---

UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark one)

[X] Annual report under section 13 or 15(d) of the Securities
Exchange Act of 1934

for the fiscal year ended December 31, 2006

OR

[   ] Transition report under section 13 or 15(d) of
the Securities Exchange Act of 1934

for the transition period from __________ to __________.

Commission file number:******0-33519**

WHO'S YOUR DADDY,
INC.(Name of small business issuer as specified in its
charter)

|Nevada                   | #98-0360989                         
|------------------------ | ------------------------------------
|(State of Incorporation) | (I.R.S. Employer Identification No.)

**5840 El Camino Real, Suite 108, Carlsbad, CA
92008**(Address of principal executive offices)

**(760) 438-5470**(Issuer's telephone
number)

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

Securities registered under Section 12(g) of the Act:
**Common Stock, par value $0.001 per share**

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

Check if there is no disclosure of delinquent filers in response
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. [X ]

Registrant's revenues for its most recent fiscal
year:**$1,189,057**

As of March 30, 2007, the aggregate market value of the voting
common equity held by non-affiliates of the registrant was approximately
$12,154,990 based on the closing trade reported on the NASD Over-the-Counter
Bulletin Board National Quotation System. Shares of common stock held by
each officer and director and by each person who owns five percent or more of
the outstanding common stock have been excluded from this calculation as
such persons may be considered to be affiliated with the company.

On March 30, 2007, the registrant had 21,949,376 shares of
common stock, $0.001 par value per share, issued and outstanding.

On March 30, 2007, the registrant had 2,000,000 shares of
preferred stock, $0.001 par value per share, issued and outstanding.

Indicate whether the registrant is an accelerated filer based on
the market value of its public float held by non-affiliates at the end of
the most recent second fiscal quarter: [   ] Yes [X] No

Documents incorporated by reference: None

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

Transitional Small Business Disclosure Format: Yes [ 
 ] No [X]

1

---



WHOS YOUR DADDY, INC. 
  Index to Annual Report on Form 10-KSB 
  for the Year Ended December 31, 2006

|         |                                                                                                                       | Page
|-------- | --------------------------------------------------------------------------------------------------------------------- | ----
|         |                                                                                                                       |     
|         | PART I                                                                                                                |     
|         |                                                                                                                       |     
|ITEM 1:  | DESCRIPTION OF BUSINESS                                                                                               | 3   
|         |                                                                                                                       |     
|ITEM 2:  | DESCRIPTION OF PROPERTY                                                                                               | 7   
|         |                                                                                                                       |     
|ITEM 3:  | LEGAL PROCEEDINGS                                                                                                     | 7   
|         |                                                                                                                       |     
|ITEM 4:  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                   | 7   
|         |                                                                                                                       |     
|         | PART II                                                                                                               |     
|         |                                                                                                                       |     
|ITEM 5:  | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                              | 8   
|         |                                                                                                                       |     
|ITEM 6:  | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                                             | 9   
|         |                                                                                                                       |     
|ITEM 7:  | FINANCIAL STATEMENTS                                                                                                  | 13  
|         |                                                                                                                       |     
|ITEM 8:  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE                            | 35  
|         |                                                                                                                       |     
|ITEM 8A: | CONTROLS & PROCEDURES                                                                                                 | 35  
|         |                                                                                                                       |     
|         | PART III                                                                                                              |     
|         |                                                                                                                       |     
|ITEM 9:  | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
      COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT | 36  
|         |                                                                                                                       |     
|ITEM 10: | EXECUTIVE COMPENSATION                                                                                                | 38  
|         |                                                                                                                       |     
|ITEM 11: | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND RELATED STOCKHOLDER MATTERS                  | 38  
|         |                                                                                                                       |     
|ITEM 12: | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                        | 39  
|         |                                                                                                                       |     
|ITEM 13: | EXHIBITS AND REPORTS ON FORM 8-K                                                                                      | 39  
|         |                                                                                                                       |     
|ITEM 14: | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                | 40  

2

---

PART I

ITEM
1.           DESCRIPTION OF
BUSINESS

The Company

We were incorporated in the State of Nevada on October 12, 2000
under the name Cogen Systems, Inc. We changed our name to Snocone Systems, Inc.
on December 6, 2001. On April 1, 2005, Snocone Systems, Inc. completed and
closed an Agreement and Plan of Merger with Whos Your Daddy, Inc. (WYD), an
unrelated, privately-held California corporation, whereby WYD became a
wholly-owned subsidiary of the Company. WYD was founded by Edon Moyal and Dan
Fleyshman in November, 2001 with their vision of licensing the phrase Whos
Your Daddy.

As a result of the merger, we changed our name to Whos Your
Daddy, Inc. After developing an Energy Drink, we changed our primary business to
the manufacture and distribution of ready-to-drink King of Energy. beverages
centered on our trademark-protected brand. While we continue to pursue licensing
opportunities for our trademark-protected brand that come before us, our current
efforts are concentrated on expanding the distribution of our energy drinks.

Description of Business

1. Whos Your Daddy® King of EnergyDrinks

The most important and exciting extension of our branding,
previously consisting of licensing our trademarks, is our entry into the sale of
beverages. In the third quarter of 2005, we commenced sales of the Whos Your
Daddy® King of Energy Regular and Sugar-Free cranberry-pineapple
flavour energy drinks. While we continue to pursue licensing opportunities for
our trademark-protected brand that come before us, our current efforts are
concentrated on expanding the distribution of our energy drinks.

The business strategy behind our King of Energy energy drinks
focuses on maintaining the edge, energy and humor behind our brand, while
continuing to build brand awareness and recognition. Our target market includes
young adults who seek alternatives to bad tasting energy drinks, coffee and
other stimulants. As part of our strategy, we have developed products and events
that appeal to this group, and we continue to assess opportunities to expand our
product lines and distribution worldwide.

Our King of Energy energy drinks come in two flavours and four
distinct formulas. We have Regular and Sugar-Free versions of our unique
cranberry-pineapple flavour, which we started shipping in the third quarter of
2005, and Regular and Sugar-Free versions of our Green Tea flavour. We
introduced our Regular Green Tea beverage in July, 2006, and ours is one of the
first Green Tea beverages for the energy drink market. In February, 2007, we
began shipping our Sugar-Free Green Tea flavoured beverage. For this product, we
are targeting women and the more mature generation who are interested in the
anti-oxidants, cleansing and weight loss features of Green Tea. This expands the
scope of retailers who can carry our products, since many Green Tea retailers do
not carry energy drinks.

Unlike many of the other energy drinks on the market, our King
of Energy energy drinks taste good and are similar to drinking a soda or fruit
punch. Formulated with taurine and caffeine, our energy drinks are designed to
energize and improve mental performance while increasing concentration,
alertness and physical endurance. We believe our beverages will strengthen the
value of the Whos Your Daddy® brand, while diversifying our product
line.

In 2006, we distributed 3 flavours of our King of Energy
drinks  Cranberry-Pineapple in Regular and Sugar Free and Regular Green Tea. In
February, 2007 we started shipping our 4th flavour - Sugar Free Green Tea. Over
the past 12 months we have brought on in excess of 35 distributors who
distribute the energy drinks in 15 states. Our energy drinks have received great
reviews, from media to end user, and this has supported our signing on new
distributors and retailers.

We are actively developing new flavours of our King of Energy
energy drinks. We will introduce these gradually as we gain control of more
shelf space and geographic distribution, capitalizing on economies of scale.

3

---

2. Licensing of our Trademark-Protected Brand

We design and license a variety of products centered on our
trademark-protected brand, Whos Your Daddy®. We currently hold
trademarks for more than 300 products in the United States, Mexico, Middle East,
Far East, Japan and the European Community. The Whos Your Daddy®
range of product offerings is designed to appeal to young men, women and sports
fans who strive for Style with Authority. Royalties paid to us under previous
licensing agreements for products generally were based on a percentage of the
licensees net sales of the licensed products and we plan to continue this in
the future.

While our operational focus is concentrated on the development
of the King of Energy brand recognition, we are also continuing to register
the Whos Your Daddy trademarks throughout the world and are pursuing
licensing opportunities that come before us.

3. Marketing and Distribution

We produce our King of Energy energy drinks at facilities
utilized by known national brands such as 7-UP®, RC Cola®
and Pepsi®. We also utilize premier American caners  Ball
Corporation in the West (the largest canning company in the world) and
Rexam Beverage Can Companyin the East (one of the largest canning
companies in the United States). Beverage companies much larger than our
organization dictate the standards of production at these manufacturers. This
allows us to utilize the existing established high standards without the
expenditure of funds on developing standards. In addition, to eliminate
inconsistencies in the product itself, we have decided to retain our flavour
company to provide the actual formulation at all facilities.

Selection of bottlers is primarily governed by their capability
to handle 16 oz cans, proximity to our geographical markets of activity,
available plant capacity, pricing, terms and storage facilities at the plant.

We have established distribution agreements with some of the
largest and most respected beer and beverage distributors in the United States.
Our business strategy is to continue growing our distribution network and to
concentrate on the needs of distributors to facilitate continued geographical
expansion in the United States. Existing and new strategic relationships play a
large role in our expansion, and we are strategically selective in building our
distribution network. We have increased and expanded our top tier distribution
network to include Arizona, Arkansas, California, Idaho, Louisiana, Michigan,
Mississippi, Missouri, Nebraska, Nevada, New Mexico, Ohio, Tennessee, Texas and
Utah.

We currently have over 35 distributors that cover 15 states. A
competitive environment exists in selecting and targeting distributors. Factors
affecting the selection decision include existing distribution and
infrastructure of trucks and warehousing facilities, marketing efforts and
effectiveness, existing complementary and/or competing product lines, reputation
in the marketplace and the ability to fulfill their volume agreements. Our
choices are geared toward developing a long-term relationship with distributors,
as their efforts directly affect our revenues and profitability.

We work with numerous distributors throughout the United States
and are in negotiations with a Mexican distributor. Some of the distributors
have larger territories than others, giving them the ability to generate more
revenue to the Company. Most distributors territory includes a portion of a
state, which is where they regularly distribute their other products. A few
distributors cover an entire state. However, we are not dependent on any one
specific distributor as there are alternate sources in most areas.

Currently we do not have any outstanding licensing deals.
However, the Company continuously pursues new opportunities that come before us
to expand the Whos Your Daddy® range of products utilizing our
trademark-protected brand .

4

---

4. Competition

The beverage industry is highly competitive. The principal areas
  of competition are pricing, packaging, development of new products and flavours
  and marketing campaigns. Our products compete with a wide range of drinks produced
  by a relatively large number of manufacturers, most of which have substantially
  greater financial, marketing and distribution resources than we do. Our King
  of EnergyTM drinks are subject to extensive competition by numerous domestic
  and foreign companies. Such competitors include Red Bull®, Rockstar®
  and Monster® energy drinks.

Any branded clothing and accessory products we will license
will be subject to extensive competition by numerous domestic and foreign
companies with substantially greater financial, marketing and distribution
resources than we do. Such competitors with respect to licensing of our brand
include Cherokee, Inc., No Fear® and ODM®, which license
their many brands for products competitive with Whos Your Daddy®
products. The factors which shape the competitive environment include quality of
construction and design of the product, brand name, style and color selection,
price and the manufacturers ability to respond quickly to the retailer on a
national basis. Therefore, our success is dependent on our ability, and the
ability of our licensees, to design, manufacture and sell products bearing its
brand and to respond to ever-changing consumer demands.

5. Intellectual Property

We design and license a variety of products centered on our
trademark-protected brand, Whos Your Daddy®. Depending upon the
jurisdiction, trademarks are valid as long as they are in use and/or their
registrations are properly maintained and they have not been found to have
become generic. Registrations of trademarks can generally be renewed as long as
the trademarks are in use. We currently hold trademarks for more than 300
products in the U.S., Mexico, Middle East, Far East, Japan and the European
Community.

In addition, we exclusively manufacture, promote and sell our
four flavours of the King of Energy energy drinks. We have developed and own
the formula to all of the King of Energy flavours and are in the process of
obtaining patents for our formulas.

Offices and Key Personnel

Our principal office is located at 5840 El Camino Real, Suite
108, Carlsbad, California 92008. Our phone number is (760) 438-5470. Dan
Fleyshman is our president, Edon Moyal is our Chief Executive Officer and Reuven
I. Rubinson is our Chief Financial Officer.

Employees

Prior to the merger, we had no employees. We relied upon our
officers, directors and part-time outside consultants to further our business
efforts.

As of March 30, 2007, we employed 10 persons. None of these
employees are represented by labor unions and we believe that our employee
relations are satisfactory.

Corporate History

We are a Nevada corporation incorporated on October 12, 2000 as
Cogen Systems, Inc. We changed our name to Snocone Systems, Inc. on December 6,
2001.

On April 1, 2005, we acquired all of the issued and outstanding
shares of WYD, a California corporation. Pursuant to the merger, 4,500,000
shares of our common stock were issued to the WYD shareholders for all of the
outstanding stock of WYD. Of our 4,500,000 shares of stock required for closing,
2,040,000 shares were issued from treasury and the remaining 2,460,000 shares
were transferred from existing issued shares. After the April, 2005 merger, we
qualified to do business in California as a foreign corporation.

5

---

The merger was accounted for by us as a reverse-acquisition
because control of the Company passed to the WYD shareholders and WYD was
considered as the accounting acquirer. Therefore its accounting history has been
carried forward as our history. On April 13, 2005, our shareholders voted to
change the name of the Company to Whos Your Daddy, Inc from Snocone Systems,
Inc.

A history of the business ventures we were involved in prior to
the merger with WYD, all of which have been terminated, is presented below.

On October 12, 2000, we acquired ownership rights to certain
software and intellectual property. . Under the terms of the Agreement and
Assignment of Intellectual Property Rights, we issued 3,600,000 shares of
restricted common stock with an aggregate value of $3,000 dollars. On September
2, 2003, we signed an agreement with RBM Financial, Inc. and TwentyTen
Investments Corp., contracting to them the job of identifying the financial
viability of this software in terms of generating revenue and, also, to explore
alternative technologies that would generate revenue.

On May 17, 2004, we finalized a Content Distribution and
Revenue Share Agreement with TwentyTen Investments Corp. (TwentyTen) for which
TwentyTen received 400,000 shares of restricted common stock. Under that
agreement, we received $40,000 from TwentyTen to cover basic operating costs of
the SMS OfficePools.com application during the year. On April 21, 2005, the
parties mutually agreed to terminate the Content Distribution and Revenue Share
Agreement. TwentyTen Investments Corp. returned the 400,000 common shares. In
consideration for the termination of the contract and work performed to date by
TwentyTen Investments, we issued to TwentyTen Investments 40,000 restricted
shares of common stock.

On October 13, 2004, we signed a licensing agreement with
FitBeautiesMag.com to use our Mobile Video Streaming Service for
FitBeautiesMag's web service. We obtained a non-exclusive licensing agreement
for a period of one year. We incurred no costs and earned no revenue in
connection with this arrangement.

On October 29, 2004, we entered into an Asset Purchase
Agreement with Riskebiz Internet Services Inc. (Riskebiz) for the purpose of
acquiring the exclusive, perpetual, worldwide right to publish, market,
advertise, promote, distribute, manufacture, sublicense, vend and otherwise use
RISKeye Mobile Viewing and Surveillance Technology (RISKeye), owned by
Riskebiz. We issued 200,000 shares of restricted common stock for the
acquisition. Mr. Kevin Day, who was our acting Chief Financial Officer, a
director and our president until September 24, 2004, was appointed Chief
Technology Advisor. Mr. Day was also the President and majority owner of
Riskebiz. On April 21, 2005, the parties mutually agreed to terminate the Asset
Purchase Agreement with Riskebiz. Riskebiz returned the 200,000 common shares
and in consideration for the termination of the contract and work performed to
date by Riskebiz, the Company issued to Riskebiz 20,000 common shares.

On November 29, 2004, we finalized a license and revenue
sharing agreement with SMART-TEK Communications Inc. creating a joint-venture to
market and sell the RISKeye mobile surveillance viewing technology. On January
28, 2005, the parties terminated the agreement.

Research and Development

We did not incur any material research and development
expenditures for the year ended December 31, 2006.

Government Regulation

We are not aware of any existing or pending governmental
regulation that will have a material impact on the operation of our
business.

6

---

Available Information

Our Internet addresses are www.whosyourdaddyinc.comand www.kingofenergy.com . Information contained on our
website is not part of this annual report filed on Form 10-KSB. Our www.whosyourdaddyinc.comwebsite contains a link to the
Securities and Exchange Commission (SEC) website which lists our SEC filings.
Our annual report on Form 10-KSB and quarterly reports on Form 10-QSB are
available free of charge thru this link as soon as reasonably practicable after
we electronically file such material with, or furnish it to, the SEC

ITEM
2.           DESCRIPTION OF
PROPERTY

We do not own any real property. Our principal executive
offices are located at a leased premise at 5840 El Camino Real, Suite 108,
Carlsbad, CA 92008. We are leasing approximately 5,000 square feet under an
agreement that commenced in March, 2007 and expires in March 2012. Monthly
payments under the lease are currently approximately $8,800, increasing to
approximately $10,100. Our leased space includes both offices and a warehouse
and we consider it adequate for the operations of our business.

ITEM
3.           LEGAL PROCEEDINGS

On July 19, 2006, we received a Demand for Arbitration filed
with the American Arbitration Association from Greg Sacks seeking damages
arising out of a sponsorship contract between the parties. On February 13, 2007,
the Arbitrator awarded Sacks Motorsports Inc. $1,790,000. We are in the process
of evaluating several legal options and will be pursuing appropriate actions
upon completion of this evaluation to limit and/or vacate the award.

On February 7, 2006, American Express Company filed a suit in
the San Diego Superior Court seeking payment on a credit card balance of
approximately $80,000.

Our agent for service of process is Reuven I. Rubinson, 5840 El
Camino Real, Suite 108, Carlsbad, California 92008.

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

No matters were submitted to the stockholders during the year
ended December 31, 2006.

On April 13, 2005, pursuant to a Written Consent of a Majority
of the Outstanding Shares of Common stock, a majority of our shareholders
approved a change in the Companys name to Whos Your Daddy, Inc., from Snocone
Systems Inc., and the Companys authorized capital was increased to 100,000,000
shares of common stock and 20,000,000 shares of preferred stock.

7

---

PART II

ITEM
5.           MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is currently quoted on the OTC Bulletin Board,
which is sponsored by the National Association of Securities Dealers (NASD).
The OTC Bulletin Board is a network of securities dealers who buy and sell
stock. The dealers are connected by a computer network that provides information
on current bids and asks, as well as volume information. Our shares are
quoted on the OTC Bulletin Board under the symbol WYDY.OB.

The following table reflects the reported high and low bid
prices of our Common Stock for each quarter for the period indicated as reported
by the NASD OTCBB. Such prices are inter-dealer prices without retail mark-up,
mark-down, or commission and may not represent actual transactions.

YEAR ENDED DECEMBER 31, 2005

QUARTER ENDED
    HIGH
    LOWMarch 31, 2005
    $4.20
    $0.45June 30, 2005
    $2.40
    $0.40September 30, 2005
    $2.00
    $0.82December 31, 2005
    $1.40
    $0.66


YEAR ENDED DECEMBER 31, 2006

QUARTER ENDED
    HIGH
    LOWMarch 31, 2006
    $1.27
    $0.68June 30, 2006
    $1.04
    $0.35September 30, 2006
    $1.07
    $0.38December 31, 2006
    $1.37
    $0.70


Holders of Common Stock

As of March 30, 2007, there were approximately 1,230 holders of
record of our common stock.

Dividends

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. We have not paid dividends in
prior years and have no plans to pay dividends in the near future. We intend to
reinvest earnings in the continued development and operation of its business.
Any payment of dividends would depend upon our growth, profitability, financial
condition and such other factors as the board of directors may deem relevant.

8

---

Sales of Unregistered Securities

During the year ended December 31, 2006, we issued: (1)
2,348,918 restricted shares to various investors for cash under the general
exemption provided by section 4(2) of the Securities Act of 1933, (2) 90,000
restricted shares to three directors for services rendered during the year, (3)
228,700 restricted shares to two individuals and two companies for commissions,
(4) 170,000 restricted shares to two companies for services rendered during the
year, (5) 1,784,975 restricted shares to various investors as conversion of
their loans to WYD, (6) 555,779 restricted shares to the Investors described in
Note 9, as a conversion of a portion of the amounts owed to them, (7) 167,000
restricted shares to King of Energy West, LLC in connection with the signing of
its distributor agreement, (8) 1,000,000 restricted shares to Geneva Equities,
Ltd. for investment banking services rendered and termination of their contract,
(9) 84,868 restricted shares for interest expense, (10) 423,143 restricted
shares for other expenses and (11) 388,000 restricted shares to officers and
related parties for unpaid compensation. The stock issued during this year was
valued at $3,412,919.

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

Forward-Looking Statements

Certain statements in this report and elsewhere (such as in
other filings by the Company with the SEC, press releases, presentations by the
Company of its management and oral statements) may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of 1934, as amended.
Actual results may differ materially from those included in the forward-looking
statements. The Company intends such forward-looking statements to be covered by
the safe-harbour provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and is including this
statement for purposes of complying with those safe-harbour provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies and expectations of the Company, are generally
identifiable by use of the words "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," projects or similar variations of these
words and expressions. Actual results may materially differ from any
forward-looking statements. Factors that might cause or contribute to such
differences include, among others: competitive pressures, changes in economic
conditions, legislative/regulatory changes, availability of capital, interest
rates, generally accepted accounting principles, constantly changing technology
and market acceptance of the Company's products and services. These risks and
uncertainties should be considered in evaluating forward-looking statements, and
the Company undertakes no obligation to publicly release the result of any
revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

The following discussion should be read in conjunction with the
financial statements included herein. Certain statements contained herein may
constitute forward-looking statements, as discussed above. Because such
statements include risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements.

Business Focus

1. Whos Your Daddy® King of Energy Energy Drinks

The most important and exciting extension of our branding,
previously consisting of licensing our trademarks, is our entry into the sale of
beverages. In the third quarter of 2005, sales of the Whos Your
Daddy® King of Energy Regular and Sugar-Free energy drinks
commenced. While we continue to pursue licensing opportunities for our
trademark-protected brand, our current efforts are concentrated on expanding the
distribution of our energy drinks.

The business strategy behind our King of Energy energy drinks
focuses on maintaining the edge, energy and humor behind our brand, while
continuing to build brand awareness and recognition. Our target market includes
young adults who seek alternatives to bad tasting energy drinks, coffee and
other stimulants. As part of our strategy, we have developed products and events
that appeal to this group, and we continue to assess opportunities to expand our
product lines and distribution worldwide.

9

---

Our King of Energy energy drinks come in two flavours and four
distinct formulas. We have Regular and Sugar-Free versions of our unique
cranberry-pineapple flavour, which we started shipping in the third quarter of
2005, and Regular and Sugar-Free versions of our Green Tea flavour. We
introduced our Regular Green Tea beverage in July, 2006, and ours is one of the
first Green Tea beverages for the energy drink market. In February, 2007, we
began shipping our Sugar-Free Green Tea flavoured beverage. For this product, we
are targeting women and the more mature generation who are interested in the
anti-oxidants, cleansing and weight loss features of Green Tea. This expands the
scope of retailers who can carry our products, since many Green Tea retailers do
not carry energy drinks.

Unlike many of the other energy drinks on the market, our King
of Energy energy drinks taste good and are similar to drinking a soda or fruit
punch. Formulated with taurine and caffeine, our energy drinks are designed to
energize and improve mental performance while increasing concentration,
alertness and physical endurance. We believe our beverages will strengthen the
value of the Whos Your Daddy® brand, while diversifying our product
line.

In 2006, we distributed 3 flavours of our King of Energy
drinks  Cranberry-Pineapple in Regular and Sugar Free and a Regular Green Tea.
In February, 2007 we started shipping our 4th flavour - Sugar Free Green Tea.
Over the past 12 months we have brought on in excess of 35 distributors who
distribute the energy drinks in 15 states. Our energy drinks have received great
reviews, from media to end user, and this has supported our signing on new
distributors and retailers.

We are actively developing new flavours of our King of Energy
energy drinks. We will introduce these gradually as we gain control of more
shelf space and geographic distribution, capitalizing on economies of scale.

2. Licensing of Trademark-Protected Brand

We design and license a variety of products centered on our
trademark-protected brand, Whos Your Daddy. We currently hold trademarks for
more than 300 products in the United States, Mexico, Middle East, Far East,
Japan and the European Community. The Whos Your Daddy® range of
product offerings is designed to appeal to young men, women and sports fans who
strive for Style with Authority. Royalties paid to us under previous
licensing agreements for products generally were based on a percentage of the
licensees net sales of the licensed products and we plan to continue this in
the future.

While our operational focus is concentrated on the development
of the King of Energy brand recognition, we are also continuing to register
the Whos Your Daddy trademark throughout the world and are exploring
licensing opportunities as they are brought to us.

3. Marketing and Distribution

We only produce our King of Energy energy drinks at facilities
utilized by known national brands such as 7-UP®, RC Cola®
and Pepsi®. We also utilize premier American caners  Ball
Corporation in the West (the largest canning company in the world) and
Rexam Beverage Can Companyin the East (one of the largest canning
companies in the United States). Beverage companies much larger than our
organization dictate the standards of production at these manufacturers. This
allows us to utilize the existing established high standards without the
expenditure of funds on developing standards. In addition, to eliminate
inconsistencies in the product itself, we have decided to retain our flavour
company to provide the actual formulation at all facilities.

Selection of bottlers is primarily governed by their capability
to handle 16 oz cans, proximity to our geographical markets of activity,
available plant capacity, pricing, terms and storage facilities at the plant.

We have established distribution agreements with some of the
largest and most respected beer and beverage distributors in the United States.
Our business strategy is to continue growing our distribution network and to
concentrate on the needs of distributors to facilitate continued geographical
expansion in the United States. Existing and new strategic relationships play a
large role in our expansion, and we are strategically selective in building our
distribution network. We have increased and expanded our top tier distribution
network to include Arizona, Arkansas, California, Idaho, Louisiana, Michigan,
Mississippi, Missouri, Nebraska, Nevada, New Mexico, Ohio, Tennessee, Texas and
Utah.

10

---

We currently have over 35 distributors that cover 15 states. A
competitive environment exists in selecting and targeting distributors. Factors
affecting the selection decision include existing distribution and
infrastructure of trucks and warehousing facilities, marketing efforts and
effectiveness, existing complementary and/or competing product lines, reputation
in the marketplace and the ability to fulfill their volume agreements. Our
choices are geared toward developing a long-term relationship with distributors,
as their efforts directly affect the companys revenues and profitability.

We work with numerous distributors throughout the United States
and are in negotiations with a Mexican distributor. Some of the distributors
have larger territories than others, giving them the ability to generate more
revenue to the Company. Most distributors territory includes a portion of a
state, which is where they regularly distribute their other products. A few
distributors cover an entire state. However, the company is not dependent on any
one specific distributor as there are alternate sources in most areas.

Currently the company does not have any outstanding licensing
deals. However, the company continuously explores new possibilities of utilizing
the Whos Your Daddy® range of products.

Plan of Operation

To date, we have funded our operations primarily through the
issuance of stock via private placements under the exemption provided by section
4(2) of the Securities Act of 1933, in exchange for technology rights and
services and to settle obligations under various loans. In 2005, we raised
$2,271,677 via loans and $663,475 from the issuance of restricted common stock
for cash. In 2006, we raised $575,899 via loans and $1,265,456 from the issuance
of restricted common stock for cash.

On August 31, 2006, we secured a revolving $250,000 credit line
for the production of our King of Energy drinks. The AJW Entities agreed to
subordinate their security interest to this credit line. At December 31, 2006 we
had utilized approximately $186,000 of this line.

Management is currently seeking additional capital through its
investment banker and other sources. In the near future, we expect to raise a
minimum of $5,000,000, which will be used to pay down accounts and accrued
expenses payable, including approximately $230,000 of taxes (which the Company
is currently arranging a payment plan on), increase inventory, purchase
promotional materials for expanding the distributor network and pay operational
expenses. Should we be unsuccessful in obtaining additional funding, we may be
unable to meet our cash flow requirements in the short term. On April 11, 2007,
effective April 3, an agreement was reached with the AJW entities to retire
their convertible debentures. Further, a commitment was received by two
institutional investors on April 11, 2007 which will provide the consideration
required to retire this debt and may bring in an additional $1,000,000 of cash.
A final agreement is being negotiated with these investors.

Results of Operations

From October 12, 2000 through December 31, 2005, we engaged in
no significant operations other than organization activities and research and
development. We received minimal revenue. We expended $3,028,137 in 2005 and
$2,861,102 in 2006 for administration costs, and $622,556 in 2005 and $2,806,183
in 2006 for marketing costs. Operational costs over the next year will depend on
a number of factors, including costs with respect to our business plan.

Liabilities and Stockholder Equity

Our total liabilities as of December 31, 2006 were $6,322,284.
  Our total current liabilities consisted of: (a) $553,000 of Accounts Payable
  (b) $2,282,000 of accrued expenses and interest (c) $232,000 of taxes, (d) $238,000
  of amounts due to officers, employees and related parties (e) $715,000 of other
  loans payable and (f) $222,000 representing the current portion of long-term
  debt. The largest obligation we have is a $1,790,000 arbitration award in favor
  of Sacks Motorsports Inc against the Company, included in accrued expenses.
  We are in the process of evaluating several legal options and will be pursuing
  appropriate actions upon completion of this evaluation to limit and/or vacate
  the award.

11

---

Liquidity and Capital Resources

On December 31, 2006, we had a working capital deficit of
$3,831,885 compared with $3,032,977 at December 31, 2005. We plan to utilize
debt and/or equity financings to fund short-term and long-term growth. The
availability of future financings will depend on market conditions and other
factors. A portion of the funds may be used to grow the business through
acquisition of other businesses.

The forecast of the period of time through which our financial
resources will be adequate to support operations is a forward-looking statement
that involves risks and uncertainties. The actual funding requirements may
differ materially from this as a result of a number of factors including plans
to rapidly expand new operations. There can be no assurance we will be able to
continue as a going concern or achieve material revenues or profitable
operations.

For the most recent year ended December 31, 2006, we incurred a
loss in the amount of $5,648,069 compared to a loss of $4,251,311 in 2005. These
losses are attributable to organizational expenses, expenses associated with
setting up a company structure and market-ready products and implementing the
first stage of our business plan, as well as the $1,790,000 arbitration award.
We anticipate we will operate at a loss until additional funding is secured,
depending upon the performance of the business.

As of December 31, 2006, there were no off-balance sheet
arrangements.

Revenue Recognition

Licensing Revenue is recorded over the life of the contract
when earned based on the terms of the contract. Sales Revenue is recognized when
products are shipped to the customer and title passes.

Going Concern

We may require additional capital for our operational
activities and, although we intend to raise capital through the issuance of
stock in the near future, our ability to raise capital through the issuance of
stock in the future is unknown. Obtaining additional financing and attaining
profitable operations are necessary for us to continue operations. These
factors, among others, raise substantial doubt about our ability to continue as
a going concern. The consolidated financial statements do not include any
adjustments that may result from the outcome of these aforementioned
uncertainties.

12

---

ITEM
7.           FINANCIAL
STATEMENTS

|Report
      of Independent Registered Public Accounting Firm                                                         | 15
|--------------------------------------------------------------------------------------------------------------------- | --
|                                                                                                                      |   
|Consolidated
      Balance Sheets as at December 31, 2006 and 2005                                                    | 16
|                                                                                                                      |   
|Consolidated
      Statements of Operations for the Years Ended December 31, 2006 and 2005                            | 18
|                                                                                                                      |   
|Consolidated
      Statements of Cash Flows for the Years Ended December 31, 2006 and 2005                            | 19
|                                                                                                                      |   
|Consolidated
      Statements of Changes in Stockholders Equity for the Years Ended December
      31, 2005 and 2006 | 21
|                                                                                                                      |   
|Notes
      to Financial Statements                                                                                   | 23

13

---

WHOS YOUR DADDY, INC.

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005









14

---

BAUM & COMPANY, P.A. Certified Public Accountants
1515 University Drive - Suite 226 Coral Springs, Florida 33071

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors Whos Your
Daddy, Inc.

We have audited the accompanying Consolidated Balance Sheets of
Whos Your Daddy, Inc. as at December 31, 2006 and 2005, and the related
Consolidated Statements of Operations, Cash Flows and Changes in Stockholders
Equity for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, these financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as at December 31, 2006 and 2005, and the results of its operations and its cash
flows for the years then ended in conformity with U.S. generally accepted
accounting principles.

The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
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.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
2(b) to the financial statements, the Company has not attained profitable
operations and is dependent upon obtaining adequate financing to fulfill its
development activities. These factors raise substantial doubt that the Company
will be able to continue as a going concern. Managements plans in regard to
these matters are also discussed in Note 2(b). The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Baum & Company, PA Coral Springs, Florida April
12, 2007

15

---

Whos Your Daddy, Inc. Consolidated Balance Sheets As
at December 31, 2006 and 2005

|                                     |   | 2006    |   |   | 2005    |  
|------------------------------------ | - | ------- | - | - | ------- | -
|Assets                               |  
|Current Assets                       |   |         |   |   |         |  
|Cash                                 | $ | 5,459   |   | $ | 2,977   |  
|Accounts Receivable                  |   | 12,617  |   |   | 4,255   |  
|Inventories                          |   | 244,541 |   |   | 83,286  |  
|Loans Receivable                     |   | 13,025  |   |   | 1,955   |  
|Escrow
      Deposits                |   | -       |   |   | 5,000   |  
|Prepaid Expenses                     |   | 134,614 |   |   | 37,120  |  
|Total Current Assets                 |   | 410,256 |   |   | 134,593 |  
|                                     |   |         |   |   |         |  
|Property, Plant and Equipment        |   |         |   |   |         |  
|Fixed Assets                         |   | 73,731  |   |   | 71,924  |  
|Less:
      Accumulated Depreciation |   | (26,742 | ) |   | (11,054 | )
|Net Property, Plant and Equipment    |   | 46,989  |   |   | 60,870  |  
|                                     |   |         |   |   |         |  
|Non-Current Assets                   |   |         |   |   |         |  
|Organization Costs, Net              |   | -       |   |   | 500     |  
|Trademarks                           |   | 86,401  |   |   | 71,737  |  
|Security
      Deposits              |   | 53,849  |   |   | 10,900  |  
|Total Non-Current Assets             |   | 140,250 |   |   | 83,137  |  
|                                     |   |         |   |   |         |  
|Total Assets                         | $ | 597,495 |   | $ | 278,600 |  

(The accompanying notes are an integral part of these financial
statements) 16

---

Whos Your Daddy, Inc. Consolidated Balance Sheets As
at December 31, 2006 and 2005 (Continued)

|                                                      |   | 2006        |   |   | 2005       |  
|----------------------------------------------------- | - | ----------- | - | - | ---------- | -
|Liabilities and
      Stockholders Deficiency        |  
|Current Liabilities                                   |   |             |   |   |            |  
|Accounts
      and Accrued Expenses Payable           | $ | 2,907,914   |   | $ | 982,088    |  
|Due to Officers' and
      Related Parties            |   | 766,875     |   |   | 607,026    |  
|Loans
      Payable  Short-Term                      |   | 345,000     |   |   | 200,000    |  
|Current Portion of
      Long-Term Debt               |   | 222,352     |   |   | 1,378,456  |  
|Total Current Liabilities                             |   | 4,242,141   |   |   | 3,167,570  |  
|                                                      |   |             |   |   |            |  
|Non-Current Liability                                 |   |             |   |   |            |  
|Long-Term Debt, Net of
      Current Portion          |   | 2,080,143   |   |   | 593,896    |  
|Total Liabilities                                     |   | 6,322,284   |   |   | 3,761,466  |  
|Stockholders Deficiency                              |   |             |   |   |            |  
|                                                      |   |             |   |   |            |  
|Preferred Stock -
      20,000,000 Shares Authorized, |   |             |   |   |            |  
|2,000,000
      Shares Issued and Outstanding.        |   | 2,000       |   |   | 2,000      |  
|                                                      |   |             |   |   |            |  
|Common
      Stock  $.001 Par Value. 100,000,000     |   |             |   |   |            |  
|Shares Authorized,
      21,032,821 and 13,791,438    |   |             |   |   |            |  
|Shares
      Issued and Outstanding at December 31,   |   |             |   |   |            |  
|2006 and 2005.                                        |   | 21,033      |   |   | 13,792     |  
|Additional Paid-in Capital                            |   | 5,675,928   |   |   | 2,345,250  |  
|Prepaid Expense Paid by
      Issuing Stock           |   | (131,872    | ) |   | (200,100   | )
|Deficit                                               |   | (11,291,878 | ) |   | (5,643,808 | )
|Total Stockholders Deficiency                        |   | (5,724,789  | ) |   | (3,482,866 | )
|                                                      |   |             |   |   |            |  
|Total Liabilities and Stockholders Deficiency        | $ | 597,495     |   | $ | 278,600    |  

(The accompanying notes are an integral part of these financial
statements) 
  17

---

Whos Your Daddy, Inc. Consolidated Statements of
Operations For the Years Ended December 31, 2006 and 2005

|                                       |   | 2006       |   |   | 2005       |  
|-------------------------------------- | - | ---------- | - | - | ---------- | -
|                                       |   |            |   |   |            |  
|Revenues                               | $ | 1,189,057  |   | $ | 77,463     |  
|                                       |   |            |   |   |            |  
|Cost of Goods Sold                     |   | 685,916    |   |   | 52,331     |  
|                                       |   |            |   |   |            |  
|Gross
      Margin                     |   | 503,141    |   |   | 25,132     |  
|                                       |   |            |   |   |            |  
|Expenses                               |   |            |   |   |            |  
|                                       |   |            |   |   |            |  
|Administrative and General             |   | 2,861,102  |   |   | 3,028,137  |  
|                                       |   |            |   |   |            |  
|Advertising, Promotion and Marketing   |   | 2,806,183  |   |   | 622,556    |  
|                                       |   |            |   |   |            |  
|Loss on
      Termination of Contract  |   | -          |   |   | 60,352     |  
|                                       |   |            |   |   |            |  
|Corporate
      Franchise Taxes        |   | 800        |   |   | 800        |  
|                                       |   |            |   |   |            |  
|Total Expenses                         |   | 5,668,085  |   |   | 3,711,845  |  
|                                       |   |            |   |   |            |  
|Loss before Interest Expense           |   | (5,164,944 | ) |   | (3,686,713 | )
|                                       |   |            |   |   |            |  
|Interest
      Expense                 |   |            |   |   |            |  
|                                       |   |            |   |   |            |  
|Cash                                   |   | (439,571   | ) |   | (278,874   | )
|                                       |   |            |   |   |            |  
|Stock and Warrants Issued              |   | (43,554    | ) |   | (285,724   | )
|                                       |   |            |   |   |            |  
|Loss before Provision for Income Taxes |   | (5,648,069 | ) |   | (4,251,311 | )
|                                       |   |            |   |   |            |  
|Provision
      for Income Taxes       |   | -          |   |   | -          |  
|                                       |   |            |   |   |            |  
|Net Loss                               | $ | (5,648,069 | ) | $ | (4,251,311 | )
|                                       |   |            |   |   |            |  
|Loss per Share                         |   | ($0.34     | ) |   | ($0.36     | )
|                                       |   |            |   |   |            |  
|Weighted Average Shares Outstanding    |   | 16,398,991 |   |   | 11,922,628 |  

(The accompanying notes are an integral part of these financial
statements) 18

---

Whos Your Daddy, Inc. Consolidated Statements of Cash
Flows For the Years Ended December 31, 2006 and 2005

|                                                          |   | 2006       |   |   | 2005       |  
|--------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|Cash Flows From Operating Activities                      |   |            |   |   |            |  
|Net Loss for the Period                                   | $ | (5,648,069 | ) | $ | (4,251,311 | )
|Add:
      Non-Cash Items:                                |   |            |   |   |            |  
|Depreciation and Amortization                             |   | 26,400     |   |   | 17,917     |  
|Defiance Termination Recorded as                          |   |            |   |   |            |  
|Long-Term Debt                                            |   | -          |   |   | 60,352     |  
|Stock Issued for Interest Expenses                        |   | 43,554     |   |   | 285,724    |  
|Stock and Warrants Issued for Services and Other Expenses |   | 1,040,877  |   |   | 760,804    |  
|                                                          |   | (4,537,238 | ) |   | (3,126,514 | )
|Change in Non-Cash
      Working Capital Items:           |   |            |   |   |            |  
|Financing Fees Paid by Issuing Stock                      |   | -          |   |   | (200,100   | )
|Capital Acquisition Costs                                 |   | (75,000    | ) |   | -          |  
|Accounts Receivable                                       |   | (8,362     | ) |   | (4,255     | )
|Advances to Officers                                      |   | -          |   |   | (4,048     | )
|Inventories                                               |   | (161,255   | ) |   | (83,286    | )
|Loans Receivable                                          |   | (8,070     | ) |   | -          |  
|Escrow Deposit                                            |   | 5,000      |   |   | (5,000     | )
|Prepaid Expenses                                          |   | (97,494    | ) |   | (37,120    | )
|Trademarks, Net                                           |   | (24,876    | ) |   | (65,075    | )
|Security Deposits                                         |   | (42,949    | ) |   | (900       | )
|Accounts and Accrued Expenses Payable                     |   | 2,324,824  |   |   | 867,966    |  
|Due to Officers and Related Parties                       |   | 404,348    |   |   | 272,028    |  
|Conversion of Interest to Loan                            |   | 522,760    |   |   | -          |  
|Prepaid Expense Paid by Issuing Stock                     |   | 68,228     |   |   | -          |  
|Cash Used by Operations                                   | $ | (1,630,084 | ) | $ | (2,386,304 | )
|                                                          |   |            |   |   |            |  
|Cash Flows From Investing Activities                      |   |            |   |   |            |  
|Additions to Property,
      Plant and Equipment          | $ | (1,807     | ) | $ | (57,174    | )
|Loans
      Made                                          |   | -          |   |   | (12,907    | )
|Repayments on Loans Made                                  |   | (3,000     | ) |   | 37,085     |  
|Cash Used By Investing Activities                         | $ | (4,807     | ) | $ | (32,996    | )
|                                                          |   |            |   |   |            |  
|Cash Flows From Financing Activities                      |   |            |   |   |            |  
|Stock Issued for Cash                                     | $ | 1,265,456  |   | $ | 663,475    |  
|Proceeds
      from NIR financing                         |   | -          |   |   | 1,750,000  |  
|Proceeds from Other Loans                                 |   | 575,899    |   |   | 521,677    |  
|Loan
      Repayments - Other Loans                       |   | (203,982   | ) |   | (377,154   | )
|Additional Paid In
      Capital  Reverse Acquisition    |   | -          |   |   | (139,837   | )
|Cash Provided By Financing Activities                     | $ | 1,637,373  |   | $ | 2,418,161  |  

(The accompanying notes are an integral part of these financial
statements) 19

---

Whos Your Daddy, Inc. Consolidated Statements of Cash
Flows For the Years Ended December 31, 2006 and 2005 (Continued)

|                                                                             |   | 2006       |   |   | 2005       |  
|---------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|Cash Used by Operations                                                      | $ | (1,630,084 | ) | $ | (2,386,304 | )
|Cash Used By Investing Activities                                            |   | (4,807     | ) |   | (32,996    | )
|Cash Provided By Financing Activities                                        |   | 1,637,373  |   |   | 2,418,161  |  
|Change In Cash                                                               |   | 2,482      |   |   | (1,139     | )
|Cash,
      Beginning Of Period                                              |   | 2,977      |   |   | 4,116      |  
|Cash, End Of Period                                                          | $ | 5,459      |   | $ | 2,977      |  
|Other Cash Items                                                             |   |            |   |   |            |  
|Cash Paid for Interest
      Expense                                         | $ | 439,571    |   | $ | 278,874    |  
|Cash Paid
      for Income Taxes                                             | $ | -          |   | $ | -          |  
|Items Not Requiring the Use of Cash                                          |   |            |   |   |            |  
|Stock and
      Warrants Issued for Services and Other Expenses              | $ | 1,040,877  |   | $ | 760,804    |  
|Stock Issued for Interest
      Expenses                                     | $ | 43,554     |   | $ | 285,724    |  
|AJW
      Entities Conversion of Loan to Stock                               | $ | 192,617    |   | $ | -          |  
|Other Loans Converted to
      Stock                                         | $ | 676,416    |   | $ | -          |  
|Loans
      Payable  Short-Term Directly Paid an Account Payable            | $ | 25,000     |   | $ | -          |  
|Conversion of Account
      Payable to Loans Payable  Short-Term            | $ | 300,000    |   | $ | -          |  
|Conversion of Account Payable to Long-Term Debt                              | $ | -          |   | $ | 210,000    |  
|Restricted Stock Issued
      for Amounts Due to Officers' and Related       |   |            |   |   |            |  
|Parties                                                                      | $ | 194,000    |   | $ | -          |  
|Due to Officers' and
      Related Parties Paid Off by Another Related Party |   |            |   |   |            |  
|Loan                                                                         | $ | 40,307     |   | $ | -          |  
|Nevada Corporation Stock
      Returned for No Consideration,                |   |            |   |   |            |  
|then Reinstated                                                              | $ | -          |   | $ | 3,119,283  |  
|Nevada Corporation Stock
      Issued - WYD Reverse Acquisition              | $ | -          |   | $ | 4,500,000  |  

(The accompanying notes are an integral part of these financial
statements) 20

---

Whos Your Daddy, Inc.ConsolidatedStatementsofChangesinStockholdersEquity For the Years EndedDecember31, 2005 and 2006

COMMON
        STOCKNUMBER
      
      
      
      
      
      ADDITIONALOF
      
      
      
      
      
      PAID-INSHARES
      
      
      AMOUNT
      
      
      CAPITAL
      
      
      
      DEFICIT
      
      
      TOTALBalance, December 31, 2004
      
      7,042,169
      
      $
      7,042
      
      $
      1,709,370
      
      
      $
      (1,417,753
      )
      $
      298,659Stock Reinstated for No Consideration
      
      3,119,283
      
      
      3,119
      
      
      (3,119
      )
      
      
      -
      
      
      -Stock Issued for Debt
      
      68,500
      
      
      69
      
      
      68,431
      
      
      
      -
      
      
      68,500Adjust Valuation of Technology Acquired
      
      (540,000
      )
      
      (540
      )
      
      (215,460
      )
      
      
      -
      
      
      (216,000
      )Loss for the Quarter
      
      -
      
      
      -
      
      
      -
      
      
      
      (117,945
      )
      
      (117,945
      )Balances, March 31, 2005
      
      9,689,952
      
      
      9,690
      
      
      1,559,222
      
      
      
      (1,535,698
      )
      
      33,214Stock Issued for Who's Your Daddy. Inc (CA)
      
      4,500,000
      
      
      4,500
      
      
      (4,500
      )
      
      
      -
      
      
      -Shares Cancelled as Part of Reverse Acquisition
      
      (2,460,000
      )
      
      (2,460
      )
      
      2,460
      
      
      
      -
      
      
      -Write off Nevada Deficit on Reverse Acquisition
      
      -
      
      
      -
      
      
      (1,535,698
      )
      
      
      1,535,698
      
      
      -Record California Deficit on Reverse Acquisition
      
      -
      
      
      -
      
      
      1,665,510
      
      
      
      (1,665,510
      )
      
      -Adjust for California Common Stock Acquired asPart of Reverse Acquisition
      
      -
      
      
      -
      
      
      (844,350
      )
      
      
      -
      
      
      (844,350
      )Write off Technology
      
      -
      
      
      -
      
      
      (136,815
      )
      
      
      -
      
      
      (136,815
      )Other Adjustments on Reverse Acquisition
      
      -
      
      
      -
      
      
      (13,045
      )
      
      
      -
      
      
      (13,045
      )Stock Issued for Services
      
      43,000
      
      
      43
      
      
      30,340
      
      
      
      -
      
      
      30,383Capital Acquisition Fees
      
      -
      
      
      -
      
      
      (262,795
      )
      
      
      -
      
      
      (262,795
      )Loss for the Quarter
      
      -
      
      
      -
      
      
      -
      
      
      
      (756,075
      )
      
      (756,075
      )Balances June 30, 2005
      
      11,772,952
      
      $
      11,773
      
      $
      460,329
      
      
      $
      (2,421,585
      )
      $
      (1,949,483
      )


(The accompanying notes are an integral part of these financial
statements) 21

---

Whos Your Daddy, Inc.ConsolidatedStatementsofChangesinStockholdersEquity(Continued)For the Years EndedDecember31, 2005 and 2006

|                                                  |  | PREFERRED
      STOCK |  |   | COMMON
      STOCK |  |  |            |   |   |        |   |   |            |   |   |             |  
|------------------------------------------------- |  | --------------------- |  | - | ------------------ |  |  | ---------- | - | - | ------ | - | - | ---------- | - | - | ----------- | -
|                                                  |  | NUMBER                |  |   |                    |  |  | NUMBER     |   |   |        |   |   | ADDITIONAL |   |   | CAPITALIZED |  
|                                                  |  | OF                    |  |   |                    |  |  | OF         |   |   |        |   |   | PAID-IN    |   |   | FEES        |  
|                                                  |  | SHARES                |  |   | AMOUNT             |  |  | SHARES     |   |   | AMOUNT |   |   | CAPITAL    |   |   |             |  
|                                                  |  |                       |  |   |                    |  |  |            |   |   |        |   |   |            |   |   |             |  
|Balances June 30, 2005                            |  |                       |  |   |                    |  |  | 11,772,952 |   | $ | 11,773 |   | $ | 460,329    |   |   |             |  
|                                                  |  |                       |  |   |                    |  |  |            |   |   |        |   |   |            |   |   |             |  
|Stock Issued for Cash                             |  |                       |  |   |                    |  |  | 650,000    |   |   | 650    |   |   | 359,350    |   |   |             |  
|Stock Issued for Interest Expense                 |  |                       |  |   |                    |  |  | 150,000    |   |   | 150    |   |   | 149,850    |   |   |             |  
|Stock Issued for Promotion and Marketing services |  |                       |  |   |                    |  |  | 450,000    |   |   | 450    |   |   | 315,401    |   |   |             |  
|Less: Prepaid Services                            |  |                       |  |   |                    |  |  | -          |   |   | -      |   |   | (109,875   | ) |   |             |  
|Stock issued for Financial Services               |  |                       |  |   |                    |  |  | 474,000    |   |   | 474    |   |   | 449,550    |   |   |             |  
|Reclassify Financing Fees Due to Amended          |  |                       |  |   |                    |  |  |            |   |   |        |   |   |            |   |   |             |  
|Agreement                                         |  |                       |  |   |                    |  |  | -          |   |   | -      |   |   | 262,795    |   | $ | (235,795    | )
|Loss for the quarter                              |  |                       |  |   |                    |  |  | -          |   |   | -      |   |   | -          |   |   |             |  
|Balances September 30, 2005                       |  |                       |  |   |                    |  |  | 13,496,952 |   |   | 13,497 |   |   | 1,887,400  |   |   | (235,795    | )
|Stock Issued for Cash                             |  |                       |  |   |                    |  |  | 370,947    |   |   | 371    |   |   | 249,629    |   |   | -           |  
|Stock issued for Financial services               |  |                       |  |   |                    |  |  | 209,164    |   |   | 209    |   |   | 109,791    |   |   | -           |  
|Stock Issued for Services and Other Expenses      |  |                       |  |   |                    |  |  | 126,500    |   |   | 127    |   |   | 123,794    |   |   | -           |  
|Warrants and Stock Issued for Interest Expenses   |  |                       |  |   |                    |  |  | 7,875      |   |   | 8      |   |   | 135,716    |   |   | -           |  
|Cancel Shares Issued for Market Services          |  |                       |  |   |                    |  |  | (420,000   | ) |   | (420   | ) |   | (159,080   | ) |   | -           |  
|Issuance of Preferred Stock to Officers           |  | 2,000,000             |  | $ | 2,000              |  |  | -          |   |   | -      |   |   | (2,000     | ) |   | -           |  
|Capitalized Fees Expensed This Quarter            |  | -                     |  |   | -                  |  |  | -          |   |   | -      |   |   | -          |   |   | 35,695      |  
|Loss for the quarter                              |  | -                     |  |   | -                  |  |  | -          |   |   | -      |   |   | -          |   |   | -           |  
|Balances December 31, 2005                        |  | 2,000,000             |  |   | 2,000              |  |  | 13,791,438 |   |   | 13,792 |   |   | 2,345,250  |   |   | (200,100    | )
|Stock Issued for Cash                             |  | -                     |  |   | -                  |  |  | 2,348,918  |   |   | 2,349  |   |   | 1,263,106  |   |   | -           |  
|Stock Issued for Services and Other Expenses      |  | -                     |  |   | -                  |  |  | 2,466,843  |   |   | 2,466  |   |   | 804,611    |   |   | -           |  
|Warrants and Stock Issued for Interest Expenses   |  | -                     |  |   | -                  |  |  | 84,868     |   |   | 85     |   |   | 43,469     |   |   | -           |  
|Conversion of Loans into Stock                    |  | -                     |  |   | -                  |  |  | 2,340,754  |   |   | 2,341  |   |   | 1,294,492  |   |   | -           |  
|Distributor Signing Bonus paid in stock           |  | -                     |  |   | -                  |  |  | -          |   |   | -      |   |   | -          |   |   | (87,508     | )
|Capitalized Fees Expensed This Year               |  | -                     |  |   | -                  |  |  | -          |   |   | -      |   |   | -          |   |   | 155,736     |  
|Fees Paid for Financing                           |  | -                     |  |   | -                  |  |  | -          |   |   | -      |   |   | (75,000    | ) |   | -           |  
|Rounding                                          |  |                       |  |   |                    |  |  |            |   |   |        |   |   |            |   |   |             |  
|Loss for the Year                                 |  | -                     |  |   | -                  |  |  | -          |   |   | -      |   |   | -          |   |   | -           |  
|Balances December 31, 2006                        |  | 2,000,000             |  | $ | 2,000              |  |  | 21,032,821 |   | $ | 21,033 |   | $ | 5,675,928  |   | $ | (131,872    | )

(The accompanying notes are an integral part of these financial
statements) 22

---

Whos Your Daddy, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|1. | Basis for Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Who’s Your Daddy, Inc. (the “Company”)
        is involved in the licensing of its proprietary name, “Who’s
        Your Daddy®” and the manufacture, sale and distribution of its
        “King of EnergyTM” energy drinks. The Company was incorporated
        in the State of Nevada on October 12, 2000 under the name Cogen Systems,
        Inc. The Company changed its name to Snocone Systems, Inc. on December
        6, 2001.                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On March 14, 2005, the Company completed a one-for-five
      reverse stock split. All share and per share amounts included in this
      document have taken this reverse split into account, unless otherwise
      noted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As discussed below, on April 1, 2005, the Company
      acquired all of the issued and outstanding shares of Whos Your Daddy,
      Inc. (WYD), a company incorporated in California. For accounting
      purposes, this merger is being treated as a reverse-acquisition since
      control of the Company passed to the WYD shareholders. As a result of this
      accounting treatment, subsequent to the reverse-acquisition the historical
      financial statements of the acquiring company (WYD) are presented for all
      periods prior to the acquisition, along with the consolidated financial
      statements of both entities for all periods after the reverse-acquisition
      date.                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Consequently, the consolidated Statements of Operations
      and Cash Flows for the year ended December 31, 2005 include the operations
      of WYD, the acquiring entity, for the period beginning January 1, 2005 to
      March 31, 2005 and the consolidated operations of both companies from
      April 1, 2005 (the date of the merger) through December 31,
2005.                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On April 13, 2005, a majority of the Companys
      shareholders approved a change in the Companys name to Whos Your Daddy,
      Inc. from Snocone Systems Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On June 12, 2005, the Company acquired all of the issued
      and outstanding shares of Pharb University Brand, Inc. (Pharb), a
      company incorporated in Delaware, for a total of 1,000,000 restricted
      shares of the Companys common stock. 500,000 shares of common stock were
      issued and 500,000 shares were to be delivered within fifteen (15) days
      after the date the quarterly financial statements of the Company have been
      prepared showing that cumulative sales of Pharbs products and/or the
      Companys products sold through Pharbs sales channels have reached
      $4,000,000.                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On February 28, 2006, the Board of Directors of the
      Company, of Pharb Acquisition Corp. (a Delaware corporation and a wholly
      owned subsidiary of the Company) and of Pharb University Brand, Inc. (a
      Delaware corporation) and Mark De Mattei, an individual, mutually agreed
      that: (i) their Merger Agreement dated June 12, 2005 was terminated and
      rescinded ab initioand (ii) such agreement was of no further force
      or effect. All stock issued or to be issued under this agreement was
      cancelled. Due to the rescission of the merger agreement all references to
      that entity have been eliminated and these financial statements do not
      include any assets or any results of operations of Pharb.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | a)          
      Development Stage Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Through December 31, 2005, the Company was considered a
      development stage company. Revenues commenced in the third quarter of 2005
      and have exceeded $1.1 million in 2006. Consequently, the Company is no
      longer in the development stage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | b)          
      Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The accompanying financial statements have been prepared
      assuming the Company will continue as a going
concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

23

---

|   | The future of the Company is dependent upon its ability
      to obtain financing and upon future profitable operations. Management is
      currently seeking additional capital through its investment banker and
      other sources. In the near future, we expect to raise a minimum of
      $5,000,000, which will be used to pay down accounts and accrued expenses
      payable, including approximately $230,000 of taxes (which the Company is
      currently arranging a payment plan on), increase inventory, purchase
      promotional materials for expanding the distributor network and pay
      operational expenses. Should we be unsuccessful in obtaining additional
      funding, we may be unable to meet our cash flow requirements in the short
      term. On April 11, 2007, effective April 3, an agreement was reached with
      the AJW entities to retire their convertible debentures. Further, a
      commitment was received by two institutional investors on April 11, 2007
      which will provide the consideration required to retire this debt and may
      bring in an additional $1,000,000 of cash. A final agreement is being
      negotiated with these investors.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The financial statements of the Company have been
      prepared in accordance with generally accepted accounting principles in
      the United States of America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The financial statements have, in managements opinion,
      been properly prepared within reasonable limits of materiality and within
      the framework of the significant accounting policies summarized
    below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The preparation of financial statements in conformity
      with generally accepted accounting principles requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the periods. Actual results could differ from those
      estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Revenue is recorded over the life of the contract when
      earned based on the terms of the contract. Revenue is recognized when
      products are shipped to the customer and title passes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company considers all highly liquid debt instruments
      with an original maturity of three months or less to be cash equivalents.
      Cash and cash equivalents, accounts receivable and accounts payable are
      short-term in nature and the net values at which they are recorded are
      considered to be reasonable estimates of their fair values. The carrying
      values of notes payable are deemed to be reasonable estimates of their
      fair values                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company is concentrating its efforts in two revenue
      generating categories  Beverage and Licensing. There are major players in
      each of these categories and the inability of the Company to obtain or
      maintain contracts in any one of these areas could affect the future of
      the Company. Also, revenue derived from international customers are
      subject to risks associated with foreign operations, such as obtaining
      governmental permits and approvals, currency exchange fluctuations,
      currency restrictions, political instability, labor problems, trade
      restrictions and changes in tariff and freight charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Receivables are recorded net of any allowance for
      expected losses. Receivable balances are reviewed quarterly to determine
      if any allowance is required. At December 31, 2006, an allowance of
      $10,890 was recorded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

24

---

| | f) | Long Lived Assets
| | -- | -----------------

Fixed assets are recorded at cost. For book purposes, depreciation
  is computed on the straight-line method, based on the estimated useful lives
  of the assets of generally five years. Expenditures for maintenance and repairs
  are charged to operations as incurred. Depreciation and Amortization expense
  was $26,400 and $17,917 for the years ended December 31, 2006 and 2005. The
  Company reviews property, plant and equipment and any identifiable intangibles
  for impairment whenever events or changes in circumstances indicate the carrying
  amount of an asset may not be recoverable. Recoverability of these assets is
  measured by comparison of its carrying amount to future undiscounted cash flows
  the assets are expected to generate. If property, plant and equipment and certain
  identifiable intangibles are considered to be impaired, the impairment to be
  recognized equals the amount by which the carrying value of the assets exceeds
  its fair market value.

| | g) | Intangible assets
| | -- | -----------------

Organization Costs were recorded at cost and were amortized over
  a five year period. Costs incurred in the registration of Trademarks are recorded
  at cost and not amortized. The Company continually evaluates the carrying value
  of Trademarks and other intangible assets to determine whether there are any
  impairment losses. If indicators of impairment are present in intangible assets
  used in operations and future cash flows are not expected to be sufficient to
  recover the assets carrying amount, an impairment loss would be charged
  to expense in the period identified.

| | h) | Advertising
| | -- | -----------

Advertising costs, which are included in Advertising, Promotion
  and Marketing expense, are expensed as incurred.

| | i) | Inventories
| | -- | -----------

Inventories are presented at the lower of cost or market value,
  including shipping and handling.

| | j) | Organizational and Start-Up Costs
| | -- | ---------------------------------

Costs of start-up activities were expensed
  as incurred.

| | k) | Accounts and Accrued Expenses Payable
| | -- | -------------------------------------

Included in this amount of $2,907,914
  as of December 31, 2006 is approximately $230,000 of unpaid payroll taxes (which
  the Company is currently arranging payment plans on), $1,790,000 for the arbitration
  award discussed below and $550,000 of accounts payable. We are in the process
  of evaluating several legal options relating to the arbitration award and will
  be pursuing appropriate actions upon completion of this evaluation to limit
  and/or vacate the award

| | l) | Loans Payable  Short-Term
| | -- | --------------------------

In September 2006, the Companys then-legal counsel agreed
  to convert their account payable into a short-term loan of $300,000. $100,000
  of this loan is payable in monthly instalments, starting in November 2006, and
  $200,000 is payable when the Company obtains financing of at least $3,500,000.
  In addition, the Company issued its former legal counsel a five-year warrant
  to purchase 75,000 shares of the Companys stock at an exercise price of
  $1.25 and WYD gave them a first priority security interest in all of the Trademarks
  and associated goodwill owned by WYD.

In October 2005, $150,000 was borrowed
as a short-term bridge loan and was supposed to be repaid in December 2005, when
funding was expected to be secured through the efforts of this individual. The
funding did not materialize and on August 25, 2006, the Company was sued to
force repayment of this loan. In October, 2006, this note was purchased by a
shareholder and all litigation was dropped. The shareholder converted the note
into restricted stock of the Company in the fourth quarter of 2006.

25

---

| | m) | Basic and Diluted Loss Per Share
| | -- | --------------------------------

In accordance with SFAS No. 128 
  Earnings Per Share, the basic loss per common share is computed
  by dividing net loss available to common stockholders by the weighted average
  number of common shares outstanding. Diluted loss per common share is computed
  similar to basic loss per common share except that the denominator is increased
  to include the number of additional common shares that would have been outstanding
  if the potential common shares had been issued and if the additional common
  shares were dilutive. At December 31, 2006, the Company had no stock equivalents
  that were anti-dilutive and excluded in the earnings per share computation.

| | n) | Foreign Currency Translation
| | -- | ----------------------------

The Companys functional currency
  is the U.S. dollar. Transactions in foreign currencies are translated into U.S.
  dollars as follows:

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

| | o) | New Accounting Standards
| | -- | ------------------------

| | i. | In December 2004, the FASB issued a revision to Statement
      No. 123, Accounting for Stock- Based Compensationwhich supersedes
      APB Opinion No. 25, Accounting for Stock Issued to Employees. The
      revised SFAS 123 eliminates the alternative to use Opinion 25s intrinsic
      value method of accounting and instead, requires entities to recognize the
      cost of employee services received in exchange for awards of equity
      instruments based on the grant-date fair value of those awards.
      Furthermore, public entities are required to measure liabilities incurred
      to employees in share-based payment transactions at fair value as well as
      estimate the number of instruments for which the requisite service is
      expected to be rendered. Any incremental compensation cost for a
      modification of the terms or conditions of an award is measured by
      comparing the fair values before and after the modification.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | For public entities that file as small business issuers,
      the effective date of the revised Statement is as of the beginning of the
      next fiscal year that begins after December 15, 2005. Consequently, the
      Company began recognizing the cost of employee services received in
      exchange for awards of equity instruments based on the grant-date fair
      value of those awards in 2006. In 2005, the Company used the intrinsic
      value method. The following table shows the effects on net loss and loss
      per share for the year ended December 31, 2005 had compensation and
      payment been measured on the fair value method pursuant to SFAS No.
      123:                                                                                                                                                                                                                                                                                 

Year Ended December 31, 2005

Net loss, as reported
    
    ($4,251,311
    )Officers Salary cost increase based on the fair value
      method
    
    (6,417,125
    )Marketing Expense increase based on the
      fair value method
    
    (436,100
    )Financing Expense increase based on the fair value method
    
    (246,332
    )Sales Expense increase based on the fair
      value method
    
    (448,520
    )Investment Banking Services Expense increase based on the
      fair value method
    
    (2,989,200
    )Pro forma net loss
    
    ($14,788,588
    )


26

---

Basic loss per shareAs reported
    ($.36)Pro forma
    ($1.24)


|4. | Share Capital                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On March 14, 2005, the Companys Board of Directors
      approved a one-for-five reverse stock split. Following the reverse stock
      split the number of issued and outstanding shares in the Company totalled
      approximately 10,180,106.                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | All share and per share amounts included in these
      financial statements have taken into account the reverse split described
      above unless otherwise noted.                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The par value of the common stock remained unchanged at
      $0.001 and the number of authorized common shares was reduced to
      20,000,000. On April 13, 2005, pursuant to a Written Consent of a Majority
      of the Outstanding Shares of common stock, the Companys authorized
      capital was increased to 100,000,000 shares of common stock and 20,000,000
      shares of preferred stock.
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Companys shares began trading on the OTC Bulletin
      Board effective August 17, 2004.                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | At December 31, 2006, 13,846,671 outstanding shares of
      common stock were restricted for periods of up to two years.                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | During the quarter ended March 31, 2005, the Company
      issued shares in settlement of loans payable as
follows:                                                                                                                                                                                                                                                                                        

| |                                                                                                                          | NUMBER    |        
| | ------------------------------------------------------------------------------------------------------------------------ | --------- | -------
| |                                                                                                                          | OF SHARES | VALUE  
| |                                                                                                                          |           |        
| | For convertible promissory notes issued
      settled during the quarter ended March 31, 2005 at face value of the notes | 68,500    | $68,500
| |                                                                                                                          |           |        
| |                                                                                                                          | 68,500    | $68,500

During the year ended December 31,
2006, the Company issued shares in settlement of loans payable as follows:

| |                                                                       |  | NUMBER OF |  |   |           | 
| | --------------------------------------------------------------------- |  | --------- |  | - | --------- | 
| |                                                                       |  | SHARES    |  |   | VALUE     | 
| |                                                                       |  |           |  |   |           | 
| | AJW Entities Conversion of Loans to
      Restricted Stock            |  | 555,779   |  | $ | 192,617   | 
| | Other Loans Converted to Restricted Stock                             |  | 1,572,832 |  |   | 676,416   | 
| | Restricted Stock Issued for Amounts Due to
      Officers and Related |  |           |  |   |           | 
| | Parties                                                               |  | 388,000   |  |   | 194,000   | 
| |                                                                       |  | 2,516,611 |  | $ | 1,033,033 | 

27

---

| | d) | Other Stock and Warrants Issued
| | -- | -------------------------------

On February 28, 2005, the Company reinstated
  3,119,283 shares that had been returned to the Company for no consideration
  on November 3, 2004. 2,460,000 of these shares formed part of the purchase consideration
  for the Whos Your Daddy, Inc. acquisition (Note 8(a)).

The Company issued the following
restricted common stock during the six months ended September 30, 2005: (1)
4,500,000 restricted shares of common stock per the acquisition of Whos Your
Daddy, Inc. (Note 8(a)) as of April 1, 2005, (2) 8,000 restricted shares of
common stock to Concord Business Services for services rendered, as of June 9,
2005, (3) 35,000 restricted shares of common stock to Pasadena Capital Partners,
for services rendered, as of June 9, 2005, (4) 24,000 restricted shares of
common stock to Keith Middlebrooks as of August 1, 2005, (5) 250,000 restricted
shares of common stock to The Hanneman Group, for services rendered and to be
rendered, as of August 6, 2005, (6) 190,000 restricted shares of common stock to
Rich Entertainment, Inc., for services rendered, as of August 6, 2005, (7)
10,000 restricted shares of common stock to Miller and Pliakas, LLP, for
services rendered, as of August 6, 2005, (8) 400,000 restricted shares of common
stock to October Funds Ltd. for cash and (9) 850,000 restricted shares of common
stock to Geneva Equities Ltd., for cash and services rendered, on various dates.
As discussed in Note 1, 500,000 restricted shares of common stock were initially
issued per the acquisition of Pharb University Brand, Inc. as of June 12, 2005
and subsequently cancelled as if they had not been issued.

In the three months ended December 31,
2005, the Company issued: (1) 328,947 restricted shares with registration rights
to Around the Clock Partners, for cash, (2) 189,164 restricted shares to Geneva
Equities Ltd. for services rendered for the above October transactions, (3)
42,000 restricted shares to October Funds Ltd. to adjust the above transaction,
(4) 20,000 restricted shares to George Salameh for investment banking services,
(5) 65,000 restricted shares to Danny Kashou as settlement of claims, (6) 69,375
restricted shares to shareholders as payment of interest on loans and as
settlement of claims and (7) cancelled 250,000 restricted shares of common stock
to The Hanneman Group and returned them to Treasury.

In the three months ended December 31,
2005, the Company issued: (1) 5-year warrants to purchase a total of 56,818
shares of common stock, at an exercise price of $0.88 per share, to Harlan
Kleinman, Paresh Patel and Jon Slizza as a retainer against a success fee
payable on closing of an Offering of the Companys securities (these were
cancelled in 2006 inasmuch as no success fee was earned), (2) 5-year warrants to
purchase a total of 148,514 shares of common stock, at an exercise price of
$1.01 per share, to Harlan Kleinman in connection with his convertible debenture
(these were cancelled in 2006 when the debenture was converted), (3) 5-year
warrants to purchase a total of 50,000 shares of common stock, at an exercise
price of $1.50 per share, to the Investors described in Note 9 as part of their
financing (4) 5-year warrants to purchase a total of 35,000 shares of common
stock, at an exercise price of $1.25 per share, to Around the Clock Partners, as
part of their cash investment described in the above paragraph, (5) 5-year
warrants to executives to purchase a total of 7,150,000 shares of common stock
as detailed in Note 12 (525,000 of these were cancelled in 2006), (6) three
5-year warrants to its investment banker, effective April 1, 2005, each to
purchase 1,000,000 shares of common stock each on similar terms to the CEO and
President, as detailed in Note 12, (7) three 5-year warrants to its sales
managing company, effective June 27, 2005, each to purchase 200,000 shares of
common stock each on similar terms to the CEO and President, as detailed in Note
12, and (8) three 5-year warrants in connection with a Marketing and Promotion
Agreement, as described in Note 6, effective August 10, 2005, each to purchase
1,000,000 shares of common stock each on similar terms to the CEO and President
as detailed in Note 12. These warrants were terminated on March 1, 2006 by
mutual agreement.

During the year ended December 31,
2006, the Company issued: (1) 2,348,918 restricted shares to various investors
for cash, (2) 90,000 restricted shares to its three directors for services
rendered during the year, (3) 228,700 restricted shares to two individuals and
two companies for commissions, (4) 170,000 restricted shares to two companies
for services rendered during the year, (5) 1,784,975 restricted shares to
various investors as conversion of their loans to the Company, (6) 555,779
restricted shares to the Investors described in Note 9, as a conversion of a
portion of the amounts owed to them, (7) 167,000 restricted shares to King of
Energy West, LLC in connection with the signing of its distributor agreement,
(8) 1,000,000 restricted shares to Geneva Equities, Ltd. for investment banking
services rendered and termination of their contract, (9) 84,868 restricted
shares for interest expense, (10) 423,143 restricted shares for other expenses

28

---

and (11) 388,000 restricted shares to
officers and related parties for unpaid compensation. The stock issued during
this quarter was valued at $998,805.

During the year ended December 31,
2006, the Company issued: (1) 5-year warrants to purchase a total of 122,000
shares of common stock to employees, (2) 5-year warrants to purchase a total of
364,057 shares of common stock to investors as part of their investment in the
Company, (3) 5-year warrants to purchase a total of 10,000 shares of common
stock as a commission, (4) 5-year warrants to purchase a total of 194,000 shares
of common stock as art of loan conversions, (5) 5-year warrants to purchase a
total of 33,000 shares of common stock to King of Energy West, LLC in connection
with the signing of its distributor agreement, (6) 5-year warrants to purchase a
total of 75,000 shares of common stock to the Companys legal counsel as part of
their conversion of their account payable into a short-term loan and (7)
cancelled warrants to purchase a total of 730,322 shares of common stock in
connection with termination of contracts.

For each of the issuances described
above, we relied upon the exemption from registration provided by Section 4(2)
of the Securities Act of 1933.

A summary of the Companys stock
warrants is presented below:

ExerciseShares
    
    PriceBalance December 31, 2004
    
    0Granted during 2005, net:
    
    3,650,000
    
    $2.003,600,000
    
    $1.5035,000
    
    $1.25148,514
    
    $1.013,550,000
    
    $1.0056,818
    
    $0.88Balance December 31, 2005
    
    11,040,332Granted during 2006, net:
    
    28,571
    
    $2.50373,486
    
    $2.00(64,000
    )
    $1.5075,000
    
    $1.25(148,514
    )
    $1.01(140,000
    )
    $1.00(56,818
    )
    $0.88Balance December 31, 2006
    
    11,108,057


|5. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On September 2, 2003, the Company entered into an
      agreement with RBM Financial, Inc. and TwentyTen Investments Corp. for
      programming, marketing and business concept expertise. The programming
      expertise was provided by Riskebiz Internet Services, Inc, a corporation
      owned by the then- President of the Company. Under the terms of the
      agreement, the Company prepaid $100,000 for services provided through
      August, 2004. This agreement was terminated on April 21, 2005.                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company also paid $6,250 in 2004 to a company owned
      by the Companys former President for advice on acquisitions, strategy,
      planning and management. Under the terms of a contract dated September 30,
      2004, the Company was committed to pay up to $1,700 per month to its
      former President for up to a year for management services to guide the
      Company in the development of its business, products and services. This
      agreement was terminated on April 25, 2005 upon the resignation of the
      Companys former President.

29

---

|   | The Company has signed agreements with two related
      parties for systems control, Sarbanes-Oxley planning and management
      consulting services. Under the terms of these agreements, the Company is
      committed to pay $11,000 monthly. A portion of this amount is being
      deferred until the Company receives additional funding. For the year ended
      December 31, 2005, the Company paid $49,000 to these parties and deferred
      payment on $34,000. For the year ended December 31, 2006, the Company paid
      $22,000, issued restricted stock and warrants as payment of $74,000 and
      deferred payment on the balance due to these parties. 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | For the year ended December 31, 2005, officers and
      shareholders made loans to the Company of approximately $199,000 and
      officers deferred salary of approximately $96,000. For the year ended
      December 31, 2006, officers and shareholders made loans to the Company of
      approximately $580,000 and received repayment of advances of approximately
      $200,000. In addition, during the year ended December 31, 2006 officers
      were paid total salaries of approximately $174,000, issued restricted
      stock and warrants as payment of $120,000 of salary and they deferred
      payment on the balance due of their salaries.              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|6. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | SMART-TEK Communications Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On November 29, 2004, the Company entered into a Revenue
      Sharing and Product Development agreement with SMART-TEK Communications
      Inc. (Smart-Tek), whereby Smart-Tek would earn shares for their
      involvement in the design, engineering, sales, manufacturing, technology
      and expertise with the application(s) or product(s) in partnership with
      the Company, and the Company would earn 50% of the revenues associated
      with the marketable final product. On January 28, 2005, the parties
      concluded that they could not identify an application or product to
      co-develop, produce and market so as to fulfill the agreement
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Rich Entertainment, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On August 4, 2005, the Company entered into a Marketing
      and Promotion Agreement (the Promotion Agreement) with Rich
      Entertainment, Inc., a California corporation (RE), f/s/o Percy Miller.
      Pursuant to the Agreement, RE was to provide certain marketing and
      promotion services for certain products (the Promoted Products) of the
      Company.                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | This agreement was mutually terminated on March 1, 2006,
      effective February 28, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Lease Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company leases its facilities under a non-cancelable
      operating lease arrangement for a 62-month period in Carlsbad, California.
      The lease was signed in November, 2006. Occupancy commenced on March 16,
      2007 and ends on April 30, 2012, with a 36-month extension period. The
      remaining lease payments as of December 31, 2006 under this lease are
      $567,235.                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company leases equipment under non-cancelable
      operating lease arrangements for a 39-month period. The lease commenced in
      July 2005 and ends in September 2008. The remaining lease payments under
      this lease are $8,106.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company does not currently utilize any
      off-balance-sheet financing. Rent expense for the years ended December 31,
      2006 and 2005 were $87,537 and $ 66,984.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Future minimum lease payments under non-cancelable
      operating leases having remaining terms in excess of one year as of
      December 31, 2006 are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

30

---

| | Twelve Months Ended December 31, |   |         |  |  |  | 
| | -------------------------------- | - | ------- |  |  |  | 
| | 2007                             | $ | 82,063  |  |  |  | 
| | 2008                             |   | 103,294 |  |  |  | 
| | 2009                             |   | 112,473 |  |  |  | 
| | 2010                             |   | 116,409 |  |  |  | 
| | 2011                             |   | 120,483 |  |  |  | 
| | 2012                             |   | 40,619  |  |  |  | 
| | Total minimum lease payments     | $ | 575,341 |  |  |  | 

|7. | Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On July 19, 2006, we received a Demand for Arbitration
      filed with the American Arbitration Association from Greg Sacks seeking
      damages arising out of a sponsorship contract between the parties. On
      February 13, 2007, the Arbitrator awarded Sacks Motorsports Inc
      $1,790,000. We are in the process of evaluating several legal options and
      will be pursuing appropriate actions upon completion of this evaluation to
      limit and/or vacate the award..
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On February 7, 2006, American Express Company filed a
      suit in the San Diego Superior Court seeking payment on a credit card
      balance of approximately $80,000                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|8. | Acquisitions /
Divestitures                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | a) | On April 1, 2005, the Company acquired all of the issued
        and outstanding shares of Whos Your Daddy, Inc. (WYD),
        a company incorporated in California. Under the terms of the agreement
        and plan of merger, the Company issued 2,040,000 shares and delivered
        an additional 2,460,000 issued and outstanding non-float common shares
        with an agreed stock price of $1.00 per share. All shares, other than
        those to be issued to related parties, have been issued. The shares that
        are to be issued to related parties will be issued when the Company reaches
        $4,000,000 in revenues.                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | b) | At the time the Company signed an initial Content Distribution
        and Revenue Share Agreement with TwentyTen Investments Corp., the Company
        believed it would realize at least the acquisition value from the SMSOfficePools.com
        service. The Company has since reviewed this acquisition and has come
        to the conclusion that the value is not materializing as originally anticipated.                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | On April 21, 2005, the parties mutually agreed to terminate
        the Content Distribution and Revenue Share Agreement. TwentyTen Investments
        Corp. returned to the Company the 400,000 common shares issued. In consideration
        of the termination of the contract and work performed to date by TwentyTen
        Investments, the Company issued to TwentyTen Investments 40,000 common
        shares.                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | c) | At the time the Company signed an initial Agreement
        with Riskebiz Internet Services, a corporation owned by a then-director,
        the Company believed it might realize at least the acquisition value from
        the RISKeye mobile technology. The Company has since reviewed this acquisition
        and has come to the conclusion that development is not materializing as
        originally anticipated. On April 21, 2005, the parties mutually agreed
        to terminate the Asset Purchase Agreement. Riskebiz 200,000 common shares
        issued for the RISKeye mobile viewing technology. In consideration of
        the termination of the contract, and work performed to date by Riskebiz,
        the Company issued to Riskebiz Internet Services 20,000 common shares.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | d) | The Company has decided to sell all rights, title and
        interest in various technologies which are no longer core to its business,
        to an unrelated corporation for 250,000 shares of such corporations
        stock. The shares are restricted for a period of two years, pending the
        filing of a registration statement. The unrelated corporation is in the
        process of issuing these shares. As a result, the expenses related to
        this technology were written off to Additional Paid in Capital as part
        of the Reverse Acquisition in these financial statements.                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | e) | On June 12, 2005, the Company acquired all of the issued
        and outstanding shares of Pharb University Brand, Inc. (Pharb),
        a company incorporated in Delaware, for a total of 1,000,000 restricted
        shares of the Companys common stock. 500,000 shares of common stock
        have been issued and 500,000 shares shall be delivered within fifteen
        (15) days after the date the quarterly financial statements of the Company
        have been                                                                                                                                                                                                                                                                                                                          

31

---

|   | prepared showing that cumulative sales of Pharbs
      products and/or the Companys products sold through Pharbs sales channels
      have reached $4,000,000. On February 28, 2006, the Board of Directors of
      the Company, Pharb Acquisition Corp., and Pharb University Brand, Inc. and
      Mark De Mattei mutually agreed to rescind the agreement ab
      initio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|9. | Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On April 29, 2005, the Company entered into a Securities
      Purchase Agreement with New Millennium Capital Partners II, LLC, AJW
      Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC
      (collectively, the Investors or the AJW Entities) for the sale of (i)
      $3,750,000 in callable secured convertible notes (the Notes) and (ii)
      stock purchase warrants (the Warrants) to buy 2,628,505 shares of common
      stock. Pursuant to the Securities Purchase Agreement, the Company also
      agreed to covenants regarding its business and the use of proceeds. On
      April 29, 2005, the Investors purchased $1,250,000 in Notes and received
      Warrants to purchase 876,170 shares of the Company's common stock. The
      full text of these Notes and the other agreements between the Company and
      the Investors is filed with the Current Report on Form 8-K filed on May
      16, 2005.                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective as of October 5, 2005, the Company entered into
      an amendment and repayment letter agreement (the Amendment) with the AJW
      Entities whereby the Purchase Agreement was amended and any prior breach
      or default under the Purchase Agreement was resolved. The Amendment
      provides for the Company to limit the investment by the AJW Entities to
      $1,750,000 in Notes and Warrants to purchase only 50,000 shares of common
      stock, which amended the originally agreed upon amount of $3,750,000 in
      Notes and Warrants to purchase up to 2,628,505 shares of common stock. The
      Warrants to purchase 50,000 shares of common stock are for a term of five
      years with an exercise price of $1.50 per share. As part of the Amendment,
      the AJW Entities invested an additional $500,000 in the Company after the
      Company filed its registration statement. The full text of these Notes and
      the other agreements between the Company and the Investors is filed with
      the Current Report on Form 8-K filed on October 7, 2005.                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | As a result of the Amendment, the initial $1,250,000
      payment was reclassified to long-term debt in these financial statements.
      Further, the fees incurred in connection with receiving these funds have
      been reclassified as Capitalized Financing Fees and will be amortized over
      the repayment period of the new agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective as of December 5, 2006, the Company and the AJW
      Entities modified the Callable Secured Convertible Notes dated April 29,
      2005 and the Amendment dated October 5, 2005 and other matters set forth
      herein. Under this modification, the Company is allowed to prepay, at its
      option, all or a portion of the principal outstanding under the Notes,
      with an agreed-upon payoff balance as of December 5, 2006 of $2,150,000,
      which includes interest thru December 31, 2006. Further, the AJW Entities
      agreed that the Company is no longer in default and to waive any all
      penalties that were due and owing to the Investors for, including but not
      limited to, the Companys failure to have a registration statement
      declared effective on time. They agreed there will be no additional
      penalties or an Event of Default under the Notes, so long as the Company
      honors the Investors future conversion requests, as allowed in each of
      the Debt Instruments, as they are received in a timely manner. The full
      text of this modification is filed with the Current Report on Form 8-K/A
      filed on January 29, 2007.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective April 3, 2007, the Company and the AJW Entities
      modified the Callable Secured Convertible Notes dated April 29, 2005, the
      Amendment dated October 5, 2005, the Amendment Dated December 5, 2006 and
      other matters set forth herein. Under this modification, the Company has
      agreed to repurchase the Notes in exchange for a payment of $1,000,000 and
      the issuance of 1,000,000 restricted shares of the Companys common stock
      and 1,000,000 freely trading shares of the Companys common stock by April
      30, 2007. The full text of this modification is filed with the Current
      Report on Form 8-K/A filed on April 13, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Two institutional investors have committed to put up the
      cash and securities required under this modification in exchange for
      4,500,000 restricted shares of the Companys common stock. A final
      agreement is being negotiated with these
investors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

32

---

|10. | Long-Term Debt
|--- | --------------

| | Note Payable in equal monthly installments
      of $8,000, |   |           |  
| | ----------------------------------------------------------- | - | --------- | -
| | including interest, through January, 2008                   | $ | 222,352   |  
| | Convertible Debentures Payable to AJW
      Entities,       |   |           |  
| | plus interest at 15%, due April, 2008                       |   | 2,080,143 |  
| | Less: Current Portion                                       |   | (222,352  | )
| | Total Notes Payable                                         | $ | 2,080,143 |  

The aggregate amount of required
payments at December 31, 2006 is as follows:

| | 12 Months Ending December 31, 2007 | $ | 240,000   |  
| | ---------------------------------- | - | --------- | -
| | 12 Months Ending December 31 2008  |   | 2,080,143 |  
| | Total                              |   | 2,320,143 |  
| | Less: Amount representing interest |   | (17,648   | )
| | Total at present value             | $ | 2,302,495 |  

|11. | Income Taxes                                                                                                                                                                                                                                                                                                                             
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                          
|    | Deferred income taxes (benefits) are provided for certain
      income and expenses which are recognized in different periods for tax and
      financial reporting purposes. The Company has established a 100% valuation
      allowance against this deferred tax asset, as the Company has no history
      of profitable operations.
|    |                                                                                                                                                                                                                                                                                                                                          
|    | The differences between Federal income tax rate and the
      effective income tax rate as reflected in the accompanying statements of
      operations are:                                                                                                                                                                             

| |                                         | December 31, 2006 | December 31, 2005
| | --------------------------------------- | ----------------- | -----------------
| |                                         |                   |                  
| | Statutory federal income tax
      rate | 34%               | 34 %             
| | State Rate (Net of Federal Benefit)     | 6                 | 6                
| | Valuation allowance                     | (40)              | (40)             
| | Effective tax rate                      | -%                | -%               

|    | The minimum annual state franchise tax in California is
      $800.                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | At December 31, 2006, the Company had net operating loss
      carry-forwards for income tax purposes in excess of $12,000,000 and
      Section 179 carry-forwards in excess of $113,000. Some of these carryovers
      are limited to being applied against specific Companys
  operations.                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12. | Executives Employment Agreements                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Effective April 1, 2005, pursuant to the merger with WYD,
      the Company entered into employment agreements with Edon Moyal, its CEO,
      and Dan Fleyshman, its President. In June, 2005, pursuant to the merger
      with Pharb, the Company entered into a similar employment agreement with
      one executive. These agreements were amended in December, 2005. In
      January, 2006 the contract with the Pharb executive was
  terminated.

33

---

Mr. Moyal is primarily responsible for
formulating the Companys strategic plan, developing marketing strategies and
new product concepts, establishing distribution channels, analyzing branding
initiatives, developing new licensing opportunities, recruiting and developing
key executives for the organization and sourcing capital to ensure the continued
growth of the Company. Mr. Fleyshman is primarily responsible for the strategic
development of key licensing and manufacturing relationships for the Company. In
addition, Mr. Fleyshman is instrumental in the formulation of the Companys
strategic plan, the recruitment process of key executives for the organization
and the creative development behind branding initiatives.

The agreements are for a period of five
years. Each executive is to receive annual cash compensation of $144,000 and
2.0% of the annual gross revenue of the Company - effective January 1, 2005.
Additionally, each employment agreement provides for the issuance of three
warrants, exercisable from months 13 to 60 of the employment agreement, as
follows: one to purchase 1,000,000 shares of common stock at a price of $1.00,
one to purchase 1,000,000 shares of common stock at a price of $1.50,and
one to purchase 1,000,000 shares of common stock at a price of $2.00.
Additionally, each employment agreement provides for the issuance of 1,000,000
shares of voting preferred stock that cannot be converted to common shares in
the Company with supermajority voting rights not less than four votes per share
of such capital stock. As part of the termination agreement with the Pharb
executive, for no additional consideration, his preferred stock was returned to
the Company, his warrants were cancelled and he agreed to forgo any gross
revenue payments.

In December, 2005, the Company entered
into an employment agreement with Reuven I, Rubinson, its CFO, effective June 1,
2005, the starting date of his employment with the Company. Mr. Rubinsons term
is for three years, his annual compensation started at $96,000 and he receives
0.5% of the annual gross revenue of the Company. Additionally, he received three
warrants, each to purchase 175,000 shares of common stock, on similar terms and
strike prices to the three warrants described in the above paragraph. Mr.
Rubinson is responsible for all filings with the SEC and for the Companys books
and records and all aspects of its accounting system.

In December, 2005, the Company entered
into three year employment agreements with two executives. One of these
executives agreement was effective May 1, 2005, the starting date of his
employment with the Company, and he received annual compensation of $120,000,
0.5% of the annual gross revenue of the Company and three warrants to purchase
175,000 shares of common stock on similar terms and strike prices to the
warrants described above. This executive resigned on April 7, 2006 and his
warrants have been canceled. The other executives agreement was effective
December 16, 2005, the starting date of his employment with the Company, and he
received annual compensation starting at $96,000. This other executive resigned
from the Company on March 24, 2006. Under the employment termination agreement
he is receiving compensation to the date of his termination and 100,000 warrants
with an exercise price of $2.00 from month 13 to 60 of the agreement. Only these
warrants are reflected in these financial statements.

The full text of these five employment
agreements are filed with the Current Report on Form 8-K and 8-K/A filed on
January 3, 2006.

On June 23, 2006, the Company entered
into a three year employment agreement with Joseph Conte to become a
Vice-President of the Company. The agreement was effective May 1, 2006, the
starting date of his employment with the Company. His monthly compensation
started at $4,000, increased to $8,000 on October 1, 2006 and will increase to
$12,000 on May 1, 2007. In addition, he receives $0.10 per case of our energy
drink produced, based on his prior employment with the company that developed
the formula for the energy drink, with that companys fee being reduced
accordingly. He will receive one five-year warrant to purchase 25,000 shares of
the Companys common stock, with an exercise price of $2.00, exercisable from
months 13 to 60, when the Companys cumulative net revenues reach $5,000,000 and
another warrant for the purchase of an additional 25,000 shares when the
Companys cumulative net revenues reach $10,000,000. Thereafter, he will receive
warrants for the purchase of an additional 25,000 shares of the Companys common
stock for each additional $10,000,000 of Company cumulative net revenues. The
full text of this employment agreement is filed with the Current Report on Form
8-K filed on June 29, 2006.

Effective October 1, 2006, the Board of
Directors voted to increase the salaries of Messrs. Moyal (CEO) and Fleyshman
(President) to $18,000 monthly and Mr. Rubinson (CFO) to $15,000 monthly
respectively.

34

---

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

On August 18, 2005, the Company, through a mutual agreement
with Morgan & Company ("Morgan"), dismissed Morgan as its independent
accountant. The change in accountants was approved by unanimous written consent
of the Board of Directors on August 18, 2005.

None of Morgan's reports on the Company's financial statements
for the years ended December 31, 2003 and 2004 contained an adverse opinion or
disclaimer of opinion, nor was any such report qualified or modified as to
uncertainty, audit scope or accounting principles, except that the reports were
qualified as to the Companys ability to continue as a going concern.

During the years ended December 31, 2003 and 2004, and through
the date of Morgans dismissal, there were no disagreements between the Company
and Morgan on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreements, if not
resolved to Morgans satisfaction would have caused it to make reference to the
subject matter of the disagreements in connection with its reports.

However, the Company originally decided, and Morgan agreed,
that the accounting treatment for the April, 2005 merger between the Company and
Whos Your Daddy, Inc. should be treated as an acquisition by Snocone of WYD. In
looking at the transaction closer and applying the requirements of SFAS 141, it
was determined by our current Chief Financial Officer that the merger should
have been treated as a reverse acquisition by WYD of Snocone. Our current
accountants concur with this revised treatment.

The Companys audited financial statements filed with the SEC
on April 17, 2006 in the Companys 10-KSB for the year ended December 31, 2005
reflected this correction of accounting treatment of the merger. The Company
reissued its second and third quarter reports on form 10-QSB/A to reflect this
treatment on March 21, 2007.

ITEM 8A.        
CONTROLS AND PROCEDURES

|(a) | Evaluation of disclosure controls and
  procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Our chief executive and chief financial officers have
      evaluated our disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of
      December 31, 2006. These officers have concluded that our disclosure
      controls and procedures were not effective as of December 31, 2006 to
      ensure that information required to be disclosed by the Company in reports
      that it files or submits under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in Securities
      and Exchange Commission rules and forms.                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In order to eliminate manual creation of sales orders and
      streamline the order fulfilment cycle the Company implemented an Internal
      Database System in 2006. The system has no audit trail. Therefore,
      transactions can be changed after they are originally entered with no
      record of who made the change and when it was made. The consultant
      responsible for developing this system has been informed of this weakness
      by the CFO and is expected to implement appropriate action on it. Further,
      during this evaluation, the Chief Financial Officer became aware that
      certain procedures were followed inconsistently. Specifically, some sales
      orders were not invoiced on a timely basis and certain control checklists
      for distributors and orders were not utilized.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Chief Financial Officer and the sales department have
      reviewed all the transactions for the year, prior to the completion of
      this report, and have determined that the information contained herein has
      been properly recorded. Accordingly, these weaknesses in disclosure
      controls and procedures should have no effect on the proper recording in
      these financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b) | Changes in internal controls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Subsequent to the date of their evaluation, described in
      the previous section, there were no changes made in our internal controls
      over financial reporting that have materially affected, or are reasonably
      likely to affect, our internal control over financial
  reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

35

---

PART III

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

The following table sets forth the name, age and position of
each of the members of our Board of Directors, executive officers and promoters
as of December 31, 2006:

|Name               | Age | Position                                                          
|------------------ | --- | ------------------------------------------------------------------
|                   |     |                                                                   
|Dan Fleyshman      | 25  | President and
      Director.                                     
|Edon Moyal         | 25  | Chief Executive Officer and
      Director. Chairman of the Board.
|Derek Jones        | 68  | Director                                                          
|Reuven I. Rubinson | 53  | Chief Financial Officer                                           

The president and CEO have five-year employment agreements
which commenced April 1, 2005. The CFO has a three-year employment agreement
which commenced June 1, 2005.

Information concerning our executive officers and directors is
set forth below.

Dan Fleyshman  President and Director.

Dan Fleyshman has been President and Director of the Company
since April 26, 2005. Mr. Fleyshman will serve as director until the next annual
meeting of stockholders and until his successor has been duly elected and
qualified. Since 2001, Mr. Fleyshman was the President of Who's Your Daddy,
Inc., which was acquired by the Company as a wholly owned subsidiary in April,
2005. Mr. Fleyshman is primarily responsible for the strategic development of
key licensing and manufacturing relationships for the Company. In addition, Mr.
Fleyshman is instrumental in the formulation of the Companys strategic plan,
the recruitment process of key executives for the organization and the creative
development behind branding initiatives.

Edon Moyal  Chief Executive Officer and Director.Chairman of the Board

Edon Moyal has been Chief Executive Officer and Director of the
Company since April 26, 2005. Mr. Moyal will serve as director until the next
annual meeting of stockholders and until his successor has been duly elected and
qualified. Since 2001, Mr. Moyal has been the Chief Executive Officer of Who's
Your Daddy, Inc., which was acquired by the Company as a wholly owned subsidiary
in April, 2005. Mr. Moyal is primarily responsible for formulating the Companys
strategic plan, developing marketing strategies and new product concepts,
establishing distribution channels, analyzing branding initiatives, developing
new licensing opportunities, recruiting and developing key executives for the
organization and sourcing capital to ensure the continued growth of the
Company.

Derek Jones - Director

Derek Jones was appointed as Director of the Company on April
  26, 2005. Mr. Jones will serve as director until the next annual meeting of
  stockholders and until his successor has been duly elected and qualified. For
  more than the past nine years, Mr. Jones has been a consultant and telecom analyst.
  Mr. Jones, since 2003, has served as a Director of Native American Studies and
  Fund Raising Division of the Rio Grande Foundation, a New Mexico free market
  research and educational organization dedicated to the study of public policy.
  Along with his background in Business Administration, Mr. Jones brings to the
  Company his knowledge and 35 years experience in the area of corporate development
  and finance as well as his background in the areas of International Finance
  and business affairs.

36

---

Reuven I. Rubinson, CPA, MBA - Chief Financial Officer

On August 19, 2005, the Board of Directors appointed Mr.
Rubinson as Chief Financial Officer. Mr. Rubinson was consulting with the
Company since April, 2005 and was an employee since June 1, 2005. Mr. Rubinson
received his B.A. from The Colorado College in 1975 and his MBA from New York
University in 1977. Mr. Rubinson has owned and managed his public CPA practice
from 1975 to the present and has acted as a Controller for several companies,
including a start-up company from 1997 to 2001 and a publicly traded (OTC)
company from 1989 to 1995. In 1983, he joined a regional New York CPA firm which
specialized in Wall Street clientele, including many large hedge funds and was
admitted as a partner in January, 1985. He was responsible for client audits and
other financial and tax engagements, computer advisory services and staff
training. Mr. Rubinson has extensive experience in financial management
possessing expertise in both accounting and MIS. Mr. Rubinson is responsible for
all filings with the SEC and for the Companys books and records and all aspects
of its accounting system.

Family Relationships

There are no family relationships between or among the
directors, executive officers or persons nominated or chosen by the Company to
become directors or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge and belief during the past five
years, other than what has already been reported herein, none of the following
occurred with respect to a present or former director, executive officer, or
employee of the Company: (1) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time; (2) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); (3) being
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of any competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities; and (4) being found
by a court of competent jurisdiction (in a civil action), the SEC or the
Commodities Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.

Term of Office

Our directors are appointed for a one year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.

Audit Committee

We do not have a separately-designated standing audit
committee. The entire board of directors is acting as our audit committee under
the direction of one of our independent auditors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires
the Companys directors and executive officers and persons who beneficially own
more than ten percent (10%) of a registered class of the Companys equity
securities to file with the SEC initial reports of ownership and reports of
change in ownership of common stock and other equity securities of the Company.
Officers, directors and greater than ten percent (10%) shareholders are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. To our knowledge, the following persons have failed to file, on a
timely basis, the identified reports required by Section 16(a) of the Exchange
Act during the most recent fiscal year: none.

Code of Ethics Disclosure Compliance

The Company has a Code of Ethics that applies to the principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, as described in sections
406 and 407 of the Sarbanes-Oxley Act of 2002. The Code of Ethics is attached
hereto as Exhibit 9.1.

37

---

ITEM
10.          EXECUTIVE COMPENSATION

The directors of the Company receive 7,500 restricted shares of
the Companys common stock each quarter, starting in the first quarter of 2006,
in their capacity as a director. The CEO and the registrants three most highly
compensated executive officers are compensated as employees, as per their
employment agreements, as detailed in Note 12 to the Financial Statements. There
are no other officers in the Company and there are no other employees who earn
over $100,000.

Exhibit 10.1 presents the Executive Compensation required to be
disclosed by Item 402(b) of Reg. S-B.

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

The following table sets forth certain information as of
December 31, 2006, regarding (i) each person known by us to be the beneficial
owner of more than five percent (5%) of the outstanding shares of our common
stock, (ii) each director and named executive officer of the Company and (iii)
all officers and directors as a group. Each person named in the table has sole
voting and investment power with respect to all shares shown as beneficially
owned by such person.

|Title of Class | Name/Address of          | Amount and Nature |              
|-------------- | ------------------------ | ----------------- | -------------
|               | Beneficial Owner*        | of Beneficial     | Percentage   
|               |                          | Ownership of      | Of           
|               |                          | Common Stock (1)  | Securities(2)
|               |                          |                   |              
|Common Stock   | Derek Jones              | 30,000            | 0.143%       
|Common Stock   | Edon Moyal               | 945,375           | 4.494%       
|Common Stock   | Dan Fleyshman            | 945,375           | 4.494%       
|Common Stock   | Reuven I. Rubinson       | 120,000           | 0.570%       
|               |                          |                   |              
|Common Stock   | All executive officers   |                   |              
|               | and directors as a group | 2,040,750         | 9.701%       
|               | (4 persons)              |                   |              
|               |                          |                   |              
|Common Stock   | Around The Clock         | 1,187,142         | 5.643%       
|               | Partners LP              |                   |              

* The address of each of the indicated holders is c/o Whos
Your Daddy, Inc., 5840 El Camino Real, Suite 108, Carlsbad, CA 92008.

(1) Pursuant to SEC rules, a person is deemed to beneficially
own shares of common stock over which the person has or shares investment or
voting power, or has the right to acquire such power within 60 days.

(2) The percentage of common stock owned is calculated based on
the number of shares of common stock outstanding, plus in the case of each
person the number of shares of common stock issuable only to such person upon
the exercise of options or warrants and the conversion of convertible debt
securities.

Securities Authorized for Issuance Under Equity Compensation
Plans

We have not issued any securities to our officers or directors
under our existing incentive stock option plan

38

---

ITEM
12.          CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS

On October 29, 2004, the Company entered into an Asset Purchase
Agreement with Riskebiz Internet Services Inc., to acquire the assets, known as
RISKeye Mobile Viewing and Surveillance Technology, owned by Riskebiz. The
Company issued 200,000 shares of restricted common stock for the assets. Mr.
Kevin Day, who is a Director of the Company, is the President and majority owner
of Riskebiz. Subsequent to the Agreement with Riskebiz Internet Services, on
April 21, 2005, the parties mutually agreed to terminate the RISKeye Asset
Purchase Agreement and cancelled 180,000 of these shares.

ITEM
13.          EXHIBITS AND REPORTS
ON FORM 8-K

|EXHIBITS:    |                                                                                                         
|------------ | --------------------------------------------------------------------------------------------------------
|             |                                                                                                         
|Exhibit 9.1  | Code of Ethics                                                                                          
|Exhibit 10.1 | Summary Compensation
      Table                                                                        
|Exhibit 31.1 | Certification of Chief
      Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|Exhibit 31.2 | Certification of Chief
      Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|Exhibit 32.1 | Certification Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002                           
|Exhibit 32.2 | Certification Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002                           

REPORTS ON FORM 8-K:

8-K filed 04-01-2005 8-K filed 04-07-2005 8-K filed
05-05-2005 8-K filed 05-06-2005 8-K/A filed 06-13-2005 8-K filed
06-16-2005 8-K filed 08-10-2005 8-K filed 08-22-2005 8-K filed
08-25-2005 8-K/A filed 08-26-2005 8-K filed 10-07-2005 8-K filed
11-17-2005 8-K filed 01-03-2006 8-K/A filed 01-03-2006 8-K filed
01-19-2006 8-K filed 03-06-2006 8-K/A filed 03-06-2006 8-K filed
03-07-2006 8-K/A filed 03-07-2006 8-K filed 03-17-2006 8-K/A filed
03-17-2006 8-K filed 04-18-2006 8-K filed 05-06-2006 8-K filed
06-29-2006 8-K/A filed 08-06-2006 8-K/A filed 01-26-2007 8-K filed
02-26-2007 8-K filed 04-13-2007

39

---

ITEM
14.          PRINCIPAL ACCOUNTANT
FEES AND SERVICES

Audit Services
    Audit Related Fees
    Tax Fees
    Other FeesMorgan & Company2004
    21,000
    0
    0
    02005
    17,145
    0
    0
    0Baum & Company2004
    13,000
    0
    0
    02005
    45,000
    0
    0
    02006
    40,000
    0
    0
    0


**SIGNATURES**

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

|                     | **WHOS YOUR DADDY, INC.**
|-------------------- | --------------------------
|                     |                           
|Date: April 16, 2007 | By:                       
|                     | Name:                     
|                     | Title:                    

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

|By: /s/ Edon Moyal  | Date: April 16, 2007
|------------------- | --------------------
|Edon Moyal          |                     
|Director            |                     
|                    |                     
|                    |                     
|By: /s/ Derek Jones | Date: April 16, 2007
|Derek Jones         |                     
|Director            |                     

40

---