SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

               [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, 2006

                        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, 2006
were $2,266,460.

As of April 10, 2007 the  aggregate  market  value of the voting and  non-voting
common  equity  held  by  non-affiliates  of the  registrant  was  approximately
$817,000,  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 April 10,
2007, was 53,038,942 shares, held by approximately 137 stockholders.


Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

<PAGE>

                                 KNOBIAS, INC.
                          ANNUAL REPORT ON FORM 10-KSB
                  For the Fiscal Year Ended December 31, 2006

                               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 Equity Securities and Related Stockholder
                        Matters............................................    5
      Item  6.    Management's Discussion and Analysis or Plan Of
                        Operation..........................................   11
      Item  7.    Financial Statements.....................................   20
      Item  8.    Changes in and Disagreements with Accountant on
                        Auditing Accounting and Financial Disclosure.......   20
      Item 8A.    Controls and Procedures..................................   20
      Item 8B.    Other Information........................................   20

PART III
      Item  9.    Directors, and Executive Officers, Promoters, Control
                        Persons, and Corporate Governance; Compliance
                        with Section 16(a) of the Exchange Act.............   21
      Item 10.    Executive Compensation...................................   24
      Item 11.    Security Ownership of Certain Beneficial Owners and
                        Management and Related Stockholder Matters.........   25
      Item 12.    Certain Relationships, Related Transactions, and
                        Director Independence..............................   31

PART IV
      Item 13.    Exhibits.................................................   32
      Item 14.    Principal Accountant Fees and Services ..................   37

      Signatures...........................................................   38




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 $99,000 in connection with this service or 4% of
revenues for the year ended December 31, 2006.

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 billed  $340,000 for this product during 2006 or 15% of revenues for the
year ended December 31, 2006.

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 16% and 19% of its gross revenues
for the years ended December 31, 2006 and 2005, respectively.

EMPLOYEES

As of December 31, 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  $2,900,  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

The Company is currently involved in pending litigation in Illinois regarding an
order to withhold child support that was entered against a former employee.  The
withholding order was for an amount in excess of the former  employee's  salary.
The Company has been  ordered to pay the  withholding  amount and an  additional
penalty for failure to withhold  said amount.  A Notice of Appeal has been filed
with the  Appellate  Court.  The Company has entered into an agreement  with the
former employee  regarding the former  employee's  payment to the Company of the
withholding amount.


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.

<TABLE>
<S>                                 <C>              <C>
                                    High($)          Low ($)
                                    ------           -------

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                        0.25            0.04
Second Quarter                       0.18            0.05
Third Quarter                        0.11            0.05
Fourth Quarter                       0.11            0.05

2007
First Quarter                        0.06            0.02
Second Quarter (1)                   0.02            0.02

<FN>
(1) As of April 9, 2007
</FN>
</TABLE>

The number of shares of Common Stock, $0.01 par value,  outstanding on April 10,
2007, was 53,038,942 shares, held by approximately 137 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.

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
     53,038,942  shares were currently issued and outstanding at April 10, 2007;
     and

o    5,000,000  shares of preferred  stock,  $0.01 par value per share, of which
     5,000,000  shares have been  designated as Series A  Convertible  Preferred
     Stock,  and of which 541,666 shares were currently issued or outstanding at
     April 10, 2007.

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

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 as of December  31, 2006,  are limited to the $0.12 per share  required
under the terms of the stock and total $460,000.

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.

                                       6
<PAGE>

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.

The  Company  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.  The
registration  statement is not effective.  We have informal  agreements with the
holders of our preferred stock in which they have agreed to waive the liquidated
damages.

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.

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.

                                       7
<PAGE>

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.

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.

                                       8
<PAGE>

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.

                                       9
<PAGE>

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.

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.

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.

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.

                                       10
<PAGE>

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

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.

As reported in the Report of Independent  Registered  Public  Accounting Firm on
our  December  31,  2006  consolidated  financial  statements,  the  Company has
suffered recurring losses from operations and has a working capital deficit that
raises substantial doubt about our ability to continue as a going concern.

                                       11
<PAGE>

RESULTS OF OPERATIONS

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

The following table shows the consolidated statements of operations for the year
ended December 31, 2006 and 2005:


<TABLE>
                                    DECEMBER 31,
                            ----------------------------
<S>                                  <C>             <C>             <C>              <C>
                                2006            2005          $ CHANGE         % CHANGE
                            ------------    ------------    ------------      -----------
Revenue
 Subscriptions              $  1,730,072    $  1,976,680    $    246,608              12%
 Information provisioning        536,388         148,442         387,946             261%
                             ------------    ------------
   Total revenue               2,266,460       2,125,122         141,338               7%
Operating Expenses
 Product related costs         2,464,241       2,125,030        (339,211)             16%
 Selling, general and
  administrative expenses      1,253,975       1,867,465         613,490              33%
 Depreciation and
  amortization                    72,234          72,039             195               -%
                            ------------    ------------
   Total operating expenses    3,790,450       4,064,534         274,084               7%
                            ------------    ------------

   Operating loss             (1,523,990)     (1,939,412)        415,422              21%
                            ------------    ------------

 Interest expense, net          (736,269)       (703,759)        (32,510)             -5%
                             ------------    ------------
    Net loss                 $ (2,260,259)   $ (2,643,171)   $   382,912              14%
                             ============    ============
</TABLE>

Subscription   revenues  have  decreased   $246,608  or  12%.  The  decrease  is
attributable  to customers who have ceased business in sectors which utilize our
products and in declining  users in some other of our  existing  customers.  Our
information  provisioning increased 261% due to significant increases in 2006 of
our media  products  including  press release  income and issuer  services media
packages.

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
increased by $339,211  during the year ended  December 31, 2006 due primarily to
the re-allocation of certain company personnel into that area to more accurately
match their daily duties. Also, the 5 additional employees who were hired during
2006 were solely dedicated to the product area.

Selling,  general and  administrative  costs decreased  primarily as a result of
re-allocation  of  employees  to the product  area based on their  actual  daily
duties and to continued  savings  obtained through having in-house legal counsel
and decreases in our audit fees from prior years due to a $30,000  credit issued
by our audit firm during  2006.  Additional  decreases in that area are based on
rescission of our prior commission agreement with our employees and a write down
of commissions due under that prior agreement of $90,000.

Interest  expense  for the  year  ended  December  31,  2006,  increased  due to
increases in outstanding indebtedness and the interest thereon, partially offset
by decreases in amortization of debt discount of $78,610.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2006, we had cash of $30,255 and had a working  capital  deficit
of $4,737,212.  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.

                                       12
<PAGE>

For  the  year  ended  December  31,  2006,  net  cash  used in  operations  was
$1,454,000. The primary funding of these operations was $1,415,000 received from
the issuance of new debt.  The net loss for the period of $2,260,000  was offset
by non-cash  expense items and by increases in our accounts  payable and accrued
expenses. By comparison, for the year ended December 31, 2005, our net cash used
in operating  activities was $1,482,000.  This amount is comprised of a net loss
for the period of $2,643,000,  which was offset by non-cash expense items and by
increases in our accounts payable and accrued expenses

The purchase of fixed assets during the years ended December 31, 2006, and 2005,
were $34,000 and $6,000, respectively.

The following is a description  of certain  transactions  that were entered into
during 2005 and 2006 to help provide funds for ongoing operations:

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.

o    On April 10,  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 and continuing throughout 2006, we obtained advances
     on our next level of  fund-raising  from Bushido  Capital Master Fund, L.P.
     under  convertible  notes  payable.  These  advances  totaled  $775,000  at
     December 31, 2005 and we received  additional advances of $1,415,000 during
     the year ended  December 31, 2006.  These  advances bear interest at 8% per
     annum.

o    On  February  22,  2007,  we entered  into a letter of intent  ("Letter  of
     Intent")  regarding  a  proposed  restructuring  of  the  debt  and  equity
     capitalization of, and the amendment of certain  outstanding  agreements of
     Knobias,  Inc.  (the  "Company").  Pursuant  to the Letter of  Intent,  the
     principal  terms of the  restructuring  (the  "Restructuring")  include the
     following:  (i) the conversion of all outstanding  indebtedness  (except as
     set  forth  in  (ii)  and  (vii)below),   including  accrued  interest  and
     penalties, into a newly established Series B convertible preferred stock of
     the Company (the "Series B Preferred Stock"),  (ii) the exchange of certain
     indebtedness  of the  Company  in the  principal  amount  of  approximately
     $250,000  into a 4-year  subordinated  loan,  (iii)  the  amendment  of the
     Company's  outstanding Series A Convertible  Preferred Stock (the "Series A
     Preferred Stock") to eliminate  certain rights,  preferences and privileges
     of the  Series A  Preferred  Stock,  (iv) an offer  by the  Company  to the
     holders of the Series A Preferred  Stock to convert  such  Preferred  Stock
     into common stock of the Company,  (v) the agreement by certain officers of
     the Company to terminate  their  existing  employment  agreements and enter
     into new six-month  agreements with the Company,  (vi) the agreement by the
     Company  and all holders of  existing  warrants  and options to cancel such
     outstanding  warrants and options,  and (vii) retiring of $200,000 in notes
     form a senior secured lender which will, in  consideration  thereof,  waive
     interest  and  penalties.  Prior to the  closing of the New  Financing  (as
     hereinafter defined),  the holders of the new Series B Preferred Stock will
     own 75% of the fully-diluted stock of the Company, and assuming the holders
     of the existing  Series A Preferred  Stock accept the exchange  offer noted
     above, such holders will own 14% of the fully-diluted stock of the Company.
     In  connection  with the  Restructuring,  the  Company  expects a financing
     commitment  pursuant  to which the Company  will  receive a minimum of $1.5
     million of new  capital in the form of a senior  secured  convertible  note
     (the "New Financing").  In advance of the closing of the New Financing, the
     Company  expects  ones of its lenders to provide  bridge  financing to meet
     certain  of  the   Company's   immediate   cash  needs.   As  part  of  the
     Restructuring,  the  majority  holders of the new Series B Preferred  Stock
     will have the right to designate two of the Company's five  directors,  and
     the majority in interest of the  investors in the New  Financing  will also
     have the right to designate two of the Company's five directors. The common
     equity  shareholders  will  elect one  director  out of the 5. The Board of
     Directors  also approved a resolution  to effect a 1-for-100  reverse stock
     split,  subject to the  receipt of  shareholder  approval.  As of April 16,
     2007,  a  formal  agreement  on the  proposed  restructuring  has not  been
     executed.

                                       13
<PAGE>

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.

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

In July 2006, the Financial  Accounting  Standards Board ("FASB")  finalized and
issued  Interpretation No. 48, ("FIN 48"), entitled  "Accounting for Uncertainty
in Income Taxes - an  interpretation  of FASB  Statement No. 109," which defines
the threshold for  recognizing  the benefits of tax return  positions as well as
guidance  regarding  the  measurement  of the  resulting  tax  benefits.  FIN 48
requires a company to recognize for financial statement purposes the impact of a
tax position if that position is "more likely than not" to prevail (defined as a
likelihood of more than fifty percent of being  sustained  upon audit,  based on
the technical  merits of the tax  position).  FIN 48 will be effective as of the
beginning  of the  Company's  fiscal year ending  December  31,  2007,  with the
cumulative  effect  of  the  change  in  accounting  principle  recorded  as  an
adjustment to retained earnings.  The Company is currently evaluating the impact
of adopting FIN 48 on its consolidated financial statements.

In September 2006, the SEC Staff issued SAB No. 108  "Considering the Effects of
Prior  Year  Misstatements  when  Quantifying   Misstatements  in  Current  Year
Financial  Statements" to require  registrants to quantify  financial  statement
misstatements  that have been  accumulating  in their  financial  statements for
years and to correct them, if material,  without restating. Under the provisions
of SAB No. 108,  financial  statement  misstatements  are to be  quantified  and
evaluated  for  materiality  using  both  balance  sheet  and  income  statement
approaches.  SAB No. 108 is effective for fiscal years ending after November 15,
2006. The adoption of this  pronouncement  did not have a material impact on the
Company's  consolidated  results  of  operations  or  financial  condition.

In  September  2006,  the  FASB  issued  SFAS  No.  157,  entitled  "Fair  Value
Measurements,"  to define fair value,  establish a framework for measuring  fair
value and  expand  disclosures  about fair value  measurements.  This  statement
provides  guidance  related to the definition of fair value, the methods used to
measure fair value and disclosures about fair value  measurements.  SFAS No. 157
is effective for financial  statements  issued for fiscal years  beginning after
November 15, 2007, and interim periods within those fiscal years. The Company is
currently  evaluating  the impact of adopting  SFAS No. 157 on its  consolidated
financial statements.

CRITICAL ACCOUNTING POLICIES

Revenue recognition and accounts receivable

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 accrued
liabilities.

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.

                                       14
<PAGE>

STOCK BASED COMPENSATION

On January 1, 2006, we adopted Statement of Financial  Accounting  Standards No.
123 (revised  2004),  Share-Based  Payment,  ("SFAS  123(R)") which requires the
measurement and recognition of compensation  expense for all share-based payment
awards made to our employees and directors  based on estimated  fair values.  We
adopted SFAS 123(R) using the modified  prospective  transaction  method,  which
requires the  application of the accounting  standard as of January 1, 2006, the
first day of our fiscal year 2006. Our consolidated  financial  statements as of
and for the year ended  December 31, 2006 reflect the impact of SFAS 123(R).  In
accordance with the modified  prospective  transition  method,  our consolidated
financial statements for prior periods have not been restated to reflect, and do
not include,  the impact of SFAS  123(R).  The value of the portion of the award
that is  ultimately  expected  to vest is  recognized  as an  expense  over  the
requisite service periods in our consolidated statement of operations.  Prior to
the adoption of SFAS 123(R),  we accounted for  stock-based  awards to employees
and  directors  using the intrinsic  value method in  accordance  with APB 25 as
allowed under Statement of Financial  Accounting  Standards No. 123,  Accounting
for Stock-Based  Compensation  (SFAS 123). As stock-based  compensation  expense
recognized  in the  consolidated  statement of  operations  for 2006 is based on
awards  ultimately   expected  to  vest,  it  has  been  reduced  for  estimated
forfeitures.  SFAS 123(R)  requires  forfeitures  to be estimated at the time of
grant and revised,  if necessary,  in subsequent  periods if actual  forfeitures
differ from those estimated.  The estimated average forfeiture rate for the year
ended December 31, 2006, of approximately 7% was based on historical  forfeiture
experience and estimated future employee forfeitures.  Stock-based  compensation
expense  recognized  as operating  expense  under SFAS 123(R) for the year ended
December 31, 2006 was $300,333,  as determined  by the  Black-Scholes  valuation
model,  and consisted of stock-based  compensation  expense  related to employee
stock  options.  See  Note  B  to  the  consolidated  financial  statements  for
additional information.

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 $2,260,259  for the year ended  December 31, 2006, and
$2,643,171  for the year ended  December 31, 2005.  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  Registered  Public  Accounting  Firm Has 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  April  16,  2007,  our  independent  registered  public
accounting firm stated that our consolidated  financial  statements for the year
ended  December 31, 2006,  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,  2006 in the  amount of
$2,260,259  and  our  current  liabilities   exceeding  our  current  assets  by
$4,737,000  as of December 31, 2006.  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.

                                       15
<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:

*    identifying appropriate targets in an efficient and timely fashion;

*    negotiating terms that we believe are reasonable;

*    Failing to  accurately  assess  the true cost of  entering  new  markets or
     marketing new products;

*    integrating the operations, technologies, products, personnel and customers
     of the acquired enterprise;

*    maintaining our focus on our existing business;

*    losing key employees; and

*    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.

                                       16
<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:

*    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;

*    There is no  cumulative  voting in the election of  directors,  which would
     otherwise  allow less than a majority  of  stockholders  to elect  director
     candidates;

*    Stockholders  cannot call a special meeting of stockholders  and cannot act
     by written consent; and

*    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:

*    election of our board of directors;

*    removal of any of our directors;

*    amendment of our certificate of incorporation or bylaws; and

*    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.

                                       17
<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:

*    that a broker or dealer  approve a person's  account  for  transactions  in
     penny stocks; and

*    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:

*    obtain financial  information and investment  experience  objectives of the
     person; and

*    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:

*    sets  forth the basis on which the  broker or dealer  made the  suitability
     determination; and

*    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 Current Notes  Payable,  We Would
Be Required To Deplete Our Working  Capital,  If Available,  Or Raise Additional
Funds.  Our Failure To Repay the Notes  Payable,  If  Required,  Could Result In
Legal Action Against Us, Which Could Require The Sale Of Substantial Assets.

We have $2,450,000 of notes payable which were due at various times during 2006.
We have reached informal  agreements with our lenders to extend these maturities
for an undetermined  length of time. We also have  $1,588,000  which are not yet
due but will become due during 2007.

                                       18
<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.

Our  ability to  operate  is  conditioned  on our  ability to obtain  additional
financing.  Our ability to satisfy our future capital requirements and implement
our  growth  plans  will  depend  upon many  factors,  including  the  financial
resources  available to us, the expansion of our sales and marketing efforts and
the status of competition.  We believe that current and future available capital
resources,  including  the net proceeds  from sale of our products and services,
will be sufficient to fund our operations at current levels for the  foreseeable
future. However, the exact amount of funds that we will require will depend upon
many  factors,  and it is possible  that we will require  additional  financing.
There can be no assurance that  additional  financing will be available to us on
acceptable  terms,  or at all. If additional  funds are raised by issuing equity
securities,  further  dilution to the  existing  stockholders  will  result.  If
adequate  funds  are not  available,  we may be  required  to  delay,  reduce or
eliminate  its programs or obtain funds  through  arrangements  with partners or
others  that may  require us to  relinquish  rights to certain of its  products,
technologies  or  other  assets.  Accordingly,  the  inability  to  obtain  such
financing  could  have a  material  adverse  effect on our  business,  financial
condition and results of operations.

The Internet could become subject to regulations  that affect our business.  Our
business segments, both directly and indirectly,  rely on the Internet and other
electronic  communications  gateways.  We  intend  to  expand  our use of  these
gateways.  To date,  the use of the  Internet  has  been  relatively  free  from
regulatory restraints. However, legislation, regulations, or interpretations may
be adopted in the future that constrain our own and our customers'  abilities to
transact  business  through  the  Internet  or other  electronic  communications
gateways.  There is a risk  that any  additional  regulation  of the use of such
gateways  could have a material  adverse  effect on our business  and  financial
condition.

If we fail to maintain effective internal controls over financial reporting, the
price of our common stock may be adversely  affected.  Our internal control over
financial  reporting  may  have  weaknesses  and  conditions  that  need  to  be
addressed,  the  disclosure of which may have an adverse  impact on the price of
our common stock. We are required to establish and maintain appropriate internal
controls over financial reporting.  Failure to establish those controls,  or any
failure of those controls once  established,  could adversely  impact our public
disclosures   regarding  our  business,   financial   condition  or  results  of
operations.  In addition,  management's  assessment  of internal  controls  over
financial  reporting  may identify  weaknesses  and  conditions  that need to be
addressed in our internal  controls  over  financial  reporting or other matters
that may raise  concerns for investors.  Any actual or perceived  weaknesses and
conditions  that need to be  addressed in our  internal  control over  financial
reporting,  disclosure of management's  assessment of our internal controls over
financial reporting or disclosure of our public accounting firm's attestation to
or report on  management's  assessment of our internal  controls over  financial
reporting may have an adverse impact on the price of our common stock.

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.

                                       19
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

Included at end of annual report.

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

None.

ITEM 8A. CONTROLS AND PROCEDURES

Evaluation of Disclosure  Controls and Procedures:  As of December 31, 2006, 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.

                                       20
<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

<TABLE>

<S>                        <C>      <C>
NAME                       AGE      POSITION
------------------         ---      -------------------------------------
E. Key Ramsey              46       President, Chief Executive Officer,
                                    Chairman of the Board of Directors
                                    and Director

Gregory E. Ballard         40       Vice President, Chief Operating
                                    Officer and Director

Susan R. Walker            38       Chief Financial Officer

Robert L. Atkins           47       Secretary and Director

Timothy J. Aylor           42       Director

Danny M. Dunnaway          58       Director

Joseph L. Stephens         49       Director
</TABLE>

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.

                                       21
<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.

                                       22
<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.

                                       23
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

The following  table sets forth for the years ended December 31, 2006,  2005 and
2004, 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       2006   175,000      0              0            0           0         0         0
and CEO  after  the                   2005   175,000      0              0            0     250,000         0         0
Merger and President of Knobias       2004   146,875      0              0            0           0         0         0

Gregory  E.  Ballard,  Our  Vice      2006   175,000      0              0            0           0         0         0
President  and COO                    2005   175,000      0              0            0     250,000         0         0
after the Merger and COO of Knobias   2004   146,875      0              0            0           0         0         0
</TABLE>

Option/SAR Grants in Last Fiscal Year

<TABLE>
<S>                     <C>              <C>          <C>      <C>       <C>         <C>          <C>          <C>           <C>
Name                    Option                                                    Stock
                        Awards                                                    Awards
                                                                                                                          Equity
                                                                                                                         Incentive
                                                                                                             Equity        Plan
                                                   Equity                                                   Incentive      Awards:
                                                  Incentive                                                   Plan        Market or
                                                    Plan                                                     Awards:       Payout
                                                   Awards:                                      Market     Number of      Value of
                                                  Number of                       Number of    Value of     Unearned      Unearned
                       Number of     Number of    Securities                      Shares or   Shares or     Shares,       Shares,
                       Securities    Securities   Underlying                       Units of    Units of     Units or      Units or
                       Underlying    Underlying  Unexercised                      Stock That  Stock That  Other Rights  Other Rights
                      Unexercised   Unexercised    Unearned             Option    Have Not     Have Not    That Have     That Have
                        Options       Options      Options    Option  Expiration   Vested       Vested     Not Vested    Not Vested
                          (#)           (#)          (#)     Exercise    Date       (#)          ($)          (#)           ($)
                                                              Price
                      Exercisable  Unexercisable               ($)

E. Key Ramsey           250,000          0            0        0.72      2015        0            0            0             0

Gregory E. Ballard      250,000          0            0        0.72      2015        0            0            0             0
</TABLE>

Under the terms of the letter of intent entered into subsequent to year end, all
options issued April 11, 2005, were canceled.

Compensation of directors

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

                                       24
<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 31, 2007,
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 53,038,942  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.

<TABLE>
<S>                                                                        <C>                  <C>
-------------------------------------------------------------------------------------------------------------
               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)       10.33%

Gregory E. Ballard
P.O. Box 2785, Ridgeland, MS  39158
Vice President, COO and Director                                      5,520,921 (2)(4)       10.41%

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)       5.88%

Joseph L. Stephens
P.O. Box 829
Magee, MS  39111
Director                                                              1,504,745 (9)           2.84%

All Directors & Officers (7 persons) as a Group                      16,422,197               30.96%

Duncan Capital Group, LLC                                            11,080,096 (10)          20.89%
</TABLE>

*    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.

                                       25
<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:

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

(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,  all of which are  exercisable;  and (iv) options to purchase
     30,000 shares of common stock,  all of which are  exercisable,  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, all of which are exercisable.

(5)  Includes  options to purchase  40,000 shares of common stock,  all of which
     are exercisable.

(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.

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.

                                       26
<PAGE>

Restricted  Stock and  Restricted  Stock Unit  Awards.  Restricted  stock awards
entitle  recipients to acquire  shares of common stock,  subject to the right 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.

                                       27
<PAGE>

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:

                                       28
<PAGE>

o    any  merger or  consolidation  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.

                                       29
<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, 2006.

<TABLE>
<S>                                                 <C>                       <C>                       <C>
                                       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                2,638,100         $            0.73                 2,638,100
Equity compensation plan not
  approved by security holders                3,559,780                      0.13                         0
                                      -----------------         -----------------       -------------------
         Total                                6,197,880                      0.39                 6,197,880
</TABLE>

                                       30
<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 was 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 and 2006,  we  borrowed  $2,190,000  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.

                                       31
<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.

          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.

                                       32
<PAGE>

          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

          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.

                                       33
<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.

                                       34
<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.

               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.

          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 anexhibit to
               the registration statement on Form SB-2 filed with the Commission
               on December 30, 2004 and incorporated herein by reference.

                                       35
<PAGE>

          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.

          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)

                                       36
<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 2006 and 2005 were $55,100 and $103,250 respectively.

Audit-Related Fees

None.

Tax Fees

None.

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.

                                       37
<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 17, 2007                    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 17, 2007
-----------------
E. Key Ramsey

/s/ GREGORY E. BALLARD     Vice President, COO and Director   April 17, 2007
----------------------
Gregory E. Ballard

/s/ ROBERT L. ATKINS       Secretary and Director             April 17, 2007
--------------------
Robert L. Atkins

/s/ TIMOTHY J. AYLOR       Director                           April 17, 2007
--------------------
Timothy J. Aylor

/s/ DANNY M. DUNNAWAY      Director                           April 17, 2007
---------------------
Danny M. Dunnaway

/s/ JOSEPH L. STEPHENS     Director                           April 17, 2007
----------------------
Joseph L. Stephens


                                       38
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2006 AND 2005

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

                                 KNOBIAS, INC.

                                       39
<PAGE>

                                 KNOBIAS, INC.
                         Index to Financial Statements

                                                                     Page No.
                                                                     --------
Reports of Independent Registered Public Accounting Firms            F-3 - F-4
Consolidated Balance Sheet as of December 31, 2006                      F-5

Consolidated Statements of Operations For the Years Ended
  December 31, 2006 and 2005                                            F-6
Consolidated  Statements of Stockholders' Deficit
 For the Years Ended December 31, 2006 and 2005                         F-7

Consolidated Statements of Cash Flows For the Years Ended
 December 31, 2006 and 2005                                             F-8
Notes to Consolidated Financial Statements                           F-9 - F-22

                                       40
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Knobias, Inc.

We have audited the accompanying consolidated balance sheet of Knobias, Inc. and
subsidiaries   (the  "Company")  as  of  December  31,  2006,  and  the  related
consolidated statements of operations,  stockholders' deficit and cash flows for
the  year  then  ended.   These  consolidated   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Knobias,  Inc. and  subsidiaries  at December 31, 2006, and the results of their
operations  and their  cash  flows for the year then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note A to the
consolidated financial statements, the Company has incurred recurring losses and
has a working capital deficit of $4,737,212.  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 also described in Note A. The
consolidated financial statements do not include any adjustments relating to the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of liabilities that might result should the Company be unable to
continue as a going concern.

As  described  in Note B to the  consolidated  financial  statements,  effective
January 1, 2006, the Company  changed its method of accounting  for  share-based
compensation  to adopt Statement of Financial  Accounting  Standards No. 123(R),
Share-Based Payment.

/s/ KMJ Corbin & Company LLP
Irvine, California
April 17, 2007

                                       F-3
<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,
stockholders' deficit, and cash flows for the year then ended. . These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility is to express an opinion on the financial statements based on our
audit.

We have  conducted  our audit 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 audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Knobias, Inc. at
December 31, 2005,  and the results of its operations and its cash flows for the
year then ended, in conformity with accounting  principles generally accepted in
the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue as a going  concern.  As discussed in Note A, the Company
has incurred  significant  operating  losses in 2005and also in the prior years.
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 A. 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-4
<PAGE>

                                 KNOBIAS, INC.
                           CONSOLIDATED BALANCE SHEET
                               DECEMBER 31, 2006

<TABLE>
<S>                                                                      <C>

                                     Assets
Current assets
Cash                                                           $      30,255
Accounts receivable, net of allowance (Note A)                       169,926
Prepaid expenses                                                      16,354

Total current assets                                                 216,535

Property and equipment, net                                          146,811

Other assets                                                           8,171

Total assets                                                   $     371,517

               Liabilities and Stockholders' deficit

Current liabilities
Accounts payable                                               $     390,483
Accrued liabilities                                                  525,374
Notes payable                                                      4,037,890

Total current liabilities                                          4,953,747
Commitments and Contingencies
Stockholders' deficit:
Series A Convertible Preferred stock, $0.01 par value;
5,000,000 shares authorized;
958,333 shares issued and outstanding
(liquidation preference of ($460,000))                             1,150,000
Common stock, $0.01 par value; 95,000,000 shares
authorized; 50,766,505 shares issued and outstanding                 507,665
Additional paid-in capital                                        10,284,520
Accumulated deficit                                              (16,524,415)

Total stockholders' deficit                                       (4,582,230)

Total liabilities and stockholders' deficit                    $     371,517
</TABLE>

See accompanying notes to consolidated financial statements

                                      F-5
<PAGE>

                                 KNOBIAS, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

<TABLE>
<S>                                            <C>                      <C>
                                                     2006                     2005

Revenue:
Subscriptions                                  $  1,730,072             $  1,976,680
Information provisioning                            536,388                  148,442
Total revenue                                     2,266,460                2,125,122

Operating expenses:
Product related costs                             2,464,241                2,125,030
Selling, general and administrative               1,253,975                1,867,465
Depreciation and amortization                        72,234                   72,039
Total operating expenses                          3,790,450                4,064,534

Loss from operations                             (1,523,990)              (1,939,412)

Other income (expense):
Interest income                                          31                    1,294
Interest expense                                   (736,300)                (705,053)
Total other expense, net                           (736,269)                (703,759)

Net loss                                       $ (2,260,259)            $ (2,643,171)

Loss per share (basic and diluted)             $      (0.04)            $      (0.05)

Basic and diluted weighted average
shares outstanding                               50,766,505               50,766,505
</TABLE>

See accompanying notes to consolidated financial statements

                                      F-6
<PAGE>

                                 KNOBIAS, INC.
                      STATEMENTS OF STOCKHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

<TABLE>
<S>                             <C>         <C>            <C>            <C>          <C>             <C>              <C>
                                      Series A                                          Additional
                                      Preferred                   Common Stock             Paid-in      Accumulated
                                 Shares         Amount         Shares       Amount         Capital          Deficit           Total

 Balance, January 1, 2005       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)

 Estimated fair value of
 common stock issued for debt
 issue costs                          -              -              -        1,000               -                -           1,000

 Adjustment for rounding 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)

 Share-based compensation             -              -              -            -         300,333                -         300,333

 Net loss                             -              -              -            -               -       (2,260,259)     (2,260,259)

 Balance, December 31, 2006     958,333     $1,150,000     50,766,505     $507,665     $10,284,520   $  (16,524,415)    $(4,582,230)
</TABLE>

See accompanying notes to consolidated financial statements

                                      F-7
<PAGE>

                                 KNOBIAS, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
<TABLE>
<S>                                                     <C>                     <C>
                                                        2006                    2005
Cash flows from operating activities:
Net loss                                                $ (2,260,259)           $ (2,643,171)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization                                 72,234                  72,039
Share-based compensation                                     300,333                       -
Amortization of debt issuance costs                          443,497                 522,107
Provision for bad debts                                       55,500                  20,000
Cancellation of shares issued for expenses                         -                  (1,000)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable                  (156,451)                  8,874
Decrease in prepaid expenses                                   7,163                   4,042
Increase in other assets                                        (200)                      -
Increase in accounts payable and accrued liabilities          84,325                 535,605

Net cash used in operating activities                     (1,453,858)             (1,481,504)


Cash flows used in investing activities:
Capital expenditures                                         (33,708)                 (6,256)

Cash flows from financing activities:
Repayment of notes payable                                      (274)                      -
Proceeds from notes payable                                1,415,000               1,348,163

Net cash provided by financing activities                  1,414,726               1,348,163

Net decrease in cash                                         (72,840)               (139,597)

Cash, beginning of year                                      103,095                 242,692

Cash, end of year                                       $     30,255            $    103,095



Supplemental disclosure of cash flow information

Cash paid during the year for:
Interest                                                $     16,241            $      1,395
Income taxes                                                       -                       -

Non-cash transactions:
Equipment purchases under vendor finance agreements                -                   3,209
Accrued and prepaid interest financed into new debt                -                  50,000
Fees for debt issuance compensated through stock
issuance                                                           -                   1,000
</TABLE>

See accompanying notes to consolidated financial statements

                                      F-8
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

NOTE A - 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.

The accompanying consolidated financial 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,  2006,  the  Company
incurred a loss of $2,260,259.  The Company's current  liabilities  exceeded its
current  assets by  $4,737,212  as of December 31, 2006.  These  factors,  among
others,  raise  substantial  doubt about the Company's  ability 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  consolidated  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.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Estimates

The preparation of financial statements in conformity with 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.  Significant  estimates  made by management  are,  among
others, the realizability of accounts  receivable,  recoverability of long-lived
assets, and the valuation of stock options, warrants, and deferred taxes. 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-9
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

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, 2006, is approximately $119,000.

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 fixtures 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,  and the
shorter of lease terms or estimated useful lives for leasehold improvements.

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  stage are  expensed as
incurred.  Website development costs are being amortized over three years on the
straight-line basis beginning with the date of the website launch and were fully
amortized  prior to January 1,  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 values of property and equipment,
and  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,  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 SFAS No. 109,  "Accounting for Income Taxes."
Because the Company  has  incurred  losses  since its  inception,  no income tax
expense has been incurred.  The Company has not yet generated  taxable income. A
valuation  allowance  is provided for deferred tax assets when it is more likely
than not that such asset will not be recovered.

                                      F-10
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

Deferred Revenue

The Company generally receives monthly subscription fees for its services.  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  ($6,675 at December 31,
2006).

Fair Value of Financial Instruments

The carrying  values of the  Company's  financial  instruments,  including  cash
equivalents,  short-term  investments,  accounts  receivable,  accounts payable,
accrued  expenses,  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 the
Securities and Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") No.
101, "Revenue  Recognition in Financial  Statements" ("SAB 101") as amended. 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.


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 with credit  quality  institutions.  At times,  such
cash may be in excess of the Federal  Deposit  Insurance  Corporation  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.   There  are  two  customers   with  balances   aggregating
approximately  21% of accounts  receivable  at December 31, 2006.  These amounts
were fully collected subsequent to year end.

                                      F-11
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

Stock Based Compensation

At December 31, 2006, the Company had one stock-based compensation plan.

On  January  1,  2006,  the  Company   adopted  SFAS  No.  123  (revised  2004),
"Share-Based  Payment,"  ("SFAS  123(R)")  which  establishes  standards for the
accounting of transactions in which an entity  exchanges its equity  instruments
for goods or services,  primarily  focusing on accounting for transactions where
an entity obtains employee services in share-based  payment  transactions.  SFAS
123(R)  requires  a public  entity  to  measure  the cost of  employee  services
received  in  exchange  for an  award of  equity  instruments,  including  stock
options,  based on the grant-date fair value of the award and to recognize it as
compensation expense over the period the employee is required to provide service
in exchange for the award,  usually the vesting period.  SFAS 123(R)  supersedes
the Company's previous accounting under Accounting  Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees," ("APB 25") for periods beginning
in fiscal 2006. In March 2005, the Securities and Exchange Commission issued SAB
No. 107,  "Valuation of Share-Based  Payment  Arrangements for Public Companies"
("SAB No. 107") relating to SFAS 123(R).  The Company has applied the provisions
of SAB No. 107 in its adoption of SFAS 123(R).

The  Company  adopted  SFAS 123(R)  using the  modified  prospective  transition
method,  which requires the application of the accounting standard as of January
1,  2006,  the  first day of the  Company's  fiscal  year  2006.  The  Company's
consolidated financial statements as of and for the year ended December 31, 2006
reflect the impact of SFAS 123(R).  In accordance with the modified  prospective
transition method,  the Company's  consolidated  financial  statements for prior
periods have not been  restated to reflect,  and do not  include,  the impact of
SFAS 123(R).

SFAS 123(R) requires companies to estimate the fair value of share-based payment
awards on the date of grant  using an option-  pricing  model.  The value of the
portion  of the award  that is  ultimately  expected  to vest is  recognized  as
expense  over  the  requisite  service  periods  in the  Company's  consolidated
statement  of  operations.  Prior to the  adoption of SFAS  123(R),  the Company
accounted for stock-based  awards to employees and directors using the intrinsic
value  method  in  accordance  with  APB  25 as  allowed  under  SFAS  No.  123,
"Accounting  for  Stock-Based  Compensation"  ("SFAS 123").  Under the intrinsic
value  method,  stock-based  compensation  expense  was  not  recognized  in the
Company's consolidated statements of operations, other than for option grants to
employees  below the fair market  value of the  underlying  stock at the date of
grant.  No  option-based  employee  compensation  cost  was  recognized  in  the
consolidated  statement of operations  for the year ended  December 31, 2005, as
all options  granted  under the plan had an  exercise  price equal to or greater
than the fair market value of the underlying common stock on the date of grant.

Stock-based  compensation  expense  recognized during the period is based on the
value of the portion of share-based  payment awards that is ultimately  expected
to vest during the period.  Stock-based  compensation  expense recognized in the
Company's  consolidated  statement of operations for the year ended December 31,
2006 included  compensation expense for share-based payment awards granted prior
to,  but not yet  vested as of  December  31,  2005 based on the grant date fair
value  estimated in  accordance  with the pro forma  provisions  of SFAS 123 and
compensation  expense for the share-based  payment awards granted  subsequent to
December  31, 2005 based on the grant date fair value  estimated  in  accordance
with  the  provisions  of  SFAS  123(R).  As  stock-based  compensation  expense
recognized  in the  consolidated  statement  of  operations  for the year  ended
December 31, 2006 is based on awards  ultimately  expected to vest,  it has been
reduced for  estimated  forfeitures.  SFAS  123(R)  requires  forfeitures  to be
estimated at the time of grant and revised, if necessary,  in subsequent periods
if actual  forfeitures  differ  from  those  estimates.  The  estimated  average
forfeiture  rate for the year ended December 31, 2006, of  approximately  7% was
based  on  historical   forfeiture  experience  and  estimated  future  employee
forfeitures.  In the Company's pro forma information required under SFAS 123 for
the periods prior to fiscal 2006, the Company  accounted for forfeitures as they
occurred.

SFAS 123(R)  requires the cash flows  resulting from the tax benefits  resulting
from tax  deductions in excess of the  compensation  cost  recognized  for those
options to be classified  as financing  cash flows.  Due to the  Company's  loss
position,  there were no such tax  benefits  during the year ended  December 31,
2006.  Prior to the  adoption  of SFAS  123(R)  those  benefits  would have been
reported as  operating  cash flows had the  Company  received  any tax  benefits
related to stock option exercises.

Description of Plan

The Company's  stock option plan provides for grants of options to employees and
directors of the Company to purchase the  Company's  shares,  as  determined  by
management  and the board of directors,  at the fair value of such shares on the
grant date.  As of December 31, 2006,  the Company is  authorized to issue up to
5,000,000  shares  under  this  plan  and  has  approximately  2,362,000  shares
available for future issuances.

                                      F-12
<PAGE>

Summary of Assumptions and Activity

The fair value of  stock-based  awards to employees  and directors is calculated
using the Black-Scholes option pricing model even though the model was developed
to  estimate  the fair value of freely  tradeable,  fully  transferable  options
without  vesting  restrictions,  which differ  significantly  from the Company's
stock options.  The Black-Scholes  model also requires  subjective  assumptions,
including  future stock price  volatility  and expected time to exercise,  which
greatly affect the calculated  values.  The expected term of options  granted is
derived from historical data on employee  exercises and post-vesting  employment
termination behavior.  The risk-free rate selected to value any particular grant
is based on the U.S.  Treasury rate that  corresponds to the pricing term of the
grant effective as of the date of the grant. The expected volatility is based on
the  historical  volatility  of the Company's  stock price.  These factors could
change in the future,  affecting the  determination of stock-based  compensation
expense in future periods. The fair value of options granted was estimated using
the following weighted-average assumptions:




<TABLE>
<S>                                      <C>
                                       2005
Stock options:
Expected term (in years)                 10
Expected volatility                     259%
Risk-free interest rate                 4.4%
Dividend yield                            -
</TABLE>

The following  table  illustrates  the effect on net loss and net loss per share
for the year ended  December  31,  2005 as if the  Company  had applied the fair
value recognition  provisions of SFAS 123 to options granted under the Company's
stock option plan. For purposes of this pro forma disclosure,  the fair value of
the  options  is  estimated  using the  Black-Scholes  option-pricing  model and
amortized on a straight-line basis to expense over the options' vesting period:



<TABLE>
<S>                                                     <C>
                                                          Year Ended
                                                      December 31, 2005

Net loss - as reported                                  $ (2,643,171)

 Add:  Share-based employee compensation
   expense included in net loss - as reported                      -

 Deduct:  Share-based employee compensation
   expense determined under fair value method,
   net of related tax effects - pro forma                 (1,519,000)
Net loss - pro forma                                      (4,162,171)

Basic and diluted loss available to common
   stockholders per common share - as reported          $      (0.05)

Basic and diluted loss available to common
   stockholders per common share - pro forma            $      (0.08)
</TABLE>

                                      F-13
<PAGE>

A summary of option activity as of December 31, 2005 and 2006 and changes during
the years then ended, is presented below:

<TABLE>
<S>                                           <C>          <C>          <C>          <C>
                                                            Weighted-Average
                                                                      Remaining    Aggregate
                                                          Exercise   Contractual   Intrinsic
                                                 Shares     Price    Term (Years)    Value

Options outstanding at January 1, 2005          158,500    $ 2.00
Options granted                               3,262,000    $ 0.72
Options exercised                                     -    $    -
Options cancelled or expired                   (350,500)     1.30
Options outstanding at December 31, 2005      3,070,000    $ 0.76
Options granted                                       -    $    -
Options exercised                                     -    $    -
Options cancelled or expired                   (431,900)   $ 0.72
Options outstanding and exercisable at
    December 31, 2006                         2,638,100    $ 0.73       8.23         $ -

Options exercisable at December 31, 2005      2,331,350    $ 0.78
</TABLE>

Upon the exercise of options,  the Company issues new shares from its authorized
shares.

As of December 31, 2006, there was no unrecognized  compensation cost related to
employee and director stock option compensation arrangements.

As a result of adopting  SFAS 123(R) on January 1, 2006,  the Company's net loss
for 2006 was $300,333 higher than if it had continued to account for share-based
compensation under APB 25. Basic and diluted net loss per share for 2006 was not
affected by the adoption of SFAS 123(R).

The following  table  summarizes  stock-based  compensation  expense  related to
employee  and  director  stock  options  under  SFAS  123(R)  for the year ended
December 31, 2006, net of estimated forfeitures, which was allocated as follows:

<TABLE>
<S>                                                     <C>
                                                        Year
                                                        Ended
                                                        December 31,
                                                        2006
Stock-based compensation expense included in:
    Product related costs                               $ 188,073
    Selling, general and administrative                   112,260
Total                                                   $ 300,333
</TABLE>

All  issuances  of the  Company's  stock for  non-cash  consideration  have been
assigned a dollar amount  equaling  either the market value of the shares issued
or the value of consideration  received whichever is more readily  determinable.
The  majority  of the non- cash  consideration  received  pertains  to  services
rendered by  consultants  and others and has been valued at the market  value of
the shares  issued.  In certain  issuances,  the Company may  discount the value
assigned to the issued shares for illiquidity and restrictions on resale.

                                      F-14
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

Beneficial Conversion Feature

The convertible  features of convertible notes provides for a rate of conversion
that is below market value (see Note D). Such feature is normally  characterized
as a  "beneficial  conversion  feature"  ("BCF").  Pursuant  to  EITF  No.  98-5
"Accounting For Convertible  Securities with Beneficial  Conversion  Features or
Contingently  Adjustable  Conversion Ratio" and EITF No.  00-27,"Application  of
EITF Issue No.  98-5 To Certain  Convertible  Instruments,"  the  relative  fair
values of the BCFs have been  recorded as a discount from the face amount of the
respective  debt  instrument.  The Company is amortizing  the discount using the
effective  interest  method through  maturity of such  instruments.  The Company
records  the  corresponding  unamortized  debt  discount  related  to the BCF as
interest  expense when the related  instrument  is converted  into the Company's
common stock.

Advertising Costs

Advertising  costs are expensed as incurred.  Total  advertising  expenses  were
$27,000 and $16,000 for the year ended December 31, 2006 and 2005, respectively.

Loss per Share

Basic  loss  per  share  is  computed  by  dividing  loss  available  to  common
stockholders  by the  weighted  average  number of common  shares  assumed to be
outstanding during the period of computation. Diluted loss per share is computed
similar to basic loss per share  except that the  denominator  is  increased  to
include the number of additional  common shares that would have been outstanding
if the potential shares had been issued and if the additional common shares were
dilutive. All potentially dilutive shares, approximately 6,780,000 and 6,615,000
as of December 31, 2006 and 2005, respectively,  have been excluded from diluted
loss per share,  as their  effect  would be  anti-dilutive  for the periods then
ended.

Recently Issued Accounting Pronouncements

In July 2006, the Financial  Accounting  Standards Board ("FASB")  finalized and
issued  Interpretation No. 48, ("FIN 48"), entitled  "Accounting for Uncertainty
in Income Taxes - an  interpretation  of FASB  Statement No. 109," which defines
the threshold for  recognizing  the benefits of tax return  positions as well as
guidance  regarding  the  measurement  of the  resulting  tax  benefits.  FIN 48
requires a company to recognize for financial statement purposes the impact of a
tax position if that position is "more likely than not" to prevail (defined as a
likelihood of more than fifty percent of being  sustained  upon audit,  based on
the technical  merits of the tax  position).  FIN 48 will be effective as of the
beginning  of the  Company's  fiscal year ending  December  31,  2007,  with the
cumulative  effect  of  the  change  in  accounting  principle  recorded  as  an
adjustment to retained earnings.  The Company is currently evaluating the impact
of adopting FIN 48 on its consolidated financial statements.

In September 2006, the SEC Staff issued SAB No. 108  "Considering the Effects of
Prior  Year  Misstatements  when  Quantifying   Misstatements  in  Current  Year
Financial  Statements" to require  registrants to quantify  financial  statement
misstatements  that have been  accumulating  in their  financial  statements for
years and to correct them, if material,  without restating. Under the provisions
of SAB No. 108,  financial  statement  misstatements  are to be  quantified  and
evaluated  for  materiality  using  both  balance  sheet  and  income  statement
approaches.  SAB No. 108 is effective for fiscal years ending after November 15,
2006. The adoption of this  pronouncement  did not have a material impact on the
Company's consolidated results of operations or financial condition.

In  September  2006,  the  FASB  issued  SFAS  No.  157,  entitled  "Fair  Value
Measurements,"  to define fair value,  establish a framework for measuring  fair
value and  expand  disclosures  about fair value  measurements.  This  statement
provides  guidance  related to the definition of fair value, the methods used to
measure fair value and disclosures about fair value  measurements.  SFAS No. 157
is effective for financial  statements  issued for fiscal years  beginning after
November 15, 2007, and interim periods within those fiscal years. The Company is
currently  evaluating  the impact of adopting  SFAS No. 157 on its  consolidated
financial statements.

                                      F-15
<PAGE>

NOTE C - PROPERTY AND EQUIPMENT

Major  classes of property and  equipment at December 31, 2006,  consists of the
following:

<TABLE>
<S>                                                     <C>
                                                          2006
                                                          ----
Furniture, equipment and leasehold improvements       $    200,760
Computer hardware and software                             457,931
Website and database development                           608,544
                                                      ------------
Total property, equipment, and database development      1,267,235

Less: accumulated depreciation and amortization        (1,120,424)
                                                      ------------
Property and equipment, net                           $    146,811
                                                      ============
</TABLE>

Depreciation  and  amortization  expense  was  $72,234 and $72,039 for the years
ended December 31, 2006 and 2005, respectively.

                                      F-16
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

NOTE D - NOTES PAYABLE AND SUBORDINATED DEBT

Notes  payable  and  subordinated  debt at  December  31,  2006,  consist of the
following:

<TABLE>
<S>                                                                                         <C>
     Senior  Subordinated  Notes  for  $550,000  bearing  interest  at 12%  with
     interest payable monthly, in default and due on demand.  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.  The Company has  informal
     agreements with the holder of the Senior  Subordinated  Notes in which they
     have  agreed  to  waive  the  liquidated   damges  clause  of  the  related
     registration rights agreements.                                                            $ 550,000

     Line of credit equipment  financing with $15,000 limit,  variable  interest
     rate (20.49% at December 31, 2006), with payments due monthly.                                 2,890

     Secured convertible notes, interest at 8% payable quarterly, in default due
     on demand. 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.  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 for failure to have an effective
     registration  statement  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

     Promissory note with company director,  interest at 12% payable monthly, in
     default  and  due on  demand.  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.                                                          50,000

     Line of credit for  $300,000  with local  bank,  interest  at prime plus 2%
     maturing on April 10, 2007.                                                                  170,000

     Promissory Note, interest at 8% due on demand                                                 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, $1,415,000 is due through December
     2007 and  $775,000  is in  default  and due on  demand.  The  financing  is
     continuous and ongoing,  on a bi-monthly basis, until the Company completes
     its anticipated issuance of privately placed securities                                    2,190,000

     Total                                                                                  $   4,037,890
</TABLE>

                                      F-17
<PAGE>

In connection with the Secured  Convertible  Notes,  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 No.98-5 to Certain  Convertible  Instruments,"  the Company
recognized the relative fair value attributable to the warrants in the amount of
$608,990 and recorded such amount to additional  paid-in-capital  and a discount
against the debt.  The Company  valued the warrants in accordance  with EITF No.
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 secured  convertible  notes and in accordance
with  EITF  No.98-5  "Accounting  for  Convertible  Securities  with  Beneficial
Conversion Features or Contingently  Adjustable  Conversion Ratios," the Company
recognized  an  embedded  beneficial  conversion  feature  ("BCF").  The Company
allocated a portion of the proceeds equal to the intrinsic value of that feature
to additional paid-in capital.  Under EITF No. 98-5, the amount allocated to the
BCF should be deducted  from the balance of the note.  Therefore,  $316,009  was
recorded as a discount  attributable to the BCF. This discount has been recorded
as  additional  paid-in  capital and as a discount  against  the debt.  The debt
discount  attributed  to the BCF was  amortized  through  the  maturity  date of
November 1, 2006, as interest expense.

                                      F-18
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005


NOTE E - ACCRUED LIABILITIES

Accrued liabilities at December 31, 2006, consist of the followings:

<TABLE>
<S>                                                            <C>
Accrued payroll                                                $ 37,123
Accrued interest                                                420,395
Accrued commissions                                               3,810
Miscellaneous accrued expenses                                   13,679
Deferred revenue                                                 50,367
                                                               --------
Total accrued liabilities                                      $525,374
                                                               ========
</TABLE>

NOTE F - STOCKHOLDERS' EQUITY

Common Stock

During the year ended December 31, 2005, the Company  cancelled  1,000 shares of
common stock previously issued in connection with services performed. The shares
were  valued at  $1,000  on the date of grant  and on the date of  cancellation.
Accordingly,  the Company  reversed the 2004  expense of $1,000  during the year
ended December 31, 2005.

During the year ended  December  31,  2005,  the Company  issued 1,000 shares of
common stock in connection with the payment of debt issuance  costs.  The shares
were  valued  at  $1,000  (based on the fair  value of the  common  stock at the
measurement date) recorded such amount to interest expense during 2005.

Series A Preferred Stock

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 the Company's  internet-based financial
services  platform  and (ii)  execution  of  customer  securities  transactions.
Cumulative dividends not declared as of December 31, 2006, totaled $460,000.

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 was no BCF
associated with this preferred stock.

                                      F-19
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

NOTE G - STOCK OPTIONS AND WARRANTS

Stock Options

During the year ended  December 31, 2005,  the Company  granted to its employees
options to purchase an aggregate  of  3,262,000  shares of common stock at $0.72
per share.  The options  vested  through  December 31, 2006,  and expire in June
2015.

Warrants

During the year ended December 31, 2005, the Company issued warrants to purchase
an aggregate of 356,030  shares of restricted  common stock in  connection  with
additional debt  agreements.  The estimated value of warrants granted during the
year ended  December 31, 2005,  was determined  using the  Black-Scholes  option
pricing model and the following  assumptions:  expected term of 5 years,  a risk
free interest rate of 4.40%, a dividend yield of 0% and volatility of 259%.

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

<TABLE>
<C>                     <C>                    <C>                  <C>
                      Warrants Outstanding and Exercisable
                                         Weighted Average          Weighted
                                       Remaining Contractual       Average
Exercise Prices    Number Outstanding       Life (Years)        Exercise Price
$0.01 to $0.85          3,559,780              2.96                 $ 0.13
</TABLE>


<TABLE>
<S>                                     <C>                    <C>
                                                        Weighted Average
                                 Number of Shares       Price Per Share
Outstanding at January 1, 2005          4,094,968              0.75
   Granted                                356,030              0.84
   Exercised                                    -                 -
   Canceled or expired                          -                 -
Outstanding at December 31, 2005        4,450,998              0.75
   Granted                                      -                 -
   Exercised                                    -                 -
   Canceled or expired                   (891,218)             3.25
Outstanding at December 31, 2006        3,559,780              0.13
</TABLE>

                                      F-20
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

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 on a  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.

The  Company  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.  The
registration  statement is not effective.  We have informal  agreements with the
Registration  Rights  Agreement  that they  will not  require  payment  of these
penalties.

NOTE I - INCOME TAXES

The Company has adopted SFAS No. 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  statements 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 $12,560,000,  expire at various times from 2015 through 2036,
subject to limitations of Section 382 of the Internal  Revenue Code, as amended.
The  deferred  tax asset  related to the net  operating  loss  carry  forward is
approximately  $4,452,000.  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, 2006, of  additional  net operating  losses of  approximately  $2,260,000 or
additional deferred tax assets of $768,000. Components of deferred tax assets as
of December 31, 2006 are as follows:

<TABLE>
<S>                                <C>
Net operating loss carry forward   $ 4,452,000
                                   -----------
Valuation allowance                 (4,452,000)
                                   -----------
Net deferred tax asset             $        --
                                   ===========
</TABLE>

                                      F-21
<PAGE>

                                 KNOBIAS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2006 and 2005

NOTE K - LEASES AND COMMITMENTS

The Company has entered into leases for office and warehouse space on a month to
month basis.  There are no ongoing minimum lease  obligations after December 31,
2006.

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 six months to two years. Most of the contracts  automatically  renew unless
specifically terminated by either party.

Rent expense for the years ended  December 31, 2006 and 2005,  totaled  $135,000
and $131,000, respectively.

NOTE L - BUSINESS CONCENTRATION

The Company had one customer which  represented  16% and 19% of its revenues for
the years ended December 31, 2006 and 2005, 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  $50,000  under the ongoing  convertible
promissory  note agreement with Bushido  Capital since January 1, 2007,  through
April 16, 2007.

In February  2007,  the Company  signed a letter of intent  regarding a proposed
restructuring  of the debt and equity  capitalization  of, and the  amendment of
certain  outstanding  agreements  of  Knobias,  Inc.  Pursuant  to the letter of
intent, the principal terms of the restructuring (the  "Restructuring")  include
the following terms: (i) the conversion of all outstanding  indebtedness (except
as set forth in (ii) and (vii) below), including accrued interest and penalties,
into a newly  established  Series B convertible  preferred  stock of the Company
(the "Series B Preferred Stock"),  (ii) the exchange of certain  indebtedness of
the Company in the  principal  amount of  approximately  $250,000  into a 4-year
subordinated  loan,  (iii) the amendment of the Company's  outstanding  Series A
Convertible  Preferred  Stock (the  "Series A  Preferred  Stock")  to  eliminate
certain rights, preferences and privileges of the Series A Preferred Stock, (iv)
an offer by the  Company  to the  holders  of the  Series A  Preferred  Stock to
convert such Preferred Stock into common stock of the Company, (v) the agreement
by certain  officers  of the  Company to  terminate  their  existing  employment
agreements and enter into new six-month  agreements  with the Company,  (vi) the
agreement  by the Company and all  holders of existing  warrants  and options to
cancel such outstanding  warrants and options, and (vii) retiring of $200,000 in
notes form a senior secured lender which will, in consideration  thereof,  waive
interest  and  penalties.  Prior  to  the  closing  of  the  New  Financing  (as
hereinafter  defined),  the holders of the new Series B Preferred Stock will own
75% of the fully-diluted  stock of the Company,  and assuming the holders of the
existing  Series A Preferred  Stock accept the exchange offer noted above,  such
holders will own 14% of the  fully-diluted  stock of the Company.  In connection
with the Restructuring,  the Company expects a financing  commitment pursuant to
which the Company  will  receive a minimum of $1.5 million of new capital in the
form of a senior secured  convertible note (the "New Financing").  In advance of
the  closing of the New  Financing,  the  Company  expects one of its lenders to
provide bridge financing to meet certain of the Company's  immediate cash needs.
As part of the Restructuring, the majority holders of the new Series B Preferred
Stock will have the right to designate two of the Company's five directors,  and
the majority in interest of the  investors in the New  Financing  will also have
the right to designate two of the Company's  five  directors.  The common equity
shareholders  will elect one director out of the 5. The Board of Directors  also
approved a resolution to effect a 1-for-100 reverse stock split,  subject to the
receipt of shareholder approval. As of April 16, 2007, a formal agreement on the
proposed restructuring has not been executed.

Subsequent  to year  end,  416,667  shares  of  Series A  Preferred  Stock  were
converted into 1,666,668  shares of common stock and 750,000 warrant shares were
exercised  for 605,769  shares of common stock.  In connection  with the warrant
exercise, the Company did not receive any proceeds.

                                      F-22
<PAGE>

EXHIBIT 31.1

                                 KNOBIAS, INC.
                 OFFICER'S CERTIFICATE PURSUANT TO SECTION 302

I, E. Key Ramsey, the Chief Executive Officer of Knobias, Inc., certify that:

1.   I have reviewed this annual report on Form 10-KSB of Knobias, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the small  business  issuer as of, and for,  the periods  presented in this
     report;

4.   The  small  business  issuer's  other  certifying   officer(s)  and  I  are
     responsible  for  establishing  and  maintaining  disclosure  controls  and
     procedures  (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) and
     internal control over financial reporting (as defined in Exchange Act Rules
     13a-15(f) and 15d-15(f)) for the small business issuer and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision, to ensure that material information relating to the small
          business  issuer,  including its  consolidated  subsidiaries,  is made
          known to us by others within those entities,  particularly  during the
          period in which this report is being prepared;

     (b)  [Omitted pursuant to SEC Release No. 33-8238];

     (c)  Evaluated the effectiveness of the small business issuer's  disclosure
          controls and procedures  and presented in this report our  conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the  end of the  period  covered  by  this  report  based  on  such
          evaluation; and

     (d)  Disclosed  in this  report any change in the small  business  issuer's
          internal  control over financial  reporting  that occurred  during the
          small business issuer's most recent fiscal quarter (the small business
          issuer's  fourth fiscal  quarter in the case of an annual report) that
          has materially affected, or is reasonably likely to materially affect,
          the small business issuer's internal control over financial reporting;
          and

5.   The  small  business  issuer's  other  certifying  officer(s)  and  I  have
     disclosed,  based on our most recent  evaluation  of internal  control over
     financial reporting,  to the small business issuer's auditors and the audit
     committee of the small  business  issuer's  board of directors  (or persons
     performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the small  business  issuer's
          ability   to  record,   process,   summarize   and  report   financial
          information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a significant  role in the small business  issuer's
          internal control over financial reporting.



Date: April 17, 2007                                 /s/ E. KEY RAMSEY
                                                     -----------------
                                                         E. Key Ramsey
                                                     Chief Executive Officer


<PAGE>


EXHIBIT 31.2

                                 KNOBIAS, INC.
                 OFFICER'S CERTIFICATE PURSUANT TO SECTION 302

I, Susan R. Walker, the Chief Financial Officer of Knobias, Inc., certify that:

1.   I have reviewed this annual report on Form 10-KSB of Knobias, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the small  business  issuer as of, and for,  the periods  presented in this
     report;

4.   The  small  business  issuer's  other  certifying   officer(s)  and  I  are
     responsible  for  establishing  and  maintaining  disclosure  controls  and
     procedures  (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) and
     internal control over financial reporting (as defined in Exchange Act Rules
     13a-15(f) and 15d-15(f)) for the small business issuer and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision, to ensure that material information relating to the small
          business  issuer,  including its  consolidated  subsidiaries,  is made
          known to us by others within those entities,  particularly  during the
          period in which this report is being prepared;

     (b)  [Omitted pursuant to SEC Release No. 33-8238];

     (c)  Evaluated the effectiveness of the small business issuer's  disclosure
          controls and procedures  and presented in this report our  conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the  end of the  period  covered  by  this  report  based  on  such
          evaluation; and

     (d)  Disclosed  in this  report any change in the small  business  issuer's
          internal  control over financial  reporting  that occurred  during the
          small business issuer's most recent fiscal quarter (the small business
          issuer's  fourth fiscal  quarter in the case of an annual report) that
          has materially affected, or is reasonably likely to materially affect,
          the small business issuer's internal control over financial reporting;
          and

5.   The  small  business  issuer's  other  certifying  officer(s)  and  I  have
     disclosed,  based on our most recent  evaluation  of internal  control over
     financial reporting,  to the small business issuer's auditors and the audit
     committee of the small  business  issuer's  board of directors  (or persons
     performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the small  business  issuer's
          ability   to  record,   process,   summarize   and  report   financial
          information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a significant  role in the small business  issuer's
          internal control over financial reporting.



Date: April 17, 2007                               /s/ SUSAN R. WALKER
                                                   -----------------
                                                       Susan R. Walker
                                                       Chief Financial Officer


<PAGE>


Exhibit 32.1

                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection  with the Annual report of Knobias,  Inc. (the  "Company") on Form
10-KSB for the period ending  December 31, 2006 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"),  I, E. Key Ramsey,  Chief
Executive Officer of the Company,  certify, pursuant to 18 U.S.C. section 906 of
the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities and Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and result of operations of the Company.

A signed  original of this  written  statement  required by Section 906 has been
provided to Knobias, Inc. and will be retained by Knobias, Inc. and furnished to
the Securities and Exchange Commission or its staff upon request.



Date:  April 17, 2007                          By: /s/ E. KEY RAMSEY
                                                  ------------------
                                                  E. Key Ramsey
                                                  Chief Executive Officer


<PAGE>


Exhibit 32.2

                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection  with the Annual report of Knobias,  Inc. (the  "Company") on Form
10-KSB for the period ending  December 31, 2006 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Susan R. Walker, Chief
Financial Officer of the Company,  certify, pursuant to 18 U.S.C. section 906 of
the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities and Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and result of operations of the Company.

A signed  original of this  written  statement  required by Section 906 has been
provided to Knobias, Inc. and will be retained by Knobias, Inc. and furnished to
the Securities and Exchange Commission or its staff upon request.



Date:  April 17, 2007                            By: /s/ SUSAN R. WALKER
                                                    ------------------
                                                 Susan R. Walker
                                                 Chief Financial Officer