                             | $0.51    | $10,200 | February                  19, 2005 | February                  19, 2010 |
| 75,000                             | $0.53    | $39,750 | April                  1, 2004     | July                  27, 2009     |
| 2,198                              | $1.00    | $2,198  | February                  4, 2002  | February                  4, 2010  |
| 172,198                            |     | $89,648 |                               |                               |
|                               |     |    |                               |                               |
| 2002                  vesting date |     | $2,198  |                               |                               |
| 2004                  vesting date |     | $39,750 |                               |                               |
| 2005                  vesting date |     | $47,700 |                               |                               |
|                               |     |    |                               |                               |
| Total                              |     | $89,648 |                               |                               |

----

|                                |   | Option                  Awards                                           |   | Stock                  Awards                                            |   |
|-------------------------------------|--------|--------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
| Name                                |   | Number                  of securities underlying unexercised options (#) |   | Number                  of securities underlying unexercised options (#) |   | Equity                  incentive plan awards: Number of securities underlying unexercised                  unearned options (#) |   | Option                  Exercise Price($) |   | Option                  Expiration Date |   | Number                  of shares or units of stock that have not vested(#) |   | Market                  value of shares or units of stock that have not vested($) |   | Equity                  incentive plan awards; Number of unearned shares, units or other                  rights                  that have not vested(#) |   | Equity                  incentive plan awards: Market or payout value of unearned shares,                  units or                  other rights that have not vested($) |   |
|                                |   |                                                                     |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   | Exercisable                                                              |   | Unexercisable                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| James                  F. Brooks    |   |                                                                     | 0      |                                                                     |   | 100,000 |   |   | 0 |   | $ | 0.15 |   |   | 10/8/2008 |   |   | 0 |   | $ | 0 |   |   | 0 |   | $ | 0 |   |
|                                |   |                                                                     |   |                                                                     |   | 500,000 |   |   |   |   | $ | 0.20 |   |   | 11/10/2008 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 175,000 |   |   |   |   | $ | 0.26 |   |   | 10/1/2008 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 500,000 |   |   |   |   | $ | 0.30 |   |   | 11/10/2008 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 500,000 |   |   |   |   | $ | 0.50 |   |   | 1/5/2010 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 1,000,000 |   |   |   |   | $ | 0.51 |   |   | 2/20/2009 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 1,000,000 |   |   |   |   | $ | 0.53 |   |   | 6/25/2009 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 50,000 |   |   |   |   | $ | 0.76 |   |   | 6/2/2010 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Suzanne                  M. Verrill |   |                                                                     | 0      |                                                                     |   | 75,000 |   |   |   |   | $ | 0.50 |   |   | 4/5/2010 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 20,000 |   |   |   |   | $ | 0.51 |   |   | 2/19/2010 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                                                     |   |                                                                     |   | 75,000 |   |   |   |   | $ | 0.53 |   |   | 7/27/2009 |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Other      Benefits**

**Employment      Contracts**

----

**Director      Compensation**

| **Name**                                |   | **Fees                  earned or paid in cash****($)** |   | **Stock                  awards****($)** |   | **Option                  awards****($)** |   | **Non-equity                  incentive plan compensation****($)** |   | **Change                  in pension value and nonqualified deferred compensation                  earnings** |   | **All                  other compensation****($)** |   | **Total****($)** |   |
|-----------------------------------------|--------|---------------------------------------------------------|--------|------------------------------------------|--------|-------------------------------------------|--------|--------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|------------------|--------|
|                                    |   |                                                    |   |                                     |   |                                      |   |                                                               |   |                                                                                                          |   |                                               |   |             |   |
| Clifford                  D. Brune (1)  |   | $                                                       | 10,000 |                                     | $      | 0                                         |   | $                                                                  | 0      |                                                                                                          | $      | 0                                                  |   | $                | 0      |   | $ | 215,000 |   | $ | 225,000 |   |
| J.                  Weldon Chitwood (2) |   | $                                                       | 5,000  |                                     | $      | 0                                         |   | $                                                                  | 0      |                                                                                                          | $      | 0                                                  |   | $                | 0      |   | $ | 0 |   | $ | 5,000 |   |
| Richard                  Levy (3)       |   | $                                                       | 5,000  |                                     | $      | 0                                         |   | $                                                                  | 0      |                                                                                                          | $      | 0                                                  |   | $                | 0      |   | $ | 0 |   | $ | 5,000 |   |

|   | (1) | Clifford                D. Brune was appointed a director of the Company in December 2005                and                elected as a director in June 2006. He receives a stipend as a Director                and for serving as the Chairman of the Audit Committee and the                Compensation Committee. Mr. Brune also receives additional monies                for his                consulting services to the Company. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | J.                Weldon Chitwood has been a director of the Company since October                2003 and                receives a stipend as a Director. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Richard                Levy has been a director of the Company since April 1994 and receives                a                stipend as a Director. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      12. Securities Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters**

----

| Name                  and Address of Beneficial Owner (1)                     |   | AmountBeneficially                  Owned (2) |       | Percent                    ofClass |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------|------------|------------------------------------|--------|
|                                                                          |   |                                          |       |                               |   |
| Robert                  S. Trump (3)                                          |   |                                          | 4,455,422  |                               |   | 12.8 | % |
| Longview                  Fund, L.P. (4)                                      |   |                                          | 3,185,517  |                               |   | 9.1 | % |
| Gruber                  & McBaine Capital Management (5)                  |   |                                          | 2,718,500  |                               |   | 7.8 | % |
| Heartland                  Advisors, Inc. (6)                                 |   |                                          | 1,489,487  |                               |   | 4.3 | % |
| MicroCapital                  (7)                                             |   |                                          | 2,952,800  |                               |   | 8.5 | % |
| James                  F. Brooks (8)                                          |   |                                          | 3,856,100  |                               |   | 11.0 | % |
| Clifford                  D. Brune (9)                                        |   |                                          | 1,000,000  |                               |   | 2.9 | % |
| J.                  Weldon Chitwood (10)                                      |   |                                          | 500,000    |                               |   | 1.4 | % |
| Richard                  Levy (11)                                            |   |                                          | 500,000    |                               |   | 1.4 | % |
| Suzanne                  Verrill (12)                                         |   |                                          | 173,496    |                               |   | 0.5 | % |
| Anthony                  Cataldo (13)                                         |   |                                          | 4,638,462  |                               |   | 13.3 | % |
| All                  directors and executive officers as a group              |   |                                          | 6,029,596  |                               |   | 17.3 | % |
| (5                  persons)                                                  |   |                                          |       |                               |   |   |   |
|                                                                          |   |                                          |       |                               |   |   |   |
|             Total |   |                                          | 31,499,380 |                               |   |   |   |

|   | (1) | Unless                otherwise indicated, the business address for each of such beneficial                owners is in care of BrandPartners Group, Inc., 10 Main Street, Rochester,                New Hampshire 03839. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Directly                and indirectly. The inclusion of securities owned by others as                beneficially owned by the respective individuals does not constitute                an                admission that such individuals are the beneficial owners of such                securities. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Represents                4,455,422 shares of common stock. The business address for Mr. Trump                is in                care of Trump Management, Inc., 2611 West Second Street, Brooklyn,                NY                11223 |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Represents                3,185,517 shares of common stock. The address for Longview Fund L.P.                is                600 Montgomery St., 44th                Floor, San Francisco, CA 94111. Besides the shares of common stock                reported on Form 13G, Longview Fund owns 196,667 warrants for common                stock                priced at $0.85 per share. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Includes                shares beneficially owned by various individuals with share voting                power                by Gruber and McBaine Capital Management, 50 Osgood Place, Penthouse,                San                Francisco, CA 94133. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Includes                shares beneficially owned by various individuals with share voting                power                by Heartland Advisors, 789 N. Water St., Milwaukee, WI                53202. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Includes                shares beneficially owned by various individuals with share voting                power                by MicroCapital Fund, LP, 5775 Peachtree Dunwoody Rd., Building G,                Suite                300, Atlanta, GA 30346. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (8) | Mr.                Brooks is the Company’s Chairman of the Board of the Directors, President                and Chief Executive Officer. This represents: (a) 31,100 shares of                common                stock; (b) options to purchase 100,000 shares of common stock from                the                Company exercisable until October 8, 2008 at $0.15 per share; (c)                options                to purchase 500,000 shares of common stock from the Company exercisable                until November 10, 2008 at $0.20 per share; (d) options to purchase                175,000 shares of common stock from the Company exercisable until                October                1, 2008 at $0.26 per share; (e) options to purchase 500,000 shares                of                common stock from the Company exercisable until November 10, 2008                at $0.30                per share; (f) options to purchase 500,000 shares of common stock                from the                Company exercisable until January 5, 2010 for $0.50 per share; (g)                options                to purchase 1,000,000 shares of common stock from the Company exercisable                until February 20, 2009 for $0.51 per share; (h) options to purchase                1,000,000 shares of common stock from the Company exercisable until                June                25, 2009 at $0.53 per share; (i) options to purchase 50,000 shares                of                common stock from the Company exercisable until June 2, 2010 at $0.76                per                share. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (9) | Mr.                Brune is a member of the Company’s Board of Directors. This represents:                (a) options to purchase 250,000 shares of common stock from the Company                exercisable until September 10, 2009 at $0.54 per share; (b) options                to                purchase 250,000 shares of common stock from the Company exercisable                until                January 5, 2010 at $0.50 per share; and (c) options to purchase 500,000                shares of common stock from the Company exercisable until December                29,                2010 at $0.43 per share. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (10) | Mr.                Chitwood is a member of the Company’s Board of Directors. This represents:                (a) options to purchase 400,000 shares of common stock from the Company                exercisable until October 15, 2008 at $0.30 per share; and (b) options                to                purchase 100,000 shares of common stock from the Company, exercisable                until February 7, 2010, at $0.50 per                share. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (11) | Mr.                Levy is a member of the Company’s Board of Directors. This represents: (a)                options to purchase 400,000 shares of common stock from the Company                exercisable until October 15, 2008 at $0.30 per share; and (b) options                to                purchase 100,000 shares of common stock from the Company exercisable                until                February 7, 2010 at $0.50 per                share. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12) | Ms.                Verrill is the Company’s former Chief Financial Officer. This represents:                (a) 1,298 shares of common stock; (b) options to purchase 20,000                shares of                common stock from the Company exercisable until February 19, 2009                at $0.51                per share; (c) options to purchase 75,000 shares of common stock                from the                Company exercisable until July 27, 2009 at $0.53 per share; (d) options                to                purchase 2,198 shares of common stock from the Company at $1.00 per                share                exercisable until February 4, 2010; and (e) options to purchase 75,000                shares of common stock from the Company at $0.50 per share exercisable                until April 5, 2010. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (13) | Mr.                Cataldo was the Company’s Non-Executive Chairman until his resignation in                August of 2006. This represents (a) 938,462 shares of common stock;                (b)                options to purchase 700,000 shares of common stock from the Company                exercisable until October 8, 2008 at $0.20 per share; (c) options                to                purchase 1,500,000 shares of common stock from the Company exercisable                until October 8, 2008 at $0.30 per share; (d) options to purchase                1,000,000 shares of common stock from the Company exercisable until                June                28, 2009 at $0.53 per share; and (e) options to purchase 500,000                shares of                common stock from the Company exercisable until January 3, 2010 at                $0.50                per share. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      13. Certain Relationships and Related Transactions and Director      Independence**

----

**Item      14. Principal Accountant Fees and Services**

|                                |   | **2006** |    | **2005** |   |
|-------------------------------------|--------|----------|---------|----------|--------|
|                                |   |     |    |     |   |
| Audit                  fees         |   | $        | 125,100 |     | $      | 196,646 |   |
| Audit                  related fees |   | $        | 12,000  |     | $      | 12,000 |   |
| Tax                  fees           |   | $        | 20,760  |     | $      | 20,000 |   |
| All                  other fees     |   | $        | 0       |     | $      | 0 |   |
|                                |   |     |    |     |   |   |   |
|                                |   |     |    |     |   |   |   |
| Totals                              |   | $        | 157,860 |     | $      | 228,646 |   |

----

**PART      IV**

**Index      to Exhibits**

| 2.1 | Agreement                and Plan of Merger, dated as of August 1, 2001, between Financial                Performance Corporation and the Company (incorporated by reference                to                Exhibit 2.2 to the Company’s Quarterly Report on Form 10-QSB for the                quarter ended September 30, 2001). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1 | By-laws                of the Company (incorporated by reference to Exhibit 3.1 to the Company’s                Quarterly Report in Form 10-QSB for the quarter ended September 30,                2001). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Certificate                of Incorporation dated August 7, 2001 (incorporated by reference                to                Exhibit 3.2 to the Company’s Quarterly Report on Form 10-QSB for the                quarter ended September 30, 2001). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1 | Specimen                Certificate of Common Stock (incorporated by reference to Exhibit                4.1 to                the Company’s Quarterly Report on Form 10-QSB for the quarter ended                September 30, 2001). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| 4.2 | Certificate of Designation of Class A Convertible              Preferred Stock of the Company (incorporated by reference to Exhibit              4.1              to the Company’s Current Report on Form 8-K filed on January 31,              2001). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | Form                of Indemnification Agreement between the Company and its Officers                and                Directors (incorporated by reference to Exhibit 10.35 to the Company’s                Registration Statement on Form S-1, Registration No.                33-20886). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Restated                and Amended Shareholders Agreement, dated as of October 18, 1994,                by and                among Michaelson Kelbick Partners Inc., Susan Michaelson, Hillary                Kelbick                and the Company, effective as of October 1, 1998 (incorporated by                reference to Exhibit 10.80 to the Company’s Quarterly Report on Form                10-QSB for the quarter ended September 30,                1998). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Form                of Warrant, dated as of October 21, 1998, between the Company and                Richard                Levy (incorporated by reference to Exhibit 10.81 to the Company’s Annual                Report on Form 10-KSB for the year ended December 31,                1998). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Form                of Warrant Agreement, dated as of October 21, 1998, covering warrants                issued to Richard Levy and others (incorporated by reference to Exhibit                10.86 to the Company’s Annual Report on Form 10-KSB for the year ended                December 31, 1998). |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | Stock                Purchase and Sale Agreement, dated as of November 17, 1999, by and                among                the Company, Robert S. Trump and Jeffrey Silverman (incorporated                by                reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K                filed November 30, 1999). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Stock                Purchase and Sale Agreement, dated as of November 17, 1999, by and                among                the Company, Robert S. Trump and Ronald Nash (incorporated by reference                to                Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November                30, 1999). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Stockholders                Agreement, dated as of November 17, 1999, by and among the Company,                Robert                S. Trump, Jeffrey Silverman, and Ronald Nash (incorporated by reference                to                Exhibit 10.3 to the Company’s Current Report on Form 8-K filed November                30, 1999). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8 | Option                Agreement, dated November 17, 1999, between Robert S. Trump and Jeffrey                Silverman (incorporated by reference to Exhibit 10.4 to the Company’s                Current Report on Form 8-K filed on November 30,                1999.) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.9 | Option                Agreement, dated November 17, 1999, between Robert S. Trump and Jeffrey                Silverman (incorporated by reference to Exhibit 10.5 to the Company’s                Current Report on Form 8-K filed November 30,                1999). |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | Option                Agreement, dated November 17, 1999, between Robert S. Trump and Jeffrey                Silverman (incorporated by reference to Exhibit 10.6 to the Company’s                Current Report on Form 8-K filed November 30,                1999). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | Option                Agreement, dated November 17, 1999, between Robert S. Trump and Ronald                Nash (incorporated by reference to Exhibit 10.7 to the Company’s Current                Report on Form 8-K filed November 30,                1999). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Option                Agreement, dated November 17, 1999, between Robert S. Trump and Ronald                Nash (incorporated by reference to Exhibit 10.8 to the Company’s Current                Report on Form 8-K filed November 30,                1999). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | Option                Agreement, dated November 17, 1999, between Robert S. Trump and Ronald                Nash (incorporated by reference to Exhibit 10.9 to the Company’s Current                Report on Form 8-K filed November 30,                1999). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14 | Stock                Option Agreement, dated as of November 17, 1999, between the Company                and                Jeffrey Silverman (incorporated by reference to Exhibit 10.10 to                the                Company’s Current Report on Form 8-K filed November 30,                1999). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15 | Stock                Option Agreement, dated as of November 17, 1999, between the Company                and                Ronald Nash (incorporated by reference to Exhibit 10.11 to the Company’s                Current Report on Form 8-K filed November 30,                1999). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16 | Registration                Rights Agreement, dated as of November 17, 1999 by and among the                Company,                Robert S. Trump, William F. Finley, Jeffrey Silverman and Ronald                Nash                (incorporated by reference to Exhibit 10.12 to the Company’s Current                Report on Form 8-K filed November 30,                1999). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17 | Stock                Option Agreement, dated as of January 10, 2000, between the Company                and                Jeffrey Silverman (incorporated by reference to Exhibit 10.39 to                the                Company’s Annual Report on Form 10-KSB for the year ended December 31,                1999). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18 | Stock                Option Agreement, dated as of January 10, 2000, between the Company                and                Ronald Nash (incorporated by reference to Exhibit 10.40 to the Company’s                Annual Report on Form 10-KSB for the year ended December 31,                1999). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19 | Agreement                and Plan of Merger dated February 23, 2000, between the Company,                FPC                Acquisition Corp., iMapData.com, Inc., William Lilley III and Laurence                J.                Defiance (incorporated by reference to Exhibit 10.17 to the Company’s                Current Report on Form 8-K filed February 24,                2000). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20 | Employment                Agreement, dated April 25, 2000, between the Company and Edward T.                Stolarski (incorporated by reference to Exhibit 10.5 to the Company’s                Current Report on Form 10-QSB for the quarter ended March 31,                2000). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.21 | Stock                Option Agreement, dated as of April 26, 2000, between the Company                and                Edward T. Stolarski, covering 100,000 shares of common stock (incorporated                by reference to Exhibit 10.5 to the Company’s Report on Form 10-QSB for                the quarter ended March 31,                2000). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.22 | Stock                Option Agreement, dated as of April 26, 2000, between the Company                and                Edward T. Stolarski, covering 300,000 shares of common stock (incorporated                by reference to Exhibit 10.5 to the Company’s Report on Form 10-QSB for                the quarter ended March 31, 2000). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23 | Stock                Option Agreement, dated August 9, 2000, between the Company and Jonathan                Foster (incorporated by reference to Exhibit 10.48 to the Company’s Annual                Report on Form 10-KSB for the year ended December 31,                2000). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24 | Stock                Option Agreement, dated August 9, 2000, between the Company Nathan                Ganther                (incorporated by reference to Exhibit 10.48 to the Company’s Annual Report                on Form 10-KSB for the year ended December 31,                2000). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.25 | Stock                Option Agreement, dated August 9, 2000, between the Company J. William                Grimes (incorporated by reference to Exhibit 10.48 to the Company’s Annual                Report on Form 10-KSB for the year ended December 31,                2000). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.26 | Loan                and Security Agreement, dated as of January 11, 2001, between Fleet                Capital Corporation (“Fleet”) and Willey Brothers, Inc. (incorporated by                reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K                filed on January 31, 2001). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.27 | Secured                Guaranty Agreement, dated as of January 11, 2001, executed by the                Company                in favor of Fleet (incorporated by reference to Exhibit 10.1 to the                Company’s Current Report on Form 8-K filed January 31,                2001). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.28 | Agreement                dated as of January 11, 2001, among the Company, Thomas P. Willey,                as                trustee of the Thomas P. Willey Revocable Trust of 1998, James M.                Willey,                as trustee of the James M. Willey Trust - 1995, Jeffrey S. Silverman,                William Lilley III, Ronald Nash, Robert Trump, and Laurence DeFranco                (incorporated by reference to Exhibit 10.2 to the Company’s Current Report                on Form 8-K filed January 31,                2001). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.29 | Subordinated                Convertible Term Promissory Note, dated January 11, 2001, made by                the                Company in favor of the James M. Willey Trust - 1995, in the principal                amount of $1,000,000 (incorporated by reference to Exhibit 2.1 to                the                Company’s Current Report on Form 8-K filed January 31, 2001). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.30 | Subordinated                Convertible Term Promissory Note, dated January 11, 2001, made by                the                Company in favor of the James M. Willey Trust - 1995, in the principal                amount of $3,750,000 (incorporated by reference to Exhibit 2.1 to                the                Company’s Current Report on Form 8-K filed January 31,                2001). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.31 | Subordinated                Convertible Term Promissory Note, dated January 11, 2001, made by                the                Company in favor of the Thomas P. Willey Revocable Trust of 1998,                in the                principal amount of $3,750,000 (incorporated by reference to Exhibit                2.1                to the Company’s Current Report on Form 8-K filed January 31,                2001). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.32 | Subordinated                Convertible Term Promissory Note, dated January 11, 2001, made by                the                Company in favor of the Thomas P. Willey Revocable Trust of 1998,                in the                principal amount of $1,000,000 (incorporated by reference to Exhibit                2.1                to the Company’s Current Report on Form 8-K filed January 31,                2001). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.33 | Stock                Purchase Agreement, dated as of January 11, 2001, by and among James                M.                Willey, individually and as trustee of the James M. Willey Trust                - 1995,                Thomas P. Willey, individually and as trustee of the Thomas P. Willey                Revocable Trust of 1998, and the Company (incorporated by reference                to                Exhibit 2.1 to the Company’s current report on Form 8-K filed on January                31, 2001). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.34 | Promissory                Note, dated February 12, 2001, made by iMapData in favor of Ronald                Nash,                in the principal amount of $50,000 (incorporated by reference to                Exhibit                10.46 to the Company’s Annual Report on Form 10-KSB for the year ended                December 31, 2000). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.35 | Promissory                Note, dated February 12, 2001, made by iMapData in favor of Jeffrey                Silverman, in the principal amount of $50,000 (incorporated by reference                to Exhibit 10.46 to the Company’s Annual Report on Form 10-KSB for the                year ended December 31, 2000). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.36 | Promissory                Note, dated February 12, 2001, made by iMapData in favor of William                Lilley, in the principal amount of $100,000 (incorporated by reference                to                Exhibit 10.46 to the Company’s Annual Report on Form 10-KSB for the year                ended December 31, 2000). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.37 | Stockholders                Agreement dated February 12, 2001, by and among iMapData.com, Inc.,                financial Performance Corporation, 1404467 Ontario Limited, BP Media                Intermediate Fund L.P., William Lilley, and Laurence DeFranco                (incorporated by reference to Exhibit 10.49 to the Company’s Annual Report                on Form 10-KSB for the year ended December 31,                2000). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.38 | Subordinated                Convertible Promissory Note, dated March 1, 2001, made by the Company                in                favor of Jeffrey S. Silverman, in the principal amount of $245,000                (incorporated by reference to Exhibit 10.47 to the Company’s Annual Report                on Form 10-KSB for the year ended December 31,                2000). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.39 | Subordinated                Convertible Promissory Note, dated March 1, 2001, made by the Company                in                favor of Ronald Nash, in the principal amount of $245,000 (incorporated                by                reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-KSB                for the year ended December 31,                2000). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.40 | Amendment,                dated as of March 21, 2001, to Agreement, dated as of January 11,                2001,                among the Company, Thomas P. Willey, as trustee of the Thomas P.                Willey                Revocable Trust of 1998, James M. Willey, as trustee of the James                M.                Willey Trust - 1995, Jeffrey S. Silverman, William Lilley III, Ronald                Nash, Robert Trump, and Laurence DeFranco (incorporated by reference                to                Exhibit 10.44 to the Company’s Annual Report on Form 10-KSB for the year                ended December 31, 2000). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.41 | Amendment                and Waiver Agreement, dated as of May 21, 2001, between Fleet and                Willey                Brothers (incorporated by reference to Exhibit 10.25 to the Company’s                Quarterly Report on Form 10-QSB for the quarter ended September 30,                2001). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.42 | Letter                Agreement, dated October 16, 2001, amending the terms of i) Stock                Purchase                Agreement, dated as of January 11, 2001, by and among the Company,                James                M. Willey, individually and as trustee of the James M. Willey Trust                - 1995                and Thomas P. Willey, individually and as trustee of The Thomas P.                Willey                Revocable Trust of 1998, ii) Subordinated Convertible Term Promissory                Notes, dated January 11, 2001, made by the Company in favor of each                of the                James M. Willey Trust - 1995 and the Thomas P. Willey Revocable Trust                of                1998, in the principal amount of $3,750,000, and iii) Subordinated                Convertible Term Promissory Notes, dated January 11, 2001, made by                the                Company in favor of each of the James M. Willey Trust - 1995 and                the                Thomas P. Willey Revocable Trust of 1998, in the principal amount                of                $1,000,000 (incorporated by reference to Exhibit 10.65 to the Company’s                Annual Report on Form 10-KSB filed on March 31,                2003). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.43 | Second                Amendment and Waiver Agreement, dated as of October 22, 2001, between                Fleet and Willey Brothers (incorporated by reference to Exhibit 10.25                to                the Company’s Quarterly Report on Form 10-QSB for the quarter ended                September 30, 2001). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.44 | Financial                Performance Corporation Incentive Compensation Plan (incorporated                by                reference to Exhibit 10.32 to the Company’s Quarterly Report on Form                10-QSB for the quarter ended September 30,                2001). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.45 | Financial                Performance Corporation 2001 Stock Incentive Plan (incorporated by                reference to Exhibit 10.33 to the Company’s Quarterly Report on Form                10-QSB for the quarter ended September 30,                2001). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.46 | Subordinated                Note and Warrant Purchase Agreement, dated as of October 22, 2001,                by and                among the Company, Willey Brothers, Inc. and Corporate Mezzanine                II, L.P.                (“CMII”) (incorporated by reference to Exhibit 10.34 to the Company’s                Quarterly Report on Form 10-QSB for the quarter ended September 30,                2001). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.47 | Subordinated                Promissory Note, in the Principal Amount of $5,000,000, made by Willey                Brothers, Inc. in favor of CMII (incorporated by reference to Exhibit                10.34 to the Company’s Quarterly Report on Form 10-QSB for the quarter                ended September 30, 2001). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.48 | Common                Stock Purchase Warrant, dated October 22, 2001, between the Company                and                CMII (incorporated by reference to Exhibit 10.34 to the Company’s                Quarterly Report on Form 10-QSB for the quarter ended September 30,                2001). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| 10.49 | Registration Rights Agreement, dated as of October              22,              2001, between the Company and CMII (incorporated by reference to Exhibit              10.34 to the Company’s Quarterly Report on Form 10-QSB for the quarter              ended September 30, 2001). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.50 | Subordination                and Intercreditor Agreement, dated as of October 22, 2001, by and                among                Willey Brothers, Inc., CMII and Fleet Capital Corporation (incorporated                by                reference to Exhibit 10.34 to the Company’s Quarterly Report on Form                10-QSB for the quarter ended September 30,                2001). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.51 | Amendment                to the Option Agreement, dated as of November 15, 2001, between Jeffrey                S.                Silverman and Robert Trump (incorporated by reference to Exhibit                10.8 to                the Company’s Quarterly Report on Form 10-QSB for the quarter ended March                31, 2002). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.52 | Amendment                to Option Agreement, dated as of November 15, 2001, between Ronald                Nash                and Robert Trump (incorporated by reference to Exhibit 10.11 to the                Company’s Quarterly Report on Form 10-QSB for the quarter ended March 31,                2002 |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.53 | Form                of Warrant Agreement, between the Company and the Warrantholders                listed                therein, together with Form of Warrant Certificate, executed by each                purchaser in the private placement of common stock and warrants through                Broadband Capital, LLC as placement agent (incorporated by reference                to                Exhibit 10.33 to the Company’s Annual Report on Form 10-KSB for the year                ended December 31, 2001). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.54 | Rights                Agreement, between the Company and the Holders listed therein, executed                by                each purchaser in the private placement of common stock and warrants                through Broadband Capital, LLC as placement agent (incorporated by                reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-KSB                for the year ended December 31,                2001). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.55 | Form                of Stock Option Agreement, dated as of March 27, 2002, between the                Company                and each of Jonathan Foster, Nathan Gantcher and J. William Grimes                (incorporated by reference to Exhibit 10.66 to the Company’s Annual Report                on Form 10-KSB filed on March 31,                2003). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.56 | Form                of Stock Option Agreement, dated as of March 27, 2002, between the                Company                and each of Jeffrey S. Silverman and Edward T. Stolarski (incorporated                by                reference to Exhibit 10.33 to the Company’s Quarterly Report on Form                10-QSB for the quarter ended March 31,                2002). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.57 | Third                Amendment and Waiver Agreement, dated as of March 29, 2002, among                Fleet,                Willey Brothers and the Company (incorporated by reference to Exhibit                10.23 to the Company’s Annual Report on Form 10-KSB for the year ended                December 31, 2001). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.58 | Letter                Agreement, dated April 17, 2002, between and among Fleet, Willey                Brothers                and the Company (incorporated by reference to Exhibit 10.21 to the                Company’s Quarterly Report on Form 10-QSB for the quarter ended June 30,                2002). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.59 | Letter                Agreement, dated May 15, 2002, between and among Fleet, Willey Brothers                and the Company (incorporated by reference to Exhibit 10.21 to the                Company’s Quarterly Report on Form 10-QSB for the quarter ended June 30,                2002). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.60 | Amendment                No. 1 and Waiver, dated as of May 14, 2002, by and among the Company,                Willey Brothers, and CMII (incorporated by reference to Exhibit 10.30                to                the Company’s Quarterly Report on Form 10-QSB for the quarter ended June                30, 2002). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.61 | Letter                Agreement, dated July 11, 2002, between and among Fleet, Willey Brothers                and the Company (incorporated by reference to Exhibit 10.21 to the                Company’s Quarterly Report on Form 10-QSB for the quarter ended June 30,                2002). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.62 | Amendment                No. 2 and Waiver, dated as of August 9, 2002, by and among the Company,                Willey Brothers, and CMII (incorporated by reference to Exhibit 10.30                to                the Company’s Quarterly Report on Form 10-QSB for the quarter ended June                30, 2002). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.63 | Fourth                Amendment, dated as of September 25, 2002, among Fleet, Willey Brothers                and the Company (incorporated by reference to Exhibit 10.21 to the                Company’s Quarterly Report on Form 10-QSB for the quarter ended September                30, 2002). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.64 | Letter                Agreement, dated October 9, 2002, between Willey Brothers and CMII                (incorporated by reference to Exhibit 10.67 to the Company’s Annual Report                on Form 10-KSB filed on March 31,                2003). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.65 | Stock                Redemption Agreement, dated as of October 31, 2002, between the Company                and iMapData (incorporated by reference to Exhibit 10.1 to the Company’s                Current Report on Form 8-K filed on November 14,                2002). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| 10.66 | Pledge and Escrow Agreement, dated as of October              31,              2002, among the Company, iMapData and LandAmerica Financial Group,              Inc.              (incorporated by reference to Exhibit 10.2 to the Company’s Current Report              on Form 8-K filed on November 14, 2002). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| 10.67 | Promissory Note, dated October 31, 2002, made by              iMapData              in favor of the Company, in the principal amount of $1,550,000              (incorporated by reference to Exhibit 10.3 to the Company’s Current Report              on Form 8-K filed on November 14, 2002). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| 10.68 | Letter Agreement, dated October 31, 2002, between              the              Company and iMapData (incorporated by reference to Exhibit 10.4 to              the              Company’s Current Report on Form 8-K filed on November 14,              2002). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| 10.68 | Fifth Amendment, dated as of December 20, 2002,              among              Fleet, Willey Brothers and the Company (incorporated by reference to              Exhibit 10.68 to the Company’s Annual Report on Form 10-KSB filed on March              31, 2003). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.69  | Letter                  Agreement, dated February 12, 2003 among Fleet, Willey Brothers                  and the                  Company (incorporated by reference to Exhibit 10.69 to the Company’s                  Annual Report on Form 10-KSB filed on March 31, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.70  | Sixth                  Amendment, dated as of March 18, 2003, among Fleet, Willey Brothers                  and                  the Company (incorporated by reference to Exhibit 10.70 to the                  Company’s                  Annual Report on Form 10-KSB filed on March 31, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.71  | Waiver,                  dated March 31, 2003, by and among the Company, Willey Brothers                  and CMII                  (incorporated by reference to Exhibit 10.71 to the Company’s Annual Report                  on Form 10-KSB filed on March 31, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.72  | Form                  of Stock Option Agreement dated as of March 25, 2003 between the                  Company                  and each of Chet Borgida, Kenneth Csaplar, Richard Levy, Jeffrey                  Adam                  Lipsitz and Anthony van Daalen (incorporated by reference to Exhibit                  10.1                  to the Company’s Report on Form 10-Q filed May 15,                  2003).                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.73  | Employee                  Stock Option Agreement dated as of March 25, 2003 between the Company                  and                  Edward T. Stolarski (incorporated by reference to Exhibit 10.2                  to the                  Company’s Report on Form 10-Q filed May 15, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.74  | Employee                  Stock Option Agreement dated as of March 25, 2003 between the Company                  and                  Sharon Burd (incorporated by reference to Exhibit 10.3 to the Company’s                  Report on Form 10-Q filed May 15, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.75  | Agreement                  dated as of May 15, 2003 by and among the Company, Willey Brothers,                  James                  M. Willey, individually and as trustee of the James M. Willey Trust                  - 1995                  and Thomas P. Willey, individually and as trustee of The Thomas                  P. Willey                  Revocable Trust of 1998 (incorporated by reference to Exhibit 10.4                  to the                  Company’s Report on Form 10-Q filed May 15, 2003).                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.76  | Amended                  agreement dated June 16, 2003 by and among the Company, Willey                  Brothers,                  James M. Willey, individually and as trustee of the James M. Willey                  Trust                  - 1995 and Thomas P. Willey, individually and as trustee of The                  Thomas P.                  Willey Revocable Trust of 1998 and Nixon Peabody LLP as Escrow                  Agent,                  amending Agreement, dated as of May 15, 2003, by and among the                  parties                  (incorporated by reference to Exhibit 10.1 to the Company’s Report on Form                  10-Q filed August 26, 2003).                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.77  | Waiver                  dated as of June 30, 2003 by and among the Company, Willey Brothers                  and                  Corporate Mezzanine II, L.P. (incorporated by reference to Exhibit                  10.2 to                  the Company’s Report on Form 10-Q filed August 26,                  2003).                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.78  | Seventh                  Amendment, dated as of August 21, 2003, among Fleet Capital Corporation,                  Willey Brothers, Inc. and the Company (incorporated by reference                  to                  Exhibit 10.3 to the Company’s Report on Form 10-Q filed August 26,                  2003).                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.79  | Eighth                  Amendment, dated as of September 29, 2003, among Fleet Capital                  Corporation, Willey Brothers, Inc. and the Company (incorporated                  by                  reference to Exhibit 99.1 to the Company’s Report on Form 8-K filed                  October 2, 2003 and Exhibit 10.2 to the Company’s Report on Form 10-Q                  filed November 14, 2003).                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.80  | Second                  Amended Agreement dated as of September 15, 2003 by and among the                  Company,                  Willey Brothers, James M. Willey, individually and as trustee of                  the James                  M. Willey Trust - 1995 and Thomas P. Willey, individually and as                  trustee                  of The Thomas P. Willey Revocable Trust of 1998 and Nixon Peabody                  LLP as                  Escrow Agent, amending Agreement, dated as of May 15, 2003, by                  and among                  the parties (incorporated by reference to Exhibit 10.1 to the Company’s                  Report on Form 10-Q filed November 14,                  2003). |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.81  | Letter                  Agreement dated as of September 30, 2003, between and among the                  Company,                  Willey Brothers, Corporate Mezzanine II, L.P. and Fleet Capital                  Corporation, relating to Subordinated Notes and Warrant Purchase                  Agreement, dated October 22, 2001, between the Company, Willey                  Brothers                  and Corporate Mezzanine II, L.P. (incorporated by reference to                  Exhibit                  10.3 to the Company’s Report on Form 10-Q filed November 14,                  2003).                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.82  | Common                  Stock Purchase Warrant, dated October 2, 2003 between the Company                  and                  James F. Brooks (incorporated by reference to Exhibit 10.4 to the                  Company’s Report on Form 10-Q filed November 14, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.83  | Stock                  Option Agreement dated as of October 2, 2003 between the Company                  and James                  F. Brooks (incorporated by reference to Exhibit 10.5 to the Company’s                  Report on Form 10-Q filed November 14, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.84  | Agreement                  effective as of October 15, 2003, between the Company and Anthony                  J.                  Cataldo (incorporated by reference to Exhibit 10.6 to the Company’s Report                  on Form 10-Q filed November 14, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.85  | Termination                  Agreement dated as of January 13, 2003 (delivered October 28, 2003),                  by                  and among the Company, Robert S. Trump, Ronald Nash and the Estate                  of                  Jeffrey Silverman, relating to Stockholders Agreement, dated as                  of                  November 17, 1999, by and among the parties (incorporated by reference                  to                  Exhibit 10.7 to the Company’s Report on Form 10-Q filed November 14,                  2003).                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.86  | Waiver                  dated as of November 6, 2003, by and among the Company, Willey                  Brothers                  and Corporate Mezzanine II, L.P. (incorporated by reference to                  Exhibit                  10.8 to the Company’s Report on Form 10-Q filed November 14,                  2003).                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.87  | Promissory                  Note dated November 7, 2003 in the principal amount of $100,000                  made by                  the Company in favor of Filter International (incorporated by reference                  to                  Exhibit 10.9 to the Company’s Report on Form 10-Q filed November 14,                  2003).                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.88  | Promissory                  Note dated November 7, 2003, in the principal amount $250,000,                  made by the                  Company in favor of Camden International Ltd. (incorporated by                  reference                  to Exhibit 10.10 to the Company’s Report on Form 10-Q filed November 14,                  2003).                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.89  | Employment                  Agreement dated as of November 10, 2003 between the Company and                  James F.                  Brooks (incorporated by reference to Exhibit 10.11 to the Company’s Report                  on Form 10-Q filed November 14, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.90  | Ninth                  Amendment, dated as of November 29, 2003, among Fleet Capital Corporation,                  Willey Brothers and the Company (incorporated by reference to Exhibit                  10.5                  to the Company’s Report on Form 8-K filed February 5,                  2004).                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.91  | Surrender                  Agreement for leasehold at 777 Third Avenue, New York NY, dated                  as of                  January 20, 2004 between the Company and Sage Realty Group as agent                  (incorporated by reference to Exhibit 10.1 to the Company’s Report on Form                  8-K filed February 5, 2004).                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.92  | Settlement                  Agreement dated January 20, 2004 by and among the Company, Willey                  Brothers, James M. Willey, individually and as trustee of the James                  M.                  Willey Trust - 1995 and Thomas P. Willey, individually and as trustee                  of                  The Thomas P. Willey Revocable Trust of 1998 and McLane, Graf,                  Raulerson                  & Middleton, PA as escrow agent, settling obligations under prior                  agreements dated as of May 15, 2003 (incorporated by reference                  to Exhibit                  10.2 to the Company’s Report on Form 8-K filed February 5,                  2004). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.93  | Amendment                  No. 3 and Waiver to Subordinated Note and Warrant Purchase Agreement                  dated                  as of January 7, 2004 between Corporate Mezzanine II, L.P., Willey                  Brothers and the Company (incorporated by reference to Exhibit                  10.3 to the                  Company’s Report on Form 8-K filed February 5, 2004).               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.94  | Amendment                  No. 1 to the Subordinated Note dated as of January 7, 2004 by Willey                  Brothers, Inc. as maker and Corporate Mezzanine II, L.P. as holder                  (incorporated by reference to Exhibit 10.4 to the Company’s Report on Form                  8-K filed February 5, 2004).                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.95  | Unsecured                  Subordinated Promissory Note between the Company and Longview Fund                  L.P.                  dated July 6, 2004 (incorporated by reference to Exhibit 10.1 to                  the                  Company’s Quarterly Report on Form 10-Q filed August 16,                  2004).                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.96  | Common                  Stock Purchase Warrant, dated as of July 6, 2004, between the Company                  and                  Longview Fund L.P. (incorporated by reference to Exhibit 10.2 to                  the                  Company’s Quarterly Report on Form 10-Q filed August 16,                  2004).                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.97  | Amendment                  to Employment Agreement dated as of August 13, 2004 between the                  Company                  and James F. Brooks (incorporated by reference to Exhibit 10.3                  to the                  Company’s Quarterly Report on Form 10-Q filed August 16,                  2004).                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.98  | Amendment                  to Agreement dated August 13, 2004 between the Company and Anthony                  J.                  Cataldo (incorporated by reference to Exhibit 10.4 on the Company’s                  Quarterly Report on Form 10-Q filed August 16, 2004).                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.99  | Agreement                  dated August 16, 2004 between the Company and James F. Brooks                  (incorporated by reference to Exhibit 10.3 on the Company’s Quarterly                  Report on Form 10-Q filed August 16, 2004 (incorporated by reference                  to                  Exhibit 10.22 to the Company’s Annual 10K Report filed on March 25,                  2005). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.100 | Purchase                  and Joinder Agreement with BancRealty Advisors, LLC, dated September                  21,                  2004 (incorporated by reference to Exhibit 10.1 on the Company’s Quarterly                  Report on Form 10-Q filed November 16, 2004).                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.101 | Modification                  Agreement, dated September 29, 2004, between the Company and Longview                  Fund                  L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current                  Report Form 8-K, dated September 30, 2004).                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.102 | Unsecured                  Subordinated $625,000 Promissory Note issued by the Company to                  Longview                  Fund L.P. dated September 29, 2004 (incorporated by reference to                  Exhibit                  10.2 to the Company’s Current Report filed on form 8-K filed September 30,                  2004).                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.103 | Registration                  Rights Agreement entered into September 20, 2004 between the Company                  and                  Longview Fund L.P. (incorporated by reference to Exhibit 10.3 to                  the                  Company’s Current Report filed on Form 8-K filed September 30,                  2004).                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.104 | Tenth                  Amendment dated December 28, 2004 between Bank of America Business                  Capital, Willey Brothers and the Company (incorporated by reference                  to                  Exhibit 10.14 to the Company’s Annual 10K Report filed on March 25,                  2005).                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.105 | Modification                  agreement to Unsecured Subordinated $625,000 Subordinated Promissory                  Note                  dated January 5, 2005 between Longview Fund, L.P. and the Company                  (incorporated by reference to Exhibit 10.15 to the Company’s Annual 10K                  Report filed on March 25, 2005).                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.106 | Form                  of Common Stock Purchase Warrant to be issued in accord with Modification                  Agreement to Unsecured $625,000 Subordinated Note (incorporated                  by                  reference to Exhibit 10.16 to the Company’s Annual 10K Report filed on                  March 25, 2005).                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.107 | Letter                  of Engagement for marketing, financial public relations and investor                  relations services dated as of February 1, 2005 between Trilogy                  Capital                  Partners, Inc. and the Company (incorporated by reference to Exhibit                  10.17                  to the Company’s Annual 10K Report filed on March 25,                  2005).               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.108 | Common                  Stock Purchase Warrant, exercisable at $1.00 issued to Trilogy                  Capital                  Partners(incorporated by reference to Exhibit 10.18 to the Company’s                  Annual 10K Report filed on March 25, 2005).                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.109 | Common                  Stock Purchase Warrant, exercisable at $1.50 issued to Trilogy                  Capital                  Partners (incorporated by reference to Exhibit 10.19 to the Company’s                  Annual 10K Report filed on March 25, 2005).                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.110 | Common                  Stock Purchase Warrant, exercisable at $2.00 issued to Trilogy                  Capital                  Partners (incorporated by reference to Exhibit 10.20 to the Company’s                  Annual 10K Report filed on March 25, 2005).                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.111 | Amendment                  to Employment Agreement dated March 16, 2005 between James F. Brooks                  and                  the Company (incorporated by reference to Exhibit 10.21 to the                  Company’s                  Annual 10K Report filed on March 25, 2005).                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.112 | Amendment                  to Agreement, dated March 16, 2005, between Anthony J. Cataldo                  and the                  Company (incorporated by reference to Exhibit 10.22 to the Company’s                  Annual 10K Report filed on March 25, 2005).                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.113 | Investor                  Relations Consulting Agreement between the Company and Alliance                  Advisors,                  LLC, effective April 3, 2006 (incorporated by reference to Exhibit                  10.1 to                  the Company’s report on Form 10-Q filed on May 15,                  2006).                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.114 | Separation                  agreement and release dated August 10, 2006 between the Company                  and                  Anthony J. Cataldo (incorporated by referenced to Exhibit 10.1                  to the                  Company’s report on Form 8-K filed August 10, 2006).                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 14.1   | Code                  of Ethics adopted December 8, 2004 by the Company’s Board of Directors                  (incorporated by reference to Exhibit 99.1 to the Company’s Current Report                  on Form 8-K, dated December 10, 2004).                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 14.2   | Letter                  from Grant Thorton LLP addressed to the Securities and Exchange                  Commission                  in accordance with Item 304(a)(3) of Regulation S-K (incorporated                  by                  reference to Exhibit 16.1 to the Company’s Report on Form 8-K filed April                  17, 2003).                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 16.1   | Letter                  from Goldstein Golub Kessler LLP addressed to the Securities and                  Exchange                  Commission in connection with Item 304(a)(3) of Regulation S-K                  (incorporated by reference to Exhibit 16.1 to the Company’s Report on Form                  8-K filed February 23, 2003).                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 16.2   | Letter                  from Goldstein Golub Kessler LLP dated February 20, 2004 addressed                  to the                  Securities and Exchange Commission in connection with Item 304(a)(3)                  of                  Regulation S-K (incorporated by reference to Exhibit 16.1 to the                  Company’s                  Current Report on Form 8-K filed February 23,                  2004). |

----

|   |                                                                                                                                                                                                                                                                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 16.3   | Resignation                  letter from Goldstein & Morris dated October 20, 2004 (incorporated by                  reference to Exhibit 16.1 to the Company’s Current Report filed on Form                  8-K filed October 22, 2004).                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 16.4   | Letter                  from Goldstein and Morris Certified Public Accountants P.C. addressed                  to                  the Securities and Exchange Commission dated November 23, 2004                  (incorporated by reference to Exhibit 16.1 to the Company’s Current Report                  filed on Form 8-K filed December 1, 2004). |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 16.5   | Letter                  from Michael F. Albanese, CPA, addressed to Securities and Exchange                  Commission in connection with Item 304(a)(3) of Regulation S-K                  (incorporated by reference to Exhibit 16.1 to the Company’s Current Report                  on Form I-K filed April 22, 2005).                               |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 21.1   | List                  of Subsidiaries (incorporated by reference to Exhibit 21.1 to the                  Company’s Annual Report filed on Form 10-K Report filed March 25,                  2005).                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 23.1   | Consent                  of Goldstein and Morris Certified Public Accountants (incorporated                  by                  reference to Exhibit 23.1 to the Company’s Annual Report filed on Form                  10-K for the year ended December 31, 2003).                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 31.1   | Certification                  of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002 (filed herewith)                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 31.2   | Certification                  of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002 (filed herewith)                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 32.1   | Certification                  of Chief Executive Officer and Chief Financial Officer Pursuant                  to 18                  U.S.C. Section 1350, as adopted Pursuant to Section 906 of the                  Sarbanes-Oxley Act of 2002. (filed                  herewith)                                                                            |

----

|                                                                    |                            |
|-------------------------------------------------------------------------|---------------------------------|
| /s/                  James F. Brooks                                    | March                  29, 2007 |
| James                  F. Brooks, Chairman and Chief Executive Officer  |                            |
|                                                                    |                            |
| /s/                  Clifford D. Brune                                  | March                  29, 2007 |
| Clifford                  D. Brune, Director                            |                            |
|                                                                    |                            |
| /s/                  J. Weldon Chitwood                                 | March                  29, 2007 |
| J.                  Weldon Chitwood, Director                           |                            |
|                                                                    |                            |
| /s/                  Richard Levy                                       | March                  29, 2007 |
| Richard                  Levy, Director                                 |                            |
|                                                                    |                            |
| /s/                  Suzanne Verrill                                    | March                  1, 2007  |
| Suzanne                  Verrill, Chief Financial Officer and Secretary |                            |

----

**INDEX        TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                   |   | Page   |
|------------------------------------------------------------------------|--------|--------|
|                                                                   |   |   |
| Report                  of Independent Registered Public Accountants   |   | F-2    |
|                                                                   |   |   |
| Financial                  Statements                                  |   |   |
|                                                                   |   |   |
| Consolidated                  Balance Sheets                           |   | F-3    |
|                                                                   |   |   |
| Consolidated                  Statements of Operations                 |   | F-5    |
|                                                                   |   |   |
| Consolidated                  Statements of Stockholders’ Equity |   | F-6    |
|                                                                   |   |   |
| Consolidated                  Statements of Cash Flows                 |   | F-7    |
|                                                                   |   |   |
| Notes                  to Consolidated Financial Statements            |   | F-8    |

----

**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

|                                                                 |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|
| /s/                   Moore                  Stephens, P.C.     |   |   |   |
| Cranford,                  New JerseyMarch                  22, 2007 |   |   |        |

----

**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

|                                                                      |   |   |   |
|---------------------------------------------------------------------------|--------|--------|--------|
| /s/ Michael                  F. Albanese, C.P.A.                     |   |   |   |
| Parsippany,                  New JerseyFebruary                  25, 2005 |   |   |        |

----

**CONSOLIDATED        BALANCE SHEETS**

|                                                                                        |   |   | December                    31, |        | December                    31, |   |
|---------------------------------------------------------------------------------------------|--------|--------|---------------------------------|-------------|---------------------------------|--------|
|                                                                                        |        |   | 2006                            |        | 2005                            |   |
| ASSETS                                                                                      |   |   |                            |        |                            |   |
|                                                                                        |   |   |                            |        |                            |   |
| Cash                                                                                        |   |   | $                               | 504,684     |                            | $      | 525,665 |   |
| Accounts                    receivable,net of allowance for                                 |   |   |                            |        |                            |   |   |   |
| doubtful                    accounts of $360,000 and $414,598                          |   |   |                            | 6,863,811   |                            |   | 6,924,612 |   |
| Costs                    and estimated earnings in excess of billings                       |   |   |                            | 1,929,933   |                            |   | 1,567,239 |   |
| Inventories,                    net                                                         |   |   |                            | 768,395     |                            |   | 651,143 |   |
| Prepaid                    expenses and other current assets                                |   |   |                            | 353,171     |                            |   | 336,393 |   |
|      Total                    current assets                       |   |   |                            | 10,419,994  |                            |   | 10,005,052 |   |
|                                                                                        |   |   |                            |        |                            |   |   |   |
| Property                    and equipment, net                                              |   |   |                            | 1,373,733   |                            |   | 1,599,465 |   |
| Goodwill                                                                                    |   |   |                            | 24,271,969  |                            |   | 24,271,969 |   |
| Deferred                    financing costs                                                 |   |   |                            | 115,358     |                            |   | 193,255 |   |
| Other                    assets                                                             |   |   |                            | 325,441     |                            |   | 306,294 |   |
|                                                                                        |   |   |                            |        |                            |   |   |   |
|      Total                    assets                               |   |   | $                               | 36,506,495  |                            | $      | 36,376,035 |   |
|                                                                                        |   |   |                            |        |                            |   |   |   |
| LIABILITIES                    AND STOCKHOLDERS' EQUITY                                     |   |   |                            |        |                            |   |   |   |
|                                                                                        |   |   |                            |        |                            |   |   |   |
| Current                    liabilities                                                      |   |   |                            |        |                            |   |   |   |
| Accounts                    payable and accrued expenses                               |   |   | $                               | 7,775,189   |                            | $      | 7,344,764 |   |
| Billings                    in excess of cost and estimated earnings                   |   |   |                            | 4,354,739   |                            |   | 2,237,249 |   |
| Short                    term debt                                                     |   |   |                            | 729,692     |                            |   | 666,667 |   |
|      Total                    current liabilities                  |   |   |                            | 12,859,620  |                            |   | 10,248,680 |   |
|                                                                                        |   |   |                            |        |                            |   |   |   |
| Long                    term debt, net of current maturities                                |   |   |                            | 6,451,766   |                            |   | 6,740,267 |   |
|                                                                                        |   |   |                            |        |                            |   |   |   |
| Stockholders'                    equity                                                     |   |   |                            |        |                            |   |   |   |
| Preferred                    stock, $.01 par value; 20,000,000 shares                  |   |   |                            |        |                            |   |   |   |
|  authorized;                    none outstanding.                                      |   |   |                            | -           |                            |   | - |   |
| Common                    stock, $.01 par value; 100,000,000 shares                    |   |   |                            |        |                            |   |   |   |
|   authorized;                    issued 34,923,359 and 34,255,597                 |   |   |                            | 349,234     |                            |   | 342,554 |   |
| Additional                    paid in capital                                          |   |   |                            | 45,133,635  |                            |   | 44,999,810 |   |
| Accumulated                    deficit                                                 |   |   |                            | (28,025,117 | )                               |   | (25,700,726 | ) |
| Other                    Comprehensive Income                                               |   |   |                            |        |                            |   |   |   |
| Foreign                    currency adjustment                                         |   |   |                            | 49,857      |                            |   | 57,951 |   |
| Treasury                    stock, at cost                                                  |   |   |                            | (312,500    | )                               |   | (312,500 | ) |
|                                                                                        |   |   |                            |        |                            |   |   |   |
|      Total                    stockholders' equity                 |   |   |                            | 17,195,109  |                            |   | 19,387,089 |   |
|                                                                                        |   |   |                            |        |                            |   |   |   |
|      Total                    liabilities and stockholders' equity |   |   | $                               | 36,506,495  |                            | $      | 36,376,035 |   |

| *The                    accompanying notes are an integral part of these financial                    statements.*  |
|--------------------------------------------------------------------------------------------------------------------------|

----

**CONSOLIDATED        STATEMENTS OF OPERATIONS**

|                                                                          |   | December                    31, |       | December                    31, |   | December                    31, |   |
|-------------------------------------------------------------------------------|--------|---------------------------------|------------|---------------------------------|--------|---------------------------------|--------|
|                                                                          |   | 2006                            |       | 2005                            |   | 2004                            |   |
|                                                                          |   |                            |       |                            |   |                            |   |
|                                                                          |   |                            |       |                            |   |                            |   |
| Revenues                                                                      |   | $                               | 52,476,383 |                            | $      | 52,036,057                      |   | $ | 50,612,819 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
| Costs                    and expenses                                         |   |                            |       |                            |   |                            |   |   |   |   |
| Cost                    of revenues                                           |   |                            | 42,306,432 |                            |   | 37,298,018                      |   |   | 35,017,272 |   |
| Selling,                    general and administrative                        |   |                            | 10,992,878 |                            |   | 11,152,475                      |   |   | 9,472,529 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
|     Total                    expenses                     |   |                            | 53,299,310 |                            |   | 48,450,493                      |   |   | 44,489,801 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
|     Operating                    income (loss)            |   |                            | (822,927   | )                               |   | 3,585,564                       |   |   | 6,123,018 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
| Other                    income (expense)                                     |   |                            |       |                            |   |                            |   |   |   |   |
| Interest,                    net                                              |   |                            | (1,501,464 | )                               |   | (1,064,244                      | )      |   | (988,676 | ) |
| Gain                    on forgiveness of debt                                |   |                            | -          |                            |   | -                               |   |   | 9,085,285 |   |
|     Total                    other income (expense)  |   |                            | (1,501,464 | )                               |   | (1,064,244                      | )      |   | 8,096,609 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
| Income                    (loss) from continuing operations                   |   |                            | (2,324,391 | )                               |   | 2,521,320                       |   |   | 14,219,627 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
| Provision                    for income taxes                                 |   |                            | -          |                            |   | 606,511                         |   |   | - |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
| **NET                    INCOME (LOSS)**                                      |   | $                               | (2,324,391 | )                               | $      | 1,914,809                       |   | $ | 14,219,627 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
| Basic                    and diluted earnings (loss) per share                |   |                            |       |                            |   |                            |   |   |   |   |
| Basic                                                                         |   | $                               | (0.07      | )                               | $      | 0.06                            |   | $ | 0.47 |   |
| Diluted                                                                       |   | $                               | (0.07      | )                               | $      | 0.05                            |   | $ | 0.39 |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
|                                                                          |   |                            |       |                            |   |                            |   |   |   |   |
| Weighted                    - average shares outstanding                      |   |                            |       |                            |   |                            |   |   |   |   |
| Basic                                                                         |   |                            | 34,923,262 |                            |   | 34,660,397                      |   |   | 30,390,636 |   |
| Diluted                                                                       |   |                            | 34,923,262 |                            |   | 40,898,154                      |   |   | 36,474,663 |   |

| *The                    accompanying notes are an integral part of these                    statements.* |
|----------------------------------------------------------------------------------------------------------|

----

**CONSOLIDATED        STATEMENTS OF STOCKHOLDERS’**

|                                                    |   | Common                    Stock |         | Additional                   |   |                                    |   |             |         | Accum.             |   | Treasury                    Stock |   |   |         |
|---------------------------------------------------------|--------|---------------------------------|--------------|------------------------------|--------|------------------------------------|--------|-------------|--------------|--------------------|--------|-----------------------------------|--------|--------|--------------|
|                                                    |   | Shares                          |         | Par                    Value |   | Paid                    in Capital |   | Comp.Income |         | AccumulatedDeficit |   | Comp.Income                       |   | Shares |         | $ |   | Total |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |
| Balance                    at December 31, 2003         |   |                            | 18,163,553   |                         | $      | 181,636                            |   | $           | 40,634,822   |               |   |                              |   |   | ($41,835,162 | ) |   |   |   |   | (100,000 | ) |   | ($312,500 | ) |   | ($1,331,204 | ) |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                    issued in private placement   |   |                            | 12,400,001   |                         | $      | 124,000                            |   | $           | 2,771,000    |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 2,895,000 |   |
| Shares                    issued for debt               |   |                            | 1,550,000    |                         | $      | 15,510                             |   | $           | 789,490      |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 805,000 |   |
| Shares                    issued for services           |   |                            | 32,000       |                         | $      | 1,330                              |   | $           | 16,029       |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 17,359 |   |
| Options/warrants                    exercised           |   |                            | 352,043      |                         | $      | 2,500                              |   | $           | 73,370       |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 75,870 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                    issued in connection with   |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| extension                    of debt maturity           |   |                            |         |                         |   |                               |   | $           | 105,000      |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 105,000 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options/warrants                    issued for services |   |                            |         |                         |   |                               |   | $           | 73,470       |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 73,470 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    income                           |   |                            |    |                         |   |                          |   |        |    |               | $      | 14,219,627                        |   | $      | 14,219,627   |   |   |    |   |   |    |   |   |    |   | $ | 14,219,627 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                    at December 31, 2004         |   |                            | 32,497,597   |                         | $      | 324,976                            |   | $           | 44,463,181   |               | $      | 14,219,627                        |   |   | ($27,615,535 | ) |   |   |   |   | (100,000 | ) |   | ($312,500 | ) | $ | 16,860,122 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options/warrants                    exercised           |   |                            | 1,757,800    |                         | $      | 17,578                             |   | $           | 372,962      |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 390,540 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                    issued in connection with   |   |                            |         |                         |   |                               |   | $           | 163,667      |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 163,667 |   |
| extension                    of debt maturity           |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                    income                 |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign                    currency adjustment          |   |                            |         |                         |   |                               |   |        |         |               | $      | 57,951                            |   |   |         |   | $ | 57,951 |   |   |   |   |   |   |   | $ | 57,951 |   |
| Net                    income                           |   |                            |    |                         |   |                          |   |        |    |               | $      | 1,914,809                         |   | $      | 1,914,809    |   |   |    |   |   |    |   |   |    |   | $ | 1,914,809 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                    at December 31, 2005         |   |                            | 34,255,397   |                         | $      | 342,554                            |   | $           | 44,999,810   |               | $      | 16,192,387                        |   |   | ($25,700,726 | ) | $ | 57,951 |   |   | (100,000 | ) |   | ($312,500 | ) | $ | 19,387,089 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                    issued for legal services     |   |                            | 9,500        |                         | $      | 95                                 |   | $           | 3,610        |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 3,705 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                    issued for services           |   |                            | 120,000      |                         | $      | 1,200                              |   | $           | 45,600       |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 46,800 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                    issued as part of             |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| severance                    agreement                  |   |                            | 538,462      |                         | $      | 5,385                              |   | $           | 84,615       |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   | $ | 90,000 |   |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                    income                 |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign                    currency adjustment          |   |                            |         |                         |   |                               |   |        |         |               |   | ($8,094                           | )      |   |         |   |   | ($8,094 | ) |   |   |   |   |   |   |   | ($8,094 | ) |
| Net                    (loss)                           |   |                            |         |                         |   |                               |   |        |         |               |   | ($2,324,391                       | )      |   | ($2,324,391  | ) |   |   |   |   |   |   |   |   |   |   | ($2,324,391 | ) |
|                                                    |   |                            |         |                         |   |                               |   |        |         |               |   |                              |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                    at December 31, 2006         |   |                            | 34,923,359   |                         | $      | 349,234                            |   | $           | 45,133,635   |               | $      | 13,859,902                        |   |   | ($28,025,117 | ) | $ | 49,857 |   |   | (100,000 | ) |   | ($312,500 | ) | $ | 17,195,109 |   |

| *The                    accompanying notes are an integral part of these                    statements.* |
|----------------------------------------------------------------------------------------------------------|

----

**CONSOLIDATED        STATEMENT OF CASH FLOWS**

|                                                                                                                                                       |   | December                    31, |       | December                    31, |   | December                    31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|---------------------------------|--------|---------------------------------|--------|
|                                                                                                                                                       |   | 2006                            |       | 2005                    *       |   | 2004                    *       |   |
| Cash                    flows from operating activities                                                                                                    |   |                            |       |                            |   |                            |   |
| Net                    income (loss)                                                                                                                       |   | $                               | (2,324,391 | )                               | $      | 1,914,809                       |   | $ | 14,219,627 |   |
| Adjustments                    to reconcile net income (loss) to net cash provided by (used                    in) operating                    activities |   |                            |       |                            |   |                            |   |   |   |   |
| Depreciation                    and amortization                                                                                                           |   |                            | 854,080    |                            |   | 711,770                         |   |   | 620,269 |   |
| Forgiveness                    of long term debt                                                                                                           |   |                            | -          |                            |   | -                               |   |   | (9,085,285 | ) |
| Provision                    for doubtful accounts                                                                                                         |   |                            | (54,598    | )                               |   | 273,259                         |   |   | (44,991 | ) |
| Non-cash                    compensation                                                                                                                   |   |                            | 140,505    |                            |   | 167,167                         |   |   | 90,860 |   |
| Allowance                    for obsolete inventory                                                                                                        |   |                            | (19,588    | )                               |   | (35,251                         | )      |   | (290,927 | ) |
| Non-cash                    interest expense                                                                                                               |   |                            | -          |                            |   | -                               |   |   | 105,000 |   |
| Gain                    (loss) on disposal of assets                                                                                                       |   |                            | (2,383     | )                               |   | 2,955                           |   |   | - |   |
| Changes                    in operating assets and liabilities                                                                                             |   |                            |       |                            |   |                            |   |   |   |   |
| Accounts                    receivable                                                                                                                     |   |                            | 115,399    |                            |   | (2,118,204                      | )      |   | 921,934 |   |
| Costs                    and estimated earnings in excess of billings                                                                                      |   |                            | (362,694   | )                               |   | (487,724                        | )      |   | 775,371 |   |
| Inventories                                                                                                                                                |   |                            | (97,664    | )                               |   | 711,050                         |   |   | (66,995 | ) |
| Prepaid                    expenses and other current assets                                                                                               |   |                            | (16,778    | )                               |   | 354,765                         |   |   | (149,523 | ) |
| Other                    assets                                                                                                                            |   |                            | (19,147    | )                               |   | (12,476                         | )      |   | - |   |
| Accounts                    payable and accrued expenses                                                                                                   |   |                            | 430,430    |                            |   | 1,382,051                       |   |   | (587,807 | ) |
| Other                    current liabilities                                                                                                               |   |                            | -          |                            |   | -                               |   |   | (1,600,848 | ) |
| Billings                    in excess of costs and estimated earnings                                                                                      |   |                            | 2,117,490  |                            |   | (2,492,412                      | )      |   | (1,603,574 | ) |
| Net                    cash provided by operating activities                                                                                               |   |                            | 760,661    |                            |   | 371,759                         |   |   | 3,303,111 |   |
| Cash                    flows (used in) investing activities                                                                                               |   |                            |       |                            |   |                            |   |   |   |   |
| Purchase                    of Membership Interest                                                                                                         |   |                            | -          |                            |   | -                               |   |   | (250,000 | ) |
| Acquisition                    of equipment                                                                                                                |   |                            | (548,072   | )                               |   | (692,668                        | )      |   | (546,886 | ) |
| Net                    cash (used in) investing activities                                                                                                 |   |                            | (548,072   | )                               |   | (692,668                        | )      |   | (796,886 | ) |
| Cash                    flows (used in) financing activities                                                                                               |   |                            |       |                            |   |                            |   |   |   |   |
| Net                    borrowings on short term debt                                                                                                       |   |                            | 63,025     |                            |   | (3,378,564                      | )      |   | (959,778 | ) |
| Net                    borrowings on long term debt                                                                                                        |   |                            | (288,501   | )                               |   | 931,074                         |   |   | (2,083,190 | ) |
| Proceeds                    from exercise of options                                                                                                       |   |                            | -          |                            |   | 390,540                         |   |   | 73,370 |   |
| Proceeds                    from private placement of equity, net of costs                                                                                 |   |                            | -          |                            |   | -                               |   |   | 2,895,000 |   |
| Net                    cash (used in) financing activities                                                                                                 |   |                            | (225,476   | )                               |   | (2,056,950                      | )      |   | (74,598 | ) |
| NET                    INCREASE (DECREASE) IN CASH                                                                                                         |   |                            | (12,887    | )                               |   | (2,377,859                      | )      |   | 2,431,627 |   |
| Effect                    of exchange rates on cash and equivalents                                                                                        |   |                            | (8,094     | )                               |   | 57,951                          |   |   | - |   |
| Cash,                    beginning of periods                                                                                                              |   |                            | 525,665    |                            |   | 2,845,573                       |   |   | 413,946 |   |
| Cash,                    end of periods                                                                                                                    |   | $                               | 504,684    |                            | $      | 525,665                         |   | $ | 2,845,573 |   |
| Supplemental                    disclosures of cash flow information:                                                                                      |   |                            |       |                            |   |                            |   |   |   |   |
| Cash                    paid during the period for interest *                                                                                              |   | $                               | 709,331    |                            | $      | 620,209                         |   | $ | 796,399 |   |
| Cash                    paid during the period for taxes                                                                                                   |   | $                               | 236,179    |                            | $      | 363,101                         |   | $ | - |   |

| *The                    accompanying notes are an integral part of the financial                    statements.* |
|------------------------------------------------------------------------------------------------------------------|
|                                                                                                             |
| *                    *Reclassified                    for comparative purposes*                                  |   |   |   |   |   |   |   |   |   |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        A - NATURE OF BUSINESS AND BASIS OF PRESENTATION**

| BrandPartners                    Retail, Inc. | “Brand                    Retail”   |
|-----------------------------------------------|-------------------------------------------------|
| Grafico,                    Incorporated      | “Grafico”                           |
| Building                    Partners, Inc.    | “Build                    Partners” |
| BrandPartners                    Europe, Ltd. | “Brand                    Europe”   |

| ·   | Strategic                  retail positioning and branding |
|--------------------|------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Environmental                  design and construction services |
|--------------------|-----------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Retail                  merchandising analysis, display systems, and                  signage |
|--------------------|-----------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Point-of-sale                  communications and marketing                  programs |
|--------------------|---------------------------------------------------------------------------------------|

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

|  | 1. | *Principles                  of Consolidation* |
|--|----|------------------------------------------------|

*Consolidation        of Variable Interest Entities, and Interpretation of ARB No. 51,*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 2. | *Revenue                  Recognition* |
|--|----|----------------------------------------|

|  | 3. | *Cash                  and Cash Equivalents* |
|--|----|----------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 4. | *Inventorie**s* |
|--|----|-----------------|

|                              |   | 2006   |    | 2005   |   |
|-----------------------------------|--------|--------|---------|--------|--------|
|                              |   |   |    |   |   |
| Finished                    goods |   | $      | 488,954 |   | $      | 458,087 |   |
| Raw                    Material   |   | $      | 270,197 |   | $      | 186,825 |   |
| Work-in-Process                   |   | $      | 9,244   |   | $      | 6,231 |   |
|                              |   |   |    |   |   |   |   |
|                              |   | $      | 768,395 |   | $      | 651,143 |   |

|  | 5. | *Property                  and Equipment* |
|--|----|-------------------------------------------|

*Accounting        for Costs of Computer Software Developed or Obtained for Internal        Use*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 6. | *Goodwill                  and Deferred Financing Costs* |
|--|----|----------------------------------------------------------|

*Goodwill        and Other Intangible Assets*

|  | 7. | *Impairment                  of Long-Lived Assets and Long-Lived Assets to be Disposed                  Of.* |
|--|----|--------------------------------------------------------------------------------------------------------------|

|  | 8. | *Warranty                  Costs* |
|--|----|-----------------------------------|

|  | 9. | *Income                  Taxes* |
|--|----|---------------------------------|

|  | 10. | * Fair                  Value of Financial Instruments* |
|--|-----|--------------------------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - **
**SUMMARY        OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 11. | * Income                  (Loss) Per Share* |
|--|-----|--------------------------------------------------|

|  | 12. | * Derivative                  Instruments and Hedging                  Activities* |
|--|-----|-----------------------------------------------------------------------------------------|

*Accounting        for Derivative Instruments and Hedging Activities*

|  | 13. | *Concentration                  of Credit Risk* |
|--|-----|-------------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 14. | * Stock-Based                  Compensation* |
|--|-----|---------------------------------------------------|

*Accounting        for Stock Issued to Employees*
*Share-Based        Payment*

*hare-based        Payment.*

*Accounting        for Stock Issued to Employees.*

*Accounting        for Equity Instruments That Are Issued to Other Than Employees for Acquiring        or        in Conjunction with Selling Goods or Services.*
*Issues        Related to the Accounting for Stock Compensation, *

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 15. | * Use                  of Estimates* |
|--|-----|-------------------------------------------|

| ·   | Reported                  amounts of assets and liabilities |
|--------------------|-------------------------------------------------------------|

| ·   | Disclosure                  of contingent assets and liabilities at the date of the financial                  statements |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | Revenues                  and expenses during the reporting                  period |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | Collectibility                  of accounts receivable |
|--------------------|--------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Realizability                  of goodwill and other intangible                  assets |
|--------------------|-----------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Costs                  to complete engagements |
|--------------------|------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Accruals |
|--------------------|----------|

|   |   |
|--------|--------|

| ·   | Income                  taxes |
|--------------------|-------------------------------|

|   |   |
|--------|--------|

| ·   | Other                  factors |
|--------------------|--------------------------------|

|  | 16. | * Long-Lived                  Assets* |
|--|-----|--------------------------------------------|

*Accounting        for the Impairment or Disposal of Long-Lived Assets.*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 17. | *Recently                  Issued Accounting Standards* |
|--|-----|---------------------------------------------------------|

*Accounting        for Certain Hybrid Financial Instruments, *
*Accounting        for Derivative Instruments and Hedging Activities,*
*Accounting        for Transfers and Servicing of Financial Assets and Extinguishments of        Liabilities.*

*Accounting        for the Servicing of Financial Assets,*

*Accounting        for Uncertainty in Income Taxes - an interpretation of FASB Statement No.        109.*
*Accounting        for Income Taxes*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

*Fair        Value Measurements*
*Disclosures        about Fair Value of Financial Instruments*
*Accounting        for Certain Investments*
*Accounting        for Certain Investments Held by Not-for-Profit Organizations*
*Accounting        for Derivative Instruments and Hedging Activities.*

*The        Fair Value Option for Financial Assets and Financial Liabilities - Including        an        Amendment of FASB Statement No. 115.*

| 1.   | Recognized                  financial assets and financial liabilities except                  for: |
|----------------|-----------------------------------------------------------------------------------------------------|

| a.   | An                  investment in a subsidiary that the entity is required to                  consolidate |
|----------------|------------------------------------------------------------------------------------------------------------|

| b.   | An                  interest in a variable interest entity that the entity is required                  to                  consolidate |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Employees’                  and plans’ obligations for pension benefits, other postretirement                  benefits, post-employment benefits, employee stock option and stock                  purchase plans, and other forms of deferred compensation                  arrangements. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | d. | Financial                    assets and financial liabilities recognized under leases as defined                    in                    FASB Statement No. 13, *Accounting                    for Leases.* |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | e. | Deposit                    liabilities, withdrawable on demand, of banks, savings and loan                    associates, credit unions, and other similar depository                    institutions. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | f. | Financial                    instruments that are in whole, or in part, classified by the                    user as a                    component of shareholders’equity. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | Firm                    commitments that would otherwise not be recognized at inception                    and that                    involve only financial                    instruments. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | Nonfinancial                    insurance contracts and warranties that the insurer can settle                    by paying a                    third party to provide those goods or                    services. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 4. | Host                    financial instruments resulting from separation of an embedded                    nonfinancial derivative instrument from a nonfinancial hybrid                    instrument. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 1. | May                    be applied instrument by instrument, with a few exceptions, such                    as                    investments other wise accounted for by the equity                    method |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | Is                    irrevocable (unless a new election date                    occurs) |
|--|----|------------------------------------------------------------------------------------------|

|  | 3. | Is                    applied only to entire instruments and not to portions of                    instruments |
|--|----|----------------------------------------------------------------------------------------------------------------|

|  | 18. | * Accounts                    Receivable* |
|--|-----|------------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|  | 19. | * Translation                    of Foreign Currency* |
|--|-----|------------------------------------------------------------|

**NOTE        C - ADOPTION OF SFAS NO. 142, **
***GOODWILL        AND OTHER INTANGIBLE ASSETS***

*Business        Combinations,*
*Goodwill        and Other Intangible Assets*

| ·   | All                  business combinations initiated after June 30, 2001 must use the                  purchase                  method of accounting. The pooling of interest method of accounting                  is                  prohibited except for transactions initiated before July 1,                  2001. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Intangible                  assets acquired in a business combination must be recorded separately                  from                  goodwill if they arise from contractual or other legal rights or                  are                  separable from the acquired entity and can be sold, transferred,                  licenses,                  rented or exchanged, either individually or as part of a related                  contract,                  asset or liability; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Goodwill,                  as well as intangible assets with indefinite lives, acquired after                  June                  30, 2001, are not amortized. Effective January 1, 2002, all previously                  recognized goodwill and intangible assets with indefinite lives                  are no                  longer be subject to amortization; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Effective                  January 1, 2002, goodwill and intangible assets with indefinite                  lives are                  to be tested for impairment annually and whenever there is an impairment                  indicated; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | All                  acquired goodwill must be assigned to reporting units for purposes                  of                  impairment testing and segment                  reporting. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        D - ACQUISITIONS AND SUBSIDIARIES**

*BRANDPARTNERS        RETAIL, INC.*

| Total                    purchase cost                          |   | $      | 33,144,938 |   |
|-----------------------------------------------------------------|--------|--------|------------|--------|
| Fair                    value of net assets acquired            |   |   | 6,134,704  |   |
|                                                            |   |   |       |   |
| Excess                    of cost over fair value of net assets |   |   |       |   |
| acquired                    allocated to goodwill               |   | $      | 27,010,234 |   |

*GRAFICO        INCORPORATED*

*BUILDING        PARTNERS, INC.*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        D - ACQUISITIONS AND SUBSIDIARIES (continued)**

*BRANDPARTNERS        EUROPE, LTD.*

*RISK*

**NOTE        E - INVESTMENT IN UNCONSOLIDATED AFFILIATE**

**NOTE        F - GAIN ON FORGIVENESS OF DEBT**

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        G - LEASE SETTLEMENT**

| Upon                    signing of the agreement |   | $      | 500,000 |   |
|--------------------------------------------------|--------|--------|---------|--------|
| March                    1, 2004                 |   |   | 100,000 |   |
| September                    1, 2004             |   |   | 100,000 |   |
| February                    24, 2005             |   |   | 100,000 |   |
|                                             |   |   |    |   |
|                                             |   | $      | 800,000 |   |
|                                             |   |   |    |   |

**NOTE        H - PROPERTY AND EQUIPMENT**

|                                                         |   | 2006   |       | 2005   |   |
|--------------------------------------------------------------|--------|--------|------------|--------|--------|
|                                                         |   |   |       |   |   |
| Computer                      equipment and software         |   | $      | 3,480,561  |   | $      | 3,297,785 |   |
| Furniture,                      fixtures and other equipment |   |   | 1,727,423  |   |   | 1,509,511 |   |
| Leasehold                      improvements                  |   |   | 790,553    |   |   | 776,437 |   |
| Assets                      in progress                      |   |   | 105,015    |   |   | 35,628 |   |
|                                                         |   |   | 6,103,552  |   |   | 5,619,361 |   |
|                                                         |   |   |       |   |   |   |   |
| Less                      accumulated depreciation           |   |   | (4,729,819 | )      |   | (4,019,896 | ) |
|                                                         |   |   |       |   |   |   |   |
|                                                         |   | $      | 1,373,733  |   | $      | 1,599,465 |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        I - COSTS AND BILLINGS ON UNCOMPLETED CONTRACTS**

|                                                                    |   | 2006   |       | 2005   |   |
|-------------------------------------------------------------------------|--------|--------|------------|--------|--------|
|                                                                    |   |   |       |   |   |
| Costs                      and estimated earnings in excess of billings |   | $      | 1,929,933  |   | $      | 1,567,239 |   |
|                                                                    |   |   |       |   |   |   |   |
| Billings                      in excess of costs and estimated earnings |   |   | (4,354,739 | )      |   | (2,237,249 | ) |
|                                                                    |   |   |       |   |   |   |   |
|                                                                    |   | $      | (2,424,806 | )      | $      | (670,010 | ) |
|                                                                    |   |   |       |   |   |   |   |

**NOTE        J - SHORT TERM DEBT**

|                                                  |   | 2006   |    | 2005   |   |
|-------------------------------------------------------|--------|--------|---------|--------|--------|
|                                                  |   |   |    |   |   |
| Current                    portion long term debt (1) |   | $      | 666,667 |   | $      | 666,667 |   |
| Line                    of credit (1)                 |   |   | -       |   |   | - |   |
| Capital                    lease, current portion (2) |   |   | 21,525  |   |   | - |   |
| Put                    warrant (3)                    |   |   | 41,500  |   |   | - |   |
|                                                  |   |   |    |   |   |   |   |
|                                                  |   | $      | 729,692 |   | $      | 666,667 |   |

| (1)   | On                  May 5, 2005, the Company negotiated a credit facility (the “Facility”)                  with a commercial lender. The Facility provides for the                  following: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $2,000,000                  Term Loan, requiring 36 equal monthly                  payments |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | $5,000,000                  Revolving Line of Credit |
|--------------------|------------------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        J - SHORT TERM DEBT (continued)**

| ·   | Prime                  Interest Rate on Term Loan principal not subject to the LIBOR                  rate |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | Prime                  Rate interest plus 25 basis points (0.25%) on Revolving Line of                  Credit                  Loan principal not subject to the LIBOR                  rate |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | LIBOR                  rate equals LIBOR plus 275 basis points                  (2.75%) |
|--------------------|-----------------------------------------------------------------------------------------|

| (2)   | The                  current portion of a capital lease obligation, which consists of                  two                  leases. One is for equipment, and the other lease covers a telephone                  system for the Rochester location. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | The                  put warrant is related to the subordinated promissory note in the                  principal amount of $5,000,000, which is discussed further in Note                  L                  (2). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**NOTE        K - CAPITAL LEASES**

|                                             |   | 2006   |    |
|--------------------------------------------------|--------|--------|---------|
|                                             |   |   |    |
| Machinery                    & Equipment     |   | $      | 9,662   |   |
| Office                    equipment              |   |   | 91,521  |   |
|                                             |   |   | 101,183 |   |
| Less                    accumulated depreciation |   |   | (7,895  | ) |
|                                             |   | $      | 93,288  |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        K - CAPITAL LEASES (continued)**

| **Year                    Ending**                         |   |   |    |
|------------------------------------------------------------|--------|--------|---------|
| **December                    31,**                        |   |   |    |
|                                                       |   |   |    |
| 2007                                                       |   | $      | 25,893  |   |
| 2008                                                       |   |   | 25,893  |   |
| 2009                                                       |   |   | 25,591  |   |
| 2010                                                       |   |   | 22,270  |   |
| 2011                                                       |   |   | 14,847  |   |
|                                                       |   |   |    |   |
| Total                    minimum lease payments            |   |   | 114,494 |   |
| Less                    amount representing interest       |   |   | (21,207 | ) |
|                                                       |   |   |    |   |
| Present                    value of minimum lease payments |   | $      | 93,287  |   |
|                                                       |   |   |    |   |

**NOTE        L - UNSECURED SUBORDINATED PROMISSORY NOTE**

*pro-rata*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        M - LONG TERM DEBT**

|                                                 |   | 2006   |      | 2005*  |   |
|------------------------------------------------------|--------|--------|-----------|--------|--------|
|                                                 |   |   |      |   |   |
| Note                    payable (1)                  |   | $      | 944,445   |   | $      | 1,611,111 |   |
| Note                    payable (2)                  |   |   | 5,000,000 |   |   | 5,000,000 |   |
| Put                    warrant liability (2)         |   |   | 41,500    |   |   | 166,000 |   |
| Interest                    payable (2)              |   |   | 1,102,226 |   |   | 629,823 |   |
| Capital                    lease (3)                 |   |   | 93,287    |   |   | - |   |
|                                                 |   |   | 7,181,458 |   |   | 7,406,934 |   |
| Less                    current maturities (1)       |   |   | (666,667  | )      |   | (666,667 | ) |
| Less                    put warrant liability (2)    |   |   | (41,500   | )      |   |   |   |
| Capital                    lease current portion (3) |   |   | (21,525   | )      |   | - |   |
|                                                 |   | $      | 6,451,766 |   | $      | 6,740,267 |   |

| *                             ** | *Reclassified                      for comparative                      purposes.* |
|-------------------------------------------------------------------------------|------------------------------------------------------------------------------------|

| (1)   | See                  Note J |
|-----------------|-----------------------------|

| (2)   | A                  subordinated promissory note in the principal amount of $5,000,000                  was                  issued on October 22, 2001 by an unrelated third party. The note                  bears                  interest at 16% per annum, with 12% payable quarterly in cash and                  4% being                  accreted to the unpaid principal (“PIK amount”). The note matures on                  October 22, 2008, at which time the principal and all PIK amounts                  are due.                  Under the terms of the note, the Company is required to maintain                  certain                  financial covenants and is in compliance as of December 31,                  2006. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Following                  October 22, 2006, the fifth anniversary of the closing                  date; |
|-----------------|----------------------------------------------------------------------------------------------------------|

| (b)   | Repayment                  in full of the aggregate principal amount, together with interest,                  after                  the third anniversary of the closing                  date; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Effective                  declaration by any Holder of the Note that the Note has become                  due and                  payable; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Change                  in control; or |
|-----------------|----------------------------------------|

| (e)   | Sale                  of all or substantially all of the assets of the                  Company. |
|-----------------|--------------------------------------------------------------------------------------------------|

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        M - LONG TERM DEBT (continued)**

| a)   | Interest                  rate of 18% per annum |
|----------------|-------------------------------------------------|

|   |   |
|--------|--------|

| b)   | Due                  and payable on October 22, 2009 |
|----------------|------------------------------------------------------|

|   |   |
|--------|--------|

| c)   | No                  financial covenants |
|----------------|-----------------------------------------|

|                              |   | 2007   |    | 2008   |   |
|-----------------------------------|--------|--------|---------|--------|--------|
|                              |   |   |    |   |   |
| Note                  payable (1) |   | $      | 666,667 |   | $      | 277,777 |   |
| Note                  payable (2) |   |   | -       |   |   | 6,564,899 |   |
|                              |   |   |    |   |   |   |   |
| Totals                            |   | $      | 666,667 |   | $      | 6,842,676 |   |
|                              |   |   |    |   |   |   |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        N - INCOME TAXES (BENEFIT)**

| **Year                    Net Operating****Loss                    Expires** |   |   |      |
|------------------------------------------------------------------------------|--------|--------|-----------|
|                                                                         |   |   |      |
| 2022                                                                         |   | $      | 2,688,022 |   |
| 2023                                                                         |   |   | 3,646,804 |   |
| 2026                                                                         |   |   | 1,306,433 |   |
|                                                                         |   | $      | 7,641,259 |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        O - CONCENTRATIONS**

*Significant        Customers*

*Concentration        of Credit Risk*

**NOTE        P - STOCKHOLDERS’ EQUITY**

*Class        A Convertible Preferred Stock*

*Private        Placement of Equity*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        P - STOCKHOLDERS’ EQUITY (continued)**

*Stock        Options*

| Exercise                  Price Range |   | Outstanding                  as ofDecember                  31, 2006 |       | OutstandingWeighted                  Average Remaining Life (years) |   | OutstandingWeighted                  Average Exercise Price |   | Exercisable                  as of December                  31, 2006 |   |
|---------------------------------------|--------|----------------------------------------------------------------------|------------|---------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|                                  |   |                                                                 |       |                                                                |   |                                                        |   |                                                                  |   |
| $0.00                  to $0.50       |   |                                                                 | 7,644,000  |                                                                |   | 2.45                                                        |   | $                                                                     | 0.34   |   |   | 7,644,000 |   |
| $0.51                  to $0.99       |   |                                                                 | 6,139,667  |                                                                |   | 2.20                                                        |   | $                                                                     | 0.58   |   |   | 6,139,667 |   |
| $1.00                  to $1.99       |   |                                                                 | 56,549     |                                                                |   | 3.10                                                        |   | $                                                                     | 1.00   |   |   | 56,549 |   |
|                                  |   |                                                                 |       |                                                                |   |                                                        |   |                                                                  |   |   |   |   |   |
|                                  |   |                                                                 | 13,840,216 |                                                                |   |                                                        |   |                                                                  |   |   |   | 13,840,216 |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        P - STOCKHOLDERS’ EQUITY (continued)**

| (1)   | Average                  expected volatility of 191% and                  348% |
|-----------------|--------------------------------------------------------------------------------|

| (2)   | Average                  risk-free interest rate of 4.51% and                  3.70% |
|-----------------|--------------------------------------------------------------------------------------|

| (3)   | Expected                  lives of five years |
|-----------------|-----------------------------------------------|

*hare-Based        Payment.*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        P - STOCKHOLDERS’ EQUITY (continued)**

|                                                      |   |             |       | Weighted-Average                  |   |
|-----------------------------------------------------------|--------|------------------|------------|-----------------------------------|--------|
|                                                      |   | Warrants/Options |       | Exercise                    Price |   |
|                                                      |   |             |       |                              |   |
| Outstanding                    at December 31, 2004       |   |             | 19,001,327 |                              | $      | 1.69 |   |
| Granted                                                   |   |             | 3,646,667  |                              | $      | 0.57 |   |
| Exercised                                                 |   |             | (1,804,000 | )                                 | $      | 0.22 |   |
| Forfeited                                                 |   |             | (1,600,874 | )                                 | $      | 2.77 |   |
|                                                      |   |             |       |                              |   |   |   |
| Outstanding                    at December 31, 2005       |   |             | 19,243,120 |                              | $      | 1.69 |   |
| Granted                                                   |   |             | 0          |                              |   |   |   |
| Exercised                                                 |   |             | 0          |                              |   |   |   |
| Forfeited                                                 |   |             | (5,402,904 | )                                 | $      | 2.23 |   |
|                                                      |   |             |       |                              |   |   |   |
| Outstanding                    at December 31, 2006       |   |             | 13,840,216 |                              |   |   |   |
|                                                      |   |             |       |                              |   |   |   |
|                                                      |   |             |       |                              |   |   |   |
| Weighted-average                    fair value of options |   |             |       |                              |   |   |   |
| and                    warrants granted during the year:  |   |             |       |                              |   |   |   |
|                                                      |   |             |       |                              |   |   |   |
| December                    31, 2004                      |   |             |       |                              | $      | 1.28 |   |
| December                    31, 2005                      |   |             |       |                              | $      | 0.57 |   |
| December                    31, 2006                      |   |             |       |                              | $      | 0.00 |   |
|                                                      |   |             |       |                              |   |   |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        P - STOCKHOLDERS’ EQUITY (continued)**

**NOTE        Q - STOCK BASED COMPENSATION**

*Accounting        for Stock Issued to Employees, *

*Share-Based        Payment.*

*Accounting        for Stock Issued to Employees.*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        Q - STOCK BASED COMPENSATION (continued)**

|                                       |   | Year                    Ended December 31, |   |
|--------------------------------------------|--------|--------------------------------------------|--------|
|                                       |   | 2005                                       |   | 2004 |   | 2003 |   | 2002 |   | 2001 |   |
|                                       |   |                                       |   |   |   |   |   |   |   |   |   |
| Dividend                    Yield          |   |                                       | 0      | % |   | 0 | % |   | 0 | % |   | 0 | % |   | 0 | % |
| Expected                    Volatility     |   |                                       | 191.00 | % |   | 348.00 | % |   | 194.89 | % |   | 125.88 | % |   | 119.05 | % |
| Risk                    Free Interest Rate |   |                                       | 4.51   | % |   | 3.70 | % |   | 3.04 | % |   | 4.69 | % |   | 3.77 | % |
| Expected                    life (years)   |   |                                       | 5      |   |   | 5 |   |   | 5 |   |   | 5                    and 8 |   |   | 5 |   |

|                                                    |   | **2001** |       | **2002** |   | **2003**    |   | **2004** |        | **2005** |   |
|---------------------------------------------------------|--------|----------|------------|----------|--------|-------------|--------|----------|-------------|----------|--------|
|                                                    |   |     |       |     |   |        |   |     |        |     |   |
| Net                  income (loss), as reported         |   | $        | (9,489,559 | )        | $      | (11,972,547 | )      | $        | (10,964,062 | )        | $      | 14,219,617 |   | $ | 1,914,809 |   |
| Total                  stock-based employee             |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
| compensation                  expense determined        |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
| under                  fair value based method for      |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
| all                  awards, net of related tax effects |   |     | (34,128    | )        |   | (15,355     | )      |     | (180,871    | )        |   | (399,067 | ) |   | (304,531 | ) |
| Pro                  Forma net income (loss)            |   | $        | (9,523,687 | )        | $      | (11,987,902 | )      | $        | (11,144,933 | )        | $      | 13,820,550 |   | $ | 1,610,278 |   |
|                                                    |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
| Weighted                  average shares outstanding    |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
|  Basic                                             |   |     | 13,951,398 |     |   | 18,437,942  |   |     | 18,468,553  |     |   | 30,390,636 |   |   | 33,109,064 |   |
|  Diluted                                           |   |     | 13,951,398 |     |   | 18,437,942  |   |     | 18,468,553  |     |   | 36,474,663 |   |   | 46,266,873 |   |
|                                                    |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
| Net                  income (loss) per share            |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
| As                  reported                       |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
|  Basic                                             |   |     | ($0.68     | )        |   | ($0.65      | )      |     | ($0.59      | )        | $      | 0.47 |   | $ | 0.06 |   |
|  Diluted                                           |   |     | ($0.68     | )        |   | ($0.65      | )      |     | ($0.59      | )        | $      | 0.39 |   | $ | 0.04 |   |
| Pro                  forma                         |   |     |       |     |   |        |   |     |        |     |   |   |   |   |   |   |
|  Basic                                             |   |     | ($0.68     | )        |   | ($0.65      | )      |     | ($0.60      | )        | $      | 0.45 |   | $ | 0.05 |   |
|  Diluted                                           |   |     | ($0.68     | )        |   | ($0.65      | )      |     | ($0.60      | )        | $      | 0.38 |   | $ | 0.03 |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        Q - STOCK BASED COMPENSATION (continued)**

*pro        forma*

**NOTE        R - EMPLOYEE BENEFIT PLANS**

**NOTE        S - COMMITMENTS AND CONTINGENCIES**

*Backlog*

*Employment        Agreements*

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        S - COMMITMENTS AND CONTINGENCIES (continued)**

*Leases*

|                                         |   | RentalCommitments |      |
|----------------------------------------------|--------|-------------------|-----------|
| Years                    Ending December 31, |   |              |      |
| 2007                                         |   | $                 | 720,747   |   |
| 2008                                         |   |              | 755,745   |   |
| 2009                                         |   |              | 788,799   |   |
| 2010                                         |   |              | 705,915   |   |
| 2011                                         |   |              | 474,989   |   |
|                                         |   | $                 | 3,446,195 |   |

|                                         |   | Operating                    LeaseCommitments |    |
|----------------------------------------------|--------|-----------------------------------------------|---------|
| Years                    Ending December 31, |   |                                          |    |
| 2007                                         |   | $                                             | 136,219 |   |
| 2008                                         |   |                                          | 129,306 |   |
| 2009                                         |   |                                          | 88,979  |   |
| 2010                                         |   |                                          | 12,684  |   |
| 2011                                         |   |                                          | 728     |   |
|                                         |   |                                          |    |   |
|                                         |   | $                                             | 367,916 |   |

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        T - RELATED PARTY TRANSACTIONS**

**NOTE        U - SUPPLEMENTAL CASH FLOW INFORMATION**

**NOTE        V - SUBSEQUENT EVENTS**

----

**BrandPartners        Group, Inc. and Subsidiaries**

**NOTE        W - QUARTERLY RESULTS (unaudited)**

|                                                           |   | December                  31, 2006 |       |
|----------------------------------------------------------------|--------|------------------------------------|------------|
|                                                           |   | March                  31          |       | June                  30 |   | September                  30 |   | December                  31 |   |
|                                                           |   |                               |       |   |   |   |   |   |   |
| Revenue                                                        |   | $                                  | 11,092,862 |   | $ | 12,908,402 |   | $ | 13,528,194 |   | $ | 14,946,925 |   |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Cost                  of Goods                                 |   |                               | 9,521,434  |   |   | 9,552,781 |   |   | 10,459,009 |   | $ | 12,742,563 |   |
| Selling,                  general & administrative expense |   |                               | 2,554,975  |   |   | 2,632,337 |   |   | 2,650,193 |   | $ | 3,185,840 |   |
| Total                  expenses                                |   |                               | 12,076,409 |   |   | 12,185,118 |   |   | 13,109,202 |   |   | 15,928,403 |   |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Operating                  income (loss)                       |   |                               | (983,547   | ) |   | 723,284 |   |   | 418,992 |   |   | (981,478 | ) |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Other                  income (expense)                        |   |                               | (341,568   | ) |   | (376,244 | ) |   | (411,664 | ) | $ | (371,988 | ) |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Net                  Income (Loss) Before Income Taxes         |   |                               | (1,325,115 | ) |   | 347,040 |   |   | 7,328 |   |   | (1,353,466 | ) |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Provision                  for Income Taxes                    |   |                               | -          |   |   | - |   |   |   |   |   |   |   |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Net                  Income (Loss)                             |   | $                                  | (1,325,115 | ) | $ | 347,040 |   | $ | 7,328 |   | $ | (1,353,466 | ) |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Per                  share income                              |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Basic                                                          |   | $                                  | (0.04      | ) | $ | 0.01 |   | $ | 0.00 |   | $ | (0.04 | ) |
| Diluted                                                        |   | $                                  | (0.04      | ) | $ | 0.01 |   | $ | 0.00 |   | $ | (0.04 | ) |
|                                                           |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Shares                  used                                   |   |                               |       |   |   |   |   |   |   |   |   |   |   |
| Basic                                                          |   |                               | 34,666,730 |   |   | 34,766,161 |   |   | 34,924,513 |   |   | 35,286,479 |   |
| Diluted                                                        |   |                               | 34,666,730 |   |   | 35,324,827 |   |   | 35,483,179 |   |   | 35,286,479 |   |

|                                                           |   |   | December                  31, 2005    |   |
|----------------------------------------------------------------|--------|--------|---------------------------------------|--------|
|                                                                |   |   | March                  31   |   |   | June                  30 |   |   | September                  30 |   |   | December                  31 |   |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Revenue                                                        |   | $      | 14,568,029                            |   | $ | 12,552,178 |   | $ | 11,885,907 |   | $ | 13,029,943 |   |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Cost                  of Goods                                 |   |   | 9,531,750                             |   |   | 8,893,051 |   |   | 8,639,266 |   | $ | 10,233,951 |   |
| Selling,                  general & administrative expense |   |   | 2,900,738                             |   |   | 2,656,962 |   |   | 2,832,630 |   | $ | 2,762,145 |   |
| Total                  expenses                                |   |   | 12,432,488                            |   |   | 11,550,013 |   |   | 11,471,896 |   |   | 12,996,096 |   |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Operating                  income (loss)                       |   |   | 2,135,541                             |   |   | 1,002,165 |   |   | 414,011 |   |   | 33,847 |   |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Other                  income (expense)                        |   |   | (325,639                              | )      |   | (318,962 | ) |   | (212,289 | ) | $ | (207,354 | ) |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Net                  Income (Loss) Before Income Taxes         |   |   | 1,809,902                             |   |   | 683,203 |   |   | 201,722 |   |   | (173,507 | ) |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Provision                  for Income Taxes                    |   |   | -                                     |   |   | - |   |   | 352,170 |   |   | 254,341 |   |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Net                  Income (Loss)                             |   | $      | 1,809,902                             |   | $ | 683,203 |   | $ | (150,448 | ) | $ | (427,848 | ) |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Per                  share income                              |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Basic                                                          |   | $      | 0.05                                  |   | $ | 0.02 |   | $ | (0.00 | ) | $ | (0.01 | ) |
| Diluted                                                        |   | $      | 0.05                                  |   | $ | 0.02 |   | $ | (0.00 | ) | $ | (0.01 | ) |
|                                                           |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Shares                  used                                   |   |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Basic                                                          |   |   | 33,109,064                            |   |   | 33,775,982 |   |   | 34,240,682 |   |   | 34,660,397 |   |
| Diluted                                                        |   |   | 39,680,204                            |   |   | 45,122,144 |   |   | 34,240,682 |   |   | 34,660,397 |   |

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