UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB


     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006

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

            For the transition period from __________ to ___________

                        Commission file number: 000-49957

                         LOCATEPLUS HOLDINGS CORPORATION
                 (Name of small business issuer in its charter)

                DELAWARE                             04-3332304
     (State or other jurisdiction                  (IRS Employer
     of incorporation or organization)             Identification No.)


          100  CUMMINGS  CENTER,
              SUITE  235M,
         BEVERLY,  MASSACHUSETTS                        01915
     (Address of principal executive offices)         (Zip Code)


                                 (978) 921-2727
                           (Issuer's telephone number)

      Securities registered under Section 12(b) of the Exchange Act: NONE.

         Securities registered under Section 12(g) of the Exchange Act:

                         COMMON STOCK, PAR VALUE $0.01
                                (Title of class)

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.
[X] Yes     [  ]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 12b-2 of the Exchange Act) Yes [  ] No [X]


Revenues  for  the  most  recent  fiscal  year  are:  $  12,250,073.

The  aggregate  market  value of the voting and non-voting common equity held by
non-affiliates,  computed  by reference to the average bid and ask price of such
common  equity  on  March  31,  2007,  is  $  1,750,362

State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of  the  latest  practicable date. As of March 31, 2007  there were
8,335,057  shares  of  Common  Stock  outstanding.


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

<PAGE>



                                TABLE OF CONTENTS
                                -----------------


     PAGE
     ----
PART I
ITEM 1     Description of Business. . . . . . . . . . . . . . . . . . . 1
ITEM 2     Description of Property. . . . . . . . . . . . . . . . . . . 6
ITEM 3     Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 7
ITEM 4     Submission of Matters to a Vote of Security Holders. . . . . 7

PART II
ITEM 5     Market for Common Equity and Related Stockholder
           Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 6     Management's Discussion and Analysis of Financial
           Condition and Results of Operations. . . . . . . . . . . .  13
ITEM 7     Financial Statements . . . . . . . . . . . . . . . . . . . .19
ITEM 8     Changes In and Disagreements with Accountants on
           Accounting and Financial Disclosure. . . . . . . . . . . . .20
ITEM 8A    Controls and Procedures. . . . . . . . . . . . . . . . . . .20

PART III
ITEM 9     Directors, Executive Officers, Promoters and
           Control Persons; Compliance withSection 16(a)
           of the Exchange Act. . . . . . . . . . . . . . . . . . . . .20
ITEM 10    Executive Compensation . . . . . . . . . . . . . . . . . . .23

ITEM 11    Security Ownership of Certain Beneficial Owners
           and Management . . . . . . . . . . . . . . . . . . . . . . .25
ITEM 12    Certain Relationships and Related Transactions . . . . . . .26
ITEM 13    Exhibits and Reports on Form 8-K . . . . . . . . . . . . . .28
ITEM 14    Principal Accountant Fees and Services . . . . . . . . . . .30


                                      * * *
<PAGE>

                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

OVERVIEW

LocatePLUS  Holdings  Corporation,  through  itself  and  its  wholly-owned
subsidiaries  LocatePLUS  Corporation,  Worldwide  Information,  Inc., Certifion
Corporation,  Dataphant,  Inc.,  and  Metrigenics,  Inc.,  (collectively,  the
"LocatePLUS  Group"),  are  business-to-business,  business-to-government  and
business-to-consumer  providers  of  public information via our proprietary data
integration  solutions.  Since  1996, we have sold a CD-ROM-based product, which
we  refer  to  as  Worldwide Information , which enables users to search certain
motor  vehicle  records  and  driver's  license  information in multiple states.
Since  March  1,  2000, we have maintained a database that is accessible through
the  Internet,  known as LocatePLUS.  Our LocatePLUS product contains searchable
and  cross-referenced  public  information  on individuals throughout the United
States, including individuals' names, addresses, dates of birth, Social Security
numbers,  prior residences, and, in certain circumstances, real estate holdings,
recorded  bankruptcies, liens, judgments, drivers' license information and motor
vehicle  records.  On  September  1,  2003,  our  newly  formed  wholly-owned
subsidiary,  Certifion  Corporation,  acquired  all  of  the  assets  of Project
Entersect  Corporation  a  provider  of  data  technology.  Certifion  provides
self-screening  for  both  resume  and  online dating services and has filed for
patent protection for both of these services.  In October 2003, our newly formed
wholly-owned subsidiary, Dataphant, Inc. acquired Voice Power Technology through
a merger.  Through this merger, Dataphant now has information on virtually every
land-based  phone  number in the United States and approximately 30% of the cell
phone  numbers  in  the United States.  On January 6, 2004, the Company formed a
new  wholly-owned  subsidiary, Metrigenics, Inc., with operations located in New
York  state.  Metrigenics was formed to develop new ways to integrate biometrics
with  data.  Metrigenics  has  finished  first  stage testing on matching DNA to
facial  characteristics  and  expects to have first stage products within twelve
months.

INDUSTRY BACKGROUND

     We  are  a  public  information  provider.  Users  of  our information have
historically  included  law  enforcement,  other government agencies, law firms,
investigation  companies,  private  investigators  and  insurance  companies.
Information  is used by those entities for various activities ranging from legal
discovery  to  the detection of fraud and the prevention of crime and terrorism.
Additional users, such as large businesses, have increasingly availed themselves
of  our  information  services  in connection with their identity validation and
other  business  decisions.

     Non-traditional  users,  such  as  individuals using job search and on-line
dating  service  sites,  have  also  begun  to  avail  themselves  of background
information  in  response  to  concerns  about  identity  theft.

     The  majority  of  the data in the database is publicly available and it is
only  through  our  proprietary  matching  and searching technology that creates
significant  value  to  the  data.  Examples  of  such  public  data  include:

-  names  and  addresses          -  property  ownership
-  aliases                        -  bankruptcies
-  nationwide  court  records     -  certain  criminal  records


     The  sources  of  these types of public data, however, are often fragmented
and  geographically dispersed.  In addition, the reliability of this information
and  the  data  provided  by  various  sources  may  not be consistent.  In this
environment,  users  that  wish  to  use  public  information are faced with the
time-consuming,  costly  and  difficult  task  of  gathering  data from numerous
locations and sources, verifying the information acquired and organizing it into
a  useful  format.  While  services  and  technologies  have developed to enable
remote  access  to certain information sources, there have historically been few
comprehensive  access  points  for  information

                                       1
<PAGE>


available  about  individuals.  Traditional  sources  of  information, including
credit  reporting  services  and  other  database  services, make available only
limited  types  of  information  for specific purposes, such as verifying credit
worthiness.  Such  services  may  also be limited by applicable law to specified
uses  and  users.  Almost  none of those sources are integrated in a manner that
allows  easy  and  rapid  access  to  data.

BUSINESS STRATEGY

     Our business plan is to provide an entire suite of information products and
services  for  professionals  in  law enforcement agencies, law firms, insurance
underwriting,  fraud  investigation, private equity funds, private investigation
and  financial  institutions.  We  believe  that we will be able to compete with
comparable  services  based  upon  the  pricing  of  our services and based upon
certain  technical  advantages incorporated in our systems.  We have proprietary
matching  and  searching  capabilities  that  give  us  an  advantage  over  our
competitors.  In  addition,  we  acquired the technology to gather virtually all
the  landline phone numbers and 30% of cell phone numbers through our VPT merger
which  no  known competitors have.  To date, our products have primarily focused
on  the  United  States  market.  With  the  recent  formation of Metrigenics, a
research  and development company, we are expanding into products with worldwide
applicability.  Metrigenics  is  working on the development of matching DNA with
facial  characteristics.  With  the success of early trials, it is expected that
first  stage  products  could  be  seen  as  early  as  twelve  months.

OUR TARGET MARKET AND SCREENING OF USERS

     Our products have historically been marketed and sold to federal, state and
local  government  agencies  (including  law  enforcement  agencies),  private
investigators,  human  resource  professionals  and  the  legal profession.  Our
products  have  been  used  in:


-     crime  and  terrorism investigation (e.g., in conjunction with federal and
state  investigations  in  the aftermath of the September 11th terrorist attacks
and  the  subsequent  anthrax  incidents);
-     detection  of  fraud;
-     "skip tracing" (i.e., the location of debtors and individuals in violation
of  parole  or  bail  restrictions);
-     background  checks;
-     legal  due  diligence;  and
-     Identity  self  certification
-     Private  security
-     Risk-management.



Certifion  offers  data  for  self-certification purposes in connection with job
search  and  Internet  dating  services  and has provided an addition channel in
which  to distribute the same data developed by LocatePLUS.  Our LocatePLUS  and
Worldwide  Information  products  are  generally  marketed  and  sold  only  to
pre-screened  business and government end users.  Before obtaining access to our
LocatePLUS  database or our Worldwide Information  product, we generally require
commercial customers to provide background information about their business need
for data and about themselves, such as business licenses, bar admission cards or
private  investigator  licenses.  Individuals  involved  in law enforcement must
provide  similar  evidence  of  their  authority.

To  prevent the misuse of our data, we have adopted a three-tier security schema
for  our  LocatePLUS  Group  products.  We  believe  that  we lead the market in
protecting  access to our data.  With recent challenges in the industry relating
to  data  access,  we  have  been  ahead  of the curve in adopting a schema that
restricts  the  most sensitive data.  Our groups are classified in the following
manner.


                                       2
<PAGE>


LEVEL   INDUSTRY USERS                    SAMPLE DATASETS AVAILABLE TO USERS

                                         Names, Addresses and Phone Numbers
I     General Business                Past Residences, Neighbors and Affiliates
                                                   Real Property

      Private Investigators                     Level I Data, plus:
      Insurance                                 Liens and Judgments
II    Attorneys/Law Firms                         Drivers' Records
      Government                            Certain Motor Vehicle Records
      Corporate Security


                                             Level I and II Data, plus:
III     Law Enforcement                     Comprehensive Criminal Records
                                           Restricted Motor Vehicle Records
                                            Certain Credit Reporting Data

As we move forward, we expect to further define user groups and data available
to those groups.  We expect to roll out a new version of our search engine that
allows us to do just that by year end.

LOCATEPLUS

     We  launched  our  LocatePLUS  Internet site in March 2000.  Our LocatePLUS
database  contains  searchable  and  cross-referenced  public  information  on
individuals  throughout  the  United  States.  Information  is  presented  in  a
dynamic,  hyper-linked  fashion, permitting users to rapidly identify and obtain
personal  information  relating  to individuals and their associated residences,
possible  acquaintances,  and  a variety of other types of data.  Our LocatePLUS
database  consists  of  approximately  five  billion  individual  data  entries.
According  to  our estimates, we have data entries relating to approximately 205
million  adult  individuals  in  the  United States (or approximately 98% of the
adult  population of the United States, based on the 2000 United States Census).

Datasets currently integrated in our LocatePLUS product include nationwide
records relating to:


-  names  and  addresses                     -  real  estate  records
-  aliases                                   -  prior  residences
-  dates  of  birth                          -  recorded  bankruptcies
-  Social  Security  numbers                 -  liens
-  driver's  license  information            -  motor  vehicle  records
-  residential  address  information         -  certain  death  records
    (including dates of residence)
-  certain  criminal  arrest, conviction     -  phone numbers
    and incarceration records                -  vessel registrations


We  can  currently  give  no  assurance  as to the timing of integration of such
datasets,  however,  or  whether  these new datasets will be integrated with our
LocatePLUS  product  at  all.


                                       3
<PAGE>


     We  believe  that  one  of  the  significant  advantages  of our LocatePLUS
product,  in comparison with many products with which we compete, is the ability
of  LocatePLUS  to  "tie"  data  associated with a given individual to produce a
single  report.  Our  LocatePLUS  system  uses  a  proprietary  methodology  to
associate  data in a manner that generally results in a matching of data entries
across  diverse  data  sources, allowing users to obtain a single, comprehensive
data  report about an individual, even when there is no single element that ties
data  entries  together  (such as a Social Security number).  This comprehensive
data report is itself linked to other data potentially relevant to a business or
government  agency  researching  an  individual,  such as names and addresses of
possible  acquaintances, relatives and neighbors of that individual.  Another of
the  advantages  that  LocatePLUS  Group has is its unlisted and cell phone data
which  we  believe  no  other  competitor  has.

LOCATEPLUS ANYWHERE

     We  also  offer  a  version  of  our LocatePLUS  product that is accessible
through wireless personal digital assistants and e-mail capable pagers, which we
refer to as LocatePLUS AnyWhere.  LocatePLUS AnyWhere  was commercially launched
in  mid-December  2002.  This  product  is  being  marketed  primarily  to  law
enforcement.  The  product  is  sold  on  a  subscription  fee basis, permitting
unlimited access to our LocatePLUS database for a flat monthly fee provided that
that  the  user  agrees to a fixed term commitment.  As of December 31, 2006, we
had  realized  only  nominal  revenue  from  this  product.

WORLDWIDE INFORMATION

     Since  1996,  we have produced CD-ROM products that enable users to quickly
search motor vehicle records in multiple states through a dynamic search engine,
known  as  Worldwide  Information  .  Our Worldwide Information  product enables
users  to  search certain motor vehicle records and drivers' license information
in  multiple  states  through  a  dynamic  search engine.  Unlike many competing
products,  our  Worldwide Information  product enables users to rapidly identify
vehicles  or drivers using complete or partial search criteria.  We believe that
this ability to search partial data is a valuable tool in circumstances in which
incomplete  information  is  available,  as  is  often  the  case  in  criminal
investigations.  Unlike  data  provided  by Internet-based services, searches on
our CD-ROM product are confidential and unavailable to any person other than the
user  of  our  CD-ROM  product.  We believe that the confidential nature of this
CD-ROM  product  makes  it  particularly attractive to law enforcement agencies,
which  must  often  conduct  criminal  investigations  in  strict  secrecy.

As  of December 31, 2006, there were approximately 3,500 pre-screened purchasers
of  our  Worldwide  Information  CD-ROM  product.

ENTERSECT

     On  September  1, 2003, our newly formed wholly-owned subsidiary, Certifion
Corporation,  acquired  all  of  the  assets  of Project Entersect Corporation a
provider  of  data  technology.  Certifion  operates  under  the  trade  name of
"Entersect,"  and  it  provides self-screening for both resume and online dating
services.

DATAPHANT

In  October  2003,  Voice  Power  Technology  merged  into  our  newly  formed
wholly-owned subsidiary, Dataphant, Inc.  Through this merger, Dataphant now has
information  on virtually every land-based phone number in the United States and
approximately  30%  of  the cell phone numbers in the United States.  We believe
that  we are the only company that has this information.  The Dataphant data has
been  integrated  into  both  LocatePLUS  and  Worldwide  Information  products.
Currently  the only distribution of this data is through the other subsidiaries.


                                       4
<PAGE>

METRIGENICS

  On January 6, 2004, the Company formed a new wholly-owned subsidiary,
Metrigenics, Inc., with operations located in New York state.  Metrigenics was
formed to develop new ways to integrate biometrics with data.  Metrigenics has
finished first stage testing on matching DNA to facial characteristics and
expects to have first stage products within twelve months.

SOURCES OF OUR DATA

     Our  operations  depend  upon  information  derived  from a wide variety of
automated  and  manual sources.  External sources of data include public records
information  companies, governmental authorities and on-line search systems.  We
license  or otherwise obtain our data from five primary sources, as well as over
twenty  other ancillary sources (including both private and government sources).
In the event that any of our primary sources of data were no longer available to
us,  we  believe  that  we  would be able to integrate alternate sources of data
without  significant  disruption  to  our  business or operations, as we believe
there  are  currently  a  number  of  equivalent  providers  of  such  data.

REGULATORY RESTRICTIONS ON OUR BUSINESS

     Both  federal and state law regulates the sale of data.  Recently, consumer
advocates  and  federal  regulators have voiced concerns regarding public access
to, or commercial use of, personal information.  As a result, increased pressure
has been placed upon federal and state legislators to regulate the dissemination
or  commercial  use  of  personal  information.

One  such  legislative  enactment that has had an effect on our business was the
Financial  Services  Modernization  Act  of  2000,  also  known  as  the
"Gramm-Leach-Bliley  Act".  Among  other  things,  this  law  restricts  the
collection,  use,  and  transfer  of  certain data that includes "credit header"
information,  which  had  historically  functioned  as  the backbone of our data
resources.  Implementation  of  this  law's  restrictions  by  the Federal Trade
Commission  significantly  limited  the  availability  of  certain  data for our
database,  but  we  have  subsequently  developed  datasets  that  function
independently  of  "credit  header"  information.  Although  we have not engaged
counsel  to  review  this  matter or the conduct of our operations generally, we
believe  that  our operations are currently unaffected by the Gramm-Leach-Bliley
Act  or  any law specifically applicable to the dissemination of data concerning
individuals.  More  recently,  congress has been addressing the access to public
data  such as ours.  Any further restriction on our use of personal information,
however,  could  limit  the  usefulness  and  have  a material adverse affect on
operations,  our products, including our LocatePLUS product, and our operations.
Federal  and  state law prohibits us from selling information about minors.  Our
products  have  been  designed  to  prevent  the  dissemination  of  such  data.

DISTRIBUTION OF OUR PRODUCTS

     We distribute our content both directly (though the Internet in the case of
our  LocatePLUS  product  and  through  the  mail  in  the case of our Worldwide
Information  CD-ROM)  and through "channel partner" arrangements, by which third
parties access our databases in consideration for a royalty.  We also, from time
to  time,  provide certain consulting services to third party database providers
on  the  integration  and  assimilation of public data.  To date, our efforts to
license data have resulted in several channel partnerships.  For the year ending
December 31, 2006, we have recognized revenue of $5,471,120 on these agreements.

COMPETITION

     Current  competitors for our LocatePLUS  and Entersect include ChoicePoint,
Confi-chek.com,  and  Lexis-Nexis.  Many of the companies that currently compete
with  this  product,  as well as other companies with whom we may compete in the
future,  are  national or international in scope and have greater resources than
we  do.  Those  resources could enable those companies to initiate price cuts or
take  other  measures  in  an effort to gain market share in our target markets.


                                       5
<PAGE>

Our  Worldwide  Information  product  primarily  competes with the registries of
motor  vehicles of various states that sell their data to screened users.  These
state  agencies  generally  provide  data  in  "raw  form"  without  the  search
capabilities  that  we  provide  in  our  Worldwide  Information  product.

EMPLOYEES

     As of December 31, 2006, the LocatePLUS Group had 88 employees.  We believe
that  our  relations  with  our  employees  are  good.

ITEM 2 - DESCRIPTION OF PROPERTY
FACILITIES
     LocatePLUS  Holdings  Corporation and LocatePLUS Corporation, are presently
headquartered  in  Beverly,  Massachusetts,  where we lease approximately 32,000
square  feet.  The  lease on that facility expires on February 28, 2012, and our
annual  lease  obligation  is  approximately  $476,412.

Worldwide  Information,  Inc.,  is  presently located in Byfield, Massachusetts,
where  it  leases  approximately  2,700  square  feet.  The lease on the Byfield
facility expired on March 1, 2003, and we are currently a tenant-at-will in this
facility.  Our annual lease payments on that facility in 2006 were approximately
$28,000.  We  are  currently  negotiating to extend this lease to December 2007.

Dataphant,  Inc.,  is  located  in  Austin, Texas, where it leases approximately
3,000  square feet pursuant to a month-to-month lease (which includes the use of
office  equipment,  with  current  monthly  rent  of  $3,680).

Certifion  Corporation,  (which  does  business  under the name "Entersect"), is
located  in  Santa  Ana,  California, where it leases approximately 1,900 square
feet  pursuant  to  a  month-to-month lease with current monthly rent of $4,144.

Metrigenics Inc., has access to University office and lab space with no lease or
rental  commitment.  We  believe  that  our  facilities  are  sufficient for our
projected  needs.

INTELLECTUAL  PROPERTY

     Publicly  available  data  concerning  individuals  is  generally
non-proprietary.  As  a  result,  our  intellectual property consists largely of
certain  trade secrets and know-how associated with the integration of databases
and  our  ability  to  link  diverse  datasets.  We  rely  on  a  combination of
confidentiality  agreements,  restrictions on access to our proprietary systems,
and  contractual  provisions  (such  as  in  our user agreements) to protect our
intellectual  property.

     We  have  registered  LOCATEPLUS.COM  as a trademark with the United States
Patent  and  Trademark  Office.  We maintain LOCATEPLUS, WORLDWIDE INFORMATION ,
ENTERSECT  ,  CareerScan , and TrustmeID  as unregistered trademarks relating to
our  products.  We  may,  from  time  to  time, claim certain other rights under
trademark  law,  however, we currently have no other marks registered or pending
with  the  United States Patent and Trademark Office or the equivalent agency of
any  other  country.

     In  2003, we filed for patent protection covering certain aspects of two of
our  products.  We  have filed for patent protection covering certain aspects of
our  unique  search  product, "Bull's Eye," that electronically matches database
information  with  current  public  phone  and  utility  information to identify
current  information.  We  also  filed,  through  our  Certifion subsidiary, for
patent  protection  covering  certain  aspects  of  our self-validation products
Career  Screen  and  TrustmeID  .


                                       6
<PAGE>

ITEM 3 - LEGAL PROCEEDINGS
     We  are  not currently involved in any material legal proceedings, although
claims  may arise from time to time in the conduct of our operations.  There can
be  no  assurance at this time that any claims that may arise in connection with
the conduct of our business will not materially adversely affect our business or
operations,  or  divert  our  critical  resources.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No items were submitted to shareholders for a vote during 2006.

                                     PART II
ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION

     Prior to December 5, 2005, the Company had outstanding two classes of
stock, Class A Voting Common Stock of which there were 150,000,000 shares
authorized with 111,424,416 issued, and Class B Non-Voting Common Stock of which
there were 250,000,000 shares authorized with 74,505,730 issued.  At the annual
meeting of the shareholders held on November 12, 2005, the shareholders approved
a plan of recapitalization whereby 1) each outstanding share of our Class A
Voting Common Stock and our Class B Non-Voting Common Stock combine into a
single class of voting common stock with 400,000,000 authorized and 185,930,146
issued, 2) effect a one-for-fifty reverse split of this new class of common
stock resulting in a 8,000,000 authorized and 3,718,603 issued, and 3) increase
the authorized from 8,000,000 to 25,000,000.  The combination of the two classes
of stock was completed on December 5, 2005.  The reverse split and change in
authorized shares was completed on December 12, 2005.  In addition, the
completion of the recapitalization triggered the mandatory conversion of certain
notes payable in the amount of $8,965,000 into 1,793,000 of the new Common
Stock.

We  had  three  securities  that  began trading on the Over-the-Counter Bulletin
Board  on  December  12,  2002:

-     shares  of  our  Class  A  Voting Common Stock are quoted under the symbol
"LPLHA";

-     shares  of our Class B Non-Voting Common Stock are quoted under the symbol
"LPLHB";  and

-     our  public  warrants  (redeemable  warrants  to purchase one share of our
Class  A  Voting  Common  Stock  with  an exercise price of $0.50 per share) are
quoted  under  the  symbol  "LPLHW".

     Post the plan of recapitalization, on December 12, 2005, we had two
securities trading on the Over-the-Counter Bulletin Board as follows:

-     shares  of  our  Common  Stock,  quoted  under  the  symbol  "LPHC";  and

-     our  public warrants (redeemable with 50 warrants to purchase one share of
our  Common Stock at an exercise price of $25.00 per share) are quoted under the
symbol  "LPHCW".

     The following tables set forth the high and low closing sales prices per
share (and per public warrant), for our Class A Voting Common Stock, Class B
Non-Voting Common Stock and public warrants for each quarter during fiscal years
2003, 2004, 2005, and 2006, as reported by the Over-the-Counter Bulletin Board.


                                       7
<PAGE>

<TABLE>
<CAPTION>


                              2003                                           2004
                      THREE MONTHS ENDED                               THREE MONTHS ENDED
          ----------------------------------------------  ----------------------------------------------
           MAR 31      JUN 30       SEP 30      DEC 31      MAR 31     JUN 30       SEP 30      DEC  31
          ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
          HIGH  LOW   HIGH  LOW   HIGH  LOW   HIGH  LOW   HIGH  LOW   HIGH  LOW   HIGH  LOW   HIGH  LOW
          ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----
<S>       <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
LPLHA.OB  0.40  0.14  0.42  0.12  0.38  0.28  0.34  0.24  0.63  0.29  0.58  0.37  0.39  0.25  0.37  0.25
--------  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----
LPLHB.OB  0.29  0.10  0.29  0.10  0.35  0.20  0.25  0.13  0.41  0.20  0.44  0.32  0.38  0.22  0.32  0.21
--------  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----
LPLHW.OB  0.10  0.00  0.12  0.00  0.13  0.03  0.09  0.05  0.26  0.07  0.19  0.09  0.13  0.04  0.12  0.05
--------  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----  ----
</TABLE>



<TABLE>
<CAPTION>


                              2005                                            2006
                      THREE MONTHS ENDED                                THREE MONTHS ENDED
          ----------------------------------------------------  ------------------------------------
             MAR 31        JUN 30         SEP 30      DEC 31      MAR 31      JUN 30       SEPT 30
          ------------  ------------  ------------  ----------  ----------  -----------   ----------
          HIGH   LOW    HIGH   LOW    HIGH    LOW   HIGH  LOW   HIGH  LOW   HIGH  LOW     HIGH  LOW
          -----  -----  -----  -----  -----  -----  ----  ----  ----  ----  ----  ----    ----  ----
<S>       <C>    <C>    <C>    <C>    <C>    <C>    <C>   <C>   <C>   <C>   <C>   <C>     <C>    <C>
LPLHA.OB  0.315  0.172  0.217  0.125  0.15   0.072   N/A   N/A   N/A   N/A  N/A   N/A     N/A    N/A
--------  -----  -----  -----  -----  -----  -----  ----  ----  ----  ----  ----  ----    ----  ----
LPLHB.OB  0.265  0.172   0.21   0.12  0.155  0.081   N/A   N/A   N/A   N/A  N/A   N/A     N/A    N/A
--------  -----  -----  -----  -----  -----  -----  ----  ----  ----  ----  ----  ----    ----  ----
LPLHW.OB   0.08   0.04  0.055   0.03  0.055  0.007   N/A   N/A   N/A   N/A  N/A   N/A     N/A    N/A
--------  -----  -----  -----  -----  -----  -----  ----  ----  ----  ----  ----  ----    ----  ----
LPHC       N/A    N/A    N/A    N/A    N/A    N/A   9.47  2.75  3.50  1.43  2.89   .47    1.70   .76
--------  -----  -----  -----  -----  -----  -----  ----  ----  ----  ----  ----  ----    ----  ----
LPHCW      N/A    N/A    N/A    N/A    N/A    N/A   .058   .01  .023  .012  .020  .006    .065  .003
-------   -----  -----  -----  -----  -----  -----  ----  ----  ----  ----  ----  ----    ----  ----
</TABLE>


HOLDERS
     As  of  December  31,  2006  there  were:

-     approximately  480  holders  of  record  of  our  Common  Stock,
-     approximately  150  holders  of  record  of  our  public  warrants.

DIVIDENDS

     We have never declared or paid a cash dividend.  At this time, we do not
anticipate paying dividends in the future.  We are under no legal or contractual
obligation to declare or to pay dividends, and the timing and amount of any
future cash dividends or distributions is at the discretion of our Board of
Directors and will depend, among other things, on our future after-tax earnings,
operations, capital requirements, borrowing capacity, financial condition and
general business conditions.  We plan to retain any earnings for use in the
operation of our business and to fund future growth.

SECURITIES  AUTHORIZED  FOR  ISSUANCE  UNDER  EQUITY  COMPENSATION  PLANS

     The following table reflects equity compensation granted or issued by us as
of  December  31,  2006,  to  employees  and  non-employees  (such as directors,
consultants,  advisors,  vendors,  customers, suppliers and lenders) in exchange
for  consideration  in  the  form  of  goods  or  services.



                                       8
<PAGE>



                                                             NUMBER OF
                                NUMBER OF       WEIGHTED    SECURITIES
                              SECURITIES TO     AVERAGE      REMAINING
                             BE ISSUED UPON     EXERCISE     AVAILABLE
                              EXERCISE OF       PRICE OF    FOR FUTURE
                              OUTSTANDING     OUTSTANDING    ISSUANCE
                                OPTIONS,        OPTIONS,    UNDER EQUITY
                                WARRANTS        WARRANTS    COMPENSATION
PLAN CATEGORY                  AND RIGHTS      AND RIGHTS     PLANS(1)
                             --------------   -----------   ------------
EQUITY COMPENSATION
PLANS APPROVED BY
SECURITY HOLDERS:
    Common Stock                  699,976         $30.54       491,221

EQUITY COMPENSATION
PLANS NOT APPROVED BY
SECURITY HOLDERS:
    Common Stock                3,088,342         $ 6.55         N/A
TOTAL:
                             --------------   -----------   ------------
    Common Stock                3,788,318         $10.98         N/A


(1)     Excludes securities reflected in column titled "Number of securities to
be issued upon exercise of outstanding options, warrants and rights".

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     The  following is a list of our securities sold within the past three years
without  registration  under  the  Securities  Act  of  1933,  as  amended.

-     From  November  1999  to December 31, 2003, we granted options to purchase
28,347,716  shares  of  both  classes of our Common Stock (Class A Voting Common
Stock and Class B Non-Voting) to 79 employees and consultants under the terms of
our  Incentive  and  Non-qualified Stock Option Plan. These options have varying
exercise  prices.  Of  these  options  to purchase 28,347,716 shares, options to
purchase  1,419,450  shares  of  Common  Stock  have  been  exercised  by eleven
employees  and  consultants  and  options to purchase 1,452,500 shares of Common
Stock have been canceled by employees who terminated their employment. The offer
and  sale of these securities were exempt from registration under the Securities
Act  pursuant  to  Rules  701  and  506  promulgated  thereunder.

-     In  April  2001,  we  made  a  non-transferable  offer  to  our accredited
stockholders  to  sell  three  shares of our Class B Non-voting Common Stock for
$0.10  per  share  for  each  share  of Class A Voting Common Stock held by each
stockholder.  Pursuant  to that offer, we sold approximately 31.6 million shares
of  Class  B  Non-voting  Common Stock to 270 of our stockholders. The offer and
sale  of these securities were exempt from registration under the Securities Act
under  the  provisions  of  Rule  506  promulgated  thereunder,  as  we received
representations  from  all  offerees  that they were accredited investors at the
time  of  the  offer  and  sale  and  no  general  solicitation  was undertaken.

-     At  various  times  from  November  17,  2000 to March 12, 2002, we issued
warrants  to  purchase  an  aggregate of 537,902 shares of Class A Voting Common
Stock  to  11 accredited investors serving as consultants  and to members of our
Advisory  Board  in  consideration  for services rendered. The offer and sale of
these  securities  were  exempt from registration under the Securities Act under
the  provisions  of  Rule  506  and  508  promulgated thereunder, as we received
representations  from  all
offerees  that  they were accredited investors at the time of the offer and sale
and  no  general  solicitation  was  undertaken.  A  Form  D  Notice  of Sale of
Securities  Pursuant  to  Regulation  D  was  not  filed with the Securities and
Exchange  Commission  in  a  timely  manner.

-     From  August  2001  to  April  2002,  we  issued  warrants  to purchase an
aggregate  of  3,272,455  shares  of  Class  B  Non-Voting  Common  Stock  to 17
accredited  consultants  and  to  members  of  our  Advisory


                                       9
<PAGE>

Board  in  consideration  for  services  rendered.  The  offer and sale of these
securities  were  exempt  from  registration  under the Securities Act under the
provisions  of  Rule  506  and  508  promulgated  thereunder,  as  we  received
representations  from  all  offerees  that they were accredited investors at the
time  of the offer and sale and no general solicitation was undertaken. A Form D
Notice  of  Sale  of  Securities Pursuant to Regulation D was not filed with the
Securities  and  Exchange  Commission  in  a  timely  manner.

-     From  September  2001 through February 13, 2002, we sold 20,421,510 shares
of Class B Non-voting Common Stock to 175 accredited investors (of which 82 were
existing  stockholders)  for  $0.15  per  share.  The  offer  and  sale of these
securities  were  exempt  from  registration  under the Securities Act under the
provisions  of  Rule  506 promulgated thereunder, as we received representations
from  all  offerees that they were accredited investors at the time of the offer
and  sale  and  no  general  solicitation  was  undertaken.

-     On  August 27, 2002, we issued warrants to purchase an aggregate of 70,000
shares  of  Class  B  Non-voting  Common  Stock  to  two members of our Board of
Directors  pursuant  to our Non-employee Director Stock Option Policy. The offer
and  sale  of these securities was exempt from registration under the Securities
Act  under  the  provisions  of Rule 506 and Rule 508 promulgated thereunder, as
both  recipients  are  accredited  and  no  general solicitation was undertaken.

-     In  December  2002,  we  issued  a one year term note with ten year, fully
vested  detachable  warrants  to  an  individual  who,  as  a  condition  of his
investment,  required  that  he  be  appointed  to the Board of Directors of the
Company.  The note bears interest at the rate of 10% per annum and is payable in
one  lump  sum at maturity.  The detachable warrants provide for the purchase of
250,000  shares of our Class B Non-Voting Common Stock with an exercise price of
$0.22  per  share.  The  offer  and  sale  of  these  securities was exempt from
registration  under the Securities Act under the provisions of Rule 506 and Rule
508  promulgated  thereunder,  as  both recipients are accredited and no general
solicitation  was  undertaken.

-     On  March 28, 2003, we issued warrants to purchase 105,000 shares of Class
B Non-voting Common Stock to three members of our Board of Directors pursuant to
our  Non-employee  Director  Stock  Option  Policy.  The offer and sale of these
securities  was  exempt  from  registration  under  the Securities Act under the
provisions of Rule 506 and Rule 508 promulgated thereunder, as the recipient was
accredited  and  no  general  solicitation  was  undertaken.

-     During  2003, we issued various eighteen month term notes with proceeds to
us  of  $1.6  million,  net  of  issuance costs. These notes provided for simple
interest ranging from 10% to 12% per annum.  These notes included  with ten year
fully  vested  detatchable warrants to purchase an aggregate of 2,500,000 shares
of  Class  B  Non-Voting  Common Stock with a weighted average exercise price of
$0.14.  The  offer  and  sale  of  these securities was exempt from registration
under  the  Securities  Act  under  the  provisions  of  Rule  506  and Rule 508
promulgated  thereunder,  as  the  recipient  was  accredited  and  no  general
solicitation  was  undertaken.

-     During  2003,  we  received  $398,000  by issuing units at $0.16 per unit.
Each  unit  consisted  of one share of Class A Voting Common Stock and a warrant
which  is  convertible  into three shares of Class A Voting Common Stock with an
exercise price at $0.16 per share.  A price adjustment mechanism included in the
warrants  provides  that,  if  the  stock  price  decreases,  the  warrants will
nevertheless  permit  the  holder  to  receive,  upon a cashless exercise of the
warrants,  at least one share of Class A Voting Common Stock per warrant without
any  cash  payment.  The  offer  and  sale  of  these  securities
was  exempt  from  registration under the Securities Act under the provisions of
Rule  506  and  Rule 508 promulgated thereunder, as the recipient was accredited
and  no  general  solicitation  was  undertaken.

-     During  June  2003,  we  issued  2,500,000 shares of Class A Voting Common
Stock  to  one investor and 125,000 shares of Class B Non-Voting Common Stock to
three  different  investors.  The  offer  and


                                       10
<PAGE>


sale  of these securities were exempt from registration under the Securities Act
under  the  provisions  of  Rule 506 and Rule 508 promulgated thereunder, as the
recipient  was  accredited  and  no  general  solicitation  was  undertaken.

-     During  August  2004  we  canceled  a put we issued to one investor, which
provided  that  the  Company,  subject to certain limitations, may sell up to $5
million  in shares of Class A Voting Common Stock.  We subsequently entered into
a similar put with the same investor which provided that the Company, subject to
certain  limitations,  may  sell  up  to  $5 million in shares of Class A Voting
Common  Stock.  The  offer  and  sale  of  these  securities  was  exempt  from
registration  under the Securities Act under the provisions of Rule 506 and Rule
508  promulgated  thereunder,  as  the  recipient  was accredited and no general
solicitation  was  undertaken.

-     During  June  2004,  we  paid  $500,000 to NFC Corporation, in the form of
4,000,000  restricted  shares  of the Company's Class A Voting Common Stock, for
future  investor  relation services.  The offer and sale of these securities was
exempt  from  registration under the Securities Act under the provisions of Rule
506  and Rule 508 promulgated thereunder, as the recipient was accredited and no
general  solicitation  was  undertaken.

-     On  June  17,  2004  we  entered into a Securities Purchase Agreement with
Laurus  Master  Fund,  Ltd.,  a  Cayman Islands company, relating to the private
placement  of  a  convertible  term  note issued by the Company in the principal
amount of $3,000,000 due June 17, 2007 (the "Note"), and a common stock purchase
warrant  (the  "Warrant"). We also entered into related security documents and a
Registration  Rights  Agreement.  On November 30, 2004, this note was amended to
increase  the principal amount to $4,000,000 and add an additional warrant.  The
terms,  as  amended,  allow for this note to covert into 6,666,667 shares of our
Class  A  Voting  Common Stock at a fixed conversion rate of $0.30 per share and
5,000,000  shares  of our Class A Voting Common Stock at a fixed conversion rate
of  $0.40  per  share.  One Warrant provides for the purchase of up to 1,320,000
shares  of  Class  A Common Stock at a price of $0.45 each, subject to customary
adjustments,  until  June  17, 2009, and the additional Warrant provides for the
purchase  of  up  to  650,000 shares of Class A Common Stock at a price of $0.35
each,  subject  to customary adjustments, until November 30, 2009.  On March 31,
2005,  the  Company  amended  its convertible term note issued by the Company to
Laurus  Master  Fund,  Ltd.,  a  Cayman Islands company.  The terms, as amended,
allow  for  this  note  to  convert  into 6,250,000 shares of our Class A Voting
Common  Stock at a fixed conversion rate of $0.16 per share, 3,333,333 shares of
our  Class  A  Voting Common Stock at a fixed conversion rate of $0.30 per share
and  5,000,000  shares  of our Class A Voting Common Stock at a fixed conversion
rate  of  $0.40 per share.  In July, 2005, the company raised $9 million through
the  issuance  of  convertible  debt.  The  net  proceeds  were used to pay down
existing  debt  of  $4  million  and  the remaining balance will be used to fund
operations.  As  of  July  8,  2005,  the balance on this note was paid in full.

-     In  connection  with an offering that closed on August 15, 2005 we entered
into  a  Purchase  Agreement with certain institutional and accredited investors
relating  to  the  private  placement  of  convertible  term notes issued by the
Company  in  the  principal  amount of $8,965,000 and warrants to purchase up to
41,189,000  shares  of  our  capital  stock. Of the proceeds from this offering,
approximately $4.1 million was used to retire current secured convertible notes,
and  the  remainder  will  be  used  for  general  working  capital.

All  of  the notes are convertible, and the warrants are exercisable, first into
as many shares of our Class A Voting Common Stock, par value $0.01 per share, as
are  available for issuance at the time of conversion or exercise, and then into
shares  of  our  Class B Non-Voting Common Stock, par value $0.01 per share.  As
part  of our agreement with these investors, we have agreed to seek the approval
from  our  stockholders of the recapitalization of each outstanding share of our
Class  A  Voting  Common  Stock  and  our Class B Non-Voting Common Stock into a
single class of voting common stock, as well as a one-for-fifty reverse split of
this new class of common stock.  If our stockholders approve these measures, the
notes  will  automatically convert into shares of the new class of common stock,
and  any  unexercised  warrants  will be exercisable for shares of that class of
stock as well.  As there are currently no un-issued shares of our Class A Voting
Common  Stock  that  are  not  otherwise


                                       11
<PAGE>


reserved  for  issuance,  we  anticipate  that  these notes and warrants will be
exercisable  for  shares  of  either  our Class B Non-Voting Common Stock or the
newly  created  class  of  common  stock,  if  approved.  Without  taking  into
consideration  interest  payable  on  the  notes, the notes are convertible into
89,650,000  shares  of  our  common  stock  (regardless  of  class) at a current
conversion  rate  of  $0.10  per  share and the warrants are exercisable for ten
years  from  the date they were issued for up to 41,189,000 shares of our common
stock (regardless of class) at a current exercise price of $0.15 per share.  The
conversion  price  of  the notes and the exercise price of the warrants are each
subject  to  adjustment for a variety of events, including, for example, payment
of  dividends, certain mergers or asset sales, and certain securities issuances.
In  conjunction  with  this  offering, we also entered into related Registration
Rights  and  Voting Agreements.  On December 12, 2005, the we completed the plan
of  recapitalization  which  triggered the mandatory conversion of certain notes
payable  in  the  amount  of  $8,965,000 into 1,793,000 of the new common stock.

On  December  29,  2005,  the  Company entered into an Investment Agreement with
Dutchess  Private Equities Fund II, L.P.  Pursuant to that Investment Agreement,
we  received  proceeds  of  $1,500,000  by  issuing  a twelve-month note payable
convertible  into  300,000 shares of Common Stock at $5.00 per share and 200,000
founders  shares  and  Common  Stock purchase warrant for 750,000 shares with an
exercise  price  of  $5.00  per share. The remaining balance of $892,226 of this
Debenture  as  amended  effective October 18, 2006 is convertible into shares of
our  Common  Stock  at the lesser of $.70 per share or 75% of the lowest closing
bid  price during the 20 trading days next preceding the date of conversion.  On
July  21,  2006  we issued a Debenture to Dutchess Private Equities Fund, LP , a
related  private  equities fund and received proceeds of $750,000. The Debenture
is  due  on  July 21, 2011 and pays twelve per cent (12%) interest. Interest and
principal  are  payable  at such times and under such conditions are outlined in
the Debenture. The Debenture is convertible into shares of our Common Stock at .
at  the  lesser  of $.70 per share or 75% of the lowest closing bid price during
the 20 trading days next preceding the date of conversion (collectively, the two
funds  "Dutchess").  The  holder may not convert if it would cause the holder to
own more than 4.9% of the outstanding Common Stock of the Company. A discount to
this  note  has been recorded for the warrants and founders shares in the amount
of  $622,107  and will be amortized over the life of the note and be recorded as
interest  expense.  As  of  December  31,  2006,  $455,448  has  been amortized.

On  March 20, 2007, we issued a secured convertible debenture to Cornell Capital
Partners in the aggregate principal amount of $6,000,000 of which $3,000,000 was
advanced  immediately.  The  second  installment  of $2,000,000 will be advanced
immediately  prior to the filing by the Company with the Securities and Exchange
Commission  (the  "Commission")  of  the  Registration  Statement.  The  last
installment  of  $1,000,000  will  be advanced immediately prior to the date the
Registration Statement is declared effective by the Commission.   The Debentures
mature  on  the  third  anniversary  of  the date of issuance. The holder of the
Debentures may convert at any time amounts outstanding under the Debentures into
shares  of  common  stock  of  the Company at a fixed conversion price per share
equal  to  $0.314.  Under  the  Purchase Agreement the debentures are secured by
substantially  all  of the Company's, and its wholly owned subsidiaries' assets.

Under  the  Purchase  Agreement, we also issued to Cornell five-year warrants in
six  separate  series  as  follows:

A  Warrants  to  purchase  2,384,814 shares of common stock at $0.314 per share;
B  Warrants  to  purchase  2,186,079 shares of common stock at $0.343 per share;
C  Warrants  to  purchase  2,017,919 shares of common stock at $0.372 per share;
D  Warrants  to  purchase  1,748,863 shares of common stock at $0.429 per share;
E  Warrants  to  purchase  1,499,026  shares of common stock at $0.50 per share;
F  Warrants  to  purchase  1,500,000  shares of common stock at $0.01 per share.

SMALL  BUSINESS  ISSUER  PURCHASES  OF  EQUITY  SECURITIES

     We  did  not  repurchase  any  of  our  securities  during  2006  .



                                       12
<PAGE>


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     YOU  SHOULD  READ THE FOLLOWING DISCUSSION AND ANALYSIS OF OUR CONSOLIDATED
FINANCIAL  CONDITION AND RESULTS OF OPERATIONS TOGETHER WITH "SELECTED FINANCIAL
DATA"  AND  OUR  CONSOLIDATED  FINANCIAL  STATEMENTS  AND RELATED NOTES INCLUDED
ELSEWHERE  IN  THIS  ANNUAL  REPORT.  THIS  DISCUSSION  AND  ANALYSIS  CONTAINS
FORWARD-LOOKING  STATEMENTS  THAT  INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS.
OUR  ACTUAL  RESULTS  MAY  DIFFER  MATERIALLY  FROM  THOSE  ANTICIPATED IN THESE
FORWARD-LOOKING  STATEMENTS  BECAUSE  OF  CERTAIN  FACTORS,  INCLUDING,  BUT NOT
LIMITED  TO,  THOSE  PRESENTED  BELOW.

OVERVIEW

     The  LocatePLUS  Group is a business-to-business and business-to-government
provider  of  public information via our proprietary data integration solutions.
Since  1996, we have sold a CD-ROM-based product, which we refer to as Worldwide
Information  ,  that  enables  users to search certain motor vehicle records and
driver's license information in multiple states through a dynamic search engine,
using  complete or partial information.  Since March 1, 2000, we have maintained
a  database  that  is accessible through the Internet, known as LocatePLUS.  Our
LocatePLUS  product  contains searchable and cross-referenced public information
on  individuals  throughout  the  United  States,  including individuals' names,
addresses,  dates  of  birth, Social Security numbers, prior residences, and, in
certain  circumstances,  real  estate  holdings,  recorded  bankruptcies, liens,
judgments,  drivers'  license  information  and  motor  vehicle  records.  Since
September  2003,  our  wholly-owned  subsidiary, Certifion, has offered personal
information  for  self-certification  purposes  through  its  Entersect product.

     We  distribute  our content both directly (through the Internet in the case
of  our  LocatePLUS  product  and  through the mail in the case of our Worldwide
Information  CD-ROM)  and  through  "channel  partner"  arrangements,  by  which
third-party  database  providers obtain access to our databases in consideration
for  a  royalty (such as job search and on-line dating sites, in the case of our
Entersect  product).

     On  September  1,  2003,  through  our newly formed wholly-owned subsidiary
Certifion  Corporation,  we  acquired  all  the  assets  of  Project  Entersect
Corporation  in consideration for $62,662.  The acquisition was accounted for as
a  purchase  and  is recorded and reflected with our operations from the time of
purchase.  The  subsidiary  operates  under the trade name Entersect.  Entersect
provides a self-identification and validation service for online job posting and
dating  sites.

     On  October  17,  2003,  through  our newly formed wholly-owned subsidiary,
Dataphant,  Inc.,  we  acquired  Voice  Power  Technologies, Inc., a Texas-based
provider  of  data technology.  In connection with this acquisition, Voice Power
Technologies,  Inc.  merged  with and into Dataphant, Inc.  As consideration for
the merger, shareholders of Voice Power Technologies, Inc. received an aggregate
of 2,500,000 shares of LocatePLUS Class B Non-voting Common Stock.  Through this
acquisition,  we  now  have  information concerning virtually all landline phone
numbers  in  the United States and approximately 25% of United States cell phone
numbers.  This  data  has  been  integrated  into  our  current  product  lines.

     Although  our  products generally consist primarily of publicly available -
and  therefore  non-proprietary - information, we integrate data in our products
in  a  proprietary  manner  that  allows  users  to  access  data  rapidly  and
efficiently.  In  addition,  our  LocatePLUS  product  utilizes  proprietary
methodologies  to  link  data  from  different  sources  associated with a given
individual  to  a single background report, even though the sources of data with
respect  to  a  given  individual  may  be  incomplete  or  contain only partial
information  with  respect  to  that  individual.  We  have  also  sought patent
protection  with  respect  to  aspects  of  our  marking  and  search technology
(referred  to  as  our  "Bull's  Eye" feature) and aspects of our CareerScan and
TrustmeID  products.
Revenue  associated  with  our  Worldwide Information product is recognized upon
delivery  to  the customer of a CD-ROM, provided that no significant obligations
remain,  evidence  of  the  arrangement  exists,


                                       13
<PAGE>


the  fee  is  fixed  or  determinable  and collectability is reasonably assured.
Information  in our Worldwide Information product is updated and released either
quarterly  or  twice a year.  In the case of our LocatePLUS product, we charge a
fee  to  customers, which varies based upon the type and quantity of information
requested.  Capitalizing  on  the  synergies  gained  through  the  Companies
acquisitions,  in  2004,  Worldwide  was able to utilize the technology acquired
through  Voicepower  Technologies, when it merged into Dataphant, to develop the
industry's  first  ever  searchable  non-published  and cell phone CD-ROM.  This
product became Worldwide's fastest growing CD-ROM product to date.  In addition,
Worldwide,  using  the  search capabilities built into the CD-ROM search engine,
has  expanded  beyond  CD-ROMs.  Worldwide  recently  entered  into an exclusive
partnership  with the State of New Hampshire's Department of Safety to implement
its  technology  on the state's Intranet.  Sonia Bejjani, Company co-founder and
President  of  Worldwide,  was  profiled  in "Women to Watch in 2005" by Women's
Business  Boston,  January  2005  issue.

Revenue from our LocatePLUS product is recognized when there is either an agreed
upon  royalty  fee or the requested information is downloaded, there is evidence
of  an  arrangement,  the  fee  is  fixed or determinable, and collectability is
reasonably  assured.  We  charge  our  fees  to  customers'  credit  cards
(approximately  60%  of  our  current  LocatePLUS  customer  base)  or  invoice
customers  for such fees on a monthly basis (approximately 40% of our LocatePLUS
customer  base).  During  2005,  our  LocatePLUS  online  customer base exceeded
20,000  customers.  Within  this  customer  base,  subscriptions  for ChoicePlan
billing  plans,  which  are  billing  plans  for  committed revenue per customer
ranging  from  $25  per month to $5,000 per month, increased to 1,200 customers.
In  addition, we made a significant change to our billing practice in 2004, with
the  implementation  of  a  new  minimum  usage fee.  We expect this change will
increase  annual  billings  by  at  least  $1M  per  year.

     Revenue  from  our  Entersect product is recognized when certifications are
purchased  online (and paid for via credit card) or the requested information is
downloaded,  there  is  evidence  of  an  arrangement,  the  fee  is  fixed  or
determinable,  and  collectability  is  reasonably  assured.

    Revenue  from Dataphant is generated exclusively through inter-company sales
to  our  other  wholly  owned  subsidiaries  and  eliminated  on  consolidation.

     Our  costs  of  revenue  consist  primarily of our costs to obtain data and
software  maintenance  expenses,  which consist primarily of payroll and related
expenses  for  information  technology  personnel,  Internet  access and hosting
charges,  and  expenses  relating to Web content and design.  We obtain our data
from  multiple  sources and we have entered into various license agreements with
the  related  data  providers.  In  2006  and  2005,  we recorded $3,828,408 and
$4,055,417,  respectively,  in  costs related to these agreements.  In the event
that  any  of  our  primary sources of data became unavailable to us, we believe
that we would be able to integrate alternate sources of data without significant
disruption  to  our  business  or operations, as there are currently a number of
providers  of  such  data.

     Our selling and marketing expenses consist of salaries and commissions paid
to  sales representatives for the products that we offer, as well as direct mail
advertising  campaigns  and  magazine  and  Internet-banner  advertisements.

     General and administrative expenses consist of payroll and related expenses
for  non-sales,  non-research  and  development and executive and administrative
personnel,  facilities  expenses,  insurance,  professional  services  expenses,
travel  and  other  miscellaneous  expenses.

     Interest  income  consists  of  earnings  on our cash, cash equivalents and
short  term  investments.  Interest expense is primarily attributable to various
notes issued through the year ended December 31, 2006.  As of December 31, 2006,
we  had  notes  payable  (current  and  long-term)  totaling  $1,638,125.

We  have  incurred  significant net losses since our inception.  We incurred net
losses  of  approximately  $5.9  million  in 2006 and $5.6 million in 2005.  Our
accumulated  deficit  as  of  December  31,  2006 was approximately $42 million.


                                       14
<PAGE>


Our  ultimate  success  is still dependent upon our ability to secure additional
financing to meet our working capital and ongoing project development needs.  We
anticipate  that  we  will increase our sales and marketing, product development
and  general  and  administrative  expenses  during 2006 and for the foreseeable
future.  To  achieve  our business objectives, we must raise additional capital,
which  may  consist of future debt or equity offerings.  Any such financings may
be  dilutive  to  existing  investors.

RESULTS OF OPERATIONS

     YEAR ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31, 2005

     REVENUES.  Revenue  from  our  Worldwide  Information  TM  CD-ROM  product
increased to $588,977 for the year ended December 31, 2006 from $480,412 for the
year  ended  December  31, 2005, an increase of 22%  Revenue from our LocatePLUS
and  Entersect  online  products,  decreased  to  $6,182,251  for the year ended
December  31,  2006  as  compared  to $6,257,679 for the year ended December 31,
2005,  a  decrease  of  1%.  Revenue  from  our  channel  partners  increased to
$5,471,120  for  the  year ended December 31, 2006 as compared to $4,358,038 for
the year ended December 31, 2005 an increase of 25%.  The increase is attributed
to the addition of new channel partners and additional sales to existing channel
partners.  Management expects revenue from channels to decrease substantially in
2007  as  a  major  contract  has expired.  As part of deploying channel partner
agreements,  we occasionally provide engineering services.  We did not recognize
any  engineering  revenue  in 2006 as compared to $505,000 recognized in 2005, a
decrease  of  100%.  Engineering  services  revenues  are  not recurring and are
dependent  on  customer needs.  We recognized wireless revenue of $7,725 in 2006
as  compared to $11,908 in 2005. We expect online, wireless, and channel revenue
to  increase  and  CD-ROM  revenue  to  be stable during the next twelve months.

COSTS  OF  REVENUES.  For the year ended December 31, 2006, our costs of revenue
for  Worldwide  Information TM were $38,965 as compared to $133,612 for the year
ended December 31, 2005, a decrease of 70%.  Data cost are relatively fixed even
as  revenue from the product increases, no marked increase in costs is realized.
For  the  year  ended  December  31,  2006, our costs of revenue associated with
LocatePLUS  and channel partner sales were $3,828,408, as compared to $4,055,417
for  the  year  ended December 31, 2005, a decrease of 6%. Costs of revenues are
expected  to stabilize at about $3.5 million annually, as that amount represents
the cost for the required data sets.  As revenue increases, costs of revenue are
not  expected  to  increase proportionately.  Costs of engineering services were
allocated  based  on  time  spent  for  engineering services.  Costs of wireless
revenues  are primarily the cost of wireless connectivity and the amortized cost
of  devices  sold  to  end  users.

SELLING  AND  MARKETING  EXPENSES.  Selling  and marketing expenses for the year
ended  December 31, 2006 were $1,714,502, as compared to $2,492,172 for the year
ended December 31, 2005, a decrease of approximately 31%.  We expect selling and
marketing  expense  to  increase over the next twelve months as we focus greater
efforts  on  the  acquisition  of  new  customers  to  increase  revenues.

GENERAL  AND  ADMINISTRATIVE  EXPENSES.  General and administrative expenses for
the  year  ended December 31, 2006 were $7,539,311 as compared to $7,537,444 for
the  year  ended  December  31,  2005,  an  increase  of  less  than  1%.

RESEARCH  AND  DEVELOPMENT  EXPENSES.  Research and development expenses for the
year  ended December 31, 2006 were $196,600 as compared to $214,287 for the year
ended  December  31,  2005,  a  decrease  of  8%. These expenses are a result of
investigation  of  new  biometric  data  products  through  the  creation  of
Metrigenics.  We  anticipate  these  expenses will stabilize for the foreseeable
future.

INTEREST  INCOME.  No interest income was recorded in 2006.  Interest income for
the  year  ended  December  31,  2005  was  $57,256

     INTEREST  EXPENSE.  Interest  expense  decreased to $1,320,934 for the year
ended December 31, 2006, from $2,705,835 for the year ended December 31, 2005, a
decrease  of 51%.  The interest expense is attributable to the payoff of certain
notes payable issued in 2004 and the interest expense associated with additional
financing  during  2006.


                                       15
<PAGE>


OTHER  INCOME.  Other income increased to $4,523 for the year ended December 31,
2006,  from  $(7,952)  for  the  year  ended  December  31,  2005.

LIQUIDITY AND CAPITAL RESOURCES

     From  our  incorporation  in  1996  through  December  31,  2004, we raised
approximately  $40  million  through  a  series of private placements and public
offerings of equity and convertible debt to fund marketing and sales efforts and
develop  our  products  and  services.

As  of  December  31,  2006,  our  cash  and  cash  equivalents  totaled $29,822

     We  raised  approximately $3.8 million from sales of our equity during 2004
and approximately $4.0 million from the issuance of notes payable.  Our ultimate
success  is  still  dependent upon our ability to secure additional financing to
meet  our  working capital and ongoing project development needs.  We anticipate
that  we  will increase our sales and marketing, product development and general
and  administrative  expenses  during  2005  and for the foreseeable future.  To
achieve  our  business  objectives,  we must raise additional capital, which may
consist of future debt or equity offerings.  Any such financings may be dilutive
to existing investors.  Pursuant to a certain put, we sold 369,535 shares, after
adjusting  for  a  1 for 50 reverse split on December 12, 2205, for a total $5.0
Million  in net proceeds from the investor through December 31, 2005.  No amount
remains  available  under  the  put  at  December  31, 2005.  Management's plans
include increasing sales, expanding infrastructure, and hiring additional staff.
To accomplish this, we intend to identify sources of additional capital and seek
funding  from  such  sources.

     On  June  17,  2004  we  entered  into a Securities Purchase Agreement with
Laurus  Master  Fund,  Ltd.,  a  Cayman Islands company, relating to the private
placement  of  a  convertible  term  note  issued  by  us  in  the
principal  amount  of  $3,000,000  due  June 17, 2007 (the "Note"), and a common
stock  purchase  warrant  (the  "Warrant").  On November 30, 2004, this note was
amended  to  increase  the  principal amount to $4,000,000 and add an additional
warrant.  The  terms,  as  amended, allow for this note to covert into 6,666,667
shares  of  our  Class A Voting Common Stock at a fixed conversion rate of $0.30
per  share  and  5,000,000  shares of our Class A Voting Common Stock at a fixed
conversion rate of $0.40 per share.  One Warrant provides for the purchase of up
to 1,320,000 shares of Class A Common Stock at a price of $0.45 each, subject to
customary  adjustments, until June 17, 2009, and the additional Warrant provides
for  the  purchase of up to 650,000 shares of Class A Common Stock at a price of
$0.35 each, subject to customary adjustments, until November 30, 2009.  On March
31, 2005, the Company amended its convertible term note issued by the Company to
Laurus  Master  Fund,  Ltd.,  a  Cayman Islands company.  The terms, as amended,
allow  for  this  note  to  convert  into 6,250,000 shares of our Class A Voting
Common  Stock at a fixed conversion rate of $0.16 per share, 3,333,333 shares of
our  Class  A  Voting Common Stock at a fixed conversion rate of $0.30 per share
and  5,000,000  shares  of our Class A Voting Common Stock at a fixed conversion
rate  of  $0.40  per  share.

     In  connection  with  an offering that closed on August 15, 2005 we entered
into  a  Purchase  Agreement with certain institutional and accredited investors
relating  to  the  private  placement  of  convertible  term notes issued by the
Company  in  the  principal  amount of $8,965,000 and warrants to purchase up to
41,189,000  shares  of  our  capital  stock. Of the proceeds from this offering,
approximately $4.1 million was used to retire current secured convertible notes,
and  the  remainder  will  be  used  for  general  working  capital.

     All  of  the notes are convertible, and the warrants are exercisable, first
into  as  many  shares  of  our Class A Voting Common Stock, par value $0.01 per
share,  as are available for issuance at the time of conversion or exercise, and
then  into  shares  of  our Class B Non-Voting Common Stock, par value $0.01 per
share.  As  part  of  our agreement with these investors, we have agreed to seek
the  approval  from our stockholders of the recapitalization of each outstanding
share of our Class A Voting Common Stock and our Class B Non-Voting Common Stock
into  a  single class of voting common stock, as well as a one-for-fifty reverse
split  of  this  new  class  of common stock.  If our stockholders approve these
measures,  the  notes will automatically convert into shares of the new class of
common  stock,  and  any  unexercised warrants will be exercisable for shares of
that  class  of stock as well.  As there are currently no unissued shares of our
Class  A  Voting  Common  Stock that are not otherwise reserved for issuance, we
anticipate  that  these  notes  and  warrants  will be exercisable for shares of
either  our Class B Non-Voting Common Stock or the newly created class of common
stock,  if  approved.  Without taking into consideration interest payable on the
notes,  the


                                       16
<PAGE>


notes  are convertible into 89,650,000 shares of our common stock (regardless of
class)  at  a  current  conversion  rate of $0.10 per share and the warrants are
exercisable  for  ten  years from the date they were issued for up to 41,189,000
shares  of our common stock (regardless of class) at a current exercise price of
$0.15  per  share.  The  conversion price of the notes and the exercise price of
the warrants are each subject adjustment for a variety of events, including, for
example,  payment  of  dividends,  certain  mergers  or asset sales, and certain
securities  issuances.  In  conjunction with this offering, we also entered into
related Registration Rights and Voting Agreements.  On November 14, 2005, at the
annual  meeting  of  the  shareholders,  the  recapitalization was approved by a
majority  of  the  outstanding shares of both classes of stock.  On December 12,
2005,  we  completed  the plan of recapitalization which triggered the mandatory
conversion  of  certain notes payable in the amount of $8,965,000 into 1,793,000
of  the  new  common  stock.

     On December 29, 2005, we entered into an Investment Agreement with Dutchess
Private  Equities  Fund  II,  L.P.  Pursuant  to  that  Investment Agreement, we
received  proceeds  of  $1,500,000  by  issuing  a note payable convertible into
300,000  shares  of  Common Stock at $5.00 per share and 200,000 founders shares
and  Common  Stock purchase warrant for 750,000 shares with an exercise price of
$5.00  per  share.  We  also  entered  into  an  agreement  where we may, at our
discretion,  periodically  "put"  or  require Dutchess to purchase shares of our
Common  Stock.  The  aggregate  amount that Dutchess is obligated to pay for our
shares will not exceed $10.0 million.  For each share of  Common Stock purchased
under  the Investment Agreement, Dutchess will pay 93% of the lowest closing bid
price on the Over-the-Counter Bulletin Board (or other principal market on which
our  Common Stock is traded) during the ten day period immediately following the
date  on  which  we  give notice to Dutchess of our intention to put such stock.
Our ability to put the shares under the Investment Agreement is conditioned upon
us  registering  the  shares  of  Common  Stock with the Securities and Exchange
Commission  and  satisfaction  of  certain  other  customary closing conditions.

     On July 21, 2006 we issued a Debenture to Dutchess Private Equities Fund,
LP , a related private equities fund and received proceeds of $750,000. The
Debenture is due on July 21, 2011 and pays twelve per cent (12%) interest.
Interest and principal are payable at such times and under such conditions are
outlined in the Debenture. The Debenture is convertible into shares of our
Common Stock at the lesser of $.70 per share or 75% of the lowest closing bid
price during the 20 trading days next preceding the date of conversion
(collectively, the two funds "Dutchess").  The holder may not convert if it
would cause the holder to own more than 4.9% of the outstanding Common Stock of
the Company.
On  March 20, 2007, we issued a secured convertible debenture to Cornell Capital
Partners in the aggregate principal amount of $6,000,000 of which $3,000,000 was
advanced  immediately.  The  second  installment  of $2,000,000 will be advanced
immediately  prior to the filing by the Company with the Securities and Exchange
Commission  (the  "Commission")  of  the  Registration  Statement.  The  last
installment  of  $1,000,000  will  be advanced immediately prior to the date the
Registration Statement is declared effective by the Commission.   The Debentures
mature  on  the  third  anniversary  of  the date of issuance. The holder of the
Debentures may convert at any time amounts outstanding under the Debentures into
shares  of  common  stock  of  the Company at a fixed conversion price per share
equal  to  $0.314.  Under  the  Purchase Agreement the debentures are secured by
substantially  all  of the Company's, and its wholly owned subsidiaries' assets.

Under  the  Purchase  Agreement, we also issued to Cornell five-year warrants in
six  separate  series  as  follows:

A  Warrants  to  purchase  2,384,814 shares of common stock at $0.314 per share;
B  Warrants  to  purchase  2,186,079 shares of common stock at $0.343 per share;
C  Warrants  to  purchase  2,017,919 shares of common stock at $0.372 per share;
D  Warrants  to  purchase  1,748,863 shares of common stock at $0.429 per share;
E  Warrants  to  purchase  1,499,026  shares of common stock at $0.50 per share;
F  Warrants  to  purchase  1,500,000  shares of common stock at $0.01 per share.


                                       17
<PAGE>


COMMITMENTS AND CONTINGENCIES

     OPERATING LEASES

     We  lease  office  space  and  equipment  under  various  operating  lease
agreements which terminate on various dates through 2012.  Rent expense amounted
to  $568,212  and $563,180 during 2006 and 2005, respectively.  This increase is
due  to  the  rising  of  market  rates.

     CAPITAL LEASES

     Through  December  31,  2006,  we  entered into certain long-term equipment
lease  agreements.  These agreements are classified as capital leases and expire
in  2007.  Future minimum lease payments under our non-cancelable capital leases
total  $49,536.

     LICENSE AGREEMENTS

The  following  represents the contractual obligation and commercial commitments
as  of  December  31,  2006.

<TABLE>
<CAPTION>


                                          Payments Due by Period
                                       LESS THAN      1-3         3-5      MORE THAN
CONTRACTUAL OBLIGATIONS      TOTAL       1 YEAR      YEARS       YEARS      5 YEARS
<S>                        <C>         <C>         <C>         <C>         <C>
Long-Term Debt
including current portion  $1,638,125  $1,627,996  $   10,129           -  $        -
Capital Leases                 49,536      49,536           -           -           -
Operating Leases            2,583,418     598,368     952,824     952,824      79,402
License Agreements          1,372,492     732,492     480,000     160,000           -
                           ----------  ----------  ----------  ----------  ----------
Total                      $5,643,571  $3,008,392  $1,442,953  $1,112,824  $   79,402
                           ----------  ----------  ----------  ----------  ----------
</TABLE>


CRITICAL ACCOUNTING POLICIES

     We  have  identified  the  policies  below  as  critical  to  our  business
operations  and  the understanding of our results of operations.  The impact and
any  associated  risks  related to these policies on our business operations are
discussed  throughout  this  section where such policies affect our reported and
expected  financial  results.  For  a  detailed discussion on the application of
these and other accounting policies, see Note 2 in the Notes to the Consolidated
Financial  Statements  included  elsewhere in this Annual Report.  Note that our
preparation  of  our  Consolidated  Financial  Statements  requires  us  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities,  disclosure of contingent assets and liabilities at the date of our
financial  statements,  and  the reported amounts of revenue and expenses during
the  reporting  period.  There  can be no assurance that actual results will not
differ  from  those  estimates.

Our  accounting  policies  that  are  the most important to the portrayal of our
financial  condition  and  results,  and  which  require  the  highest degree of
management  judgment  relate  to  revenue  recognition  and  the  provision  for
uncollectible  accounts  receivable.  We  estimate  the  likelihood  of customer
payment  based principally on a customer's credit history and our general credit
experience.  To  the extent our estimates differ materially from actual results,
the timing and amount of revenues recognized or bad debt expense recorded may be
materially  misstated  during  a  reporting  period.

CERTAIN RELATED PARTY TRANSACTIONS

     NON-EMPLOYEE DIRECTORS STOCK OPTION POLICY

On  March  28,  2003,  and  pursuant to our Non-employee Directors' Stock Option
Policy,  we granted warrants to purchase an aggregate of 105,000 shares of Class
B  Non-voting  Common  Stock,  with  an exercise price of $0.15, to three of our
Directors  (Robert  Kite,  John  Houlihan,  and  Thomas  Garlock).

On  November  3,  2003, and pursuant to our Non-employee Directors' Stock Option
Policy, we granted options to purchase an aggregate of 500,000 shares of Class B
Non-voting  Common  Stock,  with  an  exercise


                                       18
<PAGE>

price  of  $0.20,  and  paid  an  aggregate  of $50,000 to five of our Directors
(Messrs.  Kite,  Houlihan  and  Garlock,  Gerard  Scalley  and  Thomas  Murphy).

In May 2004, and pursuant to our Non-employee Directors' Stock Option Policy, we
granted  options  to purchase an aggregate of 5,000,000 shares of Class A Voting
Common  Stock, with an exercise price of $1.50 to five of our Directors (Messrs.
Kite,  Houlihan  and  Garlock,  Gerard  Scalley  and  Thomas  Murphy).

     USE OF OUR ASSETS

     Certain  of  our  executives  are  allowed  use  of company owned or leased
vehicles  for both business and personal purposes.  The owned vehicles have been
capitalized as assets of the Company, totaling $102,954 as of December 31, 2006.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

          In  February  2006,  the Financial Accounting Standards Board ("FASB")
issued  Statement  of Financial Accounting Standard 155 - Accounting for Certain
Hybrid  Financial  Instruments ("SFAS 155"), which eliminates the exemption from
applying  SFAS  133 to interests in securitized financial assets so that similar
instruments  are  accounted  for  similarly  regardless  of  the  form  of  the
instruments.  SFAS  155  also  allows  the election of fair value measurement at
acquisition,  at  issuance, or when a previously recognized financial instrument
is  subject  to  a re-measurement event. Adoption is effective for all financial
instruments acquired or issued after the beginning of the first fiscal year that
begins  after  September  15, 2006. Early adoption is permitted. The adoption of
SFAS 155 is not expected to have a material effect on our consolidated financial
position,  results  of  operations  or  cash  flows.

In  March 2006, the FASB issued Statement of Financial Accounting Standard 156 -
Accounting  for  Servicing  of Financial Assets ("SFAS 156"), which requires all
separately  recognized  servicing  assets and servicing liabilities be initially
measured  at  fair value. SFAS 156 permits, but does not require, the subsequent
measurement  of  servicing  assets  and  servicing  liabilities  at  fair value.
Adoption  is  required  as of the beginning of the first fiscal year that begins
after  September 15, 2006. Early adoption is permitted. The adoption of SFAS 156
is  not  expected  to  have  a  material  effect  on  our consolidated financial
position,  results of operations or cash flows In December 2004, the FASB issued
SFAS No. 153, "Exchanges of Non-monetary Assets, an amendment of APB Opinion No.
29." APB Opinion No. 29, "Accounting for Non-monetary Transactions," is based on
the  principle that exchanges of non-monetary assets should be measured based on
the  fair value of the assets exchanged. SFAS No. 153 amends APB Opinion No. 29,
eliminating the exception to fair value accounting for non-monetary exchanges of
similar productive assets and replaces it with a general exception to fair value
accounting  for  non-monetary exchanges that do not have commercial substance. A
non-monetary  exchange  has commercial substance if the future cash flows of the
entity  are  expected  to  change significantly as a result of the exchange. The
statement  is  effective  for  non-monetary  asset exchanges occurring in fiscal
periods  beginning  after  June  15,  2005.  The  Company  does  not expect this
statement  to  have  a  material  impact  on  its  financial  statements.

OFF-BALANCE-SHEET ARRANGEMENTS

The  Company  has  no  off-balance-sheet  arrangements currently in effect or in
effect during the year ended December 31, 2006, including but not limited to any
guarantee  contracts that has the characteristics defined in paragraph 3 of FASB
Interpretation  No.  45  (November 2002), as amended; any retained or contingent
interest  in  assets  transferred  to  an  unconsolidated  entity  or  similar
arrangement,  any  obligation  that  could  be  accounted  for  as  a derivative
instrument,  or any obligation arising out of a variable interest (as referenced
in  FASB  Interpretation  No.  46,  as  amended).

ITEM 7 - FINANCIAL STATEMENTS
     Our financial statements as of and for the twelve months ended December 31,
2006  are  set forth in the section of this Annual Report beginning on page F-1.



                                       19
<PAGE>


ITEM  8  -  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURE

None

ITEM  8A  -  CONTROLS  AND  PROCEDURES

 EVALUATION  OF  DISCLOSURE  CONTROLS  AND  PROCEDURES.  Disclosure controls are
procedures  that  are  designed  with the objective of ensuring that information
required  to be disclosed in our reports filed under the Securities Exchange Act
of  1934,  as  amended  (the  "Exchange Act"), such as this quarterly report, is
recorded,  processed,  summarized and reported within the time periods specified
in  the  SEC's  rules  and forms. Disclosure controls are also designed with the
objective  of  ensuring that such information is accumulated and communicated to
our  management,  including  the  CEO  and  CFO,  as appropriate to allow timely
decisions  regarding required disclosure. Internal controls are procedures which
are  designed  with the objective of providing reasonable assurance that (1) our
transactions  are properly authorized, recorded and reported; and (2) our assets
are  safeguarded against unauthorized or improper use, to permit the preparation
of  our  condensed  consolidated  financial statements in conformity with United
States  generally  accepted  accounting  principles.

We  are  not  an  accelerated filer (as defined in the Exchange Act) and are not
required  to deliver management's report on internal controls over our financial
reporting  until  our  year ending December 31, 2007. During 2006, we identified
certain matters that would constitute material weakness (as such term is defined
under  the Public Company Accounting Oversight Board Auditing Standard No. 2) in
our internal controls over financial reporting. The material weakness relates to
the  financial  closing  process,  a  lack  of  segregation  of  financial
responsibilities  and  the  need  for  additional qualified financial accounting
personnel.  These  weaknesses  have  lead management to conclude that disclosure
controls  and  procedures  are not effective for the nine months ended September
30,  2006.  To  remediate  the  internal  controls  does  not require additional
material  costs.

     During  the  nine  months  ended September 30, 2006, we have taken specific
actions  to remediate the reportable conditions and material weakness, including
the  devotion  of  additional  resources  to  the quarterly closing process, the
hiring  of  additional qualified financial accounting personnel, and realignment
of  certain  financial  responsibilities  to  achieve  stronger  segregation  of
financial  duties.  We intend to continue to further strengthen our controls and
procedures  regarding  the  closing  process.

     There  were  no  changes  in our internal controls over financial reporting
that occurred during the quarter ending September 30, 2006, that have materially
affected,  or  are reasonably likely to materially affect, our internal controls
over  financial  reporting.

There  were  no  significant  changes  in  our  internal controls over financial
reporting  that  occurred  during  the  current  quarter  that  have  materially
affected,  or  are reasonably likely to materially affect, our internal controls
over  financial  reporting



                                    PART III

ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

                                       20
<PAGE>


The  following  table  sets  forth  specific information regarding our executive
officers  and  directors  as  of  December  31,  2006.

EXECUTIVE OFFICERS AND DIRECTORS


The following table sets forth specific information regarding our executive
officers and directors as of Chief Financial Officer February 12, 2007.

EXECUTIVE OFFICERS AND DIRECTORS     AGE     POSITIONS
--------------------------------     ---     -----------------------------------
Jon R. Latorella                     42      Chairman of the Board, President
                                             and Chief Executive Officer
Sonia P. Bejjani                     37      Director; President-Worldwide
                                             Information, Inc.
James C. Fields                      39      Vice President of Finance,
                                             Treasurer Secretary, and Acting
                                             Chief Financial Officer
Ralph Caruso                         56      Director
David Skerrett(2)                    56      Director
Chris Romeo(1)                       43      Director
Mike Ryan                            47      Director
Peter Zekos                          44      Director

(1) Member of our Compensation Committee.
(2) Member of our Audit Committee.

CURRENT DIRECTORS AND OFFICERS

     JON  R.  LATORELLA  co-founded  our business in 1991 and has been our Chief
Executive  Officer since we commenced our activities.  Mr. Latorella is also the
Chairman of our Board of Directors.  Before founding our business, Mr. Latorella
served as a consultant to various local and state law enforcement agencies.  Mr.
Latorella  holds  a  Bachelor of Science/Bachelor of Arts from the University of
Massachusetts,  which  he  received  in  1994.
Subsequent  to  year  end,  Jon  Latorella  has resigned as President and CEO of
LocatePlus.

SONIA  P.  BEJJANI  co-founded our business in 1991 and has been a member of our
Board  of  Directors and employed by us in various capacities since we commenced
our  activities.  For  the five years ending August 1, 2001, Ms. Bejjani was our
Vice  President - Sales and Customer Service.  Since August 1, 2001, Ms. Bejjani
has  been  the  President  of  Worldwide  Information,  Inc.,  our  wholly-owned
subsidiary.

JAMES  C.  FIELDS  was  appointed  our  Vice  President  of  Finance, Treasurer,
Secretary  and Acting Chief Financial Officer on March 31, 2003.  Prior to that,
Mr.  Fields  served  as  our  Director  of Finance since February 2001. Prior to
joining us, Mr. Fields was the Controller and Vice President of operations at CO
Space,  a carrier neutral collocation company.  Mr. Fields is a certified public
accountant  and  holds  a Bachelor of Arts in Accounting from the College of St.
Scholastica, which he received in 1992, and a Masters of Business Administration
from  Babson  College,  which  he  received  in  1999.
       Subsequent  to  year  end,  James  Fields  has assumed an interim role of
Acting  CEO.

     DAVID  SKERRETT has been Vice President of the Middlesex Corporation for 23
years.  Middlesex  Corporation  is  in  the  top  400  heavy  civil construction
companies  in  the  nation  with  $140 million in revenue.  Mr. Skerrett holds a
Bachelor  of  Engineering  from  College  of  Technology.  Mr. Skerrett has been
elected  in  2005 to serve a one year term.  David is also a member of the Audit
Committee.

CHRIS  ROMEO is an attorney that has had a private practice since 1992 and holds
a  Bachelors  Degree  from  Wesleyan  University  and  received  a  Doctorate of
Jurisprudence  from  the  New England School of Law in 1987.  Mr. Romeo is a new
member  to  the  Board  of Directors and has been elected in 2005 to serve a two
year  term.

RALPH  CARUSO,  is the founder and President of Caruso Companies, a conglomerate
involved in many facets of industrial construction that has been in business for
over 25 years. Mr. Caruso is a new member to the Board of Directors and has been
elected  in  2005  to  serve  a  one  year  term.

MIKE  RYAN is an attorney that has had a private practice since 1992 and holds a
Bachelors  Degree  from  Merrimack  College  and  received  a  Doctorate  of
Jurisprudence  from  the  New  England School of Law in 1987.  Mr. Ryan is a new
member  to  the  Board  of Directors and has been elected in 2005 to serve a two
year  term.


                                       21
<PAGE>


PETER  ZEKOS  is founder and President of Excel Staffing, Inc., founded in 1999,
an  executive  search  and  temporary  staffing  company  located  in Worcester,
Massachusetts.  Mr.  Zekos  holds  a  Bachelors  of  Science  in  Business
Administration  from  Clark  University  in  Worcester,  Massachusetts  which he
received  in 1984.  Mr. Zekos joined our Board of Directors in 2005 and has been
elected  in  2005  to  serve  a  three  year  term.

     Each  of  the  directors  holds  such  his  or  her office until his or her
successor  is duly chosen and qualified, or until his or her earlier resignation
or removal.  The Company is not aware of any family relationships between any of
the officers and any of the Company's directors. Each of the officers holds such
office  until  his  or  her successor shall have been duly chosen and shall have
been qualified, or until his earlier resignation or removal.  We do not have any
employment  agreements  with  any  of  our  employees.

FORMER  DIRECTORS  AND  OFFICERS

     Dr.  Richard  B. Yules, a former member of our Board of Directors, resigned
from  the  Board  on  March  12,  2003.

     Mr.  Robert  A. Goddard, our former Chief Financial Officer, Treasurer, and
Secretary,  ceased  employment  with  us  on  March  31,  2003.

Thomas  E.  Murphy  a former member of our Board of Directors, resigned from the
Board  on  March  10,  2006.

John  P.  Houlihan  a former member of our Board of Directors, resigned from the
Board  on  March  12,  2006.

SECTION 16 COMPLIANCE

     Section  16(a) of the Securities Exchange Act of 1934 requires our officers
and  directors,  and  persons who own more than 10% of a registered class of our
equity  securities,  to  file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Officers, directors and greater than 10%
beneficial  owners are required to furnish us with copies of all forms they file
pursuant  to  Section  16(a).

     Except as set forth in the proceeding paragraph, and based solely on review
of  the  copies of such reports furnished to us and written representations from
reporting  persons  that  no  other reports were required, to our knowledge, all
such  persons  complied  with  all  of  the  Section  16(a)  filing requirements
applicable  to  them  with  respect  to  2006.

AUDIT COMMITTEE
     The  Audit  Committee  of  the  Board  of  Directors is responsible for the
appointment, compensation and oversight of our independent auditors, reviews the
scope of the audit services provided by our independent accountants, and reviews
our  accounting practices and internal accounting controls.  Currently, the only
member  of  the Audit Committee is Mr. Skerrett.  There is one vacancy on the
Audit  Committee  of  the  Board  of  Directors.

COMPENSATION  COMMITTEE

     The Compensation Committee of the Board of Directors reviews and recommends
to  the Board of Directors the salaries, benefits and stock option grants of all
employees,  consultants, directors and other individuals compensated by us.  The
Compensation  Committee  also administers our equity compensation plan and other
employee  benefits  plans  that  we  may  adopt  from  time  to  time.

CODE  OF  ETHICS

     The  Company  adopted  a  Code  of  Ethics  at  the meeting of the Board of
Directors  held  May  2004.


                                       22
<PAGE>


ITEM 10 - EXECUTIVE COMPENSATION

     Prior  to  December  5,  2005,  the  Company had outstanding two classes of
stock,  Class  A  Voting  Common  Stock  of  which there were 150,000,000 shares
authorized with 111,424,416 issued, and Class B Non-Voting Common Stock of which
there  were  250,000,000 shares authorized with 74,505,730 issued. At the annual
meeting of the shareholders held on November 12, 2005, the shareholders approved
a  plan  of  recapitalization  whereby  1) each outstanding share of our Class A
Voting  Common  Stock  and  our  Class  B Non-Voting Common Stock combine into a
single  class of voting Common Stock with 400,000,000 authorized and 185,930,146
issued,  2)  effect  a  one-for-fifty  reverse split of this new class of Common
Stock  resulting in a 8,000,000 authorized and 3,718,603 issued, and 3) increase
the  authorized from 8,000,000 to 25,000,000. The combination of the two classes
of  stock  was  completed  on  December 5, 2005. The reverse split and change in
authorized  shares  was  completed  on  December  12,  2005.  In  addition,  the
completion of the recapitalization triggered the mandatory conversion of certain
notes  payable  in  the  amount  of  $8,965,000 into 1,793,000 of the new Common
Stock.

SUMMARY COMPENSATION TABLE

     The  following  table  sets  forth,  for  2006,  2005  and  2004,  certain
compensation  paid  by  us,  including  salary,  bonuses  and  certain  other
compensation,  to  our  Chief Executive Officer and all other executive officers
whose  annual  compensation for the years ended December 31, 2006, 2005 and 2004
exceeded  $100,000  (the  "Named  Executive  Officers").

<TABLE>
<CAPTION>


-                          -       -         -                          NON-EQUITY      NON-        ALL
NAME AND                   -       -         -       STOCK    OPTIONS    INCENTIVE   QUALIFIED     OTHER
PRINCIPAL POSITION        YEAR   SALARY    BONUS    AWARDS    AWARDS       PLAN       DEFERRED     COMP      TOTALS
-                          -      ($)       ($)       ($)    (SHARES)    COMP ($)     COMP ($)      ($)       ($)
------------------------  ----  --------  --------  -------  ---------  -----------  ----------  ---------  --------
<S>                       <C>   <C>       <C>       <C>      <C>        <C>          <C>         <C>        <C>
JON R. LATORELLA          2006   231,468   325,000        -         -             -           -  15,000(2)   571,468
                          ----  --------  --------  -------  ---------  -----------  ----------  ---------  --------
President and             2005   232,727         -        -         -             -           -  15,000(2)   247,727
Chief Executive Officer   2004   193,955   100,000        -  70,000(1)            -           -  15,000(2)   378,955

JAMES C. FIELDS(3)        2006   142,690         -        -         -             -           -  13,200(5)   155,890
Acting Chief Financial    2005   142,893         -        -         -             -           -  13,200(5)   156,093
Officer, Treasurer and    2004   134,967         -        -  20,000(4)            -           -  10,000(5)   164,967
Secretary
</TABLE>



(1)     On  May  19,  2004  Mr. Latorella was granted incentive stock options to
purchase  70,000  Class  A Voting Common Stock with an average exercise price of
$70.05  per  share  on  a  post  recapitalization  basis.

(2)     Mr.  Latorella  and  his family are allowed use of company vehicles, the
value  of  which  is  approximately  $1,100  per  month  to  Mr.  Latorella.

(3)     Mr.  Fields commenced his employment with us in 2001.  Mr. Fields became
an  executive  officer  with  the  Company  on  March  31,  2003.

(4)     On  May  19,  2004,  Mr.  Fields  was granted incentive stock options to
purchase 20,000 shares of Class A Voting Common Stock with an exercise of $19.50
per  share  on  a  post  recapitalization  basis.

(5)     Beginning  in  April  2004,  Mr.  Fields  was  allowed  the  use  of  a
company-leased  vehicle,  the  value of which is approximately $1,100 per month.

Subsequent  to  year  end,  Jon  Latorella  has resigned as President and CEO of
LocatePlus.

                                       23
<PAGE>


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

<TABLE>
<CAPTION>


                                              OPTION AWARDS                                            STOCK AWARDS
                    --------------------------------------------------------------------  -----------------------------------------
                                                                                                                          Equity
                                                                                                                        Incentive
                                                                                                              Equity       Plan
                                                                                                            Incentive    Awards:
                                                                                                               Plan       Market
                                                                                                             Awards:        or
                                                                                                   Market     Number      Payout
                                                       Equity                             Number    Value       of        Value
                                                     Incentive                              of       of      Unearned       of
                                                        Plan                              Shares   Shares    Shares,     Unearned
                                                      Awards:                               or       or       Units      Shares,
                                                       Number                              Units    Units       or        Units
                       Number of      Number of          of                                 of       of       Other         or
                      Securities      Securities     Securities                            Stock    Stock     Rights      Other
                      Underlying      Underlying     Underlying                            That     That       That       Rights
                      Unexercised    Unexercised    Unexercised     Option                 Have     Have       Have     That Have
                        Options        Options        Unearned     Exercise     Option      Not      Not       Not         Not
                          (#)            (#)          Options       Price     Expiration  Vested   Vested     Vested      Vested
Name                  Exercisable   Unexercisable       (#)          ($)         Date       (#)      ($)       (#)         (#)
-------------------  -------------  --------------  ------------  ----------  ----------  -------  -------  ----------  ----------
<S>                  <C>            <C>             <C>           <C>         <C>         <C>      <C>      <C>         <C>
JON R. LATORELLA(1)
President and
Chief Executive
Officer                     35,000               -             -  $    12.50    12/18/08        -        -           -           -
                            50,000               -             -  $    12.50    12/18/08        -        -           -           -
                     -------------  --------------  ------------  ----------  ----------  -------  -------  ----------  ----------
                           100,000               -             -  $    50.00    12/18/08        -        -           -           -
                     -------------  --------------  ------------  ----------  ----------  -------  -------  ----------  ----------
                            20,000               -             -  $    75.00    05/19/09        -        -           -           -
                     -------------  --------------  ------------  ----------  ----------  -------  -------  ----------  ----------
                            50,000               -             -  $    19.50    05/19/09        -        -           -           -
                     -------------  --------------  ------------  ----------  ----------  -------  -------  ----------  ----------
                             2,000               -             -  $    10.00    11/03/08        -        -           -           -
                     -------------  --------------  ------------  ----------  ----------  -------  -------  ----------  ----------
                           240,000               -             -  $     0.50    12/29/09        -        -           -           -
                     -------------  --------------  ------------  ----------  ----------  -------  -------  ----------  ----------


JAMES C. FIELDS(2)
Acting Chief
Financial Officer           10,000                                     10.00    06/01/11        -        -           -           -
                     -------------                                ----------  ----------  -------  -------  ----------  ----------
                            10,000                                      7.50    03/28/13        -        -           -           -
                     -------------                                ----------  ----------  -------  -------  ----------  ----------
                            15,000                                     12.50    12/18/13        -        -           -           -
                     -------------                                ----------  ----------  -------  -------  ----------  ----------
                            20,000                                     19.50    05/19/14        -        -           -           -
                     -------------                                ----------  ----------  -------  -------  ----------  ----------
                            20,000                                      0.50    12/29/14        -        -           -           -
                     -------------                                ----------  ----------  -------  -------  ----------  ----------
</TABLE>


(1)     All options issued to Mr. Latorella expire five years from issue date.
As such, the issue date is five years prior to expiration and all options were
immediately vested upon issue.


<PAGE>

(2)     All options issued to Mr. Fields expire ten years from issue date.  As
such, the issue date is ten years prior to expiration. With the exception of the
10,000 share grant issued 6/1/2001 which vested 25% per year on its anniversary,
all options were immediately vested upon issue.


Subsequent  to  year  end,  Jon  Latorella  has resigned as President and CEO of
LocatePlus.


DIRECTOR COMPENSATION

<TABLE>
<CAPTION>

                                                                      Non-
                   Fees                            Non-Equity      Qualified
                  Earned                            Incentive       Deferred          All
                 or Paid     Stock      Option         Plan       Compensation       Other
                 in Cash     Awards     Awards    Compensation      Earnings      Compensation    Total
Name               ($)        ($)        ($)          ($)             ($)             ($)          ($)
--------------  ---------  ---------  ---------  --------------  --------------  --------------  --------
<S>             <C>        <C>        <C>        <C>             <C>             <C>             <C>
RALPH CARUSO            -          -          -               -               -               -         -
--------------  ---------  ---------  ---------  --------------  --------------  --------------  --------
DAVID SKERRETT          -          -          -               -               -               -         -
--------------  ---------  ---------  ---------  --------------  --------------  --------------  --------
PETER ZEKOS             -          -          -               -               -               -         -
--------------  ---------  ---------  ---------  --------------  --------------  --------------  --------
CHRIS ROMEO             -          -          -               -               -               -         -
--------------  ---------  ---------  ---------  --------------  --------------  --------------  --------
MIKE RYAN               -          -          -               -               -               -         -
--------------  ---------  ---------  ---------  --------------  --------------  --------------  --------
</TABLE>

Independent members of the Board will be compensated for their service in 2007
$25,000 per member.


                                       24
<PAGE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As  of  the  close  of  business on December 31, 2006, there were 7,685,067
shares  of  Common  Stock  issued  and  outstanding. There were also unexercised
options  and  warrants issued to purchase shares of Common Stock (including both
vested  and  unvested  options)  outstanding  on  that date. Of these, 2,136,207
issued shares and 4,613,712 options, warrants, and convertible shares were owned
by  officers,  directors  and  over  5%  stockholders.

     The following table sets forth certain information known to us with respect
to the beneficial ownership of our Common Stock as of the close of business on
December 31, 2006, by:
     -Each of our directors;
     -Each of our executive officers;
     -Each person known to us to beneficially own more than 5% of either class
      of our common stock; and
     -All of our directors and executive officers as a group.

Beneficial  ownership  is  determined  in  accordance  with  the  rules  of  the
Securities  and  Exchange  Commission.  In  computing  the  number  of  shares
beneficially  owned  by a person and the percentage of ownership of that person,
shares  of  common stock underlying options or warrants held by that person that
are  currently exercisable or will become exercisable within 60 days of December
31,  2006  are  deemed outstanding, while such shares are not deemed outstanding
for computing percentage ownership of any other person. To our knowledge, except
as  indicated in the footnotes to this table, each stockholder identified in the
table  possesses  sole  voting  and  investment power with respect to all shares
shown  as  beneficially  owned  by  such  stockholder. Each of our directors and
executive officers can be contacted at 100 Cummings Center, Suite 235M, Beverly,
Massachusetts  01915.

                                            COMMON STOCK
                                    NUMBER OF SHARES       PERCENTAGE
BENEFICIAL OWNER                    BENEFICIALLY OWNED      OF CLASS
--------------------------          ------------------     -----------
Directors
JON R. LATORELLA                             983,735(1)         12.02%
SONIA P. BEJJANI                              92,508(2)          1.19%
RALPH CARUSO                                  22,944                 *
DAVID SKERRETT                                 1,995(3)              *
PETER ZEKOS                                   20,700(5)              *
CHRIS ROMEO                                        -                 -
MIKE RYAN                                          -                 -

Officers
JAMES C. FIELDS                               65,000(7)              *
5% or More Shareholders
SPECIAL SITUATION FUNDS                    1,410,000(8)         17.44%
DUTCHESS                                   3,871,037(9)         34.70%

All directors and
executive officers
as a group                                 6,467,919(10)        65.35%

*     Less than one percent of outstanding shares.

(1)     Includes  499,475  shares issuable upon exercise of a fully vested stock
options,  with  a  weighted  average  exercise  price  of  $17.45  per  share.
(2)     Includes  90,000  shares  issuable upon exercise of a fully vested stock
options,  with  an  average  exercise  price  of  $26.16  per  share.
(3)     Consists  of  225  held  in  IRA and 1,770 in trusts for which he is the
custodian.
(4)     Includes  1,500  shares  held  by  the  Houlihan  Trust,  over which Mr.
Houlihan has voting and dispositional authority.  Also includes 24,900 shares of
issuable  upon  exercise  of  certain  immediately  exercisable warrants with an
exercise  price  of  $62.07  per  share.
(5)     Includes  700  shares  issuable  upon  exercise  of a fully vested stock
options,  with  an  average  exercise  price  of  $15.00  per  share.


                                       25
<PAGE>


(6)     Includes  21,950 shares of issuable upon exercise of certain immediately
exercisable  warrants  with  an  exercise  price  of  $69.63  per  share
(7)     Includes the vested portion of stock incentive stock options to purchase
up  to 65,000 shares with a weighted average exercise price of $11.65 per share.
(8)     Includes 505,000 shares and 200,000 shares issuable upon the exercise of
warrants  with  an  exercise price of $7.50 per share held by Special Situations
Fund  III,  L.P. and 505,000 shares 200,000 shares issuable upon the exercise of
warrants  with  an  exercise price of $7.50 per share held by Special Situations
Private  Equity  Fund,  L.P.
(9)     Includes 400,000 shares and 2,346,037shares issuable upon the conversion
of  certain  notes  payable using a conversion price of $0.70 per share, 750,000
shares  issuable upon the exercise of five year warrant issued December 29, 2005
with  an  exercise price of $5.00 per share and 375,000 shares issuable upon the
exercise  of  five  year  warrant issued July 21, 2006 with an exercise price of
$1.00  per  share.
(10)     Includes  4,613,712  shares  issuable upon the exercise of warrants and
conversion  of  certain  notes  payable.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
     On  June  17,  2002,  the Board of Directors adopted our Interested Parties
Transaction  Policy,  pursuant  to  which  the  Company  will not enter into any
agreement,  arrangement  or  understanding  with any director, officer, or 5% or
greater  stockholder  of  unless (i) the terms of such agreement, arrangement or
understanding  are  consistent  with  the  terms  of  equivalent  agreements  or
arrangements  that  the  Company  could  obtain from third parties; and (ii) the
agreement,  arrangement  or  understanding  is  fair  to  the  Company.

JON  R.  LATORELLA

     Mr.  Latorella is our President and Chief Executive Officer and is Chairman
of  our  Board  of  Directors.
     Subsequent  to year end, Jon Latorella has resigned as President and CEO of
LocatePlus.

     INCENTIVE  STOCK  OPTION

In  2004,  Mr.  Latorella  was  granted  fully vested incentive stock options to
purchase  1,000,000  and 2,500,000 Class A Voting common with exercise prices of
$1.50  and  $0.39  per  share  respectively.

USE  OF  COMPANY  CARS.

Mr.  Latorella  and his family are allowed use of two company cars, the value of
which  is  approximately  $1,500  per  month.

JAMES  C.  FIELDS

Mr.  Fields  is  our  Acting  Chief Financial Officer and Acting Chief Executive
Officer.

     STOCK  OPTION

On  December  18,  2003,  was  issued incentive stock options to purchase 10,000
shares  of  our Class A Voting Common Stock with an exercise price of $12.50 per
share  on  a  post  recapitalization  basis.  In  2004,  Mr.  Fields  was issued
incentive  stock  options to purchase 20,000 shares of our Class A Voting Common
Stock  with  an  exercise  price  of $19.50 per share on a post recapitalization
basis.

     USE  OF  COMPANY  CARS.

Mr.  Fields is allowed use of a company car, the value of which is approximately
$1,100  per  month.

THOMAS  GARLOCK

     Mr.  Garlock  is  a  former  member  of  our  Board  of  Directors.


                                       26
<PAGE>

NON-EMPLOYEE  DIRECTORS  STOCK  OPTION  AND  COMPENSATION  POLICY

In 2004, Mr. Garlock was issued an option to purchase 20,000 shares of our Class
A  Voting  Common  Stock  for  $75.00  per  share  pursuant  to our Non-employee
Directors  Stock  Option  and  Compensation  Policy.

GERARD  SCALLEY

     Mr.  Scalley  is  a  former  member  of  our  Board  of  Directors.

     NON-EMPLOYEE  DIRECTORS  STOCK  OPTION  AND  COMPENSATION  POLICY

     In  2004  Mr. Scalley was issued an option to purchase 20,000 shares of our
Class  A  Voting  Common  Stock  for $75.00 per share on a post recapitalization
basis  pursuant  to  our  Non-employee  Directors  Stock Option and Compensation
Policy.

ROBERT  KITE

Mr.  Kite is former member of our Board of Directors.  Mr. Kite was appointed to
the  Board  in  December  2002.

     NON-EMPLOYEE  DIRECTORS  STOCK  OPTION  AND  COMPENSATION  POLICY

     In  2004  Mr.  Kite  was  issued an option to purchase 20,000 shares of our
Class  A  Voting  Common Stock for $75.00 per share pursuant to our Non-employee
Directors  Stock  Option  and  Compensation  Policy.

ITEM 13- EXHIBITS AND REPORTS ON FORM 8-K

REPORTS OF FORM 8-K

On  January  21,  2005,  we filed a Form 8-K/A and reported under Items 4.01 and
9.01  that  the  audit  committee  of LocatePLUS Holdings Corporation received a
letter  of  resignation  dated December 10, 2004, from the Company's independent
accountants, Carlin, Charron, and Rosen, LLP. (CCR).  The amendment included the
response  letter  from  CCR.

On  February 9, 2005, we filed a Form 8-K and reported under Items 4.01 and 9.01
that  Livingston  &  Haynes,  P.C.  was engaged as the Company's new independent
accountants.

     On July 13, 2005, we filed a Form 8-K and reported under Items 1.01, 4.01
and 9.01 that on July 8, 2005 the Company entered into a Purchase Agreement with
a certain institutional and accredited investors relating to the private
placement of convertible term notes issued by the Company in the principal
amount of $8,000,000, and a common stock purchase warrant. Of the proceeds,
approximately $4.1 million will be used to retire current secured convertible
notes, and the remaining will be used for general working capital.

In conjunction, the Company also entered into related Registration Rights
Agreement and a Voting Agreement. The Note is convertible into shares of our
common stock, $0.01 par value per share upon an affirmative vote by shareholders
to combine our existing Class A Voting Common and Class B Non-Voting Common into
a single class of Common stock and execute a 1 for 50 reverse at a vote to be
held prior to November 5, 2005.  At that time, the fixed conversion rate will be
$0.10 per share, or 80,000,000 million shares.  The Warrant provides for the
purchase of up to 32,000,000 shares of Common Stock at a price of $0.15 each,
subject to customary adjustments, until July 8, 2010.

     On September 2, 2005 we filed a Form 8-K and reported under item 8.01 that
the Board of Directors voted to extend the expiration date of the Company's
publicly traded warrants, with an exercise price of $0.50, an additional 18
months.  The warrants, which originally were scheduled to expire on October 12,
2005, will now expire on April 12, 2007.

     On September 23, 2005 we filed a Form 8-K and reported under Item 9.01 that
on June 2, 2005, the


                                       27
<PAGE>


Company issued a press- release setting forth our financial results for the
fiscal quarter ended March 31,  2005.

     On September 26, 2005 we filed a Form 8-K and reported under Items 1.01 and
9.01  that  on  January  3, 2005, the Company entered into a 24 month definitive
material  channel  partner  agreement with total contract value of $7.2 million.

On December 5, 2005, we filed a Form 8-K and reported under item 8.01 in which
we notified NASDAQ that we would be effectuating the shareholder approved
combination of its Class B Non-Voting  Common  Stock  into Class A Voting Common
Stock, and then a 1 for 50 reverse  stock split into a single class of Common
Stock.

On March 20, 2007, we filed a Form 8-K and reported under item 1.01 that we had
consummated a
Securities  Purchase  Agreement  (the "Purchase Agreement") dated March 20, 2007
with  Cornell  Capital  Partners  L.P. ("Cornell") providing for the sale by the
Company  to  Cornell of its 8.5% secured convertible debentures in the aggregate
principal  amount  of  $6,000,000.

EXHIBITS

3.1     Second Amended and Restated Certificate of Incorporation of LocatePLUS
Holdings Corporation, as filed with the Secretary of State of the State of
Delaware on March 19, 2002.(1)
3.2     By-Laws of LocatePLUS Holdings Corporation.(1)
4.1     Warrant and Unit Agreement by and between LocatePLUS Holdings
Corporation and Transfer Online, Inc., dated March 22, 2002.(1)
4.2     Form of Warrant Certificate.(2)
4.3     Form of Unit Certificate.(2)
4.4     Form of Class A Voting Common Stock Certificate.(2)
4.5     Form of Class B Non-voting Common Stock Certificate.(2)
4.6     Form of Restricted Warrant Agreement (Warrant to Purchase Shares of
Class A Voting Common Stock).(1)
4.7     Form of Restricted Warrant Agreement (Warrant to Purchase Shares of
Class B Non-voting Common Stock).(2)
4.8     $10,000 Convertible Promissory Note, dated March 9, 2001.(1)
4.9     Amended Form of Warrant Certificate.(3)
4.10     Amendment to $10,000 Convertible Promissory Note, dated July 23,
2002.(3)
10.1     Master Lease Agreement between Cummings Properties, Inc. and Worldwide
Information, Inc., dated November 20, 1999.(1)
10.2     Secured Note, dated June 1, 2001.(1)
10.3     Purchase Agreement dated July 8, 2005, by and between LocatePLUS
Holdings Corporation and certain Investors named therein, as amended August 12,
2005.(4)
10.4     Form of 3% Senior Convertible Note dated July 8, 2005 and August 15,
2005, by and between LocatePLUS Holdings Corporation and each of the Investors
named in Exhibit 10.26. (4)
10.5     Registration Rights Agreement dated July 8, 2005, by and between
LocatePLUS Holdings Corporation and certain Investors named therein, as amended
August 12, 2005. (4)
10.6     Form of Common Stock Purchase Warrant issued to the Investors named in
Exhibit 10.26. (4)
10.7     Debenture, dated December 29, 2005, by and between LocatePLUS Holdings
Corporation and Dutchess Private Equities Fund II, L.P. (5)
10.8     Debenture Registration Rights Agreement, dated December 29, 2005 by and
between LocatePLUS Holdings Corporation and Dutchess Private Equities Fund II,
L.P. (5)
10.9     Warrant Agreement Dated December 30, 2005(5)
10.10     Security Agreement Dated December 30, 2005(5)
10.11     Subscription Agreement Dated December 30, 2005(5)
10.12     Debenture, dated July 21, 2006, by and between LocatePLUS Holdings
Corporation and Dutchess Private Equities Fund, L.P. (5)


                                       28
<PAGE>


10.13     Debenture Registration Rights Agreement, dated July 21, 2006 by and
between LocatePLUS Holdings Corporation and Dutchess Private Equities Fund, L.P.
(5)
10.14     Warrant Agreement Dated July 21, 2006 (5)
10.15     Security Agreement Dated July 21, 2006(5)
10.16     Subscription Agreement Dated July 21, 2006(5)
10.17     Addendum Dated October 18, 2006 to Debenture Dated December 29, 2005
and Debenture Dated July 21, 2006(5)
21.1     Subsidiaries of LocatePLUS Holdings Corporation.(1)
31.1     302 Certification of the Chief Executive Officer
31.2     302 Certification of the Chief Financial Officer
32     906 Certification of C.E.O. and C.F.O.

(1)     Filed as an Exhibit to Form SB-2, filed with the Securities and Exchange
Commission on March 28, 2002 (Registration No. 333-85154).
(2)     Filed as an Exhibit to Form SB-2/A, filed with the Securities and
Exchange Commission on June 21, 2002 (Registration No. 333-85154).
(3)     Filed as an Exhibit to Form SB-2/A, filed with the Securities and
Exchange Commission on July 24, 2002 (Registration No. 333-85154).
(4)     Filed as Exhibit to Form 8-K, filed with the Securities and Exchange
Commission on July 13, 2005.
(5)     Filed as Exhibit to Form SB-2/A, filed with the Securities and Exchange
Commission on January 4, 2007, (Registration No. 333-138311


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
     During  2006,  our  principal  accountant,  Livingston & Haynes, P.C. (L&H)
billed  $93,850  in connection with the audit of our annual financial statements
and  the  review  of  our  quarterly  financial  statements.
TAX FEES
     During  2006,  L&H  billed  us  $11,250  for  tax  related  services.
ALL  OTHER  FEES.
     During  2006  L&H billed us $24,000 in fees relating to the registration of
securities.


                                       29
<PAGE>


                                   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.

               LOCATEPLUS HOLDINGS CORPORATION


/s/ James C. Fields
    James C. Fields,  Interim President and Chief Executive Officer
May 2, 2007




                                       30
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors of
LocatePLUS Holdings Corporation
Beverly, Massachusetts

We  have  audited  the  accompanying  consolidated  balance  sheet of LocatePLUS
Holdings  Corporation  as  of  December  31,  2006, and the related consolidated
statements  of operations, stockholders' equity (deficit) and cash flows for the
year  ended December 31, 2006 and December 31, 2005.  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.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audit  provides  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  LocatePLUS
Holdings  Corporation  and  its  subsidiaries  as  of December 31, 2006, and the
results  of  its consolidated operations and its consolidated cash flows for the
years  ended  December  31,  2006,  and  December  31,  2005, in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  disclosed  in the financial
statements,  the Company has an accumulated deficit at December 31, 2006 and has
suffered  substantial  net  losses  in  each  of the last two years, which raise
substantial  doubt  about  the Company's ability to continue as a going concern.
Management's  plans  in  regard  to  these matters are disclosed in Note 1.  The
consolidated  financial  statements  do  not  include any adjustments that might
result  from  the  outcome  of  this  uncertainty.




/s/LIVINGSTON & HAYNES, P.C.
Livingston & Haynes, P.C.
Wellesley, Massachusetts

May 1, 2007


                                     F-1
<PAGE>




                        LOCATEPLUS HOLDINGS CORPORATION
                           CONSOLIDATED BALANCE SHEET
                               DECEMBER 31, 2006

ASSETS
Current assets:
  Cash and cash equivalents                       $     29,822
  Accounts receivable, trade
     - net of allowance                                796,487
  Current Portion of LT Receivable                     405,000
  Prepaid expenses and
    other current assets                               344,729
                                                  ------------
      Total current assets                           1,576,038
                                                  ------------

Property and equipment, net                          1,941,750
Long Term Receivable                                 1,877,614
Other assets                                           275,413
                                                  ------------
      Total assets                                   5,670,815
                                                  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                   1,910,665
  Accrued expenses                                   2,549,593
  Deferred revenue                                      28,657
  Current portion of capital lease
    obligation                                          46,966
  Notes Payable                                        153 221
  Convertible notes payable                          1,474,775
                                                  ------------
      Total current liabilities                      6,163,877

Notes payable                                           10,129
                                                  ------------
      Total liabilities                              6,174,006
                                                  -------------

Commitments and contingencies

Stockholders' equity:
   Common Stock , $0.01 par value,
      25,000,000 shares authorized
      7,363,857 shares issued and
      outstanding at December 31, 2006                  73,639
  Additional paid-in capital                        38,957,425
  Warrants                                           3,107,702
  Impairment on assets                                (842,000)
  Accumulated deficit                              (41,799,957)
                                                  -------------
      Total stockholders' equity                      (503,191)
                                                  -------------

      Total liabilities and stockholders' equity     5,670,815
                                                  ============



See Independent Auditors' Report and Notes to Consolidated Financial Statements.


                                     F-2
<PAGE>



                          LOCATEPLUS HOLDINGS COMPANY
                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                              FOR THE YEARS ENDED
                                                 DECEMBER 31,
                                             2006          2005

Revenues
   Information sales - CD Rom            $   588,977   $    480,412
   Information sales - online              6,182,251      6,257,679
   Information sales - channel             5,471,120      4,358,038
   Information sales - wireless                7,725         11,908
   Engineering services                            -        505,000
                                         -----------   ------------
   Total revenues                         12,250,073     11,613,037
                                         -----------   ------------
Costs and expenses:
   Costs of revenues
      CD Rom                                  38,965        133,612
      Online and channel                   3,828,408      4,055,417
      Engineering                                  -        123,750
   Selling and marketing                   1,714,501      2,492,172
   General and administrative              7,539,311      7,537,444
   Research and Development                  196,600        214,287
                                         -----------   ------------
      Total operating expenses            13,317,785     14,556,682
                                         -----------   ------------
Operating loss                            (1,067,712)   ( 2,943,645)

Other income (expense):
   Interest income                                 -         57,256
   Interest expense                       (1,320,934)    (2,705,835)
   Other income                                4,523         (7,952)
   Write Down of LT Accounts Receivable   (1,291,636)             -
   Finance Related Expenses               (2,286,075)             -
                                         -----------   ------------
Net loss                                 $(5,961,834)  $( 5,600,176)
                                         ===========   ============

Basic and diluted net loss per share     $     (0.86)  $      (1.56)

Shares used in computing basic and
diluted net loss per share                 6,907,321      3,582,049



See Independent Auditors' Report and Notes to Consolidated Financial Statements.


                                     F-3
<PAGE>



<TABLE>
<CAPTION>


LOCATEPLUS HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                                                     CLASS A                     CLASS B          ADDITIONAL
                            COMMON STOCK           COMMON STOCK                COMMON STOCK        PAID-IN
                          SHARES    AMOUNT      SHARES        AMOUNT        SHARES      AMOUNT     CAPITAL    WARRANTS
                         ---------  -------  -------------  -----------  ------------  ---------  ----------  ---------
<S>                      <C>        <C>      <C>            <C>          <C>           <C>        <C>         <C>
Balance at
December 31, 2004                -             96,890,978      968,909    73,169,178    731,692   25,391,508  2,410,787

Issuance of shares                             16,121,047      161,211     1,336,552     13,366    1,641,979

Combine Class B
common into Class A                            74,505,730      745,058   (74,505,730)  (745,058)

Effect 1 for 50 reverse
split                    3,900,789  $39,008  (187,517,755)  (1,875,178)                            1,836,170

Conversion of Notes
Payable                  1,793,000   17,930                                                        8,551,965    395,105

Services performed
for Stock

Impairment on
Assets

Net loss for the year
ended December 31, 2005
                         ---------  -------  -------------  -----------  ------------  ---------  ----------  ---------
Balance at
December 31, 2005        5,693,789   56,938             -            -             -          -   37,421,622  2,805,892

Issuance of shares       1,670,068   16,701                                                        1,535,804    301,810

Adjustment to
Impairment

Net loss for the year
ended December 31, 2006
                         ---------  -------  -------------  -----------  ------------  ---------  ----------  ---------
Balance at
December 31, 2006        7,363,857   73,639              -            -             -          -  38,957,425  3,107,702
                         =========  =======  =============  ===========  ============  =========  ==========  =========




                                                                       TOTAL
                             STOCK                                 STOCKHOLDERS'
                         SUBSCRIPTION   IMPAIRMENT      ACCUM          EQUITY
                          RECEIVABLE     ON ASSETS     DEFICIT       (DEFICIT)
                         -------------  -----------  ------------  --------------
<S>                      <C>            <C>          <C>           <C>
Balance at
December 31, 2004            (488,558)               (30,237,947)     (1,223,609)

Issuance of shares                                                     1,816,556

Combine Class B
common into Class A                                                            -

Effect 1 for 50 reverse
split                                                                          -

Conversion of Notes
Payable                                                                8,965,000

Services performed
for Stock                     488,558                                    488,558

Impairment on
Assets                                    (831,500)                     (831,500)

Net loss for the year
ended December 31, 2005                               (5,600,176)     (5,600,176)
                         -------------  -----------  ------------  --------------
Balance at
December 31, 2005                   -     (831,500)  (35,838,123)      3,614,829

Issuance of shares                                                     1,854,314

Services performed
for Stock

Adjustment to
Impairment                                 (10,500)                      (10,500)

Net loss for the year
ended December 31, 2006                               (5,961,834)     (5,961,834)
                         -------------  -----------  ------------  --------------
Balance at
December 31, 2006                         (842,000)  (41,799,957)       (503,191)
                         =============  ===========  ============  ==============

</TABLE>


See Independent Auditors' Report and Notes to Consolidated Financial Statements.

                                     F-4
<PAGE>


                        LOCATEPLUS HOLDINGS CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         FOR THE YEARS ENDED
                                                             DECEMBER 31,
                                                         2006          2005

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                            (5,961,834)   ($5,600,176)
  Adjustments to reconcile net
    loss to net cash used in
    operating activities:
      Depreciation and amortization
        of property and equipment                        852,378      1,026,805
      Provision for doubtful accounts                    (21,318)        (7,768)
      Interest expense related to
        warrants issued with debt                        496,015        199,375
      Services performed and interest
        expense in exchange for stock                    214,650        958,643
      Stock Based Compensation Expense                   102,558        133,454
      Value Allowance for notes receivable             2,099,986              -
      Amortization of intangible assets                    9,108              -
      Changes in assets and liabilities:
        Accounts receivable                             (547,315)    (3,468,376)
        Prepaid expenses and other assets                394,284       (430,949)
        Other Assets                                    (114,375)       149,777
        Accounts payable                                  52,178       (174,071)
        Accrued expenses                               2,326,960         (9,536)
        Deferred revenue                                 (49,730)        20,143
                                                      -----------   ------------
          Net cash used in operating activities         (146,455)    (7,202,677)
                                                      -----------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Principal repayment of purchased
    note receivable                                            -        453,070
  Purchase of note receivable                                  -       (175,211)
  Purchases of property and equipment                   (190,644)      (629,636)
                                                      -----------   ------------
          Net cash provided by investing activities     (190,644)      (351,777)
                                                      -----------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of debt                                   (1,306,935)    (4,331,363)
  Proceeds from issuance of debt                       1,250,000     10,640,653
  Payments of obligations under capital lease           (186,880)      (595,446)
  Proceeds from issuance of common stock and
    collection of stock subscriptions receivable,
    net of issuance costs                                      -      1,264,407
                                                      -----------   ------------
          Net cash provided by financing activities     (243,815)     6,978,251
                                                      -----------   ------------
Net (decrease) increase in cash and
  cash equivalents                                      (580,914)      (576,203)

Cash and cash equivalents, beginning of period           610,736      1,186,939
                                                      -----------   ------------
Cash and cash equivalents, end of period                  29,822        610,736
                                                      ===========   ============

Supplemental disclosures of cash flows
  information:
Cash paid for interest                               $   779,776   $  2,284,726

Supplemental disclosure of non-cash
  investing and financing activities:
Relative fair value of detachable warrants
  issued in conjunction with convertible debt        $   301,810   $    395,105


See Independent Auditors' Report and Notes to Consolidated Financial Statements.



                                     F-5
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     NATURE OF BUSINESS AND BASIS OF PRESENTATION

     LocatePLUS  Holdings Corporation (the "Company") was initially incorporated
in  Massachusetts  in  1996  as  Worldwide  Information, Inc.  In July 1999, the
Company  reincorporated in Delaware and changed its name to LocatePLUS.com, Inc.
On  August  1,  2001,  the Company changed its name from LocatePLUS.com, Inc. to
LocatePLUS  Holdings Corporation as part of a corporate restructuring.  Also, as
part  of  the  restructuring, the Company created two wholly-owned subsidiaries,
LocatePLUS  Corporation  and  Worldwide Information, Inc.  The restructuring was
completed  by  commonly-controlled  entities and, accordingly, was accounted for
based  on  historical  cost.  In  September 2003, the Company, through its newly
formed wholly owned subsidiary Certifion Corporation, acquired all of the assets
of  Project  Entersect  Corporation.  The  acquisition  was  accounted  for as a
purchase and is recorded with the Company's operations from the date of purchase
through  December  31,  2003.  In  October  2003, the Company merged Voice Power
Technology  into its newly formed wholly owned subsidiary Dataphant, Inc.  There
were  no  assets  acquired  in this acquisition and the Company issued 2,500,000
shares  of  its  Class  B  Non-Voting common stock to the stock holders of Voice
Power  Technology in consideration for a two year non-competition agreement with
these  stock  holders.  All  intercompany  accounts  and  transactions have been
eliminated  in  consolidation.

     The  Company  provides  access  to public information such as bankruptcies,
real  estate  transactions, motor vehicles, and drivers' licenses to commercial,
private  sector  and law enforcement entities in the United States.  In 1999 and
prior periods, this information was delivered to customers on compact disks.  In
March  2000, the Company began providing information through the Internet and in
2002  began  providing information through the use of handheld wireless devices.

     LIQUIDITY  AND  OPERATIONS
     The  accompanying  consolidated  financial  statements  have  been prepared
assuming  the  Company  will  continue  as  a  going concern, which contemplates
continuity  of  operations,  realization  of  assets  and  the  satisfaction  of
liabilities  and  commitments in the normal course of business.  The Company has
incurred  substantial  losses in each of the last two years, and has incurred an
accumulated  deficit  of  approximately  $42  million through December 31, 2006.
These  circumstances  raise  substantial  doubt  about  the Company's ability to
continue  as  a  going  concern.  These financial statements don not include any
adjustments  that  might  result  from  the  outcome  of  this  uncertainty.

     The  Company  raised approximately $1.3 million, $8 million, and $4 million
of  equity  or  debt  during  2006,  2005,  and 2004 respectively.  The ultimate
success  of the Company is still dependent upon its ability to secure additional
financing  to  meet  its  working capital and ongoing project development needs.

     During  August  2003,  the  Company issued a put to one investor through an
equity  agreement,  which  provides  that  the  Company,  subject  to  certain
limitations,  has  the  right  to  sell,  at its discretion, up to $5 million in
shares  of  the Company's Common Stock to the investor at a purchase price equal
to  95%  of the lowest closing bid price for the Company's Common Stock during a
ten-day  pricing period.  The number of shares that the Company may sell to that
investor  is  limited  by  the  trading volume of the Company's Common Stock and
certain  customary  closing  conditions.  The Company sold 369,535 shares, after
adjusting  for  a  1 for 50 reverse split on December 12, 2005, for a total $5.0
Million  in  net  proceeds  from  the  investor  through  December  31,  2005.


                                     F-6
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

On December 29, 2005, the Company entered into an Investment Agreement where the
Company  received  proceeds  of $1,500,000 by issuing a note payable convertible
into 300,000 shares of Common Stock at $5.00 per share.  The Company also issued
a  put  to  one  investor  through  an equity agreement, which provides that the
Company,  subject  to  certain  limitations,  has  the  right  to  sell,  at its
discretion,  up  to  $10  million in shares of the Company's Common Stock to the
investor  at  a  purchase price equal to 93% of the lowest closing bid price for
the  Company's  Common  Stock  during  a  ten-day pricing period.  The number of
shares  that  the  Company  may  sell to that investor is limited by the trading
volume  of  the Company's Common Stock and certain customary closing conditions.
No  shares  have  yet  been  sold  under  this  agreement

On  July  21,  2006  the  Company entered into an Investment Agreement where the
Company received proceeds of $750,000 by issuing a note payable convertible into
shares  of  Common  Stock  at  the lesser of $.70 per share or 75% of the lowest
closing  bid  price  during  the  20  trading  days  next  preceding the date of
conversion.

Management's  plans  include  increasing  sales,  expanding  infrastructure, and
hiring  additional staff.  To accomplish this will require additional financing.
Management  plans  to  explore  both debt and equity options, which the board of
directors  is  willing  to  pursue.

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     CASH  EQUIVALENTS
     The Company considers all money market funds, bank certificates of deposit,
and  short  term investments with original maturities of three months or less at
the  date  of  purchase  to  be  cash  equivalents.


     CONCENTRATION  OF  CREDIT  RISK
     Financial  instruments  that  subject the Company to credit risk consist of
cash  and  cash  equivalents, accounts receivable and notes receivable. The risk
with respect to cash and cash equivalents is minimized by the Company's policies
in  which  such  investments  are  placed  only  with  highly  rated  financial
institutions  and in instruments with relatively short maturities. The financial
stability  of  these  financial  institutions  is  constantly reviewed by senior
management.  The  notes  receivable are placed with unrelated companies that are
also  reviewed  by management. Consequently, the carrying value of cash and cash
equivalents,  and  notes  receivable  approximates their fair value based on the
short-term  maturities  of  these  instruments. The Company reached an agreement
with  respect  to a customer to convert the outstanding balance at September 30,
2006  into  a  term receivable to be collected the balance over 94 payments. The
carrying  value  of  this receivable is approximately $2.4 million of which $1.9
million  is  classified  as  long  term.




     PROPERTY  AND  EQUIPMENT
     Property  and  equipment are carried at cost less accumulated depreciation.
Depreciation is calculated using the straight-line method at rates sufficient to
write  off  the  cost  of  the  assets  over  their  estimated  useful  lives.

     INTANGIBLE  ASSETS
     Costs  of  acquiring  businesses,  such  as  customer lists and non-compete
agreements,  are  being amortized on a straight-line basis over 2-3 years, while
deferred  financing costs are being amortized over the term of the related debt.

     INCOME  TAXES
     The  Company  accounts  for  income  taxes using the liability method under
which  deferred  tax  assets and liabilities are determined based on differences
between  financial  reporting and income tax bases of assets and liabilities and
are  measured  using  the  enacted  tax  rates  and  laws  that  will


                                     F-7
<PAGE>


                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


be  in effect when the differences are expected to reverse.  The majority of the
Company's  deferred  tax  asset  has  been  established  for the expected future
benefit of net operating tax loss and credit carryforwards.  A valuation reserve
against  net  deferred tax assets is required if, based upon available evidence,
it  is more likely than not that some or all of the deferred tax assets will not
be  realized.

     REVENUE  RECOGNITION
     The  Company  provides  access  to public information such as bankruptcies,
real  estate transactions and motor vehicles and drivers' licenses.  The Company
provides  this  information as an online service through its website, wirelessly
to  handheld wireless devices, via XML over the Internet to Channel Partners, or
through  licenses  of  the  information  on  compact  disks.

     The  Company  updates  the information contained in compact disks (CD ROMs)
either  quarterly  or semi-annually.  Revenue is recognized upon delivery to the
customer  of  a  compact  disk, provided that no significant obligations remain,
evidence  of  the  arrangement  exists,  the fees are fixed or determinable, and
collectability  is reasonably assured.  In October 2002, the Company changed its
method of selling compact disks.  Prior to October, compact disks were sold with
an  upfront  purchase  of  an  annual supply of compact disks, with the purchase
price  allocated  equally  based  on  the  number  of compact disks to which the
customer  was  entitled.  Deferred  revenue  principally  related to undelivered
compact disks.  Subsequent to October 2002, compact disks are sold individually.
Customers  may  choose  to  have  the  disks  automatically  shipped and billed.

     Online  customers  are  charged  fees  which  vary  based  on  the  type of
information  requested.  Revenue is recognized when the information requested is
downloaded,  there  is  evidence  of  an  arrangement,  the  fees  are  fixed or
determinable,  and  collectability  is  reasonably  assured.
     Wireless  customers  using  LocatePLUS  Anywhere  are  charged  a  monthly
subscription  fee  billed  in arrears.  Revenue is recognized on a monthly basis
when  there  is  evidence of an arrangement, the fees are fixed or determinable,
and  collectability  is  reasonably  assured.

     Channel  partners are charged royalty fees, which vary based on the type of
information  requested.  Revenue is recognized when the information requested is
downloaded,  there  is  evidence  of  an  arrangement,  the  fees  are  fixed or
determinable,  and  collectability  is  reasonably  assured.

     Engineering  services  relate  to  integration services provided to a third
party  database  provider  with  whom the Company has an arrangement whereby the
Company  provides  the third party access to the Company's database.  Revenue is
recognized  over  the  term  of  the  contract  when  there  is  evidence  of an
arrangement,  the  fees  are  fixed  or  determinable,  and  collectability  is
reasonably  assured.

     COSTS  OF  REVENUES  AND  SOFTWARE  DEVELOPMENT  COSTS
     Costs  of  revenues relating to CD Rom sales consist primarily of costs for
data  acquisition,  materials  and  costs associated with compilation of compact
disks,  such  as  labor.  Costs  of  revenues  relating  to online sales consist
primarily  of costs for license agreements related to data acquisition, software
development  and  maintenance  costs  and costs associated with delivery of such
services  that  include  labor  and  depreciation.

     Software development costs are generally charged to operations as incurred,
as  they  relate  to ongoing maintenance of data and the Company's website.  The
Company  evaluates  certain  software  development  costs  for capitalization in
accordance with the American Institute of Certified Public Accountants Statement
of  Position  98-1  ("SOP 98-1"), "Accounting for the Costs of Computer Software
Developed  or  Obtained  for  Internal  Use."  Costs  incurred  relating  to the
Company's own personnel and outside consultants who are directly associated with
software


                                     F-8
<PAGE>


                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


developed  for  internal  use  may  be  capitalized.  Costs  eligible  for
capitalization  under  SOP  98-1  have  been  immaterial  to  date.

     STOCK  COMPENSATION  PLANS

Prior to January 1, 2006, the Company accounted for its stock-based compensation
plans  under the recognition and measurement provisions of Accounting Principles
Board  Opinion  No. 25, "Accounting for Stock Issued to Employees" ("APB Opinion
No.  25")  and  related  interpretations, as permitted by Statement of Financial
Accounting  Standards  No. 123, "Accounting for Stock-Based Compensation" ("SFAS
No.  123").  The Company applied the disclosure only provisions of the Statement
of  Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation"  ("SFAS  123")  and  SFAS  No.  148,  "Accounting  for Stock-Based
Compensation  -  Transition  Disclosure"  (SFAS  148") for employee stock option
awards for the twelve months ended December 31, 2005.  Had compensation cost for
the  Company's  stock  option  plan  been determined in accordance with the fair
value-based  method  prescribed under SFAS 123, the Company's net loss and basic
and  diluted  net  loss  per share would have approximated the pro forma amounts
indicated  below.

                                                    YEAR ENDED
                                                 DECEMBER 31 2005
                                                    -------------
Net loss - reported                                 $ (5,600,176)
Amortization of stock compensation expense            (1,289,122)
                                                    -------------
Pro forma net loss                                  $ (6,889,298)
                                                    =============

Pro forma net loss per share - basic and diluted          $(1.92)

     In 2005, the fair value of stock options used to compute pro forma net loss
and  net loss per share disclosures was estimated on the date of grant using the
Black-Scholes  option-pricing  model  with  the  following  weighted  average
assumptions: dividend yield of 0%; expected volatility of 30%; average risk-free
interest  rate  of  4.37%;  and  an  expected  option holding period of 6 years.

Effective  January  1,  2006,  the  Company  adopted  the fair value recognition
provisions  of  Statement  of  Financial Accounting Standards No. 123(R), "Share
Based  Payment"  ("SFAS  No.  123(R)") using the modified prospective transition
method.  No  stock-based  compensation  expense  was  recognized  in  the income
statement  for  the  year  ended December 31, 2005, as all options granted under
the  Company's  stock-based  employee  compensation  plans had an exercise price
equal  to  the market value of the underlying common stock on the date of grant.
As  permitted  by  SFAS  No. 123, stock-based compensation was included as a pro
forma disclosure in the notes to the Company's financial statements for the year
ended  December  31,  2005.

Under  that  transition  method,  compensation cost recognized in the year ended
December  31,  2006 includes: (a) compensation cost for all stock-based payments
granted  prior  to, but not yet vested as of January 1, 2006, based on the grant
date fair value estimated in accordance with the original provisions of SFAS No.
123,  and  (b) compensation cost for all stock-based payments granted subsequent
to  January  1, 2006, based on the grant date fair value estimated in accordance
with  the provisions of SFAS No. 123(R). Results for prior periods have not been
restated,  as  provided  for  under  the  modified-prospective  method.  Total
stock-based compensation expense recognized in the income statement for the year
ended  December  31,  2006  was  $102,558

Prior to the adoption of SFAS No. 123(R), the Company presented all tax benefits
of  deductions  resulting  from  the exercise of stock options as operating cash
flows in the consolidated statements of cash flows. SFAS No. 123(R) requires the
tax  benefits  resulting  from tax deductions in excess of the compensation cost
recognized  for  those  options  ("excess  tax  benefits")  to be classified and


                                     F-9
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


reported  as  both  an  operating  cash outflow and a financing cash inflow on a
prospective  basis  upon  adoption.

SFAS  No. 123R requires the use of a valuation model to calculate the fair value
of  stock-based  awards. The Company has elected to use the Black-Scholes-Merton
("BSM") option valuation model, which incorporates various assumptions including
volatility,  expected  life,  and  interest  rates. The assumptions used for the
years  ended  December  31,  2006  and  2005  and  the  resulting  estimates  of
weighted-average  fair  value  per share of options granted during those periods
are  as  follows:

                                                  FOR THE TWELVE MONTHS ENDED
                                                          DECEMBER 31,
                                                      2006         2005
                                                    --------      --------
Expected life                                       6 years        6 years
Volatility                                              31%            34%
Risk free interest rate                               4.86%          4.03%
Dividend yields                                           -              -
Weighted-average fair value of
  options granted during the period                       -          15.00


The  expected  life of the options represents the estimated period of time until
exercise  and  is  based  on  historical  experience  of  similar awards, giving
consideration  to  the  contractual terms, vesting schedules and expectations of
future  employee behavior. For 2006, expected stock price volatility is based on
a  combination  of historical volatility of the Company's stock and the one-year
implied volatility of its traded options, for the related vesting periods. Prior
to  the  adoption  of  SFAS  123R, expected stock price volatility was estimated
using  only historical volatility of the Company's stock. The risk-free interest
rate is based on the implied yield available on U.S. Treasury zero-coupon issues
with  an  equivalent  remaining  term. The Company has not paid dividends in the
past  and  does  not  plan  to  pay  any  dividends  in  the  near  future.

     ADVERTISING
     The  Company  charges  advertising  costs  to  operations  when  incurred.
Advertising  expense  was  $269,749  in  2006  and  $576,715  in  2005.

     EARNINGS  PER  SHARE
     Basic  earnings  per  share  is  based  upon the weighted average number of
common  shares outstanding during each period.  Diluted earnings per share gives
effect  to  all  dilutive potential common shares outstanding during the period.
The  computation  of  diluted earnings per share does not assume the issuance of
potential  common  shares  that have an anti-dilutive effect.  Diluted per share
computations  are  not  presented  since  the  effect  would  be  anti-dilutive.

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

     RECENT  PRONOUNCEMENTS
     In  February 2006, the Financial Accounting Standards Board ("FASB") issued
Statement  of  Financial Accounting Standard 155 - Accounting for Certain Hybrid
Financial Instruments ("SFAS 155"), which eliminates the exemption from applying
SFAS  133  to  interests  in


                                     F-10
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


securitized  financial  assets  so  that  similar  instruments are accounted for
similarly  regardless  of  the form of the instruments. SFAS 155 also allows the
election  of  fair  value  measurement  at  acquisition,  at issuance, or when a
previously recognized financial instrument is subject to a re-measurement event.
Adoption is effective for all financial instruments acquired or issued after the
beginning  of  the first fiscal year that begins after September 15, 2006. Early
adoption  is  permitted.  The  adoption  of  SFAS  155 is not expected to have a
material effect on our consolidated financial position, results of operations or
cash  flows.

     In  March  2006, the FASB issued Statement of Financial Accounting Standard
156  - Accounting for Servicing of Financial Assets ("SFAS 156"), which requires
all  separately  recognized  servicing  assets  and  servicing  liabilities  be
initially  measured  at  fair value. SFAS 156 permits, but does not require, the
subsequent  measurement  of  servicing  assets and servicing liabilities at fair
value.  Adoption  is  required as of the beginning of the first fiscal year that
begins  after  September  15, 2006. Early adoption is permitted. The adoption of
SFAS 156 is not expected to have a material effect on our consolidated financial
position,  results of operations or cash flows In December 2004, the FASB issued
SFAS No. 153, "Exchanges of Non-monetary Assets, an amendment of APB Opinion No.
29." APB Opinion No. 29, "Accounting for Non-monetary Transactions," is based on
the  principle that exchanges of non-monetary assets should be measured based on
the  fair  value of the assets exchanged. SFAS No. 153 amendsAPB Opinion No. 29,
eliminating the exception to fair value accounting for non-monetary exchanges of
similar productive assets and replaces it with a general exception to fair value
accounting  for  non-monetary exchanges that do not have commercial substance. A
non-monetary  exchange  has commercial substance if the future cash flows of the
entity  are  expected  to  change significantly as a result of the exchange. The
statement  is  effective  for  non-monetary  asset exchanges occurring in fiscal
periods  beginning  after  June  15,  2005.  The  Company  does  not expect this
statement  to  have  a  material  impact  on  its  financial  statements.

3.     ACCOUNTS  RECEIVABLE,  TRADE
     Trade  accounts  receivable  are presented net of an allowance for doubtful
collections  of  $150,944  at December 31, 2006.  In determining this allowance,
objective  evidence  that  a  single  receivable  is  uncollectible as well as a
historical  pattern of collections of accounts receivable that indicate that the
entire  face amount of a portfolio of accounts receivable may not be collectible
is  considered  at  each  balance  sheet  date.

4.     PREPAID  EXPENSES  AND  OTHER  CURRENT  ASSETS
     Prepaid  expenses  and  other  current  assets  primarily  consist  of
approximately  $163,361  in  prepaid  insurance  and  prepaid  professional data
services,  and  $43,750  in fees for financing that are being amortized over the
length  of  the  term.

5.     NOTES  RECEIVABLE

     Demand  promissory  note receivable from an unrelated leasing company, with
interest  at  11%.  One million dollars was advanced to the leasing company near
the  end  of  2002  as  proceeds from the Company's initial public offering were
collected.  There  is  no  business  relationship  between  the Company and this
leasing  company or any officers or directors of either company. At December 31,
2004,  substantial  doubt  existed  on  collectability  of  these  balances.  An
allowance  of  $500,000  was  recorded  against  the  outstanding  balance.  The
remaining  principal  balance  at December 31, 2005 was $358,508. As of December
31,  2006,  the  Company  fully  allowed  for  the  remaining principal balance.


                                     F-11
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


7.     PROPERTY AND EQUIPMENT
     Property  and  equipment  at  December 31, 2006, consists of the following:

          Equipment                              $ 4,523,254
          Vehicles                                   102,954
          Software                                   938,017
          Furniture and fixtures                     389,783
          Leasehold improvements                     618,093
                                                 -----------
                                                   6,572,101

            Less accumulated depreciation and
                 amortization                      4,630,351
                                                 -----------
          Property and equipment, net            $ 1,941,750
                                                 ===========

     The  carrying  value  of  assets  under capital leases was $568,646, net of
amortization  of $1,401,352,  as  of  December  31,  2006.

     Depreciation  and  amortization expense was $852,378 and $1,026,850 for the
years  ended  December  31,  2006  and  2005,  respectively.

8.     PREPAID  EXPENSES  AND  OTHER  CURRENT  ASSETS
     Prepaid  expenses  and  other  current  assets  consist of the following at
December  31,  2006:

          Prepaid expenses                            90,161
          Deferred financing costs                    43,750
          Other                                      210,818
                                                 -----------
          Total                                    $ 344,729
                                                 ===========

9.     LONG  -TERM  RECEIVABLE

     At  year-end,  under  the  terms  of  a  negotiated  agreement, the Company
converted  $4.2  million  held  by one customer that it was carrying in accounts
receivable  into  a  long  term  receivable. The terms of the agreement call for
monthly  payments  of  $45,000  per month. In accordance with GAAP, the carrying
value  of  this receivable has been adjusted to reflect the present value of the
future  required  minimum payments. Using a 10% discount rate, the present value
of  the  receivable  is  being  carried  at $2.9 million of which $405,000 is in
current  assets  and $2.5 million in long-term assets. In addition, an allowance
for  bad  debt  has  also  been recorded against the receivable in the amount of
approximately  $570,000.  The  following  table  summarizes  the  value  of  the
receivable  (amounts  in  thousands).

Face value      Present value     Allowance     Net carrying value
$  4,205        $  2,913            $  570           $  2,343

10.     OTHER  ASSETS
     Other  assets  consist  of  the  following  at  December  31,  2006:

          Restricted trading securities            $  33,000
          Security deposits                           92,964
          Other Non-Current Assets                   149,449
                                                 -----------
          Total                                    $ 275,413
                                                 ===========

     Restricted  trading  securities  consist  of  200,000  restricted shares of
common  stock  in  Data  Evolution  Holdings,  Inc. (DEH), which trades over the
counter  under  the  symbol  DTEV.  These  shares  were  acquired  as part of an
agreement  to  provide  service  and  data  to  DEH.  The  service


                                     F-12
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


and  data  was  at  valued  at  $875,000.  At  the time the service and data was
valued, November 22, 2004, the trailing 10 day average closing price of DTEV was
$5.96  per  share,  or  $1,192,000.  Due  to  the  fact  that  these shares were
restricted,  a  mutually  agreed  upon 25% liquidity discount was applied to the
value,  or  $894,000, as such 200,000 shares were exchanged for the service.  At
December 31, 2005, the 10-day trailing average closing price was $.22 per share,
or  the  value of the shares was $58,000. An impairment to the current value has
been  recorded  to  adjust  the  security  carrying  value  to  the original 25%
discount.  The  company  recorded  an  impairment  of  $842,000 and the adjusted
carrying  value  is  now  $33,000.

11.     ACCRUED  EXPENSES

     Accrued  expenses  consist  of  the  following  at  December  31,  2006:

          Payroll and related taxes              $    88,917
          Accounting, legal and professional fees     82,500
          Finance Related Expenses                 2,286,075
          Interest on Notes Payable                   45,128
          Other                                       46,973
                                                 -----------
          Total                                  $ 2,549,593
                                                 ===========

12.     NOTES  PAYABLE

     Convertible promissory note due on demand, that bears interest at the rate
of  12% per annum.  The note is convertible into 44,444 shares of Class A Voting
Common  Stock  at the note holder's option.  The note requires quarterly payment
of  interest  until  the  principal  is  repaid  or  converted.

During  2003,  the  Company  received  $2.3  million,  by  issuing  subordinated
promissory  notes  bearing  simple  interest ranging from 10% and 12% per annum.
The  balance  of  this  debt at December 31, 2005, is $1,714,000.  The remaining
debt  is  due  in  2006.  In  conjunction  with the issuance of these notes, the
Company  issued  warrants  to  purchase  2,500,000  shares of Class B Non-Voting
Common  stock  with  a  weighted  average  exercise  price  of  $0.14.

The  Company  allocated  the  investment proceeds between the notes and warrants
based  on  their  relative fair values.  The relative fair value of the warrants
was  determined to be $218,482, which was recorded as debt discount, a reduction
of the carrying amount of the notes.  This amount is being amortized to interest
expense  over  the  term  of  the  debt.  The  unamortized  balance of this debt
discount is $124,899 at December 31, 2003 ($4,491 long-term).  The fair value of
the  warrants  was  based  on  the  Black-Scholes  model.  The  Black-Scholes
calculation  incorporated  the  following  assumptions:  0%  dividend yield, 29%
volatility,  3.6%  average  risk-free  interest  rate,  a  ten-year  life and an
underlying  Class  B  Non-Voting  Common  Stock  value  of  $0.14  per  share.

On  June  17, 2004 the Company entered into a Securities Purchase Agreement with
Laurus  Master  Fund,  Ltd.,  a  Cayman Islands company, relating to the private
placement  of  a  convertible  term  note issued by the Company in the principal
amount of $3,000,000 due June 17, 2007 (the "Note"), and a common stock purchase
warrant  (the  "Warrant").  On  November  30,  2004,  this  note  was amended to
increase  the principal amount to $4,000,000 and add an additional warrant.  The
terms,  as  amended,  allow for this note to covert into 6,666,667 shares of our
Class  A  Voting  Common Stock at a fixed conversion rate of $0.30 per share and
5,000,000  shares  of our Class A Voting Common Stock at a fixed conversion rate
of  $0.40  per  share.  One Warrant provides for the purchase of up to 1,320,000
shares  of  Class  A Common Stock at a price of $0.45 each, subject to customary
adjustments,  until  June  17, 2009, and the additional Warrant provides for the
purchase  of  up  to  650,000 shares of Class A Common Stock at a price of $0.35
each,  subject  to customary adjustments, until November 30, 2009.  On March 31,
2005,  the  Company  amended  its


                                     F-13
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


convertible  term  note  issued  by  the  Company to Laurus Master Fund, Ltd., a
Cayman  Islands  company.  The terms, as amended, allow for this note to convert
into  6,250,000  shares of our Class A Voting Common Stock at a fixed conversion
rate  of $0.16 per share, 3,333,333 shares of our Class A Voting Common Stock at
a  fixed  conversion rate of $0.30 per share and 5,000,000 shares of our Class A
Voting  Common  Stock  at  a fixed conversion rate of $0.40 per share.  In July,
2005,  the  company  raised $9 million through the issuance of convertible debt.
The  net  proceeds  were  used  to  pay down existing debt of $4 million and the
remaining  balance  will  be  used  to fund operations.  As of July 8, 2005, the
balance  on  this  note  was  paid  in  full.

In  connection with an offering that closed on August 15, 2005 we entered into a
Purchase  Agreement with certain institutional and accredited investors relating
to  the private placement of convertible term notes issued by the Company in the
principal  amount of $8,965,000 and warrants to purchase up to 41,189,000 shares
of  our  capital  stock.  Of the proceeds from this offering, approximately $4.1
million  was used to retire current secured convertible notes, and the remainder
will  be  used  for  general  working  capital.

All  of  the notes are convertible, and the warrants are exercisable, first into
as many shares of our Class A Voting Common Stock, par value $0.01 per share, as
are  available for issuance at the time of conversion or exercise, and then into
shares  of  our  Class B Non-Voting Common Stock, par value $0.01 per share.  As
part  of our agreement with these investors, we have agreed to seek the approval
from  our  stockholders of the recapitalization of each outstanding share of our
Class  A  Voting  Common  Stock  and  our Class B Non-Voting Common Stock into a
single class of voting common stock, as well as a one-for-fifty reverse split of
this new class of common stock.  If our stockholders approve these measures, the
notes  will  automatically convert into shares of the new class of common stock,
and  any  unexercised  warrants  will be exercisable for shares of that class of
stock as well.  As there are currently no un-issued shares of our Class A Voting
Common  Stock  that  are not otherwise reserved for issuance, we anticipate that
these  notes  and  warrants will be exercisable for shares of either our Class B
Non-Voting Common Stock or the newly created class of common stock, if approved.
Without  taking  into consideration interest payable on the notes, the notes are
convertible  into 89,650,000 shares of our common stock (regardless of class) at
a  current  conversion  rate of $0.10 per share and the warrants are exercisable
for  ten years from the date they were issued for up to 41,189,000 shares of our
common  stock  (regardless  of  class)  at a current exercise price of $0.15 per
share.  The conversion price of the notes and the exercise price of the warrants
are  each  subject  adjustment  for a variety of events, including, for example,
payment  of  dividends,  certain  mergers or asset sales, and certain securities
issuances.  In  conjunction  with  this  offering,  we also entered into related
Registration  Rights and Voting Agreements.  On November 14, 2005, at the annual
meeting  of the shareholders, the recapitalization was approved by a majority of
the  outstanding  shares of both classes of stock.  Effective December 2005 that
debt  was  converted  to  common  stock.

13.     COMMITMENTS  AND  CONTINGENCIES

     OPERATING  LEASES
     The  Company leases office space and equipment under various non-cancelable
operating  lease agreements which terminate on various dates through 2007.  Rent
expense  amounted  to  $566,445 and $563,180 during 2006 and 2005, respectively.



                                     F-14
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


     Future  minimum  payments  under  non-cancelable  operating  leases  are as
follows:

YEAR ENDING DECEMBER 31,
               2007          598,368
               2008          476,412
               2009          476,412
               2010          476,412
               2011          476,412
               2012           79,402
                         -----------
               Total     $ 2,583,418
                         ===========

CAPITAL LEASES
     The  Company  acquired  equipment  under  long-term  capital  leases.  The
economic  substance  of  the  leases  is  that  the  Company  is  financing  the
acquisition  of  the  assets  through  the  leases.

     The following is a schedule by years of future minimum lease payments under
the  capital  leases,  together  with the net present value of the minimum lease
payments  at  December  31,  2006.

YEAR ENDING DECEMBER 31,

    2007                                                          49,536
    Less:  amounts representing interest and executory costs       2,570
                                                                 -------
    Present value of future minimum lease payments                46,966

    Less:  current portion of obligation under capital lease      46,966
                                                                 -------
    Long-term obligation under capital lease                     $     -
                                                                 =======

     LICENSE AGREEMENTS
     The  Company  obtains  its  data from multiple sources and has entered into
various  license  agreements with the related data providers.  In 2006 and 2005,
the  Company recorded $3,616,065 and $2,906,465 respectively in costs related to
these  agreements.  In  the event that any of the primary sources of data are no
longer  available  to  the Company, management believes that it would be able to
integrate  alternate  sources  of  data  without  significant  disruption to the
business  or  operations,  as  there are currently a number of providers of such
data.  The  Company  is required to make minimum payments under these agreements
as  follows:

YEAR ENDING DECEMBER 31,

        2007     $  492,492
                 ----------
                 $  492,492
                 ==========

     The  Company's  operations  depend  upon  information  that includes public
records.  If  material changes were to occur in federal or state laws regulating
or  prohibiting  the  distribution of public records, particularly credit header
records,  the  Company's  financial condition and results of operations could be
materially  affected.  In the event that such a termination occurred, management
believes  it  could  acquire  replacement data from other sources; however, such
termination  might  have  an  adverse  effect  on  the  Company's  operations.


                                     F-15
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


     LEGAL  PROCEEDINGS
     The  Company  is  from time to time subject to legal proceedings and claims
which  arise  in  the  normal  course  of its business.  Management believes the
outcome  of  any  pending  or  known  matters will not have a materially adverse
effect  on  the  Company's  financial  position  or  results  of  operations.

     DATA  EVOLUTION  HOLDINGS,  INC.
     The  Company  has  entered  into  a  services agreement with Data Evolution
Holdings,  Inc. (DEH), which trades over the counter under the symbol DTEV.  The
agreement  calls  for the Company to purchase services from DEH that will expand
our  ability  to  distribute  our  product  through  DEH PowerSys products.  The
agreement  calls  for  the  Company  to  purchase access to PowerSys products, a
feasibility  study,  a  two-year  support  plan, and become a strategic alliance
partner.  The  value  of  these  services  has  not  yet been determined by DEH,
however,  the  payment  of these services will be made in Company Class A Common
Voting  Stock  that  will  have  a  four  year  lock  up  period.

14.     INCOME TAXES

     Deferred tax assets consist of the following at December 31:

                                                    2006
                                              -------------
      Net operating loss carry forwards       $  14,000,000
      Depreciation and amortization                 425,000
      Bad debt reserve                              285,000
      Investment loss                               400,000
      Capitalized research and development        1,000,000
                                              -------------
      Gross deferred tax assets                  16,110,000
      Valuation allowance                       (16,110,000)
                                              -------------
                                              $           -
                                              =============


The  Company  has  provided  a  valuation  allowance  for the full amount of the
deferred  tax  assets  since  realization  of  these  future  benefits  is  not
sufficiently assured.  As the Company achieves profitability, these deferred tax
assets  may  be  available to offset future income tax liabilities and expenses.

At  December  31,  2006,  the  Company  had net operating loss carryforwards for
federal  and  state income tax reporting purposes of approximately $ 35,000,000.
The  federal  and  state  net  operating loss carryforwards expire through 2026.

Certain  substantial changes in the Company's ownership may occur.  As a result,
under  the  provisions of the Internal Revenue Code, the amount of net operating
loss  carryforwards  available  annually  to offset future taxable income may be
limited.  The  amount  of  this  annual  limitation is determined based upon the
Company's  value  prior  to  the  ownership  changes  taking  place.  Subsequent
ownership  changes  could  further  affect  the  limitation  in  future  years.


                                     F-16
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


15.     COMMON  STOCK

     DESCRIPTION  OF  COMMON  STOCK
     On  March  23,  2001,  the  Company  amended  its articles of incorporation
wherein it renamed all of the authorized 150,000,000 shares of common stock, par
value  $0.01  per share, Class A Voting Common Stock and authorized the issuance
of  250,000,000  shares  of  Class  B  Non-voting  Common  Stock.

Each  Class  A  Voting Common stockholder is entitled to one vote for each share
held  on  all  matters submitted to a vote of stockholders.  The holders of both
classes  of common stock are entitled to dividends on a pro rata basis, when and
if  declared by the Company's board of directors.  Through December 31, 2004, no
dividends  have  been  declared  or  paid.

     On  August  12,  2002, the Company commenced its initial public offering of
securities  (Registration No. 333-85154, effective August 12, 2002), pursuant to
which  the  Company  offered  up 12,000,000 units for $0.30 per unit.  Each unit
consisted  of  one  share  of  Class  B Non-voting Common Stock and a three year
redeemable  warrant to purchase one share of Class A Voting Common Stock with an
exercise  price  of  $0.50  per  share.

     On  December  5,  2005,  the  Company amended its articles of incorporation
wherein  it  combined  each outstanding share of our Class A Voting Common Stock
and  our  Class  B  Non-Voting Common Stock into a single class of voting common
stock  with  400,000,000  authorized.

     On  December 12, 2005, the Company amended its articles of incorporation to
effect  a  one-for-fifty  reverse  split of the common stock and to increase the
authorized  from  the  resulting  split  of  8,000,000  to  25,000,000.

     As  of  December 31, 2006, a total of 4,279,539 shares of Common Stock were
reserved  for  issuance  upon  exercise  of outstanding stock option and warrant
agreements.

     STOCK  OPTIONS  AND  WARRANTS
     During  2005,  the  Company issued warrants to purchase 1,574,780 shares of
Common Stock at an average exercise price of $6.31 per share to third parties in
exchange  for  services.  The  Company  recorded  a  discount to Note payable or
expense  of  $413,321  associated  with  these  warrants.

     During  2005, the fair value of the options and warrants to purchase shares
of  Class  A  Voting  Common  Stock  was  based on the Black-Scholes model.  The
Black-Scholes  calculation  incorporated the following assumptions:  0% dividend
yield, 20% volatility, 3.9% average risk-free interest rate, a ten-year life and
an  underlying  Class  A  Voting  Common Stock average value of $5.00 per share.

     During  2006, the fair value of the options and warrants to purchase shares
of  Class  A  Voting  Common  Stock  was  based on the Black-Scholes model.  The
Black-Scholes  calculation  incorporated the following assumptions:  0% dividend
yield, 34% volatility, 4.1% average risk-free interest rate, a ten-year life and
an  underlying  Common  Stock.

     As  of  December  31,  2006,  there  were  a total of 3,088,342 options and
warrants  outside  the  Stock  Plans.

16.     STOCK OPTION PLANS

     On  November  16,  1999,  the Board of Directors approved the Incentive and
Non-Qualified  Stock  Option Plan as amended (the "1999 Plan").  Under the terms
of  the 1999 Plan, the Company is authorized to grant incentive and nonqualified
stock  options to purchase shares of common stock to its employees, officers and
directors,  and  consultants  or  advisors.  The  Board  of  Directors


                                     F-17
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


administers  the  Plan.  A  maximum  of  15,000,000,  shares,  or  300,000 after
adjusting  for  the  reverse  split,  of  Class  A  Voting Common Stock has been
approved  for  issuance under the 1999 Plan of which 6,061 post split shares are
available  for  grant  at  December  31, 2006.  The options are not transferable
except  by  will  or  domestic  relations  order.

     On  March  28,  2003,  the  Board  of  Directors approved the Incentive and
Non-Qualified  Stock  Option  Plan  (the  "2003 Plan") which was approved by the
stockholders  at  the  May 29, 2003 annual meeting.  Under the terms of the 2003
Plan,  the  Company  is  authorized  to  grant  incentive and nonqualified stock
options  to  purchase  shares  of  common  stock  to its employees, officers and
directors,  and consultants or advisors.  The Board of Directors administers the
2003  Plan.  A  maximum of 25,000,000 shares, or 500,000 after adjusting for the
reverse  split, of Class A Voting Common Stock and 25,000,000 shares, or 500,000
after  adjusting for the reverse split, of Class B Non-Voting Common Stock, or a
combined  total  of  1,000,000 post split shares have been approved for issuance
under  the  2003  Plan  of which 486,000 are available for grant at December 31,
2006.  The  options  are  not  transferable except by will or domestic relations
order.

     The  Board of Directors determines the exercise price and vesting period of
the  options  at  the  date  of  grant.  The  exercise price for incentive stock
options  shall  not  be less than 100% of the fair market value of the Company's
stock  on  the  date  of  grant.  The option exercise period will not exceed ten
years  from the date of grant.  The options are generally fully exercisable when
issued  to directors and consultants and exercisable 25% per year and continuing
over four years for employees (based on continual employment). If a grantee owns
stock  representing  more than 10% of the outstanding shares on the date such an
incentive  option  is  granted,  the price shall be at least 110% of fair market
value  and  the  maximum  term of the options will be five years.  The following
table  presents activity under the Plans adjusting for the reverse split for the
years  ended  December  31,  2006  and  2005:




                                                   WEIGHTED
                                                   AVERAGE
                                                   EXERCISE
                                       SHARES        PRICE

Outstanding at December 31, 2004      693,290        30.96
Issued                                 10,200        17.00
Exercised                                   -            -
Canceled                               (3,364)       11.00
                                      -------       ------
Outstanding at December 31, 2005      700,126        30.86
Issued                                      -            -
Exercised                                   -            -
Canceled                                 (150)       10.00
                                      -------       ------
Outstanding at December 31, 2005      700,126        30.54

     The  following  summarizes  information  relating to options outstanding at
December  31,  2006:


                     OPTIONS OUTSTANDING                OPTIONS EXERCISABLE
                ---------------------------------     ----------------------
                           WEIGHTED
                            AVERAGE      WEIGHTED      WEIGHTED
RANGE OF                   REMAINING     AVERAGE       AVERAGE
EXERCISE                  CONTRACTUAL    EXERCISE      EXERCISE
PRICE            SHARES   LIFE (YEARS)     PRICE        SHARES     PRICE
-------------   --------  ------------   --------      --------   ---------
$0.00 - 10.00    234,151     4.20         $  9.66       207,076    $   9.65

$10.00 - 15.00   109,625     5.85        $  12.51       109,275    $  12.51

$15.00-75.00     356,000     6.26        $  49.88       348,000    $  50.59
-------------   --------  ------------   --------      --------   ---------
                 699,976     5.51        $  30.56       664,351    $  31.56
                ========  ============   ========      ========   =========





                                     F-18
<PAGE>

                         LOCATEPLUS HOLDINGS CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


17.     DEFINED CONTRIBUTION RETIREMENT PLAN
     The  Company  sponsors  a  defined  contribution  retirement plan under the
provisions  of  Section  401(k)  of  the  Internal  Revenue  Code,  which covers
substantially  all  employees.  The  Company  may  make  discretionary  matching
contributions  up  to  1% of employee contributions.  Company contributions vest
ratably  over  a  six-year  period.  Company  matching contributions amounted to
$9,721  and  $7,133  in  2006  and  2005,  respectively.

18.     SEGMENT  INFORMATION
     The  Company  has  two  reportable  segments  which  management operates as
distinct sales organizations; these two segments are segregated by the nature of
products  and  services  provided.  The  Company  measures and evaluates its two
reportable segments based on revenues and costs of revenues.  The CD ROM segment
provides  information  on  motor  vehicles  and  drivers' licenses, contained on
compact  disks.  The  online  segment  provides  information  on  individuals
throughout  the  United  States  of  America  through the Company's website.  No
material  operating  costs,  other  than  costs  of  revenues,  or  assets  and
liabilities  relate  to  the  CD  ROM  segment.

                                                FOR THE YEAR ENDED
                                                  DECEMBER 31,
                                                2006          2005
Reportable segment sales:
CD Rom                                   $    588,977        $    480,412
Online and Channel                         11,653,371          10,615,717
                                         ------------        ------------
Total reportable segment sales             12,242,348          11,096,129
                                         ============        ============
Costs of Segment sales:
CD Rom                                         38,965             133,612
Online and Channel                          3,828,408           4,055,417
                                         ------------        ------------
Total costs of reportable segment sales     3,867,373          4,189,029
                                         ============        ============

19.     SUBSEQUENT EVENTS

In  January 2007 the Company issued a $150,000, 8% note payable in settlement of
negotiations  over  the purchase of Company stock. The note calls for 12 monthly
payments  of  $12,500  due  through  December  1,  2007.

On  March  20,  2007,  the Company issued a secured convertible debenture to one
investor in the aggregate principal amount of $6 million of which $3 million was
advanced  immediately.  The  second  installment  of $2 million will be advanced
immediately  prior to the filing by the Company with the Securities and Exchange
Commission  of  the  Registration Statement.  The last installment of $1 million
will  be  advanced  immediately  prior to the date the Registration Statement is
declared  effective  by  the  Commission.  The  Debentures  mature  on the third
anniversary  of  the date of issuance and has a fixed conversion price per share
equal  to  $0.314





See Independent Auditors Report


                                     F-19