SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                                Amendment No. 1

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

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

                  For the fiscal year ended: December 31, 2005

                        Commission file number 000-33315

                                  KNOBIAS, INC.
             (Exact name of registrant as specified in its charter)


                 Delaware                                    13-3968990
                 --------                                    ----------
       (State or other jurisdiction of                     (I.R.S. Employer
        incorporation or organization)                    Identification No.)


875 Northpark Drive, Building 2, Suite 500
Ridgeland, Mississippi                                           39157
----------------------                                           -----
(Address of principal executive offices)                       (zip code)



       Registrant's telephone number, including area code (601) 978-3399

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

         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $.01 par value
                                (Title of Class)

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X|

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes |X| No |_|

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

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

The issuer's revenues for its most recent fiscal year ended December 31, 2005
were $2,125,122.

As of March 30, 2006 the aggregate market value of the voting and non-voting
common equity held by non-affiliates of the registrant was approximately
$2,596,000, based upon the closing sales price on the Nasdaq Over-The-Counter
Bulletin Board for that date.

The number of shares of Common Stock, $0.01 par value, outstanding on March 30,
2006, was 50,766,505 shares, held by approximately 140 stockholders.


Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
<PAGE>
                                EXPLANATORY NOTE

This Amendment No. 1 on Form 10-KSB/A amends the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 2005, filed with the Securities
and Exchange Commission on April 4, 2006, to correct a typographical error in
Exhibit 31.2 (Officer's Certificate Pursuant to Section 302).  Except as set
forth herein, there have been no other changes to the Form 10-KSB as originally
filed.

This Amendment No. 1 speaks as of the original filing date of the Form 10-KSB
and does not reflect events occurring after the filing of the original
Form 10-KSB, or modify or update the disclosures therein in any way other than
as required to reflect the amendment described above.
<PAGE>

                                  KNOBIAS, INC.
                          ANNUAL REPORT ON FORM 10-KSB
                   For the Fiscal Year Ended December 31, 2005

                                TABLE OF CONTENTS


                                  PART I
                                                                            Page
                                                                            ----
      Item  1.    Business.................................................    1
      Item  2.    Properties...............................................    4
      Item  3.    Legal Proceedings........................................    4
      Item  4.    Submission of Matters to a Vote of Security Holders......    4

PART II
      Item  5.    Market for Registrant's Common Equity and Related
                  Stockholder Matters......................................    5
      Item  6.    Management's Discussion and Analysis of Financial
                  Condition and Results Of Operations......................   12
      Item  7.    Financial Statements.....................................   21
      Item  8.    Changes in and Disagreements with Accountants on
                  Auditing and Financial Disclosure.......................    21
      Item 8A.    Controls and Procedures..................................   21
      Item 8B.    Other Information........................................   21

PART III
      Item  9.    Directors and Executive Officers of the Registrant.......   22
      Item 10.    Executive Compensation...................................   25
      Item 11.    Security Ownership of Certain Beneficial Owners
                  and Management...........................................   26
      Item 12.    Certain Relationships and Related Transactions...........   32

PART IV
      Item 13.    Exhibits.................................................   33
      Item 14.    Principal Accountant Fees and Services...................   38

      Signatures...........................................................   39




This form 10-KSB contains forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements are necessarily based
on certain assumptions and are subject to significant risks and uncertainties.
These forward-looking statements are based on management's expectations as of
the date hereof, and the Company does not undertake any responsibility to update
any of these statements in the future. Actual future performance and results
could differ from that contained in or suggested by these forward-looking
statements as a result of factors set forth in this Form 10-KSB (including those
sections hereof incorporated by reference from other filings with the Securities
and Exchange Commission), in particular as set forth in the "Management's
Discussion and Analysis and Results of Operation" under Item 6.

In this form 10-KSB references to "KNOBIAS", "the Company", "we," "us," and
"our" refer to KNOBIAS, INC.
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

INTRODUCTION AND BACKGROUND

We are a financial information services provider that has developed financial
databases, information systems, tools and products following over 14,000 U.S.
equities. Primarily through our wholly owned subsidiary, Knobias.com, LLC, we
market our products to individual investors, day-traders, financial oriented
websites, public issuers, brokers, professional traders and institutional
investors.

We offer a range of financial information products from multiple Knobias and
third party databases via a single, integrated internet based platform. Knobias
is uniquely capable of combining third party databases, news feeds and other
financial content with internally generated content and analysis to create
value-added, cost effective information solutions for all market participants.

Our company originally was organized as Molecular Energy Corporation on January
31, 1968 under the laws of the State of Delaware, to engage in the business of
research, development and manufacture of custom-built batteries. Until the
Merger we had no assets and have had no revenues for several years, and we were
actively seeking potential operating businesses and business opportunities with
the intent to acquire or merge with such businesses. Knobias, formerly known as
pennyPI.com, Inc., was originally organized as a Mississippi limited liability
company in September 1998, and was reorganized as a Delaware corporation in
March 2000. Knobias.com, LLC is a wholly owned subsidiary of Knobias and
continues in existence for the further development and operation of its Internet
web site relating to the provision of information regarding publicly traded
companies.

Our principal executive offices are located at 875 Northpark Drive, Ridgeland,
MS 39157, and our telephone number is (601) 978-3399.

STRATEGY

We utilize a multi-level strategy to generate revenues. Our initial strategy
involves the collection and integration of comprehensive, broad-based financial
information products that appeal to all market participants. Cost-effective, yet
broad-based, services help us generate subscription revenues across all levels
of market participants while allowing those customers to consolidate less
comprehensive vendors.

Another strategy involves the deployment of more focused, niche-based financial
information products that appeal to concentrated and more valuable market
segments. Utilizing customer relationships, Knobias intends to increase revenue
growth through more specialized products.

Knobias currently targets businesses worldwide as our products are attractive to
investors, analysts, brokers or advisers interested in the U.S. equities
markets. Our current customers and potential markets may include the following:

o    Retail brokers;
o    Institutional brokers;
o    Wholesale trading firms;
o    Investment banks and other financial institutions;
o    Research analysts;
o    Investment advisors and portfolio managers;
o    Buy side traders;
o    Hedge funds;
o    Trust and pension funds;
o    Securities attorneys;
o    Public companies;
o    Corporate intranets;
o    Investor relations and PR firms;
o    Financial executives;
o    U.S. exchanges and ECNs;
o    Financial websites;
o    Web portals;
o    Individual investors;
o    Day traders and semi-professional traders;
o    Financial planners and private client groups; and
o    Content publishers.

                                        1
<PAGE>
PRODUCTS

Knobias generates revenues primarily through the sale of content access and
distribution. Knobias subscription and pay-per-view products are primarily
web-based and are accessed via the Internet by our customers. Knobias also
generates revenues via co-branding, web hosting services, issuer services, data
distribution and redistribution agreements. All revenues are reported as one
segment due to the similar market and content provided in each service. Knobias
content and services include the following:

Knobias Fundamentals.

Knobias maintains a comprehensive database of fundamental research information
covering over 14,000 U.S. equities. This database is comprised of proprietary
data and information from third party vendors. Data sections include stock
quotes, stock charts, company profiles, company and market news, company events,
analysts ratings, short interest data, technical analysis, historical quotes,
income statements, balance sheets, cash flow statements, financial ratios,
revenue and earnings consensus estimates, analysts opinions, historical earnings
surprises, insider transactions, institutional holdings, mutual fund holdings,
historical timelines and company reports.

Knobias RaiDAR.

Knobias has developed customizable, real-time news and alerting applications
that combine news items from over 80 sources, SEC filings and proprietary
stories from our own real-time news desk. All items are delivered to the user in
real-time and are tagged with hundreds of relevant subject codes. Each item is
color coded by major subject group for quick user identification. Users can
filter real-time items by a number of criteria including subject, portfolio and
marketplace.

KNO-Zone.

The KNO-Zone product provides customers with a proprietary view of the most
important stock and market related content in real-time. Produced by our own
staff of editors, the KNO-Zone application delivers a more focused view of the
most important events driving each day's market.

Knobias Calendars.

Knobias maintains a complete set of stock and market related calendars driven
completely by proprietary data collected by Knobias staff. The calendar products
include a market planner, earnings, conference calls, shareholder meetings,
stock splits, stock dividends, media events, company presentations and industry
conferences.

Knobias Tools and Analytics.

Knobias provides its customers with a number of miscellaneous tools for
screening, filtering and analysis such as the Morning Call portfolio summary,
most actives, stock screeners, technical alerts, EDGAR tools, holder searches
and news filtering.

Knobias Morning+PLUS.

Morning+PLUS is one of our flagship specialty products. It provides customers
with over 30 modules of content for the design of their own custom intraday
report. A majority of the content modules are filtered by the user's own
portfolio list allowing for an extremely focused morning briefing. Each of the
30 modules is optional and includes broad content.

CoBranding and Data Services.

Knobias derives a portion of its revenues by provisioning financial data out to
customers through website development and hosting as well as through direct data
feeds and distribution agreements. Potential customers include financial
websites, trading platforms, public company websites, content publishers, etc.

Knobias Issuer Services.

Knobias provides certain corporate services to public companies by offering
public issuers and their investor relations professionals website and data
hosting, press release distribution, market awareness programs and conference
call hosting. Knobias began offering and increasing marketing of this product in
2005 and recognized revenues of $70,000 in connection with this service or 3% of
revenues for the year ended December 31, 2005.

pipeTrac.

pipeTrac is the newest member of the Knobias product family, focusing on the
Private Investment in Public Equities markets. The Company feels that pipeTrac
is the leading tool for any market participant that has a stake in the PIPE
space.

pipeTrac adds value in three major ways:

                                        2
<PAGE>
o    pipeTrac is the only product that delivers information on PIPE transactions
     in real-time, including registration effectiveness.

o    pipeTrac also allows powerful querying capabilities for deals and players
     in this burgeoning space.

o    pipeTRac is the only product that includes current contact information for
     investors, advisors, agents and issuers.

Knobias began billing customers for this product in January 2005 and billed
$272,000, net of discounts, for this product during 2005 or 13% of revenues for
the year ended December 31, 2005.

COMPETITION

Due to our diverse product lines, we perceive competition on a number of
different levels. On a broad-based information level, we believe competition is
limited to a small group of companies, most of which are substantially larger
than we are and have access to significant amounts of capital. On a
product-by-product level, we perceive competition from a number of small
competitors, only a few of which have the diverse product lines of Knobias.

Broad-Based Financial Platforms.

We believe there are a limited number of companies that provide comprehensive,
broad-based financial information platforms to the professional equities space.
Most companies in this group however are substantially larger than we are and
have access to significant amounts of capital. The major competitors in this
space are Bloomberg, FactSet Research Systems, Inc., Reuters, and Thomson
Financial. Many of these competitors provide real-time quotes, market data and
analytics which are not currently a part of our product offerings. Many of these
competitors also provide coverage on international securities, treasuries and
corporate bonds which coverage also is not currently part of our product
offerings. We believe we are able to compete for customers interested in U.S.
equity information due to our low cost and ease of use advantages.

Proprietary News and Commentary.

There are a number of companies that produce proprietary stock market news and
commentary daily including many of those also providing broad-based financial
information. Many of the major players such as Bloomberg, Dow Jones, and Reuters
are substantially larger than we are and have access to significant amounts of
capital. Other competitors in this space are smaller companies with focused
services that do not include broad-based product lines such as Briefing.com,
theFlyontheWall.com and StreetAccount.com. Most of these smaller competitors
focus on the "upper percentage" of U.S. equities and do not provide coverage on
all U.S. equities as does Knobias.

Niche-Based Financial Information Products.

There are many competitors firmly entrenched in a variety of focused,
niche-based information products. Few of these competitors provide information
services beyond their designated niches. Our Morning+PLUS product competes with
many financial newsletters produced daily as well as daily notes produce by many
large brokers, investment banks and research firms. We believe our Morning+PLUS
advantage lies in our technology, customization and delivery. Our new pipe|TRAC
product competes with long time players such as Sagient Research (formerly
PlacementTracker.com) and PrivateRaise.com. We believe our products can be
competitive in this space due to our integration with other Knobias product
lines not offered by these competitors.

Issuer and Corporate Services.

There are many competitors that provide public companies with a variety of
services to assist their investor and public relation efforts. Larger
competitors in this space such as BusinessWire, Computershare, PR Newswire and
Thomson have a significant market share of the more established mid and large
cap companies. Many of the major stock exchanges such as Nasdaq and NYSE also
provide certain issuer services to their listed companies. It is our intent to
focus initially on providing small and micro cap issuers with similar, less
expensive services. There does exist, however, a large, but fragmented group of
smaller competitors that serve small cap companies. We see our advantage in this
space being our distribution capabilities and trusted brand name.

MAJOR CUSTOMERS

Knobias has one customer which accounted for 19% of its gross revenues for the
year ended December 31, 2005.

EMPLOYEES

As of December 30, 2005, we had 35 employees, including two part-time employees.
Our employees are not members of any union, nor have we entered into any
collective bargaining agreements. We believe that our relationship with our
employees is good.

                                        3
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY

Our offices are located in leased facilities at Building 2, Suite 500, 875 North
Park Drive, Ridgeland, Mississippi 39157. The 7,576 square-foot facility
includes offices and computer equipment and maintenance areas. The monthly rent
for our office space is $7,600. We also lease residential property in Jersey
City, New Jersey, for a monthly rent of approximately $2,700, in order to
provide accommodations for our officers and employees who travel frequently to
the New York area. We believe that our leased property is sufficient for our
current and immediately foreseeable operating needs.

ITEM 3. LEGAL PROCEEDINGS

None.


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

None.

                                        4
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock trades on the NASD Over-The-Counter Bulletin Board under the
symbol "KNBS." Between January 5, 2004, when our stock was accepted for
quotation on the Over-The-Counter Bulletin Board, and November 16, 2004, our
stock traded under the symbol "COVSA". The Over-The-Counter Bulletin Board is
sponsored by the National Association of Securities Dealers (NASD) and is a
network of security dealers who buy and sell stocks.

For the periods indicated, the following table sets forth the high and low bid
prices per share of common stock. These prices represent inter-dealer quotations
without retail markup, markdown, or commission and may not necessarily represent
actual transactions.


                                            High($)        Low ($)
                                            ------         -------

        2004
        First Quarter (1)                    0.05            0.05
        Second Quarter                       0.09            0.06
        Third Quarter                        0.30            0.04
        Fourth Quarter (2)                   3.00            0.30

        2005
        First Quarter                        1.00            0.75
        Second Quarter                       1.11            0.71
        Third Quarter                        0.71            0.19
        Fourth Quarter                       0.25            0.17

        2006
        First Quarter (3)                    0.25            0.04


(1) Our stock first traded on February 3, 2004.
(2) Reflects a 1:3 reverse stock split on November 17, 2004.
(3) As of March 30, 2006

The number of shares of Common Stock, $0.01 par value, outstanding on April 13,
2005, was 50,666,505 shares, held by approximately 140 stockholders.

There were no cash dividends declared or paid in the last two fiscal years.
There are no restrictions on our ability to pay cash dividends currently or in
the foreseeable future.


DESCRIPTION OF SECURITIES

The following description of our capital stock is a summary and is qualified in
its entirety by the provisions of our Articles of Incorporation, with
amendments, all of which have been filed as exhibits to our registration
statement of which this prospectus is a part.

Our authorized capital stock consists of 100,000,000 shares, including:

o    95,000,000 shares of common stock, $0.01 par value per share, of which
     50,766,505 shares are currently issued and outstanding; and

o    5,000,000 shares of preferred stock, $0.01 par value per share, of which
     2,000,000 shares have been designated as Series A Convertible Preferred
     Stock, and of which 958,333 shares are currently issued or outstanding.

COMMON STOCK

Holders of common stock are entitled to one vote per share with respect to each
matter submitted to a vote of the stockholders, subject to voting rights that
may be established for shares of preferred stock, if any. Except as may be
provided in connection with such preferred stock or as otherwise may be required
by law, the common stock is the only capital stock entitled to vote in the
election of directors. The common stock does not have cumulative voting rights.

                                        5
<PAGE>
Subject to the rights of holders of preferred stock, if any, holders of common
stock are entitled to receive dividends and distributions lawfully declared by
the board of directors. If we liquidate, dissolve, or wind up our business,
whether voluntarily or involuntarily, holders of common stock will be entitled
to receive any assets available for distribution to stockholders after we have
paid or set apart for payment the amounts necessary to satisfy any preferential
or participating rights to which the holders of each outstanding series of
preferred stock are entitled by the express terms of such series of preferred
stock.

The outstanding shares of common stock are paid and non-assessable. The common
stock does not have any preemptive, subscription or conversion rights. We may
issue additional shares of authorized common stock as it is authorized by our
board of directors from time to time, without stockholder approval.

PREFERRED STOCK

Our board of directors is authorized to provide for the issuance of shares of
preferred stock in multiple series without the approval of stockholders. With
respect to each series of preferred stock, the board of directors has the
authority to fix the following terms:

o    the designation of the series;

o    the number of shares within the series;

o    whether  dividends are cumulative and, if cumulative,  the dates from which
     dividends are cumulative;

o    the rate of any dividends, any conditions upon which dividends are payable,
     and the dates of payment of dividends;

o    whether the shares are  redeemable,  the redemption  price and the terms of
     redemption;

o    the amount payable for each share if we dissolve or liquidate;

o    whether the shares are  convertible or  exchangeable,  the price or rate of
     conversion or exchange, and the applicable terms and conditions;

o    any  restrictions  on  issuance  of shares in the same  series or any other
     series;

o    voting rights applicable to the series of preferred stock; and

o    any other rights, preferences or limitations of such series.

Rights with respect to shares of preferred stock will be subordinate to the
rights of our general creditors. Shares of preferred stock that we issue will be
fully paid and non-assessable, and will not be entitled to preemptive rights
unless specified otherwise.

Series A Convertible Preferred Stock

Simultaneously with the closing of the Merger transaction, we issued 958,333
shares of Series A Convertible Preferred Stock to four institutional investors
at a price of $1.20 per share, in a transaction exempt from the registration
requirements of the federal securities laws. The following is a description of
the terms and conditions of the Series A Preferred Stock.

The Series A Preferred Stock will rank senior to the common stock and may rank
junior to equity securities issued in the future.

Holders of Series A Preferred Stock will receive an annual cumulative dividend
of $0.12 per share payable semi-annually on April 30 and October 31 of each year
beginning April 30, 2005. Holders of Series A Preferred Stock who refer
customers to us or are themselves customers of ours, will receive a dividend
equal to the greater of the cumulative dividend of $0.12 per share or a
non-cumulative dividend equal to a minimum of 10% and a maximum of 25% of the
net income from fees received by us from each referred customer and from the
holder itself for (i) access to our internet-based financial services platform
and (ii) execution of customer securities transactions. Cumulative dividends not
declared at December 31, 2005, are limited to the $0.12 per share required under
the terms of the stock and total $115,000.

                                        6
<PAGE>
Upon an acquisition or liquidation of us, each holder of Series A Preferred
Stock will receive an amount equal to the purchase price for each share held
plus any cumulative dividends and any declared but unpaid noncumulative
dividends in preference to any distribution to the holders of common stock.
After the payment of the preference amount to the holders of Series A Preferred
Stock, the remaining assets will be distributed ratably to the holders of common
and Series A Preferred Stock on an "as converted" basis. An "acquisition"
includes a Merger, consolidation, or sale of all or substantially all of our
assets in any transaction or series of related transactions in which our
stockholders do not own 50% of the voting power of the surviving corporation.

Each share of Series A Preferred Stock may be converted at any time at the
option of the holder into four shares of common stock.

The conversion ratio of the Series A Preferred Stock will be subject to a
weighted average adjustment if we issue additional equity securities at a price
less than the then-applicable conversion price. No adjustment will be made for
shares issuable upon the exercise of currently outstanding securities (including
options and warrants), the issuance or exercise of options for common stock that
may be issued pursuant to the Stock Incentive Plan, or shares issued to banks or
other institutional lenders. The conversion price initially will equal the
purchase price. The conversion price will also be subject to proportional
adjustment for stock splits, stock dividends, recapitalizations and the like.

The holders of Series A Preferred Stock and common stock will vote together and
not as a separate class, except as required by law. The Series A Preferred Stock
will have such number of votes as is equal to the number of shares of common
stock then issuable upon conversion.

We also entered into a Registration Rights Agreement with the purchasers of the
Series A Preferred Stock, pursuant to which we agreed to file a registration
statement with the SEC under the Securities Act, and to cause the registration
statement to be effective within 150 days following the closing of the offering,
to register for resale the shares of our common stock into which the Series A
Preferred Stock is convertible. We are obligated to maintain the effectiveness
of the registration statement for a period of 120 days. If the registration
statement is not timely filed or declared effective within the 150 day period,
we will be obligated to make payments, as liquidated damages, to the purchasers
in the aggregate amount of 1% of the gross proceeds of the offering for every
month, pro rata, that we are in default of such obligations.

Our ability to issue preferred stock, or rights to purchase such shares, could
discourage an unsolicited acquisition proposal. For example, we could impede a
business combination by issuing a series of preferred stock containing class
voting rights that would enable the holders of the preferred stock to block a
business combination transaction. Alternatively, we could facilitate a business
combination transaction by issuing a series of preferred stock having sufficient
voting rights to provide a required percentage vote of the stockholders.
Additionally, under certain circumstances, the issuance of preferred stock could
adversely affect the voting power of the holders of common stock. Although the
board of directors is required to make any determination to issue any preferred
stock based on its judgment as to the best interests of the stockholders, the
board of directors could act in a manner that would discourage an acquisition
attempt or other transaction that some, or a majority, of our stockholders might
believe to be in their best interests or in which stockholders might receive a
premium for their stock over prevailing market prices of such stock. The board
of directors will not seek stockholder approval prior to any issuance of
currently authorized stock, unless otherwise required by law or applicable stock
exchange requirements.

EQUITY LINE OF CREDIT FINANCING

On November 15, 2004, we entered into a Standby Equity Distribution Agreement
with Cornell Capital. Pursuant to the Standby Equity Distribution Agreement, we
may, at our discretion, periodically sell to Cornell Capital shares of our
common stock, par value $.01 per share, for a total purchase price of up to
$10.0 million. For each share of common stock purchased under the Standby Equity
Distribution Agreement, Cornell Capital will pay us 98% of, or a 2% discount to,
the lowest volume weighted average price of the common stock on the
Over-the-Counter Bulletin Board or other principal market on which the common
stock is traded for the five days immediately following the notice date. Cornell
Capital will retain 5% of each advance under the Standby Equity Distribution
Agreement. Cornell Capital's obligation to purchase shares of common stock under
the Standby Equity Distribution Agreement is subject to certain conditions,
including our obtaining an effective registration statement for the resale of
the common stock sold under the Standby Equity Distribution Agreement. Each
advance under the Standby Equity Distribution Agreement cannot exceed $250,000
and the maximum amount of advances during any 30-day period cannot exceed
$1,000,000. In no event can the number of shares issued to Cornell Capital
pursuant to an advance cause Cornell Capital to own more than 9.9% of the shares
of common stock outstanding.

                                        7
<PAGE>

Upon execution of the Standby Equity Distribution Agreement, we issued to
Cornell Capital 666,667 shares of our common stock and paid a structuring fee of
$15,000. We also entered into a Registration Rights Agreement with Cornell
Capital, pursuant to which we agreed to prepare and file with the SEC a
registration statement under the Securities Act, to register for resale the
shares of our common stock subject to the Standby Equity Distribution Agreement,
and to cause the registration statement to be effective prior to the first sale
of common stock to Cornell Capital under the Standby Equity Distribution
Agreement.

We also entered into a Placement Agent Agreement with Newbridge Securities
Corporation, a registered broker-dealer, pursuant to which we engaged Newbridge
Securities Corporation to act as our exclusive placement agent in connection
with the Standby Equity Distribution Agreement, and paid a fee of $10,000 to
Newbridge Securities Corporation.

Our executive officers and directors at the effective time of the Merger also
entered into lock-up agreements pursuant to which they have agreed not to offer,
sell or otherwise dispose of all or a portion of the shares of our common stock
owned by them, until the expiration of the Standby Equity Distribution
Agreement, except for sales pursuant to SEC Rule 144.

On April 8, 2005, we reached an agreement with Cornell Capital to terminate the
Standby Equity Distribution Agreement.

8% SECURED CONVERTIBLE NOTES

On November 15, 2004, pursuant to a Securities Purchase Agreement, we issued and
sold to DCOFI Master LDC, Bushido Capital Master Fund, L.P. and Gamma
Opportunity Capital Partners, LP an aggregate of $1,000,000 in principal amount
of our 8% Secured Convertible Notes due November 1, 2006. The Notes bear
interest at the rate of 8% per annum, payable quarterly, commencing February 1,
2005. We may elect to pay interest in shares of our common stock, and have the
right to prepay all or a portion of the Notes for an amount equal to 125% of the
principal amount to be repaid, plus all accrued and unpaid interest; provided,
however, that we can only make such a prepayment if there is an effective
registration statement for the resale of the common stock into which the Notes
are convertible, the closing price of the common stock is at least 115% of the
conversion price, and other conditions are satisfied.

The Notes mature on November 1, 2006. The Notes are convertible at any time, at
the option of the Note Purchasers, into our common stock at an initial
conversion price (subject to adjustment) of $0.60 per share; however, the
conversion price will be reduced to $0.30 per share in the event that either (i)
our annualized pre-tax net income for the three-month period ending December 31,
2005 is less than $2,000,000 or (ii) the volume weighted average trading price
for our common stock for the month of December 2005 is less than $1.00 per
share. Notwithstanding the foregoing, no Note Purchaser has the right to convert
any portion of the Notes to the extent that, after giving effect to such
conversion, such Note Purchaser would beneficially own in excess of 4.99% of our
common stock outstanding. Commencing on the first anniversary of the date of
purchase, we are obligated to redeem approximately 1/12 of the aggregate
principal amount of the Notes, plus accrued and unpaid interest. We may elect to
redeem any such monthly redemption amount in shares of common stock. After one
year, if the volume weighted average trading price of our common stock for any
30 consecutive days exceeds $1.80 and the average dollar trading volume for such
period exceeds $200,000, we may at our option cause the Note Purchasers to
convert all or a portion of the principal amount of the Notes into common stock.

Our obligations under the Notes are secured by a security interest in
substantially all of our assets and a guarantee by our subsidiaries.

                                        8
<PAGE>

The Notes are subject to certain covenants which, among other things, restrict
or limit our ability to incur any additional indebtedness, amend our certificate
of incorporation or bylaws, repurchase any of our equity securities or enter
into any agreement with respect to any of the foregoing. Events of default under
the Notes include (i) failure to pay principal or interest when due, (ii)
failure to observe or perform any covenant, (iii) the breach of any
representation or warranty under the Securities Purchase Agreement, (iv)
institution of bankruptcy proceedings, (v) certain change of control
transactions, or (vi) the registration statement described below shall not have
been declared effective within 150 days after the date of the issuance of the
Notes. Upon the occurrence of an event of default, the full principal balance of
the Notes and all interest and other amounts owed thereunder, will become due
and payable at the election of the Note Purchasers.

The net proceeds from the issuance and sale of the Notes were approximately
$925,000 (after payment of fees and expenses to the Note Purchasers). We
utilized the proceeds to repay certain bank debt, pay certain expenses and other
obligations in connection with the Merger, and for working capital.

In connection with the issuance of the Notes, we also entered into a
Registration Rights Agreement with the Note Purchasers, pursuant to which we
have agreed to file with the SEC within 45 days after the date of the initial
issuance of the Notes, and to use our reasonable best efforts to cause to become
effective within 150 days after the date of the initial issuance of the Notes, a
registration statement with respect to the resale of the shares of common stock
issuable upon conversion of the Notes. If we fail to comply with certain of our
obligations under the Registration Rights Agreement, we will be obligated to
make payments, as liquidated damages, to the Note Purchasers in the aggregate
amount of 1% of the amount of the Notes for every month, pro rata, that we are
in default of such obligations.

At the time of the issuance of the Notes, and in connection therewith, we also
issued to the Note Purchasers warrants to purchase an aggregate of 3,000,000
shares of our common stock. The warrants may be exercised, in whole or in part,
at any time within five years from the date of the issuance of the Notes, for an
exercise price of $.01 per share.

Warrants

Incident to the Merger, we assumed, on a one-share-for-one-share basis, the
obligations of Knobias to issue 891,218 shares of common stock in respect of
assumed Knobias warrants, at an exercise price of $3.25 per share. The
assumption by us of Knobias' obligations under the foregoing securities
previously issued by Knobias was required by the terms of the Merger Agreement
and effective as of the effective date of the Merger, which was November 15,
2004.

To the extent the assumption by us of Knobias' obligations with respect to such
outstanding securities of Knobias constitutes an offer and sale of securities,
such securities were offered and sold in reliance on exemptions from
registration provided by Regulation D and Section 4(2) of the Securities Act.
The warrants may be exercised by the holders thereof in whole or in part at any
time, and from time to time, during the eighteen (18) calendar month period
beginning on the corresponding date which is six months immediately following
the first date on which any shares of our common stock have been registered
pursuant to an effective registration statement under the Securities Act, and
ending on the second anniversary of such effective date. The warrants are
exercisable at a price of $3.25 per share, subject to certain adjustments, as
described below.

In connection with the bridge loan transactions in September and November 2004
between Knobias and Bridges and Pipes, LLC, an affiliate of Duncan Capital,
Knobias issued to Bridges and Pipes, LLC a warrant to purchase 25,000 shares of
common stock at an exercise price of $.60 per share. The warrant was canceled at
the effective time of the Merger and was replaced by a warrant issued by us for
the same number of shares of our common stock at the same exercise price. In
addition, in connection with the offer and sale of the Series A Preferred Stock,
we issued a warrant to Duncan Capital, LLC to purchase 178,750 shares of common
stock at an exercise price of $.60 per share. The warrants are exercisable, in
whole or in part, at any time during the five years commencing on the date of
the Merger. These warrants were offered and sold in reliance on an exemption
from registration provided by Regulation D and Section 4(2) of the Securities
Act.

We also issued warrants to the Note Purchasers in connection with the issuance
of the Notes. Such warrants entitle the holders to purchase up to 3,000,000
shares of our common stock for $.01 per share at any time during the five years
commencing on the date of the issuance of the Notes. Each warrant provides that
the holder will not have any right to exercise the warrant to the extent that,
after giving effect to the exercise, the holder and its affiliates would
beneficially own in excess of 4.99% of the outstanding shares of our common
stock. These warrants were offered and sold in reliance on an exemption from
registration provided by Regulation D and Section 4(2) of the Securities Act.

                                        9
<PAGE>

The shares of our common stock underlying the warrants described above, when
issued upon exercise and payment of the purchase price, will be fully paid and
nonassessable.

The number and kind of securities or other property for which all of the
warrants are exercisable and the exercise price are subject to adjustment upon
the occurrence of certain events, including mergers, reorganizations, stock
dividends, stock splits, and recapitalizations. Holders of warrants have no
voting, dividend, or other rights as stockholders with respect to the shares
underlying the warrants, unless and until the warrants are exercised.

Penny Stock Regulation.

Shares of our common stock are subject to rules adopted by the Securities and
Exchange Commission that regulate broker-dealer practices in connection with
transactions in "penny stocks." Penny stocks are generally equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in those
securities is provided by the exchange or system). The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from those rules, to deliver a standardized risk disclosure prepared by the
Securities and Exchange Commission, which contains the following:

o    A description of the nature and level of risk in the market for penny
     stocks in both public offerings and secondary trading;
o    A description of the broker's or dealer's duties to the customer and of the
     rights and remedies available to the customer with respect to violation to
     such duties or other requirements of securities' laws;
o    A brief, clear, narrative description of a dealer market, including "bid"
     and "ask" prices for penny stocks and the significance of the spread
     between the "bid" and "ask" price;
o    A toll-free telephone number for inquiries on disciplinary actions;
o    Definitions of significant terms in the disclosure document or in the
     conduct of trading in penny stocks; and
o    Such other information and in such form (including language, type, size and
     format), as the Securities and Exchange Commission shall require by rule or
     regulation.

Prior to effecting any transaction in a penny stock, the broker-dealer also must
provide the customer the following:

o    The bid and offer quotations for the penny stock;
o    The  compensation  of  the   broker-dealer   and  its  salesperson  in  the
     transaction;
o    The number of shares to which such bid and ask prices apply, or other
     comparable information relating to the depth and liquidity of the market
     for such stock; and
o    Monthly account statements showing the market value of each penny stock
     held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement.

These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. Holders of shares of our common stock may have difficulty selling
those shares because our common stock will probably be subject to the penny
stock rules for an indeterminate period of time.

Recent Sales of Unregistered Securities

On November 15, 2004, we consummated a "reverse merger" transaction (the
"Merger"), in which we caused KHI Acquisition, Inc., a Delaware corporation and
our recently organized, wholly owned subsidiary, to be merged with and into
Knobias Holdings, Inc., a Delaware corporation ("Knobias"). As a result of the
Merger, Knobias became our wholly owned subsidiary, and we issued 37,968,300
shares of our common stock to the former security holders of Knobias,
representing approximately 75% of our outstanding common stock following the
Merger, in exchange for 100% of the outstanding capital stock of Knobias and the
conversion of certain outstanding debentures of Knobias. The consideration
issued in the Merger was determined as a result of arm's-length negotiation
between the parties.

                                       10
<PAGE>

Concurrently with the closing of the Merger, we also issued 9,531,700 shares of
our common stock to Duncan Capital Group, LLC ("Duncan Capital") in exchange for
its 50% membership interest in Kollage, LLC, a joint venture previously owned by
Duncan Capital and Knobias, and the forgiveness of indebtedness in the aggregate
amount of approximately $400,000 owed to Duncan Capital by Kollage.

Prior to the Merger, our stockholders approved the Knobias, Inc. 2004 Stock
Incentive Plan and reserved 5,000,000 shares of our common stock for stock
options issued and issuable under that plan. At the time of the Merger, Knobias
had outstanding stock options to purchase 158,500 shares of Knobias common
stock, which outstanding options, pursuant to the Merger Agreement, were
converted into options to purchase shares of our common stock. In addition, all
outstanding warrants to purchase shares of Knobias common stock, issued by
Knobias prior to the Merger, were amended to become warrants to purchase our
common stock on the same terms and conditions as those warrants issued by
Knobias. At the closing of the Merger, all of the outstanding Knobias warrants
were exercisable for an aggregate of 891,218 shares of Knobias common stock, and
were amended to become warrants to purchase a like number of shares of our
common stock.

Simultaneously with the closing of the Merger transaction, we issued 958,333
shares of Series A Preferred Stock to four institutional investors at a price of
$1.20 per share, in a transaction exempt from the registration requirements of
the federal securities laws. The gross proceeds from such transaction were
$1,150,000. The shares were issued in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act and Rule 506 of Regulation D
promulgated thereunder. The investors were all "accredited investors" as that
term is defined under Regulation D. The investors were all provided a
confidential private offering memorandum and executed subscription agreements in
which they made representations regarding their sophistication and qualification
as accredited investors. The proceeds of the private placement were used to pay
certain expenses in connection with the Merger, repay certain indebtedness, and
for other general corporate purposes.

As described above, simultaneously with the closing of the Merger transaction,
we executed the Standby Equity Distribution Agreement with Cornell Capital.
Pursuant to the Standby Equity Distribution Agreement, we may, at our
discretion, periodically sell to Cornell Capital shares of our common stock, par
value $.01 per share, for a total purchase price of up to $10 million. Upon
execution of the Standby Equity Distribution Agreement, Cornell Capital received
666,667 shares of common stock and a structuring fee of $15,000. Such shares
were issued, and the future issuance of shares under the Standby Equity
Distribution Agreement will be, in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act and Rule 506 of Regulation D
promulgated thereunder, based upon the representation of Cornell Capital that it
is an "accredited investor" as that term is defined under Regulation D. We also
entered into a Placement Agent Agreement with Newbridge Securities Corporation,
a registered broker-dealer, pursuant to which we engaged Newbridge Securities
Corporation to act as our exclusive placement agent in connection with the
Standby Equity Distribution Agreement, and paid a fee of $10,000 to Newbridge
Securities Corporation.

As described above, on November 15, 2004, pursuant to a Securities Purchase
Agreement, we issued and sold to the Note Purchasers an aggregate of $1,000,000
in principal amount of our 8% Secured Convertible Notes due November 1, 2006
(the "Notes") and issued warrants to the Note Purchasers to purchase an
aggregate of 3,000,000 shares of common stock at an exercise price of $.01 per
share. Such securities were issued in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act and Rule 506 of Regulation D
promulgated thereunder, based upon the representation of the Note Purchasers
that each is an "accredited investor" as that term is defined under Regulation
D. The net proceeds from the issuance and sale of the Notes were approximately
$925,000 (after payment of fees and expenses to the Note Purchasers). We
utilized the proceeds to repay certain bank debt, pay certain expenses and other
obligations in connection with the Merger, and for working capital.

In connection with the private placement of Series A Preferred Stock and the
issuance of the Notes, we paid a sales commission in the amount of $136,500 to
Duncan Capital, LLC, a registered broker-dealer, of which amount $50,000 was
paid through the issuance of Series A Preferred Stock. In addition, we issued a
warrant to Duncan Capital, LLC, to purchase 178,750 shares of common stock at an
exercise price of $.60 per share.

All of the above offerings and sales were deemed to be exempt under rule 506 of
Regulation D and Section 4(2) of the Securities Act of 1933, as amended.

                                       11
<PAGE>

No advertising or general solicitation was employed in offering the securities.
The offerings and sales were made to a limited number of persons, all of whom
were accredited investors, business associates of ours or our executive
officers, and transfer was restricted by us in accordance with the requirements
of the Securities Act of 1933. In addition to representations by the
above-referenced persons, we have made independent determinations that all of
the above-referenced persons were accredited or sophisticated investors, and
that they were capable of analyzing the merits and risks of their investment,
and that they understood the speculative nature of their investment.
Furthermore, all of the above-referenced persons were provided with access to
our Securities and Exchange Commission filings.

Except as expressly set forth above, the individuals and entities to whom we
issued securities as indicated in this section of the registration statement are
unaffiliated with us.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT
OF OPERATIONS.

This report contains forward-looking statements. Actual results and events could
differ materially from those projected, anticipated, or implicit, in the
forward-looking statements as a result of the risk factors set forth below and
elsewhere in this report.

With the exception of historical matters, the matters discussed herein are
forward-looking statements that involve risks and uncertainties. Forward-looking
statements include, but are not limited to, statements concerning anticipated
trends in revenues and net income, projections concerning operations and
available cash flow. Our actual results could differ materially from the results
discussed in such forward-looking statements. The following discussion of our
financial condition and results of operations should be read in conjunction with
our financial statements and the related notes thereto appearing elsewhere
herein.

GENERAL

We are a financial information services provider that has developed financial
databases, information systems, tools and products following over 14,000 U.S.
equities. Primarily through our wholly owned subsidiary, Knobias.com, LLC, we
market our products to individual investors, day-traders, financial oriented
websites, public issuers, brokers, professional traders and institutional
investors.

We offer a range of financial information products from multiple Knobias and
third party databases via a single, integrated internet based platform. Knobias
is uniquely capable of combining third party databases, news feeds and other
financial content with internally generated content and analysis to create
value-added, cost effective information solutions for all market participants.

Our company originally was organized as Molecular Energy Corporation on January
31, 1968 under the laws of the State of Delaware, to engage in the business of
research, development and manufacture of custom-built batteries. Until the
Merger we had no assets and have had no revenues for several years, and we were
actively seeking potential operating businesses and business opportunities with
the intent to acquire or merge with such businesses. Knobias, formerly known as
pennyPI.com, Inc., was originally organized as a Mississippi limited liability
company in September 1998, and was reorganized as a Delaware corporation in
March 2000. Knobias.com, LLC is a wholly owned subsidiary of Knobias and
continues in existence for the further development and operation of its Internet
web site relating to the provision of information regarding publicly traded
companies.

                                       12
<PAGE>
RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004.

The following table shows the consolidated statements of revenues for the year
ended December 31, 2005 and 2004:


                           DECEMBER 31,
                   ----------------------------
                       2005            2004          $ CHANGE         % CHANGE
                   ------------    ------------    ------------      -----------
Revenue
 Subscription
  revenue         $  1,976,680    $  1,819,371    $    157,309               9%
 Information
  provisioning         148,442         153,017          (4,575)            - 3%
                   ------------    ------------
   Total revenue     2,125,122       1,972,388         152,734               8%
Expenses
 Product related
  costs              2,125,030       2,123,683           1,347               -%
 Selling, general
  and administrative
  expenses           1,867,465       1,571,412         296,053              19%
 Depreciation and
  amortization          72,039          87,764         (15,725)            -18%
                   ------------    ------------
   Total expenses    4,064,534       3,782,859         281,675               7%
                   ------------    ------------

   Operating loss   (1,939,412)     (1,810,471)       (128,941)             -7%
                   ------------    ------------

 Interest
  expense, net        (703,759)       (329,923)       (373,836)           -113%

 Merger related
  costs                     --        (670,733)        670,733             100%
                   ------------    ------------
    Net loss       $ (2,643,171)   $ (2,811,127)   $   167,956               6%
                   ============    ============


Subscription revenues have increased $157,309 or 8%. The increase is
attributable to increases in users of our new pipeTrac service which increased
from no customers to forty subscriptions in December 2005. This equates to a
revenues of $272,000 for the year ended December 31, 2005 which is an increase
in revenue of $13% of total net revenue. The increase caused by the introduction
of pipeTrac is offset by decreases in our KnobiasMax product of 79 users for the
period from December 2004 through December 2005 and for increases to bad debt
expense of $55,000. The increase in our bad debt expense is due to certain of
our customers going out of business during the year ended December 31, 2005, and
the subsequent write-off or write-down of the amount due from those customers.
These business closures are also partially responsible for the decreases in
KnobiasMax seats.

Product development content costs include employee costs for research and
content, as well as technical personnel who are responsible for the continued
performance of the Company's website. It also includes costs paid to third
parties for data services, user licenses, and exchange fees. These costs
remained consistent between the years ended December 31, 2005 and 2004.

Selling, general and administrative costs increased primarily as a result of
increased administrative and sales compensation costs (including sales
commissions). Increases in commissions approximated $50,000, while increases in
salaries and benefits were $99,000. The remaining increases are due to increases
in investor relations costs due to becoming a public company at the end of 2004
of approximately $43,000, as well as consulting fees of $18,000 and increases in
insurance and telecommunications and rent expense.

Depreciation and amortization expense decreased due to certain short-lived
assets purchased in prior years becoming fully depreciated during the period and
minimal fixed asset purchases in 2004 and 2005.

Interest expense for the year ended December 31, 2005, increased due to a
$452,000 increase in amortization of debt issuance costs over 2004. The debt to
which these costs related were only outstanding for 45 days in 2004. Interest
expense not related to debt issuance costs decreased for the same periods
because weighted average outstanding for most of 2004 ranged from 12% to 24%
while debt incurred after the merger bears interest at rates ranging from 8% to
12%.

                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2005, we had cash of $103,095 and had a working capital deficit
of $2,815,612. We do not have any contracts, plans or agreements in place for
any additional financing, except as discussed below. There can be no assurance
that financing will be available in amounts or on terms acceptable to us, if at
all. Our principal sources of liquidity have been cash provide by private
placement of equity and various debt financing (see below). Our principal uses
of cash have been for operations and to finance capital expenditures.

In the near term, we expect to provide for our liquidity needs through
operations, as well as through additional fund raising and potential
acquisitions. No firm details exist as to our future fund raising or the
potential of future acquisitions. Further capitalization is, however, necessary
for the expansion of our product lines and continuous upgrading of our product
offerings..

For the year ended December 31, 2005, net cash used by operations was
$1,480,000. The primary funding of these operations was $1,348,000 received from
the issuance of new debt. The net loss for the period of $2,643,000 was
decreased by non-cash expense items and by increases in our accounts payable and
accrued expenses. By comparison, for the year ended December 31, 2004, our net
cash used in operating activities was $1,841,000. This amount is comprised of a
net loss for the period of $2,811,000 reduced by non-cash expense items of
$829,000 but increased by growth of accounts payable and accrued expenses of
$111,000. Capital expenditures for the period were $88,000. Changes in capital
and debt resulting from the merger totaled $2,007,000.

The purchase of fixed assets during the years ended December 31, 2005, and 2004,
were $6,000 and $88,000, respectively.

The following is a description of certain transactions that were entered into
during 2004 and 2005 to help provide funds for ongoing operations:

o    We executed an Agreement and Plan of Reorganization with Consolidated
     Travel Systems, Inc. in which we consummated a reverse merger with that
     company.

o    On November 15, 2004, we accepted Subscription Agreements from four
     institutional investors, for gross proceeds of $1,150,000, and issued
     958,333 shares of our Series A Preferred Stock for $1.20 per share. The
     proceeds of the private placement were used to pay certain expenses in
     connection with the merger and for debt retirement and working capital.

o    On November  15,  2004,  pursuant to a Securities  Purchase  Agreement,  we
     issued and sold to DCOFI Master LDC,  Bushido Capital Master Fund, L.P. and
     Gamma  Opportunity  Capital  Partners,  LP an  aggregate of  $1,000,000  in
     principal amount of our 8% Secured  Convertible Notes due November 1, 2006.
     The Notes bear  interest  at the rate of 8% per annum,  payable  quarterly,
     commencing  February 1, 2005. The Notes are convertible at any time, at the
     option  of the  Note  Purchasers,  into  our  common  stock  at an  initial
     conversion price (subject to adjustment) of $0.60 per share;  however,  the
     conversion  price  will be  reduced  to $0.30 per  share in the event  that
     either (i) our  annualized  pre-tax net income for the  three-month  period
     ending  December  31,  2005 is less  than  $2,000,000  or (ii)  the  volume
     weighted  average  trading  price  for our  common  stock  for the month of
     December  2005 is less than  $1.00 per  share.  The net  proceeds  from the
     issuance and sale of the Notes were  approximately  $925,000 (after payment
     of fees and expenses to the Note  Purchasers).  We utilized the proceeds to
     repay  certain bank debt,  pay certain  expenses and other  obligations  in
     connection with the Merger, and for working capital.

o    On March 15, 2005,  we issued a Senior  Subordinated  Secured Note to DCOFI
     Master,  LDC for $550,000 to refinance  prior debt of $500,000 and to incur
     additional  debt to both pay  interest  accrued and prepay  interest in the
     near term  totaling  $50,000.  The notes bear interest at 12% with interest
     payable  monthly and mature  September  1, 2006.  In  connection  with this
     agreement,  we also  committed to issued 100,000 shares of our common stock
     and  issued a warrant to  purchase  323,530  shares of our common  stock at
     $0.85 per share to DCOFI Master,  LDC. In the event of prepayment,  we must
     pay 110% of the principal due, plus all accrued and unpaid interest.  If we
     do not repay these notes within two trading days of the maturity  date,  we
     are obligated to issue to the holders  100,000  shares of our common stock.
     DCOFI Master,  LDC holds a second priority lien on substantially all of our
     assets.  This lien is  junior to the lien  granted  to the  holders  of the
     Secured Convertible Notes issued November 15, 2004.

o    During April 2005, we borrowed $50,000 from one of our directors to finance
     ongoing  operations.  The note bears  interest  at 12% per  annum,  payable
     monthly,  and matures  October 7, 2005. In connection  with the issuance of
     this note,  the  Company  also  issued  10,000  warrants  to  purchase  the
     Company's common stock which are exercisable until five years from the date
     of issuance at $0.75 per share.  The debt issue  discount  attributable  to
     these  warrants  was  calculated  to be  approximately  $1,000 and has been
     recorded  as a  reduction  of the amount of the note and will be  amortized
     over the life of the loan.

                                       14
<PAGE>
o    On April 28, 2005, we entered into a Line of Credit agreement with a local
     bank for $300,000 bearing interest at prime plus two percent and maturing
     on April 27, 2006. We will make periodic draws under this agreement, as
     deemed necessary by management. The Line of Credit is guaranteed by certain
     of the Company's shareholders and board of directors.

o    On April 28, 2005, we obtained a loan for $75,000 at 8% interest due August
     22, 2005, or immediately upon a capital infusion of $1,500,000 or more.

o    Beginning in June 2005, we obtained advances on our next level of
     fund-raising from Bushido Capital Master Fund, L.P. which totaled $775,000
     at December 31, 2005. These advances were later reclassified as loans which
     are convertible into equity upon execution of our next level of
     fund-raising. These advances bear interest at 8% per annum.

Other than interest paid in connection with restructuring of debt and equity
during the merger in November 2004, we have paid a minimal amount of interest
during all periods reported. Although our new debt obligations require
significant interest payments, we have the option with our newly issued 8%
Secured Convertible Note for $1,000,000 to pay interest in kind by issuing
shares of our common stock. Also, we restructured our $500,000 Senior
Subordinated Secured Note to DCOFI Master LDC to increase the principal to
$550,000 using the additional $50,000 to pay all accrued interest and prepay
future interest. We believe that future increases in revenues and other debt and
equity cash inflows will enable us to be able to meet interest and debt
repayment obligations.

We believe that the above-described actions will provide us with the immediate
financial requirements to enable us to continue as a going concern. In the event
that we are unable to raise additional funds, we could be required to either
substantially reduce or terminate our operations.

We are not aware of any material trend, event or capital commitment which would
potentially adversely affect liquidity.

Contractual Obligations


                                                      Current
Contractual Obligations                Amount        Fiscal Year       1-3 Years
                                     ----------      ----------       ----------
Employment agreements                $  350,000      $  350,000       $       --
Short-term debt                       2,179,667       2,179,667               --
Long-term debt                               --              --               --
Operating leases                         63,000          63,000               --
                                     ----------      ----------       ----------
  Total contractual obligations      $2,592,667      $2,592,667       $       --
                                     ----------      ----------       ----------

There are no obligations past the year 2006.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Inflation

In the opinion of management, inflation has not had a material effect on the
operations of the Company.


RECENT ACCOUNTING PRONOUNCEMENTS

On December 16, 2004, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No. 123 (Revised 2004),
Share-Based Payment ("SFAS 123R"). SFAS 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The provisions of SFAS
123R were implemented beginning in the third quarter of 2005. Prior to that
time, we accounted for our share-based payment transactions under the provisions
of APB 25, which does not necessarily require the recognition of compensation
costs in the financial statements. The implementation of this statement had no
effect on our financial statements for the year ended December 31, 2005, as all
share-based payments were incurred prior to the implementation of the statement
July 1, 2005. We do not have a recurring pattern or plan for share-based
payments; therefore, we are unable to determine what impact the implementation
of SFAS 123R will have on our financial statements.

Other than SFAS 123R which is discussed above, there have been no new accounting
pronouncements issued or effective during 2005 that have had, or are expected to
have, a material impact on our consolidated financial statements.


CRITICAL ACCOUNTING ESTIMATES

Revenue recognition and accounts receivable

                                       15
<PAGE>

Subscription revenues are recognized over the period in which services are
provided. Information provisioning revenues are recognized as the services are
performed or when the goods are delivered. We recognize deferred revenue for
customers who are billed and pay on a quarterly, semi-annual or annual basis.
The amount received is amortized into income over the term of the pre-payment in
order to match the revenue with the proper period of service. Amounts deferred
as of the balance sheet date are shown in the liabilities section as Deferred
Revenue.

We record an estimate for our estimate of uncollectible accounts at the end of
each accounting period based upon a detailed analysis of the aging of accounts
receivable and specific customer analysis. Our policy is to block access to
services for users who become delinquent for a certain period of time on their
accounts. Because we adhere strictly to this policy, we have had a minimal
number of accounts which have become uncollectible once their service has become
established. We periodically write off accounts for which all collection efforts
have been exhausted against the allowance for doubtful accounts.

Depreciation and amortization

We provide for depreciation of furniture, equipment and software over periods of
five to seven years on the straight line basis. Initial website and database
development costs which we incurred in our application development phase were
capitalized and amortized over a three year period on the straight line basis.
These costs became fully amortized during the year ended December 31, 2003. We
expense post-implementation and maintenance costs in the period in which they
are incurred. No project costs have been capitalized since the initial
development of our website.

RISK FACTORS

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

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

Our common shares are considered speculative. Prospective investors should
consider carefully the risk factors set out below.

We Have a History Of Losses Which May Continue, Which May Negatively Impact Our
Ability to Achieve Our Business Objectives.

We incurred net losses of $2,643,171 for the year ended December 31, 2005, and
$2,811,127 for the year ended December 31, 2004. We cannot assure you that we
can achieve or sustain profitability on a quarterly or annual basis in the
future. Our operations are subject to the risks and competition inherent in the
establishment of a business enterprise. There can be no assurance that future
operations will be profitable. Revenues and profits, if any, will depend upon
various factors, including whether we will be able to continue expansion of our
revenue. We may not achieve our business objectives and the failure to achieve
such goals would have an adverse impact on us.

Our Independent Auditors Have Expressed Substantial Doubt About Our Ability to
Continue As a Going Concern, Which May Hinder Our Ability to Obtain Future
Financing.

In their report dated March 30, 2006, our independent auditors stated that our
financial statements for the year ended December 31, 2005, were prepared
assuming that we would continue as a going concern. Our ability to continue as a
going concern is an issue raised as a result of losses for the year ended
December 31, 2005 in the amount of $2,643,171 and our current liabilities
exceeding our current assets by $2,816,000 as of December 31, 2005. We continue
to experience net operating losses. Our ability to continue as a going concern
is subject to our ability to generate a profit and/or obtain necessary funding
from outside sources, including obtaining additional funding from the sale of
our securities, increasing sales or obtaining loans and grants from various
financial institutions where possible. Our continued net operating losses
increase the difficulty in meeting such goals and there can be no assurances
that such methods will prove successful.

If We Cannot Generate New Subscribers, We May Not Achieve Profitability.

To increase our revenues and achieve profitability, we must increase our
subscriber base significantly. We generate most of our leads for new subscribers
from our website and through our existing customer relationships. We need to
increase the number of these leads that are converted into subscriptions for our
products and services. In order to increase our revenue to the level required to
break even, we will have to increase users of our issuer services product by
approximately 140 users and our professional users by approximately 100 users
under the current anticipated product mix. While the mix of these users may
change, the need for significant increases in our customer base remains. If we
fail to generate new subscribers, we may not achieve profitability.

                                       16
<PAGE>

The Industry In Which We Operate Is Highly Competitive And Has Relatively Low
Barriers To Entry. Increased Competition Could Result In Margin Erosion, Which
Would Make Profitability Even More Difficult To Achieve And Sustain.

The market for financial information services is extremely competitive and the
barriers to entry are relatively low. Increased competition could result in
reduced operating margins, as well as a loss of market share and brand
recognition. We compete with many providers of business and financial
information including Bloomberg, Capital IQ, Dun & Bradstreet, Global Securities
Information, Reuters, Standard & Poor's, Thomson Financial, thestreet.com, Edgar
Online, 10-K Wizard, MSN and Yahoo! We also compete with large investment
banking, brokerage and investment advisory firms that provide financial
information services to their clients and others. Other competitors and
potential competitors include education and publishing companies as well as
e-commerce providers. Many of our existing and potential competitors have
greater financial resources, larger market share, broader and more varied
databases and libraries, technology and delivery systems that are more flexible
or cost-effective, stronger alliances and/or lower cost structures than we do,
which may enable them to establish a stronger competitive position than we have,
in part through greater marketing opportunities. If we fail to address
competitive developments quickly and effectively, we will not be able to grow.

Our Business Could Be Adversely Affected By Any Adverse Economic Developments In
The Financial Services Industry And/Or The Economy In General.

We depend on the continued demand for the distribution of business and financial
information. Therefore, our business is susceptible to downturns in the
financial services industry and the economy in general. Any significant downturn
in the market or in general economic conditions would likely hurt our business.

If We Fail To Keep Up With Changes Affecting The Markets That We Serve, We Will
Become Less Competitive, Adversely Affecting Our Financial Performance.

In order to remain competitive and serve our customers effectively, we must
respond on a timely and cost-efficient basis to changes in technology, industry
standards and procedures and customer preferences. We need to continuously
develop new products and services to address new developments. In some cases
these changes may be significant and the cost to comply with these changes may
be substantial. We cannot assure you that we will be able to adapt to any
changes in the future or that we will have the financial resources to keep up
with changes in the marketplace. Also, the cost of adapting our products and
services may have a material and adverse effect on our operating results.

Our Growth Strategy Assumes That We Will Make Targeted Strategic Acquisitions.
Acquisitions May Disrupt Our Business, Dilute Shareholder Value Or Distract
Management's Attention From Operations.

Unless we develop or acquire new content that we can market to our existing and
new clients, our rate of revenue growth will continue to be slow and achieving
profitability will be slow and difficult. We believe that the quickest and most
efficient way for us to acquire new content is through targeted strategic
acquisitions. If we fail to execute on this strategy, our revenues may not
increase and our ability to achieve significant profitability will be delayed.
Until now, our ability to acquire complimentary businesses has been hampered by
our limited capital resources and the lack of a public market for our stock.

An acquisition strategy is inherently risky. Some of the risks we may face in
connection with acquisitions include:

o identifying appropriate targets in an efficient and timely fashion; o
negotiating terms that we believe are reasonable; o Failing to accurately assess
the true cost of entering new markets or
     marketing new products;
o    integrating the operations, technologies, products, personnel and customers
     of the acquired enterprise;
o    maintaining our focus on our existing business;
o    losing key employees; and
o    reducing earnings because of disproportionately large depreciation and
     amortization deductions relating to the acquired assets.

We may not be able to identify any appropriate targets or acquire them on
reasonable terms. Even if we make strategic acquisitions, we may not be able to
integrate these businesses into our existing operations in a cost-effective and
efficient manner.

We May Encounter Risks Relating To Security Or Other System Disruptions And
Failures That Could Reduce The Attractiveness Of Our Website And That Could Harm
Our Business.

Although we have implemented in our products various security mechanisms, our
business is vulnerable to computer viruses, physical or electronic break-ins and
similar disruptions, which could lead to interruptions, delays or loss of data.
Additionally, our operations depend on our ability to protect systems against
damage from fire, earthquakes, power loss, telecommunications failure, and other
events beyond our control. Moreover, our website and business solutions have, in
the past, and may in the future, experience slower response times or other
problems for a variety of reasons, including hardware and communication line
capacity restraints, software failures or during significant increases in
traffic when there have been important business or financial news stories and
during the seasonal periods of peak SEC filing activity. These strains on our
system could cause customer dissatisfaction and could discourage visitors from
becoming paying subscribers. These types of occurrences could cause users to
perceive our website and technology solutions as not functioning properly and
cause them to use other methods or services of our competitors. Any disruption
resulting from these actions may harm our business and may be very expensive to
remedy, and could damage our reputation and discourage new and existing users
from using our products and services. Any disruptions could increase costs and
make profitability even more difficult to achieve.

                                       17
<PAGE>

We May Be Unable To Protect Our Intellectual Property Adequately Or Cost
Effectively, Which May Cause Us To Lose Market Share Or Reduce Our Prices.

Our success depends in part on our brand identity and our ability to protect and
preserve our proprietary rights. We cannot assure you that we will be able to
prevent third parties from using our intellectual property rights and technology
without our authorization. We do not own any patents on our technology. Rather,
to protect our intellectual property, we rely on trade secrets, common law
trademark rights and trademark registrations, as well as confidentiality and
work for hire, development, assignment and license agreements with our
employees, consultants, third party developers, licensees and customers.
However, these measures afford only limited protection and may be flawed or
inadequate. Also, enforcing our intellectual property rights could be costly and
time-consuming and could distract management's attention from operating business
matters.

Our Intellectual Property May Infringe On The Rights Of Others, Resulting In
Costly Litigation.

In recent years, there has been significant litigation in the United States
involving patents and other intellectual property rights. In particular, there
has been an increase in the filing of suits alleging infringement of
intellectual property rights, which pressure defendants into entering settlement
arrangements quickly to dispose of such suits, regardless of their merits. Other
companies or individuals may allege that we infringe on their intellectual
property rights. Litigation, particularly in the area of intellectual property
rights, is costly and the outcome is inherently uncertain. In the event of an
adverse result, we could be liable for substantial damages and we may be forced
to discontinue our use of the subject matter in question or obtain a license to
use those rights or develop non-infringing alternatives. Any of these results
would increase our cash expenditures, adversely affecting our financial
condition.

It May Be Difficult For A Third Party To Acquire Us, And This Could Depress Our
Stock Price.

Delaware corporate law and our Amended and Restated Certificate of Incorporation
and Amended and Restated Bylaws contain provisions that could delay, defer or
prevent a change in control of our company or our management. These provisions
could discourage proxy contests and make it more difficult for you and other
stockholders to elect directors and take other corporate actions. As a result,
these provisions could limit the price that investors are willing to pay in the
future for shares of common stock. For example:

o    Without prior stockholder approval, the board of directors has the
     authority to issue one or more classes of preferred stock with rights
     senior to those of common stock and to determine the rights, privileges and
     preferences of that preferred stock;
o    There is no cumulative voting in the election of directors, which would
     otherwise allow less than a majority of stockholders to elect director
     candidates;
o    Stockholders cannot call a special meeting of stockholders and cannot act
     by written consent; and
o    Our Bylaws establish advance notice requirements for submitting nominations
     for election to the board of directors and for proposing matters that can
     be acted upon by stockholders at a meeting.

Our principal stockholders, officers and directors own a controlling interest in
our voting stock and investors will not have any voice in our management.

Our officers and directors will beneficially own approximately 33% of our
outstanding common stock upon completion of this offering if all shares
registered are sold. As a result, these officers and directors, acting together,
will have the ability to control substantially all matters submitted to our
stockholders for approval, including:

o    election of our board of directors;
o    removal of any of our directors;
o amendment of our certificate of incorporation or bylaws; and o adoption of
measures that could delay or prevent a change in control or
     impede a merger, takeover, or other business combination involving us.

As a result of their ownership and positions, our directors and executive
officers collectively are able to influence all matters requiring stockholder
approval, including the election of directors and approval of significant
corporate transactions. In addition, sales of significant amounts of shares held
by our directors and executive officers, or the prospect of these sales, could
adversely affect the market price of our common stock. Management's stock
ownership may discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of us, which in turn could reduce our
stock price or prevent our stockholders from realizing a premium over our stock
price.

                                       18
<PAGE>

If We Fail to Remain Current on Our Reporting Requirements, We Could be Removed
From the OTC Bulletin Board Which Would Limit the Ability of Broker-Dealers to
Sell Our Securities and the Ability of Stockholders to Sell Their Securities in
the Secondary Market.

Companies trading on the OTC Bulletin Board, such as us, must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports under Section 13, in order to maintain price
quotation privileges on the OTC Bulletin Board. If we fail to remain current on
our reporting requirements, we could be removed from the OTC Bulletin Board. As
a result, the market liquidity for our securities could be severely adversely
affected by limiting the ability of broker-dealers to sell our securities and
the ability of stockholders to sell their securities in the secondary market.

Our Common Stock is Subject to the "Penny Stock" Rules of the SEC and the
Trading Market in Our Securities is Limited, Which Makes Transactions in Our
Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the definition of a "penny stock," for the purposes relevant to us, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require:

o    that a broker or dealer approve a person's account for transactions in
     penny stocks; and
o    the broker or dealer receive from the investor a written agreement to the
     transaction, setting forth the identity and quantity of the penny stock to
     be purchased.

In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:

o    obtain financial  information and investment  experience  objectives of the
     person; and
o    make a reasonable determination that the transactions in penny stocks are
     suitable for that person and the person has sufficient knowledge and
     experience in financial matters to be capable of evaluating the risks of
     transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:

o    sets forth the basis on which the broker or dealer made the suitability
     determination; and
o    that the broker or dealer received a signed, written agreement from the
     investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities
subject to the "penny stock" rules. This may make it more difficult for
investors to dispose of our common stock and cause a decline in the market value
of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.

We May Not Be Able To Obtain, On A Timely Basis, The Effectiveness Of A
Registration Statement Covering The Resale Of Outstanding Shares Or Shares To Be
Purchased Upon The Exercise Of Outstanding Warrants Or The Conversion Of
Convertible Securities.

We are obligated to file with the SEC one or more registration statements
covering the resale of (i) the shares of common stock to be issued upon
conversion of our Series A Preferred Stock, (ii) the shares of common stock
issuable on the conversion of the Notes and (iii) the shares of common stock
issuable upon the exercise of the warrants issued to the Note Purchasers. Under
the terms of the various registration rights agreements executed by us in
connection with these financing agreements, if we fail to timely file such
registration statements or are unable to cause such registration statements to
become effective on a timely basis, we are obligated to make certain payments as
liquidated damages to the holders of such securities. We are currently in
default for a failure to have the registration statement declared effective and
are paying liquidated damages. There can be no assurance that the registration
statements will be declared effective by the SEC.

If We Are Required For Any Reason To Repay Our Outstanding Secured Convertible
Notes, We Would Be Required To Deplete Our Working Capital, If Available, Or
Raise Additional Funds. Our Failure To Repay The Secured Convertible Notes, If
Required, Could Result In Legal Action Against Us, Which Could Require The Sale
Of Substantial Assets.

In November 2004, we entered into a Securities Purchase Agreement for the sale
of an aggregate of $1,000,000 principal amount of secured convertible notes. The
secured convertible notes are due and payable, with 8% interest, two years from
the date of issuance, unless sooner converted into shares of our common stock.
In addition, any event of default such as our failure to repay the principal or
interest when due, our failure to issue shares of common stock upon conversion
by the holder, our failure to timely file a registration statement or have such
registration statement declared effective, breach of any covenant,
representation or warranty in the Securities Purchase Agreement or related
convertible note, the commencement of a bankruptcy, insolvency, reorganization
or liquidation proceeding against us, we are a party to any change in control
transaction or fundamental transaction resulting in our disposing of at least
33% of our assets in one or more transactions and the delisting of our common
stock could require the early repayment of the secured convertible notes,
including a default interest rate of 18% on the outstanding principal balance of
the notes if the default is not cured within the specified grace period. We
anticipate that the full amount of the secured convertible notes will be
converted into shares of our common stock, in accordance with the terms of the
secured convertible notes. If we were required to repay the secured convertible
notes, we would be required to use our limited working capital and raise
additional funds. If we were unable to repay the notes when required, the note
holders could commence legal action against us and foreclose on all of our
assets to recover the amounts due. Any such action would require us to curtail
or cease operations.

                                       19
<PAGE>

If An Event Of Default Occurs Under The Securities Purchase Agreement, Secured
Convertible Notes, Warrants Or Security Agreement, The Investors Could Take
Possession Of All Our Goods, Inventory, Contractual Rights And General
Intangibles, Receivables, Documents, Instruments, Chattel Paper, Intellectual
Property And Equity Securities Of Our Subsidiaries.

In connection with the Securities Purchase Agreement we entered into in November
2004, we executed a Security Agreement in favor of the investors granting them a
first priority security interest in all of our goods, inventory, contractual
rights and general intangibles, receivables, documents, instruments, chattel
paper, intellectual property and equity securities in our subsidiaries. The
Security Agreement states that if an event of default occurs under the
Securities Purchase Agreement, Secured Convertible Notes, Warrants or Security
Agreement, the Investors have the right to take possession of the collateral, to
operate our business using the collateral, and have the right to assign, sell,
lease or otherwise dispose of and deliver all or any part of the collateral, at
public or private sale or otherwise to satisfy our obligations under these
agreements.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to
our business, but we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our Common Stock.

                                       20
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

Included at end of annual report.


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

On January 20, 2005, Knobias, Inc. (the "Registrant") dismissed Horne LLP
("Horne") as the Registrant's independent registered public accounting firm. On
January 24, 2005, the Registrant engaged Russell Bedford Stefanou Mirchandani
LLP ("RBSM") as its independent registered public accounting firm. The action to
engage Russell Bedford Stefanou Mirchandani LLP was taken upon the majority
approval of the Audit Committee of the Registrant.

During the two fiscal years ended December 31, 2005 and 2004, and through March
20, 2005, (i) there were no disagreements between the Registrant and RBSM or
Horne on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure which, if not resolved to the
satisfaction of RBSM or Horne would have caused the firms to make reference to
the matter in its reports on the Registrant's financial statements, and (ii)
RBSM's reports on the Registrant's financial statements did not contain an
adverse opinion or disclaimer of opinion, or was modified as to uncertainty,
audit scope or accounting principles. During the two fiscal years ended December
31, 2005 and 2004, and through January 20, 2005, there were no reportable events
as the term described in Item 304(a)(1)(iv) of Regulation S-B.

During the two fiscal years ended December 31, 2005 and 2004, and through
January 24, 2005, the Registrant has not consulted with RBSM regarding either:

1.   The application of accounting principles to any specific transaction,
     either completed or proposed, or the type of audit opinion that might be
     rendered on the Registrant's financial statements, and neither a written
     report was provided to the Registrant nor oral advice was provided that
     RBSM concluded was an important factor considered by the Registrant in
     reaching a decision as to the accounting, auditing or financial reporting
     issue; or

2.   Any matter that was either subject of disagreement or event, as defined in
     Item 304(a)(1)(iv)(A) of Regulation S-B and the related instruction to Item
     304 of Regulation S-B, or a reportable event, as that term is explained in
     Item 304(a)(1)(iv)(A) of Regulation S-B.

ITEM 8A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: As of December 31, 2005, the
Company's management carried out an evaluation, under the supervision of the
Company's Chief Executive Officer and the Chief Financial Officer of the
effectiveness of the design and operation of the Company's system of disclosure
controls and procedures pursuant to the Securities and Exchange Act, Rule
13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective, as of the date of their
evaluation, for the purposes of recording, processing, summarizing and timely
reporting material information required to be disclosed in reports filed by the
Company under the Securities Exchange Act of 1934.

Changes in internal controls: There were no changes in internal controls over
financial reporting, known to the Chief Executive Officer or Chief Financial
Officer that occurred during the period covered by this report that has
materially affected, or is likely to materially effect, the Company's internal
control over financial reporting.


ITEM 8B. OTHER INFORMATION

None.

                                       21
<PAGE>

PART III

ITEM 9 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Executive Officers

Set forth below are the directors and executive officers of the Company, their
ages and positions held with the Company, as follows


    NAME                       AGE      POSITION
    ------------------         ---      -------------------------------------
    E. Key Ramsey              45       President, Chief Executive Officer,
                                        Chairman of the Board of Directors
                                        and Director

    Gregory E. Ballard         39       Vice President, Chief Operating
    Officer and Director

    Susan R. Walker            37       Chief Financial Officer

    Robert L. Atkins           45       Secretary and Director

    Timothy J. Aylor           40       Director

    Danny M. Dunnaway          56       Director

    Joseph L. Stephens         47       Director




Our directors hold office until the next annual meeting of our shareholders or
until their successors are duly elected and qualified. Our executive officers
serve at the pleasure of the Board of Directors. Set forth below is a summary
description of the principal occupation and business experience of each of our
directors and executive officers for at least the last five years.

E. Key Ramsey. Mr. Ramsey was a self-employed residential and commercial real
estate developer for over 17 years, prior to creating the Knobias business
concept with co-founder Greg Ballard, in November 1999. He has served as
President and a director of Knobias since March 2000.

Gregory E. Ballard. Mr. Ballard was self-employed for approximately 12 years in
the residential and commercial design and construction business. He was a
co-founder with Mr. Ramsey of the Knobias business concept and has designed and
created Knobias' extensive and flexible databases and the Knobias.com web site.
He has served as Chief Operating Officer and a director of Knobias since March
2000. From March 2000 to March 2002, he was also Secretary of Knobias.

Susan R. Walker. Mrs. Walker was employed by Arthur Andersen, L.P. and later was
self-employed for five years in the public accounting field and worked in the
areas of accounting, tax and litigation support. Mrs. Walker has worked with
Knobias since 2001 in a part-time accounting and controller position. She was
named to the position of Chief Financial Officer in February 2006.

Robert L. Atkins. Mr. Atkins has been in the insurance business for more than 20
years. Since January 1999, he has managed a multi-line insurance agency
consisting of five producers and four staff members in three separate offices.
He is a Chartered Life Underwriter (CLU) and Life Underwriting Training Council
Fellow (LUTCF). Mr. Atkins has been a director of Knobias since March 2000 and
has served as Secretary since March 2002.

Timothy J. Aylor. Mr. Aylor has been employed by affiliates of General Electric
for more than 15 years, and is currently Vice-President Finance for GE Capital,
a global financial management company with portfolio assets totaling $6 billion.
He has served as a director of Knobias since March 2000.

Danny M. Dunnaway.  Mr.  Dunnaway has been a private  investor for more than the
past five years, and has served as a director of Knobias since March 2000.

                                       22
<PAGE>

Joseph L. Stephens.  Mr.  Stephens is the President of  Rehabilitation  Centers,
Inc.,  which provides  residential  treatment,  health  services and educational
services for handicapped children in Mississippi and Arkansas.  He has served as
a director of Knobias since March 2000.

Kevin Crow resigned his position as a member of the board of directors effective
September 2, 2005.

Except as described above, there are no family relationships among any of our
new directors and executive officers. No other arrangements or understandings
exist among present or former controlling stockholders with respect to the
election of members of our board of directors and, to our knowledge, no other
arrangements exist that might result in a change of control in the future.

Limitation of Liability of Directors

Our Amended and Restated Certificate of Incorporation provides that we will
indemnify our officers, directors, employees, and agents to the fullest extent
permitted by the Delaware General Corporate Law. Under the Delaware General
Corporate Law, other than in actions brought by or in the right of the
corporation, such indemnification would apply if it were determined in the
specific case that the proposed indemnitee acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal proceeding, if such person had
no reasonable cause to believe that the conduct was unlawful. In actions brought
by or in the right of the corporation, such indemnification probably would be
limited to reasonable expenses (including attorneys' fees) and would apply if it
were determined in the specific case that the proposed indemnitee acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, except that no indemnification may be
made with respect to any matter as to which such person is adjudged liable to
the corporation, unless, and only to the extent that, the court determines upon
application that, in view of all the circumstances of the case, the proposed
indemnitee is fairly and reasonably entitled to indemnification for such
expenses as the court deems proper. To the extent that any director, officer,
employee, or agent of ours has been successful on the merits or otherwise in
defense of any action, suit, or proceeding, as discussed herein, whether civil,
criminal, administrative or investigative, such person must be indemnified
against reasonable expenses incurred by such person in connection therewith.

We have entered into indemnification agreements with our directors and executive
officers providing for indemnification consistent with the foregoing.

Election of Directors and Officers.

Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.

No Executive Officer or Director of the Company has been the subject of any
order, judgment, or decree of any Court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring suspending or
otherwise limiting him from acting as an investment advisor, underwriter, broker
or dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.

No Executive Officer or Director of the Company has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.

No Executive Officer or Director of the Company is the subject of any pending
legal proceedings.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires Knobias, Inc. executive officers and directors, and persons who
beneficially own more than ten percent of the Company's common stock, to file
initial reports of ownership and reports of changes in ownership with the SEC.
Executive officers, directors and greater than ten percent beneficial owners are
required by SEC regulations to furnish Knobias, Inc. with copies of all Section
16(a) forms they file. Based upon a review of the copies of such forms furnished
to the Company and written representations from Company executive officers and
directors, the Company believes that during the year ended 2004, the officers
and directors filed all of their respective Section 16(a) reports on a timely
basis.

Audit Committee

The audit committee's responsibilities include: (i) reviewing the independence,
qualifications, services, fees, and performance of the independent auditors,
(ii) appointing, replacing and discharging the independent auditors, (iii)
pre-approving the professional services provided by the independent auditors,
(iv) reviewing the scope of the annual audit and reports and recommendations
submitted by the independent auditors, and (v) reviewing our financial reporting
and accounting policies, including any significant changes, with management and
the independent auditors. The audit committee currently consists of Timothy J.
Aylor and Danny M. Dunnaway. Our Board has determined that Messrs. Akylor and
Dunnaway are "independent" as that term is defined under applicable SEC rules.
Mr. Aylor qualifies as an "audit committee financial expert" as defined in Item
401(e) of Regulation S-B promulgated by the SEC. During the past fiscal year,
the audit committee had one meeting.

                                       23
<PAGE>

Nominating Committee

We do not have a Nominating Committee or Nominating Committee Charter. Our board
of directors performed some of the functions associated with a Nominating
Committee. We have elected not to have a Nominating Committee at this time,
however, our Board of Directors intend to continually evaluate the need for a
Nominating Committee.

Code of Ethics

A code of ethics relates to written standards that are reasonably designed to
deter wrongdoing and to promote:

(1)  Honest and ethical conduct, including the ethical handling of actual or
     apparent conflicts of interest between personal and professional
     relationships;

(2)  Full, fair, accurate, timely and understandable disclosure in reports and
     documents that are filed with, or submitted to, the Commission and in other
     public communications made by an issuer;

(3)  Compliance with applicable governmental laws, rules and regulations;

(4)  The prompt internal reporting of violations of the code to an appropriate
     person or persons identified in the code; and

(5)  Accountability for adherence to the code.

We have not adopted a corporate code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.

Our decision to not adopt such a code of ethics results from our having only a
limited number of officers and directors operating as the management for the
Company. We believe that as a result of the limited interaction which occurs
having such a small management structure for the Company eliminates the current
need for such a code.


Compensation Committee

The compensation committee of the board of directors reviews all forms of
compensation provided to our executive officers, directors, consultants and
employees including stock compensation and loans. The compensation committee
currently consists of Timothy J. Aylor, Danny M. Dunnaway, and Joseph Stevens.

                                       24
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth for the years ended December 31, 2005, 2004 and
2003, certain information as to the total cash compensation paid, distributed or
accrued for services, including salary and bonus amounts, rendered in all
capacities for our company and Knobias, as applicable, by the respective chief
executive officers and all other executive officers who received or are entitled
to receive remuneration in excess of $100,000 during the stated periods.

Summary Compensation Table

<TABLE>
<S>                                    <C>       <C>    <C>            <C>          <C>         <C>       <C>       <C>

                                                               SUMMARY COMPENSATION TABLE
                                                                  LONG-TERM COMPENSATION

                                                     ANNUAL COMPENSATION           LONG-TERM COMPENSATION
                                              ------------------------------- --------------------------------
                                                                                      AWARDS           PAYOUTS
                                                                              ----------------------   -------
                                                                              RESTRICTED  SECURITIES
                                                                 OTHER ANNUAL   STOCK     UNDERLYING    LTIP     ALL OTHER
                                              SALARY    BONUS    COMPENSATION  AWARD(S)    OPTIONS/    PAYOUTS  COMPENSATION
NAME AND PRINCIPAL POSITION           YEAR     ($)       ($)         ($)         ($)       SARS (#)      ($)        ($)
-----------------------------------  -----    ------    ------   ------------ ----------  ----------   -------  ------------
E. Key  Ramsey,  Our  President       2005   175,000      0              0            0     250,000         0         0
and CEO  after  the                   2004   146,875      0              0            0           0         0         0
Merger and President of Knobias       2003   135,000      0              0            0           0         0         0

Gregory  E.  Ballard,  Our  Vice      2005   175,000      0              0            0     250,000         0         0
President  and COO                    2004   146,875      0              0            0           0         0         0
after the Merger and COO of Knobias   2003   135,000      0              0            0           0         0         0
</TABLE>



Option/SAR Grants in Last Fiscal Year

On April 11, 2005, 3,262,000 stock options were granted, effective April 1,
2005. These options were given to employees and directors and have an exercise
price of $0.72 and a market price of $0.93 per share. The term of the options is
ten years with half of the options vesting upon issuance, another one fourth of
the options vesting December 1, 2005, and the remaining options vesting December
1, 2006. The value of the shares using the Black-Scholes pricing model at the
time of issuance was $1,080,000. Because we recorded compensation from share-
based payments under APB 25 at the time of the granting of the options, we
recorded no expense related to these options.


Compensation of directors

Our directors receive no compensation for their service to our Company.

                                       25
<PAGE>


ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
     RELATED STOCKHOLDER MATTERS

The following table presents information, to the best of the Company's
knowledge, about the beneficial ownership of its common stock on March 15, 2005
relating to the beneficial ownership of the Company's common stock by those
persons known to beneficially own more than 5% of the Company's capital stock
and by its directors and executive officers. The percentage of beneficial
ownership for the following table is based on 50,766,505 shares of common stock
outstanding.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and does not necessarily indicate beneficial
ownership for any other purpose. Under these rules, beneficial ownership
includes those shares of common stock over which the stockholder has sole or
shared voting or investment power. It also includes shares of common stock that
the stockholder has a right to acquire within 60 days through the exercise of
any option, warrant or other right. The percentage ownership of the outstanding
common stock, however, is based on the assumption, expressly required by the
rules of the Securities and Exchange Commission, that only the person or entity
whose ownership is being reported has converted options or warrants into shares
of our common stock.


--------------------------------------------------------------------------------
  Name of Beneficial Holder (1)         Number                  Percent
                                       of Shares               Of Class
--------------------------------------------------------------------------------
E. Key Ramsey P.O. Box 2785 Ridgeland, MS 39158
President, CEO, and Chairman             5,479,474 (2)(3)       10.75%

Gregory E. Ballard
P.O. Box 2785
Ridgeland, MS  39158
Vice President, COO and Director         5,520,921 (2)(4)       10.84%

Susan R. Walker
P.O. Box 2785
Ridgeland, MS  39158
Chief Financial Officer                     30,000 (5)              *

Robert L. Atkins
661 Highway51, Suite 1A
Ridgeland, MS  39157
Secretary and Director                     361,242 (2) (6)          *

Timothy J. Aylor
3825 Ramblewood Drive
Melbourne, FL  32934
Director                                   407,454 (2) (7)          *

Danny M. Dunnaway
875 Northpark Drive
Bldg 2, Suite 500
Ridgeland, MS  39157
Director                                 3,118,361 (2) (8)       6.14%

Joseph L. Stephens
P.O. Box 829
Magee, MS  39111
Director                                 1,504,745 (9)           2.96%

All Directors & Officers
 (7 persons) as a Group                 16,422,197              32.01%

Duncan Capital Group, LLC               11,080,096 (10)         19.84%



* Less than 1%.

(1)  As used in this table, "beneficial ownership" means the sole or shared
     power to vote, or to direct the voting of, a security, or the sole or
     shared investment power with respect to a security (i.e., the power to
     dispose of, or to direct the disposition of, a security). In addition, for
     purposes of this table, a person is deemed, as of any date, to have
     "beneficial ownership" of any security that such person has the right to
     acquire within 60 days after such date. Address for the persons listed in
     the table is care of the Company.

                                       26
<PAGE>


(2)  On October 12, 2005, Internet Productions, LLC liquidated and distributed
     its assets (consisting of 12,269,346 common shares of Knobias, Inc.) to its
     members according to its respective membership interests. The ownership of
     Internet Productions, LLC prior to this liquidation for certain directors
     and executive officers, or their affiliates and associates, in Internet
     Productions, LLC, is set forth below:

    NAME                            MEMBERSHIP INTEREST          SHARES
    ----------------------          -------------------        ----------
    Timothy J. Aylor                         0.6155513%            75,524
    Robert L. Atkins                         0.5857045%            71,862
    Gregory E. Ballard                      36.2258742%         4,444,667
    Danny M. Dunnaway, LLC                   0.6155513%            75,524
    E. Key Ramsey                           38.4710756%         4,720,138
    Ballard Childrens Trust                        9.0%         1,104,238
    Ramsey Childrens Trust                        6.75%           828,180

(3)  Includes (i)4,441,293 shares owned individually; (ii) 828,181 shares held
     by Ramsey Children's' Trust; (iii) options to purchase 250,000 shares of
     common stock (187,500 shares are immediately exercisable and 62,500 are
     exercisable on 12/1/06); and (iv) options to purchase 30,000 shares of
     common stock (22,500 shares are immediately exercisable and 7,500 shares
     are exercisable on 12/1/06) held by his wife.

(4)  Includes (i) 4,229,180 shares owned individually; (ii) 1,104,241 shares
     held by Ballard Children's Trust; (iii) options to purchase 250,000 shares
     of common stock (187,500 shares are immediately exercisable and 62,500
     shares are exercisable on 12/1/06).

(5)  Includes options to purchase 40,000 shares of common stock (30,000 shares
     are immediately exercisable and 10,000 shares are exercisable on 12/1/06).

(6)  Includes (i) 71,862 shares owned individually; (ii) options to purchase
     43,500 shares of common stock (33,500 shares are exercisable immediately
     and 10,000 shares are exercisable on 12/1/06); and (iii) 255,880 shares
     held in an IRA account for Mr. Atkins.

(7)  Includes (i) 75,524 shares owned individually; (ii) options to purchase
     43,500 shares of common stock (33,500 shares are immediately exercisable
     and 10,000 shares are exercisable on 12/1/06); and $298,430 shares owned
     jointly with his wife.

(8)  Includes (i) 304,380 shares through Danny M. Dunnaway, LLC in which Mr.
     Dunnaway owns a 90% membership interest; (ii) 86,070 shares owned by Mr.
     Dunnaway as custodian for a minor child; (iii) 251,123 shares held in an
     IRA account for Mr. Dunnaway; (iv) 85,096 shares owned by his wife; (v)
     173,500 shares held in an IRA account for his wife; (vi) 413,025 shares
     owned by Danny M. Dunnaway Charitable Remainder Unitrust; (vii)413,025
     shares owned by the Danny M. Dunnaway Foundation; (viii) options to
     purchase 43,500 shares of common stock (33,500 shares are immediately
     exercisable and 10,000 shares are exercisable on 12/1/06); and (ix)
     1,358,642 shares owned individually.

(9)  Includes (i) 1,008,118 shares owned individually; (ii) 463,127 shares as
     Executor of his father's estate; and (iii) options to purchase 43,500
     shares of common stock (33,500 shares are immediately exercisable and
     10,000 shares exercisable on 12/1/06).

(10) Includes (i) a warrants to purchase 48,000 shares of common stock issued to
     Bridges and PIPES, LLC, an affiliate of Duncan Capital and (ii) 1,333,333
     shares of common stock into which the shares of Series A Preferred Stock
     are currently convertible. The shares of Series A Preferred Stock
     beneficially owned by Duncan Capital include 208,333 shares of Series A
     Preferred Stock held by Bridges and PIPES, LLC.


Knobias, Inc. 2004 Stock Incentive Plan

The following is a brief summary of the stock incentive plan. The following
summary is qualified in its entirety by reference to the stock incentive plan.

Types of Awards

The stock incentive plan provides for the grant of non-statutory stock options,
restricted stock, restricted stock units, stock appreciation rights, incentive
stock options intended to qualify under Section 422 of the Internal Revenue Code
of 1986, as amended and other stock-based awards. No more than 50% of the total
number of shares of common stock covered by the stock incentive plan may be
issued pursuant to awards that are not options or stock appreciation rights.

                                       27
<PAGE>

Incentive Stock Options and Non-statutory Stock Options. Optionees receive the
right to purchase a specified number of shares of common stock at a specified
option price and subject to such other terms and conditions as are specified in
connection with the option grant. Options may not be granted at an exercise
price less than the fair market value of the common stock on the date of grant.
Options may not be granted for a term in excess of ten years. Outstanding
options may not be amended to provide an exercise price per share which is lower
than the then current exercise price per share of such outstanding options. The
board of directors may not cancel any outstanding options and grant in
substitution for such options new options under the stock incentive plan
covering the same or a different number of shares of common stock and having an
exercise price per share lower than the then current exercise price per share of
the cancelled options. The board of directors will, however, have the power to
amend stock options to convert them into stock appreciation rights and make
other amendments to options, provided that the optionee must consent to such
action unless the board determines that the action would not materially and
adversely affect the optionee.

Restricted Stock and Restricted Stock Unit Awards. Restricted stock awards
entitle recipients to acquire shares of common stock, subject to the right of to
repurchase all or part of such shares from the recipient in the event that the
conditions specified in the applicable award are not satisfied prior to the end
of the applicable restriction period established for such award. Restricted
stock unit awards entitle the recipient to receive shares of common stock to be
delivered in the future subject to such terms and conditions on the delivery of
the shares as the board of directors may determine.

Restricted stock and restricted stock unit awards granted under the stock
incentive plan may vest (i) solely on the basis of passage of time, (ii) solely
based on achievement of specified performance criteria or (iii) upon the passage
of time, subject to accelerated vesting if specified performance criteria are
met. The board of directors may determine, at the time of grant, that a
restricted stock or restricted stock unit award being made to an officer will
vest solely upon achievement of specified performance criteria designed to
qualify for deduction under Section 162(m) of the Internal Revenue Code. The
performance criteria for each restricted stock or restricted stock unit award
intended to so qualify for purposes of Section 162(m) of the Internal Revenue
Code will be based on one or more of the following measures: sales, earnings per
share, return on net assets, return on equity, and customer service levels.

Except as noted below, (i) restricted stock and restricted stock units that vest
solely on the basis of passage of time may vest no faster than ratably over
three years; and (ii) restricted stock and restricted stock units that vest
based on achievement of specified performance criteria, or provide for
accelerated vesting based upon achievement of specified performance criteria,
may not vest earlier than the first anniversary of the date of grant. These
vesting restrictions do not apply to restricted stock and restricted stock unit
awards collectively with respect to up to 5% of the total number of shares of
common stock covered by the stock incentive plan. In addition, the board of
directors may make exceptions to the vesting limitations described above in the
event of the recipient's death, a change in control or other extraordinary
circumstances specified in the stock incentive plan.

Stock Appreciation Rights. A stock appreciation right, or SAR, is an award
entitling the holder on exercise to receive, at our election, an amount in cash
or common stock or a combination thereof determined in whole or in part by
reference to appreciation, from and after the date of grant, in the fair market
value of a share of common stock. SARs may be based solely on appreciation in
the fair market value of common stock or on a comparison of such appreciation
with some other measure of market growth such as (but not limited to)
appreciation in a recognized market index.

Other Stock-Based Awards. Under the stock incentive plan, the board of directors
has the right to grant other awards of common stock or awards otherwise based
upon common stock or other property, including without limitation rights to
purchase shares of common stock, having such terms and conditions as the board
may determine.

Eligibility to Receive Awards

Employees, officers, directors, consultants, advisors and other service
providers are eligible to be granted awards under the stock incentive plan. The
maximum number of shares with respect to which awards may be granted to any
participant under the stock incentive plan may not exceed 5 million shares per
calendar year.

Stock Available for Awards

Awards may be made under the stock incentive plan for up to 5 million shares of
common stock.

                                       28
<PAGE>

New Plan Benefits

At the effective time of the merger, approximately 39 persons were eligible to
receive awards under the stock incentive plan, including two executive officers
and five non-employee directors of Knobias, who became our officers and
directors at the effective time of the merger. The following table provides
certain information with respect to options granted under the stock incentive
plan at the effective time of the merger.


                            2004 STOCK INCENTIVE PLAN

                                                 NONQUALIFIED STOCK OPTIONS
                                        ---------------------------------------
                                        SHARES SUBJECT TO     SHARES SUBJECT TO
                                          OPTIONS AT AN        OPTIONS AT AN
                                        EXERCISE PRICE OF     EXERCISE PRICE OF
NAME AND POSITION                        $3.004 PER SHARE      $1.295 PER SHARE
------------------------------------    -----------------     -----------------
Executive Officers                                      0                     0
Non-Executive Director Group                        8,000                 6,000
Non-Executive Officer Employee Group               52,500                86,000




The granting of future awards under the stock incentive plan is discretionary,
and we cannot now determine the number or type of awards to be granted in the
future to any particular person or group.

Administration

The stock incentive plan is administered by the board of directors. The board
has the authority to adopt, amend and repeal the administrative rules,
guidelines and practices relating to the stock incentive plan and to interpret
the plan's provisions. The board may also delegate authority under the stock
incentive plan to a committee of the board of directors. The board may also
delegate authority under the stock incentive plan to one or more officers,
except that the board will fix the terms of the awards to be granted by such
officers and the maximum number of shares subject to awards that the officers
may grant. No officer will be authorized to grant awards to himself or herself.

Subject to any applicable delegation by the board of directors and any
applicable limitations contained in the stock incentive plan, the board of
directors selects the recipients of awards and determines:

o    the number of shares of common stock covered by options and the dates upon
     which such options become exercisable;

o    the exercise price of options,  which may not be less than 100% of the fair
     market value of common stock;

o    the duration of options, which may not exceed 10 years;

o    the terms of stock appreciation rights and the dates or conditions upon
     which such stock appreciation rights become exercisable; and

o    the number of shares of common stock subject to any restricted stock,
     restricted stock unit or other stock-based awards and the terms and
     conditions of such awards, including, if applicable, conditions for
     repurchase, issue price and repurchase price.

We are required to make appropriate adjustments or substitutions in connection
with the stock incentive plan and any outstanding awards to reflect stock
splits, stock dividends, recapitalizations, spin-offs and other similar changes
in capitalization to the extent the board of directors deems such adjustment or
substitution to be necessary and appropriate. The stock incentive plan also
contains provisions addressing the consequences of any "reorganization event,"
which is defined as:

                                       29
<PAGE>

o    any merger or consolidation of with or into another entity as a result of
     which all of the common stock is converted into or exchanged for the right
     to receive cash, securities or other property; or

o    any exchange of all of common stock for cash, securities or other property
     pursuant to a share exchange transaction.

If any award expires or is terminated, surrendered or canceled without having
being fully exercised, is forfeited in whole or in part, or results in any
common stock not being issued because (i) the award is settled for cash, or (ii)
shares are used to satisfy the exercise price or tax withholding obligation, the
unused shares of common stock covered by such award will again be available for
grant under the stock incentive plan, subject, however, in the case of incentive
stock options, to any limitations under the Internal Revenue Code.

Termination or Amendment

No award may be made under the stock incentive plan after the completion of ten
years from the date on which the plan is approved by our stockholders, but
awards previously granted may extend beyond that date. The board of directors
may at any time amend, suspend or terminate the stock incentive plan, except
that no award designated as subject to Section 162(m) of the Internal Revenue
Code by the board of directors after the date of such amendment shall become
exercisable, realizable or vested, to the extent such amendment was required to
grant such award, unless and until such amendment shall have been approved by
our stockholders. In addition, without the approval of our stockholders, no
amendment may:

o    increase the number of shares authorized under the stock incentive plan;

o    materially increase the benefits provided under the stock incentive plan;

o    materially expand the class of participants  eligible to participate in the
     stock incentive plan;

o    expand the types of awards provided under the stock incentive plan; or

o    make any other changes which require stockholder approval under the rules
     of the national securities market on which the shares of common stock are
     quoted.

No award may be made that is conditioned on the approval of our stockholders of
any amendment to the stock incentive plan.

Federal Income Tax Consequences

The following generally summarizes the United States federal income tax
consequences that generally will arise with respect to awards granted under the
stock incentive plan. This summary is based on the tax laws in effect as of the
date of this information statement. Changes to these laws could alter the tax
consequences described below.

Incentive Stock Options. A participant will not have income upon the grant of an
incentive stock option. Also, except as described below, a participant will not
have income upon exercise of an incentive stock option if the participant has
been employed by our company, Knobias, or any other 50% or more-owned corporate
subsidiary at all times beginning with the option grant date and ending three
months before the date the participant exercises the option. If the participant
has not been so employed during that time, then the participant will be taxed as
described below under "Nonstatutory Stock Options." The exercise of an incentive
stock option may subject the participant to the alternative minimum tax.

A participant will have income upon the sale of the stock acquired under an
incentive stock option at a profit if sales proceeds exceed the exercise price.
The type of income will depend on when the participant sells the stock. If a
participant sells the stock more than two years after the option was granted and
more than one year after the option was exercised, then all of the profit will
be long-term capital gain. If a participant sells the stock prior to satisfying
these waiting periods, then the participant will have engaged in a disqualifying
disposition and a portion of the profit will be ordinary income and a portion
may be capital gain. This capital gain will be long-term if the participant has
held the stock for more than one year and otherwise will be short-term. If a
participant sells the stock at a loss (sales proceeds are less than the exercise
price), then the loss will be a capital loss. This capital loss will be
long-term if the participant held the stock for more than one year and otherwise
will be short-term.

                                       30
<PAGE>

Nonstatutory Stock Options. A participant will not have income upon the grant of
a nonstatutory stock option. A participant will have compensation income upon
the exercise of a nonstatutory stock option equal to the value of the stock on
the day the participant exercised the option less the exercise price. Upon sale
of the stock, the participant will have capital gain or loss equal to the
difference between the sales proceeds and the value of the stock on the day the
option was exercised. This capital gain or loss will be long-term if the
participant has held the stock for more than one year and otherwise will be
short-term.

Restricted Stock. A participant will not have income upon the grant of
restricted stock unless an election under Section 83(b) of the Internal Revenue
Code is made within 30 days of the date of grant. If a timely 83(b) election is
made, then a participant will have compensation income equal to the value of the
stock less the purchase price. When the stock is sold, the participant will have
capital gain or loss equal to the difference between the sales proceeds and the
value of the stock on the date of grant. If the participant does not make an
83(b) election, then when the stock vests the participant will have compensation
income equal to the value of the stock on the vesting date less the purchase
price. When the stock is sold, the participant will have capital gain or loss
equal to the sales proceeds less the value of the stock on the vesting date. Any
capital gain or loss will be long-term if the participant held the stock for
more than one year from the vesting date and otherwise will be short-term.

Restricted Stock Units. A participant will have income from a restricted stock
unit equal to the difference of the fair market value of the stock on the date
of delivery of the stock less the purchase price. A participant is not permitted
to make a Section 83(b) election for a restricted stock unit.

Stock Appreciation Rights and Other Stock-Based Awards. The tax consequences
associated with stock appreciation rights and any other stock-based awards
granted under the stock incentive plan will vary depending on the specific terms
of such award. Among the relevant factors are whether or not the award has a
readily ascertainable fair market value, whether or not the award is subject to
forfeiture provisions or restrictions on transfer, the nature of the property to
be received by the participant under the award and the participant's holding
period and tax basis for the award or underlying common stock.

Tax Consequences to Us. There will be no tax consequences to us except that we
will be entitled to a deduction when a participant has compensation income. Any
such deduction will be subject to the limitations of Section 162(m) of the
Internal Revenue Code.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information regarding the status of our existing
equity compensation plans at December 31, 2005.


                        AVAILABLE FOR                       NUMBER OF SECURITIES
                       FUTURE ISSUANCE                             REMAINING
                          NUMBER OF                              UNDER EQUITY
                        SECURITIES TO         WEIGHTED-          COMPENSATION
                       BE ISSUED UPON          AVERAGE               PLANS
                         EXERCISE OF      EXERCISE PRICE OF       (EXCLUDING
                         OUTSTANDING         OUTSTANDING          SECURITIES
                      OPTIONS, WARRANTS   OPTIONS, WARRANTS      REFLECTED IN
                         AND RIGHTS           AND RIGHTS          COLUMN (A))
                      -----------------   -----------------  -------------------
Equity compensation
  plans approved by
  security holders              158,500   $            0.78            4,841,500
Equity compensation
  plan not approved
  by security holders                 0                   0                    0
                      -----------------   -----------------  -------------------
         Total                  158,500                  00            4,841,500



                                       31
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In January 2005, we obtained the remainder of our financing from DCOFI Master,
Ltd. (an affiliate of Duncan Capital Group, LLC, an owner of our common stock)
totaling $225,000. On March 15, 2005, we refinanced the entire principal balance
outstanding under this arrangement and financed the first $50,000 of interest to
be paid on the financing, thereby increasing the principal balance outstanding
to $550,000. The entire amount is due September 1, 2006.

On April 7, 2005, we entered into a promissory note with Timothy Aylor, a
company director, which was due October 7, 2005. In connection with the issuance
of this promissory note, we issued a warrant to purchase 10,000 shares of the
Company's common stock, which are exercisable until five years from the date of
issuance at $0.75 per share.

On April 28, 2005, we entered into a line of credit agreement (the "LOC
Agreement") with the Bank of Brookhaven for $300,000. Pursuant to the LOC
Agreement, we may, at our discretion, periodically draw down funds up the
maximum borrowing amount of $300,000. During 2005, we borrowed $170,000 under
this LOC Agreement. This loan is personally guaranteed by a group of our
officers and directors.

During 2005, we borrowed $775,000 from a company who also owns 208,333 shares of
our preferred stock and, combined with its affiliate is owed $500,000 under our
8% Secured Convertible Notes. The advances are due at various times during 2006
and bear interest at 8%.

We have no policy regarding entering into transactions with affiliated parties.

                                       32
<PAGE>

                                     PART IV

ITEM 13. EXHIBITS


Exhibit No.       Description
-----------       -----------

2.1  Agreement  and Plan of  Reorganization,  dated as of June 30, 2004,  by and
     among Knobias Holdings,  Inc.,  Consolidated  Travel Systems,  Inc. And KHI
     Acquisition,  Inc.,  filed as an exhibit to the current  report on Form 8-K
     filed  with the  Commission  on July 14,  2004 and  incorporated  herein by
     reference.

2.2  First  Amendment  to  Agreement  and  Plan of  Reorganization,  dated as of
     October 25, 2004, by and among Knobias Holdings,  Inc., Consolidated Travel
     Systems, Inc. And KHI Acquisition, Inc., filed as an exhibit to the current
     report on Form 8-K filed  with the  Commission  on  November  19,  2004 and
     incorporated herein by reference.

3.1  Certificate of Incorporation of the Company and all amendments thereto
     prior to the Merger transaction, filed as an exhibit to the registration
     statement on Form 10-SB filed with the Commission on November 9, 2001 and
     incorporated herein by reference.

3.2  By-Laws of the Company prior to the Merger transaction, filed as an exhibit
     to the registration statement on Form 10-SB filed with the Commission on
     November 9, 2001 and incorporated herein by reference.

3.3  Amended and Restated Certificate of Incorporation of Knobias, Inc., filed
     as an exhibit to the current report on Form 8-K filed with the Commission
     on November 19, 2004 and incorporated herein by reference.

3.4  Amended and Restated Bylaws of Knobias, Inc., filed as an exhibit to the
     current report on Form 8-K filed with the Commission on November 19, 2004
     and incorporated herein by reference.

3.5  Certificate of Designation of Series A Preferred Stock of Knobias, Inc.,
     filed as an exhibit to the current report on Form 8-K filed with the
     Commission on November 19, 2004 and incorporated herein by reference.

3.6  Certificate of Merger of KHI Acquisition, Inc. with and into Knobias
     Holdings, Inc., filed as an exhibit to the current report on Form 8-K filed
     with the Commission on November 19, 2004 and incorporated herein by
     reference.

4.1  Instruments defining rights of holders, filed as an exhibit to the
     registration statement on Form 10-SB filed with the Commission on November
     9, 2001 and incorporated herein by reference.

4.2  Standby Equity Distribution Agreement dated as of November 15, 2004, by and
     between Cornell Capital Partners, LP and the Company, filed as an exhibit
     to the current report on Form 8-K filed with the Commission on November 19,
     2004 and incorporated herein by reference.

                                       33
<PAGE>

4.3  Registration Rights Agreement dated as of November 15, 2004, by and between
     Cornell Capital Partners, LP and the Company, filed as an exhibit to the
     current report on Form 8-K filed with the Commission on November 19, 2004
     and incorporated herein by reference.

4.4  Escrow Agreement dated as of November 15, 2004, by and among Cornell
     Capital Partners, LP, the Company and David Gonzalez, Esq., filed as an
     exhibit to the current report on Form 8-K filed with the Commission on
     November 19, 2004 and incorporated herein by reference.

4.5  Placement Agent Agreement dated as of November 15, 2004, by and among
     Cornell Capital Partners, LP, the Company and Newbridge Securities
     Corporation, filed as an exhibit to the current report on Form 8-K filed
     with the Commission on November 19, 2004 and incorporated herein by
     reference.

4.6  Registration Rights Agreement dated as of November 15, 2004, by and among
     the Company and the holders of the Company's Series A Preferred Stock,
     filed as an exhibit to the current report on Form 8-K filed with the
     Commission on November 19, 2004 and incorporated herein by reference.

4.7  Securities Purchase Agreement dated as of November 15, 2004, by and between
     the Company and the Note Purchasers, filed as an exhibit to the current
     report on Form 8-K filed with the Commission on November 19, 2004 and
     incorporated herein by reference.

4.8  Form of 8% Secured Convertible Note due November 1, 2006 of the Company,
     filed as an exhibit to the current report on Form 8-K filed with the
     Commission on November 19, 2004 and incorporated herein by reference.

4.9  Registration Rights Agreement dated as of November 15, 2004, by and between
     the Company and the Note Purchasers, filed as an exhibit to the current
     report on Form 8-K filed with the Commission on November 19, 2004 and
     incorporated herein by reference.

4.10 Form of Common Stock Purchase Warrant dated November 15, 2004, issued by
     the Company to the Note Purchasers, filed as an exhibit to the current
     report on Form 8-K filed with the Commission on November 19, 2004 and
     incorporated herein by reference.

4.11 Security Agreement dated as of November 15, 2004, by and between the
     Company and the Note Purchasers, filed as an exhibit to the current report
     on Form 8-K filed with the Commission on November 19, 2004 and incorporated
     herein by reference.

4.12 Form of Subsidiary Guarantee dated as of November 15, 2004, filed as an
     exhibit to the current report on Form 8-K filed with the Commission on
     November 19, 2004 and incorporated herein by reference.

4.13 Form of Warrant issued to former holders of Knobias warrants, filed as an
     exhibit to the current report on Form 8-K filed with the Commission on
     November 19, 2004 and incorporated herein by reference.

4.14 Warrant to purchase 25,000 shares of common stock issued to Bridges and
     Pipes, LLC, filed as an exhibit to the current report on Form 8-K filed
     with the Commission on November 19, 2004 and incorporated herein by
     reference.

                                       34
<PAGE>

4.15 Warrant to purchase 178,750 shares of common stock issued to Duncan
     Capital, LLC, filed as an exhibit to the current report on Form 8-K filed
     with the Commission on November 19, 2004 and incorporated herein by
     reference.

4.16 Securities Purchase Agreement, dated as of March 15, 2005, by and between
     the Company and DCOFI Master LDC, filed as an exhibit to the current report
     on Form 8-K filed with the Commission on March 21, 2005, and incorporated
     herein by reference.

4.17 Form of 12% Senior Subordinate Secured Note, dated as of March 15, 2005,
     due September 1, 2006, of the Company issued to DCOFI Master LDC, filed as
     an exhibit to the current report on Form 8-K filed with the Commission on
     March 21, 2005, and incorporated herein by reference.

4.18 Form of Common Stock Purchase Warrant, dated March 15, 2005, issued by the
     Company to DCOFI Master LDC, filed as an exhibit to the current report on
     Form 8-K filed with the Commission on March 21, 2005, and incorporated
     herein by reference.

4.19 Security Agreement, dated as of March 15, 2005, by and between the Company
     and DCOFI Master LDC, filed as an exhibit to the current report on Form 8-K
     filed with the Commission on March 21, 2005, and incorporated herein by
     reference.

4.20 Registration Rights Agreement, dated as of March 15, 2005, by and between
     the Company and DCOFI Master LDC, filed as an exhibit to the current report
     on Form 8-K filed with the Commission on March 21, 2005, and incorporated
     herein by reference.

4.21 Form of 12% Subordinate Promissory Note, dated as of April 7, 2005, due
     October 7, 2005, of the Company issued to Timothy J. Aylor, filed as an
     exhibit to the current report on Form 8-K filed with the Commission on
     April 28, 2005, and incorporated herein by reference.

4.22 Form of Common Stock Purchase Warrant, dated as of April 7, 2005, issued by
     the Company to Timothy J. Aylor, filed as an exhibit to the current report
     on Form 8-K filed with the Commission on April 28, 2005, and incorporated
     herein by reference.

4.23 Form of 8% Convertible Promissory Note, dated as of April 22, 2005, of the
     Company issued to Bridges & PIPEs, LLC, filed as an exhibit to the current
     report on Form 8-K filed with the Commission on April 28, 2005, and
     incorporated herein by reference.

4.24 Form of Common Stock Purchase Warrant, dated as of April 22, 2005, issued
     by the Company to Bridges & PIPEs, LLC, filed as an exhibit to the current
     report on Form 8-K filed with the Commission on April 28, 2005, and
     incorporated herein by reference.

4.25 Line of Credit Agreement, dated as of April 27, 2005, by and between the
     Company and the Bank of Brookhaven, filed as an exhibit to the current
     report on Form 8-K/A filed with the Commission on May 10, 2005, and
     incorporated herein by reference.

4.26 Guaranty Agreement, dated as of April 27, 2005, by Robert Atkins in favor
     of the Bank of Brookhaven, filed as an exhibit to the current report on
     Form 8-K/A filed with the Commission on May 10, 2005, and incorporated
     herein by reference.

4.27 Guaranty Agreement, dated as of April 27, 2005, by Tim Aylor in favor of
     the Bank of Brookhaven, filed as an exhibit to the current report on Form
     8-K/A filed with the Commission on May 10, 2005, and incorporated herein by
     reference.

                                       35
<PAGE>

4.28 Guaranty Agreement, dated as of April 27, 2005, by Gregory Ballard in favor
     of the Bank of Brookhaven, filed as an exhibit to the current report on
     Form 8-K/A filed with the Commission on May 10, 2005, and incorporated
     herein by reference.

4.29 Guaranty Agreement, dated as of April 27, 2005, by Danny M. Dunnaway in
     favor of the Bank of Brookhaven, filed as an exhibit to the current report
     on Form 8-K/A filed with the Commission on May 10, 2005, and incorporated
     herein by reference.

4.30 Guaranty Agreement, dated as of April 27, 2005, by E. Key Ramsey in favor
     of the Bank of Brookhaven, filed as an exhibit to the current report on
     Form 8-K/A filed with the Commission on May 10, 2005, and incorporated
     herein by reference.

4.31 Guaranty Agreement, dated as of April 27, 2005, by Joseph Stephens in favor
     of the Bank of Brookhaven, filed as an exhibit to the current report on
     Form 8-K/A filed with the Commission on May 10, 2005, and incorporated
     herein by reference.

4.32 Form of 8% Convertible Promissory Note, of the Company issued to Bushido
     Capital Master Fund, LP, filed as an exhibit to the current report on Form
     8-K filed with the Commission on March 1, 2006, and incorporated herein by
     reference.

10.1 Knobias, Inc. 2004 Stock Incentive Plan, filed as an exhibit to the current
     report on Form 8-K filed with the Commission on November 19, 2004 and
     incorporated herein by reference.

10.2 Form of Option Agreement entered into with former holders of Knobias
     options, filed as an exhibit to the current report on Form 8-K filed with
     the Commission on November 19, 2004 and incorporated herein by reference.

10.3 Indemnification Agreement, dated as of November 19, 2004, by and between
     the Company and E. Key Ramsey, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

10.4 Indemnification Agreement, dated as of November 19, 2004, by and between
     the Company and Robert L. Atkins, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

10.5 Indemnification Agreement, dated as of November 19, 2004, by and between
     the Company and Joseph L. Stephens, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

10.6 Indemnification Agreement, dated as of November 19, 2004, by and between
     the Company and Danny M. Dunnaway, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

                                       36
<PAGE>

10.7 Indemnification Agreement, dated as of November 19, 2004, by and between
     the Company and Gregory E. Ballard, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

10.8 Indemnification Agreement, dated as of November 19, 2004, by and between
     the Company and Timothy J. Aylor, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

10.9 Indemnification Agreement, dated as of November 19, 2004, by and between
     the Company and Kevin T. Crow, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

10.10 E. Key Ramsey Employment Agreement, filed as an exhibit to the
     registration statement on Form SB-2 filed with the Commission on December
     30, 2004 and incorporated herein by reference.

10.11 Greg Ballard Employment Agreement, filed as an exhibit to the registration
     statement on Form SB-2 filed with the Commission on December 30, 2004 and
     incorporated herein by reference.

21.1 List of Subsidiaries, filed as an exhibit to the current report on Form 8-K
     filed with the Commission on November 19, 2004 and incorporated herein by
     reference.

31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule
     15d-14(a), promulgated under the Securities and Exchange Act of 1934, as
     amended

31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule
     15d 14(a), promulgated under the Securities and Exchange Act of 1934, as
     amended

32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)

32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)

                                       37
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed for professional services rendered by our independent
registered public accounting firms for the audit of the registrant's annual
financial statements and review of the financial statements included in the
registrant's Form 10-QSB or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for fiscal years 2005 and 2004 were $103,250 and $56,600 respectively.

Audit-Related Fees

Russell, Bedford, Stefanou, Mirchandani, LLP and Horne LLP charged us $0 and
$20,950 for audit related fees in 2005 and 2004, respectively.

Tax Fees

Horne LLP charged us $10,075 and $1,275 for tax fees in 2005 and 2004,
respectively.

All Other Fees

None.

Policy  On Audit  Committee  Pre-Approval  Of Audit  And  Permissible  Non-Audit
Services Of Independent Auditors

Consistent with SEC policies and guidelines regarding audit independence, the
Audit Committee is responsible for the pre-approval of all audit and permissible
non-audit services provided by our principal accountants on a case-by-case
basis. Our Audit Committee has established a policy regarding approval of all
audit and permissible non-audit services provided by our principal accountants.
Our Audit Committee pre-approves these services by category and service. Our
Audit Committee has pre-approved all of the services provided by our principal
accountants.

                                       38
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on our
behalf by the undersigned, thereunto duly authorized.

KNOBIAS, INC.



Dated:  April 11, 2006                    By: /s/ E. KEY RAMSEY
                                             ---------------------------------
                                          E. Key Ramsey
                                          President, Chief Executive Officer
                                          (Principal Executive Officer)

                                          By: /s/ SUSAN R. WALKER
                                             ---------------------------------
                                          Susan R. Walker
                                          Chief Accounting Officer (Principal
                                          Accounting Officer)and Chief Financial
                                          Officer (Principal Financial Officer)






Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.



/s/ E. KEY RAMSEY          CEO, President and Director        April 11, 2006
-----------------
E. Key Ramsey

/s/ GREGORY E. BALLARD     Vice President, COO and Director   April 11, 2006
----------------------
Gregory E. Ballard

/s/ ROBERT L. ATKINS       Secretary and Director             April 11, 2006
--------------------
Robert L. Atkins

/s/ TIMOTHY J. AYLOR       Director                           April 11, 2006
--------------------
Timothy J. Aylor

/s/ DANNY M. DUNNAWAY      Director                           April 11, 2006
---------------------
Danny M. Dunnaway

/s/ JOSEPH L. STEPHENS     Director                           April 11, 2006
----------------------
Joseph L. Stephens

                                       39
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2005 AND 2004

                         FORMING A PART OF ANNUAL REPORT
                 PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934

                                  KNOBIAS, INC.

                                       F-1
<PAGE>

                                  KNOBIAS, INC.
                          Index to Financial Statements


                                                                        Page No.
                                                                     --------
Report of Independent Certified Public Accounting Firm                  F-3
Consolidated Balance Sheet as of December 31, 2005                      F-4

Consolidated Statements of Losses For the Years Ended
  December 31, 2005 and 2004                                            F-5
Consolidated  Statements of Deficiency in Stockholders' Equity
 For the Years Ended December 31, 2005 and 2004                         F-6

Consolidated Statements of Cash Flows For the Years Ended
 December 31, 2005 and 2004                                             F-7
Notes to Consolidated Financial Statements                           F-8 - F-20






                    RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                          CERTIFIED PUBLIC ACCOUNTANTS

                                       F-2
<PAGE>

REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

Board of Directors
Knobias, Inc.
Ridgeland, Mississippi

We have audited the accompanying consolidated balance sheet of Knobias, Inc., as
of December 31, 2005, and the related consolidated statements of losses,
deficiency in stockholders' equity, and cash flows for the two years then ended
December 31, 2005. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statements based upon our audits.

We have conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States of America). Those standards
require that we plan and perform the audits 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
audits provide 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 Knobias, Inc. at
December 31, 2005, and the results of its operations and its cash flows for the
two years then ended 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 discussed in Note N, the Company
has incurred significant operating losses in current year and also in the past.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are described in Note N. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



                                   /s/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                                   --------------------------------------------
                                       Russell Bedford Stefanou Mirchandani LLP
                                       Certified Public Accountants

New York, New York
March 30, 2006

                                       F-3
<PAGE>


KNOBIAS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2005


                                     Assets

Current assets
Cash                                                           $     103,095
Accounts receivable, net of allowance (Note A)                        68,975
Prepaid expenses                                                      23,517

Total current assets                                                 195,587

Property, equipment, and database development (Note C):            1,233,527
Less: accumulated amortization and depreciation                   (1,048,190)
Property, equipment, and database development, net                   185,337

Other assets                                                           7,971

Total assets                                                   $     388,895

               Liabilities and deficiency in stockholders' equity

Current liabilities
Accounts payable                                               $     504,262
Current portion of long-term debt (Note D)                         2,179,667
Accrued liabilities (Note E)                                         327,270

Total current liabilities                                          3,011,199

Long-term debt                                                             -

Total liabilities                                                  3,011,199

Deficiency in Stockholders' Equity (Note F)
Preferred stock, $0.01 par value; 5,000,000 shares authorized;
958,333 outstanding at December 31, 2005                           1,150,000
Common Stock, $0.01 par value; 95,000,000 shares
authorized; 50,766,505 outstanding                                   507,665
Additional paid-in capital                                         9,984,187
Accumulated deficit                                              (14,264,156)

Total deficiency in stockholders' equity                          (2,622,304)

Total liabilities and deficiency in stockholders' equity       $     388,895


See accompanying notes to consolidated financial statements

                                       F-4
<PAGE>

                                  KNOBIAS, INC.
                        CONSOLIDATED STATEMENTS OF LOSSES
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


                                                           2005            2004
Subscription revenues ...........................  $  1,976,680    $  1,819,371
Information provisioning ........................       148,442         153,017

Total revenue ...................................  $  2,125,122    $  1,972,388

Operating Expenses:
Product related costs ...........................     2,125,030       2,123,683
Selling, general and administrative .............     1,867,465       1,571,412
Depreciation and amortization ...................        72,039          87,764
Total operating expenses ........................     4,064,534       3,782,859

Loss from  operations ...........................    (1,939,412)     (1,810,471)

Other income (expense):
Interest income .................................         1,294             516
Merger related costs ............................          --          (670,733)
Interest expense ................................      (705,053)       (330,439)

Total other income (expense) ....................      (703,759)     (1,000,656)

Loss before provision for income taxes ..........    (2,643,171)     (2,811,127)

Provision for income taxes ......................          --              --

Net loss ........................................  $ (2,643,171)   $ (2,811,127)

Loss per share (basic and fully diluted) (Note J)  $      (0.05)   $      (0.06)

Basic and diluted weighted averages number of
shares outstanding ..............................    50,766,505      43,984,884



See accompanying notes to consolidated financial statements

                                       F-5
<PAGE>

                                 KNOBIAS, INC.
                STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

<TABLE>
<S>                                <C>            <C>            <C>             <C>             <C>            <C>              <C>
                                                                                                                          Total
                                      Series A                                            Additional                 (Deficiency In)
                                ----- Preferred ----        -------- Common -------         Paid-in     Accumulated    Stockholders'
                                Shares         Stock        Shares            Stock         Capital       Deficit         Equity


Balance, January 1, 2004 ....     --     $       --       34,911,941    $    349,119    $  6,965,182   $ (8,809,860)   $ (1,495,559)

Issuance of stock ...........  958,333      1,150,000        947,786           9,478         533,515           --         1,692,993

Issuance of stock to
 owner of remaining 50%
 of Kollage, LLC ............     --             --        9,531,700          95,317         266,683           --           362,000

Conversion of notes payable
 to common stock ............     --             --          841,216           8,412       1,293,808           --         1,302,220

Stock issued to former
 shareholders of COVSA ......     --             --        2,500,000          25,000            --             --            25,000

Stock issued in merger in
 lieu of payment of expenses      --             --        2,034,024          20,341            --             --            20,341

Beneficial conversion
 features of convertible
 debt .......................     --             --             --              --           316,009           --           316,009

Value of warrants attached
 to convertible debentures ..     --             --             --              --           608,990           --           608,990

Net loss ....................     --             --             --              --              --       (2,811,127)     (2,811,127)

Balance, December 31, 2004 ..  958,333   $  1,150,000     50,766,667    $    507,667    $  9,984,187   $(11,620,987)         20,867

Cancellation of shares
 issued for expenses ........     --             --             --            (1,000)           --             --            (1,000)

Issuance of stock ...........     --             --             --             1,000            --             --             1,000

Adjustment due to rounding
 off of shares ..............     --             --             (162)             (2)           --                2            --

Net loss ....................     --             --             --              --              --       (2,643,171)     (2,643,171)

Balance, December 31, 2005 ..  958,333   $  1,150,000     50,766,505    $    507,665    $  9,984,187   $(14,264,156)   $ (2,622,304)
</TABLE>



See accompanying notes to consolidated financial statements

                                       F-6
<PAGE>

                                  KNOBIAS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

                                                           2005           2004

Cash flows from operating activities
Net loss .........................................   $(2,643,171)   $(2,811,127)
Adjustments to reconcile net loss to net
cash used in operating activities
Allowance for doubtful accounts receivable .......        20,000        (29,794)
Depreciation and amortization ....................        72,039         87,764
Merger related costs .............................          --          670,733
Amortization of debt issuance costs ..............       522,107         70,396
Cancellation of shares issued
 for expenses ....................................        (1,000)          --
Changes in operating assets and liabilities
(Increase) decrease in accounts
 receivable ......................................         8,874         20,666
Decrease in prepaid expenses .....................         4,042         13,432
Decrease in other assets .........................          --           19,965
Increase in accounts payable and
accrued expenses .................................       535,605        116,596

Net cash used in operating activities ............    (1,481,504)    (1,841,369)

Cash flows provided by (used in) investing activities
Capital expenditures .............................        (6,256)       (87,982)

Net cash used in investing activities ............        (6,256)       (87,982)

Cash flows from financing activities
Issuance of common stock .........................          --          368,000
Issuance of preferred stock ......................          --        1,013,500
Capital contribution .............................          --          362,000
Proceeds from subordinated debt ..................          --        1,000,000
Payments for merger related costs ................          --         (488,892)
Payments for debt issuance costs .................          --         (110,000)
Repayment of debt ................................          --         (512,922)
Proceeds from notes payable ......................     1,348,163        375,000

Net cash provided by financing
 activities ......................................     1,348,163      2,006,686

Net increase (decrease) in cash ..................      (139,597)        77,335

Cash, beginning of period ........................       242,692        165,357

Cash, end of period ..............................   $   103,095    $   242,692

Supplemental disclosure of cash flow information

Cash transactions:
Cash paid for interest ...........................   $     1,395    $   182,803
Income taxes .....................................          --             --

Non-cash transactions: ...........................                         --

Subordinated debt converted to stock .............                    1,050,000
Accrued interest on subordinated debt
 converted to stock ..............................         --          253,202
Fees for merger compensated through
 preferred stock issuance ........................         --          136,500
Fees for merger compensated through
 common stock issuance ...........................         --           20,341
Common stock issued to former COVSA
 shareholders, at par value ......................         --           25,000
Debt issuance costs allocated to
 additional paid-in-capital for value
 of warrants attached to convertible
 debentures ......................................         --          608,990
Debt issuance costs allocated to
 additional-paid-in-capital for
 beneficial conversion features ..................         --          316,009
Stockholder loans converted to
 common stock ....................................         --          174,993
Equipment purchases under vendor
 finance agreements ..............................        3,209           --
Accrued and prepaid interest
 re-financed into new debt .......................       50,000           --
Fees for debt issuance compensated
 through common stock issuance....................        1,000           --

See accompanying notes to consolidated financial statements

                                       F-7
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying consolidated financial statements follows.

Nature of Business and Principles of Consolidation

Knobias,  Inc. ("the  Company" or "Knobias") was formed in November 2004,  under
the laws of the State of Delaware  pursuant to the Delaware General  Corporation
Law ("DGCL"). On November 15, 2004,  Consolidated Travel Systems, Inc. ("COVSA")
acquired all the  outstanding  stock of Knobias  Holdings,  Inc. For  accounting
purposes, the acquisition was treated as a recapitalization of Knobias Holdings,
Inc. with Knobias Holdings,  Inc. considered the acquirer (reverse acquisition).
Upon  completion  of the  transaction,  the entity  was  renamed  Knobias,  Inc.
reflecting the exchange of equity interests with COVSA.

The Company's primary subsidiary Knobias.com, LLC (formerly Penny PI, LLC) was
formed on September 4, 1998, under the laws of the State of Mississippi pursuant
to the Mississippi Limited Liability Company Act. Penny PI, LLC was organized to
design and implement an Internet website for the provision of subscriber based
information and investigative services relating to over-the-counter bulletin
board companies, commonly referred to as "penny stocks."

Knobias consolidates, maintains and markets data from the world's largest
electronic database of historical and real-time information covering thousands
of Outside Market companies. Outside Market companies include those companies
that trade publicly "over-the-counter" in such markets as the Over-the-Counter
Bulletin Board(TM), the Pink Sheets(TM), and the NASDAQ SmallCap Market (TM), as
well as entrepreneurial private companies. The Company's database development
and marketing efforts are focused toward servicing institutional customers
rather than retail investors. The Company has developed a new website under the
Knobias.com name, and discontinued supporting the original Penny PI website.
Management of the Company believes that Knobias is the first and largest
unbiased resource for Outside Market intelligence.

The accompanying consolidated financial statements include the accounts of
Knobias, Inc. and its wholly-owned subsidiary, Knobias.Com, LLC. All
Intercompany balances and transactions have been eliminated in consolidation.
Knobias Holdings, Inc. and Kollage, LLC are inactive subsidiaries of the
Company. Prior to the merger and the 100% consolidation of Kollage, LLC, its
income and expenses were included in the financial statements of Knobias
Holdings, Inc.

On June 30, 2004, Consolidated Travel Systems, Inc. (the "Company") entered into
an Agreement and Plan of Reorganization (the "Merger Agreement") with Knobias
Holdings, Inc., a privately held Delaware corporation ("Knobias"),and KHI
Acquisition, Inc., a wholly owned subsidiary of the Company (the "Merger Sub").
Pursuant to the Merger, KHI Acquisition, Inc. has been dissolved.

Estimates

The preparation of financial statements in conformity with the accounting
principles generally accepted in the United States of America requires
management to make certain 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
revenue and expenses during the reporting period. Actual results could differ
from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash and certificates of deposit issued with
an original maturity date of three months or less.

                                       F-8
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

Accounts Receivable

The Company records an estimate for its estimated uncollectible accounts at the
end of each period based upon a detailed analysis of the aging of accounts
receivable and specific customer account analysis. The Company's policy is to
block access to services for users who become delinquent for a certain period of
time on their accounts. Because of this policy and diligent monitoring of past
due accounts, the Company has had a limited number of accounts which have become
uncollectible once their service has been established. Accounts receivable are
written off against the allowance for doubtful accounts after the Company
exhausts all collection efforts. The allowance for doubtful accounts at December
31, 2005, is $63,000.

Property and Equipment

Property and equipment are stated at cost. Maintenance and repairs are expensed
in the period incurred. Major renewals and betterments are capitalized. When
items of property and equipment are sold or retired, the related costs are
removed from the accounts, and any gain or loss is included in operations.

Depreciation and amortization is provided on a straight-line basis. Furniture
and leasehold improvements are depreciated over an estimated life of ten years;
computer and other equipment are depreciated over an estimated life of five to
seven years; computer software is amortized over an estimated life of five
years.

Internal Database Development and Amortization

Website development costs are accounted for in accordance with Statement of
Position 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use, issued by the American Institute of Certified Public
Accountants. Accordingly, all external and direct internal costs incurred during
the application development stage are capitalized. Costs incurred during the
preliminary project stage and the post-implementation state are expensed as
incurred. Website development costs are being amortized over three years on the
straight-line basis. These costs are amortized on a straight-line basis
beginning with the date of the website launch and are fully amortized at
December 31, 2005. The company expenses costs related to updating and minor
upgrades of the website and product as they are incurred. No project costs have
been capitalized since the initial development of the Company's website.

Impairment of Long-Lived Assets

The Company periodically reviews the carrying value of property and equipment,
including website and data development costs, whenever events and circumstances
indicate a potential impairment. If indicators of impairment are present, and
the undiscounted cash flows to be derived from the use and eventual disposal of
the related assets are not expected to be sufficient to recover the asset's
carrying amount, and impairment loss is charged to operations in the period
identified. The impairment loss is based upon the difference between the
carrying amount and the fair value of such asset, as determined based upon the
related discounted cash flows.

Income Taxes

Knobias, Inc. is a "C Corporation" and, therefore, will, upon achieving taxable
earnings, pay taxes as a corporation. The Company accounts for corporate income
taxes using the asset and liability method of accounting prescribed by Statement
of Financial Accounting Standard No. 109. The Company has not yet generated
taxable income, a valuation allowance has been provided equal to the full amount
of the deferred tax asset related to the loss carryforward.

                                       F-9
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

Deferred Revenue

The Company generally receives monthly subscription fees for its services.
However, from time to time, the Company will receive quarterly or annual
subscriptions paid in advance and deferred revenue is recorded at that time. The
deferred revenue is amortized into revenue on a pro-rata basis each month.
Customers with quarterly or annual subscriptions may cancel their subscriptions
and request a refund for future months' revenues at any time. Therefore, a
liability is recorded to reflect the amounts which are potentially refundable.

Fair Value of Financial Instruments

The carrying values of the Company's financial instruments, including cash
equivalents, short-term investments, accounts receivable, accounts payable and
debt, approximate their fair values due to their short-term maturities.

Revenue Recognition

For revenue from services, the Company recognizes revenue in accordance with SEC
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101"). SAB 101 requires that four basic criteria must be met before
revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred or services have been rendered; (3) the selling price is
fixed and determinable; and (4) collectibility is reasonably assured.
Determination of criteria (3) and (4) are based on management's judgments
regarding the fixed nature of the selling prices of the products
delivered/services rendered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product has not been
delivered or for which services have not been rendered or are subject to refund
until such time that the Company and the customer jointly determine that the
product has been delivered or services have been rendered or no refund will be
required.

In December 2003, the SEC issued Staff Accounting Bulletin ("SAB") No. 104,
Revenue Recognition. SAB No. 104 updated and revised the existing revenue
recognition policies to make its interpretive guidance consistent with current
accounting guidance, principally EITF Issue No. 00-21, "Revenue Arrangements
with Multiple Deliverables." Also, SAB 104 incorporates portions of the Revenue
Recognition in Financial Statements-Frequently Asked Questions and Answers
document that the SEC staff considered relevant and rescinds the remainder. The
Company's revenue recognition policies are consistent with this guidance;
therefore, this guidance will not have an immediate impact on the Company's
financial statements.

Subscription services revenues are recognized over the period that services are
provided. Other revenues, which consist principally of the provision of
information through its website, are recognized as the services are performed or
when the goods are delivered. Deferred revenue consists primarily of monthly,
semi-annual, and annual prepaid subscription fees billed or collected in
advance.

Concentrations of Credit Risk

Financial instruments and related items which potentially subject the Company to
concentrations of credit risk consist primarily of cash and trade receivables.
The Company places its cash and temporary cash investments with credit quality
institutions. At times, such investments may be in excess of the FDIC insurance
limit. The Company's customers are concentrated in the investment sector and it
periodically reviews its trade receivables in determining its allowance for
doubtful accounts. The allowance for doubtful accounts at December 31, 2005, is
$63,000.

                                      F-10
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

Stock Based Compensation

Stock option grants are accounted for in accordance with Accounting Principles
Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations. Accordingly, no compensation expense is recognized for
stock options granted if the option price is not less than the fair market value
of the underlying stock at the grant date. For each of the years ended December
31, 2005 and 2004, no stock based compensation expense was included in the
determination of net loss as all options granted during the years had an
exercise price equal to the estimated market value of the stock on the date of
grant.

Stock-based awards to non-employees are accounted for under the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
Stock-Based Compensation, and Emerging Issues Task Force ("EITF") Issue No.
96-18, Accounting for Equity Instruments That are Issued to Other Than Employees
for Acquiring, or in Conjunction with Selling, Goods and Services.

Had compensation expense been determined on the basis of fair value pursuant to
SFAS No. 123, using the minimum value method as a basis of determining fair
values, net loss and net loss per share would have been increased as follows:


                                             2005             2004
                                      -----------    -------------
Net loss, as reported .............   $(2,643,171)   $  (2,811,127)
Less stock based compensation
  expense determined under fair
  value method for all stock options
                                       (1,080,000)          (3,975)
                                      -----------    -------------
Pro forma net loss ................   $(3,723,171)   $  (2,815,102)
                                      ===========    =============

Basic loss per share
  As reported .....................   $     (0.05)   $       (0.06)
                                      ===========    =============
  Pro forma .......................   $     (0.07)   $       (0.06)
                                      ===========    =============


See discussion of pricing of and additional information on these options
included in Note G.

                                      F-11
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

Advertising Costs

Advertising costs are expensed as incurred. Total advertising expenses were
$16,000 and $23,000 for the year ended December 31, 2005 and 2004, respectively.

Net Loss Per Common Share

Net loss per share - basic and diluted is based upon the weighted average common
shares outstanding which totaled 50,766,505 and 43,984,884 for the years ended
December 31, 2005 and 2004.

For purposes of determining net loss per share - diluted, neither the conversion
of debt or equity securities nor the exercise of outstanding options or warrants
are assumed because the effect would be antidilutive.

Recently Issued Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151, Inventory Costs-- an amendment of ARB No. 43, Chapter 4. This Statement
amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4,
previously stated that ". . . under some circumstances, items such as idle
facility expense, excessive spoilage, double freight, and rehandling costs may
be so abnormal as to require treatment as current period charges. . . ." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. Management does not believe the
adoption of this Statement will have any immediate material impact on the
Company.

In December 2004, the FASB issued SFAS No.152, "Accounting for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152). This Statement amends FASB Statement No. 66, Accounting for Sales of Real
Estate, to reference the financial accounting and reporting guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions. This Statement
also amends FASB Statement No. 67, Accounting for Costs and Initial Rental
Operations of Real Estate Projects, to state that the guidance for (a)
incidental operations and (b) costs incurred to sell real estate projects does
not apply to real estate time-sharing transactions. The accounting for those
operations and costs is subject to the guidance in SOP 04-2. This Statement is
effective for financial statements for fiscal years beginning after June 15,
2005. with earlier application encouraged. The Company does not anticipate that
the implementation of this standard will have a material impact on its financial
position, results of operations or cash flows.

On December 16, 2004, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No. 123 (Revised 2004),
Share-Based Payment ("SFAS 123R"). SFAS 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The provisions of SFAS
123R are effective as of the first interim period that begins after June 15,
2005. Accordingly, the Company will implement the revised standard in the third
quarter of fiscal year 2005. Prior to that time, the Company accounted for its
share-based payment transactions under the provisions of APB 25, which does not
necessarily require the recognition of compensation cost in the financial
statements. The revised standard had no impact on the Company's results of
operations in the third and fourth quarters of fiscal year 2005 because no
share-based payments were issued during those periods. The Company has no
regularly scheduled share-based payment plan and, therefore, cannot determine
the impact of this standard on future periods.

                                      F-12
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

On December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29,
Accounting for Nonmonetary Transactions (" SFAS 153"). This statement amends APB
Opinion 29 to eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. Under SFAS 153, if a
nonmonetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss. SFAS 153 is
effective for nonmonetary transactions in fiscal periods that begin after June
15, 2005. The Company does not anticipate that the implementation of this
standard will have a material impact on its financial position, results of
operations or cash flows.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional Asset Retirement Obligations, an interpretation of FASB Statement
No. 143," which requires an entity to recognize a liability for the fair value
of a conditional asset retirement obligation when incurred if the liability's
fair value can be reasonably estimated. The Company is required to adopt the
provisions of FIN 47 no later than the first quarter of fiscal 2006. The Company
does not expect the adoption of this Interpretation to have a material impact on
its consolidated financial position, results of operations or cash flows.

In May 2005 the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 154, "Accounting Changes and Error Corrections, a replacement of APB Opinion
No. 20 and FASB Statement No. 3." SFAS 154 requires retrospective application to
prior periods' financial statements for changes in accounting principle, unless
it is impracticable to determine either the period-specific effects or the
cumulative effect of the change. SFAS 154 also requires that retrospective
application of a change in accounting principle be limited to the direct effects
of the change. Indirect effects of a change in accounting principle, such as a
change in non-discretionary profit-sharing payments resulting from an accounting
change, should be recognized in the period of the accounting change. SFAS 154
also requires that a change in depreciation, amortization, or depletion method
for long-lived, non-financial assets be accounted for as a change in accounting
estimate effected by a change in accounting principle. SFAS 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. Early adoption is permitted for accounting changes and
corrections of errors made in fiscal years beginning after the date this
Statement is issued. The Company does not expect the adoption of this SFAS to
have a material impact on its consolidated financial position, results of
operations or cash flows.

On February 16, 2006 the FASB issued SFAS 155, "Accounting for Certain Hybrid
Instruments," which amends SFAS 133, "Accounting for Derivative Instruments and
Hedging Activities," and SFAS 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." SFAS 155 allows financial
instruments that have embedded derivatives to be accounted for as a whole
(eliminating the need to bifurcate the derivative from its host) if the holder
elects to account for the whole instrument on a fair value basis. SFAS 155 also
clarifies and amends certain other provisions of SFAS 133 and SFAS 140. This
statement is effective for all financial instruments acquired or issued in
fiscal years beginning after September 15, 2006. The Company does not expect its
adoption of this new standard to have a material impact on its financial
position, results of operations or cash flows.


Reclassifications

Certain reclassifications have been made in prior year's financial statements to
conform to classifications used in the current year.

NOTE B - BUSINESS COMBINATION AND CORPORATE RESTRUCTURE

Knobias,  Inc. ("the  Company" or "Knobias") was formed in November 2004,  under
the laws of the State of Delaware  pursuant to the Delaware General  Corporation
Law ("DGCL"). On November 15, 2004,  Consolidated Travel Systems, Inc. ("COVSA")
acquired all the  outstanding  stock of Knobias  Holdings,  Inc. For  accounting
purposes, the acquisition was treated as a recapitalization of Knobias Holdings,
Inc. with Knobias Holdings,  Inc. considered the acquirer (reverse acquisition).
Upon  completion  of the  transaction,  the entity  was  renamed  Knobias,  Inc.
reflecting the exchange of equity interests with COVSA.

Effective with the agreement, all previously outstanding stock owned by COVSA's
stockholders were exchanged for a total of 2,500,000 shares of the Knobias
Holdings, Inc. common stock, along with a cash payment of $400,000, less filing
fees.

The total consideration paid was $670,733 and the significant components of the
transaction are as follows:


Common stock retained (at par value)             $  25,000
Assets acquired                                          -
Liabilities assumed                                      -
Cash paid ($400,000 less filing fees)              399,367
                                                 ---------
Consideration   given  to   original   COVSA
shareholders                                       424,367
Common stock  issued for  services  provided
(at par value)                                      20,341
Commissions and fees paid                          226,025
                                                 ---------
     Total consideration/organization costs      $ 670,733
                                                 =========


In accordance with accounting principles generally accepted in the United
States, these amounts have been expensed and are reflected in the accompanying
statement of operations as a non-operating expense.

                                      F-13
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE C - PROPERTY, EQUIPMENT, AND DATABASE DEVELOPMENT

Major classes of property and equipment at December 31, 2005, consists of the
following:


                                                          2004
                                                          ----

Furniture, equipment and leasehold improvements       $    174,384

Computer hardware and software                             450,599

Website and database development                           608,544
                                                      ------------

Total property, equipment, and database development      1,233,527

Less:  accumulated amortization                           (608,544)
Less: accumulated depreciation                            (439,646)
                                                      ------------
Total accumulated depreciation                          (1,048,190)

Property, equipment and database development, net     $    185,337
                                                      ============


Depreciation and amortization expense was $72,039 and $87,764 for the years
ended December 31, 2005 and 2004, respectively.

NOTE D - NOTES PAYABLE AND SUBORDINATED DEBT

Notes payable and subordinated debt at December 31, 2005, consists of the
followings:

     Senior Subordinated Notes for $550,000 bearing interest
          at 12% with  interest  payable  monthly,  maturing
          September  1, 2006.  DCOFI  Master,  Ltd.  holds a
          second priority lien on  substantially  all of the
          Company's assets.  This lien is junior to the lien
          granted to the holders of the Secured  Convertible
          Notes issued November 15, 2004.                             $ 550,000

     Debt issuance costs, net of accumulated amortization of
          $24,020                                                       (10,980)
                                                                       ---------
                                                                        539,020
                                                                       ---------

     Line of  credit  equipment   financing  $15,000  limit,
          variable  interest  rate  (20.49% at December  31,
          2005),  with  payments due monthly  3,163  Secured
          Convertible   Notes,   interest   at  8%   payable
          quarterly,  due  November  1, 2006.  The notes are
          convertible at any time, at the option of the note
          purchaser,  into the Company's common stock at the
          initial  conversion  price (subject to adjustment)
          of $0.30 per share;  The  investors of these notes
          are   secured   by   a   security    interest   in
          substantially  all of the  Company's  assets and a
          guarantee by its subsidiaries.  At the time of the
          issuance of the notes,  the Company also issued to
          the  note  purchasers   warrants  to  purchase  an
          aggregate  of  3,000,000  shares of the  Company's
          common stock.  The warrants may be  exercised,  in
          whole or in part,  at any time  within  five years
          from the date of the issuance of the notes, for an
          exercise price of $0.01 per share.  The Company is
          currently in default on its  $1,000,000 in secured
          convertible  notes  issued  in  November  2004 for
          failure   to   have  an   effective   registration
          statement   with  the   Securities   and  Exchange
          Commission  registering the shares  underlying the
          secured   convertible  notes.  As  a  result,  the
          Company is obligated to pay 18% interest and other
          default penalties.                                          1,000,000

     Debt issuance costs, net of accumulated amortization of
          $43,750                                                       (31,250)

     Debt discount--beneficial  conversion  feature,  net  of
          accumulated amortization of $181,171                         (134,838)

     Debt discount--value  attributable to warrants  attached
          to  notes,  net  of  accumulated  amortization  of
          $342,562                                                     (266,428)
                                                                       ---------
                                                                        567,484
                                                                       ---------

     Promissory Note with company director,  interest at 12%
          payable   monthly,   due   October  7,  2005.   In
          connection  with the  issuance of this  promissory
          note,  the  Company  issued a warrant to  purchase
          10,000 shares of the Company's common stock, which
          are exercisable  until five years from the date of
          issuance at $0.75 per share,  net of discount  for
          $1,000   value  place  on  warrants   issued  less
          amortization of $1,000                                         50,000

     Line of Credit for $300,000  with local bank,  interest
          at  prime  plus 2%  maturing  on  April  27,  2006            170,000

     Promissory Note,  interest at 8% due at maturity  which
          is  August  22,  2005,  or  upon  the  funding  of
          $1,500,000 equity raise by the Company                         75,000

     Convertible  Promissory  Notes  with  Bushido  Capital,
          interest   at   8%   payable,   convertible   into
          subsequent  convertible  instruments  or shares of
          common stock  pursuant to the terms and conditions
          of the Company's anticipated issuance of privately
          placed  securities,  provided  that  such  private
          placement  issuance is  presented to Bushido on or
          before the  maturity  date of the notes at various
          times in 2006.  The  financing is  continuous  and
          ongoing,  on a bi-monthly basis, until the Company
          completes  its  anticipated  issuance of privately
          placed securities                                             775,000

                                                                      ----------
Total                                                           $     2,179,667
Less: current portion of long-term debt                               2,179,667
                                                                      ----------
Note payable - long-term                                        $            --
                                                                      ----------


Amounts due prior to December 31, 2005, have not been repaid. Informal
arrangements have been reached with the lenders to delay repayment pending
additional fundraising efforts by the Company.

In connection with the placement of the Securities Purchase Agreement, the
Company issued warrants granting the holders the right to acquire 3,000,000
shares of the Company's common stock at $0.01 per share. In accordance with EITF
Issue 00-27, Application of EITF Issue 98-5 to Certain Convertible Instruments,
the Company recognized the value attributable to the warrants in the amount of
$608,990 (calculated as a pro rata value of the note, net of debt issue costs
and the calculated value of the warrants) to additional paid-in-capital and a
discount against the debt issued during 2004. The Company valued the warrants in
accordance withy EITF 00-27; using the Company's estimate of fair value at that
time of the securities at the date of issue which was $0.60, volatility of 125%
and an interest rate of 3%.

In connection with issuance of the Securities Purchase Agreement and in
accordance with EITF Issue 98-5 Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, the
Company recognized an imbedded beneficial conversion feature present in the
Securities Purchase Agreement. The Company allocated a portion of the proceeds
equal to the intrinsic value of that feature to additional paid in capital.
Under EITF 98-5, the amount allocated to the beneficial conversion feature
should be deducted from the balance of the note. In this instance, after the
initial allocation of the value of the warrants, the amount calculated as the
intrinsic value of the beneficial conversion feature exceeded the remaining pro
rata value of the note. Therefore, the remaining $316,009 of the note balance
has been recorded as a discount attributable to the beneficial conversion
feature. This discount has been recorded as additional paid in capital and as a
discount against the Securities Purchase Agreement issued during the year ending
December 31, 2004. The debt discount attributed to the beneficial conversion
feature is amortized over the securities' twenty-four month duration as interest
expense.


                                      F-14
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE E - ACCRUED LIABILITIES

Accrued liabilities at December 31, 2005, consist of the followings:


Accrued payroll                                                $ 36,677
Accrued interest                                                143,832
Accrued commissions                                              92,203
Miscellaneous accrued expenses                                   28,567
Deferred revenue                                                 25,991
                                                               --------
Total accrued liabilities                                      $327,270
                                                               ========


NOTE F - STOCKHOLDER'S EQUITY

Common Stock

The Company is authorized to issues 95,000,000 shares of its common stock and
has 50,766,505 shares outstanding at December 31, 2005 (50,766,667 at December
31, 2004). Holders of the Class A common stock are entitled to one vote per
share.

On November 15, 2004, Consolidated Travel Systems, Inc. ("COVSA") acquired all
the outstanding stock of Knobias Holdings, Inc. For accounting purposes, the
acquisition was treated as a recapitalization of Knobias Holdings, Inc. with
Knobias Holdings, Inc. considered the acquirer (reverse acquisition). Upon
completion of the transaction, the entity was renamed Knobias, Inc. reflecting
the exchange of equity interests with COVSA.

The existing shareholders of Knobias Holdings, Inc. received an exchange of
34,911,941 shares of Knobias, Inc. for their existing Knobias Holdings, Inc.
shares held at December 31, 2003. Prior to the merger, Knobias Holdings, Inc.
also issued additional common stock which was exchanged in the merger for
947,786 shares of Knobias, Inc. and is reflected as a stock issuance in the
Statement of Deficiency in Stockholders' Equity.

The Company owned 50% of the company Kollage, LLC prior to the merger. The owner
of the remaining 50% had advanced $362,000 to the Company prior to the merger.
During the merger, the owner of the remaining 50% of Kollage, LLC was awarded
9,531,700 shares of common stock of the Company in exchange for his interest in
Kollage and advances to the Company.

The Company had subordinated debt of $1,050,000 outstanding at December 31,
2003. In connection with the merger, that debt, along with $253,202 of accrued
interest was converted into 841,216 shares of common stock of the Company.

In connection with the merger, the Company distributed to the COVSA shareholders
of record 2,500,000 shares of the Company's common stock. Also, the Company
distributed to others in exchange for services rendered 2,034,024 shares of the
Company's common stock. These amounts have been recorded as a portion of merger
costs at the par value of the stock.

Series A Preferred Stock

In November 2004, the Company accepted subscription agreements for gross
proceeds of $1,150,000 for 958,333 shares of its Series A Preferred Stock for
$1.20 per share. Holders of Series A Preferred Stock will receive an annual
cumulative dividend of $0.12 per share payable semi-annually on April 30 and
October 31 of each year beginning April 30, 2005. Holders of Series A Preferred
Stock who refer customers to the Company or are themselves customers of the
Company will receive a dividend equal to the greater of the cumulative dividend
of $0.12 per share or a non-cumulative dividend equal to a minimum of 10% and a
maximum of 25% of the net income from fees received by the Company from each
referred customer and from the holder itself for (i) access to Knobias'
internet-based financial services platform and (ii) execution of customer
securities transactions.

Each share of Series A Preferred Stock may be converted at any time at the
option of the holder into four shares of common stock. There were no beneficial
conversion discounts associated with this preferred stock.

                                      F-15
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE F - STOCKHOLDER'S EQUITY (cont.)

Additional Paid-in-Capital

Transactions to additional paid-in-capital which are not related to the issuance
of stock discussed under common stock above relate to debt issue discounts of
$608,990 for warrants attached to convertible debt securities and $316,009 for
beneficial conversion features associated with those same securities. See Note D
for a description of these securities.

NOTE G - STOCK OPTIONS AND WARRANTS

Stock Options

The following table summarizes the changes in options outstanding and the
related prices for the shares of the Company's common stock issued to the
Company employees and consultants. These options were granted in lieu of cash
compensation for services performed.

 -------------- Options Outstanding -------------  ---- Options Exercisable ----
                             Weighted
                              Average     Weighted                    Weighted
                             Remaining    Average                     Average
  Exercise       Number     Contractual   Exercise       Number       Exercise
   Prices      Outstanding  Life (Years)   Price       Exercisable     Price
$0.72-$3.004    3,070,000       9.20       $ 0.76       2,331,350      $ 0.78


Transactions involving options issued to employees summarized as follows:

                                                     Weighted Average
                                  Number of Shares    Price Per Share

Outstanding at January 1, 2004 .       65,500         $     3.004
   Granted .....................       93,000               1.295
   Exercised (Note F) ..........           --                  --
   Canceled or expired .........           --                  --
Outstanding at December 31, 2004      158,500         $      2.00
   Granted .....................    3,262,000                0.72
   Exercised ...................           --                  --
   Canceled or expired .........      350,500                  --
Outstanding at December 31, 2005    3,070,000         $      0.76


The Company granted stock options for 3,262,000 shares to employees during the
quarter ended June 30, 2005. The estimated value of the options granted to
shareholders during the nine months ended September 30, 2005, was determined
using the Black-Scholes option pricing model and the following assumptions:
expected term of 10 year, a risk free interest rate of 4.40%, a dividend yield
of 0% and volatility of 259%. Since the Company has not yet adopted SFAS No.
123R, it elected not to charge the calculated value of $1,080,000 to
compensation expense in the year granted.

The Company granted stock options for 93,000 shares to shareholders during the
year ended December 31, 2004. The estimated value of the options granted to
shareholders during the year ended December 31, 2004, was determined using the
Black-Scholes option pricing model and the following assumptions: expected term
of 1 year, a risk free interest rate of 4.00%, a dividend yield of 0% and
volatility of 0%. Since the Company has not yet adopted SFAS No. 123R, it
elected not to charge the calculated value of $3,975 to compensation expense in
the year granted.

                                      F-16
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE G - STOCK OPTIONS AND WARRANTS (cont.)

Warrants

In connection with its merger during 2004, the Company issued warrants to
purchase 3,203,750 shares of the Company's common stock. The warrants are
exercisable at prices ranging from $0.01 to $0.60 per share and are exercisable
for five years after their issuance. Warrants may be satisfied with unregistered
shares and, accordingly have been accounted for as permanent equity.

Also, the Company assumed warrants previously issued by Knobias Holdings, Inc.
under substantially the same terms in which they were originally issued. The
warrants are exercisable at a price of $3.25 per share.

The following table summarizes the changes in warrants outstanding and the
related prices for the shares of the Company's common stock.

                      Warrants Outstanding and Exercisable

                                    Weighted Average
                       Number     Remaining Contractual   Weighed Average
Exercise Prices      Outstanding      Life (Years)         Exercise Price
$0.01 to $3.25        4,450,998          3.23                 $ 0.75


Transactions involving warrants issued to investors and consultants are
summarized as follows:

                                                            Weighted Average
                                       Number of Shares     Price Per Share
Outstanding at December 31, 2003           891,218                3.25
   Granted                               3,203,750                0.05
   Exercised                                    --                  --
   Canceled or expired                          --                  --
Outstanding at December 31, 2004         4,094,968                0.75
   Granted                                 356,030                0.84
   Exercised                                    --                  --
   Canceled or expired                          --                  --
Outstanding at December 31, 2005         4,450,998              $ 0.75

The value of warrants was determined using the Company's estimate of value
utilized during its merger and fund-raising efforts (which approximated fair
market value) during November 2004. Warrants to purchase 3,000,000 shares of the
Company's stock have been recorded as a debt discount (See Note D.). Other
warrants were substantially the same as the fair market value of the new company
at the time of their issuance. Therefore, no expense was recorded at that time.

                                      F-17
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE H - SIGNIFICANT RISKS AND UNCERTAINTIES

The Company has a limited operating history and is currently pursuing a business
strategy that is largely unproven. As a result, its ability to successfully
implement its business plan is dependent on, among other things, its ability to
generate sufficient cash flow through operations or additional debt or equity
transactions to sustain business development efforts until revenues from
customers reach levels that can support ongoing operations. The Company expects
to continue to incur operating losses for the near future and there can be no
assurance that profitability will be achieved or sustained.

The Company is heavily dependent upon its developed and purchased database,
software and hardware products. As mentioned previously, the Company amortizes
capitalized database and internal use software and depreciates purchased
hardware and software on a straight-line basis over an estimated useful life of
three to five years. Due to inherent technological changes in the computer
hardware and software industry, the period over which such items are being
amortized and depreciated may be longer than its actual useful life. In the
event that this fact becomes apparent, the amortization and depreciation will
have to be accelerated.

The Company is also heavily dependent on other vendors to provide access to the
information it markets through its website. Various contracts have been entered
into, mostly for a term of one year or month-to-month basis for the provision of
this information. The failure of these vendors to supply the information
contracted for would have a severe adverse impact on the Company's ability to
provide future services to its customers.

Legal Proceedings

The Company is party to lawsuits and other claims that arise in the ordinary
course of business. The lawsuits assert claims related to the general business
activities of the Company. The cases are being vigorously contested. In the
regular course of business, management evaluates estimated losses or costs
related to litigation, and provision is made for anticipated losses whenever
management believes that such losses are probable and can be reasonably
estimated. While management believes that the final resolution of pending legal
proceedings will not have a material impact on the Company's financial position
or results of operations, the final resolution of such proceedings could have a
material adverse effect on the Company's financial position or results of
operation.

NOTE I - INCOME TAXES

The Company has adopted Financial Accounting Standard number 109, which requires
the recognition of deferred tax liabilities and assets for the expected future
tax consequences of events that have been included in the financial statement or
tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between financial statements and tax basis of
assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. Temporary differences between taxable
income reported for financial reporting purposes and income tax purposes are
insignificant.

For income tax reporting purposes, the Company's aggregate unused net operating
losses approximate $10,300,000, expire at various times from 2015 through 2035,
subject to limitations of Section 382 of the Internal Revenue Code, as amended.
The deferred tax asset related to the carry forward is approximately $3,684,000.
The Company has provided a valuation reserve against the full amount of the net
operating loss benefit, since in the opinion of management based upon the
earning history of the Company, it is more likely than not that the benefits
will not be realized.

The tax asset increased due to the accumulation during the year ended December
31, 2005, of additional net operating losses of approximately $2,600,000 or
additional deferred tax assets of $884,000. Components of deferred tax assets as
of December 31, 2005 are as follows:


        Non-Current:
        Net operating loss carry forward   $ 3,684,000
                                           -----------
        Valuation allowance                 (3,684,000)
                                           -----------
        Net deferred tax asset             $        --
                                           ===========

                                      F-18
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004


NOTE J - EARNINGS (LOSSES) PER COMMON SHARE

The following table presents the computation of basic and diluted loss per
share:

                                                     2005           2004
                                                 ------------   ------------
    Net loss available for common stockholders   $ (2,643,171)  $ (2,811,127)
                                                 ============   ============
    Basic and fully diluted loss per share       $      (0.05)  $      (0.06)
                                                 ============   ============
    Weighted average common shares outstanding     50,766,505     43,984,884
                                                 ============   ============


All per share information reflects the 1 for 3 reverse stock split effected on
November 17, 2004.

NOTE K - LEASES AND COMMITMENTS

The Company has entered into leases for office and warehouse space that expire
in at various times during 2006. Minimum lease payments for the year ending
December 31, 2006, are $63,000 with none required thereafter.

The Company has entered into various agreements for the provision of
custom-tailored stock quote displays and other information to be provided to
subscribing customers over the Internet. The agreements are for periods ranging
from 6 months to 2 years. Most of the contracts automatically renew unless
specifically terminated by either party.

Rent expense for the years ending December 31, 2005 and 2004, totaled $131,000
and $114,000, respectively.

NOTE L - BUSINESS CONCENTRATION

The Company had one customer (two for the year ended December 31, 2004) which
represent 19% and 26% of its revenues for the years ended December 31, 2005 and
2004, respectively. The Company's does not have any vendors which accounted for
more than 10% of total purchases.

NOTE M - SUBSEQUENT EVENT

The Company has borrowed an additional $290,000 under the ongoing Convertible
promissory note agreement with Bushido Capital since December 31, 2005, through
March 20, 2006.

                                      F-19
<PAGE>

                                  KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE N - GOING CONCERN

The accompanying statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the consolidated financial statements
during the year ended December 31, 2005, the Company incurred a loss of
$2,643,171. The Company's current liabilities exceeded its current assets by
$2,815,612 as of December 31, 2005. These factors among others may indicate that
the Company will be unable to continue as a going concern for a reasonable
period of time.

The Company's existence is dependent upon management's ability to develop
profitable operations and resolve its liquidity problems. Management anticipates
the Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its products and additional
equity investment in the Company. The accompanying financial statements do not
include any adjustments that might result should the Company be unable to
continue as a going concern.

In order to improve the Company's liquidity, the Company is actively pursing
additional equity financing. The Company is also actively marketing its products
in order to increase its customer base and revenues. There can be no assurance
the Company will be successful in its effort to secure additional equity
financing.

If operations and cash flows continue to improve through these efforts,
management believes that the Company can continue to operate. However, no
assurance can be given that management's actions will result in profitable
operations or the resolution of its liquidity problems.

                                      F-20