SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  FORM
10-K
 
 (Mark
One)
  x
              ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the fiscal year ended August 31, 2008
  o
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For the
transition period from ___________ to ___________
  Commission
File No. 333-138298
  MAXLIFE
FUND CORP.
 (Name of
small business issuer in its charter)
  WYOMING(State
      or other jurisdiction of
                incorporation
      or organization)
              (IRS
      Employer Identification No.)
  45
      Sheppard Avenue East, Suite 900
                North
      York, Ontario
                Canada
              M2N
      5W9(Address
      of principal executive offices)
              (Zip
      Code)
  1-866-752-5557
 (Registrant’s
telephone number, including area code)
  Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class registered:
              Name
      of each exchange on which registered:None
              NoneSecurities
      registered under Section 12(g) of the Exchange Act:Common
      Stock, par value $.001
                (Title
      of class)
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 xNo o
  Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act. Yes   o   No x
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
 
 Large
accelerated
filer                                                  o                                           Accelerated
filer                                                      o
 Non-accelerated
filer                                                    o                                           Smaller
reporting
company                                    x
 (Do not
check if a smaller reporting company)
  Revenues
for year ended August 31, 2008: $330,000
  Aggregate
market value of the voting common stock held by non-affiliates of the registrant
as of November 28, 2008, was: $218,247,608
  Number of
shares of the registrant’s common stock outstanding as of December 15, 2008 was:
30,303,168
  Transitional
Small Business Disclosure
Format:                                                                      Yes
o                                No
x
  The
Transfer Agent for the Company is First American Stock Transfer.
   
   TABLE
OF CONTENTS
  PART
      IITEM
      1.
              DESCRIPTION OF
      BUSINESS
              1ITEM
    1A.
              RISK
    FACTORS
              7ITEM
    1B.
              UNRESOLVED STAFF
      COMMENTS
              10ITEM
      2.
              DESCRIPTION OF
      PROPERTY
              10ITEM
      3.
              LEGAL
      PROCEEDINGS
              10ITEM
      4.
              SUBMISSION OF
      MATTERS TO A VOTE OF SECURITY HOLDERS
              10PART
      II
              
              10ITEM
      5.
              MARKET FOR COMMON
      EQUITY AND RELATED STOCKHOLDER MATTERS
              10ITEM
      6.
              SELECTED FINANCIAL
      DATA
              11ITEM
      7.
              PLAN OF
      OPERATIONS
              11ITEM
      8.
              FINANCIAL
      STATEMENTS
              F-ITEM
      9.
              CHANGES IN AND
      DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
              16ITEM
      9A.
              CONTROLS AND
      PROCEDURES
              16PART
      III
              
              17ITEM
      10.
              DIRECTORS, EXECUTIVE
      OFFICERS, PROMOTERS AND CONTROL PERSONS
              17ITEM
      11.
              EXECUTIVE
      COMPENSATION
              19ITEM
      12.
              SECURITY OWNERSHIP
      OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
              20ITEM
      13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
              20ITEM
      14.
              PRINCIPAL ACCOUNTANT
      FEES AND SERVICES
              20PART
      IV
              
              21ITEM
    15.
              EXHIBITS
              21SIGNATURES
              
              22
   
 
 
 PART
I
  ITEM
1.DESCRIPTION OF
BUSINESS
  Business
Development
 
 MaxLife
Fund Corp. (the “Company”, “MaxLife”, “we”, “us” or “our”) was incorporated in
the State of Wyoming on January 9, 2006.  On August 31, 2006, pursuant
to the terms of a stock purchase agreement by and among us, 1254450 Ontario Ltd.
(“1254450”), and the shareholders of 1254450 (“Shareholders”), we acquired all
of the then issued and outstanding preferred and common shares of 1254450 for a
total of $5,000 worth of our common stock to be issued at such time as our
shares are approved for listing on a public market exchange.  Pursuant
to the agreement 1254450 became our wholly owned subsidiary.
 
 Business of
Issuer
 
 General
  MaxLife
Fund Corp. is concentrating on three major components of the Life Settlement
sector; (1) to invest and trade policies for our own inventory, (2) to obtain
ownership in companies in the life settlement industry and (3) to build a large
portfolio by demand for institutional buyers. MaxLife Fund Corp. is positioning
itself to grow with the industry and expand its operation to become one of the
leaders in the Life Settlement sector.
  We have
been in discussion with owners of portfolios and some of our attempts to
purchase these portfolios were either unacceptable and /or did not meet our
criteria or objectives. They would not achieve the required rate of return or
potential gains we are seeking.
 
 We plan
to purchase or fund life policies of individuals. Our goal is to have a large
number of policies under our administration. We expect to either sell or trade
such policies at a profit or maintain the policies until maturity. We may also
lend against individual or groups of policies and thereby earn an interest
spread on the loaned funds.
 
 Depending
on the nature of the policyholder, we will provide one of two types of
settlements. A “viatical settlement” is the sale of a life insurance policy by a
terminally ill person to another party. By selling the policy, the insured (a
viator) receives an immediate cash payment to use as he or she wishes. In this
case, we take an ownership interest in the policy at a discount to its face
value and receive the death benefit under the policy when the viator dies. A
“life settlement” differs from a viatical settlement in that the insured is not
terminally ill and focuses on healthy seniors. The life policy holder is
typically 65 years of age or older, and has a life expectancy of ten years or
less. Life settlements are an attractive transaction to persons who purchased
life insurance for income protection or estate planning, but no longer need the
insurance due to growth in their investment portfolios or other changes in life
circumstances. Life settlements also appeal to persons who want to make
immediate gifts to their beneficiaries. In these instances, the insured may feel
the insurance is no longer needed. Since the market for viatical settlements has
grown to include life expectancies that are often associated with life
settlements and the age and medical condition of many life settlers gives them a
life expectancy that is the same as many viators, the distinction between these
two market segments has diminished and the markets have largely merged. We
expect to target both terminally ill policyholders as well as non-terminally ill
policyholders over the age of 65.
 
 We are a
development company. We will require additional funds to implement our business
plan. There is no assurance that we will be able to obtain additional funding
through the sales of additional equity securities or that such funding, if
available, will be obtained on terms favorable to or affordable by
us.
  
 -1-
 
 Industry
Analysis
 
 We
believe that life settlements are receiving significant attention from insurers
whose policies are being transferred, from brokers and providers seeking
financial gain from these transactions, and from lenders, mostly institutional,
seeking to enhance their return by investing in viaticals and life
settlements.
 
 An
insured whose life expectancy has deteriorated since policy issue is more
attractive to a life settlement lender who is looking to minimize the wait to
receive the policy death benefit. As a result of reviewing the insured’s medical
records, the life settlement lender will have much more current information
regarding the insured’s life expectancy that the insurer, which likely last
reviewed the medical information when the policy was issued. However, at the
present time, non-forfeiture regulations do not permit insurers to differentiate
cash surrender values based on current life expectancy, creating the opportunity
for life settlement providers to offer more for a policy, on a selective basis,
than the insurer is able to pay.
  The
financial performance of a life settlement is driven by the relationship of the
actual future lifetime of the insured after policy purchase and the expected
future lifetime upon which the life settlement offer was calculated. The
purchaser balances the present value of the death benefit, at an interest rate
that provides it with an acceptable return for the risk being assumed, against
the up-front payment for the policy, the amount of commissions, fees, and
expenses required by the transaction, and the sum needed to fund continuing
premium payments. Given that there is a reasonable distribution of the actual
future lifespan of the insureds around what was expected at policy purchase, the
life settlement Lender will realize a return from the transactions that is at
least close to what was targeted. On some of the policies that were purchased,
returns greater than what was assumed will be achieved, which balance out
lower-than-expected returns on others.
 
 However,
when individuals seek to evaluate a life settlement offer against the ultimate
value to be found from keeping the policy, they do not know the length of their
future lifetime. For some of them, keeping the policy will provide a greater
financial reward. For others, accepting the life settlement will produce a
better outcome. This suggests that the position adopted by some industry
observers that it is always better to retain the policy is not
correct.
 
 Compensation
 
 As with
many life insurance product trends, the financial interest of producers is a
powerful factor. Sales trends develop as agents and brokers learn new ways to
serve their clients, and generate income for themselves in the process. Life
settlement transactions supply life agents and brokers with a new tool to serve
clients, and provide additional sources of income for themselves. These include
fees generated from the settlement itself, which can be substantial and new
commission streams that result from additional policies funded with the proceeds
of the life settlement transaction.
 
 There are
no externally imposed compensation standards that control what a life settlement
broker, who arranges the sale of a policy, and the life agent or financial
advisor, who brings the particular client to the transaction, might receive.
However, a competitive market generally brings its own discipline, and typical
compensation levels are evolving.
 
 Value of the Death
Benefit
 
 The
strongest industry reaction has been to focus the attention of policy owners who
might be considering a life settlement on the value of the policy death benefit.
Their argument suggests that the life policy is likely one of the insured’s most
valuable assets. If a current need for capital or a concern for the cash flow
necessary to maintain premium payments is motivating the settlement, they would
suggest selling other assets before the life policy, or working out an
arrangement with the beneficiary or another interested party to assist with
premium payments.
 
 In any
analysis of a life settlement, factors particular to the current situation of
the individual insured provide the foundation for the discussion. One key issue
is balancing current wants/needs and future considerations. It can be as simple
as deciding if the insured wants to take advantage of the policy values or is
willing to let them accrue to a third party following his/her death. Risk
tolerance is an issue, as is the factor used to equate a current settlement
offer versus future policy values.
   -2-
 
 A simple
model demonstrates that the value received by holding the policy will vary
relative to the settlement offer made on the policy. Keeping the policy may be
better, or it may provide less than the settlement offer. Unfortunately, at the
time the offer is made, the insured does not know which alternative will
apply.
 
 Other Insurable Interest
Issues
 
 Other
programs, often with insurable interest issues or arbitrage opportunities
similar to life settlements, are included in a discussion of life settlements.
These include LILAC (life insurance life annuity contracts) programs,
non-recourse premium financing, and blocks of new policies purchased with a
settlement transfer in mind. Each is likely to erode profitability for the
insurers involved.
 
 By
notifying their distributors they are not interested in issuing such policies,
and by establishing appropriate underwriting techniques to avoid issuing such
policies, insurers should be able to minimize the negative impact.
 
 Coverage
Types
 
 Individually
sold life policies are the primary source of life settlement transactions. The
initial purpose of the insurance was often to provide financial protection. In
others, the initial beneficiary, often the spouse, has predeceased the insured.
Absent a secondary purpose for the insurance, a life settlement may seem like a
logical alternative.
 
 Business
insurance policies (buy-sell, keyman, etc.) can provide additional life
settlement opportunities. Policies purchased to fund buy-sell programs may no
longer be needed after one or more of the original owners have left the firm.
Policies used to provide keyman coverage may become superfluous after the
insured has retired or otherwise dropped out of active participation in the
business.
 
 Small and
midsize executive benefit plans funded with life insurance contracts may be
another group of likely targets for life settlements providers. This becomes
more likely in situations where corporate operations are being restructured,
such as following a sale or a bankruptcy, or where an infusion of cash is needed
to address a pressing business issue. Self-administered plans, using individual
rather than aggregate funding that do not maintain an ongoing relationship with
the life agent or broker that sold the plan are more likely to be
targets.
 
 The
potential reduction in the estate tax might make insurance purchased with that
purpose in mind a likely target were it not for the fact that much of the life
insurance purchased to fund estate taxes is owned by trusts. Working with a
trustee is likely to introduce sufficient extra complication to the transaction
to deter some life settlement providers. Others try to distinguish themselves by
touting their ability to work with trustees.
 
 Other
business insurance programs where regulations, such as tax laws, have changed
since the policies were purchased may also be likely candidates for life
settlements. For example, many insureds are unsure of how to handle policies
purchased under the old split-dollar rules, now that some of those rules have
changed.
 
 Target
Market
 
 Emerging
demographic trends serve as a facilitator for growth in life settlement
activity. The oldest members of the Baby Boomer generation are now approaching
60 years old. This is not yet old enough to fit within the target market profile
of life settlement providers, currently focused on ages over 70. However,
anticipation of the potential of the Baby Boomer generation as a source of
policies available for settlement has motivated life settlement providers to
refine their business model in order to be in position to take advantage of this
emerging demographic phenomenon. Not only will the Boomers provide a substantial
increase in the senior population, but also they may be more receptive to life
settlements when their ages become more attractive to life settlement providers
to the extent that the current promotion of life settlements makes this option
more familiar to them.
  -3-
  
 Minimally
funded UL (universal life) contracts are the primary target of life settlement
providers. The low funding level generates only small cash surrender values,
making it easier for the settlement offer to look attractive to the insured. In
addition, the flexible funding aspect of a UL contract allows the provider to
adjust its premium-payment pattern to take future interest rates into
consideration, optimizing the provider’s return. Aggressively priced UL
contracts provide additional potential gain, in that lower mortality and/or
higher lapse assumptions used in policy pricing, maximizing the arbitrage. One
drawback of minimally funded UL contracts is that they have little cash value
available for paying ongoing mortality charges, which increase sharply as the
insured ages.
 
 Whole
life contracts are not as attractive, although they are subject to some life
settlements. They generally have a much higher cash surrender value, increasing
the amount the Lender must pay and/or reducing the excess value that a life
settlement broker is able to provide. They also have much less flexibility in
the amount and timing of future premium payments.
 
 VUL
(variable universal life) policies, to the extent that the policy has a fixed
income option that produces returns comparable to what can be achieved with UL,
can be attractive to life settlement providers. However, expense charges are
normally higher than on UL, and, as a registered product, there is concern for
the additional regulatory oversight. The VUL contract has the same flexibility
in future premium payments that help to make UL the current product of choice.
More settlements involving VUL are likely as fewer of the easier-to-settle UL
policies remain available.
 
 There is
some life settlement activity on level-premium term products as well, although
there are some additional hurdles that need to be addressed. Generally speaking,
in order to avoid insureds who might live beyond the guaranteed period, life
settlement providers will not be interested unless the remaining period on the
term contract is at least twice as long as the estimated life expectancy of the
insured. Convertible term policies, where policy provisions permit the term
contract to be exchanged for a permanent policy, can be sold. However, the life
settlement provider will need to examine the policy form to which the term
policy can be converted, the future premium stream on that policy, and the
control the insurer has in approving the conversion.
 
 Finally,
convertible group products, where the insured is allowed to convert the group
insurance to an individual policy, may be available for life settlement,
assuming the insured has control of the election to convert the coverage and the
transfer to a third party. The life settlement provider will need to be
comfortable with the same list of things as with convertible term.
 
 Market
Size
 
 Currently,
the market can be described as follows:
  ·
              Estimated
      $431 billion of life insurance in
force.
  ·
              88%
      of universal life policies never result in a
  claim.
  ·
              More
      than $17 billion worth of Life Settlements transactions will take place
      this year.
  ·
              Sanford
      C. Bernstein & Co. estimated the life settlements market will grow to
      over $160 billion by the year 2030.
  ·
              Life
      settlements are not correlated to other financial markets so they differ
      from investing in shares, property, cash and fixed
    Interest.
  ·
              The
      low volatility of the underlying investment (the face value of life
      policies) means they are not impacted by fluctuating stocks and bond
      markets, rising interest rates or oil prices, global economic instability
      or business cycles.
  ·
              Life
      insurance policies are capital stable so when a policy is bought
      the benefit is known.
  ·
              Yield
      is determined by time and not by market forces, so it’s not a question of
      if a return will be paid, but when it will be
  paid.
 
 -4-
  Life
settlement providers compete with one another and, therefore, there is a
tendency to be optimistic when reporting results. In addition, there is an
additional segment of the market that operates below the radar screen, dealing
in private transactions that are rarely noticed. Complete and accurate
historical data were not available when earlier estimates of market size were
made and that data is still not easy to obtain.
 
 Lenders
 
 Observers
of the current situation in the life settlement market characterize it as lender
capital chasing available policies - i.e., that there is more money currently
available to fund policy purchases than there are available policies to be
purchased. As such, and keeping the magnitude of the capital being invested in
mind, it suggests just how far things have come since the late 1990s.
Institutional Lenders, using a broad definition of that term that includes hedge
funds, have replaced individuals and are a major factor of this
evolution.  Investment bankers are involved, including Deutsche Bank
and UBS making investments from their own funds and facilitating the process for
groups of other Lenders. Several major U.S. life insurers are also significant
Lenders in life settlements, providing them with an opportunity to offset
potential underwriting losses if their own policies are purchased with
investment gains from the business they purchase.
 
 Insured
mortality, the driver of life settlement profitability, is perceived to be
uncorrelated to other major drivers of investment return, such as economic
conditions, interest rates, or equity market performance. Historically, the high
and uncorrelated returns that have been available have attracted a surfeit of
capital.  Closed-end German investment funds are reported to be the
largest group of Lenders in U.S. life settlements. German interest has been
driven, in large part, by the favorable tax treatment participants receive on
life insurance investments.  The tax regulations changed in midyear
2005 and even though the German funds have tried to use leverage to offset the
higher taxes, the volume of new investment has dropped off.
  In
October 2005, the Financial Accounting Standards Board clarified the accounting
treatment of life settlement transactions. Historically, life settlement Lenders
had been required to value policies purchased using their cash surrender value.
Because the policies are purchased for amounts in excess of surrender value,
often several times the surrender value, this caused the purchaser to report a
loss at the time of purchase. New accounting guidance permits the use of either
an investment method or the fair value of the purchased policy. This is likely
to open the market to additional institutions (trusts and pension funds, for
example) that have been kept on the sidelines by internal investment
restrictions.
 
 Institutional
Lenders and the more rigid management routines they bring are perceived to be
good for the life settlement market. Because the identity of insureds is often
not revealed to the Lender, participants can have less concern for their own
privacy and that some individual may profit from their death.
 
 Securitization
is a potentially important aspect of institutional Lender participation. “Death
bonds,” as they have been referred to pejoratively, are asset-backed securities,
with the death benefit from purchased life insurance policies as the revenue
stream. Several securitizations of the life settlements have been attempted,
with limited success to date. Getting credit reporting agencies to understand
these bonds, buy into the underlying underwriting and pricing of the risks, and
assign ratings to them is one hurtle. Completing the funding for the transaction
on a timely basis is an additional concern. Dignity Partners completed a
securitization of viatical policies in 1995, a life settlement institutional
sources of capital, which helps by bringing additional legitimacy to this
maturing marketplace.
 
 Life
settlements are on the radar screen of many institutional Lenders. Those include
major investment banks (including Deutsche Bank and UBS), with a mix if
investments for their own account and the coordination of third - party
investments. Hedge funds of various sizes and nationalities, and a number of
major life insurers. (AIG is the largest insurer investing in the U.S. market),
are other sources of life settlement capital. Faced with an uncertain economy
and low interest rates, at least at the long - term end of the spectrum,
investing in life settlements presents an attractive alternative.
 
 The
timing of the actual versus expected mortality is the major driver of returns on
life settlement investments. This differs from the profitability to the insurer
of the product itself, where the investment return on the assets underlying the
product is a major determinant. The life settlement Lender receives the policy
proceeds at the death of the insured, and recovers the amount advanced to fund
the life settlement. The return on the amount invested will vary depending on
the timing of the actual death relative to what had been assumed in determining
the amount to pay for the policy. Because fluctuations in actual versus expected
mortality are not related to other measures of economic activity, life
settlements provide uncorrelated returns to Lenders.
  -5-
 
 Historically,
15% annual returns, or higher, were commonplace on life settlement investments.
Increasing competition has caused returns to drop somewhat. However due to the
current market conditions our research suggests that 12%-15% is achievable as of
November 2008, but that some transactions priced to yield less than that. By
adjusting the amount of the settlement payment for a given estimated life
expectancy, the life settlement Lender can select the expected return on its
investment, constrained, of course, by current marketplace
conditions.
 
 Life
settlements, priced to yield 12% or 15% returns, are quite attractive when
compared with the 5.25% yields currently available on A-rated 10-year corporate
bonds. The likelihood that the actual return on a life settlement would drop to
this level is small. For the return on a transaction with a seven-year life
expectancy, priced to yield 12%, to drop to 5.25%, the insured would have to
live for almost 13 years, which has a probability of approximately
15%.
  Employees
 
 We
currently have no employees other than Bennett Kurtz, our sole officer and
director.
  Industry
Regulation and Taxation
  General
 
 When the
life settlement market was first established, it was sparsely regulated. Due in
part to abuses within the industry, which were well-publicized, the federal
government and various states moved to regulate the market in the mid-1990’s.
These regulations generally took two forms. One sought to apply consumer
protection-type regulations to the market. This application was designed to
protect policyholders and purchasers. Another sought to apply securities
regulations to the market, which was designed to protect purchasers. Various
states have also used their insurance regulations to attack instances of
insurance fraud within the industry.
  Consumer
Protection Licensing
 
 The
consumer protection-type regulations arose largely from the draft of a model law
and regulations promulgated by the National Association of Insurance
Commissioners (NAIC). At least 35 states have now adopted some version of this
model law or another form of regulation governing life settlement companies in
some way. These laws generally require the licensing of providers and brokers,
require the filing and approval of settlement agreements and disclosure
statements, describe the content of disclosures that must be made to insureds
and sellers, describe various periodic reporting requirements for settlement
companies and prohibit certain business practices deemed to be
abusive.
  Securities
Regulations
 
 Some
states and the Securities and Exchange Commission have attempted to treat life
settlements as securities under federal or state securities laws and have
successfully done so in circumstances in which the transactions were structured
as securities.  No state or federal regulatory body or private
litigant has successfully asserted that our life settlement transactions are
securities under state or federal law.  Due to the manner in which we
structure our settlements and utilizing in some instances the exceptions and
exemptions under securities laws such laws have not limited our business model
to a significant extent.
  -6-
   We
believe that a combination of consumer protection-type laws and existing
insurance regulations provide an appropriate framework for regulation of the
industry.  The widespread application of securities laws would, as a
practical matter, prevent us and other life settlement companies from marketing
settlements with little or no benefit to purchasers.  Each of our
purchasers has represented themselves to be sophisticated individuals or
institutions which have little need for the protections afforded by the
securities laws.  At this point, the possible application of such laws
has not had an adverse material effect on our business but we cannot give
assurance that our business would not be materially and adversely impacted by a
securities-based action.
  Insurance
Regulation
 
 As a life
settlement company, we facilitate the transfer of ownership in life insurance
policies but do not participate in the issuance of policies.  We do
not engage in the business of insurance and are not required to be licensed as
an insurance company or insurance broker.  We do however, deal with
insurance companies and professionals in our business and are indirectly
affected by the regulations covering them. The insurance industry is highly
regulated, and these regulations affect us in numerous ways.  We must
understand the regulations as they apply to policy terms and provisions and the
entitlement to, and collectability of, policy benefits.  We rely upon
the protections against fraudulent conduct that these regulations offer and we
rely upon the licensing of companies and individuals with whom we do
business.
  Taxation
 
 In 1996,
Congress passed the Health Insurance Portability and Accountability
Act.  This act exempts from taxation proceeds received in a viatical
settlement paid to terminally ill viators (those having a life expectancy of 24
months or less) and chronically ill viators (those who are incapable of at least
two daily-living activities, such as eating and bathing, and require
supervision).
  The act
does not exempt the receipt of life settlement proceeds. Life settlement
proceeds would typically be taxed as ordinary income to the extent that the
proceeds exceed the premiums paid for the insurance policy. However although
proceeds from a life settlement transaction can be substantial the amount of
settlement often does not exceed the total amount of premiums paid over the
years and thus many times the transaction does not result in a taxable event for
the seller of the policy.
  ITEM
1A. RISK FACTORS
  In
addition to other information in this annual report on Form 10-K and in the
documents we are incorporating by reference, the following risk factors should
be carefully considered in evaluating us and our business.  Such
factors significantly affect or could significantly affect our business,
operating results or financial condition.  This annual report on Form
10-K contains forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of
1995.  Actual results could differ materially from those projected in
the forward-looking statements as a result of the risk factors set forth below
and elsewhere in this annual report on Form 10-K.
  We
Are Operating in Evolving Markets that May Be Volatile
  Although
the market has grown exponentially in the past few years, how and to what extent
it will continue to develop is uncertain.  Because there are so few
publicly reporting companies in this industry, measuring the market is
difficult. As more insureds become aware of life settlements as a financial
planning option, we expect the size of the market to grow substantially. As we
demonstrate our ability to originate, underwrite and place life settlements with
our individual clients, any dramatic growth will depend heavily upon the entry
of institutional purchasers and the increase in presentations of policies with
face values in excess of $5 million. Whether we can maintain markets for such
policies will depend on our ability to attract more institutional and accredited
investors and convince these purchasers that we can originate sufficient numbers
of qualified policies for purchase and that our policy analysis and pricing
practices are sound. Until we attract a sufficient number of institutional
clients to provide for consistent and predictable demand in addition to the
demand from our individual clients, our financial performance during any period
may be materially affected by the entry or departure of one or more of our
institutional clients from the market.
 
  -7-
  Our
prospects must be considered in light of the risks, expenses and difficulties
encountered by those attempting to operate in evolving markets. We cannot assure
you that we will be successful in addressing the risks we face. The failure to
do so could have a material adverse effect on our business, financial condition,
and results of future operations.
  Our
Operating Results in One or More Future Periods Are Likely to Fluctuate and May
Fail to Meet Expectations
  Our net
operating results have fluctuated in the past and may fluctuate significantly in
the future depending on purchaser demand for life settlements, brokerage and
referral fees, unexpected increases in general and administrative expenses and
competition for qualified policies. Because of these or other factors, our
operating results may, in some future period, fall below market expectations. In
such event, the market price of our securities might fall. Moreover,
fluctuations in our operating results may also result in volatility in the
market price of our securities.
  Our
Success Depends on Maintaining Relationships Within Our Referral
Networks
  We rely
primarily upon brokers to refer potential sellers of policies to us and upon
financial planners, known as licensees, to refer client purchasers to us. These
relationships are essential to our operations and we must maintain these
relationships to be successful. We do not have fixed contractual arrangements
with the brokers or financial planners, and they are free to do business with
our competitors. In addition, the pool of brokers and referring financial
planners is relatively small, which can increase our reliance on our existing
relationships and impair attempts to reduce brokerage fees. We are also
developing our own network of insurance and financial planning professionals,
known as producers, to refer potential sellers to us, and we expect referrals
from this source to grow. As with brokers, our ability to build and maintain
these relationships will depend upon our closing rates and the level of
compensation we pay to the referring professional. The compensation paid to the
referring professional will affect the offer price to the seller and the
compensation we receive. We must balance these interests successfully to build
our referring network and attain greater profitability.
  We
Depend on Growth in the Life Settlement Market
  Growth of
the life settlement market and our expansion within the market may be affected
by a variety of factors, including:
  o
              the
      inability to locate sufficient numbers of life
  settlors;
  o
              the
      inability to convince potential sellers of the benefits of life
      settlements;
  o
              the
      inability to attract sufficient qualified
  purchasers;
  o
              competition
      from other life settlement
companies;
  o
              the
      occurrence of illegal or abusive business practices resulting in negative
      publicity about the market; and
  o
              the
      adoption of overly burdensome governmental
  regulation.
  In
addition, the life settlement market may evolve in ways we have not anticipated
and we may be unable to respond in a timely or cost-effective manner. If the
life settlement market fails to grow as quickly as or in the directions we have
anticipated, our business, financial condition and results of operations would
be materially adversely affected as it relates to our large-scale
growth.
   -8-
  Our
Purchasers Depend on Our Ability to Predict Life Expectancies and Set
Appropriate Price; If Our Investment Returns Are Not Competitive We May Lose
Purchasers; We Must Purchase In Large Numbers
  A
purchaser’s investment return from a life settlement depends on three factors:
the policy face amount, the settlement purchase price and the demise of the
insured. We price settlements based on the policy face amount and the
anticipated life expectancy of an insured. For viatical settlements, life
expectancies are estimated based on a medical analysis of the insured. For life
settlements, life expectancies are estimated from medical and actuarial data
based on the historical experiences of similarly situated persons. The data is
necessarily based on averages involving mortality and morbidity statistics. The
outcome of a single settlement may vary significantly from the statistical
average. It is impossible to predict any one insured’s life expectancy exactly.
To mitigate the risk that an insured will outlive his or her predicted life
expectancy, we price life settlements to yield competitive returns even if this
life expectancy prediction is exceeded. In addition, life settlement purchasers
must be able to bear a non-liquid investment for an indeterminate period of
time.
  If we
underestimate the average life expectancies and price our transactions too high,
our purchasers will not realize the returns they seek, demand may fall, and
purchasers may invest their funds elsewhere. In addition, amounts escrowed for
premiums may be insufficient to keep the policy in force and it is the
responsibility of the purchasers to pay these additional premiums. If we
overestimate the average life expectancies, the settlement prices we offer will
fall below market levels, supply will decrease, and sellers may engage in
business with our competitors or pursue other alternatives. Our ability to
accurately predict life expectancies and price accordingly is affected by a
number of factors, including:
 
 o
              the
      accuracy of our life expectancy estimations, which must sufficiently
      account for factors including an insured’s age, medical condition, life
      habits (such as smoking), and geographic
  location;
  o
              Our
      ability to anticipate and adjust for trends, such as advances in medical
      treatments, that affect life expectancy data;
  and
  o
              Our
      ability to balance competing interests when pricing settlements, such as
      the amounts paid to life settlors, the acquisition costs paid by
      purchasers, and the compensation paid to ourselves and our referral
      networks.
  To foster
the integrity of our pricing systems, we use both in-house and outside experts,
including medical doctors and published actuarial data. We cannot assure you
that, despite our experience in settlement pricing, we will not err by
underestimating or overestimating average life expectancies or miscalculating
reserve amounts for future premiums. If we do so, we could lose purchasers
or policy sellers, and those losses could have a material adverse effect on our
business, financial condition, and results of operations.
 
 Government
Regulation Could Negatively Impact Our Business
  Further,
changes in laws or governmental regulation could affect our brokers or clients,
which could have a material adverse effect on our business.
  Our
Chairman and Chief Executive Officer Beneficially Owns 15.18% of Our Common
Stock and, as a Result, Can Exercise Significant Influence over Our
Company
  Mr.
Bennett Kurtz, our Chairman and Chief Executive Officer, is defined under SEC
regulations as the beneficial owner of approximately 15.18% of our common stock,
largely as the result of exercising voting power by proxy over shares held by
547667 Ontario Limited.  He will be able to control most matters
requiring approval by our shareholders, including the election of directors and
approval of significant corporate transactions. His voting control affects
indirectly the process for nominating directors, since theoretically he could
nominate and elect directors without board involvement.  This
concentration of ownership may also have the effect of delaying or preventing a
change in control of MaxLife, which in turn could have a material adverse effect
on the market price of our common stock or prevent our shareholders from
realizing a premium over the market price for their shares of common
stock.
   -9-
  Our
Stock Is Thinly Traded and the Stock Price May Be Volatile
  Although
our common stock was traded on the OTC Bulletin Board market during the period
covered by this filing, our common stock has qualified for and traded on the
OTCBB since June 29, 2007.  Our stock is not widely traded and our
share prices may be volatile due to actual or anticipated variations in our
quarterly operating results, positive or negative developments concerning our
business, our industry or the general economy.
 
 ITEM
1B. UNRESOLVED STAFF COMMENTS
 
 None.
 
 ITEM
2. DESCRIPTION OF PROPERTY
  Effective
December 12, 2008, we currently operate our business from our corporate
headquarters located at 45 Sheppard Avenue, Suite 900, North York, Ontario M2N
5W9.  We lease our premises on a month to month lease agreement
commencing December 12, 2008.
  ITEM
3. LEGAL PROCEEDINGS
  There is
no litigation pending or threatened by or against us.
  ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  None.
   PART
II
 
 ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
 
 Holders of Our Common
Stock
 
 As of
December 12, 2008, we had approximately 30,303,168 shares issued and outstanding
and 28 registered holders of our common stock.
  The
Company's common shares, par value $0.001 (the “Shares”) were approved for
trading on the Over-the-Counter Bulletin Board (OTC-BB) under the symbol MXFB on
June 29, 2007.
  The table
set forth below reflects the reported high and low bid prices of the Common
Stock for each quarter for the period indicated. These prices are all on the
basis of the pre reverse stock split. Such prices are interdealer prices without
retail markups, markdowns or commissions and may not represent actual
transactions.
  QUARTER
      ENDED
              
              HIGH
              
              
              LOWAugust
      31, 2007
              
              $
              3.18
              
              
              $
              1.00November
      30, 2007
              
              $
              9.00
              
              
              $
              3.05February
      29, 2008
              
              $
              17.18
              
              
              $
              6.15May
      31, 2008
              
              $
              27.60
              
              
              $
              16.55August
      31, 2008
              
              $
              29.55
              
              
              $
              15.23
  -10-
  
 Dividends
 
 On August
31, 2008, the company paid dividends of $0.625 per share on its 26,400 issued
and outstanding preferred stock totaling $16,500.  The preferred stock
entitles the holders to receive a dividend equal to $0.625 per share to be paid
on a quarterly basis.
 
 Payment
of dividends on common shares in the future will depend upon our earnings,
capital requirements, and other factors, which our Board of Directors may deem
relevant.
  ITEM
6.  SELECTED FINANCIAL DATA
  As a
“smaller reporting company”, we are not required to provide the information
required by this Item.
 
 ITEM
7.  PLAN OF OPERATIONS
  Plan of
Operations
  During
the next twelve months, we expect to take the following steps in connection with
the further development of our business and the implementation of our plan of
operations:
 
 We will
continue to make relationships with insurance brokers and their clients to seek
out opportunistic policies and life settlements situations available. We will
attempt to raise additional financing for working capital and to marketing
efforts. We will also seek investment partners in order to raise the necessary
funds to acquire existing policies. Such partners include banks, hedge funds,
investment funds and sophisticated investors. We will be sourcing new
relationships with companies in the sector with the objective of purchasing an
ownership in their businesses.
  We will
prepare advertisements and information material to disseminate to our network of
brokers with the intention of ramping up purchases of policies. With funds
obtained from banks and investment funds we will be in a position to purchase
and administer policies and portfolios. We will also look to offer a product
which gives investors the security they require in these times and we will
charge for our expertise and services of sourcing, buying and monitoring their
investments.
  The
addition of a stronger infrastructure will be required and we intend to hire
management personnel and support staff.  This will enable us to
segregate work responsibilities and meet the ongoing growth of the
business.  We will be in a position to handle different territories
both in Canada and the United States.
  Additional
financings will be available to us through our relationships and performance.
This will enable us to continue with our growth plans. The internal organization
will be reviewed to see that it can handle the influx of new business. The
administration of the policies will be pertinent and we will have to determine
if we have sufficient staff to handle this responsibility. We will review in
depth the success of purchasing of policies and initiating new policies. Upon
review it will be determined if dividends can be paid to shareholders or if
funds should be used to further purchase policies.
  The
management team will be strengthened, if need be, to ensure that shareholder
value is maximized and the business plan is being implemented
properly.
   -11-
 
 Results of
Operations
 
 Comparative
Analysis for the year ended August 31, 2008 and 2007:
 
 Revenue
for the year ended August 31, 2008 was $330,000 and $Nil for the year ended
August 31, 2007. Cost of Sales for the year ended August 31, 2008 was $303,250
and $Nil for the year ended August 31, 2007. Gross profit for the year ended
August 31, 2008 was $26,750 and $Nil for the year ended August 31, 2007. The
revenues and related cost of sales and gross profit resulted from the sale of an
insurance policy during the first quarter of 2008.
 
 General
and administrative expenses for the year ended August 31, 2008 were $102,585 and
$1,434 for the year ended August 31, 2007. The increase during the year ended
August 31, 2008 was primarily attributable to increases in payments for printing
and advertising, travel, administrative office expenses and directors and
officers insurance incurred in the business operations.
 
 Professional
fees for the year ended August 31, 2008 were $122,458 and $17,540 for the year
ended August 31, 2007. These fees are attributable to legal, accounting,
consulting and auditing services. The increase in professional fees were
attributable to the increase in accounting, valuation and disclosure
requirements of equity instruments including stock options, stock warrants and
preferred stock issuances during the year ended August 31, 2008.
 
 Stock
based compensation for the year ended August 31, 2008 were $363,170 and $Nil for
the year ended August 31, 2007.  The increase in stock based
compensation was due to the following equity transactions entered into during
year ended August 31, 2008:
 
 a)
              On
      September 20, 2007, the Company issued 6,000 shares of common stock in
      exchange for services rendered by two individuals on the Board of
      Directors. For the year ended August 31, 2008, $34,200 of these services
      were rendered and included as stock based
  compensation.
 
 b)
              On
      April 21, 2008 the Company executed stock option agreements with four
      directors of the Company in consideration for their appointment to the
      Board of Directors.  The total stock compensation related to the
      stock options amounted to $453,580 and are amortized over the service
      period of six months from the grant date. For the year ended August 31,
      2008, the Company expensed $328,969 as stock based compensation related to
      the stock options.
 
 During
the year the Company tested goodwill of its operating unit, 1254450, for
impairment. In order to determine if a writedown of goodwill was necessary,
management utilized a two step process (i) we compared the implied fair value of
the reporting unit, 1254450, with its carrying amount of $35,269 and (ii) an
estimate of the fair value of the reporting unit was performed using a valuation
technique based on multiples of earnings. The implied fair value of the
reporting unit was compared with its carrying amount as of August 31, 2008.
Management has determined that the implied fair value of goodwill is $Nil as at
31 August 2008 and as a result an impairment loss of $35,269 has been recognized
in the statement of loss and comprehensive loss for the year ended 31August
2008.
 
 During
the year ended August 31, 2008 the Company issued 26,400 shares of preferred
stock for proceeds of $660,000, including 13,200 warrants to purchase 13,200
shares of common stock.   The total value of the warrants
amounted to $244,158 and was included as an addition to additional paid-in
capital – warrants.
  Unrealized
loss of available for sale securities, net of deferred taxes for the year ended
August 31, 2008 were $36,884 and $Nil for the year ended August 31,
2007.  This loss was attributable to the continued reduction in the
fair value of available-for-sale securities.
  For the
year ended August 31, 2008, we had a net loss of $602,882 and net earnings of
$23,388 for the year ended August 31, 2007.   The increase in
operating expenses during the year ended August 31, 2008 were due to higher
professional fees, travel costs and stock based compensation expenses during the
period.
  During
the period ending year ended August 31, 2008 and year ended August 31, 2007, we
had no provision for income taxes due to the net operating losses
incurred.
   -12-
 
 Capital Resources and
Liquidity
 
 We are
still in the process of developing and implementing our business plan and
raising additional capital. As such, management is taking action to obtain
additional funding.  MaxLife will use current funds to seek out and
purchase businesses operating in the life settlements industry.
 
 At August
31, 2008, we had working capital of approximately $470,371. It is the intent of
management and significant stockholders, if necessary, to provide sufficient
working capital necessary to support and preserve the integrity of the corporate
entity. However, there is no legal obligation for either management or
significant stockholders to provide additional future funding. .We have
implemntaed a preferred share unit offering consisting of preferred shares plus
warrants. The unit offering will be continued to be offered in order to obtain
the financing we require.
 
 During
the fiscal year, we had a unit offering consisting of preferred shares plus
warrants. We successfully raised an amount of $660,000 from this issue, which is
still available.  In the previous fiscal year, we completed a private
placement via a share purchase agreement to secure financing of
$2,500,000.  We received $500,000 from this placement which resulted
in the issuance of 170,068 shares of common stock. We deployed some of these
funds and purchased life settlement policies with a face amount of $2,650,000
and carrying value of $452,955 as of August 31, 2008.  Additional
working capital is available to ensure that the premiums on these policies will
be paid as required.
 Cash
flows from operating activities
 
 Cash
flows used in operating activities for the year ended August 31, 2008 were
$459,066 and $73,632 for the year ended August 31, 2007.  The increase
in cash flows used in operating activities was due to the payment of investment
in life insurance policies purchased during the year.
 
 MaxLife
reviews and monitors its current life settlement policies to determine if there
is an opportunity for gains by selling policies or to hold for a longer
term.
  Cash
flows from investing activities
 
 On
February 25, 2008 the Company and Capital Growth Planning, Inc. (“CGP”), a El
Cajon, California company, formed MaxLife-CGP Partners, LLC (the “Joint
Venture”), a El Cajon, California company, to work together in sourcing,
purchasing, and managing certain life settlement insurance policy assets for the
Joint Venture.  It is the Company’s goal to deploy a portion of funds
raised in a Preferred stock offering as a loan to the Joint Venture. CGP,
through its executives and subsidiary Companies, will use its life settlement
experience, contacts, and specialized products to source, purchase, and manage
the life settlement policy assets for the Joint Venture.  The Company
and CGP each have interests of 50% in the Joint
Venture.
 
 Cash
flows used in investing activities for the year ended August 31, 2008 were
$1,250 and $Nil for the year ended August 31, 2007.  The increase in
cash flows used in investing activities was due to the establishment of an
investment of $1,250 in the above noted joint venture during the second quarter
of 2008.
 
 MaxLife
is also looking at alternatives available to invest funds on hand to earn a
competitive return and maintains that such investments enable funds to be
available to purchase policies.
 
 Cash
flows from financing activities
 
 During
the year ended August 31, 2008,  the Company issued 26,400 shares of
preferred stock for proceeds of $660,000.
 
 These
funds will be used by the company to
 
 ·
              Continue
      its plan of operations, including the rolling out of financial products
      that are based on Life Settlement Policies that have been formalized by
      Capital Growth Planning Inc.;·
              Create
      a stronger infrastructure and continue with our growth
    plans;·
              Hire
      management personnel and support staff;·
              Review
      the internal organization to see that it can handle the influx of new
      business, and·
              Strengthen
      the management team, if need be.
 
  -13-
  We will
ensure that shareholder value is maximized, that our  business plan is
being implemented properly and the Company will be in a position to trade
policies and capitalize on their previous purchases.
 
 The funds
from the unit offering will also be used to purchase life settlement policies
and portfolios. It will enable MaxLife to be opportunistic and react in a timely
manner to purchase portfolios that will have embedded value for
shareholders.
 
 MaxLife
is also reviewing other financing options as lines of credits or asset based
loans to coincide with the equity raised.
  Critical
Accounting Policies
  Max
Life’s financial statements and related public financial information are based
on the application of accounting principles generally accepted in the United
States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenue and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use if estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
  Our
significant accounting policies are summarized in Note 3 of our financial
statements. While all these significant accounting policies impact its financial
condition and results of operations, Max Life views certain of these policies as
critical. Policies determined to be critical are those policies that have the
most significant impact on Max Life’s consolidated financial statements and
require management to use a greater degree of judgment and estimates. Actual
results may differ from those estimates.
 
 Our
management believes that given current facts and circumstances, it is unlikely
that applying any other reasonable judgments or estimate methodologies would
cause effect on our consolidated results of operations, financial position or
liquidity for the periods presented in this report.
 
 The
Company believes that the following discussion addresses the Company’s most
critical accounting policies, which are those that are most important to the
portrayal of the Company’s financial condition and results of operations and
require management’s most difficult, subjective and complex
judgements.
 
 Investment
in Life Insurance Policies
  Investment
in life insurance policies are recorded in accordance the Financial Accounting
Standards Board Staff Position No. FTB 85-4-1 Accounting for Life Settlement
Contracts by Third-Party Investors (FSP FTB 85-4-1). FSP FTB 85-4-1 states that
an investor may elect to account for its investments in life settlement
contracts using either the investment method or the fair value method. The
election shall be made on an instrument-by instrument basis and is irrevocable.
Under the investment method, an investor shall recognize the initial investment
at the purchase price plus all initial direct costs. Continuing costs (policy
premiums and direct external costs, if any) to keep the policy in force shall be
capitalized. Under the fair value method, an investor shall recognize the
initial investment at the purchase price. In subsequent periods, the investor
shall remeasure the investment at fair value in its entirety at each reporting
period and shall recognize change in fair value earnings (or other performance
indicators for entities that do not report earnings) in the period in which the
changes occur. The Company has elected to value its investments in life
settlement contracts using the investment method.
   -14-
  Goodwill
and Intangible Assets
  Goodwill
is the residual amount that results when the purchase price of an acquired
business exceeds the sum of the amounts allocated to the tangible and intangible
assets acquired, less liabilities assumed, based on fair values.
  The
Company accounts for purchased goodwill and other intangible assets in
accordance with SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS
No. 142, goodwill and any other intangibles deemed to have indefinite lives are
not subject to amortization; however, goodwill is subject to an assessment for
impairment, which must be performed at least annually, or more frequently if
events or circumstances indicate that goodwill or other indefinite lived
intangibles might be impaired.
  The
Company tested goodwill of its operating unit, 1254450, for impairment at 31
August 2008 and 2007.
  In order
to determine if writedown of goodwill was necessary, management utilized a two
step process: (i) they compared the implied fair value of the reporting unit,
1254450, with its carrying amount of $35,269 and (ii) the estimated fair value
of the reporting unit was performed using a valuation technique based on
multiples of earnings.
  The
implied fair value of the reporting unit was compared with its carrying amount;
and management has determined that the implied fair value of goodwill is $Nil as
at 31 August 2008 and as a result an impairment loss of $35,269 has been
recognized in the statement of loss and comprehensive loss for the year ended 31
August 2008.
 
 The
Company cannot predict the occurrence of certain future events that might
adversely affect the reported value of goodwill that totaled $Nil at August 31,
2008. Such events include, but are not limited to, strategic decisions made in
response to economic and competitive conditions, the
 impact of
the economic environment on the Company’s customer base, or a material
negative
 change in
its relationships with significant customers.
  Stock
Based Compensation
  In
Decemeber 2004, the Financial Accounting Standard Board ("FASB") issued SFAS No.
123R, Share-Based Payment ("SFAS No. 123R). SFAS No. 123R establishes standards
for the accounting for transaction in which an entity exchanges its equity
instruments for goods for services. It also addresses transactions in which an
entity incurs liabilities in exchange for goods or services that are based on
the fair value of the entity's equity instruments or that may be settled by the
issuance of those equity instruments. SFAS No. 123R focuses primarily on
accounting for transactions in which an entity obtains employee services in
shared-based payment transactions. SFAS No. 123R requires that the compensation
cost relating to share-based payment transactions be recognized in the
consolidated financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued.
  The
warrants and stock options are valued using the Black-Scholes option pricing
model using the following input variables and assumptions: exercise prices per
share as noted above, stock price on the date of issuances; calculated
volatility; calculated average term of maturity of five years; an estimated risk
free rate based on the US treasury zero-coupon yield curve. The assumptions used
by the Company in determining its stock based ompensation may differ materially
from actual results due to changing market and economic conditions, higher or
lower calculated volitility rates or risk free rate of return. While the Company
believes that the assumptions used are appropriate, differences in actual
experience or changes in assumptions may materially affect the Company’s
financial position or results of operations.
  We cannot
predict what future laws and regulations might be passed that could have a
material effect on our results of operations. We assess the impact of
significant changes in laws and regulations on a regular basis and update the
assumptions and estimates used to prepare our financial statements when we deem
it necessary.
 
 We have
not made any material changes to our critical accounting estimates or
assumptions or the judgments affecting the application of those estimates or
assumptions. We discuss our significant accounting policies, including those
policies that are not critical, in Note 3 of our Consolidated Financial
Statements
  -15-
   ITEM
8. FINANCIAL STATEMENTS
 
  
 MAXLIFE
FUND CORP. AND SUBSIDIARY
 (A
Development Stage Company)
  CONSOLIDATED
FINANCIAL STATEMENTS
  31
AUGUST 2008
   
  
 
 PageREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              F-1CONSOLIDATED
      FINANCIAL STATEMENTSConsolidated
      Balance Sheets
              F-2Consolidated
      Statements of Operations and Comprehensive Loss
              F-3Consolidated
      Statements of Stockholders' Equity
              F-4Consolidated
      Statements of Cash Flows
              F-5Notes
      to the Consolidated Financial Statements
              F-6
      - F-17
  
 
 
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the
Board of Directors and Stockholders of
 MaxLife
Fund Corp. and Subsidiary
 
  We have
audited the accompanying consolidated balance sheets of MaxLife Fund Corp. and
Subsidiary (A Development Stage Company) as of 31 August 2008 and 2007
and the related consolidated statements of operations, comprehensive loss,
stockholders' equity and cash flows for the years ended 31 August 2008 and 2007
and for period from the date of inception (9 January 2006) to 31 August 2008.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
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 audits to obtain reasonable assurance about whether the
consolidated 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 audits include consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstance, but not for 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 consolidated
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 consolidated financial statements referred to above present fairly,
in all material respects, the financial position of MaxLife Fund Corp. and
Subsidiary (A Development Stage Company) as of 31 August 2008 and 2007,
and the results of its operations for the years ended 31 August 2008 and 2007
and for the period from the date of inception (9 January 2006) to 31 August 2008
in conformity with accounting principles generally accepted in the United States
of America.
  
  /s/
DNTW Chartered Accountants, LLP
  Licensed
Public Accountants
  Markham,
Canada
 25
November 2008
 
  F-1
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
 MAXLIFE
FUND CORP. AND SUBSIDIARY
 (A
Development Stage Company)
  CONSOLIDATED
BALANCE SHEETS
  AS
AT 31 AUGUST
  (Expressed
in United States Dollars)
  2008
                
                
                2007ASSETSCurrent
      AssetsCash
                
                $
                500,836
                
                
                $
                506,204Available-for-sale
      securities, at fair value (cost - $89,816 (2007 - $89,816)
                
                
                2,313
                
                
                
                19,017Total
      Current Assets
                
                
                503,149
                
                
                
                525,221Long
      Term AssetsInvestment
      in life insurance policies
                
                
                452,955
                
                
                
                430,078Investment
      in joint venture
                
                
                1,250
                
                
                
                -Goodwill
                
                
                -
                
                
                
                35,269Deferred
      taxes
                
                
                -
                
                
                
                25,573Total
      Long Term Assets
                
                
                454,205
                
                
                
                490,920Total
      Assets
                
                $
                957,354
                
                
                $
                1,016,141
  LIABILITIES
AND STOCKHOLDERS' EQUITY
 Current
      LiabilitiesAccounts
      payable and accrued liabilities
                
                $
                28,084
                
                
                $
                418,500Management
      salary payable
                
                
                30,000
                
                
                
                --Advances
      from stockholder
                
                
                4,694
                
                
                
                34,700Total
      Liabilities
                
                
                62,778
                
                
                
                453,200
  Stockholders'
Equity
 Preferred
      stock $25.00 par value; Authorized 100,000,000; Issued and outstanding
      26,400  (2007 - Nil); non-voting; dividends of $0.625 paid on a
      quarterly basis; non-convertible; redeemable at the option of the Company
      after two years
                
                
                660,000
                
                
                
                -Common
      stock $.001 par value; Authorized 200,000,000; Issued and outstanding
      30,303,168  (2007 - 30,297,168)
                
                
                30,303
                
                
                
                30,297Additional
      paid in capital
                
                
                961,967
                
                
                
                606,803Additional
      paid in capital - warrants
                
                
                244,158
                
                
                
                -Accumulated
      other comprehensive loss
                
                
                (85,206
                )
                
                
                (51,053
                )Deficit
      accumulated during the development stage
                
                
                (916,646
                )
                
                
                (23,106
                )Total
      Stockholders' Equity
                
                
                894,576
                
                
                
                562,941Total
      Liabilities and Stockholders' Equity
                
                $
                957,354
                
                
                $
                1,016,141
  The
accompanying notes are an integral part of these financial
statements.
  F-2
  MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
 MAXLIFE
FUND CORP. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
  (Expressed
in United States Dollars)
 
 For
      the Year Ended 31 August2008
                  
                  
                  For
      the Year Ended 31 August 2007
                  
                  
                  For
      the Period from Inception (9 January 2006) to 31 August
    2008SALE
      OF POLICY
                  
                  $
                  330,000
                  
                  
                  $
                  -
                  
                  
                  $
                  330,000COST
      OF POLICY SOLD
                  
                  
                  303,250
                  
                  
                  
                  -
                  
                  
                  
                  303,250GROSS
      PROFIT
                  
                  
                  26,750
                  
                  
                  
                  -
                  
                  
                  
                  26,750EXPENSESStock
      based compensation
                  
                  
                  363,170
                  
                  
                  
                  -
                  
                  
                  
                  363,170Professional
      fees
                  
                  
                  122,458
                  
                  
                  
                  17,540
                  
                  
                  
                  150,206General
      and administrative
                  
                  
                  102,585
                  
                  
                  
                  1,434
                  
                  
                  
                  140,020Management
      Salary
                  
                  
                  30,000
                  
                  
                  
                  -
                  
                  
                  
                  30,000Loss
      (gain) on foreign exchange
                  
                  
                  7,055
                  
                  
                  
                  (4,470
                  )
                  
                  
                  2,584Interest
      and bank charges
                  
                  
                  1,150
                  
                  
                  
                  919
                  
                  
                  
                  2,354TOTAL
      OPERATING EXPENSES
                  
                  
                  626,418
                  
                  
                  
                  15,423
                  
                  
                  
                  688,334LOSS
      FROM OPERATIONS
                  
                  
                  (599,668
                  )
                  
                  
                  (15,423
                  )
                  
                  
                  (631,584
                  )REALIZED
      GAIN ON SALE OF AVAILABLE-FOR-SALE SECURITIES
                  
                  
                  -
                  
                  
                  
                  37,192
                  
                  
                  
                  37,192GOODWILL
      IMPAIRMENT LOSS
                  
                  
                  (35,269
                  )
                  
                  
                  -
                  
                  
                  
                  (35,269
                  )INTEREST
                  
                  
                  2,055
                  
                  
                  
                  1,619
                  
                  
                  
                  3,674NET
      (LOSS) EARNINGS
                  
                  $
                  (632,882
                  )
                  
                  $
                  23,388
                  
                  
                  $
                  (655,987
                  )FOREIGN
      CURRENCY TRANSLATION ADJUSTMENT
                  
                  
                  3,095
                  
                  
                  
                  16
                  
                  
                  
                  2,731UNREALIZED
      (LOSS) GAIN ON AVAILABLE-FOR-SALE SECURITIES, NET OF DEFERRED
      TAXES
                  
                  
                  (37,248
                  )
                  
                  
                  (45,227
                  )
                  
                  
                  (82,475
                  )COMPREHENSIVE
      LOSS
                  
                  $
                  (667,035
                  )
                  
                  
                  (21,823
                  )
                  
                  
                  (735,731
                  )(LOSS)
      GAIN PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND
      DILUTED
                  
                  $
                  (0.02
                  )
                  
                  $
                  0.00WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
                  
                  
                  30,302,739
                  
                  
                  
                  30,127,932
  The
accompanying notes are an integral part of these financial
statements.
  F-3
 
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
 MAXLIFE
FUND CORP. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST 31,
2008
  (Expressed
in United States Dollars)
  Preferred
      Shares
                
                
                Common
      StockShares
                
                
                Amount
                
                
                Additional
      Paid-In Capital
                
                
                Shares
                
                
                Amount
                
                
                Additional
      Paid-In Capital
                
                
                Additional
      Paid-In Capital - Warrants
                
                
                Accumulated
      other comprehensive Loss
                
                
                Deficit
      accumulated during the development stage
                
                
                Total
      stockholders' EquityIssuance
      of common stock at inception
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                
                30,000,000
                
                
                $
                30,000
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                30,000Issuance
      of common stock for cash
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                116,100
                
                
                
                116
                
                
                
                115,984
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                116,100Issuance
      of common stock for services
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                11,000
                
                
                
                11
                
                
                
                10,989
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                11,000Acquisition
      of 1254450 Ontario Ltd.
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                5,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                5,000Foreign
      currency translation
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (5,842
                )
                
                
                -
                
                
                
                (5,842
                )Net
      loss for the period
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (46,494
                )
                
                
                (46,494
                )Balance,
      August 31, 2006
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                
                30,127,100
                
                
                $
                30,127
                
                
                $
                131,973
                
                
                $
                -
                
                
                $
                (5,842
                )
                
                $
                (46,494
                )
                
                $
                109,764Issuance
      of common stock for cash
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                170,068
                
                
                
                170
                
                
                
                499,830
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                500,000Financing
      fees
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (25,000
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (25,000
                )Unrealized
      loss on available-for-sale investments, net of taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (45,227
                )
                
                
                -
                
                
                
                (45,227
                )Foreign
      currency translation
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                16
                
                
                
                -
                
                
                
                16Net
      earnings
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                23,388
                
                
                
                23,388Balance,
      August 31, 2007
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                
                30,297,168
                
                
                
                30,297
                
                
                $
                606,803
                
                
                $
                -
                
                
                $
                (51,053
                )
                
                $
                (23,106
                )
                
                $
                562,941Common
      stock issued for services
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                6,000
                
                
                
                6
                
                
                
                34,194
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                34,200Stock
      options issued
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                328,970
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                328,970Financing
      fees
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (8,000
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (8,000
                )Unrealized
      loss on available-for-sale investments, net of taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (37,248
                )
                
                
                -
                
                
                
                (37,248
                )Fair
      market value of warrants attached to preferred stock
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                244,158
                
                
                
                -
                
                
                
                (244,158
                )
                
                
                -Preferred
      stock issued for cash
                
                
                26,400
                
                
                
                660,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                660,000Foreign
      currency translation
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,095
                
                
                
                -
                
                
                
                3,095Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (632,882
                )
                
                
                (632,882
                )Dividends
      paid
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (16,500
                )
                
                
                (16,500
                )Balance,
      August 31, 2008
                
                
                26,400
                
                
                $
                660,000
                
                
                $
                -
                
                
                
                30,303,168
                
                
                
                30,303
                
                
                $
                961,967
                
                
                $
                244,158
                
                
                $
                (85,206
                )
                
                $
                (916,646
                )
                
                $
                894,576
  The
accopanying notes are an integral part of these financial
statements.
  F-4
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  MAXLIFE
FUND CORP. AND SUBSIDIARY
 (A
Development Stage Company)
  CONSOLIDATED
STATEMENTS OF CASH FLOWS
  (Expressed
in United States Dollars)
  For
      the Year Ended 31 August
                      2008
                    
                    
                    For
      the Year Ended 31 August 2007
                    
                    
                    For
      the Period from Inception (9 January 2006) to 31 August
    2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      (loss) earnings
                    
                    $
                    (632,882
                    )
                    
                    $
                    23,388
                    
                    
                    $
                    (655,987
                    )Adjustments
      to reconcile net earnings (loss) to net cash provided by (used in)
      operating activities:Goodwill
      impairment loss
                    
                    
                    35,269
                    
                    
                    
                    -
                    
                    
                    
                    35,269Stock
      based compensation
                    
                    
                    328,970
                    
                    
                    
                    -
                    
                    
                    
                    328,970Unrealized loss on available-for-sale securities
                    
                    
                    (37,248
                    )
                    
                    
                    (45,227
                    )
                    
                    
                    (88,318
                    )Equity issued to acquire 1255450 Ontario Limited
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    5,000Issuance
      of common stock for services
                    
                    
                    34,200
                    
                    
                    
                    -
                    
                    
                    
                    75,200Changes
      in operating assets and liabilities:Available-for-sale
      securities
                    
                    
                    16,704
                    
                    
                    
                    (19,017
                    )
                    
                    
                    (2,313
                    )Purchase
      of insurance policies and capitalized premiums
                    
                    
                    (352,877
                    )
                    
                    
                    (407,051
                    )
                    
                    
                    (759,928
                    )Proceeds
      on sale of policy
                    
                    
                    330,000
                    
                    
                    
                    -
                    
                    
                    
                    330,000Accounts
      payable and accrued liabilities
                    
                    
                    (390,416
                    )
                    
                    
                    409,537
                    
                    
                    
                    23,121Management
      salary payable
                    
                    
                    30,000
                    
                    
                    
                    
                    
                    
                    
                    30,000Deferred
      taxes
                    
                    
                    25,573
                    
                    
                    
                    (25,573
                    )
                    
                    
                    -CASH
      PROVIDED BY OPERATING ACTIVITIES
                    
                    
                    (612,707
                    )
                    
                    
                    (63,943
                    )
                    
                    
                    (678,986
                    )CASH
      FLOWS FROM INVESTING ACTIVITIESCapital
      contribution to joint venture
                    
                    
                    (1,250
                    )
                    
                    
                    -
                    
                    
                    
                    (1,250
                    )Acquisition
      of 1255450 Ontario Limited
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (21,739
                    )CASH
      FLOWS USED IN INVESTING ACTIVITIES
                    
                    
                    (1,250
                    )
                    
                    
                    -
                    
                    
                    
                    (22,989
                    )CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance
      of preferred stock
                    
                    
                    660,000
                    
                    
                    
                    -
                    
                    
                    
                    660,000Advances
      to shareholder
                    
                    
                    (30,006
                    )
                    
                    
                    (6,894
                    )
                    
                    
                    (26,900
                    )Dividends
      paid
                    
                    
                    (16,500
                    )
                    
                    
                    -
                    
                    
                    
                    (16,500
                    )Financing
      fees
                    
                    
                    (8,000
                    )
                    
                    
                    -
                    
                    
                    
                    (8,000
                    )Issuance
      of common stock
                    
                    
                    -
                    
                    
                    
                    475,000
                    
                    
                    
                    591,100CASH
      FLOWS PROVIDED BY FINANCING ACTIVITIES
                    
                    
                    605,494
                    
                    
                    
                    468,106
                    
                    
                    
                    1,199,700EFFECT
      OF FOREIGN CURRENCY TRANSLATION
                    
                    
                    3,095
                    
                    
                    
                    16
                    
                    
                    
                    3,111NET
      INCREASE IN CASH
                    
                    
                    (5,368
                    )
                    
                    
                    404,179
                    
                    
                    
                    500,836CASH,
      BEGINNING OF YEAR
                    
                    
                    506,204
                    
                    
                    
                    102,025
                    
                    
                    
                    -CASH,
      END OF YEAR
                    
                    $
                    500,836
                    
                    
                    $
                    506,204
                    
                    
                    $
                    500,836
 The
accompanying notes are an integral part of these financial
statements.
  F-5
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
   MAXLIFE
FUND CORP. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  (Expressed
in United States Dollars)
 
  1. NATURE
OF OPERATIONS
  MaxLife
Fund Corp, Inc. (the "Company") was incorporated on 9 January 2006 under the
laws of the State of Wyoming.
  The
Company is engaged in financial services, where they seek, acquire, fund and
manage the life insurance policies of individuals.  The Company either
holds these policies until maturity or markets the policies for sale at an
earlier date.
  2. ORGANIZATION
  On 31
August 2006, the Company acquired 100% of the issued and outstanding common
shares of 1254450 Ontario Ltd. ("1254450") an Ontario, Canada corporation for a
purchase price of $25,000 Canadian ($21,739 US) in cash and common shares equal
to $5,000 US.  The parties agreed to defer the issuance of the common
shares until the Company becomes listed on a public market exchange, at which
time the shareholders of 1254450 will be issued that number of common shares
that have a cash value of $5,000 US.  In addition, the shareholders of
1254450 transferred the amounts due to them by 1254450 to the Company. On 31
August 2008 the goodwill determined on the acquisition of 1254450 Ontario Ltd.
of $35,269 was written down, as further described in note 3.
  Consideration
Exchanged:
  Cash
              
              $
              21,739Convertible
      debenture
              
              
              5,000$
              26,739
  Assets
acquired:
  Liabilities
      assumed
              
              $
              (31,558
              )Estimated
      fair value of tangible assets acquired
              
              
              23,028Goodwill
              
              
              35,269$
              26,739
 
  F-6
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
  3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
  The
accounting policies of the Company are in accordance with accounting principles
generally accepted in the United States of America.  Presented below
are those policies considered particularly significant:
  Principles
of Consolidation
  The
Company includes, in consolidation, its wholly owned subsidiary, 1254450 Ontario
Ltd. All significant intercompany transactions and balances have been eliminated
upon consolidation.
  Development
Stage Company
  The
Company is considered to be in the development stage as defined in Statement of
Financial Accounting Standards ("SFAS") No. 7, Accounting and Reporting by
Development Stage Enterprises.The Company has devoted substantially all
of its efforts to business planning and development by means of raising capital
for investing in life Insurance policies. The Company has also not realized any
significant revenues.
  Available-for-sale-securities
  Available-for-sale
securities are reported at fair value and consist of securities not classified
as trading securities or as held-to-maturity securities. Unrealized holding
gains and losses on available-for-sale securities, net of deferred income taxes,
are reported as a net amount in accumulated other comprehensive income within
stockholders' equity. Gains and losses on the sale of available-for-sale
securities are determined using the weighted average cost method.
  Declines
in the fair value of individual held-to-maturity and available-for-sale
securities below their cost that are other than temporary would result in
write-downs of the individual securities to their fair value. Such write-downs
would be included in earnings.
  Investment
in Life Insurance Policies
  Investment
in life insurance policies are recorded in accordance the Financial Accounting
Standards Board Staff Position No. FTB 85-4-1 Accounting for Life Settlement
Contracts by Third-Party Investors (FSP FTB 85-4-1).  FSP FTB
85-4-1 states that an investor may elect to account for its investments in life
settlement contracts using either the investment method or the fair value
method.  The election shall be made on an instrument-by instrument
basis and is irrevocable.  Under the investment method, an investor
shall recognize the initial investment at the purchase price plus all initial
direct costs.  Continuing costs (policy premiums and direct external
costs, if any) to keep the policy in force shall be
capitalized.  Under the fair value method, an investor shall recognize
the initial investment at the purchase price.  In subsequent periods,
the investor shall remeasure the investment at fair value in its entirety at
each reporting period and shall recognize change in fair value earnings (or
other performance indicators for entities that do not report earnings) in the
period in which the changes occur.  The Company has elected to value
its investments in life settlement contracts using the investment
method.
   F-7
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  Fair
Value of Financial Instruments
  The
carrying value of the Company's notes receivables, advances and accounts payable
approximates fair value because of the short-term maturity of these
instruments.
  Foreign
Translation Adjustment
  The
accounts of the Company were translated into United States dollars in accordance
with the provisions of FASB Statement No. 52, Foreign Currency Translation
("SFAS No. 52").  In accordance with the provisions of SFAS No. 52,
transaction gains and losses on these assets and liabilities are included in the
determination of income for the relevant periods.  Adjustments
resulting from the translation of the financial statements from their functional
currencies to United States dollars are accumulated as a separate component of
accumulated other comprehensive income and have not been included in the
determination of income for the relevant periods.
  Income
Taxes
  The
Company accounts for income taxes pursuant to SFAS No. 109, Accounting for Income Taxes.
Deferred tax assets and liabilities are recorded for differences between the
financial statements and tax basis of the assets and liabilities that will
result in taxable or deductible amounts in the future based on enacted tax laws
and rates. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Income tax expense is
recorded for the amount of income tax payable or refundable for the period
increased or decreased by the change in deferred tax assets and liabilities
during the period.
  Use
of Estimates
  The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Examples include estimates of stock based compensation; the
potential outcome of future tax consequences of events that have been recognized
in our financial statements or tax returns; estimating the fair value and/or
goodwill impairment for our reporting units; and determining when investment
impairments are other-than-temporary. Actual results could differ from those
estimates. These estimates are reviewed periodically, and, as adjustments become
necessary, they are reported in earnings in the period in which they become
known.
  F-8
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  Earnings
or Loss Per Share
  The
Company accounts for earnings per share pursuant to SFAS No. 128, Earnings per Share, which
requires disclosure on the financial statements of "basic" and "diluted"
earnings (loss) per share. Basic earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding for the year.  Diluted earnings (loss) per share is
computed by dividing net income (loss) by the weighted average number of common
shares outstanding plus common stock equivalents (if dilutive) related to stock
options and warrants for each year.
  There
were no dilutive financial instruments for the year ended 31 August 2008 and
2007 or for the period from inception (9 January 2006) to 31 August
2008.
  Goodwill
and Intangible Assets
  Goodwill
is the residual amount that results when the purchase price of an acquired
business exceeds the sum of the amounts allocated to the tangible and intangible
assets acquired, less liabilities assumed, based on fair values.
  The
Company accounts for purchased goodwill and other intangible assets in
accordance with SFAS No. 142, Goodwill and Other Intangible
Assets.  Under SFAS No. 142, goodwill and any other intangibles
deemed to have indefinite lives are not subject to amortization; however,
goodwill is subject to an assessment for impairment, which must be performed at
least annually, or more frequently if events or circumstances indicate that
goodwill or other indefinite lived intangibles might be impaired.
  The
Company tested goodwill of its operating unit, 1254450, for impairment at 31
August 2008 and 2007.
  In order
to determine if writedown of goodwill was necessary, management utilized a two
step process: (i) they compared the implied fair value of the reporting unit,
1254450, with its carrying amount of $35,269 and (ii) the estimated fair value
of the reporting unit was performed using a valuation technique based on
multiples of earnings.
  The
implied fair value of the reporting unit was compared with its carrying amount;
and management has determined that the implied fair value of goodwill is $Nil as
at 31 August 2008 and as a result an impairment loss of $35,269 has been
recognized in the statement of loss and comprehensive loss for the year ended 31
August 2008.
  Joint
Ventures
  The
Company accounts for its non-controlling interests in joint ventures where the
Company has influence over financial and operational matters, generally 50% or
less ownership interest, under the equity method of accounting. In such cases,
the Company's original investments are recorded at cost and adjusted for its
share of earnings, losses and distributions.
 
  F-9
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  Comprehensive
Income
  The
Company adopted SFAS No. 130, Reporting Comprehensive
Income. SFAS No. 130 establishes standards for reporting and presentation
of comprehensive income and its components in a full set of financial
statements. Comprehensive income is presented in the statements of changes in
stockholders' equity, and consists of net loss and unrealised gains (losses) on
available for sale marketable securities; foreign currency translation
adjustments and changes in market value of future contracts that qualify as a
hedge; and negative equity adjustments recognized in accordance with SFAS 87.
SFAS No. 130 requires only additional disclosures in the financial statements
and does not affect the Company's financial position or results of
operations.
  Stock
Based Compensation
  In
Decemeber 2004, the Financial Accounting Standard Board ("FASB") issued SFAS No.
123R, Share-Based
Payment ("SFAS No. 123R). SFAS No. 123R establishes standards for the
accounting for transaction in which an entity exchanges its equity instruments
for goods for services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity's equity instruments or that may be settled by the issuance of
those equity instruments. SFAS No. 123R focuses primarily on accounting for
transactions in which an entity obtains employee services in shared-based
payment transactions. SFAS No. 123R requires that the compensation cost relating
to share-based payment transactions be recognized in the consolidated financial
statements. That cost will be measured based on the fair value of the equity or
liability instruments issued.
  Recent
Accounting Pronouncements
  In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS
157 defines fair value, establishes a framework for measuring fair value and
expands disclosure of fair value measurements. SFAS 157 applies under other
accounting pronouncements that require or permit fair value measurements and
accordingly, does not require any new fair value measurements. SFAS 157 is
effective for financial statements issued for fiscal years beginning after 15
November 2007.  Management believes the adoption of this pronouncement
will not have a material impact on the Company's consolidated financial
statements.
  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities. SFAS 159 permits entities to choose to
measure many financial instruments, and certain other items, at fair value. SFAS
159 applies to reporting periods beginning after 15 November 2007. The adoption
of SFAS 159 is not expected to have a material impact on the Company’s financial
condition or results of operations.
 
  F-10
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  Recent
Accounting Pronouncements (Continued)
  In
December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141, (revised 2007), Business
Combinations. SFAS 141(R) applies the acquisition method of accounting
for business combinations established in SFAS 141 to all acquisitions where the
acquirer gains a controlling interest, regardless of whether consideration was
exchanged. Consistent with SFAS 141, SFAS 141(R) requires the acquirer to fair
value the assets and liabilities of the acquiree and record goodwill on bargain
purchases, with main difference the application to all acquisitions where
control is achieved. SFAS 141(R) is effective for financial statements issued
for fiscal years beginning after 15 December 2008. The adoption of this
statement is not expected to have a material effect on the Company's future
financial position or results of operations.
  In
December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No.
160, Noncontrolling Interests
in Consolidated Financial Statements - An amendment of ARB No. 51.SFAS
160 requires companies with noncontrolling interests to disclose such interests
clearly as a portion of equity but separate from the parent's equity. The
noncontrolling interest's portion of net income must also be clearly presented
on the statement of operations. SFAS 160 is effective for financial statements
issued for fiscal years beginning after 15 December 2008. The adoption of this
statement is not expected to have a material effect on the Company's future
financial position or results of operations
  In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets ("FSP 142-3").  FSP 142-3 amends the factors
an entity should consider in developing renewal or extension assumptions used in
determining the useful life of recognized intangible assets under FASB Statement
No. 142, Goodwill and Other
Intangible Assets. This new guidance applies prospectively to intangible
assets that are acquired individually or with a group of other assets in
business combinations and asset acquisitions. FSP 142-3 is effective for
financial statements issued for fiscal years and interim periods beginning after
15 December 2008. Early adoption is prohibited.  The adoption of this
statement is not expected to have a material effect on the Company's financial
statements.
  In  May
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of  non-governmental entities that
are presented in conformity with generally accepted accounting principles in the
United States.  It is  effective 60 days following the SEC's
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting
Principles.  We have not yet commenced evaluating the potential
impact, if any, of the adoption of FASB Statement No. 162 on our
consolidated financial position, results of operations and cash
flows.
   F-11
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 4. INVESTMENT
IN INSURANCE POLICIES
  As at 31
August 2008 the Company holds four life insurance policies with carrying amounts
of $452,955 and face amounts totaling $2,650,000.
  5. ADVANCES
FROM SHAREHOLDER
  The
advances from the shareholder are non-interest bearing, unsecured and have no
specific terms of repayment.  The carrying value of the advances
approximates the market value due to the short-term maturity of the financial
instruments.
  6. CAPITAL
STOCK
  Common
Stock
  On 9
January 2006, the Company issued 30,000,000 common stock to the founders of the
corporation at the par value of $0.001 each.
  On 31
August 2006, the Company completed a private placement of 117,100 common stock,
with a par value of $0.001 at a price of $1.00 each.
  On 31
August 2006, the Company issued 11,000 common stock to various individuals for
legal services rendered.  The shares issued were valued at their fair
market value of $1.00 which is the amount that would have been received if the
shares had been issued for cash.  Management believes that the fair
market value of the services received approximates this value.
  On 29
August 2007, the Company issued 170,068 shares of common stock with a par value
of $0.001 at a price of $2.94 each for an aggregate value of
$500,000.
  On 20
September 2007, the Company issued 6,000 shares of common stock in exchange
for  services rendered by two individuals on the Board of Directors.
The shares issued were valued at their fair market value of $5.70 which is the
amount that would have been received if the shares had been issued for
cash.  Management believes that the fair market value of the services
received approximates this value.  For year ended 31 August 2008,
$34,200 (2007 - $Nil) of these services were rendered and included in stock
based compensation.
   F-12
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 Preferred
Stock
  On 18
March 2008, the Company filed articles of amendment to amend the par value of
its preferred stock from $.001 to $25.00 per share.  The preferred
stock have the following rights attached to them: non-voting, entitle the
holders to receive a dividend equal to $0.625 per share to be paid on a
quarterly basis; not convertible into shares of the Company's common stock;
provided all dividends have been paid to the shareholders, the preferred stock
is redeemable by the Company after two years; in the event of any liquidation,
dissolution or winding up of the Company, holders of the preferred stock shall
have the same liquidation rights as the holders of the Company's common stock,
whereby there are no redemption provisions.
  The
preferred stock of the Company are currently offered in units (the
"Unit").  Each Unit consists of 1,200 shares of preferred stock plus
warrants to purchase 600 shares of common stock. The warrants may be exercised
at any time beginning six months from the date of issuance and ending on the
fifth anniversary of the final closing of the offering of the preferred stock.
The warrants are exercisable, in whole or in part, at exercise prices equal to
the following:
  One third
(1/3) or 200 warrants per Unit shall be exercisable into common stock at $25.00
per share;
  One third
(1/3) or 200 warrants per Unit shall be exercisable into common stock at $30.00
per share;
  One third
(1/3) or 200 warrants per Unit shall be exercisable into common stock at $35.00
per share.
  The
warrants were issued on various dated throughout the year and valued as
follows:
  (A) 4,400
shares at an exercise price of $25.00 per share -  $18.94, $18.19,
$20.19, $20.16
  (B) 4,400
shares at an exercise price of $30.00 per share -   $18.10,
$17.39, $19.34, $19.32
  (C) 4,400
shares at an exercise price of $35.00 per share -   $17.35, $16.68,
$18.58, $18.57
  The total
value of the warrants amounted to $244,158 (2007 - $NIL) and are included as an
addition to additional paid-in capital - warrants.
  The
warrants were valued using the Black-Scholes option pricing model with the
following input variables and assumptions: exercise prices of $25, $30 and $35
per share as noted above, stock price on the date of issuances
of  $27.60, $26.30, $28.65, and $28.49 respectively; calculated
volatility amounted to 84.56%; calculated average term of maturity of five
years; an estimated risk free rate ranging from 2.95% to 3.68% based on the five
year US treasury zero-coupon yield curve.
 
  
 F-13
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 During
the year Company issued 26,400 shares of preferred stock for proceeds of $
660,000 including 26,400 warrants to purchase of 26,400 shares of common stock
as discussed above. On 31 August 2008 the Company paid dividends of $0.625 per
share on its 26,400 issued and outstanding preferred stock totaling
$16,500.
  8.   STOCK
OPTIONS
  On 21
April 2008 the Company executed stock option agreements with four directors of
the Company in consideration for their appointment to the Board of
Directors.  Under the terms of these agreements the Company granted to
each director an option to purchase a total of 10,000 shares of the company's
common stock ("Option Shares") in the following manner: (A) 2,500 shares at an
exercise price of $20.00 per share, (B) 3,500 shares at an exercise price of
$25.00 per share and (C) 4,000 shares at an exercise price of $35.00 per share.
The grantee shall have the option to purchase all of the Option Shares after six
months of the grant date of 22 October 2008.  The optionsexpire in five years
from the grant date, on 21 April 2008.
  The stock
options were valued using the Black-Scholes option pricing model with the
following input variables and assumptions: exercise prices of $20, $35 and $35
per share as noted above, stock price on the date of issuance
of  $18.48; calculated volatility amounted to 84.56%; calculated
average term of maturity of five years; an estimated risk free rate ranging from
2.95% based on the five year US treasury zero-coupon yield curve.
  The stock
options were valued as follows:
  (A)
10,000 shares at an exercise price of $20.00 per share
-    $12.33
  (B)
14,000 shares at an exercise price of $25.00 per share
-     $11.61
  (C)
16,000 shares at an exercise price of $35.00 per share
-     $10.48
  The total
stock compensation related to the Option Shares amounted to $453,580 and is
amortized over the service period of six months from the grant date and have
been included in stock based compensation in the consolidated statement of
loss.
   F-14
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 9. SUPPLEMENTAL
CASH FLOW INFORMATION
  During
the year ended 31 August 2008 and 2007 and for the period from inception (9
January 2006) to 31 August 2007, there were no interest or taxes paid by the
Company.
  During
the year ended 31 August 2008 there were unrealized losses on available-for-sale
securities of $37,248 (2007 - $45,227).
  On
September 20, 2007, the Company issued 6,000 shares of common stock in exchange
for services rendered by two individuals on the Board of Directors. For the year
ended August 31, 2008, $34,200 of these services were rendered and included as
stock based compensation.
  On 21
April 2008 the Company executed stock option agreements with four directors of
the Company in consideration for their appointment to the Board of
Directors.  The total stock compensation related to the stock options
amounted to $453,580 and are amortized over the service period of six months
from the grant date. For the year ended August 31, 2008, the Company expensed
$328,969 as stock based compensation related to the stock options.
  10.
INVESTMENT IN JOINT VENTURE
  On 25
February 2008 the Company and Capital Growth Planning, Inc. (“CGP”), a El Cajon,
California company, formed MaxLife-CGP Partners, LLC (the “Joint Venture”), a El
Cajon, California company, to work together in sourcing, purchasing, and
managing certain life settlement insurance policy assets for the Joint
Venture.  It is the Company’s goal to deploy a portion of funds raised
in a Preferred stock offering as a loan to the Joint Venture. CGP, through its
executives and subsidiary Companies, will use its life settlement experience,
contacts, and specialized products to source, purchase, and manage the life
settlement policy assets for the Joint Venture.  The Company and CGP
each have interests of 50% in the Joint Venture.  The Joint Venture
has been concluded to be jointly controlled, and the Company can exercise
significant influence.  Therefore, the investment in the Joint Venture
is recorded by the equity method of accounting.  The Company has
contributed $1,250 to the Joint Venture.
  As
required under the Joint Venture agreement the Company granted Options of common
stock (“Maxlife Options”) to CGP based on the achievement of certain net profit
earned in the Joint Venture.  The Maxlife Options will vest one year
from the date the Maxlife Warrant is issued, and will expire two years
thereafter. The milestones are based on the following:
  
 Milestone
      -
                Net
      Profit Earned in the Joint Venture
              MaxLife
      Options Granted$1,000,000
              100,000
      at $15$5,000,000
              150,000
      at $20$10,000,000
              200,000
      at $25$15,000,000
              250,000
      at $30$20,000,000
              300,000
      at $35$25,000,000
              350,000
      at $40
   F-15
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 10.
INVESTMENT IN JOINT VENTURE (Continued)
  As
required under the Joint Venture agreement CGP granted Options (“CGP Options”)
to the Company based on the achievement of earnings targets based on net profit
earned in the Joint Venture.  CGP Options will be issued with a three
year term to purchase CGP’s Series B Non-voting Common Stock at the price per
share listed below:
  
 Milestone
      -
                Net
      Profit Earned in the Joint Venture
              CGP
      Options Granted$1,000,000
              100,000
      at $1$5,000,000
              150,000
      at $2$10,000,000
              200,000
      at $3$15,000,000
              250,000
      at $4$20,000,000
              300,000
      at $5$25,000,000
              350,000
      at $6
  The
services that each member will provide towards reaching the milestones has not
yet commenced.  Upon commencement of the service period, the Company
will value the Options and amortize it over the estimated performance
period.
 
  F-16
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 11.
INCOME TAXES
  The
Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income
Taxes.  SFAS No. 109 prescribes the use of the liability method
whereby deferred tax asset and liability account balances are determined based
on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates.  The effects
of future changes in tax laws or rates are not anticipated.
  Under
SFAS No. 109 income taxes are recognized for the following: a) amount of tax
payable for the current year, and b) deferred tax liabilities and assets for
future tax consequences of events that have been recognized differently in the
financial statements than for tax purposes.
  The
Company has tax losses available to be applied against future years income as a
result of the losses incurred since inception.  However, due to the
losses incurred in the period and expected future operating results, management
determined that it is more likely than not that the deferred tax asset resulting
from the tax losses available for carryforward will not be realized through the
reduction of future income tax payments.  Accordingly a 100% valuation
allowance has been recorded for income tax losses available for
carryforward.
  The
components of deferred income taxes have been determined at the combined
Canadian federal and provincial statutory rate of 36.12% and US 15% statutory
rate as follows:
  2008
              
              
              2007Deferred
      income tax asset:Income
      tax losses available for carryforward
              
              
              99,622
              
              
              
              1,717Unrealized
      loss on available-for-sale securities
              
              
              25,573
              
              
              
              25,573Valuation
      allowance
              
              
              (125,195
              )
              
              
              (1,717
              )Deferred
      income taxes
              
              $
              -
              
              
              $
              25,573
  12.
COMMITMENT AND CONTINGENT LIABILITY
  The
Company is contingently liable for the payment of the premiums due on the
insurance policies as described in Note 4.  Although the individual
beneficiary is responsible for these payments, if they are not paid when they
fall due, the Company must pay these premiums on the insured's behalf within a
30 day grace period or the policy would lapse.  As of 31 August 2008
and 2007, the policies premiums were up to date and the policies were in good
standing.
 
 
 
 
 F-17
 MAXLIFE
FUND CORP. AND SUBSIDIARY
  (A
Development Stage Company)
  NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
  FOR
THE PERIOD FROM THE DATE OF INCEPTION (9 JANUARY 2006) TO 31 AUGUST
2008
  (Expressed
in United States Dollars)
 13.
FINANCIAL INSTRUMENTS
  Foreign
Currency Risk
  The
Company is exposed to currency risks due to potential variation of the
currencies in which it operates. Principal currencies include the United States
dollar and Canadian dollar. We monitor our foreign currency exposure regularly
to minimize our foreign currency risk exposure.
  Concentrations
of credit
  SFAS No.
105, Disclosure of Information
About Financial Instruments with Off-Balance-Sheet Risk and Financial Instrument
with Concentration of Credit Risk, requires disclosure of any significant
off-balance-sheet risk and credit risk concentration. The Company does not have
significant off-balance-sheet risk or credit concentration. The Company
maintains cash with major financial institutions. From time to time, the company
may have funds on deposit with commercial banks that exceed federally insured
limits. Management does not consider this to be a significant risk.
  Liquidity
Risk
  The
company is exposed to liquidity risk as its continued operations are dependent
upon obtaining additional capital or maturing or trading of invested policies to
satisfy its liabilities as they come due.
  Predictive
risk
  Our
investment return from a life settlement depends on the difference between the
policy face amount and purchaser’s cost basis (consisting of the acquisition
cost and premiums paid to maintain the policy) and the length of the holding
period, and the demise of the insured. The anticipated life expectancy of an
insured are estimated from standard medical and actuarial data based on the
historical experiences of similarly situated persons. The data is based on
averages involving mortality and morbidity statistics. The outcome of a single
settlement may vary significantly from the statistical average. It is impossible
to predict any one insured’s life expectancy exactly. To mitigate the risk that
an insured will outlive his or her predicted life expectancy, we review all
purchases of life settlement policies and the insured medical records and value
the price of life settlements to yield competitive returns in line with our
expected rate of return.
  F-18
   ITEM
9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
  At no
time have there been any disagreements with such accountants regarding any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.
  ITEM
9A.  CONTROLS AND PROCEDURES
  Evaluation
of 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 our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act), as of August 31, 2008. Based on
this evaluation, our principal executive officer and principal financial officer
has concluded that our disclosure controls and procedures are effective to
ensure that information required to be disclosed by us in the reports we file or
submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms and that our disclosure and controls are designed
to ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is accumulated and communicated to our
management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
  MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Management
of the Company is responsible for establishing and maintaining effective
internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act.  The Company’s internal control over financial reporting
is designed to provide reasonable assurance to the Company’s management and
Board of Directors regarding the preparation and fair presentation of published
financial statements in accordance with United State’s generally accepted
accounting principles (US GAAP), including those policies and procedures
that: (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the company, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with US GAAP and that receipts and expenditures are being made only
in accordance with authorizations of management and directors of the company,
and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.
  Management
conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
Management’s assessment included an evaluation of the design of our internal
control over financial reporting and testing of the operational effectiveness of
our internal control over financial reporting. Based on this assessment,
Management concluded the Company maintained effective internal control over
financial reporting as of August 31, 2008.
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation.
  This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management’s report in this
Annual Report.
  Changes in internal
controls
  We have
not made any significant changes to our internal controls subsequent to the
Evaluation Date. We have not identified any significant deficiencies or material
weaknesses or other factors that could significantly affect these controls, and
therefore, no corrective action was taken.
  
 
 -16-
 
 
 PART
III
  ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
  Our
directors and officers, as of December 15, 2008, are set forth below. The
directors hold office for their respective term and until their successors are
duly elected and qualified. Vacancies in the existing Board are filled by a
majority vote of the remaining directors. The officers serve at the will of the
Board of Directors.
  Name
              Age
              Positions
      and Offices HeldBennett
      Kurtz
              47
              President,
      Chief Executive Officer, Chief Financial Officer and
    DirectorDan
      Schmitt
              41
              DirectorRandy
      Delkus
              41
              DirectorDaniel
      E. Kahan
              54
              Director
  Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years:
  Bennett Kurtz was previously
President and CEO of Kurtz Financial Group, a corporate finance company offering
a full range of consulting and investment banking services to companies seeking
growth. Mr. Kurtz has been involved in financing Public Companies and taking
private company’s public through reverse mergers.
  Mr. Kurtz
was involved in an early stage private placement for Ezenet Inc., which later
raised $51,000,000. Previously he administered and managed a comprehensive
mortgage portfolio in excess of $125,000,000. He was responsible for
underwriting and the syndication of mortgages to financial institutions and
accredited investors. Mr. Kurtz also was responsible for managing and growing a
chain of retail hearing aid centers, which he later sold.
  Mr. Kurtz
graduated from York University in 1983 with a BA degree in Administrative
Studies.
 
 Mr. Dan Schmitt is co-founder
and Chief Executive Officer of Anthony, Allan & Quinn, Inc. ETAL (“AAQ”)
Inc.  This integrated family of businesses, offered clients a broad
range of services and technological solutions, including electronic medical
records, outsourced business services,  marketing and advertising
initiatives.
 
 Since its
inception in 1993, AAQ grew from a single automotive marketing firm to a
diversified holding company with combined revenues of over $100 million in 2003.
By 1998, AAQ had become the 156th fastest
growing company in the United States on Inc. Magazine’s Inc. 500 list. In 1997,
recognizing a tremendous need and opportunity for the application of document
processing solutions to the healthcare industry, Mr. Dan Schmitt and his two AAQ
partners co-founded ABF, to serve insurance companies, Managed Care
Organizations, HMO’s, and Third Party Administrators. ABF leveraged a
combination of proprietary print, insert and Web-based technology to integrate
directly with healthcare company claim systems. By 2003, ABF had become the
23rd
fastest growing company on the Inc. 500 and #1 in Missouri. In July of 2003, ABF
was sold to publicly-traded WebMD, for cash and stock of $260
million.
 
 Mr.
Schmitt was the leading force of AAQ and ABF business models and the architect
of a methodology for creating new business initiatives. He has since combined
his expertise in business development, administration, finance, and marketing,
to create The Incubation Factory – a privately funded business incubator. In
2005, Mr. Schmitt opened the doors to “The Factory” in state of the art
renovated 50,000 sq.ft. warehouse in downtown St. Louis. The Incubation Factory
is dedicated to the mission of growing businesses faster, smarter, and cheaper
than ever thought possible. Mr. Schmitt serves as the Chief Operating Officer of
The Incubation Factory.
 
 Mr.
Schmitt earned a B.A. in Marketing from the University of Northern Iowa in
1989.  He spends time consulting with each of the businesses while
always keeping an eye to the next business opportunity.
 
 Mr. Randy Delkus is a senior
healthcare executive with experience in both for profit and not for profit
sectors.  He received his B.S. in Nursing, Magna Cum Laude, from St.
Louis University and also holds a Business degree from Southern Illinois
University, specializing in Marketing and Management.  He completed
his Masters in Business Administration at Webster University in St. Louis,
graduating Magna Cum Laude.
 
 Mr.
Delkus is currently the President of Anthony, Allan & Quinn (AAQ) and The
Incubation Factory (TIF), a go-to market business incubator that works with
start up companies, universities, individual entrepreneurs and private and
public industry; 75% of its current portfolio has a life sciences and/or
healthcare focus.
 
 Prior to
AAQ, Mr. Delkus served as Chief Executive Officer for one of St. Louis’ most
premier healthcare institutions.
   -17-
 
 Mr. Daniel E. Kahan has an
extensive international actuarial background in the life insurance industry. Mr.
Kahan has hands-on experience and knowledge of the life settlements market in
North America. After earning a B.Sc. (Honors) in Mathematics from University
College, London, England, he qualified as an Associate of the Institute of
Actuaries in 1984. He worked for 3 years in South Africa for Metropolitan Life,
before moving to North America. In Toronto, Ontario, Canada he worked for Sun
Life and Zurich Life, and in Chicago, Illinois, U.S.A., for Blue
Cross.
 
 In 1994
he founded Canadian Life Line in Nova Scotia, to provide insurance secured
loans, with the approval of the Nova Scotia Superintendent of Loans &
Insurance.
 
 In July
2001, he was a panel member at the Society of Actuaries Product Development
Meeting session in Toronto, on Life Settlements.
 
 Committees and
Meetings
  The board
of directors is currently composed of 4 people. All board action requires the
approval of a majority of the directors in attendance at a meeting at which a
quorum is present.
  We
currently do not have standing audit, nominating or compensation committees. Our
entire board of directors handles the functions that would otherwise be handled
by each of the committees. We intend, however, to establish an audit committee,
a nominating committee and a compensation committee of the board of directors as
soon as practicable. We envision that the audit committee will be primarily
responsible for reviewing the services performed by our independent auditors,
evaluating our accounting policies and our system of internal controls. The
nominating committee would be primarily responsible for nominating directors and
setting policies and procedures for the nomination of directors. The nominating
committee would also be responsible for overseeing the creation and
implementation of our corporate governance policies and procedures. The
compensation committee will be primarily responsible for reviewing and approving
our salary and benefit policies (including equity plans), including compensation
of executive officers.
  Upon the
establishment of an audit committee, the board will determine whether any of the
directors qualify as an audit committee financial expert.
 
 Family
Relationships
 
 There are
no family relationship among any of our officers or directors.
 
 Involvement
in Certain Legal Proceedings
  To the
best of our knowledge, none of our directors or executive officers has been
convicted in a criminal proceeding, excluding traffic violations or similar
misdemeanors, or has been a party to any judicial or administrative proceeding
during the past five years that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws, except for matters that were dismissed without
sanction or settlement. Except as set forth in our discussion below in “Certain
Relationships and Related Transactions,” none of our directors, director
nominees or executive officers has been involved in any transactions with us or
any of our directors, executive officers, affiliates or associates which are
required to be disclosed pursuant to the rules and regulations of the
SEC.
 
 CERTAIN
LEGAL PROCEEDINGS
  No
director, nominee for director, or executive officer has appeared as a party in
any legal proceeding material to an evaluation of his ability or integrity
during the past five years.
  COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
  We have
not filed a Form 5 for the year ending August 31, 2008.
  -18-
   ITEM
11. EXECUTIVE COMPENSATION
  The
particulars of the compensation paid to the following persons:
  (a)
              our
      principal executive officer;(b)
              each
      of our two most highly compensated executive officers who were serving as
      executive officers at the end of the years ended August 31, 2008, 2007 and
      2006; and(c)
              up
      to two additional individuals for whom disclosure would have been provided
      under (b) but for the fact that the individual was not serving as our
      executive officer at the end of the years ended August 31, 2008, 2007 and
      2006,
  who we will collectively refer to as
the named executive officers of our company, are set out in the following
summary compensation table, except that no disclosure is provided for any named
executive officer, other than our principal executive officers, whose total
compensation did not exceed $100,000 for the respective fiscal
year:
  SUMMARY
COMPENSATION TABLE
  Annual
      Compensation
              
              
              Long-Term
      CompensationAwards
              PayoutsName
      And Principal Position
              Year
              Salary
              Bonus
              Other
      Annual Compensation
              Stock
                Award(s)
              Options
                Awards
              LTIP
                Payouts
              All
      Other Compensation($)
              ($)
              ($)
              ($)
              ($)
              ($)
              ($)Bennett Kurtz, Chief
      Executive Officer
              2006
              0
              0
              0
              0
              0
              0
              02007
              0
              0
              0
              0
              0
              0
              02008
              30,000
      (1)
              0
              0
              0
              82,242
      (2)
              0
              0
  Mr. Dan Schmitt
      Director
              2006
              0
              0
              0
              0
              0
              0
              02007
              0
              0
              0
              0
              0
              0
              02008
              0
              0
              0
              0
              82,242
      (2)
              0
              0
 
 Mr. Randy Delkus
      Director
              2006
              0
              0
              0
              0
              0
              0
              02007
              0
              0
              0
              0
              0
              0
              02008
              0
              0
              0
              17,100
      (3)
              82,242
      (2)
              0
              0Mr. Daniel E. Kahan
      Director
              2006
              0
              0
              0
              0
              0
              0
              02007
              0
              0
              0
              0
              0
              0
              02008
              0
              0
              0
              17,100
      (3)
              82,242
      (2)
              0
              0
  (1)
              In
      consideration of the services to be rendered hereunder, the Company hereby
      agrees to pay to Bennett Kurtz to serve as Chief Executive Officer of the
      Company for $10,000 per month from June 1, 2008 to December 31, 2008 and
      then $12,500 per month commencing January 1, 2009 until December 31, 2009.
      $30,000 was accrued as at August 31,
2008.
 
 (2)
              On
      April 21, 2008 the Company executed stock option agreements with four
      directors of the Company in consideration for their appointment to the
      Board of Directors.  Under the terms of these agreements the
      Company granted to each director an option to purchase a total of 10,000
      shares of the company's common stock ("Option Shares") in the following
      manner: (A) 2,500 shares at an exercise price of $20.00 per share, (B)
      3,500 shares at an exercise price of $25.00 per share and (C) 4,000 shares
      at an exercise price of $35.00 per share. The grantee shall have the
      option to purchase all of the Option Shares after six months of the grant
      date of October 22, 2008.  The optionsexpire in five
      years from the grant date, on April 21, 2008.(3)
              On
      20 September 2007, the Company issued 6,000 shares of common stock in
      exchange for services rendered by two individuals on the Board of
      Directors. The shares issued were valued at their fair market value of
      $5.70 which is the amount that would have been received if the shares had
      been issued for cash.
   -19-
 
 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  Security
Ownership of Certain Beneficial Owners and Management
 
 The
following table sets forth information regarding the number of shares of Common
Stock beneficially owned on December 15, 2008, the Closing Date, by each person
who is known by the Company to beneficially own 5% or more of the Company’s
Common Stock, each of the Company’s directors and executive officers, and all of
the Company’s directors and executive officers, as a group:
  Title of
      Class
              Name
      and Address of Beneficial Owner
              Amount
      and Nature
                of
      Beneficial Ownership
              Percentage
      of Class (1)Common
              574667
      Ontario Limited (2)
                32
      Prue Avenue
                Toronto,
      ON M6B 1R4
              4,600,000
              15.18%Common
              Itamar
      Cohen
                3100
      Steeles Ave. W. PH
                Concord,
      ON L4K 3R1
              12,900,000
              46.13%All
      officers and directors as a group (1 person)
              4,600,000
              15.18%
  (1)
              Based
      on 30,303,168 shares of our common stock outstanding.(2)
              574667
      Ontario Limited is controlled by Bennett Kurtz and there Mr. Kurtz is
      deemed as the beneficial owner of these
shares.
  ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
  None
 
 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Audit
Fees
  For the
Company’s fiscal year ended August 31, 2008, we were billed approximately
$30,000 (2007 – $9,000) for professional services rendered for the audit of our
financial statements.
  Audit-Related
Fees
 
 For the
Company’s fiscal year ended August 31, 2008 and 2007 we did not incur any fees
for services rendered for other audit related fees.
 
 Tax
Fees
  For the
Company’s fiscal year ended August 31, 2008 and 2007 we did not incur any fees
for professional services rendered for tax compliance, tax advice, and tax
planning.
  All Other
Fees
  None.
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
  Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require
that before our auditor is engaged by us or our subsidiaries to render any
auditing or permitted non-audit related service, the engagement be:
 
 -approved
by our audit committee; or
 
 -entered
into pursuant to pre-approval policies and procedures established by the audit
committee, provided the policies and procedures are detailed as to the
particular service, the audit committee is informed of each service, and such
policies and procedures do not include delegation of the audit committee's
responsibilities to management.
 
 We do not
have an audit committee. Our President, Chief Executive Officer, Chief Financial
Officer, Principal Accounting Officer pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by our President, Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer either before or after the respective services
were rendered.
 
 -20-
 
 PART
IV
 
 ITEM
15. EXHIBITS
 
 Exhibit
      Number
              Exhibit
      Title31.1
              Certification
      pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of
      the Sarbanes- Oxley Act of 2002.32.1
              Certification
      pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
  (b)  Reports
of Form 8-K filed in fourth quarter of the fiscal year:
  None
 
 -21-
  SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
  MAXLIFE
      FUND CORP.By:
              /s/Bennett
      KurtzBennett
      KurtzPresident,
      Chief Executive Officer,
                Chief
      Financial Officer,
                Principal
      Accounting Officer, and Director
 
 Dated:
December 15, 2008
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
  NAME
              TITLE
              DATE/s/ Bennett Kurtz
              President,
      Chief Executive Officer,
              December
      15, 2008Bennett
      Kurtz
              Chief
      Financial Officer, Principal Accounting Officer, and
    Director
     -22-