SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                       For the Fiscal Year Ended 12/31/05

                         Commission File Number 0-10822

                                   BICO, Inc.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Pennsylvania                                           25-1229323
 ------------------------------                            --------------------
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                           Identification Number)


                       1 Wakonda, Dove Canyon, California          92679
                     --------------------------------------      --------
                    (Address of principal executive offices)    (Zip Code)

        Registrant's telephone number, including area code (949) 367-1362

        Securities registered pursuant to Section 12(b) of the Act: None

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

                         Common Stock, $.0001 par value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes  X   No
                     -----   -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 2005: Common Stock, $.0001 par value -- $3,409,912

As of December 31, 2005, there were 34,099,118,372 shares of common stock, par
value $.0001 per share, were issued and outstanding.

Exhibit index is located on page 13 and 14

<PAGE>


                                Table of Contents


Part I.........................................................................1
   Item 1  -  Description of Business..........................................1
      Background...............................................................1
      Principal Products and Services..........................................1
      Markets and Distribution.................................................2
      New Business Model.......................................................2
      Intellectual Property....................................................2
      Going Concern Considerations.............................................2
      Risk Factors.............................................................3
   Item 2  -  Description of Property..........................................4
   Item 3  -  Legal Proceedings................................................4
   Item 4  -  Submission of Matters to a Vote of Security Holders..............4
Part II........................................................................5

   Item 5  -  Market for Common Equity and Related Stockholder Matters.........5
   Item 6  -  Management's Discussion and Analysis or Plan of Operation........5
      Overview.................................................................6
      a.      Plan of Operation................................................6
      b.      Financial Condition and Results of Operations....................6
      c.      Off-balance Sheet Arrangements...................................7
   Item 7  -  Financial Statements............................................F1
   Item 8  -  Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure........................................8
   Item 8A -  Controls and Procedures..........................................8
Part III.......................................................................8

   Item 9  -  Directors, Executive Officers, Promoters and Control Persons;
               Compliance with Section 16(a) of the Exchange Act...............8
   Item 10 -  Executive Compensation..........................................11
   Item 11 -  Security Ownership of Certain Beneficial Owners and Management
               Related Stockholder Matters................................... 12
   Item 12 -  Certain Relationships and Related Transactions .................12
   Item 13 -  Exhibits........................................................13
   Item 14 -  Principal Accountant Fees and Services..........................14

                                       i

<PAGE>


Part I


Item 1 - Description of Business


                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-KSB (this "Form 10 K"),
including statements under "Item 1. Description of Business," and "Item 6.
Management's Discussion and Analysis", constitute "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995 (collectively, the "Reform
Act"). Certain, but not necessarily all, of such forward-looking statements can
be identified by the use of forward-looking terminology such as "believes",
"expects", "may", "will", "should", or "anticipates", or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of BICO, Inc. ("BICO", "the
Company", "we", "us" or "our") to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. References in this Form 10-KSB, unless another date
is stated, are to December 31, 2005.


Background

BICO, Inc. was incorporated in the Commonwealth of Pennsylvania in 1972 as
Coratomic, Inc. Before closing down all operations in February, 2003, the
Company's primary business was the development of new devices and technologies,
which included environmental and medical products. On March 18, 2003 the Company
filed a voluntary petition for Chapter 11 bankruptcy with the United States
Bankruptcy Court for the Western District of Pennsylvania. As part of the
bankruptcy court supervised reorganization, all of the Company's existing
operations were either sold or closed and all assets were liquidated to raise
cash for expenses related to the bankruptcy and pay creditors. By the end of the
reorganization the Company had no employees, no operations and no assets, all of
its prior businesses were gone, as were the subsidiaries through which some of
the Company's operations had been conducted.

The Company's plan of reorganization, as approved in the bankruptcy proceeding,
called for BICO to merge with cXc Services, Inc., ("CXC") a privately held
Delaware corporation formed in 2003 to introduce and commercialize a video
webphone in the United States. This video webphone was the sole business of the
Company during 2005. The material changes which occurred in the bankruptcy and
the merger with CXC have resulted in the Company completing its reorganization
and exiting the bankruptcy proceeding as a startup business fully dependent upon
our ability to attract adequate funding to support the new webphone business.
Efforts to raise the funding required to launch the webphone business in 2005
were unsuccessful.


Principal Products and Services

BICO planned to distribute webphones from a variety of OEM manufacturers, with
the Company's initial offering expected to be the em@iler E3(TM) ("E3")
manufactured by UK based Amstrad. Although the exclusive distribution agreement

                                       1

<PAGE>

between the Company and Amstrad lapsed, we believed that, if the Company had
obtained funding, Amstrad would have entered into a commercial supply
relationship with us for its E3 product and subsequent models.

Due to a lack of funding, the Company abandoned this business model at the close
of the third quarter 2005.

Markets and Distribution

The target market for webphones was to have been the multi-housing and
hospitality industries. The webphone provides advertisers and e-commerce
businesses with a new way to reach consumers. BICO intended to become primarily
an advertising media publisher for specialized Internet appliances as well as a
value-added reseller of Internet appliances, telephone services, video
conferencing, and e-commerce fulfillment.

Dependent on the availability of financing, the initial deployment of the
webphones was scheduled for late 2005 utilizing a "forced distribution" strategy
by focusing on large strategic sponsors like apartment communities.

We were not able to record any sales of the webphone, advertising or ancillary
services. We entered into conditional agreements to run pilot programs in which
we would distribute webphones to various apartment communities for 90 or 120 day
trial periods during which the residents and owners/managers would have
evaluated the desirability and value of the webphones and services offered over
them. Due to a lack of funding, the pilots were never conducted.

The pilot programs were a prerequisite for receiving both orders for
commercially meaningful quantities of webphones and positive coverage in
multi-family industry and advertising media due to the progressive nature of the
webphones and the service offering they enable.

Due to a lack of funding, the Company abandoned the multi-family market at the
close of the third quarter 2005.


New Business Model

Beginning with the 4th quarter 2005, the board of directors directed the
Company's management to begin searching for a merger partner with a business
possessing greater potential to add value to shareholders.

As a subsequent event, on February 21, 2006 the Company signed a definitive
agreement to acquire 100% of the issued and outstanding stock of Vegas Wireless
Entertainment, Inc. "Vegas Wireless" or "VWE". Vegas Wireless specializes in the
creation and distribution of mobile entertainment software products. VWE
software allows consumers, regardless of service provider or handset
manufacturer, to download and play a wide variety of popular casino style games,
as well as participate in mobile lotteries and sports betting. It is anticipated
that upon the completion of the acquisition of VWE, that the Company would adopt
the creation and distribution of mobile entertainment software products as its
primary business. (See NOTE I).

Intellectual Property

The Company's intellectual property consists of its business plan and certain
proprietary technical knowledge regarding the network and security operations of
the Amstrad E3 webphone appliance and its programming. This knowledge was
important to the Company and its ability to execute the webphone business plan,
which it has now abandoned. The Company holds no trademarks, patents or other
protected intellectual property.

                                       2

<PAGE>


Going Concern Considerations

At December 31, 2005, and for the fiscal year then ended, we had a net loss and
negative working capital, which raise substantial doubt about our ability to
continue as a going concern, and which caused our independent auditors to
qualify their report on our financial statements. Our ability to continue
operations will depend on positive cash flow from future operations and on our
ability to raise additional funds through equity or debt financing. Neither of
these are likely without the consummation of a transaction with a merger
partner. If we are unable to raise or obtain needed funding, we may be forced to
discontinue operations.


Risk Factors

Risk Factors Related to Our Finances

o    If BICO Fails To Raise Additional Financing We May Not Be Able To Fund Our
     Ongoing Operations And Implement Our Business Plan.
     The Company requires additional capital to support even minimal ongoing
     operations. Should the Company not be able to raise capital as required,
     the Company may need to cease operations entirely. Any additional financing
     may involve dilution to the Company's then-existing shareholders.

o    BICO Has No Operating Business Which Makes It Difficult To Forecast Our
     Future Results.
     As a result of having abandoned the video webphone business, and having no
     other operating business, it is impossible to predict the Company's future
     performance or the period of time in which it can sustain its existence.

Risk Factors Related to Our Operations

o    BICO Has Not Been Successful in Raising Sufficient Operating Capital.
     The Company was not able to raise the approximately $8,000,000 required to
     launch the webphone business. Because of this, BICO decided to abandon the
     webphone business at the end of the 3rd quarter 2005.

o    BICO Currently Has No Viable Business.
     The Company has not been able to raise the working capital necessary to
     launch the webphone business. As a result, BICO does not have a viable
     business model or any business operations, and unless it can quickly
     develop or acquire through merger or acquisition a new business the Company
     will not be able to continue operations.


Risk Factors Related to Our Stock

o    BICO's Common Stock May Be Affected By Limited Trading Volume And May
     Fluctuate Significantly, Which May Affect Our Shareholders' Ability To Sell
     Shares Of Our Common Stock.
     Prior to this filing, there has been a limited public market for our common
     stock and there can be no assurance that a more active trading market for
     our common stock will develop. An absence of an active trading market could
     adversely affect our shareholders' ability to sell our common stock in
     short time periods, or possibly at all. Our common stock has experienced,
     and is likely to experience in the future, significant price and volume
     fluctuations, which could adversely affect the market price of our common

                                       3

<PAGE>


     stock without regard to our operating performance. In addition, we believe
     that factors such as quarterly fluctuations in our financial results and
     changes in the overall economy or the condition of the financial markets
     could cause the price of our common stock to fluctuate substantially. These
     fluctuations may also cause short sellers to enter the market from time to
     time in the belief that we will have poor results in the future. We cannot
     predict the actions of market participants and, therefore, can offer no
     assurances that the market for our stock will be stable or appreciate over
     time. These factors may negatively impact shareholders' ability to sell
     shares of our common stock.

o    BICO's Common Stock Is Deemed To Be "Penny Stock," Which May Make It More
     Difficult For Investors To Sell Their Shares Due To Suitability
     Requirements.
     Our common stock is deemed to be "penny stock" as that term is defined in
     Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as
     amended. These requirements may reduce the potential market for our common
     stock by reducing the number of potential investors. This may make it more
     difficult for investors in our common stock to sell shares to third parties
     or to otherwise dispose of them. This could cause our stock price to
     decline.


Item 2 - Description of Property

The Company does not currently own or lease any real property. An office has
been provided to the Company at no cost by one of its executive officers. We do
not anticipate any need for purchasing real property or leasing office or other
space greater than would be necessary to house our executive and administrative
offices.


Item 3 - Legal Proceedings

We are not presently involved in any legal proceedings nor are any material
legal proceedings known to be threatened.


Item 4 - Submission of Matters to a Vote of Security Holders

No matters were presented to a vote of securities holders.

                                       4

<PAGE>


Part II

Item 5 - Market for Common Equity and Related Stockholder Matters

The Company's common stock is quoted on the OTC Bulletin Board under the symbol
BIKO.

The following table sets forth the range of high and low bid information for the
Company's common stock for each quarterly period in 2005 and 2004. These
quotations are believed to be representative inter-dealer prices, without retail
mark-up, markdown or commission, and may not represent actual transactions.

                                                   Bid
                                           High            Low
               4th Quarter 2005           $.0002          $.0001
               3rd Quarter 2005           $.0004          $.0001
               2nd Quarter 2005           $.0008          $.0003
               1st Quarter 2005           $.0019          $.0005

               4th Quarter 2004           $.0021          $.0005
               3rd Quarter 2004           $.0018          $.0008
               2nd Quarter 2004           $.0017          $.0007
               1st Quarter 2004           $.0015          $.0009

Sources: QuoteMedia.com


As of December 31, 2005, the Company had approximately 6,922 Shareholders of
Record.

We have never paid a cash dividend and do not anticipate doing so in the
foreseeable future.

We have no equity compensation plans which authorize the issuance of shares, nor
are there any individual compensation arrangements which authorize issuance of
shares. However, in the first quarter of 2006 the company issued shares to
certain individuals to satisfy accrued but unpaid 2005 obligations. (See NOTE J
- SUBSEQUENT EVENTS)

During 2005 the company issued 6,164,385,590 shares of its common stock.
5,251,798,246 shares were issued to raise $231,850 in new equity funds.
905,819,305 shares were issued to satisfy $96,296 in services related
obligations. 6,768,039 shares were issued to satisfy previous employee
obligations valued at $3,384.


Item 6 - Management's Discussion and Analysis or Plan of Operation

This report contains forward looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934. These forward looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or anticipated results, including those set forth under
"Factors that may affect future results" in this Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere in this
report. The following discussion and analysis should be read in conjunction with
"Selected Financial Data" and the Company's financial statements and notes
thereto included elsewhere in this report.

                                       5

<PAGE>


Overview

As part of the Company's bankruptcy reorganization plan, it merged with cXc
Services, Inc. (a privately held Delaware corporation), abandoned the Company's
original bio-technology business plan, and adopted the business plan of cXc
Services. Under this new business plan, BICO was primarily focused on being both
a distributor of Internet appliances and an advertising and content publisher,
primarily focused on the multi-housing and hospitality industries. At the end of
the third quarter of 2005 the Company abandoned its plans for distribution of
the video webphone and focused on finding an alternate strategy to preserve
value for shareholders.

On February 20, 2006 the Company entered into an agreement to acquire Vegas
Wireless Entertainment, Inc. a Canadian corporation in exchange for newly issued
common stock which would comprise approximately 74% of the outstanding common
stock after the transaction.


a.   Plan of Operation

BICO, Inc. has raised $231,850 through private placement issuance of common
stock during 2005 to support operations. The Company raised an additional
$30,500 in the 1st quarter of 2006 to continue its operations. The Company's
continued operation was and continues to be dependent on raising sufficient
funds through the sources available to it, primarily issuance of stock either
through private placement or a facility in place prior to the merger with J. P.
Carey Asset Management and Perrin, Holden and Davenport Capital Corp. (PHD), to
support its base-level ongoing monthly expenses, which were approximately
$76,500, per month. BICO had planned on raising an estimated $8,000,000
necessary to implement its webphone business plan during 2005. This requirement
consisted of $4,000,000 to support the acquisition of product, $2,000,000 to
complete the infrastructure needed to support the installed webphone base, and
approximately $2,000,000 to ensure the timely availability of next generation
product.

The Company was not successful in securing the $8,000,000 necessary to launch
the webphone business and abandoned all efforts to raise this working capital at
the end of the 3rd quarter 2005.

As of December 31, 2005 the company had no full time employees.

b.   Financial Condition and Results of Operations

At December 31, 2005, and for the fiscal year then ended, we had a net loss and
negative working capital, which raise substantial doubt about our ability to
continue as a going concern, and which caused our independent auditors to
qualify their report on our financial statements. Our ability to continue
operations will depend on positive cash flow from future operations and on our
ability to raise additional funds through equity or debt financing. If we are
unable to raise or obtain needed funding, we will be forced to discontinue
operations.

The Company emerged from almost 21 months in Chapter 11 bankruptcy on December
7, 2004 ("Effective Date") reorganized as a new business. No business activity,
product or services previously offered exist in BICO's new efforts. The
operations and markets are completely different. The board of directors and the
management team are completely different. Under these circumstances comparisons
to past periods provide limited benefit to communicating the company's financial
condition or results of operation. (See Item 1 - Description of Business)

                                       6

<PAGE>
<TABLE>
<CAPTION>


Upon emergence from bankruptcy on the Effective Date, BICO adopted "fresh start"
accounting and reporting, which resulted in material adjustments to the
historical carrying amounts of our assets and liabilities (see Note B-Basis of
Presentation and Significant Accounting Policies). As a result, the historical
financial data of the company prior to and during bankruptcy ("Predecessor") may
not be entirely comparable to the historical financial data of the company after
emerging from bankruptcy ("Successor") and may be of limited value in evaluating
our financial and operating prospects in the future.

Funds have been used to support the costs associated with the merger with cXc
Services and the Company's unsuccessful effort to institute its business plan.

The primary use of funds during 2005 has been focused on developing the
Company's webphone business plan and searching for the capital required to
execute the plan.

During 2005 (the first full year of operations for the Successor period) the
Company incurred $918,031 in General and Administrative expenses primarily for
new business development and organization related costs. During 2004 (the
majority of which was part of the Predecessor period) the Company had $691,584
in General and Administrative expenses primarily in bankruptcy related cost and
merger related costs.

During 2005, the Successor period, the Company did not generate sales revenue.
For 2004, primarily the Predecessor period the Company had only $7,500 in sales
revenue, all of which was generated prior to the merger with cXc Services, Inc.

Accounts Payable at December 31, 2005 was $538,306. Approximately $101,000
represented unpaid legal fees, approximately $357,000 was accrued compensation
deferred by management, $22,000 represented a State of Pennsylvania tax
liability claim that survived the bankruptcy, and $40,000 due to the Company's
Transfer Agents related to the issuance of shares

Selected Quarterly Financial Data (Unaudited)

The following is a summary of the quarterly results of operations for the years
ended December 31, 2005 and 2004:


                           1st Quarter             2nd Quarter          3rd Quarter            4th Quarter
                    ----------------------------------------------------------------------------------------
                         2005       2004         2005      2004       2005       2004       2005        2004
                         ----       ----         ----      ----       ----       ----       ----        ----
                                                           (in thousands)
<S>                     <C>        <C>          <C>       <C>        <C>        <C>        <C>         <C>
Income                  $ 0.0      $ 5.0        $ 0.0     $ 2.5      $ 0.0      $ 0.0      $ 0.0       $ 0.0
Operating
Expenses                140.7       39.6        303.9      39.7      274.3       99.3      199.2       513.0
                    ----------------------------------------------------------------------------------------
Op Income
(Loss)                 (140.7)     (34.6)      (303.9)    (37.2)    (274.3)     (99.3)    (199.2)     (513.0)
Other Income
(Loss)                  117.6                                                 1,193.0               (7,150.0)
                    ----------------------------------------------------------------------------------------
Net Income
(Loss)                  (23.1)     (34.6)      (303.9)    (37.2)    (274.3)   1,093.7     (199.2)   (7,663.0)
                    ========================================================================================


c.   Off-balance Sheet Arrangements

BICO, Inc. has no off-balance sheet arrangements.

                                       7
</TABLE>

<PAGE>


Item 7 - Financial Statements

The information below presents financial data of the Company as of and for the 2
years ended December 31, 2005. The historical financial data for December 31,
2004 the period from January 1, 2004 to December 7, 2004, and the period from
December 8, 2004 to December 31, 2004 should be read in conjunction with
accompanying notes.

The consolidated financial statements of Predecessor for the period from January
1, 2003 to December 7, 2004 were prepared while the Company was still involved
in Chapter 11 proceedings and, accordingly, were prepared in accordance with
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
under the Bankruptcy Code" ("SOP 90-7"). As a result, the historical financial
data for such periods does not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that would have resulted if Predecessor were
deemed not to have been continuing as a going concern.

                                      F-1

<PAGE>


Opinion of Our Auditors


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders
BICO, Inc.

We have audited the accompanying balance sheet of BICO, Inc., (the "Company") as
of December 31, 2005 (Successor Company balance sheet), and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
year then ended and the period from December 8, 2004 to December 31, 2004
(Successor Company operations), and for the period from January 1, 2004 to
December 7, 2004 (Predecessor Company operations). 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 the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

On December 7, 2004, the Bankruptcy Court entered an order confirming the plan
of reorganization, which became effective on December 8, 2004. Accordingly, the
accompanying financial statements have been prepared in conformity with AICPA
Statement of Position 90-7, Financial Reporting for Entities in Reorganization
Under the Bankruptcy Code, for the Successor Company as a new entity with
assets, liabilities, and a capital structure having carrying values not
comparable with prior periods as described in Note B.

In our opinion, the Successor Company financial statements present fairly, in
all material respects, the financial position of the Company as of December 31,
2005, and the results of its operations and its cash flows for the year then
ended and for the period from December 8, 2004 to December 31, 2004, in
conformity with accounting principles generally accepted in the United States of
America. Further, in our opinion, the Predecessor Company financial statements
referred to above present fairly, in all material respects, the results of the
Predecessor Company's operations and its cash flows for the period from January
1, 2004 to December 7, 2004, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note B, the Company's
continued operation is dependent on raising sufficient funds through sources
available to it to support its base-level monthly expenses and to advance its
business plan. This condition raises substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.




/s/  Goff Backa Alfera & Company, LLC
---------------------------------------
     Goff Backa Alfera & Company, LLC


Pittsburgh, Pennsylvania

April 11, 2006

--                                      F-2

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<CAPTION>


                                          BICO, Inc.
                                         Balance Sheet
                                     at December 31, 2005


                                            ASSETS



<S>                                                                              <C>
CURRENT ASSETS
    Cash  and  equivalents                                                       $     2,882
    Other current assets                                                               5,562
                                                                                 -----------

TOTAL  CURRENT  ASSETS                                                                 8,444

FIXED ASSETS
     Furniture and equipment                                                           2,830
     Accumulated depreciation                                                         (1,225)
                                                                                 -----------

                     TOTAL  FIXED ASSETS                                               1,604

                     TOTAL ASSETS                                                $    10,049
                                                                                 ===========


                       LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIENCY)


CURRENT  LIABILITIES
    Accounts  payable                                                            $   538,306
                                                                                 -----------

                     TOTAL CURRENT LIABILITIES                                       538,306


STOCKHOLDERS'  EQUITY (DEFICIENCY)
    Common stock, par value $.0001 per share, authorized 250,000,000,000
    shares at Dec. 31,3,409,912standing, 34,099,118,372 at Dec. 31, 2005           3,409,912


    Convertible preferred stock, par value $.0001 per share, authorized
    150,000,000 shares is12,547 in series, outstanding 125,470,031 at December
    31, 2005                                                                          12,547
    Additional  paid-in  capital                                                  (2,955,301)
    Accumulated  deficit                                                            (995,415)
                                                                                 -----------

                     TOTAL  STOCKHOLDERS'  EQUITY (DEFICIENCY)                      (528,257)
                                                                                 -----------
                     TOTAL  LIABILITIES  AND
                         STOCKHOLDERS'  EQUITY (DEFICIENCY)                      $    10,049
                                                                                 ===========


               The accompanying note are an integral part of these statements.

                                             F-3
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                                   BICO, Inc.

                            Statements of Operations



                                       Successor      Successor     Predecessor
                                      -----------    -----------    -----------
                                      January 1 to   December 8 to  January 1 to
                                      December 31,   December 31,   December 7,
                                         2005           2004           2004
                                      -----------    -----------    -----------

Revenues
   Net  sales                         $      --      $      --      $     7,500

Costs  and  expenses
   Cost  of  products  sold                  --             --             --
   General  and  administrative           918,031        195,229        496,355
                                      -----------    -----------    -----------
                                          918,031        195,229        496,355
                                      ===========    ===========    ===========
Loss from operations                     (918,031)      (195,229)      (488,855)
                                      ===========    ===========    ===========

 Other (income) and expense
   Settlement Gain                       (117,500)          --             --
   Forgiveness of debt                       --             --         (928,188)
   Interest income                           (119)          (226)          --
   Gain on sale of Diasense                  --             --         (264,773)
   Reorganization expense                    --             --        7,150,000
                                      -----------    -----------    -----------
                                         (117,619)          (226)     5,957,039
                                      -----------    -----------    -----------

Net Loss                                 (800,412)      (195,003)    (6,445,894)
                                      ===========    ===========    ===========

Loss  per  common  share  Basic:
   Net Loss                           $     (0.00)   $        (0.00)$     (0.00)
   Less: Preferred stock dividends          (0.00)            (0.00)      (0.00)
                                      -----------    -----------    -----------

Net loss attributable to
   common stockholders:               $     (0.00)   $        (0.00)$     (0.00)
                                      -----------    -----------    -----------

Loss  per  common  share  Diluted:
   Net Loss                                 (0.00)            (0.00)      (0.00)
                                      -----------    -----------    -----------
   Less: Preferred stock dividends          (0.00)            (0.00)      (0.00)
                                      -----------    -----------    -----------

   Net loss attributable to
   common stockholders:               $     (0.00)   $        (0.00)$     (0.00)
                                      ===========    ===========    ===========


        The accompanying note are an integral part of these statements.

                                      F-4

<PAGE>
<TABLE>
<CAPTION>

                                               BICO, Inc.

                             Statement of Stockholders' Equity (Deficiency)



                                              Preferred Stock                    Common Stock
                                          Shares           Amount           Shares           Amount
                                      --------------   --------------   --------------   --------------
<S>                                   <C>              <C>              <C>              <C>
Predecessor:
Balance  at  December 31, 2003                  --     $         --      7,387,507,775   $  738,750,778
                                      --------------   --------------   --------------   --------------
Change in par value                             --               --               --       (736,014,027)
Net loss                                        --               --               --               --
Stock issued for services                       --               --      6,500,000,000          650,000
Fresh start adjustments                         --               --        -20,000,000       (2,000,000)
                                      --------------   --------------   --------------   --------------

Predecessor balance at December 7,
2004                                            --               --     13,867,507,775        1,386,751

Successor:
Preferred stock to cXc shareholders      125,470,031           12,547             --               --
Stock issued to creditors                       --               --     12,822,762,447        1,282,276
Issuance of common stock                        --               --      1,244,462,560          124,446
Net loss                                        --               --               --               --
                                      --------------   --------------   --------------   --------------
Balance at December 31, 2004             125,470,031           12,547   27,934,732,782        2,793,473


Stock issued to creditors                       --               --        791,533,590           79,153

Issuance of common stock                        --               --      5,372,852,000          537,285

Net loss                                        --               --               --               --
                                      --------------   --------------   --------------   --------------
Balance at December 31, 2005             125,470,031   $    12,547.00   34,099,118,372   $    3,409,912

                                                   F-5

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                         BICO, Inc.

                      Statement of Stockholders' Equity (Deficiency)
                                        (Continued)



                                        Additional
                                         Paid-in         Accumulated
                                         Capital           Deficit            Total
                                      --------------    --------------    --------------
<S>                                   <C>               <C>               <C>
Predecessor:
Balance  at  December 31, 2003        $ (468,788,830)   $ (277,852,641)   $   (7,890,693)
                                      --------------    --------------    --------------
Change in par value                      736,014,027              --                --
Net loss                                        --          (6,445,894)       (6,445,894)
Stock issued for services                  6,500,000              --           7,150,000
Fresh start adjustments                 (282,438,221)      284,298,535          (139,686)
                                      --------------    --------------    --------------

Predecessor balance at December 7,
2004                                      (8,713,024)             --          (7,326,273)

Successor:
Preferred stock to cXc shareholders           87,453              --             100,000
Stock issued to creditors                  5,586,548              --           6,868,824
Issuance of common stock                     375,554              --             500,000
Net loss                                        --            (195,003)         (195,003)
                                      --------------    --------------    --------------
Balance at December 31, 2004              (2,663,469)         (195,003)          (52,452)


Stock issued to creditors                     (8,082)             --              71,072

Issuance of common stock                    (283,750)             --             253,535

Net loss                                        --            (800,412)         (800,412)
                                      --------------    --------------    --------------
Balance at December 31, 2005          $   (2,955,301)   $     (995,415)   $     (528,257)


              The accompanying note are an integral part of these statements.

                                        F-5(Cont)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                               BICO, Inc.
                                         Statement of Cash Flows


                                                              Successor     Successor      Predecessor
                                                             January 1 to  December 8 to   January 1 to
                                                             December 31,  December 31,    December 7,
                                                                 2005           2004           2004
                                                             -----------    -----------    -----------
<S>                                                          <C>            <C>            <C>
Cash flows used by operating activities:
   Net income  (loss)                                        $  (800,412)   $  (195,003)   $(6,445,894)
   Adjustments  to  reconcile  net  loss  to  net
     cash  used  by  operating  activities :
      Depreciation                                                   943            282           --
      Unrelated investors' interest in subsidiaries                 --             --             --
      Stock issued in exchange for services                         --             --        7,150,000
      Decrease (increase) in  accounts  receivable                  --             --             --
      (Increase) decrease in  prepaid  expenses                      400           (532)        (5,400)
      Increase  (decrease)  in  accounts  payable                404,328         (5,585)        99,837
      Increase  (decrease) in other liabilities                     --             --       (1,285,276)
      Debt forgiveness                                              --             --             --
      assets held for sale                                          --             --         (184,773)
Gain on sale of assets held for sale                                --             --             --
                                                             -----------    -----------    -----------

          Net cash flow used by operating activities            (394,741)      (200,838)      (671,506)
                                                             -----------    -----------    -----------

Cash flows from investing activities:
  Purchase  of  property, plant and equipment                       --           (2,250)          (570)
  Purchase of exclusivity license                                   --             --         (100,000)
                                                             -----------    -----------    -----------
          Net cash provided (used) by investing activities          --           (2,250)      (100,570)
                                                             -----------    -----------    -----------

Cash flows from financing activities:
  Proceeds  from  stock  offering                                324,607        250,000        250,000
  Proceeds from sale of cXc stock                                   --             --          100,000
                                                             -----------    -----------    -----------

         Net cash  provided  by  financing  activities           324,607        250,000        350,000
                                                             -----------    -----------    -----------

         Net  increase  (decrease)  in  cash                     (70,134)        46,912       (422,076)

Cash and cash equivalents, beginning of period                    73,016         26,104        448,180
                                                             -----------    -----------    -----------

Cash and cash equivalents, end of period                     $     2,882    $    73,016    $    26,104
                                                             ===========    ===========    ===========


                    The accompanying note are an integral part of these statements.

                                                  F-6
</TABLE>

<PAGE>


                                   BICO, Inc.
                            Statements of Cash Flows
                                   (Continued)


                                                       Year ended December 31,
Supplemental Information:                                2005           2004
-------------------------

Interest paid                                             --             --

Supplemental schedule of non-cash
---------------------------------
investing and financing activities:
-----------------------------------


Reduction of Additional paid in capital
created by application of Fresh Start Accounting          --     $284,298,535

Write off of accumulated deficit as a result
 of Fresh Start Accounting                                --     $282,438,221

Change in par value of common stock                       --     $736,014,027

Change in Additional paid in capital as a result
 of change in par value of common stock                   --     $736,014,027

Settlement of liabilities through common stock
 issuance                                             $ 79,153   $  6,868,824

Preferred stock issued to cXc shareholders                --     $    100,000


        The accompanying note are an integral part of these statements.

                                      F-7

<PAGE>


BICO, Inc.

                          Notes to Financial Statements


NOTE A - BACKROUND AND ORGANIZATION

BICO, Inc. ("BICO") was incorporated in the Commonwealth of Pennsylvania in 1972
as Coratomic, Inc. Before closing down all operations in February 2003, the
Company's primary business was the development of new devices and technologies,
which included environmental and medical products. On March 18, 2003 the Company
filed a voluntary petition for Chapter 11 bankruptcy with the United States
Bankruptcy Court for the Western District of Pennsylvania. As part of the
bankruptcy court supervised reorganization, all of the Company's existing
operations were either sold or closed and all assets were liquidated to raise
cash for expenses related to the bankruptcy and pay creditors. By the end of the
reorganization the Company had no employees, no operations and no assets, all of
its prior businesses were gone, as were the subsidiaries through which some of
the Company's operations had been conducted.

The Company's plan of reorganization, as approved in the bankruptcy proceeding,
called for BICO to merge with cXc Services, Inc., a privately held Delaware
corporation formed in 2003 to introduce and commercialize a video webphone in
the United States. This video webphone became the sole business of the Company.
The material changes which occurred in the bankruptcy and the merger with cXc
resulted in the Company completing its reorganization and exiting the bankruptcy
proceeding as a startup business. cXc Services, Inc. ("CXC") was a start-up
business at the time it merged into BICO, and had no sales or other source of
revenue.

BICO entered a Joint Plan of Reorganization (the Plan) which was accepted by our
creditors, and confirmed by the Bankruptcy Court on September 23, 2004 subject
to our becoming current on our SEC reporting, which we did. Under the Plan, CXC
merged into BICO and BICO was the surviving entity. BICO obtained 100% of the
assets of CXC, including the exclusive distribution rights in North America to
Amstrad's model E3 em@iler webphone and management expertise. In return, the
shareholders of CXC received full voting, convertible Series M Preferred Stock
in BICO. The preferred stock was convertible at a future date into an amount of
common stock equal to 49.6% of the total authorized common stock by BICO, but
did not provide CXC holders with any priority over the common shareholders upon
liquidation, nor any dividend or disbursement priority. In a related subsequent
event, the board of directors and the holders of preferred stock approved a
change in the conversion ratio by which the preferred stock would be exchanged
for common stock and reduced the proportionate ownership of the Company they
would hold on conversion from 49.6% of the total authorized common stock (an
amount equal to 79.8% of the shares outstanding on a fully diluted basis at
November 4, 2004, the merger date, including certain shares reserved for payment
of services subsequent to our reorganization) to less than 1% of the total
authorized common stock (an amount equal to 4.94% of shares outstanding on a
fully diluted basis at November 4, 2004, the merger date). The former
shareholders of CXC now hold all three positions on the Board of Directors of
BICO. BICO continues business operations as a publicly traded company with
continuing limited infusions of capital from selling additional common shares
and cash received from the settlement of certain claims during the first quarter
of 2005.

CXC was a private company based in Dove Canyon, California. CXC was located by
the Plan proponent, PHD Capital (PHD and CXC had no prior dealings). Neither
CXC, nor any of its principals, had any prior dealings with BICO or its
subsidiaries.

On March 30, 2005, BICO entered into a Settlement Agreement and Mutual General
Releases with Kenneth F. Raznick, Chairman of the Board of Directors of BICO,
Susan Raznick, Mr. Raznick's spouse, RFK Investments, LLC, a Michigan limited

                                      F-8

<PAGE>


liability company wholly owned by Mr. Raznick, Richard M. Greenwood, Chief
Executive Officer, President and member of the Board of Directors of BICO, Mark
DiCamillo, Executive Vice President and Chief Operating Officer of BICO, Richard
Rundles, Executive Vice President, Real Estate Distribution Development, John D.
Hannesson, formerly Executive Vice President of Law and Administration of BICO,
Perrin, Holden & Davenport Capital Corp., Jody Eisenman, principal of Perrin
Holden & Davenport Capital, and Nelson Braff, principal of Perrin Holden &
Davenport Capital.

The Settlement Agreement was entered into in connection with resolution of
certain issues arising from the merger of CXC into BICO and funding for BICO
subsequent to the merger. The Settlement Agreement provides for: (i) a reduction
in the conversion ratio of the Series M Preferred Stock of BICO from one share
of Series M Preferred Stock convertible into one thousand (1000) shares of
common stock of BICO to one share of Series M Preferred Stock convertible in to
thirteen and fifteen one-hundredths (13.15) shares of common stock of BICO; (ii)
a cash payment to BICO from Mr. Raznick in the amount of $117,500; (iii) the
resignation of Mr. Raznick as a member and Chairman of the Board of Directors of
BICO; and (iv) various releases of claims among the parties.


NOTE B - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Going Concern Basis

The accompanying Financial Statements have been prepared on a going concern
basis, which assumes continuity of operations and realization of assets and
satisfaction of liabilities in the ordinary course of business, and in
accordance with SOP-7.

BICO, Inc. has raised $231,850 through private placement issuance of common
stock during 2005 to support operations. The Company raised an additional
$30,500 in the 1st quarter of 2006 to continue its operations. The Company's
continued operation was and continues to be dependent on raising sufficient
funds through the sources available to it, primarily issuance of stock either
through private placement or a facility in place prior to the merger with J. P.
Carey Asset Management and Perrin, Holden and Davenport Capital Corp. (PHD), to
support its base-level ongoing monthly expenses, which were approximately
$76,500, per month. BICO had planned on raising an estimated $8,000,000
necessary to implement its webphone business plan during 2005. This requirement
consisted of $4,000,000 to support the acquisition of product, $2,000,000 to
complete the infrastructure needed to support the installed webphone base, and
approximately $2,000,000 to ensure the timely availability of next generation
product.

The Company was not successful in securing the $8,000,000 necessary to launch
the webphone business and abandoned all efforts to raise this working capital at
the end of the 3rd quarter 2005. BICO management is now focused on supporting
work towards closing a transaction in which the Company would acquire all of the
outstanding shares of Vegas Wireless Entertainment, Inc.


Fresh Start Accounting

The Company implemented "fresh start" accounting and reporting in accordance
with the American Institute of Certified Public Accountants ("AICPA") Statement
of Position No. 90-7, "Financial Reporting by Entities in Reorganization under
the Bankruptcy Code" ("SOP 90-7") upon its emergence from bankruptcy on December
7, 2004, the date of the final order by the Bankruptcy Court. Fresh start
accounting required the Company to allocate the reorganization value to its
assets and liabilities based upon their estimated fair values. The determination
of fair value of assets and liabilities is subject to significant estimation and
assumptions. The accumulated deficit as of December 7, 2004 was eliminated.
Although not required by SOP90-7 prior period operating results were presented
to help explain the effects of "fresh start" accounting.

                                      F-9

<PAGE>


Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less at acquisition to be
cash equivalents.

Income (Loss) Per Common Share

Net income (loss) per common share is based upon the weighted average number of
common shares outstanding. The income (loss) per share does not include common
stock equivalents since the effect would be anti-dilutive. The weighted average
shares used to calculate the loss per share amounted to 30,219,648,153 for the
year ended December 31, 2005, 17,677,043,711 for the period ended December 31,
2004, 10,244,793,988 for the period ended December 7, 2004, and 7,357,012,122
for the year ended December 31, 2004. The net income (losses) attributable to
common shareholders for the year ended December 31, 2005 was ($800,412). For the
periods ended December 31, 2004 and December 7, 2004 the net income (losses)
were ($195,229) and ($6,445,894) respectively.

Income Taxes

The Company previously adopted Statement of Financial Accounting Standards No.
109 (FAS 109), Accounting for Income Taxes, which requires the asset and
liability method of accounting for income taxes. Enacted statutory tax rates are
applied to temporary differences arising from the differences in financial
statement carrying amounts and the tax bases of existing assets and liabilities.

Estimates and Assumptions

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 reporting period.
Actual results could differ from those estimates.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to significant
concentrations of credit risk, consist principally of cash investments at
commercial banks. Cash and cash equivalents are temporarily invested in interest
bearing accounts in financial institutions, and such investments may be in
excess of the FDIC insurance limit.

Comprehensive Income

The Company's consolidated net income (loss) is the same as comprehensive income
required to be disclosed under Statement of Financial Accounting Standards No.
130.

Forgiveness of Debt

On December 7, 2004 the Bankruptcy Court issued its final order and the Company
emerged from Chapter 11 bankruptcy. As a result of the bankruptcy all
liabilities subject to compromise were settled. Reduction in liabilities as a
result of the bankruptcy proceedings were recognized as Forgiveness of Debt in
the Statements of Operations.

                                      F-10

<PAGE>


NOTE C - SALE OF ASSETS

No assets were sold in 2005.

In July 2004 the Company sold its equity and debt interest in subsidiary
Diasense, Inc. to an unrelated party for $80,000 and recognized a net gain of
$264,773 at that time.

NOTE D - BUSINESS SEGMENTS

The Company has only one segment which was focused in the areas of the sale of
webphone Internet appliances.

NOTE E - STOCKHOLDERS' EQUITY

Preferred Stock

The Board of Directors of the Company may issue up to 150,000,000 shares of
preferred stock in series, which would have rights as determined by the Board.

In connection with the Company's reorganization under Chapter 11 BICO obtained
100% of the assets of CXC. In return, the former shareholders of CXC received
full voting, convertible, Series M Preferred Stock in BICO. The preferred stock
was convertible at a future date into an amount of common stock equal to 49.6%
of the total authorized common stock by BICO, but did not provide CXC holders
with any priority over the common shareholders upon liquidation, nor any
dividend or disbursement priority. In a related subsequent event, the board of
directors and the holders of preferred stock approved a change in the conversion
ratio by which the preferred stock would be exchanged for common stock and
reduced the proportionate ownership of the Company they would hold on conversion
from 49.6% of the total authorized common stock (an amount equal to 79.8% of the
shares outstanding on a fully diluted basis at November 4, 2004, the merger
date, including certain shares reserved for payment of services subsequent to
our reorganization) to less than 1% of the total authorized common stock (an
amount equal to 4.94% of shares outstanding on a fully diluted basis at November
4, 2004, the merger date).

On February 20, 2006 the Company's board of directors authorized the immediate
conversion of all Series M Preferred Stock into common stock at the prescribed
conversion ratio of 13.15 shares of common stock for each share of Series M.
There were 125,470,031 shares of Series M preferred outstanding and they have
been converted into 33,017,438,658 shares of restricted common stock.

Common Stock

In accordance with BICO's reorganization under Chapter 11 the Company's
authorized number of common stock shares was increased to 250 billion and the
par value was amended to $.0001. Also, in accordance with the reorganization,
5.5 billion shares were issued to consultants for services related to
reorganization and approximately 12.8 billion shares were issued to settle
claims of former creditors and preferred shareholders.

During the period from January 1, 2005 through December 31, 2005 BICO issued
6,164,385,590 shares of its common stock. 5,251,798,246 shares were issued to
raise $231,850 in new equity funds. 905,819,305 shares were issued to satisfy
$96,296 in services related obligations. 6,768,039 shares were issued to satisfy
previous employee obligations valued at $3,384.

                                      F-11

<PAGE>


NOTE F - INCOME TAXES

As of December 31, 2005, the Company had available approximately $165,000,000 of
net operating loss carry-forwards for federal income tax purposes. These
carry-forwards are available, subject to ownership change and other limitations,
to offset future taxable income, and expire in tax years 2006 through 2024. The
Company also has research and development credit carry-forwards available to
offset federal income taxes of approximately $1,569,000, subject to ownership
change and other limitations, expiring in tax years 2006 through 2021.

The Company has not reflected any future income tax benefits for these temporary
differences or for net operating loss and credit carry-forwards because of the
uncertainty as to realization. Accordingly, the adoption of FAS 109 had no
effect on the financial statements of the Company.

NOTE G - COMMITMENTS AND CONTINGENCIES

Litigation

The Company is not presently involved in any legal proceedings nor are any
material legal proceedings known to be threatened. The recent bankruptcy
disposed of all liabilities which predated the bankruptcy filing, and no new
legal actions have arisen since.


Employment Agreements

BICO accepted pre-existing and approved employment contracts with cXc Services
for Messrs. Greenwood, DiCamillo, Hannesson and Rundles. Each contract contained
a provision that if the company was unable to make payments under each
respective contract due to insufficient funds or the expectation of insufficient
funds, the company was not obligated to make the payments but the company would
be obliged to accrue any such missed payments and pay them when it could
prudently do so. The Company notified the effected executives on January 27,
2005. It may not be able to make payments under their respective employment
contracts. Mr. Hannesson terminated his employment by resigning effective March
11, 2005, but continued providing legal services. (see - NOTES H and J) As of
February 22, 2006, the Company, with the approval of an independent shareholder
committee, officially terminated the Employment Agreements with Messrs.
Greenwood, DiCamillo and Rundles settling any back compensation that may have
been owed through the issuance of shares of Common Stock. (See - NOTE J)


NOTE H - RELATED PARTY TRANSACTIONS

During 2005, the Company incurred expenses for legal services to John Hannesson,
a former officer, Legal expenses were incurred in the amount of $90,000 to Mr.
Hannesson's legal firm. The unpaid balance for this and other unpaid fees were
settled through the issuance of shares of Common Stock. (See - NOTE J)

During 2004, the Company made payments and incurred expenses for services of
certain members of its Board of Directors, Legal expenses were incurred in the
amount of $51,571 to Mr. Hannesson's legal firm and network and server related
expenses of $2,145 were incurred for services provided by Mr. DiCamillo. Also,
Mr. Raznick and Mr. Greenwood were reimbursed for $62,000 and $9,648,
respectively, for expenses incurred relative to legal, market research, office
and other items.



NOTE I - SUBSEQUENT EVENT - VWE

On February 21, 2006 the Company signed a definitive agreement to acquire 100%
of the issued and outstanding stock of Vegas Wireless Entertainment, Inc.
("Vegas Wireless" or "VWE").

                                      F-12

<PAGE>


VWE specializes in the creation and distribution of mobile gaming products. It
intends to take advantage of the emerging market of mobile online gaming
products which will allow a global audience, regardless of mobile service
provider or handset manufacturer, to download and play a wide variety of popular
casino style games, participate in online lotteries and sports betting. Certain
mobile providers in the Asia Pacific region and Europe offer online gaming as a
download option over their networks for a fee, however, no wagers in real
currency can be placed on the game unlike current internet gaming sites accessed
via PC based browsers. VWE has a gaming solution which embeds into a payment
processing solution to facilitate real time game play and wagering.

Utilizing its programming platform, VWE will offer products in the following
casino game category: Texas Hold'em, Blackjack, Roulette, Slots and Multi-Player
Texas Hold'em. VWE intends to develop products in two additional categories,
online lottery and placing bets on events like horse racing and global sporting
events.

The VWE products will be offered under its own name and also in a `white label'
B2B product line which will privately brand all applications. This will offer
the over 1,800 worldwide online casinos a software solution to offer play on
wireless handsets, without the need for their own development and IT maintenance
staff.


NOTE J - SUBSEQUENT EVENT - ISSUANCE OF STOCK

Under the guidance of the Independent Shareholder Committee, on February 22,
2006 the Company and management agreed to terminate the Employment Agreements
with Messrs. Greenwood, Rundles and DiCamillo settling any back compensation
that may have been owed through the issuance of shares of Common Stock. In
addition, Mr. Hannesson's legal firm agreed to be compensated with shares of
Common Stock for payables owed for legal services covering the period from
October 2004 to December 31, 2005. At this time, the Board of Directors also
approved the issuance of shares as payment for Irvin Kebler's service as a
Director covering the period from December 2004 through December 2005.

                             Total Payable        Common Shares Issued
----------------------- ------------------- --------------------------
Greenwood                         $105,000                300,000,000
DiCamillo                         $142,875                408,214,486
Rundles                           $ 87,923                251,208,371
Hannesson                         $ 94,907                271,162,171
Kebler                            $ 25,000                 71,428,571
                        ------------------- --------------------------
                                  $455,705              1,302,013,599
                        =================== ==========================


Mr. Hannesson agreed to accept shares of Common Stock in lieu of other unpaid
fees and fees incurred in providing legal services related to the VWE
transaction and was issued an additional 105,000,000 shares of Common Stock on
February 28, 2006.

                                      F-13

<PAGE>
<TABLE>
<CAPTION>


Item 8 - Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

None.


Item 8A - Controls and Procedures

Within 90 days prior to the date of this report, we carried out an evaluation,
under the supervision and with the participation of the Company's management,
including our Chief Executive Officer and our Principal Accounting Officer, of
the effectiveness of our disclosure controls and procedures pursuant to Rule
13a-14 under the Securities Exchange Act of 1934, as amended. Based upon that
evaluation, the Chief Executive Officer and the Principal Accounting Officer
concluded that our disclosure controls and procedures are effective, in all
material respects, with respect to the recording, processing, summarizing, and
reporting, within the time periods specified in the Securities and Exchange
Commission's rules and forms, of information required to be disclosed by us in
the reports that we file or submit under the Exchange Act.

There were no significant changes in our internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the
evaluation referred to above.


Part III

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

Directors and Executive Officers

---------------------------- -------- --------------------------------------------- -----------------------
Name                           Age                       Title                              Tenure
---------------------------- -------- --------------------------------------------- -----------------------
<S>                            <C>    <C>                                           <C>
Richard Greenwood              58     Chairman & Secretary                          3/30/05 to date
                                      President                                     11/3/04 to date
                                      Acting Chief Financial Officer, Principal     11/30/04 to date
                                      Accounting Officer
---------------------------- -------- --------------------------------------------- -----------------------

Irvin E. Kebler                46     Director                                      11/3/04 to date
---------------------------- -------- --------------------------------------------- -----------------------

Mark DiCamillo                 50     Director                                      3/30/05 to date
                                      Executive V.P., Chief Operating Officer       11/3/04 to date
---------------------------- -------- --------------------------------------------- -----------------------

Richard Rundles                56     Executive V.P.                                11/3/04 to date
---------------------------- -------- --------------------------------------------- -----------------------

John Hannesson                 54     Executive V.P., Secretary                     11/3/04 - 3/11/05
---------------------------- -------- --------------------------------------------- -----------------------


Richard Greenwood: President & CEO and Member of the Board of Directors. Mr.
Greenwood has over 25 years experience in consumer and financial services
including senior executive positions at some of the nation's largest financial
institutions. Greenwood held various treasury positions at Citibank, including
Treasurer for the USA consumer business and the bank's European and African
consumer banking group, representing businesses in sixteen countries. Greenwood

                                       8
</TABLE>

<PAGE>


was also the CFO of California Federal Bank and Valley National. At both
Institutions, he led the capital and funding efforts as well as implementing
effective risk management systems during their respective recovery from troubled
real estate loan portfolios. Greenwood was appointed CEO by Bank Plus/Fidelity
Federal Bank. As CEO, Greenwood raised over $300 million and was responsible for
implementing a program that restructured or eliminated $1,500,000,000 in problem
loans as well as restructuring the organization of the company and its work
force. . Greenwood was President & CEO of Predictive Data, Inc., a privately
held company that services the Multi-housing industry with financial products,
from 1999 - 2000. Prior to co-founding cXc, Greenwood was President & CEO of
Hagenuk CPS/USA, a privately held manufacturer and distributor of webphones and
smart card systems and technologies over the period of 2000 - 2002. From 2002 to
the formation of cXc Services, Greenwood has worked with Raznick to promote the
commercialization of the webphone concept. Greenwood has been on the boards of
Treasury Services Inc. and Americash. Greenwood has also been an active board
member and Chairman of the Association of Financial Services Holding Companies
(Washington D.C.), Western League of Community Banks (Sacramento), and served
two years as President of SONET -ALLTEL Information Services Users Group.

Irvin E. Kebler: Member of the Board of Directors has served as the Chief
Operating Officer for The Eyde Company since joining the company in 2000. Eyde
is a private real estate development company headquartered in East Lansing,
Michigan. Mr. Kebler is also President of Utica Park, Inc., an entity which
serves as the general partner for Utica Park Place, LP, which owns and manages
an approximate 450,000 square foot retail shopping center in Utica, Michigan.
Mr. Kebler was previously in commercial banking for approximately 15 years with
Wells Fargo Bank in Southern California and Michigan National Bank in Farmington
Hills, Michigan. Mr. Kebler is a graduate of Michigan State University's School
of Business (Finance).

Mark DiCamillo: Executive Vice President, and Chief Operating Officer (Mr.
DiCamillo was appointed as a member of the Board of Directors of BICO to replace
Mr Raznick on March 30, 2005). Mr. DiCamillo is a leading expert in webphone
systems and technologies and has successfully managed Internet screen phone
deployments with iBank at the Mall of America, Illinois Power in Champaign,
Illinois, and Portland General Electric in Portland, Oregon. Prior to joining
cXc Services, from 1995 - 2003 Mr. DiCamillo was COO of HomeAccess MicroWeb,
Inc., a software developer and systems provider for Internet Appliances. Since
2003 DiCamillo has been VP & Chief Operating Officer of Once Upon a Family, LLC,
a producer and distributor of consumer products. Mr. DiCamillo is a licensed
engineer and has held engineering, marketing and management positions with Ford
Motor Company, Mattel Toys, Amhdahl Computers and Philips Electronics.

Richard Rundles: Executive Vice President, Business Development. Mr. Rundles has
over 25 years of experience in corporate real estate and has held various
senior-level management positions. Most recently, Rundles served as Executive
Vice President and Chief Operating Officer at Predictive Data, Inc. where he
successfully developed and introduced Deposit Saver, a new security deposit
program for the Multi-Housing Industry. At Trammell Crow Company, Rundles served
as Senior Vice President - West Region for their "Corporate Services" business
practice. Prior to that, Rundles was the founder and CEO of Corporate Facilities
Services, a full-service real estate services and development company acquired
by Trammell Crow Company. Rundles also served as First Vice President and
Division Head of Real Estate & Property Management at California Federal Bank.
Rundles is on the Board of Directors for the National Association of Corporate
Real Estate Executives - Los Angeles Chapter and the Advisory Council of the
National Multi-Housing Council.


John Hannesson: Executive Vice President, Administration & Law, Secretary. Mr.
Hannesson spent over 15 years as vice president, general counsel and secretary
for two NYSE listed multinational corporations, BWIP Holding, Inc. (formerly
Borg Warner Industrial Products, Inc.) and Overhead Door Corporation. Since 1998
Mr. Hannesson has been in the private practice of corporate law.

                                       9

<PAGE>


Compliance with Section 16(a) Of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, and the rules
there under require the Company's officers and directors, and persons who own
more than 10% of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish the Company with copies. Based solely on its review of
the copies of the Section 16(a) forms received by it, or written representations
from certain reporting persons, the Company believes that, during the last
fiscal year, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with, except that
the Form 3 initial filing was filed late by Messrs Greenwood, DiCamillo, Raznick
and Hannesson.


Audit Committee Information

BICO's Board of Directors does not have a separate Audit Committee. The entire
Board acts as the Audit Committee. Messrs Greenwood, Kebler (independent
director) and DiCamillo have extensive financial experience and each qualify as
a financial expert as that term is defined in Item 401(e) of Regulation S-B of
the Securities and Exchange Commission. BICO will seek additional qualified
outside directors such that a majority of the board will be outside directors
once we have raised funds to execute our business plan. Once in place, the Audit
committee and Compensation committee with be chaired by an independent director.


Code of Ethics

The Company has adopted a Policy Statement on Business Ethics and Conflicts of
Interest, which was approved by the Board of Directors, applicable to all
employees, which is attached as an exhibit to this report.

                                       10

<PAGE>
<TABLE>
<CAPTION>


Item 10 - Executive Compensation

The following table sets forth all compensation earned during the last three
years by its executive officers.

Name                                                Other                      Securities                 All other
And                                                 Annual      Restricted     Underlying      LTIP        Compen-
Principal                     Salary      Bonus     Compen-        Stock        Options/     Payouts       sation
                                                   sation($)
Position              Year     ($)         ($)                   Awards($)      SARs (#)         ($)          ($)


<S>                   <C>     <C>             <C>         <C>           <C>           <C>         <C>          <C>
Richard M.            2005    168,000         0           0             0             0           0            0
Greenwood
President, CEO &
CFO
                      2004     40,000         0           0             0             0           0            0
(1)                   2003          0         0           0             0             0           0            0

Mark DiCamillo        2005    153,125         0           0             0             0           0            0
Executive Vice
President & COO
                      2004     36,458         0           0             0             0           0            0
(1)                   2003          0         0           0             0                         0            0

Richard L. Rundles    2005    131,250         0           0             0             0           0            0
Executive Vice
President, Sales
                      2004     31,250         0           0             0             0           0            0
                      2003          0         0           0             0                         0            0
(1)

John D. Hannesson     2005    106,509         0           0             0             0           0            0
Executive Vice
President, Admin &
Law, Secretary
(1) (2)               2004     29,167         0           0             0             0           0            0
                      2003          0         0           0             0             0           0            0


Notes:

     1.   Included in the 2005 salary for Mr. Greenwood, Mr. DiCamillo, Mr.
          Rundles, and Mr. Hannesson are accrued amounts of $105,000, $142,875,
          $87,923, and $94,907, respectively. Each individual has agreed to
          receive common stock of the company in settlement of the accrued
          payables. Further explanation and a table reflecting these amounts are
          discussed below.

     2.   Mr. Hannesson provided certain organization and merger related legal
          services prior to becoming an executive of BICO, Inc. for which BICO
          compensated him $24,823.88 for those services. Mr. Hannesson resigned
          as an officer in March, 2005 and was retained as outside counsel to
          the Company from April 1, 2005 under an engagement agreement providing
          for payment of a monthly retainer of $10,000 plus expenses


No Option/SAR grants or exercises or Long-Term Incentive Plan awards or
exercises to or by any director, officer or employee occurred in the fiscal year
ended December 31, 2005.

BICO accepted pre-existing and employment contracts with cXc Services for
Messrs. Greenwood, DiCamillo, Hannesson and Rundles. Each contract contained a
provision that if the Company was unable to make payments under the contracts
due to insufficient funds or the expectation of insufficient funds the Company
was not obligated to make the payments but the Company would be obliged to
accrue any such missed payments and pay them when it could prudently do so. The
Company notified all executives on January 27, 2005 that it may not be able to
make payments under the employment contracts. As of February 22, 2006, with the
approval of an independent committee of shareholders, the Company terminated the
employment agreements with all members of management, and Mr. Greenwood and Mr.
DiCamillo have continued to serve without compensation. In consideration for the
waiver of any claims against the Company for compensation, shares of common
stock were issued to each person named below in the amount shown below (See -
Compensation Table and its Note 1). In addition, an award of common stock was

                                       11
</TABLE>

<PAGE>


granted to Mr. Irvin Kebler for his service as a director. In addition to the
shares set forth in the table below, 105,000,000 shares were issued to Mr. John
Hannesson on February 28, 2006 in lieu of payment for other unpaid legal fees
and in consideration of his performing additional legal services. (See - NOTE J
in Subsequent Events)


                             Total Payable      Common Shares Issued
---------------------------------------------------------------------

Greenwood                         $105,000               300,000,000
DiCamillo                         $142,875               408,214,486
Rundles                           $ 87,923               251,208,371
Hannesson                         $ 94,907               271,162,171
Kebler                            $ 25,000                71,428,571
                        ---------------------------------------------

                                  $455,705             1,302,013,599
                        =============================================



Item 11.  Security Ownership Of Certain Beneficial Owners And Management And
Related Stockholder Matters

The following table sets forth information regarding beneficial ownership as of
March 30, 2006 of the Company's common stock by any person who is known to the
Company to be the beneficial owner of more than 5% of the Company's voting
securities and by each director and officer of the Company.


                                                   Beneficial       Percentage
         Name                                      Ownership         of Class
         -----------------------------------------------------------------------

         Common Stock

            Jody Eisenman                          2,388,262,408           6.36%
            Nelson Braff                           2,367,000,000           6.30%
            Irvin Kebler                             120,926,499           0.32%
            Richard M. Greenwood                     431,994,473           1.14%
            Mark DiCamillo                           507,210,340           1.34%
            Richard L. Rundles                       317,205,607           0.84%
            John D. Hannesson                        409,160,789           1.08%
            All directors/officers as a group      1,738,640,566           4.73%



Item 12.  Certain Relationships and Related Transactions

See Notes to Financial Statements Note H

                                       12

<PAGE>


Item 13 - Exhibits

     ------- -------------------------------------------------------------------
     3(a)      Articles of Incorporation as filed with the Secretary of State of
               the Commonwealth of Pennsylvania on March 20, 1972 (filed with
               Form S-1 Registration Statement filed December 1, 1992)
     ------- -------------------------------------------------------------------
     3(b)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on May 8,
               1972 (filed with Form S-1 Registration Statement filed December
               1, 1992)
     ------- -------------------------------------------------------------------
     3(c)      Restatement of Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on June
               19, 1975 (filed with Form S-1 Registration Statement filed
               December 1, 1992)
     ------- -------------------------------------------------------------------
     3(d)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on
               February 4, 1980 (filed with Form S-1 Registration Statement
               filed December 1, 1992)
     ------- -------------------------------------------------------------------
     3(e)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on March
               17, 1981 (filed with Form S-1 Registration Statement filed
               December 1, 1992)
     ------- -------------------------------------------------------------------
     3(f)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on January
               27, 1982 (filed with Form S-1 Registration Statement filed
               December 1, 1992)
     ------- -------------------------------------------------------------------
     3(g)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on
               November 22, 1982 (filed with Form S-1 Registration Statement
               filed December 1, 1992)
     ------- -------------------------------------------------------------------
     3(h)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on October
               30, 1985 (filed with Form S-1 Registration Statement filed
               December 1, 1992)
     ------- -------------------------------------------------------------------
     3(i)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on October
               30, 1986 (filed with Form S-1 Registration Statement filed
               December 1, 1992)
     ------- -------------------------------------------------------------------
     3(j)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on
               December 28, 1992 (filed with Amendment No. 1 to Form S-1
               Registration Statement filed February 8, 1993)
     ------- -------------------------------------------------------------------
     3(k)

Amendment to Articles of Incorporation as filed with the Secretary of
State of the Commonwealth
                of Pennsylvania on February 7, 2000 (filed with Form 10-K for
                the fiscal year ended December 31, 1999)

     ------- -------------------------------------------------------------------
     3(l)       Amendment to Articles of Incorporation as filed with the
                Secretary of State of the Commonwealth of Pennsylvania on June
                14, 2000 (filed with Form S-1 Registration Statement filed July
                9, 2001)
     ------- -------------------------------------------------------------------
     3(m)      Amendment to Articles of Incorporation as filed with the
               Secretary of State of the Commonwealth of Pennsylvania on
               November 30, 2001 (filed with Form 10-K for the fiscal year ended
               December 31, 2001)
     ------- -------------------------------------------------------------------
     3.(n)     Amended and Restated Articles of Incorporation of BICO, Inc. as
               filed with the Secretary of State of the Commonwealth of
               Pennsylvania (filed with Form 8-K filed November 12, 2004)
     ------- -------------------------------------------------------------------
     3.(o)     Certificate of Designation of Series M Preferred Stock as filed
               with the Secretary of State of the Commonwealth of Pennsylvania
               (filed with Form 8-K filed November 12, 2004)
     ------- -------------------------------------------------------------------
     3(p)      By-Laws of BICO (as filed with Form 8K/A filed November 11, 2004)
     ------- -------------------------------------------------------------------
     3(q)      Joint Second Amended Plan of Reorganization dated August 3, 2004
               (filed with Form 8-K filed November 12, 2004)

     ------- -------------------------------------------------------------------
     3(r)      Order Approving Joint Second Amended Plan of Reorganization dated
               October 14, 2004 (filed with Form 8-K filed November 12, 2004)
     ------- -------------------------------------------------------------------
     3(s)      Amended and Restated Certificate of Designation for Series M
               Preferred (filed with Form 8-K March 30, 2005)
     ------- -------------------------------------------------------------------

                                       13

<PAGE>


     ------- -------------------------------------------------------------------
     10        Material Contracts
     ------- -------------------------------------------------------------------
     10(a)     Employment Agreement with Richard M. Greenwood dated October 1,
               2004 (filed with Form 10-KSB filed May 23, 2005)

     ------- -------------------------------------------------------------------
     10(b)     Employment Agreement with Mark DiCamillo dated October 1, 2004
               (filed with Form 10-KSB filed May 23, 2005)
     ------- -------------------------------------------------------------------
     10(c)     Policy Statement on Business Ethics and Conflicts of Interest
               (filed with Form 10-KSB filed May 23, 2005)
     ---------- ----------------------------------------------------------------
     10(d)     Settlement Agreement and Releases among the Company, former
               chairman and other officers and directors (as filed with Form 8-K
               on April 4, 2005)
     ---------- ----------------------------------------------------------------
     31.1      Certification of Chief Executive Officer Under Section 302 (filed
               herewith)
     ------- -------------------------------------------------------------------
     31.2      Certification of Acting Chief Financial Officer and Acting
               Principal Accounting Officer Under Section 302 (filed herewith)
     ------- -------------------------------------------------------------------
     32.1      Certification of Chief Executive Officer Under Section 906 (filed
               herewith)
     ------- -------------------------------------------------------------------
     32.2      Certification of Acting Chief Financial Officer and Acting
               Principal Accounting Officer Under Section 906 (filed herewith)
     ------- -------------------------------------------------------------------


Item 14 - Principal Accountant Fees and Services

The following table sets forth fees billed to the Company by our auditors during
the fiscal years ended December 31, 2005 and 2004:


                                         DECEMBER 31, 2005     DECEMBER 31, 2004
                                         ---------------------------------------


              1.  Audit Fees              $    10,000.00         $    25,728.00

              2.  Audit Related Fees                0.00                   0.00

              3.  Tax Fees                          0.00                   0.00

              4.  All Other Fees                    0.00                   0.00
                                         ---------------------------------------

              Total Fees                  $    10,000.00         $    25,728.00



Audit fees consist of fees billed for professional services rendered for the
audit of the Company's consolidated financial statements and review of the
interim consolidated financial statements included in quarterly reports and
services that are normally provided by Goff Backa Alfera & Company, LLC in
connection with statutory and regulatory filings or engagements. The 2005 audit
fees will be paid in 2006

Audit-related fees consists of fees billed for assurance and related services
that are reasonably related to the performance of the audit or review of the
Company's consolidated financial statements, which are not reported under "Audit
Fees." There were no Audit-Related services provided in fiscal 2005 or 2004.

Tax fees consist of fees billed for professional services for tax compliance,
tax advice and tax planning.

All other fees consist of fees for products and services other than the services
reported above. There were no management consulting services provided in fiscal
2005, 2004 or 2003.

                                       14

<PAGE>


SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

BICO, INC.




Signature                         Title                              Date
---------                         -----                              ----


/s/  Richard M. Greenwood         Chief Executive Officer;       April 13, 2006
-----------------------------     President; Acting
     Richard M. Greenwood         Chairman of the Board;
                                  Director; and acting
                                  Chief Financial Officer and
                                  Principal Accounting Officer





/s/                               Director                       April ___, 2006
-----------------------------
     Irvin E. Kebler






/s/  Mark DiCamillo               Director; Executive V.P.;      April 13, 2006
-----------------------------     Chief Operating Officer
     Mark DiCamillo

                                       15