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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
  THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-51163

ANGSTROM TECHNOLOGIES CORP.(Name of small business issuer in its charter)

|Nevada                                                               | n/a                                 
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|228 Bonis Avenue, #PH3                                               |                                     
|Scarborough, Ontario Canada                                          | M1T 3W4                             
|(Address of principal executive offices)                             | (Zip Code)                          

Issuer's telephone number 416-727-8889

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

Securities registered pursuant to Section 12(g) of the Act:

Common Shares, par value $0.001(Title of class)

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

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

---

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. [   ]

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

State issuer's revenues for its most recent fiscal year
$Nil

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked prices of such
common equity, as of a specified date within 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.) $297,688 as at December 7,
2007 based on a price of $0.08 per share of common stock, being the last price
at which the Registrants common equity was sold.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court. Yes [ 
 ]   No [   ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of equity stock, as of the latest practicable date.

16,052,000 common shares issued and outstanding as of March
23, 2008

DOCUMENTS INCORPORATED BY REFERENCE

N/A

Transitional Small Business Disclosure Format (Check one): Yes
[   ]   No [X].

2

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PART I

Item
1.           Description of
Business.

This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results. Our financial statements are stated in United
States Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock. As used in this annual
report, the terms we, us, our, and Angstrom mean Angstrom Technologies
Corp., unless the context clearly requires otherwise.

Corporate Overview

The address of our principal executive office is 228 Bonis
Avenue, #PH3, Scarborough, Ontario, Canada M1T 3W4. Our telephone number is
416.727.8889. Our common stock is quoted on the OTC Bulletin Board under the
symbol ANGS.

Corporate History

We were incorporated in the State of Nevada on February 24,
2005. Since inception, we have been an exploration stage company. On February
19, 2008, we merged with our wholly-owned subsidiary, Angstrom Technologies
Corp., and changed our name to Angstrom Technologies Corp, and effected two
(2) for one (1) forward stock split of our shares of common stock. The Companys
symbol commenced trading under the symbol ANGS on February 19, 2008.

Recent Corporate Developments

Since September 30, 2007 we have experienced the following
significant corporate developments:

| | 1. | Effective October 11, 2007 John Poloni and Fiore Aliperti
      resigned as directors and officers of the Company. The resignations were
      effected 10 days after the filing of a Schedule 14F-1, which was filed
      with the SEC on October 1, 2007. Prior to their resignation, on August 13,
      2007, pursuant to a share purchase agreement between Alpha Pang and Fiore
      Aliperti, our former president, Alpha Pang acquired 1,975,000 common
      shares in our capital. Following the acquisition Alpha Pang owned 28.31%
      of the Companys issued and outstanding shares of common stock.
      Subsequently, on September 10, 2007, our board of directors appointed
      Alpha Pang as president, chief financial officer, treasurer and a
      director. Mr. Pang has been, since 2001, the Managing Director, Far East
      Market of Harbour Capital Management Group (1999) Ltd., where he reviews
      business plans for companies which provide goods and services related to
      the Far East region, particularly companies from China. Mr. Pang also
      serves as a director for Talware Networx Inc., YSV Ventures Inc., both
      companies listed on the TSX Venture Exchange and Renforth Resources Inc. a
      company currently in the process of being listed on the TSX Venture
      Exchange.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 2. | Effective October 25, 2007, Telford Sadovnick, P.L.L.C.
      resigned as our companys auditors. Telford Sadovnick stated that they
      were resigning as our independent auditor due to the fact that they
    had                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

3

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| |    | withdrawn their registration with the Public Company
      Accountability Oversight Board and are no longer able to audit US issuers.
      On October 25, 2007, our board of directors appointed Danziger Hochman
      Partners LLP, Chartered Accountants as our companys new independent
      registered public accounting firm following the dismissal of Telford.
      Prior to its appointment as independent accountants, our company did not
      consult Danziger Hochman Partners LLP on any of the matters referenced in
      Item 304(a)(2) of Regulation S-B.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 3. | On January 25, 2008, we closed a private placement of
      2,100,000 units (post two for one forward split) at a purchase price of
      $0.04 per unit (post split), for gross proceeds of $84,000. Each unit
      consisted of one common share and one common share purchase warrant
      exercisable for a period of two years from closing at an exercise price of
      $0.06 (post-split). We issued all of the 2,100,000 units to 3 subscribers
      who represented to us that they were not U.S. persons (as that term is
      defined in Regulation S promulgated under the Securities Act of 1933)
      relying on the exemption from registration provided by Regulation S and/or
      Section 4(2) of the Securities Act of 1933.                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 4. | During the third quarter of 2007, the Company announced
      its intention to divest of its mineral development business and engage
      exclusively in software development and computer technology. In connection
      with this announcement, the Company gave notice to terminate its mineral
      option agreements. In connection with the change of business, on February
      1, 2008, the Companys board approved a change in the name of the Company
      from Sanford Exploration Inc. to Angstrom Technologies Corp. and a two
      for one forward stock split. On February 19, 2008, our company effected
      the change in its name to Angstrom Technologies Corp. pursuant to a
      merger with its wholly-owned subsidiary formed for the purpose of
      effecting the name change. Also on February 19, 2008 the Company effected
      the two for one forward stock split of its common shares. The Companys
      symbol commenced trading under the symbol ANGS on February 19,
    2008.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 5. | On September 10, 2007, our board of directors appointed
      Alpha Pang as president, chief financial officer, treasurer and a
      director. Mr. Pang has been, since 2001, the Managing Director, Far East
      Market of Harbour Capital Management Group (1999) Ltd., where he reviews
      business plans for companies which provide goods and services related to
      the Far East region, particularly companies from China. Mr. Pang also
      serves as a director for Talware Networx Inc., YSV Ventures Inc., both
      companies listed on the TSX Venture Exchange and Renforth Resources Inc. a
      company currently in the process of being listed on the TSX Venture
      Exchange.                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 6. | On March 27, 2008, we entered into an Agreement and Plan
      of Merger with Angstrom Microsystems Inc., a private Delaware company and
      Angstrom Acquisition Corp, our wholly owned subsidiary formed for the
      purpose of effecting a merger with AMI. Angstrom is a Green computing
      companies, providing technology solutions ranging from liquid-cooled
      blades to acceleration software in order to help reduce the power
      requirements of datacenters. Closing of the merger agreement is subject to
      a number of terms and conditions outlined under the heading Merger
      Agreement with Angstrom Microsystems Inc. below.                                                                                                                                                                                                                                                                                                                                                                

Merger Agreement with Angstrom Microsystems Inc.

On February 20, 2008, we entered into a letter of intent with
Angstrom Microsystems Inc. (AMI) all of the stockholders of AMI, for the
purpose of acquiring all of the issued and outstanding shares of AMI. Pursuant
to the terms of the Letter of Intent, subject to the entry into a definitive
agreement between the parties, stockholders of AMI would receive 1.1 shares of
our common stock for each AMI share held.

On March 27, 2008, we entered into an Agreement and Plan of
Merger (the Merger Agreement) with AMI and Angstrom Acquisition Corp.
(Angstrom Sub), a private Delaware corporation formed for the purpose of
completing the merger between AMI and Angstrom Sub. Under the terms of the
Merger Agreement we agreed to acquire, through our wholly owned subsidiary
Angstrom Sub, all of the outstanding shares of AMI thereby merging Angstrom Sub
and resulting in Angstrom Microsystems Inc. being a direct, wholly-owned
subsidiary of Angstrom. Upon the reverse subsidiary merger of Angstrom Sub with
and into AMI, if it is completed, we will issue to the shareholders of AMI an
aggregate of up to 6,927,816 shares of the common stock of Angstrom.

4

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The Merger Agreement is subject to, among other things, the
following terms and conditions:

| | (i)    | From the date of the execution of the Merger Agreement,
      AMI must carry out its business in the ordinary course consistent with
      past practice and is not permitted without the consent of Angstrom, to:
      enter into other agreements, modify its incorporating documents, declare
      or pay any dividends, sell or lease or encumber its assets, issue, deliver
      or sell any of its shares, incur any additional indebtedness, grant
      severance or termination pay to directors, officers or employees, commence
      a lawsuit, make any changes in respect of its taxes, and discharge any
      liabilities or claims other than in the ordinary course of
  business;
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (ii)   | AMI obtaining the requisite approval of the Merger
      Agreement by its stockholders;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (iii)  | AMI having delivered to Angstrom all financial statements
      required under applicable regulations of the SEC;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (iv)   | Angstrom adopting an Incentive Stock Option Plan and
      granting certain options to the employees of AMI;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (v)    | Angstrom appointing the following as directors of the
      Company: Lalit Jain as a director and a nominee of Mr. Jain as a director,
      and a nominee of Alpha Pang as a director;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (vi)   | Angstrom entering into an employment agreement with Lalit
      Jain to act as an executive officer of Angstrom;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (vii)  | All of the shareholders of AMI entering into a lock-up
      agreement pursuant to which all of the Angstrom shares of common stock to
      be issued to the AMI shareholders will be restricted from resale for a
      period of two years following closing of the transaction; and                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (viii) | Lalit Jain licensing two patents registered in his name
      to Angstrom for a nominal price.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Upon closing of the Merger, Angstrom will own and operate the
assets of AMI and change its business to that of AMI. There is no assurance that
the merger transaction will be completed as planned or at all.

Angstrom Microsystems Inc. specializes in Green computing
solutions, providing blade servers and workstations uniquely designed for the
energy-hungry datacenter sector. Angstrom provides software-based acceleration
to significantly reduce the number of machines required to perform a given task.
Angstrom combines this technology with novel cooling techniques to further
reduce energy consumption in the datacenter. Fewer machines for the same
performance coupled with less cooling power required per machine results in a
more energy-efficient datacenter.

The foregoing summary is qualified in its entirety by
reference to the Merger Agreement which is filed as Exhibit 10.4 to this Annual
Report.

Our Current Business

Until August 5, 2007, when we gave notice of our termination of
our option to acquire rights on the Whitney Lake Claims, we owned an option to
earn a 100% interest in 11 mining claims known as the Whitney Lake Claims. With
the termination of our option agreement our companys management is currently
concentrating their efforts on pursuing a change of business for our company.
During the quarter ended September 30, 2007 management of the Company determine
to change the focus of the Companys business to software development and
computer power technology. As we do not presently have an operating business
that we can pursue, we are seeking to either identify a suitable business
opportunity or enter into a suitable business combination. Management of our
company does not believe that we will be able to generate revenues without
finding and completing the acquisition of a suitable business opportunity. Our
companys management is currently concentrating their efforts on completing the
proposed merger with AMI. If we do not complete the proposed merger or if no
other suitable business opportunity is identified, shareholders will not realize
any further return on their investment in our company, and there will be no
market for our common shares.

5

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Competition

As we currently do not have an operating business, we do not
have any competitors.

Governmental Regulations

As we currently do not have an operating business, we are not
subject to government regulations.

Research and Development

During our year ended December 31, 2007 and 2006, we did not
incur research and development expenses.

Employees

We currently do not have any employees other than our directors
and officers.

Subsidiaries

Other than our wholly owned subsidiary Sanford Development
(Canada), Inc., a British Columbia company, we have no subsidiaries.

Item
2.           Description of
Property.

Our administrative office address and our mailing address is
228 Bonis Avenue, #PH3, Scarborough, Ontario, Canada M1T 3W4 and our telephone
number is 416.727.8889. Mr. Pang, our sole director and officer, currently
provides this space to us free of charge. This space may not be available to us
free of charge in the future.

Item
3.           Legal
Proceedings.

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

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

None

6

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PART II

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

Our common stock is quoted on the OTC Bulletin Board under the
name Angstrom Technologies Inc. under the symbol ANGS.

On July 11, 2007, our common stock received approval for
quotation on the Over-the-Counter Bulletin Board under the name Sanford
Explorations Inc. under the symbol SFDX. On February 19, 2008, our company:
(i) merged with its wholly-owned subsidiary, Angstrom Technologies Corp., and
changed its name to Angstrom Technologies Corp, and (ii) effected two (2) for
one (1) forward stock split of its common shares. The Companys symbol commenced
trading under the symbol ANGS on February 19, 2008. The high and low bid
prices of our common shares for the periods indicated below are as follows:

Financial Industry Regulatory Authority OTC
      Bulletin BoardQuarter Ended(1)
      High
      LowDecember 31,
      2007(2)
    $n/a
    $n/aSeptember 30,
      2007(2)
    $n/a
    $n/aJune 30,
      2007(2)
    $n/a
    $n/a


| | (1) | Our common shares were initially approved for quotation
      on the OTC Bulletin Board on July 11, 2007 under the symbol SFDX,
      however, the first trade did not occur until March 18, 2008.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                     
| | (2) | No trades occurred during this
period.                                                                                                                                                              

Our common shares are issued in registered form. Select
Fidelity Transfer Services Ltd., 2 Pelham Town Square, Suite 203, PO Box 1167,
Fonthill, Ontario, Canada (Telephone: 905-892-8118) is the registrar and
transfer agent for our common shares.

On March 23, 2008, the shareholders list of our common shares
showed 48 registered shareholders and 16,052,000 shares outstanding.

Dividend Policy

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Recent Sales of Unregistered Securities

On January 25, 2008, we closed a private placement of 2,100,000
units (post two for one forward split) at a purchase price of $0.04 per unit
(post split), for gross proceeds of $84,000. Each unit consisted of one common
share and one common share purchase warrant exercisable for a period of two
years from closing at an exercise price of $0.06 (post-split). We issued all of
the 2,100,000 units to 3 subscribers who represented to us that they were not
U.S. persons (as that term is defined in Regulation S promulgated under the
Securities Act of 1933) relying on the exemption from registration provided by
Regulation S and/or Section 4(2) of the Securities Act of 1933.

Equity Compensation Plan Information

We have not adopted any equity compensation plans since
inception.

7

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

Overview

You should read the following discussion of our financial
condition and results of operations together with the audited financial
statements and the notes to audited financial statements included elsewhere in
this filing prepared in accordance with accounting principles generally accepted
in the United States. This discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those anticipated in these forward-looking statements.

Plan of Operation

On August 5, 2007, when we gave notice of our termination of
our option to acquire rights on the Whitney Lake Claims, we owned an option to
earn a 100% interest in 11 mining claims known as the Whitney Lake Claims. With
the termination of our option agreement our companys management is currently
concentrating their efforts on pursuing a change of business for our company.
During the quarter ended September 30, 2007 management of the Company determine
to change the focus of the Companys business to software development and
computer power technology. As we do not presently have an operating business
that we can pursue, we are seeking to either identify a suitable business
opportunity or enter into a suitable business combination. Management of our
company does not believe that we will be able to generate revenues without
finding and completing the acquisition of a suitable business opportunity. Our
companys management is currently concentrating their efforts on completing the
proposed merger with AMI. If we do not complete the proposed merger or if no
other suitable business opportunity is identified, shareholders will not realize
any further return on their investment in our company, and there will be no
market for our common shares.

Cash Requirements

Over the next 12 months we anticipate that we will incur the
following operating expenses:

|Expense                    |   | Amount  | 
|-------------------------- | - | ------- | 
|Office space               | $ | 36,000  | 
|Professional fees          | $ | 80,000  | 
|Travel expenses            | $ | 20,000  | 
|General and administrative | $ | 50,000  | 
|Total                      | $ | 186,000 | 

Our estimated expenses over the next twelve months are $186,000
and our cash position as at March 27, 2008 is $13,364. We will need additional
funds to meet our working capital requirements over the twelve month period
ending March 31, 2009. We will also need additional funding in the event we
complete our merger with AMI. We anticipate that we will have to raise any
additional funds through private placements of our equity securities and/or debt
financing in order that we may fund the identification and evaluation of a
suitable business opportunity. There is no assurance that the financing will be
completed as planned or at all. We have not been successful raising the funding
necessary to proceed with our business plan. Historically, we have been able to
raise a limited amount of capital through private placements of our equity
stock, but we are uncertain about our continued ability to raise funds
privately. Further, we believe that our company may have difficulties raising
capital until we locate a prospective business opportunity through which we can
pursue our plan of operation. If we are unable to secure adequate capital to
continue our acquisition efforts, our shareholders may lose some or all of their
investment and our business may fail.

Results of Operations

The following summary of our results of operations should be
read in conjunction with our audited financial statements for the year ended
December 31, 2007 which are included herein.

8

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Our operating results for the years ended December 31, 2007 and
December 31, 2006 are summarized as follows:

Year Ended December 31,
      2007
      
      Year Ended December 31,
      2006
      Percentage Increase/
      (Decrease)Revenue
    $
    Nil
    $
    Nil
    n/aExpensesBank Charges and interest
    
    267
    
    471
    43.3%Exploration
    
    Nil
    
    24,881
    (100%)Loss on foreign exchange
    
    16,929
    
    Nil
    100%Management fees
    
    13,500
    
    5,500
    68.7%Professional fees
    
    72,880
    
    43,976
    65.7%Travel
    
    7,040
    
    Nil
    100%Regulatory fees
    
    8,235
    
    2,851
    188.8%Option termination fee
    
    20,603
    
    Nil
    100%Net Loss
    $
    (139,454)
    $
    (77,679)
    79.5%


Revenues

We have had no operating revenues since our inception on
February 24, 2005 through to the period ended December 31, 2007. We anticipate
that we will not generate any revenues for so long as we do not have an
operating business.

General and Administrative

The increase in our general and administrative expenses for the
year ended December 31, 2007 was primarily due to: (i) a one time fee associated
with the termination of our option agreements with Raven Resources Inc. and
Emporio Explorations Corp .; (ii) increased professional fees associated with
the negotiation of the termination of our option and our ongoing reporting
obligations under the Securities Exchange Act of 1934; and (iii) increased
management and travel fees.

Exploration Expenditures

During the year ended December 31, 2007 we expended $nil on
exploration on Whitney Lake Property, which we have abandoned.

Liquidity And Capital Resources

Working Capital

Year Ended December 31,
      2007
    
    Year Ended December 31,
      2006
    Percentage Increase/
      (Decrease)Current Assets
    $
    18,456
    $
    13,259
    39.2%Current Liabilities
    
    213,423
    
    86,852
    (145.7%)Working Capital
    
    (194,967)
    
    (73,593)
    (169.9%)


Cash Flows

Year Ended December 31,
      2007
    
    Year Ended December 31,
      2006
    Percentage Increase/
      (Decrease)Cash flow from operating activities
    $
    (145,987)
    $
    (43,758)
    (233.6%)Cash flow used in investing activities
    
    Nil
    
    Nil
    NilCash provided by financing activities
    
    150,892
    
    36,588
    312.4%Foreign exchange effect on cash
    
    Nil
    
    438
    (100%)Net increase (decrease) in cash
    
    4,905
    
    (6,732)
    172.8%


9

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We had cash on hand of $11,674 and a working capital deficit of
$194,967 as of December 31, 2007 compared to cash on hand of $6,769 and working
capital deficit of $73,593 for the year ended December 31, 2006. We anticipate
that we will incur approximately $186,000 for operating expenses, including
professional, legal and accounting expenses associated with our reporting
requirements under the Exchange Act during the next twelve months. Accordingly,
we will need to obtain additional financing in order to complete our full
business plan.

Cash Used In Operating Activities

We used cash in operating activities in the amount of $145,987
during the year ended December 31, 2007 and $43,758 during the year ended
December 31, 2006. Cash used in operating activities was funded by cash from
financing activities. This increase use of cash can be primarily attributed to
the property option termination payment made on Whitney Lake in the amount of
$20,603 and professional fees associated with maintaining the public company of
$28,904 of which approximately $22,000 remained unpaid at the 2007 year end
date.

Cash Used in Investing Activities

We used cash in investing activities in the amount of $Nil
during the year ended December 31, 2007 compared to $Nil cash used in investing
activities during the year ended December 31, 2006.

Cash from Financing Activities

We generated cash from financing activities in the amount of
$150,892 during the year ended December 31, 2007 compared to $36,588 during the
year ended December 31, 2006. Cash generated by financing activities is
attributable to the private placement financings of our common stock in December
2007 and advances from shareholders.

Personnel Plan

We do not currently plan to add more personnel to our company.
As we start offering service, we will consider outsourcing customer support or
hiring additional personnel.

Going Concern

We have historically incurred losses and have incurred losses
of $139,454 for the year ended December 31, 2007. Because of these historical
losses, we will require additional working capital to develop our business
operations. We intend to raise additional working capital through private
placements, public offerings, bank financing and/or advances from related
parties or shareholder loans.

The continuation of our business is dependent upon obtaining
further financing and achieving a break even or profitable level of operations.
The issuance of additional equity securities by us could result in a significant
dilution in the equity interests of our current or future stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (i)
achieve a level of revenues adequate to generate sufficient cash flow from
operations; or (ii) obtain additional financing through either private
placements, public offerings and/or bank financing necessary to support our
working capital requirements. To the extent that funds generated from operations
and any private placements, public offerings and/or bank financing are
insufficient, we will have to raise additional working capital. No assurance can
be given that additional financing will be available, or if available, will be
on terms acceptable to us. If adequate working capital is not available we may
not increase our operations.

These conditions raise substantial doubt about our ability to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might be necessary
should we be unable to continue as a going concern.

10

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Application Of Critical Accounting Policies

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

We have identified certain accounting policies, described
below, that are most important to the understanding of our financial statements.

Uses of Estimates

The preparation of consolidated financial statements in
conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Financial statement items
subject to significant judgment include expense accruals, income taxes and loss
contingencies. Actual results could differ from those estimates.

Impairment of Long-lived Assets and Long-lived Assets to be
Disposed of

In accordance with SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, our company reviews our
long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to be generated by
the asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets.

Cash and Cash Equivalents

We consider all highly liquid instruments with maturities of
three months or less at the time of issuance to be cash equivalents. As at
December 31, 2007 and 2006, we had no cash equivalents.

Foreign Currency Translation

Gains and losses arising upon settlement of foreign currency
denominated transactions or balances are included in the determination of
income. Our functional currency is the U.S. dollar. Transactions in foreign
currency are translated into U.S. dollars in accordance with the SFAS No. 52,
Foreign Currency Translation, as follows:

|i.   | monetary items at the rate prevailing at the balance
      sheet date;                           
|---- | -------------------------------------------------------------------------------------------------
|     |                                                                                                  
|ii.  | non-monetary items at the historical exchange
  rate;                                            
|     |                                                                                                  
|iii. | revenue and expenses at the average rate in effect during
      the applicable accounting period.

Reported in other comprehensive income (loss), a separate
component of shareholders deficiency, are certain foreign currency translation
adjustments.

Financial Instruments

The carrying values of the our companys financial instruments,
which comprise cash, accounts payable and accrued liabilities and due to
shareholder, approximate their fair values due to the immediate or short-term
maturity of these instruments. The Companys operations are in Canada which
results in exposure to risks from changes in foreign currency rates and the
degree of volatility of these rates. We do not use derivative instruments to
reduce our exposure to foreign currency risk. Unless otherwise noted, it is
managements opinion that our company is not exposed to significant interest or
credit risks in respect of its financial instruments.

11

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Income Taxes

Deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the period in which the
differences are expected to reverse. A valuation allowance against net deferred
tax assets is recorded if, based upon weighted available evidence, it is more
likely than not that some or all of the deferred tax assets will not be
realized.

Basic and Diluted Loss per Share

We compute net income (loss) per share in accordance with SFAS
No. 128, Earnings per Share. The standard requires presentation of both
basic and diluted earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income (loss) available to
common shareholders by the weighted average number of shares outstanding during
the period. Diluted EPS gives effect to all dilutive potential common shares
outstanding during the reporting period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of convertible debt, stock
options or warrants. Diluted EPS excludes all dilutive potential shares if their
effect is anti-dilutive. Basic and diluted loss per share are computed using the
weighted average number of common shares outstanding. Diluted EPS and the
weighted average number of common shares exclude all dilutive potential shares
since their effect would be anti-dilutive. At December 31, 2007 and 2006 our
company has no stock equivalents that were anti-dilutive and excluded from the
loss per share calculation.

Stock-based Compensation

Prior to January 1, 2006, we accounted for stock-based awards
under the recognition and measurement provisions of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees, using the
intrinsic value method of accounting, under which compensation expense was only
recognized if the exercise price of our companys employee stock options was
less than the market price of the underlying common stock on the date of grant.
Effective January 1, 2006, we adopted the fair value recognition provisions of
SFAS No. 123(R) Share Based Payments, using the modified retrospective
transition method. We have not issued any stock options or share based payments
prior to January 1, 2006. Accordingly, there was no effect on our companys
reported loss from operations, cash flows or loss per share as a result of
adopting SFAS No. 123(R).

Revenue Recognition

We recognize revenue in accordance with Securities and Exchange
Commission (SEC) Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial Statements (SAB 101), as modified by SEC Staff Accounting
Bulletin No.104. Under SAB 101, revenue is recognized at the point of passage to
the customer of title and risk of loss, there is persuasive evidence of an
arrangement, the sales price is determinable, and collection of the resulting
receivable is reasonably assured. We have not generated revenue since inception.

Comprehensive Income

We have adopted SFAS No. 130, Reporting Comprehensive
Income (FAS No. 130), which establishes standards for reporting and the
display of comprehensive income, its components and accumulated balances.
Comprehensive income (loss) is defined to include all changes in equity except
those resulting from investments by owners or distributions to owners. Among
other disclosures, FAS No. 130 requires that all items that are required to be
recognized under the current accounting standards as a component of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. Comprehensive income (loss)
is displayed in the statement of shareholders deficiency and in the balance
sheet as a component of shareholders deficiency.

Recent Accounting Pronouncements

In June 2006, the FASB issued FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statements No. 109 (FIN 48). FIN 48 clarifies the accounting for
uncertainty in income taxes by prescribing a two-step method of first evaluating
whether a tax position has met a more likely than not

12

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recognition threshold and, second, measuring that tax position
to determine the amount of benefit to be recognized in the financial statements.
FIN 48 provides guidance on the presentation of such positions within a
classified statement of financial position as well as on derecognition, interest
and penalties, accounting in interim periods, disclosure, and transition. FIN 48
is effective for fiscal years beginning after December 15, 2006. The adoption of
this statement did not have a material effect on our companys reported
financial position or results of operations.

In September 2006, the FASB issued Statement No. 157, Fair
Value Measurements(FAS 157). The objective of FAS 157 is to increase
consistency and comparability in fair value measurements and to expand
disclosures about fair value measurements. FAS 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
FAS 157 applies under other accounting pronouncements that require or permit
fair value measurements and does not require any new fair value measurements.
The provisions of FAS 157 are effective for fair value measurements made in
fiscal years beginning after November 15, 2007. In November 2007, the FASB
announced an option to defer implementation of some of the requirements of this
standard for certain non-financial assets and liabilities. Management does not
expect the adoption of this statement to have a material effect on our companys
future reported financial position or results of operations.

In September 2006, the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 108 (Topic 1N),

Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements (SAB 108),
which addresses how the effect of prior year uncorrected misstatements should be
considered when quantifying misstatements in current year financial statements.
The provisions of SAB 108 become effective as of the end of the 2007 fiscal
year. SAB 108 requires SEC registrants (i) to quantify misstatements using a
combined approach which considers both the balance sheet and income statement
approaches; (ii) to evaluate whether either approach results in quantifying an
error that is material in light of relevant quantitative and qualitative
factors; and (iii) to adjust their financial statements if the new combined
approach results in a conclusion that an error is material. SAB No. 108
addresses the mechanics of correcting misstatements that include effects from
prior years. It indicates that the current year correction of a material error
that includes prior year effects may result in the need to correct prior year
financial statements even if the misstatement in the prior year or years is
considered immaterial. Any prior year financial statements found to be
materially misstated in years subsequent to the issuance of SAB 108 would be
restated in accordance with FAS No. 154, Accounting Changes and Error
Corrections. SAB 108 is effective for fiscal years ending after November 15,
2006. The adoption of SAB 108 did not have a material effect on our companys
reported financial position or results of operations.

In February 2007, the FASB issued Statement No. 159, The
Fair Value Option for Financial Assets and Financial Liabilities  Including an
Amendment of FASB Statement No. 115 (FAS 159). This statement permits
entities to choose to measure many financial instruments and certain other items
at fair value. Most of the provisions of FAS 159 apply only to entities that
elect the fair value option. However, the amendment to FAS 115, Accounting
for Certain Investments in Debt and Equity Securities, applies to all
entities with available-for-sale and trading securities. FAS 159 is effective as
of the beginning of an entitys first fiscal year that begins after November 15,
2007. Early adoption is permitted as of the beginning of a fiscal year that
begins on or before November 15, 2007, provided the entity also elects to apply
the provisions of FAS 157, Fair Value Measurements. Management does not
expect the adoption of this statement to have a material effect on our companys
future reported financial position or results of operations.

In December 2007, the FASB issued Statement No. 141I, Business
  Combinations(FAS 141R), replacing FAS 141, Business Combinations
  (FAS 141). This statement retains the fundamental requirements in
  FAS 141 that the acquisition method of accounting (which FAS 141 termed the
  purchase method) be used for all business combinations and for an acquirer
  to be identified for each business combination. This Statement also establishes
  principles and requirements for how the acquirer: a) recognizes and measures
  in its financial statements the identifiable assets acquired, the liabilities
  assumed, and any noncontrolling interest in the acquiree; b) recognizes and
  measures the goodwill acquired in the business combination or a gain from a
  bargain purchase; and c) determines what information to disclose to enable users
  of the financial statements to evaluate the nature and financial effects of
  the business combination. This Statement clarifies that acquirers are required
  to expense costs related to any acquisitions. FAS 141R will apply prospectively
  to business combinations for which the acquisition date is on or after fiscal
  years beginning December 15, 2008. Early adoption is prohibited. We have not
  yet evaluated the impact, if any, that FAS 141R will have on our financial statements.
  Determination of the ultimate effect of this statement will depend on our companys
  structure at the date of adoption.

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In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements  An Amendment
of ARB No. 51 (FAS 160). FAS 160 establishes new accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. Specifically, this statement requires the
recognition of a noncontrolling interest (minority interest) as equity in the
consolidated financial statements and separate from the parents equity. The
amount of net income attributable to the noncontrolling interest will be
included in consolidated net income on the face of the income statement. FAS 160
clarifies that changes in a parents ownership interest in a subsidiary that do
not result in deconsolidation are equity transactions if the parent retains its
controlling financial interest. In addition, this statement requires that a
parent recognize a gain or loss in net income when a subsidiary is
deconsolidated. Such gain or loss will be measured using the fair value of the
noncontrolling equity investment on the deconsolidation date. FAS 160 also
includes expanded disclosure requirements regarding the interests of the parent
and its noncontrolling interest. FAS 160 is effective for fiscal years beginning
on or after December 15, 2008, with retrospective presentation and disclosure
for all periods presented. Early adoption is prohibited. We currently have no
entities or arrangements that will be affected by the adoption of FAS 160.
However, determination of the ultimate effect of this pronouncement will depend
on our companys structure at the date of adoption.

RISK FACTORS

Much of the information included in this annual report includes
or is based upon estimates, projections or other forward looking statements.
Such forward looking statements include any projections or estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.

Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

We may not succeed in obtaining an appropriate business
opportunity and we may never become profitable.

We are, and will continue to be, a small participant amongst
many other companies seeking a suitable business opportunity or business
combination. A large number of established and well-financed entities, including
venture capital firms, are actively seeking suitable business opportunities or
business combinations which may also be desirable target candidates for us.
Virtually all such entities have significantly greater financial resources,
technical expertise and managerial capabilities than we do. We are,
consequently, at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination. We will also
compete with numerous other small public companies seeking suitable business
opportunities or business combinations.

We may not have sufficient capital to fund our ongoing
operations and may be required to raise additional financing.

We anticipate that we may require additional financing while we
are seeking a suitable business opportunity or business combination. Further, we
anticipate that we will not have sufficient capital to fund our ongoing
operations for the next twelve months. We may be required to raise additional
financing for a particular business combination or business opportunity. We
would likely secure any additional financing necessary through a private
placement of our common shares.

There can be no assurance that, if required, any such financing
will be available upon terms and conditions acceptable to us, if at all. Our
inability to obtain additional financing in a sufficient amount when needed and
upon

14

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terms and conditions acceptable to us could have a materially
adverse effect upon our company. Although we believe that we have funds
sufficient to meet our immediate needs, we may require further funds to finance
the development of any business opportunity that we acquire. There can be no
assurance that such funds will be available or available on terms satisfactory
to us. If additional funds are raised by issuing equity securities, further
dilution to existing or future shareholders is likely to result. If adequate
funds are not available on acceptable terms when needed, we may be required to
delay, scale back or eliminate the development of any business opportunity that
we acquire. Inadequate funding could also impair our ability to compete in the
marketplace, which may result in the dissolution of our company.

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our
operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because our operations have been primarily
financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our continued
operations. Any reduction in our ability to raise equity capital in the future
would force us to reallocate funds from other planned uses and would have a
significant negative effect on our business plans and operations, including our
ability to develop new products and continue our current operations. If our
stock price declines, we may not be able to raise additional capital or generate
funds from operations sufficient to meet our obligations.

We have a limited operating history and if we are not
successful in continuing to grow our business, then we may have to scale back or
even cease our ongoing business operations.

We have a limited operating history on which to base an
evaluation of our business and prospects. Our prospects must be considered in
light of the risks, uncertainties, expenses and difficulties frequently
encountered by companies seeking to acquire or establish a new business
opportunity. Some of these risks and uncertainties relate to our ability to
identify, secure and complete an acquisition of a suitable business
opportunity.

We cannot be sure that we will be successful in addressing
these risks and uncertainties and our failure to do so could have a materially
adverse effect on our financial condition. In addition, our operating results
are dependent to a large degree upon factors outside of our control. There are
no assurances that we will be successful in addressing these risks, and failure
to do so may adversely affect our business.

It is unlikely that we will generate any or significant
revenues while we seek a suitable business opportunity. Our short and long-term
prospects depend upon our ability to select and secure a suitable business
opportunity. In order for us to make a profit, we will need to successfully
acquire a new business opportunity in order to generate revenues in an amount
sufficient to cover any and all future costs and expenses in connection with any
such business opportunity. Even if we become profitable, we may not sustain or
increase our profits on a quarterly or annual basis in the future.

We will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until we complete a business combination or
acquire a business opportunity. This may result in our company incurring a net
operating loss which will increase continuously until we complete a business
combination or acquire a business opportunity that can generate revenues that
result in a net profit to us. There is no assurance that we will identify a
suitable business opportunity or complete a business combination.

In the event that we complete a business combination or
otherwise acquire a business opportunity, the success of our operations may be
dependent upon management of the successor firm or venture partner firm,
together with a number of other factors beyond our control.

The success of our proposed plan of operation will depend to a
great extent on the operations, financial condition and management of any
identified business opportunity. While management intends to seek business
opportunities and/or business combinations with entities which have established
operating histories, there is no assurance that we will successfully locate
business opportunities meeting such criteria. In the event that we complete a
business

15

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combination or otherwise acquire a business opportunity, the
success of our operations may be dependent upon management of the successor firm
or venture partner firm, together with a number of other factors beyond our
control.

We have no agreement for a business combination or other
transaction and we may enter into a business combination with a business
opportunity having no significant operating history, losses, limited or no
potential for earnings, limited assets, negative net worth or other negative
characteristics

We have no arrangement, agreement, or understanding with
respect to acquiring a business opportunity or engaging in a business
combination with any private entity. There can be no assurance that we will
successfully identify and evaluate suitable business opportunities or conclude a
business combination. There is no assurance that we will be able to negotiate
the acquisition of a business opportunity or a business combination on terms
favorable to us. We have not established a specific length of operating history
or a specified level of earnings, assets, net worth or other criteria which it
will require a target business opportunity to have achieved, and without which
we would not consider a business combination in any form with such business
opportunity. Accordingly, we may enter into a business combination with a
business opportunity having no significant operating history, losses, limited or
no potential for earnings, limited assets, negative net worth or other negative
characteristics.

Even if there is demand for the acquisition of a business
opportunity or combination as contemplated, there is no assurance we will
successfully complete such an acquisition or combination.

We have not conducted or received results of market research
indicating that there is a demand for the acquisition of a business opportunity
or business combination as contemplated by our company. Even if there is demand
for the acquisition of a business opportunity or combination as contemplated,
there is no assurance we will successfully complete such an acquisition or
combination.

Our proposed operations, even if successful, may result in a
business combination with only one entity, increasing the risks associated with
our operations.

In all likelihood, our proposed operations, even if successful,
may result in a business combination with only one entity. Consequently, the
resulting activities will be limited to that entitys business. Our inability to
diversify our activities into a number of areas may subject us to economic
fluctuations within a particular business or industry, thereby increasing the
risks associated with our operations.

A business combination or acquisition of a business
opportunity may require management of our company to sell or transfer all or a
portion of the common shares in the capital of our company that they hold or
resign as members of our board of directors.

A business combination or acquisition of a business opportunity
involving the issuance of our common shares may result in new or incoming
shareholders obtaining a controlling interest in our company. Any such business
combination or acquisition of a business opportunity may require management of
our company to sell or transfer all or a portion of the common shares in the
capital of our company that they hold or resign as members of our board of
directors. The resulting change in our control could result in removal of one or
more of our present officers and directors, and a corresponding reduction in or
elimination of their participation in the future affairs of our company.

The issuance of common shares in connection with a business
combination or opportunity will reduce the percentage of common shares owned by
present and prospective shareholders and may result in a change in control.

Our primary plan of operation is based upon the acquisition of
a business opportunity or a business combination with a private concern, which,
in all likelihood, would result in us issuing common shares to shareholders of
such private company. Issuing previously authorized and unissued common shares
in our capital will reduce the percentage of common shares owned by present and
prospective shareholders and may result in a change in our control and/or
management.

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The requirement of audited financial statements of a target
company may forego a business combination rather than incur the expense
associated with preparing audited financial statements.

Management believes that any potential business opportunity or
target company must provide audited financial statements for review and for the
protection of all parties to the business acquisition or combination. One or
more attractive business opportunities may forego a business combination with us
rather than incur the expenses associated with preparing audited financial
statements.

Our ability to achieve any planned growth upon the
acquisition of a suitable business opportunity or business combination will be
dependent upon a number of factors including our ability to grow effectively.

Our ability to achieve any planned growth upon the acquisition
of a suitable business opportunity or business combination will be dependent
upon a number of factors including, but not limited to, our ability to hire,
train and assimilate management and other employees and the adequacy of our
financial resources. In addition, there can be no assurance that we will be able
to manage successfully any business opportunity or business combination. Failure
to manage anticipated growth effectively and efficiently could have a materially
adverse effect on our business.

Trading of our stock may be restricted by the SECs Penny
Stock regulations which may limit a stockholders ability to buy and sell our
stock.

The U.S. Securities and Exchange Commission has adopted
regulations which generally define penny stock to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and accredited investors. The term accredited investor refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of, our common stock.

FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock.

In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.

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Trading in our common shares on the OTC Bulletin Board is
limited and sporadic making it difficult for our shareholders to sell their
shares or liquidate their investments

Our common shares are currently listed for public trading on
the OTC Bulletin Board. The trading price of our common shares has been subject
to wide fluctuations. Trading prices of our common shares may fluctuate in
response to a number of factors, many of which will be beyond our control. The
stock market has generally experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance
of companies with no current business operation. There can be no assurance that
trading prices and price earnings ratios previously experienced by our common
shares will be matched or maintained. These broad market and industry factors
may adversely affect the market price of our common shares, regardless of our
operating performance.

In the past, following periods of volatility in the market
price of a companys securities, securities class-action litigation has often
been instituted. Such litigation, if instituted, could result in substantial
costs for us and a diversion of managements attention and resources.

Our sole director and officer is a resident of a country
other than the United States, investors may find it difficult to enforce, within
the United States, any judgments obtained against our company or our sole
director and officer.

We do not currently maintain a permanent place of business
within the United States. In addition, a our sole director and officer is a
national and/or resident of a country other than the United States, and all or a
substantial portion of such persons assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against our company or our sole officer or
director, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.

18

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Item
7.           Financial
Statements.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

The following consolidated financial statements are filed as
part of this annual report:

|Report
      of Danziger Hochman Partners LLP, Chartered Accountants dated March 19,
      2008.                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                           
|Consolidated
      Balance Sheets as at December 31, 2007 and 2006.                                                                                                                        
|                                                                                                                                                                                           
|Consolidated
      Statements of Operations for the years ended December 31, 2007 and 2006,
      and for the period from February 24, 2005 (date of inception) to December
      31, 2007.
|                                                                                                                                                                                           
|Consolidated
      Statements of Cash Flows for the years ended December 31, 2007 and 2006,
      and for the period from February 24, 2005 (date of inception) to December
      31, 2007.
|                                                                                                                                                                                           
|Consolidated
      Statement of Shareholders Deficiency from February 24, 2005 (date of
      inception) to December 31, 2007.                                                            
|                                                                                                                                                                                           
|Notes
      to Consolidated Financial Statements                                                                                                                                           

19

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and 
  Stockholders of Sanford Exploration, Inc. 
  (A Development Stage Company)

We have audited the accompanying consolidated balance sheet of
  Sanford Exploration, Inc. (A Development Stage Company) as of December 31, 2007,
  and the related consolidated statements of operations, changes in stockholders
  deficiency and cash flows for the year ended December 31, 2007. These financial
  statements are the responsibility of the companys management. Our responsibility
  is to express an opinion on these financial statements based on our audit.

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

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

The accompanying consolidated financial statements have been
  prepared assuming that the Company will continue as a going concern. As more
  fully described in Note 1 to the consolidated financial statements, the Company
  has incurred a working capital deficiency and has an accumulated deficit. These
  conditions raise substantial doubt about its ability to continue as a going
  concern. Managements plans in regard to these matters are also described
  in Note 1. These financial statements do not include any adjustments that might
  result from the outcome of this uncertainty.



/s/ Danziger Hochman Partners LLP

Toronto, Canada 
  March 19, 2008

F-1

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of 
  Sanford Exploration, Inc. 
  (An Exploration Stage Company)

We have audited the accompanying consolidated balance sheets
  of Sanford Exploration, Inc. (the Company) (an Exploration Stage
  Company) as at December 31, 2006 and 2005, the related consolidated statements
  of operations and cash flows for the year ended December 31, 2006, for the ten
  months ended December 31, 2005 and for the period from February 24, 2005 (inception)
  to December 31, 2006. 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 an audit to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall consolidated 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
  Sanford Exploration, Inc. (an Exploration Stage Company) as at December 31,
  2006 and 2005 and the results of its operations and its cash flows for the year
  ended December 31, 2006, ten months ended December 31, 2005 and for the period
  February 24, 2005 (inception) to December 31, 2006 in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been
  prepared assuming the Company will continue as a going concern. As discussed
  in Note 1 to the consolidated financial statements, the Company has suffered
  recurring losses and net cash outflows from operations since inception. These
  factors raise substantial doubt about the Companys ability to continue
  as a going concern. Managements plans in regard to these matters are also
  described in Note 1. These consolidated financial statements do not include
  any adjustments that might result from the outcome of this uncertainty.

/s/ TELEFORD SADOVNICK, P.L.L.C

CERTIFIED PUBLIC ACCOUNTANTS

Bellingham, Washington 
  March 15, 2007



F-2

---

SANFORD EXPLORATION, INC.(A Development Stage Company) Consolidated Balance SheetsAs at December 31, 2007 and 2006

|                                                                           |   | 2007     |   |   | 2006     |  
|-------------------------------------------------------------------------- | - | -------- | - | - | -------- | -
|                                                                           |   |          |   |   |          |  
|ASSETS                                                                     |   |          |   |   |          |  
|Current assets                                                             |   |          |   |   |          |  
|Cash                                                                       | $ | 11,674   |   | $ | 6,769    |  
|Prepaid
      expenses and other assets                                    |   | 6,782    |   |   | 6,490    |  
|                                                                           |   |          |   |   |          |  
|                                                                           | $ | 18,456   |   | $ | 13,259   |  
|                                                                           |   |          |   |   |          |  
|                                                                           |   |          |   |   |          |  
|LIABILITIES                                                                |   |          |   |   |          |  
|Current liabilities                                                        |   |          |   |   |          |  
|Accounts payable and accrued liabilities                                   | $ | 43,669   |   | $ | 49,910   |  
|Due to
      shareholder                                                   |   | 169,754  |   |   | 36,942   |  
|                                                                           |   | 213,423  |   |   | 86,852   |  
|                                                                           |   |          |   |   |          |  
|                                                                           |   |          |   |   |          |  
|SHAREHOLDERS DEFICIENCY                                                   |   |          |   |   |          |  
|Authorized:                                                                |   |          |   |   |          |  
|150,000,000 common voting stock with a par value
      of $0.001 per share |   |          |   |   |          |  
|Issued:                                                                    |   |          |   |   |          |  
|13,952,000 common stock (December 31, 2007 and
      2006)                 |   | 13,952   |   |   | 13,952   |  
|Additional paid-in capital                                                 |   | 90,998   |   |   | 90,998   |  
|Funds advanced for units subscribed                                        |   | 18,080   |   |   | -        |  
|Accumulated other comprehensive
      income (loss)                        |   | (766     | ) |   | (766     | )
|Deficit
      accumulated during the development stage                     |   | (317,231 | ) |   | (177,777 | )
|                                                                           |   | (194,967 | ) |   | (73,593  | )
|                                                                           |   |          |   |   |          |  
|                                                                           | $ | 18,456   |   | $ | 13,259   |  
|                                                                           |   |          |   |   |          |  
|Development stage company and
      going concern                          |   |          |   |   |          |  
|Change in business and subsequent events                                   |   |          |   |   |          |  

The accompanying notes are an integral part of these consolidated
  financial statements.

F-3

---

SANFORD EXPLORATION, INC.(A Development Stage Company) Consolidated Statements of OperationsFor the Years Ended December 31, 2007 and 2006

|                              |   |            |   |   |            |   |   | Cumulative from            |  
|----------------------------- | - | ---------- | - | - | ---------- | - | - | -------------------------- | -
|                              |   |            |   |   |            |   |   | February 24, 2005          |  
|                              |   |            |   |   |            |   |   | (Date of Inception)        |  
|                              |   | 2007       |   |   | 2006       |   |   | to December
      31, 2007 |  
|                              |   |            |   |   |            |   |   |                            |  
|                              |   |            |   |   |            |   |   |                            |  
|Revenue                       | $ | -          |   | $ | -          |   | $ | -                          |  
|                              |   |            |   |   |            |   |   |                            |  
|                              |   |            |   |   |            |   |   |                            |  
|Expenses                      |   |            |   |   |            |   |   |                            |  
|Bank charges and interest     |   | 267        |   |   | 471        |   |   | 922                        |  
|Consulting                    |   | -          |   |   | -          |   |   | 7,000                      |  
|Exploration expenses          |   | -          |   |   | 24,881     |   |   | 41,127                     |  
|Loss on foreign exchange      |   | 16,929     |   |   | -          |   |   | 16,929                     |  
|Impairment loss on mineral    |   |            |   |   |            |   |   |                            |  
|property                      |   | -          |   |   | -          |   |   | 47,110                     |  
|Management fees               |   | 13,500     |   |   | 5,500      |   |   | 33,000                     |  
|Professional fees             |   | 72,880     |   |   | 43,976     |   |   | 132,214                    |  
|Travel                        |   | 7,040      |   |   | -          |   |   | 7,040                      |  
|Regulatory fees               |   | 8,235      |   |   | 2,851      |   |   | 11,286                     |  
|Option termination fee        |   | 20,603     |   |   | -          |   |   | 20,603                     |  
|                              |   |            |   |   |            |   |   |                            |  
|                              |   |            |   |   |            |   |   |                            |  
|Net loss for the
      period | $ | (139,454   | ) | $ | (77,679    | ) | $ | (317,231                   | )
|                              |   |            |   |   |            |   |   |                            |  
|Basic and diluted loss        |   |            |   |   |            |   |   |                            |  
|per common share              | $ | (0.01      | ) | $ | (0.01      | ) |   |                            |  
|Weighted average number of    |   |            |   |   |            |   |   |                            |  
|common shares outstanding     |   | 13,952,000 |   |   | 10,628,454 |   |   |                            |  

The accompanying notes are an integral part of these consolidated
  financial statements.

F-4

---

SANFORD EXPLORATION, INC.(A Development Stage Company) Consolidated Statement of Shareholders DeficiencyPeriod from February 24, 2005 (Date of Inception) to December 31, 2007

Deficit
      
      
      AccumulatedCommon
        Shares
      
      
      
      
      Accumulated
      
      
      OtherAdditional
      
      
      
      
      During the
      
      
      ComprehensiveShares
      
      
      Amount
      
      
      Paid-In Capital
      
      
      
      
      Development Stage
      
      
      Income (Loss)
      
      
      Total$
      
      
      $
      
      
      
      
      $
      
      
      $
      
      
      $Stock issued for cash at $0.0005
      2,000
      
      
      1
      
      
      -
      
      
      
      
      -
      
      
      -
      
      
      1Foreign currency translation adjustment
      -
      
      
      -
      
      
      -
      
      
      
      
      -
      
      
      (1,204
      )
      
      (1,204
      )Net loss
      -
      
      
      -
      
      
      -
      
      
      
      
      (100,098
      )
      
      -
      
      
      (100,098
      )Balance, December 31, 2005
      2,000
      
      
      1
      
      
      -
      
      
      
      
      (100,098
      )
      
      (1,204
      )
      
      (101,301
      )Stock issued for cash at $0.001
      3,950,000
      
      
      3,950
      
      
      -
      
      
      
      
      -
      
      
      -
      
      
      3,950Stock issued for cash at $0.01
      10,000,000
      
      
      10,000
      
      
      90,000
      
      
      
      
      -
      
      
      -
      
      
      100,000Stock issued for cash at $1.50
      2,000
      
      
      2
      
      
      998
      
      
      
      
      -
      
      
      -
      
      
      1,000Stock repurchased for cash at $0.0005
      (2,000
      )
      
      (1
      )
      
      -
      
      
      
      
      -
      
      
      -
      
      
      (1
      )Foreign currency translation adjustment
      -
      
      
      -
      
      
      -
      
      
      
      
      -
      
      
      438
      
      
      438Net loss
      -
      
      
      -
      
      
      -
      
      
      
      
      (77,679
      )
      
      -
      
      
      (77,679
      )Balance, December 31, 2006
      13,952,000
      
      
      13,952
      
      
      90,998
      
      
      
      
      (177,777
      )
      
      (766
      )
      
      (73,593
      )Foreign currency translation adjustment
      -
      
      
      -
      
      
      -
      
      
      
      
      -
      
      
      -
      
      
      -Funds received for units subscribed
      -
      
      
      -
      
      
      -
      
      18,080
      
      
      -
      
      
      -
      
      
      18,080Net loss
      -
      
      
      -
      
      
      -
      
      
      
      
      (139,454
      )
      
      -
      
      
      (139,454
      )Balance, December 31, 2007
      13,952,000
      
      
      13,952
      
      
      90,998
      
      18,080
      
      
      (317,231
      )
      
      (766
      )
      
      (194,967
      )


The accompanying notes are an integral part of these consolidated
  financial statements.

F-5

---

SANFORD EXPLORATION, INC.(A Development Stage Company) Consolidated Statements of Cash FlowsFor the Years Ended December 31, 2007 and 2006

|                                               |   |          |   |   |         |   |   | Cumulative from        |  
|---------------------------------------------- | - | -------- | - | - | ------- | - | - | ---------------------- | -
|                                               |   |          |   |   |         |   |   | February 24, 2005      |  
|                                               |   |          |   |   |         |   |   | (Date of Inception) to |  
|                                               |   | 2007     |   |   | 2006    |   |   | December 31, 2007      |  
|                                               |   |          |   |   |         |   |   |                        |  
|Cash flow from operating activities            |   |          |   |   |         |   |   |                        |  
|Net loss for the period                        | $ | (139,454 | ) | $ | (77,679 | ) | $ | (317,231               | )
|Item not affecting cash:                       |   |          |   |   |         |   |   |                        |  
|Impairment
      loss on mineral property      |   | -        |   |   | -       |   |   | 47,110                 |  
|                                               |   | (139,454 | ) |   | (77,679 | ) |   | (270,121               | )
|Changes in non-cash working capital            |   |          |   |   |         |   |   |                        |  
|Prepaid expenses and
      other assets        |   | (292     | ) |   | (1,490  | ) |   | (6,782                 | )
|Accounts payable
      and accrued liabilities |   | (6,241   | ) |   | 35,411  |   |   | 43,669                 |  
|                                               |   |          |   |   |         |   |   |                        |  
|                                               |   | (145,987 | ) |   | (43,758 | ) |   | (233,234               | )
|                                               |   |          |   |   |         |   |   |                        |  
|Cash flow used in investing activities         |   |          |   |   |         |   |   |                        |  
|Mineral
      acquisition property costs       |   | -        |   |   | -       |   |   | (47,110                | )
|                                               |   |          |   |   |         |   |   |                        |  
|                                               |   | -        |   |   | -       |   |   | (47,110                | )
|                                               |   |          |   |   |         |   |   |                        |  
|Cash flow from financing activities            |   |          |   |   |         |   |   |                        |  
|Proceeds of advances from shareholders         |   | 132,812  |   |   | 36,588  |   |   | 169,754                |  
|Funds received for units subscribed            |   | 18,080   |   |   | -       |   |   | 18,080                 |  
|Net cash proceeds from issuance
      of       |   |          |   |   |         |   |   |                        |  
|common shares                                  |   | -        |   |   | -       |   |   | 104,950                |  
|                                               |   |          |   |   |         |   |   |                        |  
|                                               |   | 150,892  |   |   | 36,588  |   |   | 292,784                |  
|                                               |   |          |   |   |         |   |   |                        |  
|                                               |   |          |   |   |         |   |   |                        |  
|Effect of foreign exchange rate changes        |   | -        |   |   | 438     |   |   | (766                   | )
|                                               |   |          |   |   |         |   |   |                        |  
|Increase (decrease) in cash                    |   | 4,905    |   |   | (6,732  | ) |   | 11,674                 |  
|                                               |   |          |   |   |         |   |   |                        |  
|Cash, beginning of period                      |   | 6,769    |   |   | 13,501  |   |   | -                      |  
|                                               |   |          |   |   |         |   |   |                        |  
|Cash, end of period                            | $ | 11,674   |   | $ | 6,769   |   | $ | 11,674                 |  
|                                               |   |          |   |   |         |   |   |                        |  
|Supplemental Information:                      |   |          |   |   |         |   |   |                        |  
|Interest paid                                  | $ | -        |   | $ | -       |   | $ | -                      |  
|Income taxes paid                              | $ | -        |   | $ | -       |   | $ | -                      |  

The accompanying notes are an integral part of these consolidated
  financial statements.

F-6

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|1.        DEVELOPMENT
      STAGE COMPANY AND GOING CONCERN
|-----------------------------------------------------------

Sanford Exploration, Inc. (the Company,
  Sanford) was incorporated in the state of Nevada, U.S.A. on February
  24, 2005. The Companys mineral exploration operations are conducted by
  its wholly owned subsidiary, Sanford Development (Canada), Inc., which was incorporated
  in the Province of British Columbia, Canada on March 14, 2005. As discussed
  immediately below, the Company was an Exploration Stage Company, as defined
  by Statement of Financial Accounting Standard No.7, Accounting and Reporting
  by Development Stage Enterprises("SFAS 7"). The Company's principal business
  was the acquisition and exploration of mineral resources. At December 2006,
  no value was attributed to this property. At December 31, 2007, the Company
  has ceased to have any interests in exploration properties.

As more fully described in Notes 7 (a)
  and (d) to the accompanying consolidated financial statements, during the third
  quarter of fiscal 2007, the Company announced its intention to divest its mineral
  exploration business and engage exclusively in software development and computer
  technology. Subsequent to December 31, 2007, the Company reached an agreement
  to acquire all of the issued and outstanding shares of Angstrom Microsystems,
  Inc. The Company incorporated a wholly-owned subsidiary, Angstrom Technologies
  Corp. (ATC), in the state of Nevada and merged with ATC under filings
  dated February 8, 2008. Under the same filings, Sanford changed its name and
  will continue under the name Angstrom Technologies Corp. As a result of the
  changes in the nature of operations, at December 31, 2007, the Company is a
  development stage company under the recommendations of SFAS 7.

The accompanying consolidated financial
  statements have been prepared on a going concern basis, which implies the Company
  will continue to realize its assets and discharge its liabilities in the normal
  course of operations. The Company has not generated revenue since inception,
  has never paid any dividends and is unlikely to pay dividends or generate earnings
  in the immediate or foreseeable future. The continuation of the Company as a
  going concern is dependent upon the continued financial support from its shareholders,
  the ability of the Company to obtain necessary equity financing to continue
  operations and the attainment of profitable operations. As at December 31, 2007,
  the Company has accumulated losses of $317,231 since inception and has a working
  capital deficiency of $194,967.These factors raise substantial doubt
  regarding the Company's ability to continue as a going concern. These consolidated
  financial statements do not include any adjustments to the recoverability and
  classification of recorded asset amounts and classification of liabilities that
  might be necessary should the Company be unable to continue as a going concern.
  (See Note 7 (b).)

|2.    SIGNIFICANT
      ACCOUNTING POLICIES
|-------------------------------------------

Principles of Consolidation

The consolidated financial statements
  include the accounts and operations of Sanford Exploration, Inc. and its wholly-owned,
  inactive subsidiary, Sanford Exploration (Canada), Inc. All inter-company accounts
  and transactions have been eliminated.

Uses of Estimates

The preparation of consolidated financial
  statements in conformity with U.S. generally accepted accounting principles
  requires management to make estimates and assumptions that affect the reported
  amounts of assets and liabilities and disclosure of contingent assets and liabilities
  at the date of the consolidated financial statements and the reported amounts
  of revenues and expenses during the reporting period. Financial statement items
  subject to significant judgment include expense accruals, income taxes and loss
  contingencies. Actual results could differ from those estimates.

F-7

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|2.      SIGNIFICANT
      ACCOUNTING POLICIES - continued
|---------------------------------------------------------

Mineral Property Option Payments and
  Exploration Expenditures

The Company has been in the exploration
  stage since its inception on February 24, 2005, and has not yet realized any
  revenues from its planned operations. As described in Note 1 to the accompanying
  consolidated financial statements, Sanford was primarily engaged in the acquisition
  and exploration of mining properties.

The Company followed a policy of expensing
  exploration expenditures until a production decision is made in respect of the
  project and the Company is reasonably assured that it will receive regulatory
  approval to permit mining operations which may include the receipt of a legally
  binding project approval certificate. Such expenditures included exploration
  and administration expenditures. If an area of interest is abandoned or it is
  determined that its carrying value cannot be supported by future production
  or sale, the related costs are charged against operations in the year of abandonment
  or determination of value. Any amounts recorded as mineral leases and claims
  represent costs to date and do not necessarily reflect present or future values.

Impairment of Long-lived Assets and
  Long-lived Assets to be Disposed of

In accordance with SFAS No. 144, Accounting
  for the Impairment or Disposal of Long-Lived Assets, the Company reviews
  its long-lived assets for impairment whenever events or changes in circumstances
  indicate that the carrying amount of an asset may not be recoverable. Recoverability
  of assets to be held and used is measured by a comparison of the carrying amount
  of an asset to future net cash flows expected to be generated by the asset.
  If such assets are considered to be impaired, the impairment to be recognized
  is measured by the amount by which the carrying amount of the assets exceeds
  the fair value of the assets.

Environmental Protection and Reclamation
  Costs

The operations of the Company have been,
  and may in the future be, affected from time to time in varying degrees by changes
  in environmental regulations, including those for future removal and site restorations
  costs. Both the likelihood of new regulations and their overall effect upon
  the Company may vary from region to region and are not predictable.

Environmental expenditures that relate
  to ongoing environmental and reclamation programs are charged against statements
  of operations as incurred or capitalized and amortized depending upon their
  future economic benefits. The Company does not currently anticipate any material
  capital expenditures for environmental control facilities because its property
  holdings were at an early stage of exploration.

Regulatory Matters

The Company and its mineral property
  interest are subject to a variety of federal, provincial and state regulations
  governing land use, health, safety and environmental matters. The Companys
  management believes it has been in substantial compliance with all such regulations.

Cash and Cash Equivalents

The Company considers all highly liquid
  instruments with maturities of three months or less at the time of issuance
  to be cash equivalents. As at December 31, 2007 and 2006, the Company had no
  cash equivalents.

F-8

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|2. | SIGNIFICANT
        ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Gains and losses arising upon settlement of
        foreign currency denominated transactions or balances are included in
        the determination of income. The Companys functional currency is
        the U.S. dollar. Transactions in foreign currency are translated into
        U.S. dollars in accordance with the SFAS No. 52, Foreign Currency Translation,
        as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | i.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | ii.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | iii.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Reported in other comprehensive income (loss),
        a separate component of shareholders deficiency, are certain foreign
        currency translation adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The carrying values of the Companys
        financial instruments, which comprise cash, accounts payable and accrued
        liabilities and due to shareholder, approximate their fair values due
        to the immediate or short-term maturity of these instruments. Except as
        disclosed in Notes 1 and 7(d), the Company's operations are in Canada
        which results in exposure to risks from changes in foreign currency rates
        and the degree of volatility of these rates. The Company does not use
        derivative instruments to reduce its exposure to foreign currency risk.
        Unless otherwise noted, it is management's opinion that the Company is
        not exposed to significant interest or credit risks in respect of its
        financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Deferred tax assets and liabilities are determined
        based on the difference between the financial statement and tax bases
        of assets and liabilities using enacted tax rates in effect for the period
        in which the differences are expected to reverse. A valuation allowance
        against net deferred tax assets is recorded if, based upon weighted available
        evidence, it is more likely than not that some or all of the deferred
        tax assets will not be realized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Basic and Diluted Loss per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company computes net income (loss) per
        share in accordance with SFAS No. 128, Earnings per Share. The
        standard requires presentation of both basic and diluted earnings per
        share (EPS) on the face of the income statement. Basic EPS
        is computed by dividing net income (loss) available to common shareholders
        by the weighted average number of shares outstanding during the period.
        Diluted EPS gives effect to all dilutive potential common shares outstanding
        during the reporting period using the treasury stock method and convertible
        preferred stock using the if-converted method. In computing diluted EPS,
        the average stock price for the period is used in determining the number
        of shares assumed to be purchased from the exercise of convertible debt,
        stock options or warrants. Diluted EPS excludes all dilutive potential
        shares if their effect is anti-dilutive. Basic and diluted loss per share
        are computed using the weighted average number of common shares outstanding.
        Diluted EPS and the weighted average number of common shares exclude all
        dilutive potential shares since their effect would be anti-dilutive. At
        December 31, 2007 and 2006 the Company has no stock equivalents that were
        anti-dilutive and excluded from the loss per share calculation. (See Notes
        6 and 7 (b).)

F-9

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|2. | SIGNIFICANT
        ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Prior to January 1, 2006, the Company accounted for
        stock-based awards under the recognition and measurement provisions of
        Accounting Principles Board Opinion No. 25, Accounting for Stock Issued
        to Employees, using the intrinsic value method of accounting, under
        which compensation expense was only recognized if the exercise price of
        the Company's employee stock options was less than the market price of
        the underlying common stock on the date of grant. Effective January 1,
        2006, the Company adopted the fair value recognition provisions of SFAS
        No. 123(R) Share Based Payments, using the modified retrospective
        transition method. The Company had not issued any stock options or share
        based payments prior to January 1, 2006. Accordingly, there was no effect
        on the Company's reported loss from operations, cash flows or loss per
        share as a result of adopting SFAS No. 123(R).                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Advertising Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Advertising costs are expensed as incurred. No advertising
        costs have been incurred by the Company to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company recognizes revenue in accordance with Securities
        and Exchange Commission (SEC) Staff Accounting Bulletin No.
        101, Revenue Recognition in Financial Statements("SAB 101"), as
        modified by SEC Staff Accounting Bulletin No.104. Under SAB 101, revenue
        is recognized at the point of passage to the customer of title and risk
        of loss, there is persuasive evidence of an arrangement, the sales price
        is determinable, and collection of the resulting receivable is reasonably
        assured. The Company has not generated revenue since inception.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company has adopted SFAS No. 130, Reporting Comprehensive
        Income(FAS No. 130), which establishes standards for
        reporting and the display of comprehensive income, its components and
        accumulated balances. Comprehensive income (loss) is defined to include
        all changes in equity except those resulting from investments by owners
        or distributions to owners. Among other disclosures, FAS No. 130 requires
        that all items that are required to be recognized under the current accounting
        standards as a component of comprehensive income be reported in a financial
        statement that is displayed with the same prominence as other financial
        statements. Comprehensive income (loss) is displayed in the statement
        of shareholders' deficiency and in the balance sheet as a component of
        shareholders' deficiency.                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In June 2006, the FASB issued FASB Interpretation No.
        48, Accounting for Uncertainty in Income Taxes, an interpretation of
        FASB Statements No. 109("FIN 48"). FIN 48 clarifies the accounting
        for uncertainty in income taxes by prescribing a two-step method of first
        evaluating whether a tax position has met a more likely than not recognition
        threshold and, second, measuring that tax position to determine the amount
        of benefit to be recognized in the financial statements. FIN 48 provides
        guidance on the presentation of such positions within a classified statement
        of financial position as well as on derecognition, interest and penalties,
        accounting in interim periods, disclosure, and transition. FIN 48 is effective
        for fiscal years beginning after December 15, 2006. The adoption of this
        statement did not have a material effect on the Company's reported financial
        position or results of operations.

F-10

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|2. | SIGNIFICANT
        ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In September 2006, the FASB issued Statement No. 157,
        Fair Value Measurements(FAS 157). The objective of
        FAS 157 is to increase consistency and comparability in fair value measurements
        and to expand disclosures about fair value measurements. FAS 157 defines
        fair value, establishes a framework for measuring fair value in generally
        accepted accounting principles, and expands disclosures about fair value
        measurements. FAS 157 applies under other accounting pronouncements that
        require or permit fair value measurements and does not require any new
        fair value measurements. The provisions of FAS 157 are effective for fair
        value measurements made in fiscal years beginning after November 15, 2007.
        In November 2007, the FASB announced an option to defer implementation
        of some of the requirements of this standard for certain non-financial
        assets and liabilities. Management does not expect the adoption of this
        statement to have a material effect on the Company's future reported financial
        position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In September 2006, the Securities and Exchange Commission
        issued Staff Accounting Bulletin No. 108 (Topic 1N), Considering the
        Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements(SAB 108), which addresses
        how the effect of prior year uncorrected misstatements should be considered
        when quantifying misstatements in current year financial statements. The
        provisions of SAB 108 become effective as of the end of the 2007 fiscal
        year. SAB 108 requires SEC registrants (i) to quantify misstatements using
        a combined approach which considers both the balance sheet and income
        statement approaches; (ii) to evaluate whether either approach results
        in quantifying an error that is material in light of relevant quantitative
        and qualitative factors; and (iii) to adjust their financial statements
        if the new combined approach results in a conclusion that an error is
        material. SAB No. 108 addresses the mechanics of correcting misstatements
        that include effects from prior years. It indicates that the current year
        correction of a material error that includes prior year effects may result
        in the need to correct prior year financial statements even if the misstatement
        in the prior year or years is considered immaterial. Any prior year financial
        statements found to be materially misstated in years subsequent to the
        issuance of SAB 108 would be restated in accordance with FAS No. 154,
        Accounting Changes and Error Corrections. SAB 108 is effective
        for fiscal years ending after November 15, 2006. The adoption of SAB 108
        did not have a material effect on the Company's reported financial position
        or results of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In February 2007, the FASB issued Statement No. 159,
        The Fair Value Option for Financial Assets and Financial Liabilities
        - Including an Amendment of FASB Statement No. 115(FAS 159).
        This statement permits entities to choose to measure many financial instruments
        and certain other items at fair value. Most of the provisions of FAS 159
        apply only to entities that elect the fair value option. However, the
        amendment to FAS 115, Accounting for Certain Investments in Debt and
        Equity Securities, applies to all entities with available-for-sale
        and trading securities. FAS 159 is effective as of the beginning of an
        entity's first fiscal year that begins after November 15, 2007. Early
        adoption is permitted as of the beginning of a fiscal year that begins
        on or before November 15, 2007, provided the entity also elects to apply
        the provisions of FAS 157, Fair Value Measurements. Management
        does not expect the adoption of this statement to have a material effect
        on the Company's future reported financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-11

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|2. | SIGNIFICANT
        ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In December 2007, the FASB issued Statement No. 141(R),
        Business Combinations(FAS 141R), replacing FAS 141,
        Business Combinations(FAS 141). This statement retains
        the fundamental requirements in FAS 141 that the acquisition method of
        accounting (which FAS 141 termed the purchase method) be used for
        all business combinations and for an acquirer to be identified for each
        business combination. This Statement also establishes principles and requirements
        for how the acquirer: a) recognizes and measures in its financial statements
        the identifiable assets acquired, the liabilities assumed, and any noncontrolling
        interest in the acquiree; b) recognizes and measures the goodwill acquired
        in the business combination or a gain from a bargain purchase; and c)
        determines what information to disclose to enable users of the financial
        statements to evaluate the nature and financial effects of the business
        combination. This Statement clarifies that acquirers are required to expense
        costs related to any acquisitions. FAS 141R will apply prospectively to
        business combinations for which the acquisition date is on or after fiscal
        years beginning December 15, 2008. Early adoption is prohibited. The Company
        has not yet evaluated the impact, if any, that FAS 141R will have on its
        financial statements. Determination of the ultimate effect of this statement
        will depend on the Companys structure at the date of adoption.                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In December 2007, the FASB issued SFAS No. 160, Noncontrolling
        Interests in Consolidated Financial Statements  An Amendment of
        ARB No. 51(FAS 160). FAS 160 establishes new accounting
        and reporting standards for the noncontrolling interest in a subsidiary
        and for the deconsolidation of a subsidiary. Specifically, this statement
        requires the recognition of a noncontrolling interest (minority interest)
        as equity in the consolidated financial statements and separate from the
        parents equity. The amount of net income attributable to the noncontrolling
        interest will be included in consolidated net income on the face of the
        income statement. FAS 160 clarifies that changes in a parents ownership
        interest in a subsidiary that do not result in deconsolidation are equity
        transactions if the parent retains its controlling financial interest.
        In addition, this statement requires that a parent recognize a gain or
        loss in net income when a subsidiary is deconsolidated. Such gain or loss
        will be measured using the fair value of the noncontrolling equity investment
        on the deconsolidation date. FAS 160 also includes expanded disclosure
        requirements regarding the interests of the parent and its noncontrolling
        interest. FAS 160 is effective for fiscal years beginning on or after
        December 15, 2008, with retrospective presentation and disclosure for
        all periods presented. Early adoption is prohibited. The Company currently
        has no entities or arrangements that will be affected by the adoption
        of FAS 160. However, determination of the ultimate effect of this pronouncement
        will depend on the Companys structure at the date of adoption.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | MINERAL
        EXPLORATION PROPERTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | By an Assignment Agreement dated August 15, 2005, the
        Assignor assigned, transferred and set over to the Company all rights,
        title, interest and benefits held by or granted to the Assignor in and
        to a purchase and sale agreement dated December 10, 2004, whereby the
        Assignor had acquired an option to purchase a 100% interest in 11 unpatented
        mineral claims. The 11 mineral claims cover a total of 1,800 acres (728
        hectares) located in the south end of Gillies Limit Township in the Larder
        Lake Mining Division of the Province of Ontario, Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company assumed and agreed to perform all obligations
        of the Assignor under the purchase and sale agreement as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | i.   | $5,000 payment to the Optionor upon execution of the
        agreement;                                                                                                                                                                                                                                                                         
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                 
| | ii.  | The Company shall pay the Optionor a further total of
        $50,000 CDN within three (3) months after the shares of the Company begin
        trading to the public on any stock exchange or quotation system in North
        America after the filing of a prospectus or registration statement, as
        applicable (the trading date);
| |      |                                                                                                                                                                                                                                                                                                                                                 
| | iii. | The Company performed and recorded $10,000 of assessment
        work on the mineral claims due in August 2005 and, at its option, shall
        perform such assessment work so as to keep the relevant mining claims
        and interests subject to the option provided for herein in good standing;                                        

F-12

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|3. | MINERAL
        EXPLORATION PROPERTY - continued
|-- | ------------------------------------------------
|   |                                                 
|   | iv.                                             

|   | Effective August 5, 2007, the Company gave notice of
        termination of the option agreement including a release payment of $22,000
        CDN ($20,603 US). This has been accepted by the Assignor and a release
        was granted on October 30, 2007.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                
|4. | INCOME TAXES                                                                                                                                                                                                                                                   

| | a) | Provision for Income Taxes - Current                                                                                                                                                                                                                                                                                            
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                 
| |    | The difference between the actual income tax recovery
        and the expected corporate income tax recovery relates to losses not recognized.
        The following table summarizes the differences from the statutory rate
        of approximately 34% (2006  34%) to the Companys current tax
        provision recorded.

| |  |                                                             |   | Year Ended   |   |   | Year Ended   |  
| |  | ----------------------------------------------------------- | - | ------------ | - | - | ------------ | -
| |  |                                                             |   | December 31, |   |   | December 31, |  
| |  |                                                             |   | 2007         |   |   | 2006         |  
| |  |                                                             |   |              |   |   |              |  
| |  | Loss before recovery of income taxes                        | $ | (139,454     | ) | $ | (77,679      | )
| |  |                                                             |   |              |   |   |              |  
| |  | Expected income tax recovery at statutory rates
      (34%) |   | (47,414      | ) |   | (26,411      | )
| |  | Adjustments resulting from:                                 |   |              |   |   |              |  
| |  | Exploration
      expenses                                  |   | 7,005        |   |   | 8,460        |  
| |  | Increase in valuation
      allowance with respect to       |   |              |   |   |              |  
| |  | current period loss                                         |   | 40,409       |   |   | 17,951       |  
| |  | Provision for income
      taxes - current                  | $ | -            |   | $ | -            |  

| | b) | Deferred Income Taxes                                                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                            
| |    | The approximate tax effects of each type of temporary
        difference that give rise to the Companys deferred income tax assets
        and liabilities are as follows:

| |                                                            |   | Year Ended   |   |   | Year Ended   |  
| | ---------------------------------------------------------- | - | ------------ | - | - | ------------ | -
| |                                                            |   | December 31, |   |   | December 31, |  
| |                                                            |   | 2007         |   |   | 2006         |  
| |                                                            |   |              |   |   |              |  
| | Non-capital losses                                         | $ | 67,000       |   | $ | 30,000       |  
| | Mineral properties                                         |   | 42,000       |   |   | 30,000       |  
| | Deferred income tax asset before valuation
      allowance |   | 109,000      |   |   | 60,000       |  
| | Valuation allowance                                        |   | (109,000     | ) |   | (60,000      | )
| |                                                            | $ | -            |   | $ | -            |  

F-13

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|4.INCOME
      TAXES - continued
|--------------------------------

Tax Loss Carry-Forwards

At December 31, 2007, the Company had
  approximately $124,000 of unclaimed development and exploration expenditures
  and $190,000 of non-capital losses carried forward available to reduce future
  taxable income at various dates through 2027.

|5. | RELATED
        PARTY TRANSACTIONS AND BALANCES
|-- | -----------------------------------------------
|   |                                                
|   | (a)                                            
|   |                                                
|   |                                                
|   |                                                
|   |                                                
|   |                                                
|   | (b)                                            
|   |                                                
|   | (c)                                            
|   |                                                
|   | (d)                                            

|   | These transactions were in the normal course of operations.
        The value of transactions with related parties is based on the exchange
        amounts, representing the amounts established and agreed on by the related
        parties.                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6. | FUNDS AVANCED FOR SHARES SUBSCRIBED                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On December 22, 2007, the Company entered into a subscription
        agreement to issue 600,000 units at $0.04 per unit, each unit comprising
        one common share and one common share purchase warrant, for net proceeds
        of $18,080. Each share purchase warrant entitles the unit holder to purchase
        one common share for $0.06 on or before December 22, 2009. The units were
        issued subsequent to December 31, 2007.

F-14

---

|SANFORD EXPLORATION, INC.                 
|------------------------------------------
|(A Development Stage Company)             
|Notes to consolidated financial statements
|December 31, 2007
      and 2006          

|**7.** | CHANGE
        IN BUSINESS AND SUBSEQUENT EVENTS                                                                            
|------ | ----------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                             
|       | (a)                                                                                                                         
|       |                                                                                                                             
|       | (b)                                                                                                                         
|       |                                                                                                                             
|       | (c)                                                                                                                         
|       |                                                                                                                             
|       | (d)                                                                                                                         
|       |                                                                                                                             
|8.     | COMPARATIVE
        FIGURES                                                                                                 
|       |                                                                                                                             
|       | Certain comparative figures have been restated
        to conform to the basis of presentation adopted for the current year.

F-15

---

**Item 8.          
  Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.**

Effective on October 25, 2007, Telford Sadovnick, P.L.L.C.
resigned as our companys auditors.

Telford Sadovnick stated that they were resigning as our
independent auditor due to the fact that they had withdrawn their registration
with the Public Company Accountability Oversight Board and are no longer able to
audit US issuers.

Telford Sadovnicks reports on the financial statements of our
company for the year ended December 31, 2006 and the ten months ended December
31, 2005 did not contain an adverse opinion or disclaimer of opinion, nor were
they modified or qualified as to uncertainty, audit scope or accounting
principles with the exception of a statement regarding the uncertainty of our
companys ability to continue as a going concern

During this period and the subsequent interim period through
October 25, 2007, there were no disagreements with Telford Sadovnick on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements if not resolved to Telford
Sadovnicks satisfaction would have caused Telford Sadovnick to make reference
to the subject matter of the disagreement in connection with their report for
the financial statements for the past year.

On October 25, 2007, our board of directors appointed Danziger
Hochman Partners LLP, Chartered Accountants as our companys new independent
registered public accounting firm following the dismissal of Telford. Prior to
its appointment as independent accountants, our company did not consult Danziger
Hochman Partners LLP on any of the matters referenced in Item 304(a)(2) of
Regulation S-B.

Item 8A.        Controls
and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commissions rules and forms and that
such information is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow for timely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, management recognizes that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Our disclosure controls and
procedures were designed to provide reasonable assurance that the controls and
procedures would meet their objectives.

As required by SEC Rule 13a-15(b), we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report. Based on the
foregoing, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective at the reasonable
assurance level.

Managements Annual Report on Internal Control over
Financial Reporting

Management is responsible for establishing and maintaining
adequate internal control over our financial reporting. In order to evaluate the
effectiveness of internal control over financial reporting, as required by
Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment,
including testing, using the criteria in Internal Control  Integrated
Framework, issued by the Committee of Sponsoring Organizations of the Treadway

20

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Commission (COSO). Our system of internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements.

Management has used the framework set forth in the report
entitled Internal Control-Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate
the effectiveness of our internal control over financial reporting. Based on
this assessment, management has concluded that our internal control over
financial reporting was effective as of December 31, 2007.

This Annual Report does not include an attestation report of
our independent registered public accounting firm regarding internal control
over financial reporting. Our internal control over financial reporting was not
subject to attestation by our independent registered public accounting firm
pursuant to temporary rules of the SEC that permit us to provide only
managements report in this Annual Report.

There has been no change in our internal controls over
financial reporting during our most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.

Item 8B.        Other
Information

None.

21

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PART III

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


Directors and Executive Officers, Promoters and Control
Persons

As at March 27, 2008, our directors and executive officers,
their age, positions held, are as follows:

Name
    Position Held with our
      Company
    Age
    Date First Elected or
      AppointedAlpha Pang
    President, Chief Financial Officer, Treasurer
      and Director
    50
    September 10, 2007


Business Experience

The following is a brief account of the education and business
experience of our sole director and executive officer during at least the past
five years.

Alpha Pang  President, Chief Executive Officer,
Secretary, Treasurer and Director

On September 10, 2007, we appointed Alpha Pang to our board of
directors and as our President, Chief Executive Officer, Secretary and
Treasurer. Mr. Pang is an entrepreneur with various business experience
including trading, real estate, brokerage, investment banking and business
consultation. Mr. Pang has served as an independent director for start-up public
companies listed on Canadian stock exchanges. Since 2001, Mr. Pang has been the
Managing Director, Far East Market of Harbour Capital Management Group (1999)
Inc., which provides business consultation and syndication of investment funds
for start up companies. Mr. Pang also serves as a director for Talware Networx
Inc., YSV Ventures Inc., both companies listed on the TSX Venture Exchange and
Renforth Resources Inc. a company currently in the process of being listed on
the TSX Venture Exchange.

Committees of the Board

Audit Committee

We do not have an audit committee, our sole director performs
the functions of an audit committee. The current size of our board of directors
does not facilitate the establishment of a separate committee.

Nominating Committee

We do not have a nominating committee, our sole director
performs the functions of a nominating committee and oversees the process by
which individuals may be nominated to our board of directors.

The current size of our board of directors does not facilitate
the establishment of a separate committee. We hope to establish a separate
nominating committee consisting of independent directors, if the number of our
directors is expanded.

Compensation Committee

We do not have a compensation committee.

Family Relationships

There are no family relationships between any director or
executive officer.

22

---

Involvement in Certain Legal Proceedings

Our sole director, executive officers, promoters or control
persons have not been involved in any of the following events during the past
five years:

1. any bankruptcy petition filed by or
against any business of which such person was a general partner or executive
officer either at the time of the bankruptcy or within two years prior to that
time;

2. any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding traffic
violations and other minor offences);

3. being subject to any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; or

4. being found by a court of competent
jurisdiction (in a civil action), the Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated.

Audit Committee and Audit Committee Financial Expert

We have no audit committee financial expert. We believe that
the cost related to retaining a financial expert at this time is prohibitive.
Further, because of our stage of development, we believe the services of a
financial expert are not warranted.

Code Of Ethics

We adopted a Code of Ethics applicable to all of our directors,
  officers, employees and consultants, which is a code of ethics as
  defined by applicable rules of the SEC. Our Code of Ethics is attached as an
  exhibit to this annual report. If we make any amendments to our Code of Ethics
  other than technical, administrative, or other non-substantive amendments, or
  grant any waivers, including implicit waivers, from a provision of our Code
  of Ethics to our chief executive officer, chief financial officer, or certain
  other finance executives, we will disclose the nature of the amendment or waiver,
  its effective date and to whom it applies in a Current Report on Form 8-K filed
  with the SEC.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended December 31, 2007, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with, with the exception of the following:

Name
    Number of Late Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to File Requested FormsAlpha Pang
    1(1)
    1
    N/A


| | (2) | The named officer, director or greater than 10%
      stockholder, as applicable, filed a late Form 3  Initial Statement of
      Beneficial Ownership.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------

23

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Item 10. Executive Compensation.

The following table contains the particulars of 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 year
      ended December 31, 2007 who had total compensation exceeding $100,000;
      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 most recently
      completed financial year, who we will collectively refer to as the named
      executive officers, of our years ended December 31, 2007 and
  2006.

SUMMARY COMPENSATION TABLEName and
        Principal Position
      Year
      Salary
        ($)
      Bonus
        ($)
      Stock Awards ($)
      Option
        Awards ($)
      Non-Equity Incentive
        Plan Compensa- tion ($)
      Change in Pension Value and Nonqualified Deferred Compensation
        Earnings ($)
      All Other
        Compensa- tion ($)
      Total
        ($)Alpha Pang(1)President, Chief Financial Officer and Treasurer and Director
      2007 
        2006
      10,500 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      10,500 
        NilFiore Aliperti(2)Former President,
        Chief Executive Officer, Secretary, Treasurer
        and Director
      2007 
        2006
      Nil
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil
        Nil


| | (1) | Mr. Pang was appointed, president, chief financial officer,
        treasurer and director on September 10, 2007.                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                         
| | (2) | Effective October 11, 2007 Fiore Aliperti resigned as
      director and officer of the Company. The resignation was effected 10 days
      after the filing of a Schedule 14F-1, which was filed with the SEC on
      October 1, 2007.

DIRECTOR COMPENSATION

The particulars of compensation paid to our directors for our
year ended December 31, 2007, are set out in the following director compensation
table:

Name
      Year
      Fees Earned or Paid in Cash($)
      Stock **Awards** ($)
      Option Awards ($)
      Non-Equity Incentive Plan Compensation ($)
      Change
        in Pension Value and Nonqualified Deferred Compensation Earnings
      All Other Compensation ($)
      Total ($)Alpha Pang(1)
      2007
      10,500
      Nil
      Nil
      Nil
      Nil
      Nil
      10,500Fiore Aliperti(2)
      2007
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilJohn R. Poloni(2)
      2007
      4,500
      Nil
      Nil
      Nil
      Nil
      Nil
      4,500


| | (1) | Mr. Pang was appointed a director of our company on
      September 10, 2007.                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                
| | (2) | Effective October 11, 2007 Fiore
        Aliperti and John Poloni resigned as directors and officers of the Company.
        Their respective resignations were effected 10 days after the filing of
        a Schedule 14F-1, which was filed with the SEC on October 1, 2007.

We did not pay other cash compensation for services rendered as
a director in the year ended December 31, 2007. We may, however, determine to
compensate our directors in the future. Directors are entitled to reimbursement
of expenses incurred in attending meetings. In addition, our directors are
entitled to participate in our stock option plan.

24

---

We have no formal plan for compensating our directors for their
service in their capacity as directors, although such directors are expected in
the future to receive stock options to purchase common shares as awarded by our
Board of Directors or (as to future stock options) a compensation committee
which may be established. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our board of directors. Our board of directors may award special
remuneration to any director undertaking any special services on our behalf
other than services ordinarily required of a director. No director received
and/or accrued any compensation for their services as a director, including
committee participation and/or special assignments.

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for our current directors or current executive
officers. We have no material bonus or profit sharing plans pursuant to which
cash or non-cash compensation is or may be paid to our current directors or
current executive officers, except that stock options may be granted at the
discretion of the board of directors or a committee thereof.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers, except that
our directors and executive officers may receive stock options at the discretion
of our board of directors. We do not have any material bonus or profit sharing
plans pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
discretion of our board of directors.

We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control, where the value of such compensation exceeds $60,000 per
executive officer.

25

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Item
11.           Security
Ownership of Certain Beneficial Owners and Management.

As of March 23, 2008, there were 16,052,000 shares of our
common stock outstanding. The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock as of
that date by (i) each of our directors, (ii) each of our executive officers, and
(iii) all of our directors and executive officers as a group. Except as set
forth in the table below, there is no person known to us who beneficially owns
more than 5% of our common stock. The number of shares beneficially owned is
determined under rules of the Securities and Exchange Commission and the
information is not necessarily indicative of beneficial ownership for any other
purpose.

Name and Address of Beneficial Owner
      Amount
        and Nature of Beneficial Ownership
      Percent
        of Class(1)Alpha Pang 228 Bonis Avenue, #PH3 Scarborough,
        Ontario Canada M1T 3W4
      3,950,000
      24.6%Directors and Executive Officers as a group
      3,950,000
      24.6%5% StockholdersAlpha Pang 228 Bonis Avenue, #PH3 Scarborough,
        Ontario Canada M1T 3W4
      3,950,000
      24.6%Balboa International Asociada S.A. MMG Tower 53
        St. Panama
      900,000
      5.6%Penson Financial Services Canada Inc. 360 St Jacques
        Quest 11thFloor Montreal, Quebec
        H2Y 1P5
      1,395,900
      8.7%


|(1) | Based on 16,052,000 shares of common stock issued and
      outstanding as of March 23, 2008. Except as otherwise indicated, we
      believe that the beneficial owners of the common stock listed above, based
      on information furnished by such owners, have sole investment and voting
      power with respect to such shares, subject to community property laws
      where applicable. Beneficial ownership is determined in accordance with
      the rules of the Securities and Exchange Commission and generally includes
      voting or investment power with respect to securities. Shares of common
      stock subject to options or warrants currently exercisable or exercisable
      within 60 days are deemed outstanding for the purposes of computing the
      percentage ownership of the person holding such options or warrants, but
      are not deemed outstanding for the purposes of computing the percentage
      ownership of any other person.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Control

We are unaware of any contract or other arrangement the operation
  of which may at a subsequent date result in a change of control of our company.

26

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

Except as disclosed herein, there have been no transactions or
proposed transactions in which the amount involved exceeds the lesser of
$120,000 or one percent of the average of our total assets at year-end for the
last three completed fiscal years in which any of our directors, executive
officers or beneficial holders of more than 5% of the outstanding shares of our
common stock, or any of their respective relatives, spouses, associates or
affiliates, has had or will have any direct or material indirect interest.

The Company entered into a one-year agreement commencing
October 1, 2007 with a director to serve the Company and its subsidiary as an
executive officer. In consideration, the Company has agreed to pay $36,000 U.S.
per annum and a travel allowance of $500 U.S. per month. Management fees of
$9,000 and a travel allowance of $1,500 were charged for the year ended December
31, 2007 and since inception. The Company has received advances of $169,754 from
a shareholder who is also a director. The advances are non-interest bearing,
unsecured and without specific terms of repayment. Consulting fees for the year
ended December 31, 2007 of $Nil (2006 - $Nil), and since inception to December
31, 2007 of $7,000, were paid to a former director of the Company.

Director Independence

Our common stock is quoted on the OTC bulletin board
interdealer quotation system, which does not have director independence
requirements. Under NASDAQ rule 4200(a)(15), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. Our sole director, Alpha Pang, is also our chief executive officer,
president and treasurer, as a result, we do not have any independent directors.

As a result of our limited operating history and limited
resources, our management believes that we will have difficulty in attracting
independent directors. in addition, we would be likely be required to obtain
directors and officers insurance coverage in order to attract and retain
independent directors. our management believes that the costs associated with
maintaining such insurance is prohibitive at this time.

27

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Item
13.           Exhibits

Exhibits required by Item 601 of Regulation S-B

|Exhibit |                                                                                                                                                                                                                                   
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                   
|(3)     | (i) Articles
        of Incorporation; and (ii) Bylaws                                                                                                                                                                            
|        |                                                                                                                                                                                                                                   
|3.1     | Articles of
        Incorporation (incorporated by reference from our Form SB-2 filed on November
        8, 2006)                                                                                                                
|        |                                                                                                                                                                                                                                   
|3.2     | Bylaws (incorporated
        by reference from our Form SB-2 filed on November 8, 2006)                                                                                                                                           
|        |                                                                                                                                                                                                                                   
|3.3     | Articles of
        Merger filed with the Nevada Secretary of State on February 8, 2008, effective
        February 19, 2008 (incorporated by reference from our Current Report on
        Form 8-K filed on February 19, 2008)   
|        |                                                                                                                                                                                                                                   
|3.4     | Certificate
        of Change filed with the Nevada Secretary of State on February 8, 2008,
        effective February 19, 2008 (incorporated by reference from our Current
        Report on Form 8-K filed on February 19, 2008)
|        |                                                                                                                                                                                                                                   
|4.1     | Form of Warrant
        Certificate for Offering completed January 25, 2008 (incorporated by reference
        from our Form 8-K filed on February 1, 2008)                                                                       
|        |                                                                                                                                                                                                                                   
|(10)    | Material
        Contracts                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                   
|10.1    | Agreement between
        Raven Resources Inc. and Emporio Explorations Corp. (incorporated by reference
        from our Form SB-2 filed on November 8, 2006)                                                                    
|        |                                                                                                                                                                                                                                   
|10.2    | Agreement between
        Emporio Explorations Corp. and Sanford Exploration (Canada) Inc. (incorporated
        by reference from our Form SB-2 filed on November 8, 2006)                                                       
|        |                                                                                                                                                                                                                                   
|10.3    | General Release
        dated November 2, 2007 from Raven Resources Inc. (incorporated by reference
        from our Form 10-QSB filed on November 29, 2007)                                                                      
|        |                                                                                                                                                                                                                                   
|10.4*   | Letter
        of Intent dated February 20, 2008 among Angstrom Technologies Corp., Angstrom
        Microsystems Inc. and the shareholders of Angstrom Microsystems Inc.                                                         
|        |                                                                                                                                                                                                                                   
|10.5*   | Agreement
        and Plan of Merger dated March 27, 2008 between Angstrom Acquisition Corp
        Angstrom Technologies Corp. and Angstrom Microsystems Inc.                                                                    
|        |                                                                                                                                                                                                                                   
|(14)    | Code of Ethics                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                   
|14.1*   | Code
        of Business Conduct and Ethics                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                   
|(31)    | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                   
|31.1*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002                                                                                                                                                                
|        |                                                                                                                                                                                                                                   
|(32)    | Section 1350
        Certifications                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                   
|32.1*   | Section
        906 Certification under Sarbanes-Oxley Act of 2002                                                                                                                                                                

*Filed herewith

28

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Item
14.           Principal
Accountant Fees and Services

The following table sets forth the fees billed to the Company
for professional services rendered by the Company's independent registered
public accounting firm, for the years ended December 31, 2007 and December 31,
2006:

|Services       | 2007    | 2006   
|-------------- | ------- | -------
|Audit fees     | $23,500 | $10,000
|Tax fees       | $Nil    | $Nil   
|All other fees | $Nil    | $Nil   
|Total fees     | $23,500 | $10,000

Audit Fees. Consist of fees billed for
professional services rendered for the audits of our financial statements,
reviews of our interim consolidated financial statements included in quarterly
reports, services performed in connection with filings with the Securities and
Exchange Commission and related consent letters and other services that are
normally provided by Danziger Hochman Partners LLP (Danziger) for the fiscal
year ended December 31, 2007 and Telford Sadovnick, P.L.L.C. for the year
December 31, 2006 in connection with statutory and regulatory filings or
engagements.

Tax Fees.Consist of fees billed for
professional services for tax compliance, tax advice and tax planning. These
services include assistance regarding federal, state and local tax compliance
and consultation in connection with various transactions and acquisitions.

We do not use Danziger for financial information system design
and implementation. These services, which include designing or implementing a
system that aggregates source data underlying the financial statements or
generates information that is significant to our financial statements, are
provided internally or by other service providers. We do not engage Danziger to
provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Danziger is engaged by us to render any
auditing or permitted non-audit related service, the engagement be:

- approved by our audit committee (the functions of which are performed by
  our entire board of directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

Our entire board of directors pre-approves all services
provided by our independent auditors. All of the above services and fees were
reviewed and approved by our sole director either before or after the respective
services were rendered.

Our board of directors have considered the nature and amount
  of fees billed by Danziger and believe that the provision of services for activities
  unrelated to the audit is compatible with maintaining Danzigers independence.

29

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SIGNATURES

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

ANGSTROM TECHNOLOGIES CORP.



By: */s/ Alpha Pang*
         Alpha Pang 
         President, Chief Financial Officer,
  Treasurer and Director 
         (Principal Executive Officer, Principal
  Financial Officer and 
         Principal Accounting Officer)

Date: April 1, 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.



By: */s/ Alpha Pang*
         Alpha Pang 
         President, Chief Financial Officer,
  Treasurer and Director 
         (Principal Executive Officer, Principal
  Financial Officer and 
         Principal Accounting Officer)

Date: April 1, 2008

30

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