UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-KSB





Annual
Report Pursuant to Section 13 or 15 (d)


of
the Securities Exchange Act of 1934





For
the fiscal year ended December 31, 2007


Commission
file number 0-52266





BROWNSHIRE
HOLDINGS, INC.


(Name of
Small Business Issuer in its Charter)








Nevada
            
            20-4617652(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)





660 LaSalle Place, Suite 200, Highland Park,
      Illinois
            
            60035(Address
      of principal executive offices)
            
            (Zip
      Code)





Issuer's
telephone number: (847) 780-1006





Securities
registered under to Section 12(b) of the Exchange
Act:   None





Securities
registered under Section 12(g) of the Exchange Act:  Common Stock, $0.001 par
value


(Title of
class)





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





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





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





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





The
registrant had no revenue for the fiscal year ended December 31,
2007.





The
registrant is unable to determine aggregate market value of the voting and
non-voting common equity held by non-affiliates of the registrant as of December
31, 2007 due to the lack of any current market for or significant trading of its
common equity.





As of
December 31, 2007, there were 10,002,400 shares of registrant's common stock,
$0.001 par value, outstanding.





Documents
incorporated by reference:  None





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













BROWNSHIRE HOLDINGS, INC.


FORM
10-KSB


TABLE
OF CONTENTS





PagePART
      IITEM
      1.
            
            DESCRIPTION OF BUSINESS
            1ITEM
      2.
            
            DESCRIPTION OF PROPERTY
            4ITEM
      3.
            
            LEGAL PROCEEDINGS
            4ITEM
      4.
            
            SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
            4PART
      IIITEM
      5.
            
            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS
            4ITEM
      6.
            
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.
            5ITEM
      7.
            
            FINANCIAL STATEMENTS
            10ITEM
      8.
            
            CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURES
            10ITEM
      8A(T).
            
            CONTROLS AND PROCEDURES
            10ITEM
      8B.
            
            OTHER INFORMATION
            10PART
      IIIITEM
      9.
            
            DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS
      AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT
            11ITEM
      10.
            
            EXECUTIVE COMPENSATION
            12ITEM
      11.
            
            SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT AND RELATED STOCKHOLDER MATTERS
            12ITEM
      12.
            
            CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
      DIRECTOR INDEPENDENCE
            13ITEM
      13.
            
            EXHIBITS
            14ITEM
      14.
            
            PRINCIPAL ACCOUNTANT FEES AND SERVICES
            14SIGNATURES
            
            15INDEX TO FINANCIAL STATEMENTS
            F-1





_____________________







Forward-Looking
Statements




This
Annual Report on Form 10-KSB includes statements that constitute
"forward-looking statements" under the federal securities laws.  These
forward-looking statements often are characterized by the terms "may,"
"believes," "projects," "expects," or "anticipates," and do not reflect
historical facts.  Specific forward-looking statements contained in
this Annual Report include, but are not limited to, (a) our ability to acquire
or to be acquired by an operating company, and (b) our ability to sell or
otherwise derive any revenue from certain software assets that we
own.




Forward-looking
statements involve risks, uncertainties, and other factors that may cause our
actual results, performance or achievements to be materially different from
those expressed or implied by such forward-looking
statements.  Factors and risks that could affect our results and
achievements and cause them to materially differ from those contained in the
forward-looking statements include those identified throughout this Annual
Report, including those factors identified in Part II, Item 6, "Management's
Discussion and Analysis or Plan of Operation – Certain Risk Factors Affecting
Our Business," below, as well as other factors that we currently are unable to
identify or quantify, but that may exist in the future.  In addition,
various risk factors may affect generally our business, results of operations,
and financial position.  Forward-looking statements speak only as of
the date the statement was made.  We do not undertake and specifically
decline any obligation to update any forward-looking statements included in this
Annual Report on Form 10-KSB.




i
 Table of Contents





PART
I




Item 1.
            Description
      of Business.




General




Brownshire
Holdings, Inc. was incorporated on October 16, 2002, in the State of
Nevada.  Our company is the successor to Gateway Data Sciences
Corporation ("GDSC") pursuant to a reorganization under Chapter 11 of the United
States Bankruptcy Code ("Chapter 11") that was approved by the United States
Bankruptcy Court in December 2002.




Our
company has assets of nominal value and no revenue.  We are a "shell
company" as defined pursuant to Rule 12b-2 under the Securities Exchange Act of
1934 (the "Exchange Act").  We intend to seek to acquire the assets or
voting securities of one or more other companies that are actively engaged in a
business that generates revenues in exchange for securities of our company, or
to be acquired by such a company.  As of the date of this Annual
Report, we have not identified a particular acquisition target or entered into
any negotiations regarding any such acquisition.




Our
company currently intends to remain a shell company until a merger or
acquisition is consummated.  We currently anticipate that our
company's cash requirements will be minimal until we complete such a merger or
acquisition and that our directors, officers, controlling stockholder, or their
affiliates will provide the financing that may be required for our limited
operations prior to completing such a transaction.  We currently have
no employees.  Our directors and officers have agreed to allocate a
portion of their time to the activities of our company, without cash
compensation.  Our directors and officers anticipate that we can
implement our business plan by devoting a portion of their available time to our
business affairs.




Background




Formation
and Early History of GDSC




GDSC was
founded as an Arizona corporation in 1985, and GDSC initially conducted business
as a systems integrator in the IBM midrange computer market.  GDSC's
initial business strategy was to combine IBM midrange computer systems
(initially System/36 and System/38, and later the AS/400) with off-the-shelf
software products and consulting services to deliver a complete "turnkey"
solution to customers' business automation problems.  GDSC's
consulting services included custom software modifications, software
implementation services, and training.




In 1991,
GDSC began developing its own software products.  Due to its heritage
in supporting IBM platforms, GDSC focused on the IBM AS/400 and the IBM 46XX
family of retail store systems products.  Over the next few years,
GDSC gradually narrowed its software focus, reduced the number of third-party
software products that it resold and the breadth of its customer industry
coverage, and increased its portfolio of, and focus on, its own software
products.  During the early and mid-1990s, GDSC engaged in custom
software development projects and expanded its line of systems products to
include specialized peripherals required for its projects in retail store
operations and warehouse automation.  GDSC also continued to provide
complete turnkey systems to its customers when requested.




GDSC's
revenues fluctuated as its mix of products and services shifted.  In
the early 1990s, GSDC was selected by IBM as one of only three development
partners for IBM's advanced, next-generation object-oriented retail
point-of-sale system, known as StorePlace.  GDSC's customers at that
time included TJ Maxx, The Disney Store, Authentic Fitness (Speedo), Ingram
Micro-D, Allergan International, Illinois Consolidated Telephone Company,
Brookstone, ZCMI, and Allen Edmonds Shoe Corporation.




1
 Table of Contents




GDSC's
Business After 1996




GDSC
completed its initial public offering on the Nasdaq National Market System in
March 1996, raising approximately $7.0 million at a share price of
$6.75.  Shortly before its public offering, GDSC's management decided
to transition away from reselling equipment and to adopt a more traditional
software company business model.  Under this model, GDSC expected that
revenue from equipment sales would decrease while revenue from software license
fees and consulting services would increase, which would result in an
anticipated decrease in total revenue but an overall increase in gross margins,
operating margins, and net margins.  GDSC's management expected that
as it completed this transition, the equity markets would reward GDSC with a
price-to-earnings multiple more in line with those typical of growing software
companies.  In conjunction with GDSC's shift to a more traditional
software company model, GDSC's management expected that its reseller agreement
with IBM would not be renewed at its expiration in July 1997.  This
strategy change was disclosed in GDSC's filings with the Securities and Exchange
Commission.




In
January 1997, GDSC introduced its next-generation point of sale system, the
Transact(TM) Point-of-Sale System ("Transact"), based on the Java programming
language and environment.  Other software developed by GDSC in 1996
and 1997 included a retail customer relationship management product called
MarketBuilder(TM) Relationship and Database Marketing System ("MarketBuilder"),
which was announced in January 1997 as a C++ product for Unix and Windows NT,
and then re-announced as a Java and web-based system in May 1997.  By
the end of 1997, GDSC also had developed MPower(TM) software, a retailing
management system designed to work with AS/400 products
("MPower").  Transact, MarketBuilder, the Gift Registry(TM) System
("Gift Registry"), and MPower are collectively referred to in this Registration
Statement as the "GDSC Software."  During 1997, GDSC ceased marketing
all but one of its AS/400-based software products, the Kinetics(TM) warehouse
management system ("Kinetics"), and sharply reduced development resources
committed to vendor-specific technologies.




GDSC's
financial position worsened throughout 1997.  In April 1997, GDSC's
principal lender declared GDSC in default of the collateral requirements of its
$3.0 million revolving credit facility.  The credit facility was
secured by a blanket lien in substantially all of GDSC's
assets.  GDSC's financial situation deteriorated sharply when the
company became involved in litigation with a significant customer in June
1997.  The customer refused to make payments totaling $3.8 million,
which GDSC claimed had become due under its contract with the
customer.  As anticipated, GDSC's reseller agreement with IBM
terminated in July 1997, which adversely affected GDSC's revenue stream and
working capital position.  In August 1997, GDSC laid off nearly 25% of
its employees, canceled plans to occupy a new headquarters facility, negotiated
deferred payment terms with major trade creditors, and began seeking new equity
financing.




In
January 1998, GDSC sold its Kinetics software for $500,000 and used the net
proceeds to pay its secured lender.  Unable to continue to operate or
to raise capital, GDSC's Board of Directors authorized it to file a Chapter 11
bankruptcy petition on February 23, 1998.




Bankruptcy
Proceedings




On
February 23, 1998, GDSC filed a voluntary petition under Chapter 11 in the
United States Bankruptcy Court for the District of Arizona (Case No.
B-98-02021-PHX-JMM).  On June 19, 1998, the Bankruptcy Court entered
an order that directed the immediate appointment of an independent Chapter 11
Trustee with full powers (the "Trustee").  Between June 1998 and March
2002, the Trustee (a) liquidated certain of GDSC's assets and used the proceeds
to satisfy certain claims against GDSC; (b) managed various litigation matters
involving GDSC and its affiliates; and (c) participated with various creditors
of GDSC and other interested parties to draft, negotiate, and finalize a plan of
reorganization.  The Trustee submitted a plan of reorganization to the
Court on March 22, 2002 (the "Plan"), which was approved and mailed to GDSC's
creditors and stockholders on June 26, 2002.  The Trustee filed a
motion to modify the Plan on November 6, 2002.  The Bankruptcy Court
confirmed the modified Plan by order dated December 5, 2002.  The
substantive provisions of the Plan were as follows:




·
            Certain
      outstanding litigation involving GDSC's former directors and officers, the
      insurance company that issued GDSC's director and officer insurance
      policy, and third parties was settled pursuant to a "Global Settlement
      Agreement."




2
 Table of Contents





·
            A
      pool of assets was created as the sole source of all cash payments and
      distributions to be made to holders of certain allowed
      claims.  This "creditors' pool" was funded with the
      following:




o
            cash
      paid by a new stockholder group known as GDSC Acquisitions,
      LLC;




o
            a
      cash payment by GDSC's former Chief Executive Officer and
      President;




o
            a
      cash payment by the insurance company pursuant to the Global Settlement
      Agreement described above;




o
            the
      stock of GDSC's wholly owned subsidiaries and a minority interest in
      another company;




o
            cash
      in possession or control of the Trustee;
and




o
            certain
      other assets.




The
creditors' pool of assets was or will be used to satisfy any claims against GDSC
that were not transferred to our company, as described below.




·
            As
      of the effective date of the Plan, (i) GDSC was reconstituted as our
      company; (ii) all of the assets of GDSC (including the GDSC Software),
      other than the creditors' pool, vested in our company; (iii) all equity
      interests in GDSC were cancelled and our company issued 500,120 shares of
      its common stock to the former stockholders of GDSC; and (iv) our company
      issued 9,502,280 shares of common stock to GDSC Acquisitions,
      LLC.  As a result, immediately following the
      reorganization:




o
            our
      company's assets consisted primarily of (1) a litigation claim receivable
      associated with GDSC's ongoing litigation with a former customer, and (2)
      the GDSC Software; and




o
            our
      company's liabilities consisted primarily of accounts payable related to
      the litigation claim receivable.




Settlement
of Litigation




On
February 23, 2005, we settled all of our outstanding litigation claims and
counterclaims with the former customer of GDSC.  Under the terms of
the settlement, the customer paid our company $2,750,000.  We used the
proceeds of this settlement to pay a total of approximately $1,705,000 in legal
fees and other expenses incurred in connection with the settlement and other
related litigation.  In 2005 and 2006 we distributed approximately
$1.0 million of the litigation proceeds as a dividend to our
stockholders.




Software
Assets and Proprietary Rights




After the
Bankruptcy Court approved the Plan in December 2002, we attempted to resume
development of our software products, especially Transact and MarketBuilder, and
to reintroduce these products to the market.   Our efforts in
this area included attempts to partner with other companies in the retail
software industry.  Due to our limited financial resources and the
amount of time and effort consumed by the post-confirmation litigation with the
former customer of GDSC, however, we were not successful in these
efforts.  After the settlement of the litigation, we determined that
our company would be better served by acquiring an operating company and we
ceased our efforts to reintroduce our software products. We currently are not
making any effort to develop, commercialize, sell, or license these assets. We
may from time to time in the future explore opportunities to sell or develop,
commercialize, and license the software assets if we identify such opportunities
or if third parties approach us with such opportunities. We can provide no
assurance, however, that we will ever derive meaningful revenue from these
assets in the future.




We
consider our software to be proprietary and we have attempted to protect it with
a combination of copyright, trademark, and trade secret laws, nondisclosure and
other contractual agreements with former employees and third parties, and
technical measures designed to protect our proprietary
technology.  Despite these precautions, however, there can be no
assurance that the steps we have taken in the past or that we may take in the
future will be adequate to prevent misappropriation of our proprietary rights or
that third parties will not independently develop equivalent or superior
technology.




3
 Table of Contents




Employees




We
currently have no employees.  Our executive officers serve on a
part-time, as needed basis without cash compensation.  We currently do
not anticipate that we will have any employees until we acquire, or are acquired
by, an operating company.




Item 2.
            Description
      of Property.




Our
offices currently are housed within the offices of Norman S. Lynn, our Vice
President, Secretary, Treasurer, and a director of our company.  See
Part III, Item 12, "Certain Relationships and Related Transactions, and Director
Independence."




Item3.
            Legal
      Proceedings.




Not
applicable.




Item
      4.
            Submission
      of Matters to a Vote of Security
Holders.





Not
applicable.




PART
II




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




Our
company's common stock has never been listed or traded on any securities
exchange or trading market.  GDSC was delisted from the Nasdaq
National Market System in October 1997.  Information regarding trading
in GDSC's common stock has been limited for the two years ended December 31,
2007 due to the delisting from Nasdaq and discontinuance of reporting on GDSC's
common stock on the over-the-counter market.




Record
Holders




As of
December 31, 2007, there were 10,002,400 shares of common stock outstanding and
142 holders of record of our common stock.




Dividends




On
February 23, 2005, we settled certain litigation with a former customer of GDSC
for $2,750,000.  Our company received $1,045,000 of the settlement
proceeds after paying expenses associated with the
litigation.  Effective February 28, 2005, our Board of Directors
declared a dividend of $0.10 per share to all holders of our common stock on
March 1, 2005.  This represented an aggregate dividend of
approximately $1.0 million, to be paid from the proceeds of the litigation
settlement.  In May 2005, we distributed $950,228 to GDSC
Acquisitions, LLC, in connection with this dividend.  In July 2006, we
distributed $50,012 to our remaining stockholders in connection with this
dividend.




We may
pay dividends in the future on our common stock if, as, and when declared by our
Board of Directors out of funds legally available therefor.  The
current policy of our Board of Directors is to retain any available earnings for
use in the recapitalization and expansion of our business.  Therefore,
the payment of cash dividends on our common stock is unlikely in the foreseeable
future.  Any future determination to pay cash dividends will be at the
discretion of the Board of Directors and will depend upon our company's
earnings, capital requirements, financial condition, and any other factors
deemed relevant by the Board of Directors.




4
 Table of Contents




Recent
Sales of Unregistered Securities




On
September 28, 2006, our company issued warrants to acquire an aggregate of
500,000 shares of common stock to our directors and officers.  See
Item 10, "Executive Compensation."  We issued the warrants pursuant to
the exemption from registration provided by Rule 701 under the Securities Act of
1933, as amended.




Equity
Compensation Plan Information




We
currently do not maintain any equity compensation plans and there are no shares
of common stock currently authorized for issuance under any equity compensation
plans.  On September 28, 2006, our company issued warrants to acquire
an aggregate of 500,000 shares of common stock to our directors and
officers.  See Item 10, "Executive Compensation."  The
issuance of warrants to our directors and officers was not approved by our
stockholders.




Item
      6.
              Management's
      Discussion and Analysis or Plan of
Operation.


This
Management's Discussion and Analysis or Plan of Operation is presented to assist
in understanding our financial condition for the fiscal years ended December 31,
2007 and 2006.  You should read our audited financial statements for
the years ended December 31, 2007 and 2006, including the related notes thereto,
beginning on page F-1 of this Annual Report in conjunction with this
Management's Discussion and Analysis or Plan of Operation.  In
particular, you should read Note 3 to our audited financial statements for a
description of our significant accounting policies.  This discussion
contains predictions, estimates, and other forward-looking statements that
involve a number of risks and uncertainties, including those discussed elsewhere
in this Annual Report.  These risks could cause our actual results to
differ materially from those anticipated in these forward-looking
statements.




Plan
of Operation




As a
shell company, we currently have no operations and nominal
assets.  Nevertheless, we believe we possess a stockholder base that
will make us an attractive merger or acquisition candidate to an operating
privately held company seeking to become publicly held.  We intend to
locate and combine with an existing privately held company that has profitable
operations or, in our management's view, potential for earnings and appreciation
of value of its equity securities, irrespective of the industry in which it is
engaged.  A combination may be structured as a merger, consolidation,
exchange of our common stock for stock or assets of the operating company, or
any other form that will result in the combined companies becoming an operating
publicly held corporation.  We have not identified a particular
acquisition target as of the date of filing of this Annual Report, and we
currently are not engaged in any negotiations regarding such an
acquisition.  We intend to provide our stockholders with complete
disclosure documentation concerning the structure of a proposed business
combination prior to consummation of such a transaction.




We intend
to remain a shell company until a merger or acquisition is consummated, and we
anticipate that our cash requirements will be minimal during that time
frame.  We do not anticipate that we will have to raise equity capital
during the next 12 months.  One of the minority members of our
controlling stockholder provided the financing that we required to successfully
settle the lawsuit with the former customer of GDSC.  Subsequent to
the settlement of that litigation, our officers and our controlling stockholder
have provided financing for our limited operating expenses, which consist
primarily of legal, accounting, and related expenses to enable us to prepare and
file our reports with the Securities and Exchange Commission, or
"SEC."  See Item 12, "Certain Relationships and Related Transactions,
and Director Independence."  We currently anticipate that our
directors, officers, controlling stockholder, and/or their affiliates in the
future will provide the financing that may be required for our limited
operations prior to the time that we complete a merger or acquisition
transaction.  We also anticipate that such financing will be in the
form of loans to our company that will have to be repaid or refinanced in
connection with a merger or acquisition transaction.  Our directors,
officers, controlling stockholder, and their affiliates, however, are under no
obligation to provide us with any amount of financing or to continue to provide
financing to our company if they provide financing to us at a given time or from
time to time.  Accordingly, we cannot provide any assurance that we
will have access to a sufficient amount of capital to enable us to seek and
locate a merger or acquisition candidate or to successfully negotiate and
consummate a merger or acquisition transaction.




5
 Table of Contents





Pending
negotiation and consummation of a business combination, we anticipate that we
will have, aside from carrying on our search for a combination partner, no
business activities and, accordingly, we will have no source of
revenue.  Should we incur any significant liabilities prior to a
combination with a private company, we may not be able to satisfy such
liabilities as they are incurred.  If our management pursues one or
more combination opportunities beyond the preliminary negotiations stage and
those negotiations are subsequently terminated, it is possible that such efforts
will exhaust our ability to continue to seek such combination opportunities
before any successful combination can be consummated.




In our
pursuit for a business combination partner, our management intends to consider
only combination candidates that are profitable or, in management's view, have
growth potential.  Our management does not intend to pursue any
combination proposal beyond the preliminary negotiation stage with any
combination candidate that does not furnish us with audited financial statements
for its historical operations or that cannot demonstrate to our management's
satisfaction that it can furnish audited financial statements in a timely
manner.  We may engage attorneys and accountants to investigate a
combination candidate and to consummate a business combination.  We
may require payment of fees by such merger candidate to fund all or a portion of
such expenses.  We may incur enhanced risks that any combined business
combination will be unsuccessful to the extent we are unable to obtain the
advice or reports from experts.




We intend
to seek to carry out our business plan as discussed herein.  In order
to do so, we will need to pay ongoing expenses, including particularly legal and
accounting fees incurred in conjunction with future compliance with our ongoing
reporting obligations under the Exchange Act.  Except as described
above, we currently do not intend to raise funds, either debt or equity, from
investors while our company is a shell company, and we currently do not intend
to borrow any funds from third parties to make any payments to our management or
affiliates.




We have
no employees and do not expect to hire any prior to effecting a business
combination.  Our officers have agreed to allocate a portion of their
time to our company's activities, without cash compensation.  Our
directors and officers anticipate that our business plan can be implemented by
their devoting a portion of their available time to our business
affairs.




We are
not registered and we do not propose to register as an investment company under
the Investment Company Act of 1940.  We intend to conduct our business
activities so as to avoid application of the registration and other provisions
of the Investment Company Act of 1940 and the related regulations
thereunder.




We have
no operating history (apart from that of our predecessor, GDSC), nominal cash,
no other assets, and our business plan has significant business risks, as
described elsewhere in this Annual Report.  Because of these factors,
our independent registered public accounting firm has issued an audit opinion on
our financial statements that includes a statement that, in our auditor's
opinion, there is substantial doubt about our ability to continue as a going
concern.




Lack
of Revenue




On
February 23, 2005, we settled certain litigation with a former customer of GDSC
for $2,750,000.  After paying expenses related to the litigation, our
company received net proceeds of $1,045,000 from the settlement
amount.  Effective February 28, 2005, our Board of Directors declared
a dividend of $0.10 per share to all holders of our common stock on March 1,
2005.  This represented an aggregate dividend of approximately $1.0
million, which we paid from the proceeds of the litigation
settlement.  In May 2005, we distributed $950,228 to GDSC
Acquisitions, LLC, in connection with this dividend.  In July 2006, we
distributed $50,012 to our remaining stockholders in connection with this
dividend.  Except for the litigation settlement described above, we
have not generated any revenue from any source through December 31,
2007.  We do not expect to generate any measurable revenue within the
foreseeable future and may never be able to do so.





6
 Table of Contents




Results
of Operations – Years Ended December 31, 2007 and 2006




Operating
Expenses




For the
year ended December 31, 2007, operating expenses were $34,557, consisting of
$4,990 in general and administrative expenses and $29,567 in professional fees
($15,402 in accounting fees and $14,165 in legal fees) for services performed
during the period.  For the year ended December 31, 2006, operating
expenses were $75,539, consisting of $19,437 in general and administrative
expenses and $56,102 in professional fees ($25,940 in accounting fees and
$30,162 in legal fees) for services performed during the period.  The
decrease in operating expenses from 2006 to 2007 was due to limited nature of
our company's operations.




Other
Income and Expenses




During
fiscal 2007 and 2006 we recognized interest expense related to the 4.0% Multiple
Advance Credit Note dated February 28, 2005, which was used to finance our
company's working capital needs (see Note 6 to our audited financial
statements). We recognized $2,537 in interest expense for the year ended
December 31, 2007, as compared with interest expense of $1,293 during fiscal
2006.  The increase in interest expense was a result of increased
borrowings under the Multiple Advance Credit Note.




We also
recognized bank interest income of $267 in fiscal 2007, as compared with $1,559
in bank interest income earned during fiscal 2006.  The decrease in
interest income was due to decreased cash held in interest-bearing bank accounts
during 2007.




Net
Loss




Our net
loss for the year ended December 31, 2007 and 2006 was $36,827 and $75,273,
respectively, which resulted in a net loss per share of $0.00 and $0.01,
respectively.




Liquidity
and Capital Resources




Pursuant
to a 4.0% Multiple Advance Credit Note dated February 28, 2005, GDSC
Acquisitions, LLC has agreed to advance our company up to $100,000 to finance
our working capital needs.  GDSC Acquisitions currently owns 95% of
our outstanding common stock.  The promissory note bears interest at
the rate of 4.0% per annum, payable at maturity.  The note matures on
the earlier to occur of (a) a "liquidity event" with respect to our company, as
that term is defined in the note, or (b) February 28, 2009.  In
addition, Norman Lynn, our Vice President and a director of our company,
advanced funds to pay certain of our operating expenses during 2006 and 2007.
Our aggregate outstanding balance of principal and accrued interest under the
promissory note with GDSC Acquisitions and advances by Mr. Lynn was $76,012 at
December 31, 2007.




We
currently have no operations and we anticipate that we will not generate any
revenue until we consummate a business combination.  We will need
funds to support our existing operations and implementation of our plan of
operation and to comply with the periodic reporting requirements of the Exchange
Act.  We believe GDSC Acquisitions, LLC or our directors, officers,
and/or their respective affiliates will provide us with sufficient working
capital for at least the next 12 months to support and preserve the integrity of
our corporate entity, to fund the implementation of our business plan, and to
comply with the periodic reporting requirements of the Exchange
Act.  Those persons, however, are under no obligation to provide
financing to our company and we cannot provide assurance that they will do
so.  If adequate funds are not available to us, we may be unable to
complete our plan of operation.




We have
no current plans, proposals, arrangements or understandings with respect to the
sale or issuance of additional securities prior to the identity of a merger or
acquisition candidate and we do not anticipate that we will incur any
significant debt, other than debt incurred to finance our ongoing expenditures
for legal, accounting, and administrative expenses, prior to the consummation of
a business combination.




7
 Table of Contents




Income
Taxes




As a
shell company that has not generated revenues, we have not earned taxable income
to date.  Therefore no taxation has been paid nor is any payable at
present, and no current provision for taxation is
necessary.  Additionally, we have deferred tax assets primarily
attributed to tax net operating loss carryforwards.  We have reduced
such amounts to zero, however, due to the lack of evidence regarding their
realization.




Off-Balance
Sheet Arrangements




At
December 31, 2007, we did not have any off-balance sheet
arrangements.




Certain
Risk Factors Affecting Our Business




Potential
investors should carefully consider the risks and uncertainties described below
and the other information in this Annual Report before deciding whether to
invest in shares of our common stock.  If any of the following risks
actually occur, our business, financial condition, and results of operations
could be materially and adversely affected.  This could cause the
value of our common stock to decline, with the loss of part or all of an
investment in the common stock.




Our independent
auditors have substantial doubt about our ability to continue as a going
concern.  Since emerging from bankruptcy, we have not generated
any revenue from operations.  Although our historical financial
statements were prepared assuming that we would continue as a going concern, in
the view of our independent auditors there is substantial doubt about our
ability to continue as a going concern.  We cannot predict whether or
when we will ever sell or otherwise derive a meaningful amount of revenue from
the GDSC Software or from any other source.  Since we do not expect to
generate any significant revenues for the foreseeable future, our ability to
continue as a going concern will depend, in large part, on our ability to
acquire or to be acquired by an operating company or otherwise to raise
additional capital through equity or debt financing transactions.  We
currently do not have any readily available source of significant financing
other than our directors and officers, our significant stockholder, GDSC
Acquisitions LLC, and their respective affiliates.  Our financial
statements do not include any adjustments that might result should our company
be unable to continue as a going concern.




Our ability to
generate revenue is uncertain.  Accordingly, potential
investors should evaluate our company in light of the expenses, delays,
uncertainties, and complications typically encountered by early-stage
businesses, many of which will be beyond our control.  These risks
include (a) a lack of sufficient capital, and (b) unanticipated problems,
delays, and expenses relating to acquisitions of other businesses or product
development and implementation.  Our company's historical financial
data are of limited value in anticipating future revenue, capital requirements,
and operating expenses.  Our planned capital requirements and expense
levels will be based in part on our expectations concerning potential
acquisitions, capital investments, and future revenue, all of which are
difficult to forecast accurately due to our company's current stage of
development.  We may be unable to adjust spending in a timely manner
to compensate for any unexpected shortfall in revenue.  Product
development and marketing expenses may increase significantly as we expand
operations.  To the extent that these expenses precede or are not
rapidly followed by a corresponding increase in revenue or additional sources of
financing, our business, operating results, and financial condition may be
materially and adversely affected.




We will face a
variety of risks associated with new business operations that we may acquire or
that may acquire our company in the future.  We cannot provide
assurance that we will be able to




·
            identify
      suitable operating businesses to acquire or that will be able to acquire
      our company;




·
            make
      acquisitions or be acquired on commercially acceptable
    terms;




·
            effectively
      integrate and manage the combined operations of the businesses we acquire
      or that acquire us; or




·
            achieve
      operating and growth strategies with respect to the operating businesses
      that we acquire or that acquire us.




8
 Table of Contents




The
integration of the management, personnel, operations, products, services,
technologies, and facilities of any businesses that we acquire or that acquire
us in the future could involve unforeseen difficulties.  These
difficulties could disrupt ongoing businesses, distract management and
employees, and increase operating expenses, which could have a material adverse
affect on our company's business, financial condition, and operating
results.




If we acquire or
are acquired by an operating company, the persons who control that company will
likely be able to control our company indefinitely.  Generally,
in transactions where a shell company such as our company acquires or is
acquired by an operating company, the persons who own and control the operating
company receive securities that represent a significant majority of our
outstanding voting securities following the acquisition.  As a result,
the owners and management of an operating company that we acquire or that
acquires our company likely will be able to control the management and affairs
of our company and all matters requiring stockholder approval, including the
election of directors and approval of significant corporate transactions, for an
indefinite period of time after the closing of such a
transaction.  This concentration of ownership might adversely affect
the market value of our common stock in the future and the voting and other
rights of our company's other stockholders.




We will face
significant risks if we decide to develop and commercialize the GDSC Software in
the future.  These risks include, but are not limited to, the
following:




·
            We
      would require significant infusions of additional capital to develop and
      commercialize the GDSC Software.




·
            There
      is no assurance that our products and services would work as expected or
      would be accepted in the marketplace, or that we would be able to sustain
      any market acceptance that we do
achieve.




·
            If
      we develop and commercialize the GDSC Software, defects and errors could
      be found in our products or upgrades.  Software defects could
      result in delays in market acceptance or unexpected reprogramming costs,
      which could materially and adversely affect our operating
      results.




·
            Even
      if we successfully develop and commercialize the GDSC Software, we would
      be required to anticipate and respond to rapid technological
      changes.  We may not be successful in developing and marketing
      enhancements or new products and services that respond to competitive and
      technological developments and changing customer needs.  We
      could experience a material adverse effect on our operating results and
      financial condition if the industries in which we compete adopt systems
      and applications different from those used in our products and services,
      if we fail to anticipate or respond adequately to technological
      developments or customer requirements, or if any significant delays in
      product development or introduction
occur.




·
            Our
      software products would likely face stiff
  competition.




·
            We
      may not be able to adequately protect our intellectual property rights,
      prevent our competitors from gaining access to our intellectual property
      and proprietary information, or prevent third parties from infringing or
      misappropriating our proprietary
rights.




There is a
limited market for our company's common stock.  There has been
no active market for our common stock for many years.  We may seek one
or more "market makers" who will make a market in our company's common stock on
the OTC Bulletin Board and we may do other things to enhance the market
liquidity for our common stock.  We cannot provide assurance, however,
that a market for our common stock will ever develop.  Consequently,
an investor may not be able to liquidate an investment in shares of our
company's common stock in the event of an emergency or for any other
reason.  The purchase of our company's common stock, therefore, should
be considered only as a long-term investment.




Our common stock
may be subject to the "penny stock" rules as promulgated under the Exchange
Act.  In the event that no exclusion from the definition of
"penny stock" under the Exchange Act is available, then any broker engaging in a
transaction in our company's common stock will be required to provide its
customers with a risk disclosure document, disclosure of market quotations, if
any, disclosure of the compensation of the broker-dealer and its sales person in
the transaction, and monthly account statements showing the market values of our
company's securities held in the customer's accounts.  The bid and
offer quotation and compensation information must be provided prior to effecting
the transaction and must be contained on the customer's confirmation of
sale.  Certain brokers are less willing to engage in transactions
involving "penny stocks" as a result of the additional disclosure requirements
described above, which may make it more difficult for holders of our company's
common stock to dispose of their shares.




9
 Table of Contents




Item7.
            Financial
      Statements.





The
financial statements included in this report under this item are set forth
beginning on Page F-1 of this report, immediately following the signature
pages.




Item
      8.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosures.




Not
applicable.




Item
      8A(T).
            Controls
      and Procedures.




Disclosure
Controls and Procedures





Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rule 13a-15(3) under the Exchange Act as
of the end of the period covered by this report (the "Evaluation
Date").  Based on this evaluation, our principal executive officer and
principal financial officer concluded as of the Evaluation Date that our
disclosure controls and procedures were effective such that the information
relating to our company required to be disclosed in our reports (i) is recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms and (ii) is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.





Our
management, including our principal executive officer and principal financial
officer, does not expect that our disclosure controls and procedures or our
internal controls will prevent all error and all fraud.  A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are
met.  Further, the design of a control system must reflect the fact
that there are resource constraints and the benefits of controls must be
considered relative to their costs.  Due to the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within our company have
been detected.





Management's
Report on Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act.  Our management assessed the effectiveness of our
internal control over financial reporting as of December 31, 2007.  In
making this assessment, our management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in
Internal Control – Integrated
Framework.  Our management has concluded that, as of December
31, 2007, our internal control over financial reporting is effective based on
these criteria.





Changes
in Internal Control over Financial Reporting





Our
management has also evaluated our internal controls over financial reporting,
and there have been no significant changes in our internal controls or in other
factors that could significantly affect those controls subsequent to the date of
their last evaluation.





Item
      8B.
            Other
      Information.





Not
applicable.




10
 Table of Contents





PART
III




Item
      9.
            Directors,
      Executive Officers, Promoters, Control Persons and Corporate Governance;
      Compliance with Section 16(a) of the Exchange
  Act.




The
following table sets forth certain information regarding our directors and
executive officers:




Name
            Age
            PositionSteven
      A. Rothstein
            57
            President
      and DirectorNorman
      S. Lynn
            57
            Vice
      President, Corporate Secretary, Treasurer, and
  Director





Steven A. Rothstein has
served as President and a director of our company since October
2002.  Mr. Rothstein has been a self-employed consultant since January
2002 and currently serves as an associated person with InterOcean Financial in
Chicago, Illinois.  Mr. Rothstein served as a "non-registered person"
with Gunn Allen Holdings from April 2006 until August 2006.  From
January 2002 until April 2006, Mr. Rothstein held positions as a "registered
person" with National Securities Corporation, Advanced Equities, and Salomon
Grey Financial, as a member of Shampan Lamport Financial, LLC, and as a
"non-registered person" with Skye Holdings.  From 1995 to December
2001, Mr. Rothstein was Chairman of the Board of National Securities Corporation
and Chairman and President of Olympic Cascade Financial Corporation (now known
as National Holdings), which is the parent of National Securities
Corporation.  Mr. Rothstein serves as a director of Vita Foods
Products, Inc., which is listed on the American Stock Exchange.  Mr.
Rothstein was Chairman of the Board of National Securities Corporation, the
underwriter of GDSC's initial public offering ("IPO"), at the time of GDSC's
IPO.  Mr. Rothstein served as a director of GDSC from March 1996 until
June 1998.  Mr. Rothstein is a graduate of Berkshire School in
Sheffield, Massachusetts, and Brown University in Providence, Rhode
Island.




Norman S. Lynnhas served as
Vice President, Secretary, Treasurer, and a director of our company since
October 2002.  Mr. Lynn also currently serves as the Chief Operating
Officer of N.D. Management Co., Inc., an investment and asset management firm in
Highland Park, Illinois, a position he has held since January
1997.  In addition, Mr. Lynn serves as Manager and General Counsel of
BLN Capital Fundings LLC, and GSL of Ill, LLC, which are commercial finance
companies.  Mr. Lynn also has other part-time business
interests.  Mr. Lynn also is an attorney admitted to practice in the
state of Illinois.




Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Exchange Act requires our directors, executive officers, and
persons who own more than 10% of a registered class of our company's equity
securities to file reports disclosing ownership and changes in ownership with
the SEC.  Based solely on our review of the copies of such forms that
we received during the year ended December 31, 2007, we believe that during such
year our directors, executive officers, and persons who own more than 10% of our
common stock complied with such filing requirements.





Code
of Ethics





Our
company has not yet adopted a code of ethics that applies to our principal
executive officer and principal financial and accounting officer due to (a) our
lack of resources, and (b) the limited nature of our business activities and
financial and accounting transactions.  We intend to adopt a code of
ethics as soon as the size and nature of our company's business activities
dictate that it would be prudent to do so.




Audit
Committee Financial Expert




Our Board
of Directors currently serves as our audit committee although it is not required
to as a result of the fact that our common stock is not considered a "listed
security," as defined in Rule 10A-3 of the Exchange Act.  We have not
identified an "audit committee financial expert," as defined under Item
407(d)(5)(ii) of Regulation S-B.  Once a qualified independent member
of our Board of Directors is retained, we intend to appoint that individual as
our audit committee financial expert.




11
 Table of Contents




Item
      10.
            Executive
      Compensation.




Our
company did not pay any cash compensation to Mr. Rothstein, our President, or
Mr. Lynn, our other executive officer, during 2006 or 2007.  We
currently do not have employment contracts or other compensatory arrangements
with Mr. Rothstein or Mr. Lynn.  On September 28, 2006, our company
granted warrants to acquire 250,000 shares of common stock at an exercise price
of $0.01 per share to each of Messrs. Rothstein and Lynn as compensation for
their services as directors and officers of our company.  The warrants
are fully vested and exercisable and expire on September 28,
2016.   Except for those warrants, as of December 31, 2007, there
were no outstanding stock options and no long-term incentive plans or pension
plans were in effect with respect to any of our officers or
directors.  We also did not pay any cash compensation to Mr. Rothstein
or Mr. Lynn for their services as directors of our company during 2006 or
2007.




Item
      11.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.




The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of December 31, 2007, with respect to (a) each
of our directors and executive officers, (b) all of the directors and executive
officers as a group, and (c) any other person known by us to beneficially own
more than five percent of our common stock:




Shares Beneficially OwnedName
            
            Number(1)
            
            
            Percentage(1)Directors
      and Officers:Steven
      A. Rothstein(2)(4)
            
            
            9,677,528
            
            
            
            95.1
            %Norman
      S. Lynn(3)(4)
            
            
            9,752,280
            
            
            
            95.1
            %All
      directors and executive officers as a group (2 persons)
            
            
            9,927,528
            
            
            
            95.2
            %Non-Management
      5% Beneficial Owners:GDSC
      Acquisitions, LLC(4)
            
            
            9,502,280
            
            
            
            95.0
            %


_____________________________





(1)
            The
      numbers and percentages shown include the shares of common stock actually
      owned as December 31, 2007, and the shares of common stock that the
      identified person had the right to acquire within 60 days of such date
      upon the exercise of warrants.  In calculating the percentage of
      ownership, all shares of common stock that the identified person had the
      right to acquire within 60 days of December 31, 2007, upon the exercise of
      warrants are deemed to be outstanding for the purpose of computing the
      percentage of the shares of common stock owned by such person, but are not
      deemed to be outstanding for the purpose of computing the percentage of
      the shares of common stock owned by any other
  person.


(2)
            Represents
      (i) 248 shares of common stock and warrants to acquire 175,000 shares of
      common stock held by Mr. Rothstein, and (ii) 9,502,280 shares held by GDSC
      Acquisitions, LLC. Mr. Rothstein is a managing member of GDSC
      Acquisitions, LLC, and therefore may be deemed to be the beneficial owner
      of shares held by GDSC Acquisitions, LLC.  Mr. Rothstein
      disclaims beneficial ownership of shares held by GDSC Acquisitions, LLC,
      except to the extent of his ownership interest in GDSC Acquisitions,
      LLC.  See footnote 4.  Mr. Rothstein's address is 2737
      Illinois Road, Wilmette, Illinois
60091.


(3)
            Represents
      (i) warrants to acquire 250,000 shares of common stock held by Mr. Lynn,
      and (ii) 9,502,280 shares held by GDSC Acquisitions, LLC. Mr. Lynn is a
      managing member of GDSC Acquisitions, LLC, and therefore may be deemed to
      be the beneficial owner of shares held by GDSC Acquisitions,
      LLC.  Mr. Lynn disclaims beneficial ownership of shares held by
      DGSC Acquisitions, LLC, except to the extent of his ownership interest in
      GDSC Acquisitions, LLC.  See footnote 4.  Mr. Lynn's
      address is 660 LaSalle Place, Suite 200, Highland Park, Illinois
      60035.


(4)
            The
      address of GDSC Acquisitions, LLC is 660 LaSalle Place, Suite 200,
      Highland Park, Illinois 60035.  Each of Steven A. Rothstein and
      Norman S. Lynn owns approximately 19% of the equity interests in GDSC
      Acquisitions, LLC and is a managing member of GDSC Acquisitions,
      LLC.  See Item 12, "Certain Relationships and Related
      Transactions, and Director Independence," below.  Each of
      Messrs. Rothstein and Lynn disclaims beneficial ownership of shares of
      common stock held by GDSC Acquisitions, LLC, except to the extent of his
      respective ownership interest in GDSC Acquisitions,
  LLC.





12
 Table of Contents





Item
      12.
            Certain
      Relationships and Related Transactions, and Director
      Independence.





Certain
Relationships and Related Transactions





Each of
Steven A. Rothstein, our President and one of our directors, and Norman S. Lynn,
our other executive officer and a director, owns approximately 19% of the equity
interests of our majority stockholder, GDSC Acquisitions, LLC, which owns 95% of
our issued and outstanding common stock.  Pursuant to a 4.0% Multiple
Advance Credit Note dated February 28, 2005, GDSC Acquisitions has agreed to
advance our company up to $100,000 to finance our working capital
needs.  The promissory note bears interest at the rate of 4.0% per
annum, payable at maturity.  The note, as amended, matures on the
earlier to occur of (a) a "liquidity event" with respect to our company, as that
term is defined in the note, or (b) February 28, 2009.  In addition,
Norman Lynn, our Vice President and a director of our company, advanced funds to
pay certain of our operating expenses during 2006 and 2007. Our aggregate
outstanding balance of principal and accrued interest under the promissory note
with GDSC Acquisitions and advances by Mr. Lynn was $76,012 at December 31,
2007.




Prior to
the settlement of the litigation with the former customer of GDSC, Thunder Road
Capital, LLC advanced an aggregate of approximately $303,000 on behalf of our
company for various expenses incurred by our company in connection with the
litigation.  Pursuant to an arrangement between Thunder Road and our
company, upon the settlement of the litigation we repaid to Thunder Road the
$303,000 advanced by Thunder Road on behalf of our company and paid to Thunder
Road an additional $225,862 from the settlement proceeds.  Thunder
Road is an affiliate of the former Chief Executive Officer of GDSC and is a
minority member of GDSC Acquisitions, LLC.




Director
Independence




We
currently do not have any independent members on our board of
directors.  We anticipate that, after our company acquires or is
acquired by an operating company, we will seek one or more individuals who
satisfy established criteria for "independence" from our company to serve as
members of our board of directors.  We cannot provide assurance,
however, that we will be able to add members to our board of directors who meet
any standards of "independence" from our company.




13
 Table of Contents





Item
      13.
            Exhibits.




The
following exhibits are filed as part of this Annual Report:




ExhibitNumber
            
            Description3.1
            
            Articles
      of Incorporation of Brownshire Holdings, Inc. (1)3.2
            
            By-Laws
      of Brownshire Holdings, Inc. (1)4.1
            
            Form
      of Stock Certificate (1)4.2
            
            Common
      Stock Purchase Warrant dated September 28, 2006, issued to Steven A.
      Rothstein (1)4.3
            
            Common
      Stock Purchase Warrant dated September 28, 2006, issued to Norman S. Lynn
      (1)10.1
            
            Indemnification
      Agreement dated December 5, 2002, between Brownshire Holdings, Inc. and
      Steven A. Rothstein (1)10.2
            
            Indemnification
      Agreement dated December 5, 2002, between Brownshire Holdings, Inc. and
      Norman S. Lynn (1)10.3
            
            4.0%
      Multiple Advance Credit Note dated February 28, 2005, issued by Brownshire
      Holdings, Inc. in favor of GDSC Acquisitions, LLC in the principal amount
      of $100,000 (1)10.4
            
            Amendment
      No. 1 to 4.0% Multiple Advance Credit Note dated February 28, 2005
      (2)10.5
            
            Amendment
      No. 2 to 4.0% Multiple Advance Credit Note dated February 28,
      200531.1
            
            Section
      302 Certifications of Steven A. Rothstein and Norman S.
    Lynn.32.1
            
            Certifications
      of Steven A. Rothstein and Norman S. Lynn pursuant to 18 U.S.C. Section
      1350.99.1
            
            Trustee's
      Plan of Reorganization dated March 22, 2002 (1)99.2
            
            Order
      Confirming Trustee's Plan of Reorganization dated March 22, 2002
      (1)99.3
            
            Order
      Confirming Trustee's Modified Plan of Reorganization
(1)99.4
            
            Notice
      of Entry of Order Confirming Modified Plan of Reorganization and Notice of
      Effective Date (1)


_____________________


(1)
            Incorporated
      by reference to the corresponding exhibit to the registrant's Form 10-SB
      filed with the Securities and Exchange Commission on October 17, 2006
      (File No. 000-52266).


(2)
            Incorporated
      by reference to Exhibit 10.1 to the registrant's Form 10-QSB for the
      quarter ended March 31, 2007.





Item
      14.
            Principal
      Accountant Fees and Services.




The firm
ofSherb & Co.,
LLP ("Sherb & Co.") audited our consolidated financial statements for the
years ended December 31, 2007 and December 31, 2006.  The following
table sets forth the amounts billed by Sherb & Co. for each of our last two
fiscal years in connection with the following services:





2007
            
            
            2006Audit
      Fees
            
            $
            20,000
            
            
            $
            12,500Audit
      Related Fees
            
            
            --
            
            
            
            --Tax
      Fees
            
            
            --
            
            
            
            --All
      Other Fees
            
            
            --
            
            
            
            --




Audit
fees include fees for services that normally would be provided by the accountant
in connection with statutory and regulatory filings or engagements and that
generally only the independent accountant can provide.  In addition to
fees for an audit or review in accordance with generally accepted auditing
standards, this category contains fees for assistance with and review of
documents filed with the SEC.





Our board
of directors currently performs the duties of an audit committee.  The
Board of Directors evaluates and approves in advance the scope and cost of the
engagement of an auditor before the auditor renders audit and non-audit
services.  We currently do not rely on pre-approval policies and
procedures.




14
 Table of Contents





SIGNATURES





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





BROWNSHIRE
      HOLDINGS, INC.Dated:
      March 31, 2008
            By:
            /s/Steven A.
      RothsteinSteven
      A. RothsteinPresident





In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




Signature
              
              Capacity
              
              Date/s/ Steven A. Rothstein
              
              President
      and Director (Principal
              
              March
      31, 2008Steven
      A. Rothstein
              
              Executive
      Officer)/s/ Norman S. Lynn
              
              Vice
      President, Corporate Secretary,
              
              March
      31, 2008Norman
      S. Lynn
              
              Treasurer,
      and Director (PrincipalFinancial
      and Accounting Officer)




15
 Table of Contents





INDEX
TO FINANCIAL STATEMENTS





PageReport
      of Independent Registered Public Accounting Firm
            F-2Balance
      Sheets as of December 31, 2007 and 2006
            F-3Statements
      of Operations for the years ended December 31, 2007 and
    2006
            F-4Statements
      of Changes in Stockholders' Equity (Deficit) for the years ended December
      31, 2007 and 2006
            F-5Statements
      of Cash Flows for the years ended December 31, 2007 and
    2006
            F-6Notes
      to Financial Statements
            F-7





F-1
 Table of Contents





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the
Board of Directors


Brownshire
Holdings, Inc.


Highland
Park, Illinois








We have
audited the accompanying balance sheets of Brownshire Holdings, Inc. as of
December 31, 2007 and 2006 and the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting.  Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Brownshire Holdings, Inc. as of
December 31, 2007 and 2006 and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has incurred losses from operations of $34,557 and
$75,539, respectively, for the years ended December 31, 2007 and 2006. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regards to these matters are also described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.








/s/
      Sherb & Co., LLPCertified
      Public AccountantsBoca
      Raton, FloridaMarch
      26, 2008





F-2
 Table of Contents





BROWNSHIRE
HOLDINGS, INC.


BALANCE
SHEET


DECEMBER
31, 2007 AND DECEMBER 31, 2006








December
      31,
                    2007
                  
                  
                  December
      31,
                    2006AssetsCash
      and equivalents
                  
                  $
                  3,545
                  
                  
                  $
                  33,934Prepaid
      expenses
                  
                  
                  2,317
                  
                  
                  
                  1,220Total
      current assets
                  
                  
                  5,862
                  
                  
                  
                  35,154Total
      assets
                  
                  $
                  5,862
                  
                  
                  $
                  35,154Liabilities
      and Stockholders' DeficitAccounts
      payable
                  
                  $
                  2,564
                  
                  
                  $
                  17,362Due
      to shareholders
                  
                  
                  76,012
                  
                  
                  
                  53,679Total
      current liabilities
                  
                  
                  78,576
                  
                  
                  
                  71,041Total
      liabilities
                  
                  
                  78,576
                  
                  
                  
                  71,041Preferred
      stock, $0.001 par value, 20,000,000 shares authorized, no shares issued or
      outstanding
                  
                  
                  --
                  
                  
                  
                  --Common
      stock, $0.001 par value, 80,000,000 shares authorized, 10,002,400 shares
      issued and outstanding
                  
                  
                  10,002
                  
                  
                  
                  10,002Additional
      paid-in capital
                  
                  
                  (300,173
                  )
                  
                  
                  (300,173
                  )Retained
      earnings
                  
                  
                  217,457
                  
                  
                  
                  254,284Total
      stockholders' deficit
                  
                  
                  (72,714
                  )
                  
                  
                  (35,887
                  )Total
      liabilities and stockholders' deficit
                  
                  $
                  5,862
                  
                  
                  $
                  35,154




See
accompanying notes to financial statements.





F-3
 Table of Contents





BROWNSHIRE
HOLDINGS, INC.


STATEMENTS
OF OPERATIONS


FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006








Year
      ended December 31,2007
            
            
            2006Net
      revenues
            
            $
            --
            
            
            $
            --Operating
      expenses:General
      and administrative
            
            
            4,990
            
            
            
            19,437Professional
      fees
            
            
            29,567
            
            
            
            56,102Total
      operating expenses
            
            
            34,557
            
            
            
            75,539Operating
      loss
            
            
            (34,557
            )
            
            
            (75,539
            )Other
      income (expense)Interest
      income
            
            
            267
            
            
            
            1,559Interest
      expense
            
            
            (2,537
            )
            
            
            (1,293
            )Total
      other income (expense)
            
            
            (2,270
            )
            
            
            266Loss
      before income taxes
            
            
            (36,827
            )
            
            
            (75,273
            )Income
      tax provision
            
            
            --
            
            
            
            --Net
      loss
            
            $
            (36,827
            )
            
            $
            (75,273
            )Net
      loss per share:Basic
            
            $
            (0.00
            )
            
            $
            (0.01
            )Diluted
            
            $
            (0.00
            )
            
            $
            (0.01
            )Weighted
      average common shares outstanding:Basic
            
            
            10,002,400
            
            
            
            10,002,400Diluted
            
            
            10,002,400
            
            
            
            10,002,400








F-4
 Table of Contents




BROWNSHIRE
HOLDINGS, INC.


STATEMENTS
OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)


FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006








AdditionalCommon
      Stock
                
                
                Paid
      in
                
                
                RetainedShares
                
                
                Amount
                
                
                Capital
                
                
                Earnings
                
                
                TotalBalance
      at December 31, 2005
                
                
                10,002,400
                
                
                $
                10,002
                
                
                $
                (312,073
                )
                
                $
                329,557
                
                
                
                27,486Net
      loss
                
                
                --
                
                
                
                --
                
                
                
                --
                
                
                
                (75,273
                )
                
                $
                (75,273
                )Issuance
      of warrants to officers and directors
                
                
                --
                
                
                
                --
                
                
                
                11,900
                
                
                
                --
                
                
                $
                (11,900
                )Balance
      at December 31, 2006
                
                
                10,002,400
                
                
                $
                10,002
                
                
                $
                (300,173
                )
                
                $
                254,284
                
                
                $
                (35,887
                )Net
      loss
                
                
                --
                
                
                
                --
                
                
                
                --
                
                
                
                (36,827
                )
                
                
                (36,827
                )Balance
      at December 31, 2007
                
                
                10,002,400
                
                
                $
                10,002
                
                
                $
                (300,173
                )
                
                $
                217,457
                
                
                $
                (72,714
                )




See
accompanying notes to financial statements.





F-5
 Table of Contents





BROWNSHIRE
HOLDINGS, INC.


STATEMENTS
OF CASH FLOWS


FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006








Year
      ended December 312007
            
            
            2006CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (36,827
            )
            
            $
            (75,273
            )Stock
      based compensation
            
            
            --
            
            
            
            11,900Changes
      in assets and liabilities:Prepaid
      expenses
            
            
            (1,097
            )
            
            
            (1,220
            )Accounts
      payable
            
            
            (14,798
            )
            
            
            16,162Net
      cash used in operating activities
            
            
            (52,722
            )
            
            
            (48,431
            )CASH
      FLOWS FROM INVESTING ACTIVITIES
            
            
            --
            
            
            
            --CASH
      FLOWS FROM FINANCING ACTIVITIESDue
      to stockholders
            
            
            22,333
            
            
            
            37,605Dividends
      paid
            
            
            --
            
            
            
            (50,012
            )Net
      cash used in financing activities
            
            
            22,333
            
            
            
            (12,407
            )NET
      DECREASE IN CASH AND CASH EQUIVALENTS
            
            
            (30,389
            )
            
            
            (60,838
            )CASH
      AND CASH EQUIVALENTS, beginning of period
            
            
            33,934
            
            
            
            94,772CASH
      AND CASH EQUIVALENTS, end of period
            
            $
            3,545
            
            
            $
            33,934SUPPLEMENTAL
      INFORMATION:Cash
      paid for interest
            
            $
            --
            
            
            $
            --Cash
      paid for interest
            
            $
            --
            
            
            $
            --




See
accompanying notes to financial statements.





F-6
 Table of Contents





NOTES
TO THE FINANCIAL STATEMENTS


OF
BROWNSHIRE HOLDINGS, INC.


DECEMBER
31, 2007





NOTE
1: BACKGROUND AND BASIS OF PRESENTATION




Brownshire
Holdings, Inc., a Nevada corporation (the "Company"), is a holding company with
limited operating activities.  The Company was formerly known as
Gateway Data Sciences Corporation ("GDSC" or the "Predecessor
Company").  In 1998, the Predecessor Company filed a voluntary
petition to reorganize under Chapter 11 of the U.S. Bankruptcy
Code.  On June 26, 2002, the Bankruptcy Court confirmed the Trustee's
Plan of Reorganization (the "Plan").  The Plan was subsequently
modified and became effective on December 5, 2002.




The
substantive provisions of the Plan were as follows:




·
            Certain
      outstanding litigation claims involving the Predecessor Company's former
      directors and officers, the insurance company that issued the Predecessor
      Company's director and officer insurance policy, and third parties were
      settled pursuant to a "Global Settlement
  Agreement."




·
            A
      pool of assets was created as the sole source of all cash payments and
      distributions to be made to holders of certain allowed
      claims.  The "creditors' pool" was funded with the
      following:




o
            cash
      paid by a new stockholder group;




o
            a
      cash payment by the Predecessor Company's former Chief Executive Officer
      and President;




o
            a
      cash payment by the insurance company pursuant to the Global Settlement
      Agreement described above;




o
            the
      stock of the Predecessor Company's wholly owned subsidiaries and a
      minority interest in another
company;




o
            cash
      in possession or control of the bankruptcy trustee;
  and




o
            certain
      other assets.




The
creditors' pool of assets was and will be used to satisfy any claims against the
Predecessor Company that were not transferred to the Company, as described
below.




·
            As
      of the effective date, (i) the Predecessor Company was reconstituted as
      the Company; (ii) all of the assets of the Predecessor Company, other than
      the creditor's pool, vested in the Company; (iii) all equity interests in
      the Predecessor Company were cancelled and the Company issued 500,120
      shares of its common stock to the former stockholders of the Predecessor
      Company; and (iv) the Company issued 9,502,280 shares of common stock to
      the new stockholder group.  As a result, immediately following
      the reorganization:




o
            the
      Company's assets consisting primarily of a litigation claim receivable and
      intangible assets consisting of proprietary technology developed by the
      Predecessor Company; and




o
            the
      Company's liabilities consisted primarily of accounts payable related to
      the litigation claim receivable




On
December 5, 2002, the Company adopted fresh start reporting in accordance with
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
under the Bankruptcy Code" ("SOP 90-7") of the American Institute of Certified
Public Accountants.




NOTE
2: GOING CONCERN AND OPERATIONS




The
accompanying financial statements have been prepared on the basis of accounting
principles applicable to a going concern, which contemplate the realization of
assets and extinguishment of liabilities in the normal course of
business.




F-7
 Table of Contents


NOTES
TO THE FINANCIAL STATEMENTS
 OF
BROWNSHIRE HOLDINGS, INC.
 DECEMBER
31, 2007


Since its
emergence from bankruptcy, the Company has not generated any revenues from
operations to date.  While it has limited ongoing cash requirements,
this lack of revenue generation raises substantial doubt about the entity's
ability to continue to operate as a going concern.  Management intends
to seek acquisition or merger opportunities that would substantially increase
future operating cash flows.  To the extent that such opportunities
are not realized, the Company's future financial position could be adversely
affected.




NOTE
3: SIGNIFICANT ACCOUNTING POLICIES




Use
of Estimates




The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.




Reclassification




The
Company has reclassified certain captions in its 2006 statements of operations
and cash flows to conform it to its 2007 financial presentation.




Cash
and Cash Equivalents




The
Company considers all highly liquid investments with maturities from date of
purchase of three months or less to be cash equivalents.  Cash
consists of cash on deposit with banks.  The Company had no cash
equivalents at December 31, 2007 or 2006.




Litigation




The
Company recognizes gains associated with contingencies in accordance with the
provisions of Statement of Financial Accounting Standards No. 5.




Intangible
Assets




The
Company maintains intangible assets consisting of certain proprietary technology
developed by the Predecessor Company.  However, as there are no
estimated future cash flows or other realizable benefits expected from this
technology, no value has been assigned to these assets in the accompanying
financial statements.




Revenue
Recognition




The
Company had no revenue generating activities during the periods
presented.




Income
Taxes




The
Company has adopted the provisions of SFAS No. 109, "Accounting for Income
Taxes," which requires recognition of deferred tax liabilities and assets for
the expected future tax consequences of events that have been included in the
financial statements or tax returns.  Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statements and the tax basis of assets and liabilities using enacted
tax rates in effect for the year in which the differences are expected to
reverse.  As the Company has incurred net losses since its emergence
from bankruptcy, a valuation allowance has been created for all deferred tax
assets as of December 31, 2007 and December 31, 2006.




F-8
 Table of Contents


NOTES
TO THE FINANCIAL STATEMENTS
 OF
BROWNSHIRE HOLDINGS, INC.
 DECEMBER
31, 2007


Fair
Value of Financial Instruments




The
carrying value of cash and cash equivalents and accounts payable approximates
fair value due to their short term maturities.  The carrying value of
debt approximates the estimated fair value due to floating interest rates on the
debt.




Income
(Loss) Per Common Share




Income
(loss) per common share is computed based on the weighted average number of
common shares outstanding during each period.  Warrants to purchase
500,000 shares were excluded from the computation of income (loss) per share
during fiscal 2007 and 2006 as the Company generated a net loss during the
periods, thereby making such warrants anti-dilutive.




Stock-Based
Compensation




The
Company's stock-based compensation consists of warrants granted to officers and
directors.  Such grants were recorded based on the grant date fair
value using a Black-Scholes valuation model.  These grants were
expensed immediately as they were fully vested at the date of
grant.




Recent
Accounting Pronouncements




In
September, 2006, the FASB issued Statement of Financial Standards No. 157, "Fair
Value measurements" (SFAS 157).  SFAS 157 defines fair value,
establishes a framework for measuring fair value in accordance with accounting
principles generally accepted in the United States, and expands disclosure about
fair value measurements.  This statement does not require any new fair
value measurements; rather, it applies under other accounting pronouncements
that require or permit fair value measurements.  The provisions of
SFAS 157 are effective for fiscal years beginning after November 15,
2007.  The Company does not expect the adoption of SFAS 157 to have a
material impact on the Company's financial position or results of
operations.




In
September 2006, the Securities and Exchange Commissions ("SEC") issued Staff
Accounting Bulletin ("SAB") 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements," which eliminates the diversity in practice surrounding the
quantification and evaluation of financial statement errors.  The
guidance outlined in SAB 108 is effective for the Company in 2008 and is
consistent with our historical practices for assessing such matters when
circumstances have required such an evaluation.  Accordingly, the
Company does not believe that adoption of SAB 108 will have any impact on the
Company.




In
February 2007, FASB issued SFAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities" ("SFAS 159").  SFAS 159 permits
entities to choose to measure many financial instruments and certain other items
at fair value and establishes presentation and disclosure requirements designed
to facilitate comparisons between entities that choose different measurement
attributes for similar types of assets and liabilities.  SFAS 159 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007.  The Company is assessing the impact the adoption
of SFAS 159 will have on the Company's financial position and results of
operations for fiscal 2008.




NOTE
4: INCOME TAXES




Due to
recurring losses, the Company had no provision for income taxes for its years
ended December 31, 2007 and 2006.




Deferred
tax assets as of December 31, 2007 and 2006 were comprised of the
following:




F-9
 Table of Contents


NOTES
TO THE FINANCIAL STATEMENTS
 OF
BROWNSHIRE HOLDINGS, INC.
 DECEMBER
31, 2007


Year ended December 31,2007
              
              
              2006Net
      operating loss carryforwards
              
              $
              516,931
              
              
              $
              504,416Less:
      valuation allowance
              
              
              (516,937
              )
              
              
              (504,416
              )Net
      deferred tax assets
              
              $
              -
              
              
              $
              -




During
the year ended December 31, 2007, the valuation allowance increased by
$12,521.




A
reconciliation for the differences between the effective and statutory income
tax rates is as follows:




Year
      ended December 31,2007
            
            
            2006Amount
            
            
            %
            
            
            Amount
            
            
            %Federal
      statutory rates
            
            $
            (12,521
            )
            
            
            (34
            %)
            
            $
            (25,593
            )
            
            
            (34
            %)Permanent
      difference
            
            
            -
            
            
            
            -
            
            
            
            4,046
            
            
            
            5
            %Valuation
      allowance for operating loss carry forwards
            
            
            12,521
            
            
            
            34
            %
            
            
            21,547
            
            
            
            29
            %Effective
      rate
            
            $
            -
            
            
            
            -
            
            
            $
            -
            
            
            
            -




At
December 31, 2007, the Company had approximately $14,000,000 in net operating
loss carryforwards, including pre-bankruptcy net operating losses of $12.5
million.  A full valuation allowance has been established for all
deferred tax assets related to these net operating losses as there is
substantial doubt as to the ability of the Company to utilize these deferred tax
assets given certain rules limiting the use of these net operating losses
following bankruptcy and changes in ownership and the Company's historical lack
of taxable income.  The Company has not valued the pre-bankruptcy net
operating losses.  The operating losses expire through
2027.




In July
2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes – an Interpretation of FASB Statement No. 109" ("FIN
48").  This Interpretation prescribes a consistent recognition
threshold and measurement standard, as well as clear criteria for subsequently
recognizing, derecognizing and measuring tax positions for financial statement
purposes.  The Interpretation also requires expanded disclosures with
respect to uncertainties as they relate to income tax accounting.




Fin 48 is
effective for fiscal years beginning after December 15,
2006.  Management has evaluated all of its tax positions and
determined that FIN 48 did not have a material impact on the Company's financial
position or results of operations during its year ended December 31,
2007.




NOTE
5: STOCKHOLDERS' EQUITY




Capitalization




The
Company was incorporated on October 16, 2002.  The Company is
authorized to issue (a) 80,000,000 shares of common stock, par value $.001 per
share, and (b) 20,000,000 shares of preferred stock, par value $.001 per share,
under terms and conditions to be established by the Board of Directors in the
future.  Pursuant to the Plan and in connection with its emergence
from bankruptcy, effective December 5, 2002 the Company issued (i) 500,120
shares of common stock to the former stockholders of the Predecessor Company,
whose ownership interests in the Predecessor Company were cancelled pursuant to
the Plan, and (ii) 9,502,280 shares of common stock to a new stockholder group
in exchange for $250,000 payable by the new stockholder group to the creditors'
pool that was created through the bankruptcy process.




F-10
 Table of Contents




NOTES
TO THE FINANCIAL STATEMENTS


OF
BROWNSHIRE HOLDINGS, INC.


DECEMBER
31, 2007




Dividends




During
2005, the Company declared a $0.10 dividend payable to all common stockholders
for an aggregate dividend payment of $1,000,240.  As of December 31,
2005, $950,228 of these dividends were paid.  On July 24, 2006, the
Company paid the remaining $50,012 dividend to common stockholders.




Warrants




On
September 28, 2006, the Company granted warrants to acquire an aggregate of
500,000 shares of common stock at an exercise price of $0.01 per share to its
directors and officers as compensation for their services to the
Company.  The warrants are fully vested and expire on September 28,
2016.




The
Company expensed these warrants immediately based on the aggregate grant date
fair value of $11,900 computed using a Black-Scholes pricing model using the
following assumptions:  risk free rate of 4.6%, volatility of 29%,
stock price of $0.03, and expected life of 10 years.




NOTE
6: RELATED PARTY TRANSACTIONS




Pursuant
to a 4.0% Multiple Advance Credit Note dated February 28, 2005, the Company's
majority stockholder has agreed to advance the Company up to $100,000 to finance
its working capital needs.  The promissory note bears interest at the
rate of 4.0% per annum, payable at maturity.  The note, as amended,
matures on the earlier to occur of (a) a "liquidity event" with respect to the
Company, as that term is defined in the note, or (b) February 28,
2009.  In addition, a director and officer of the Company advanced
funds to pay certain of the Company's operating expenses during fiscal 2006 and
2007. The aggregate outstanding balance of principal and accrued interest under
the promissory note and advances by the director and officer was $76,012 and
$53,679 at December 31, 2007 and December 31, 2006,
respectively.  These amounts are reflected as a current liability in
the accompanying balance sheet.




On
September 28, 2006, the Company granted warrants to acquire an aggregate of
500,000 shares of common stock to its directors and officers as compensation for
their services to the Company.




NOTE
7: COMMITMENTS AND CONTINGENCIES




Operating
Leases




The Company currently has no
significant non-cancelable operating leases.




F-11
 Table of Contents





EXHIBIT
INDEX




ExhibitNumber
            Description10.5
            Amendment
      No. 2 to 4.0% Multiple Advance Credit Note dated February 28,
      200531.1
            Section
      302 Certifications of Steven A. Rothstein and Norman S.
    Lynn.32.1
            Certifications
      of Steven A. Rothstein and Norman S. Lynn pursuant to 18 U.S.C. Section
      1350.