**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-KSB/A**

**(Amendment      No. 2)**

| x | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

**For      the fiscal year ended June 30, 2006**

| o | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934**. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------|

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| **Delaware**                                             |   | **33-0954381**                     |
|----------------------------------------------------------|--------|------------------------------------|
| (State                or Other Jurisdiction of           |   | (IRS                Employer       |
| Incorporation                or Organization)            |   | Identification                No.) |
|                                                     |   |                               |
|                                                     |   |                               |
| **590                Madison Avenue, 13****th****Floor** |   |                               |
| **New                York, New York**                    |   | **10022**                          |
| (Address                of Principal Executive Offices)  |   | (Zip                Code)          |

**(212)      398-1780**

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**DOCUMENTS      INCORPORATED BY REFERENCE**

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**EXPLANATORY      NOTE**

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**PART      I**

**Item      6. Management’s Discussion and Analysis. **

**RESULTS      OF OPERATIONS**

**FOR      THE FISCAL YEAR ENDED JUNE 30, 2006 (RESTATED) (AUDITED) COMPARED TO THE SIX      MONTHS ENDED JUNE 30, 2005 (RESTATED) (AUDITED) AND THE YEAR ENDED DECEMBER      31,      2004 (AUDITED).**

**Loan      Portfolio Interest Income**

**Facility      interest and origination bank costs**

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**Valuation      Reserve - Student Loans Receivables**

**Referral      Marketing Costs**

**Operating      expenses**

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**Financial      Condition, Liquidity and Capital Resources**

**Cash      and Cash Equivalents**

**Property      and Equipment, Net**

**Other      Prepaid Expenses**

**Other      Assets**

**Accounts      Payable and Accrued Expenses**

**Contractual      Obligations and Commercial Commitments**

|                                              |   | TOTAL |      | Current |   | 1-3yrs  |   | >3Yrs |    |
|---------------------------------------------------|--------|-------|-----------|---------|--------|---------|--------|----------|---------|
| Long                Term Debt                     |   | $     | 0         |    | $      | 0       |   | $        | 0       |   | $ | 0 |   |
| Capital                Lease Obligations          |   | $     | 0         |    | $      | 0       |   | $        | 0       |   | $ | 0 |   |
| Operating                Leases                   |   | $     | 1,500,000 |    | $      | 557,000 |   | $        | 996,000 |   | $ | 0 |   |
| Unconditional                Purchase Obligations |   | $     | 0         |    | $      | 0       |   | $        | 0       |   | $ | 0 |   |
| Other                Long-Term Obligations        |   | $     | 0         |    | $      | 0       |   | $        | 0       |   | $ | 0 |   |
| TOTAL                Contractual Cash Obligations |   | $     | 1,500,000 |    | $      | 557,000 |   | $        | 996,000 |   | $ | 0 |   |

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**Commercial      Commitments**

|                                          |   | TOTAL |       | Current |   | 1-3yrs  |   | >3yrs |       |
|-----------------------------------------------|--------|-------|------------|---------|--------|---------|--------|----------|------------|
| Lines                of Credit                |   | $     | 36,600,000 |    | $      | 0       |   | $        | 36,600,000 |   | $ | 0 |   |
| Standby                Letters of Credit      |   | $     | 0          |    | $      | 0       |   | $        | 0          |   | $ | 0 |   |
| Guarantees                                    |   | $     | 0          |    | $      | 0       |   | $        | 0          |   | $ | 0 |   |
| Standby                Repurchase Obligations |   | $     | 0          |    | $      | 0       |   | $        | 0          |   | $ | 0 |   |
| Other                Commercial Commitments   |   | $     | 806,000    |    | $      | 806,000 |   | $        | 0          |   | $ | 0 |   |
| TOTAL                Commercial Commitments   |   | $     | 37,400,000 |    | $      | 806,000 |   | $        | 36,600,000 |   | $ | 0 |   |

**Our      Plan Of Operations For The Next Twelve Months**

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**OFF-BALANCE      SHEET ARRANGEMENTS**

**CRITICAL      ACCOUNTING POLICY AND ESTIMATES**

**PART      II**

**Item      7. Financial Statements. **

**Item      8A. Controls and Procedures. **

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**PART        III**

**Item        13. Exhibits.**

| **Exhibit                No.** | **Description**                                                                                                                                                                                                     |   | **Incorporated                by Reference to****Filings                Indicated**                                                                                      |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                            | Amended                and Restated Certificate of Incorporation.                                                                                                                                                   |   | Appendix                A to the Definitive Information Statement on Form 14C, filed with                the SEC                on January 23, 2006, File No. 000-33487. |
| 3.2                            | By-laws.                                                                                                                                                                                                            |   | Exhibit                3.4 to the Registration Statement on Form SB-2, filed with the SEC                on                August 10, 2001, File No. 333-67222.          |
| 10.1                           | Credit                Agreement between MRU Lending, Inc. and Nomura Credit & Capital, Inc.,                dated February 4, 2005.                                                                             |   | Exhibit                10.1 to Company’s Registration Statement on Form SB-2 filed with the SEC                on March 22, 2005, File No. 333-123503.             |
| 10.2                           | Employment                Agreement dated November 17, 2004 between the Company and Edwin J.                McGuinn, Jr.                                                                                            |   | Exhibit                10 to Company’s Pre-Effective Amendment No. 1 to Form SB-2 filed with the                SEC on November 18, 2004, File No. 333-118518.     |
| 10.3                           | Loan                Program Agreement dated July 25, 2005 between MRU Lending, Inc. and                Doral                Bank NY FSB.                                                                            |   | Exhibit                10.1 to Company’s Current Report on Form 8-K filed on July 29, 2005, File                No. 000-33487.                                     |
| 10.4                           | Loan                Sale Agreement dated July 25, 2005 between MRU Lending, Inc. and                Doral                Bank NY.                                                                                   |   | Exhibit                10.2 to Company’s Current Report on Form 8-K filed on July 29, 2005, File                No. 000-33487.                                     |
| 10.5                           | Sublease                between ISID Finance of America, Inc. and MRU Holdings, Inc. dated                April                26, 2005.                                                                            |   | Exhibit                10.1 to Company’s Current Report on From 8-K filed on May 18, 2005, File                No. 000-33487.                                      |
| 10.6                           | Guaranty                of Edwin McGuinn in favor of ISID Finance of America, Inc. dated                April 26,                2005.                                                                              |   | Exhibit                10.2 to Company’s Current Report on Form 8-K filed on May 18, 2005, File                No. 000-33487.                                      |
| 10.7                           | Securities                Purchase Agreement by and among MRU Holdings, Inc. and the purchasers                of                Series B Convertible Preferred Stock.                                              |   | Exhibit                10.1 to the Company’s Current Report on Form 8-K filed with the SEC on                January 6, 2006, File No. 000-33487.                  |
| 10.8                           | Consent                to Sublease of 1114 Trizechahn-Swig, L.L.C.                                                                                                                                                  |   | Exhibit                10.3 to Company’s Current Report on Form 8-K filed on May 18, 2005, File                No. 000-33487.                                      |
| 10.9                           | Amended                and Restated 2004 Ominibus Incentive Plan.                                                                                                                                                   |   | Appendix                C to the Definitive Proxy Statement on Form 14A, filed with the SEC                on                September 7, 2005, File No. 000-33487.      |
| 10.10                          | 2005                Consultant Incentive Plan.                                                                                                                                                                      |   | Appendix                B to the Definitive Proxy Statement on Form 14A, filed with the SEC                on                September 7, 2005, File No. 000-33487.      |
| 14.1                           | Code                of Ethics.                                                                                                                                                                                      |   | Exhibit                14 to Company’s Annual Report on Form 10-KSB filed on March 22, 2005 (File                No. 000-33487)                                    |
| 21.1                           | Subsidiaries                of the Company                                                                                                                                                                          |   | Exhibit                21 to Company’s Annual Report on Form 10-KSB filed on March 22, 2005 (File                No. 000-33487)                                    |
| 23.1                           | Consent                of Bagell, Josephs, Levine & Company, LLC*                                                                                                                                          |   |                                                                                                                                                                     |
| 31.1                           | Certification                of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a),                as adopted pursuant to Section 302 of the Sarbanes Oxley Act of                2002.*          |   |                                                                                                                                                                     |
| 31.2                           | Certification                of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a),                as adopted pursuant to Section 302 of the Sarbanes Oxley Act of                2002.*          |   |                                                                                                                                                                     |
| 32.1                           | Certification                of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes Oxley Act of                2002.* |   |                                                                                                                                                                     |
| 32.2                           | Certification                of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes Oxley Act of                2002.* |   |                                                                                                                                                                     |

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**SIGNATURES**

|         |                                            |                                   |
|--------------|-------------------------------------------------|----------------------------------------|
|         | MRU              HOLDINGS,              INC.    |
|    |                                       |                              |
|         |                                  | /s/              Edwin J. McGuinn, Jr. |
|         | By:              Edwin J. McGuinn, Jr.          |
|         | Its:              Chief Executive Officer  |

|                                  |                                                                      |                                   |
|---------------------------------------|---------------------------------------------------------------------------|----------------------------------------|
|                                  |                                                                      |
|                             |                                                                 |                              |
| Date:              September 28, 2007 |                                                            | /s/              Edwin J. McGuinn, Jr. |
|                                  | By:              Edwin J. McGuinn, Jr.                                    |
|                                  | Its:              Chief Executive Officer and              Director  |

|                                  |                                                   |                         |
|---------------------------------------|--------------------------------------------------------|------------------------------|
|                                  |                                                   |
|                             |                                              |                    |
| Date:              September 28, 2007 |                                         | /s/              Vishal Garg |
|                                  | By:              Vishal Garg                           |
|                                  | Its:              Chief Financial Officer and Director |
|                                  |                                           |                                    |
|---------------------------------------|------------------------------------------------|-----------------------------------------|
|                                  |                                           |
|                             |                                      |                               |
| Date:              September 28, 2007 |                                 | /s/              Raza              Khan |
|                                  | By:              Raza Khan                     |
|                                  | Its:              President and Director  |

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**EXHIBIT      INDEX**

| 31.1   | Certification                of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a),                as adopted pursuant to Section 302 of the Sarbanes Oxley Act of                2002.          |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                               |
| 31.2   | Certification                of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a),                as adopted pursuant to Section 302 of the Sarbanes Oxley Act of                2002.          |
|   |                                                                                                                                                                                                               |
| 32.1   | Certification                of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes Oxley Act of                2002. |
|   |                                                                                                                                                                                                               |
| 32.2   | Certification                of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes Oxley Act of                2002. |

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**MRU        HOLDINGS, INC. AND SUBSIDIARIES**

**JUNE        30, 2006 AND 2005, AND DECEMBER 31, 2004**

**INDEX        TO CONSOLIDATED FINANCIAL STATEMENTS (AUDITED)**

**FOR        THE YEAR ENDED JUNE 30, 2006, SIX MONTHS ENDED JUNE 30, 2005, AND YEAR ENDED        DECEMBER 31, 2004**

| Report                  of Independent Registered Public Accounting Firm                                                                                                                                                                                    |   | F-2    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                                                                        |   |   |
| Consolidated                  Balance Sheets as of June 30, 2006 and 2005(Audited)                                                                                                                                                                          |   | F-3    |
|                                                                                                                                                                                                                                                        |   |   |
| Consolidated                  Statements of Operations for the Year Ended June 30, 2006 (Audited),                  Six                  Months Ended June 30, 2005 (Audited), and Year Ended December 31,                  2004                  (Audited) |   | F-4    |
|                                                                                                                                                                                                                                                        |   |   |
| Consolidated                  Statements of Cash Flows for the Year Ended June 30, 2006 (Audited),                  Six                  Months Ended June 30, 2005 (Audited), and Year Ended December 31,                  2004                  (Audited) |   | F-5    |
|                                                                                                                                                                                                                                                        |   |   |
| Consolidated                  Statement of Changes in Stockholders Equity/(Deficit) from January                  1, 2004                  through June 30, 2006 (Audited)                                                                                  |   | F-6    |
|                                                                                                                                                                                                                                                        |   |   |
| Notes                  to Consolidated Financial Statements                                                                                                                                                                                                 |   | F-7    |

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**BAGELL,            JOSEPHS, LEVINE & COMPANY, L.L.C. **

**REPORT            OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM **

**/s/BAGELL,            JOSEPHS, LEVINE & COMPANY, L.L.C. **

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**MRU        HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED        AUDITED BALANCE SHEETS **

**JUNE        30, 2006 AND JUNE 30, 2005**

| **ASSETS**                                                                                                 |   |
|------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                       |   | **2006** |   | **2005** |   |
|                                                                                                       |   | **(Restated)** |   | **(Restated)** |   |
| **CURRENT                  ASSETS:**                                                                       |   |   |   |   |   |   |   |
| Cash                  and cash equivalents                                                                 |   | $ | 17,899,504 |   | $ | 6,894,522 |   |
| Restricted                  cash                                                                           |   |   | 2,975,430 |   |   | - |   |
| Accounts                  receivable                                                                       |   |   | 4,167 |   |   | 20,246 |   |
| Private                  student loans receivable, held for sale, lower of cost of                  market |   |   | 39,564,367 |   |   | 158,479 |   |
| Valuation                  reserve - private student loans receivable                                      |   |   | (814,631 | ) |   | - |   |
| Collateral                  deposit - student loans                                                        |   |   | 0 |   |   | 250,000 |   |
| Prepaid                  expenses and other current assets                                                 |   |   | 388,477 |   |   | 133,540 |   |
| **Total                  Current Assets**                                                                  |   |   | **60,017,314** |   |   | **7,456,787** |   |
|                                                                                                       |   |   |   |   |   |   |   |
| Fixed                  assets, net of depreciation                                                         |   |   | 537,131 |   |   | 273,073 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **OTHER                  ASSETS:**                                                                         |   |   |   |   |   |   |   |
| Security                  deposits                                                                         |   |   | 30,248 |   |   | 392,963 |   |
| Intangible                  assets, net of amortization                                                    |   |   | 98,960 |   |   | 0 |   |
| Investment                  in Achiever Fund I, LLC                                                        |   |   | 120,000 |   |   | 0 |   |
| Deferred                  financing fees, net of amortization                                              |   |   | 5,139,522 |   |   | 5,413,015 |   |
| **Total                  Other Assets**                                                                    |   |   | **5,388,730** |   |   | **5,805,978** |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **TOTAL                  ASSETS**                                                                          |   | **$** | **65,943,175** |   | **$** | **13,535,838** |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY (DEFICIT)**                                        |
|                                                                                                       |   |   |   |   |   |   |   |
| **CURRENT                  LIABILITIES:**                                                                  |   |   |   |   |   |   |   |
| Accounts                  payable                                                                          |   | $ | 1,410,865 |   | $ | 577,478 |   |
| Accrued                  expenses                                                                          |   |   | 870,571 |   |   | 170,775 |   |
| Accrued                  payroll                                                                           |   |   | 161,609 |   |   | 225,644 |   |
| Notes                  payable - Doral Bank FSB NY                                                         |   |   | 806,182 |   |   | 0 |   |
| Notes                  payable - Merrill Lynch                                                             |   |   | 17,863,560 |   |   | 0 |   |
| **Total                  Current Liabilities**                                                             |   |   | **21,112,787** |   |   | **973,897** |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **LONG-TERM                  LIABILITIES:**                                                                |   |   |   |   |   |   |   |
| Notes                  payable - Nomura Credit & Capital                                               |   |   | 18,732,264 |   |   | 0 |   |

| Deferred                  origination fee revenue                                                               |   |   | 1,327,273      |   |   | 7,388          |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|----------------|--------|--------|----------------|--------|
| **Total                  Long-term Liabilities**                                                                |   |   | **20,059,537** |   |   | **7,388**      |   |
|                                                                                                            |   |   |           |   |   |           |   |
| **Total                  Liabilities**                                                                          |   |   | **41,172,324** |   |   | **981,285**    |   |
|                                                                                                            |   |   |           |   |   |           |   |
| **STOCKHOLDERS'                  EQUITY (DEFICIT)**                                                             |   |   |           |   |   |           |   |
| Preferred                  Stock, Series A, $.001 par value; 25,000,000 shares                  authorized      |   |   |           |   |   |           |   |
| 0                  and 3,250,006 shares issued and outstanding as of 06/30/2006 and                  06/30/2005 |   |   | 0              |   |   | 3,250          |   |
| Preferred                  Stock, Series B, $.001 par value; 25,000,000 shares                  authorized      |   |   |           |   |   |           |   |
| 7,631,580                  and 0 shares issued and outstanding as of 06/30/2006 and 06/30/2005                  |   |   | 7,632          |   |   | 0              |   |
| Common                  Stock, $.001 par value; 200,000,000 shares authorized, 17,593,565                       |   |   |           |   |   |           |   |
| and                  13,664,502 issued and outstanding as of 06/30/2006 and                  06/30/2005         |   |   | 17,593         |   |   | 13,664         |   |
| Additional                  paid-in capital                                                                     |   |   | 35,775,538     |   |   | 6,426,066      |   |
| Additional                  paid-in capital - options                                                           |   |   | 7,518,079      |   |   | 0              |   |
| Additional                  paid-in capital - Series A beneficial conversion feature                            |   |   | 6,334,174      |   |   | 6,175,000      |   |
| Additional                  paid-in capital - Series B beneficial conversion feature                            |   |   | 10,847,759     |   |   | 0              |   |
| Additional                  paid-in capital - warrants                                                          |   |   | 16,449,131     |   |   | 13,461,649     |   |
| Accumulated                  deficit                                                                            |   |   | (52,179,055    | )      |   | (13,525,076    | )      |
| **Total                  Stockholders' Equity (Deficit)**                                                       |   |   | **24,770,851** |   |   | **12,554,553** |   |
|                                                                                                            |   |   |           |   |   |           |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)**                                        |   | **$**  | **65,943,175** |   | **$**  | **13,535,838** |   |

**The        accompanying notes are an integral part of these consolidated financial        statements.**

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**MRU        HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF OPERATIONS **

**FOR        THE YEAR ENDED JUNE 30, 2006 (AUDITED), SIX MONTHS ENDED JUNE 30, 2005        (AUDITED),AND YEAR ENDED DECEMBER 31, 2004 (AUDITED)**

|                                                                    |   | **Year**                      |          | **Six                  Months** |   | **Year**                          |   |
|-------------------------------------------------------------------------|--------|-------------------------------|---------------|---------------------------------|--------|-----------------------------------|--------|
|                                                                    |   | **Ended**                     |          | **Ended**                       |   | **Ended**                         |   |
|                                                                    |   | **June                  30,** |          | **June                  30,**   |   | **December                  31,** |   |
|                                                                    |   | **2006**                      |          | **2005**                        |   | **2004**                          |   |
|                                                                    |   | **(Audited)**                 |          | **(Audited)**                   |   | **(Audited)**                     |   |
|                                                                    |   | **(Restated)**                |          | **(Restated)**                  |   |                              |   |
| **OPERATING                  REVENUE:**                                 |   |                          |          |                            |   |                              |   |   |   |   |
| Referral                  income - consolidation student loans          |   | $                             | 0             |                            | $      | 238,175                           |   | $ | 0 |   |
| Referral                  income - private student loans                |   |                          | 1,889         |                            |   | 881                               |   |   | 8,177 |   |
| Loan                  portfolio interest income - private student loans |   |                          | 1,206,160     |                            |   | 297                               |   |   | 0 |   |
| Origination                  fee revenue - private student loans        |   |                          | 9,526         |                            |   | 0                                 |   |   | 0 |   |
| Late                  payment fee revenue - private student loans       |   |                          | 494           |                            |   | 0                                 |   |   | 0 |   |
| License                  income                                         |   |                          | 26,423        |                            |   | 0                                 |   |   | 0 |   |
| **Total                  Operating Revenue**                            |   |                          | **1,244,492** |                            |   | **239,353**                       |   |   | **8,177** |   |
|                                                                    |   |                          |          |                            |   |                              |   |   |   |   |
| **COST                  OF REVENUES**                                   |   |                          |          |                            |   |                              |   |   |   |   |
| Referral                  marketing costs - consolidation student loans |   |                          | 23,300        |                            |   | 189,725                           |   |   | 0 |   |
| Referral                  marketing costs - private student loans       |   |                          | 348,822       |                            |   | 0                                 |   |   | 0 |   |
| Facility                  interest and origination bank costs           |   |                          | 1,078,202     |                            |   | 10,185                            |   |   | 0 |   |
| Valuation                  reserve - private student loans              |   |                          | 814,631       |                            |   | 0                                 |   |   | 0 |   |
| Consulting                  and hosting                                 |   |                          | 53,775        |                            |   | 0                                 |   |   | 0 |   |
| Servicing                  and custodial costs                          |   |                          | 82,625        |                            |   | 25,070                            |   |   | 0 |   |
| **Total                  Cost of Revenues**                             |   |                          | **2,401,355** |                            |   | **224,980**                       |   |   | **0** |   |
|                                                                    |   |                          |          |                            |   |                              |   |   |   |   |
| **GROSS                  PROFIT/(LOSS)**                                |   |                          | (1,156,863    | )                               |   | 14,373                            |   |   | 8,177 |   |
|                                                                    |   |                          |          |                            |   |                              |   |   |   |   |
| **OPERATING                  EXPENSES**                                 |   |                          |          |                            |   |                              |   |   |   |   |
| Corporate                  general and administrative expenses          |   |                          | 9,609,122     |                            |   | 1,104,701                         |   |   | 774,122 |   |
| Sales                  and marketing expenses                           |   |                          | 7,447,426     |                            |   | 791,261                           |   |   | 312,301 |   |
| Operations                  expenses                                    |   |                          | 2,522,738     |                            |   | 257,307                           |   |   | 35,687 |   |
| Technology                  development                                 |   |                          | 1,466,705     |                            |   | 855,132                           |   |   | 158,646 |   |
| Legal                  expenses                                         |   |                          | 590,513       |                            |   | 791,011                           |   |   | 475,984 |   |
| Other                  operating expenses                               |   |                          | 661,255       |                            |   | 247,807                           |   |   | 98,894 |   |
| Depreciation                  and amortization                          |   |                          | 3,996,385     |                            |   | 914,981                           |   |   | 13,782 |   |
| **Total                  Operating Expenses**                           |   |                          | 26,294,144    |                            |   | 4,962,200                         |   |   | 1,869,416 |   |
|                                                                    |   |                          |          |                            |   |                              |   |   |   |   |
| **OPERATING                  (LOSS)**                                   |   |                          | (27,451,007   | )                               |   | (4,947,827                        | )      |   | (1,861,239 | ) |

| **OTHER                  INCOME/(EXPENSE)**                       |   |   |            |   |   |            |   |   |           |   |
|-------------------------------------------------------------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|----------------|--------|
| Interest                  income                                  |   |   | 428,201         |   |   | 83,398          |   |   | 13,931         |   |
| Interest                  expense                                 |   |   | (23,501         | )      |   | (67,905         | )      |   | (22,133        | )      |
| Other                  non-operating income/(expense)             |   |   | 30,868          |   |   | 16,785          |   |   | (1,992         | )      |
| **Total                  Other Income/(Expense)**                 |   |   | **435,568**     |   |   | **32,278**      |   |   | **(10,194**    | **)**  |
|                                                              |   |   |            |   |   |            |   |   |           |   |
| **NET                  (LOSS) BEFORE PROVISION FOR INCOME TAXES** |   |   | **(27,015,439** | **)**  |   | **(4,915,549**  | **)**  |   | **(1,871,433** | **)**  |
| Provision                  for income taxes                       |   |   | 0               |   |   | 0               |   |   | 0              |   |
|                                                              |   |   |            |   |   |            |   |   |           |   |
| **NET                  (LOSS)**                                   |   | **$**  | **(27,015,439** | **)**  | **$**  | **(4,915,549**  | **)**  | **$**  | **(1,871,433** | **)**  |
|                                                              |   |   |            |   |   |            |   |   |           |   |
| LESS                  PREFERRED STOCK DIVIDEND                    |   |   | (11,606,683     | )      |   | (6,296,086      | )      |   | 0              |   |
|                                                              |   |   |            |   |   |            |   |   |           |   |
| **(LOSS)                  APPLICABLE TO COMMON SHARES**           |   | **$**  | **(38,622,122** | **)**  | **$**  | **(11,211,635** | **)**  | **$**  | **(1,871,433** | **)**  |
|                                                              |   |   |            |   |   |            |   |   |           |   |
| **NET                  (LOSS) PER BASIC AND DILUTED SHARES**      |   | **$**  | **(2.56**       | **)**  | **$**  | **(0.82**       | **)**  | **$**  | **(0.14**      | **)**  |
|                                                              |   |   |            |   |   |            |   |   |           |   |
| WEIGHTED                  AVERAGE NUMBER OF COMMON                |   |   |            |   |   |            |   |   |           |   |
| SHARES                  OUTSTANDING                               |   |   | 15,100,652      |   |   | 13,608,511      |   |   | 13,209,331     |   |

**The        accompanying notes are an integral part of these consolidated financial        statements.**

----

**MRU        HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**FOR        THE YEAR ENDED JUNE 30, 2006 (AUDITED), SIX MONTHS ENDED JUNE 30, 2005        (AUDITED),AND THE YEAR ENDED DECEMBER 31, 2004        (AUDITED)**

|                                                                                                       |   | **2006**       |        | **2005**       |   | **2004**   |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|----------------|--------|------------|--------|
|                                                                                                       |   | **(Restated)** |        | **(Restated)** |   |       |   |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES**                                                  |   |           |             |           |   |            |   |   |  |   |
| Net                  (loss)                                                                                |   | $              | (27,015,439 | )              | $      | (4,915,549 | )      | $ | (1,871,433 | ) |
| **Adjustments                  to reconcile net loss to net cash**                                         |   |           |             |           |   |            |   |   |  |   |
| **used                  in operating activities:**                                                         |   |           |             |           |   |            |   |   |  |   |
| Depreciation                  and amortization                                                             |   |           | 3,996,385   |           |   | 914,981    |   |   | 13,782 |   |
| (Decrease)                  in stock options outstanding options exercise                                  |   |           | (296,613    | )              |   | 0          |   |   | 0 |   |
| Increase                  in stock options outstanding                                                     |   |           | 7,814,692   |           |   | 0          |   |   | 0 |   |
| (Increase)                  in tax provision valuation stock options outstanding                           |   |           | (2,656,995  | )              |   | 0          |   |   | 0 |   |
| Increase                  in valuation reserve - private student loans                                     |   |           | 814,631     |           |   | 0          |   |   | 0 |   |
|                                                                                                       |   |           |             |           |   |            |   |   |  |   |
| **Changes                  in assets and liabilities**                                                     |   |           |             |           |   |            |   |   |  |   |
| Decrease/(Increase)                  in accounts receivable                                                |   |           | 16,079      |           |   | (20,246    | )      |   | 0 |   |
| (Increase)                  in restricted cash                                                             |   |           | (2,975,430  | )              |   |       |   |   |   |   |
| Decrease/(increase)                  in collateral deposit - student loans                                 |   |           | 250,000     |           |   | (250,000   | )      |   | 0 |   |
| (Increase)                  in prepaid expenses and other current assets                                   |   |           | (254,938    | )              |   | 41,016     |   |   | (180,032 | ) |
| Decrease/(increase)                  in security deposits                                                  |   |           | 362,715     |           |   | (386,938   | )      |   | 0 |   |
| (Increase)                  in student loans receivable, held for sale                                     |   |           | (39,405,888 | )              |   | (158,479   | )      |   | 0 |   |
| Increase                  in accounts payable and accrued expenses                                         |   |           | 1,039,898   |           |   | 165,584    |   |   | 458,482 |   |
| (Decrease)/Increase                  in accrued payroll                                                    |   |           | (64,035     | )              |   | 225,644    |   |   | 0 |   |
| Increase                  in deferred origination fee revenue                                              |   |           | 1,319,885   |           |   | 7,388      |   |   | 0 |   |
|                                                                                                       |   |           |             |           |   |            |   |   |  |   |
| Total                  adjustments                                                                         |   |           | (30,039,614 | )              |   | 538,950    |   |   | 292,232 |   |
|                                                                                                       |   |           |             |           |   |            |   |   |  |   |
| **Net                  cash (used in) operating activities**                                               |   |           | (57,055,053 | )              |   | (4,376,599 | )      |   | (1,579,201 | ) |
|                                                                                                       |   |           |             |           |   |            |   |   |  |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES**                                                  |   |           |             |           |   |            |   |   |  |   |
| Acquisition                  of fixed assets and intangible assets                                         |   |           | (573,977    | )              |   | (247,867   | )      |   | (70,409 | ) |
| (Increase)                  in investment in Achiever Fund I LLC                                           |   |           | (120,000    | )              |   | 0          |   |   | 0 |   |
|                                                                                                       |   |           |             |           |   |            |   |   |  |   |
| **Net                  cash (used in) investing activities**                                               |   |           | (693,977    | )              |   | (247,867   | )      |   | (70,409 | ) |
|                                                                                                       |   |           |             |           |   |            |   |   |  |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITES**                                                   |   |           |             |           |   |            |   |   |  |   |
| Increase                  in advances - originating loan program agreements                                |   |           | 37,624,454  |           |   | 0          |   |   | 0 |   |
| (Decrease)                  due to repayments - originating loan program agreements                        |   |           | (36,818,272 | )              |   | 0          |   |   | 0 |   |
| Increase                  in advances - Nomura Credit and Capital credit facility                          |   |           | 19,286,667  |           |   | 0          |   |   | 0 |   |
| (Decrease)                  due to repayments - Nomura Credit and Capital credit                  facility |   |           | (554,403    | )              |   | 0          |   |   | 0 |   |

| Increase                  in advances - Merrill Lynch credit facility                                 |   |   | 17,920,204 |   |   | 0          |   |   | 0         |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|
| (Decrease)                  due to repayments - Merrill Lynch credit facility                         |   |   | (56,644    | )      |   | 0          |   |   | 0         |   |
| Proceeds                  from bridge loan                                                            |   |   | 0          |   |   | 0          |   |   | 750,000   |   |
| Proceeds                  from sale of stock and equity, net of expenses                              |   |   | 0          |   |   | 0          |   |   | 2,548,438 |   |
| Proceeds                  from conversion of warrants                                                 |   |   | 406,356    |   |   | 107,760    |   |   | 0         |   |
| Proceeds                  from conversion of options                                                  |   |   | 646,500    |   |   | 0          |   |   | 0         |   |
| Increase                  in deferred tax due to stock options outstanding                            |   |   | 2,656,995  |   |   | 0          |   |   | 0         |   |
| Costs                  associated with Series A convertible preferred issuance                        |   |   | 0          |   |   | (534,899   | )      |   | 0         |   |
| Gross                  proceeds from sale of Series A convertible preferred                  issuance |   |   | 0          |   |   | 10,503,750 |   |   | 0         |   |
| (Increase)                  in deferred financing fees                                                |   |   | (525,000   | )      |   | (206,500   | )      |   | 0         |   |
| Costs                  associated with Series B convertible preferred issuance                        |   |   | (832,845   | )      |   | 0          |   |   | 0         |   |
| Gross                  proceeds from sale of Series B convertible preferred                  issuance |   |   | 29,000,000 |   |   | 0          |   |   | 0         |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| **Net                  cash provided by financing activities**                                        |   |   | 68,754,012 |   |   | 9,870,111  |   |   | 3,298,438 |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| **NET                  INCREASE IN CASH AND CASH EQUIVALENTS**                                        |   |   | 11,004,982 |   |   | 5,245,645  |   |   | 1,648,828 |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| **CASH                  AND CASH EQUIVALENTS - BEGINNING OF PERIOD**                                  |   |   | 6,894,522  |   |   | 1,648,877  |   |   | 49        |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| **CASH                  AND CASH EQUIVALENTS - END OF PERIOD**                                        |   | $      | 17,899,504 |   | $      | 6,894,522  |   | $      | 1,648,877 |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| **SUPPLEMENTAL                  DISCLOSURE OF CASH FLOW INFORMATION:**                                |   |   |            |   |   |            |   |   |           |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| **CASH                  PAID DURING THE PERIOD FOR:**                                                 |   |   |            |   |   |            |   |   |           |   |
| Interest                  expense                                                                     |   | $      | 1,101,703  |   | $      | 67,786     |   | $      | 67,786    |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| **SUPPLEMENTAL                  DISCLOSURE OF NON-CASH ACTIVITIES:**                                  |   |   |            |   |   |            |   |   |           |   |
| Issuance                  of common stock for conversion of bridge loan                               |   | $      | 0          |   | $      | 0          |   | $      | 750,000   |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| Issuance                  of preferred stock in conversion of dividends payable                       |   | $      | 522,381    |   | $      | 0          |   | $      | 0         |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| Accrued                  Series A and B stock dividends                                               |   | $      | 599,750    |   | $      | 121,086    |   | $      | 0         |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| Issuance                  of warrants                                                                 |   | $      | 2,987,481  |   | $      | 13,461,649 |   | $      | 0         |   |
|                                                                                                  |   |   |            |   |   |            |   |   |           |   |
| Preferred                  stock converted to common shares                                           |   | $      | 3,448      |   | $      | 0          |   | $      | 0         |   |

**The        accompanying notes are an integral part of these consolidated financial        statements.**

----

**MRU        HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)**

**FOR        THE YEAR ENDED JUNE 30, 2006 (AUDITED) AND SIX MONTHS ENDED JUNE 30, 2005        (AUDITED)**

**AND        THE YEAR ENDED DECEMBER 31, 2004 (AUDITED)**

|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   | **Additional**                         |                                                                                             | **Additional**                         |   | **Additional**                                                                               |   | **Additional**                             |                                                                     | **Additional**                             |   |                                                                           |   |      |                                                   |
|-------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------------------------------------------------------------------------------------|-------------------------------------------------|--------|--------------------------------------|--------|-------------|--------------------------------------------------------------------------------------|----------------------------------------|--------|--------------------------------------------------------------------------------|--------|----------------------------------------|--------------------------------------------------------------------------------------------------|----------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------|--------|--------------------------------------------------------------------------------|--------|-----------|--------------------------------------------------------|
|                                                                                |   | **Series                    A Preferred Stock** |                                                                                 | **Series                    B Preferred Stock** |   | **Common                    Stock**  |   | **Paid-In** |                                                                                 | **Paid-In                    Capital** |   | **Paid-In                    Capital**                                         |   | **Paid-In                    Capital** |                                                                                             | **Paid-In                    Capital** |   | **Accumulated**                                                                              |   |                                       |                                                                     |
|                                                                                |   | **Shares**                                      |                                                                                 | **Amount**                                      |   | **Shares**                           |   | **Amount**  |                                                                                 | **Shares**                             |   | **Amount**                                                                     |   | **Capital**                            |                                                                                             | **-                    Options**       |   | **-                    Warrants**                                                            |   | **-                    Series A Ben Conv** |                                                                     | **-                    Series B Ben Conv** |   | **(Deficit)**                                                                  |   | **Total** |                                                   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   | **(Restated)**                                                                               |   | **(Restated)**                             |                                                                     | **(Restated)**                             |   | **(Restated)**                                                                 |   |      |                                                   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |
| **Balance,                    December 31, 2003**                                   |   |                                            | 900,000                                                                              |                                            | $      | 900                                  |   |        | 0                                                                                    |                                   | $      | 0                                                                              |   |                                   | 10,300,000                                                                                       |                                   | $      | 10,300                                                                                       |   | $                                          | 438,800                                                                  |                                       | $      | 0                                                                              |   | $         | 0                                                      |   |   |   |   |   |   |   |   | ($442,008 | ) | $ | 7,992 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additional                    capital contribution                                  |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       | 30,450                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 30,450 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    (loss) for the six months ended                              |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June                    30, 2004 before effects of reverse merger                   |   |                                            |                                                        |                                            |   |        |   |        |                                                        |                                   |   |                                                       |   |                                   |                                                                              |                                   |   |                                  |   |                                       |                                                 |                                       |   |                                                                 |   |      |                                         |   |   |     |   |   |     |   |   | (200,889 | ) |   | ($200,889 | ) |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal-June                    30, 2004                                           |   |                                            | 900,000                                                                              |                                            | $      | 900                                  |   |        | 0                                                                                    |                                   | $      | 0                                                                              |   |                                   | 10,300,000                                                                                       |                                   | $      | 10,300                                                                                       |   | $                                          | 469,250                                                                  |                                       | $      | 0                                                                              |   | $         | 0                                                      |   | $ | 0 |   | $ | 0 |   |   | ($642,897 | ) |   | ($162,447 | ) |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effects                    of Reverse Merger                                        |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Elimination                    of Iempower equity                                   |   |                                            | (900,000                                                                             | )                                               |   | (900                                 | )      |        |                                                                                 |                                   |   |                                                                           |   |                                   | (10,300,000                                                                                      | )                                      |   | (10,300                                                                                      | )      |                                       | (469,250                                                                 | )                                          |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   | ($480,450 | ) |
| Distribution                    of Pacific Technology equity to Iempower holders    |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 6,863,433                                                                                        |                                   |   | 6,863                                                                                        |   |                                       | 439,790                                                                  |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 446,653 |   |
| Assumption                    of Pacific Technology liabilities by Iempower holders |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 466,519                                                                                          |                                   |   | 466                                                                                          |   |                                       | 29,894                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 30,360 |   |
| Remaining                    equity in Pacific Technology (now MRU Holdings, Inc.)  |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 3,600,000                                                                                        |                                   |   | 3,600                                                                                        |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 3,600 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of shares in conversion                                 |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                    bridge loan and accrued interest                              |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 468,750                                                                                          |                                   |   | 469                                                                                          |   |                                       | 749,531                                                                  |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 750,000 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued for cash, July 2004 - net of expenses        |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 2,150,000                                                                                        |                                   |   | 2,150                                                                                        |   |                                       | 2,455,674                                                                |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 2,457,824 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued for cash, October 2004                       |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 37,500                                                                                           |                                   |   | 38                                                                                           |   |                                       | 59,962                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 60,000 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    (loss) for the period July 1, 2004 to December 31, 2004      |   |                                            |                |                                            |   |                                      |   |        |                |                                   |   |               |   |                                   |                            |                                   |   |                             |   |                                       |              |                                       |   |               |   |      |                                                        |   |   |               |   |   |             |   |   | (1,670,544 | ) |   | ($1,670,544 | ) |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                                  |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                    December 31, 2004**                                   |   |                                            | 0                                                                                    |                                            | $      | 0                                    |   |        | 0                                                                                    |                                   | $      | 0                                                                              |   |                                   | 13,586,202                                                                                       |                                   | $      | 13,586                                                                                       |   | $                                          | 3,734,851                                                                |                                       | $      | 0                                                                              |   | $         | 0                                                      |   | $ | 0 |   | $ | 0 |   |   | ($2,313,441 | ) | $ | 1,434,996 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of Series A preferred stock, February 2005              |   |                                            | 3,250,006                                                                            |                                            | $      | 3,250                                |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       | 2,583,533                                                                |                                       |   |                                                                           |   |      | 7,382,068                                              |   |   | 6,175,000 |   |   |   |   |   | ($6,296,086 | ) | $ | 9,847,765 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $2.00 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 40,000                                                                                           |                                   |   | 40                                                                                           |   |                                       | 79,960                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 80,000 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $1.60 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 7,100                                                                                            |                                   |   | 7                                                                                            |   |                                       | 12,153                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 12,160 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $0.50 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 31,200                                                                                           |                                   |   | 31                                                                                           |   |                                       | 15,569                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 15,600 |   |
| Accrue                  warrants issued to Nomura                              |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      | 6,079,581                                              |   |   |   |   |   |   |   |   |   |   | $ | 6,079,581 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    (loss) for the six months                                    |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ended                    June 30, 2005                                              |   |                                            |                                              |                                            |   |             |   |        |                                                        |                                   |   |                    |   |                                   |                  |                                   |   |                             |   |                                       |                                                                          |                                       |   |                    |   |      |           |   |   |           |   |   |          |   |   | (4,915,549 | ) | $ | (4,915,549 | ) |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                    June 30, 2005 (Restated)**                            |   |                                            | 3,250,006                                                                            |                                            | $      | 3,250                                |   |        | 0                                                                                    |                                   | $      | 0                                                                              |   |                                   | 13,664,502                                                                                       |                                   | $      | 13,664                                                                                       |   | $                                          | 6,426,066                                                                |                                       | $      | 0                                                                              |   | $         | 13,461,649                                             |   | $ | 6,175,000 |   | $ | 0 |   |   | ($13,525,076 | ) | $ | 12,554,553 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $2.00 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 145,709                                                                                          |                                   |   | 146                                                                                          |   |                                       | 291,273                                                                  |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 291,419 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $1.60 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 46,050                                                                                           |                                   |   | 46                                                                                           |   |                                       | 73,634                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 73,680 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $0.99 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 21,060                                                                                           |                                   |   | 21                                                                                           |   |                                       | 20,927                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 20,948 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $0.50 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 37,021                                                                                           |                                   |   | 37                                                                                           |   |                                       | 18,473                                                                   |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 18,510 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of warrants at $0.02 per share                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 89,950                                                                                           |                                   |   | 90                                                                                           |   |                                       | 1,709                                                                    |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 1,799 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of options at $3.07 per share                           |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 16,250                                                                                           |                                   |   | 16                                                                                           |   |                                       | 83,984                                                                   |                                       |   | (34,113                                                                        | )      |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 49,887 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of options at $3.00 per share                           |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 50,000                                                                                           |                                   |   | 50                                                                                           |   |                                       | 224,950                                                                  |                                       |   | (75,000                                                                        | )      |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 150,000 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of options at $2.00 per share                           |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   | 75,000                                                                                           |                                   |   | 75                                                                                           |   |                                       | 337,425                                                                  |                                       |   | (187,500                                                                       | )      |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 150,000 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of Series A preferred stock dividend                    |   |                                            | 198,017                                                                              |                                            |   | 198                                  |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       | 137,573                                                                  |                                       |   |                                                                           |   |      |                                                   |   |   | 159,174 |   |   |   |   |   | (191,029 | ) | $ | 105,916 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                    of Series A preferred stock, January 2006             |   |                                            | (3,448,023                                                                           | )                                               |   | (3,448                               | )      |        |                                                                                 |                                   |   |                                                                           |   |                                   | 3,448,023                                                                                        |                                   |   | 3,448                                                                                        |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 0 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of Series B preferred stock, net of expenses, May 2006  |   |                                            |                                                                                 |                                            |   |                                 |   |        | 7,631,580                                                                            |                                   |   | 7,632                                                                          |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       | 28,159,524                                                               |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   | 10,516,318 |   |   | (10,516,318 | ) | $ | 28,167,156 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accrue                    Series B preferred stock dividend                         |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   | 331,441 |   |   | (931,193 | ) |   | ($599,752 | ) |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accrue                    warrants issued to Merrill Lynch                          |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      | 2,987,482                                              |   |   |   |   |   |   |   |   |   |   | $ | 2,987,482 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accrue                    FAS123R stock option expense                              |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   | 7,814,692                                                                      |   |      |                                                   |   |   |   |   |   |   |   |   |   |   | $ | 7,814,692 |   |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    (loss) for the year ended June 30, 2006                      |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   | (27,015,439 |                    ) | $ | (27,015,439  | ) |
|                                                                                |   |                                            |                                                                                 |                                            |   |                                 |   |        |                                                                                 |                                   |   |                                                                           |   |                                   |                                                                                             |                                   |   |                                                                                         |   |                                       |                                                                     |                                       |   |                                                                           |   |      |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                    June 30, 2006 (Restated)**                            |   |                                            | 0                                                                                    |                                            | $      | 0                                    |   |        | 7,631,580                                                                            |                                   | $      | 7,632                                                                          |   |                                   | 17,593,565                                                                                       |                                   | $      | 17,593                                                                                       |   | $                                          | 35,775,538                                                               |                                       | $      | 7,518,079                                                                      |   | $         | 16,449,131                                             |   | $ | 6,334,174 |   | $ | 10,847,759 |   |   | ($52,179,055 | ) | $ | 24,770,852 |   |

**The        accompanying notes are an integral part of these consolidated financial        statements.**

----

**MRU        HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**JUNE        30, 2006 AND 2005 AND DECEMBER 31, 2004**

**NOTE        1 -     **
**ORGANIZATION        AND BASIS OF PRESENTATION**

**NOTE        2 -     **
**SUMMARY        OF SIGNIFICANT ACCOUNTING POLICIES**

**Principles        of Consolidation**

**Use        of Estimates**

**Revenue        Recognition**

**“**
*Accounting        for Nonrefundable Fees and Costs Associated with Originating or Acquiring        Loans        and Initial Direct Costs of Leases”.*

*,        *

----

**Costs        of Revenues**

**Valuation        Reserve - Student Loan Receivables**

----

|                                                         |   | Three                  Months   |    | Fiscal                  Year    |   |
|--------------------------------------------------------------|--------|---------------------------------|---------|---------------------------------|--------|
|                                                         |   | Ending                  6/30/06 |    | Ending                  6/30/06 |   |
|                                                         |   |                            |    |                            |   |
| Balance                  at beginning of period              |   | $                               | 0       |                            | $      | 0 |   |
| Valuation                  reserve increase/(decrease)       |   |                            |    |                            |   |   |   |
| Federally                  insured loans                     |   |                            | 0       |                            |   | 0 |   |
| Private                  student loans                       |   |                            | 814,631 |                            |   | 814,631 |   |
| Total                  valuation reserve change              |   |                            | 814,631 |                            |   | 814,631 |   |
|                                                         |   |                            |    |                            |   |   |   |
| Charge-offs,                  net of recoveries              |   |                            |    |                            |   |   |   |
| Federally                  insured loans                     |   |                            | 0       |                            |   | 0 |   |
| Private                  student loans                       |   |                            |  0 |                            |   | 0 |   |
| Net                  charge-offs                             |   |                            | 0       |                            |   | 0 |   |
|                                                         |   |                            |    |                            |   |   |   |
| Balance                  at end of period                    |   | $                               | 814,631 |                            | $      | 814,631 |   |
|                                                         |   |                            |    |                            |   |   |   |
| Private                  student loan valuation reserve as a |   |                            |    |                            |   |   |   |
| percentage                  of the private student loans     |   |                            |    |                            |   |   |   |
| receivable                  portfolio                        |   |                            |    |                            |   | 2.06 | % |

**Cash        and Cash Equivalents**

**Collateral        Deposit - Student Loans**

**Security        Deposits**

**Fixed        Assets**

| Computer                  network equipment | 3                  Years |
|---------------------------------------------|--------------------------|
| Leasehold                  improvements     | 3                  Years |
| Furniture                  and fixtures     | 3                  Years |

----

**Investment        in Achiever Fund I, LLC**

*Consolidation        of Variable Interest Entities*

*Accounting        for Investments in Limited Liability Companies*

**Income        Taxes**

**Advertising**

~~ ~~

**Reclassification**

----

**(Loss)        Per Share of Common Stock**

| Net                  (loss)                    |   | $      | (38,622,122 | )      | $      | (11,090,549 | )      | $      | (1,871,433 | )      |
|------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|--------|------------|--------|
|                                           |   |   |             |   |   |             |   |   |            |   |
| Weighted-average                  common stock |   |   |             |   |   |             |   |   |            |   |
| Outstanding                  (Basic)           |   |   | 15,100,652  |   |   | 13,608,511  |   |   | 13,209,331 |   |
|                                           |   |   |             |   |   |             |   |   |            |   |
| Weighted-average                  common stock |   |   |             |   |   |             |   |   |            |   |
| equivalents:                                   |   |   |             |   |   |             |   |   |            |   |
| Stock                  options                 |   |   | -           |   |   | -           |   |   | -          |   |
| Warrants                                       |   |   | -           |   |   | -           |   |   | -          |   |
|                                           |   |   |             |   |   |             |   |   |            |   |
| Weighted-average                  common stock |   |   |             |   |   |             |   |   |            |   |
| outstanding                  (Diluted)         |   |   | 15,100,652  |   |   | 13,608,511  |   |   | 13,209,331 |   |

**Financial        Instruments Disclosures of Fair Value**

*Disclosures          about Fair Value of Financial Instruments*

|                                                |   | June                      |       | June                      |   |
|-----------------------------------------------------|--------|---------------------------|------------|---------------------------|--------|
|                                                |   | 30,                  2006 |       | 30,                  2005 |   |
|                                                |   |                      |       |                      |   |   |   |
| Cash                                                |   | $                         | 17,899,504 |                      | $      | 6,894,522 |   |
| Restricted                  cash                    |   |                      | 2,975,430  |                      |   | 0 |   |
| Accounts                  Receivable                |   |                      | 4,167      |                      |   | 20,246 |   |
| Collateral                  deposit - student loans |   |                      | 0          |                      |   | 250,000 |   |
| Investment                  in Achiever Fund I, LLC |   |                      | 120,000    |                      |   | 0 |   |
| Accounts                  Payable                   |   |                      | 1,410,865  |                      |   | 577,478 |   |
| Notes                  Payable - Doral Bank         |   |                      | 806,182    |                      |   | 0 |   |
| Notes                  Payable - Merrill Lynch      |   |                      | 17,863,560 |                      |   | 0 |   |
| Notes                  Payable - Nomura             |   |                      | 18,732,264 |                      |   | 0 |   |

----

|                                                             |   | June                  30, 2006  |       |
|------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                             |   | Carrying                  Value |       | Fair                  Value |   |
| Private                  student loans receivable, held for sale |   | $                               | 39,564,367 |   | $ | 42,869,602 |   |

|                                                            |   | June                  30, 2005  |    |
|-----------------------------------------------------------------|--------|---------------------------------|---------|
|                                                            |   | Carrying                  Value |    | Fair                  Value |   |
| Private                  student loan receivable, held for sale |   | $                               | 158,479 |   | $ | 176,014 |   |

**Stock        Based Compensation**

*Share-Based        Payments*

**Recent        Accounting Pronouncements**

*Accounting        for Uncertainty in Income Taxes*
*Accounting        for Income Taxes*

*Accounting        for the Servicing of Financial Assets*
*Accounting        for Transfers and Servicing of Financial Assets and Extinguishments of        Liabilities*

----

*Accounting        for Certain Hybrid Financial Instruments*
*Accounting        for Derivative Instruments and Hedging Activities*
*Accounting        for Transfers and Servicing of Financial Assets and Extinguishments of        Liabilities*

**NOTE        3 -    **
**STUDENT        LOAN RECEIVABLES, HELD FOR SALE**

*Accounting          for Nonrefundable Fees and Costs Associated with Originating or Acquiring          Loans          and Initial Direct Costs of Leases*

| o   | The                Doral-MRU Lending loan program purchased approximately $18.3 million                in                private student loans. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| o   | The                Doral-MRU Funding SPV loan program purchased approximately $18.4                million                in private student loans. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| o   | The                Webbank-MRU Lending loan program purchased approximately $1.5 million                in                private student loans. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

----

**NOTE        4 -    **
**FIXED        ASSETS**

|                                            |   | 2006   |     | 2005   |   |
|-------------------------------------------------|--------|--------|----------|--------|--------|
|                                            |   |   |     |   |   |
| Computer                  network equipment     |   | $      | 691,872  |   | $      | 302,803 |   |
| Furniture                  and fixtures         |   |   | 57,912   |   |   | 21,994 |   |
| Leasehold                  improvements         |   |   | 5,884    |   |   | 5,884 |   |
|                                            |   |   | 755,668  |   |   | 330,681 |   |
| Less:                  accumulated depreciation |   |   | (218,537 | )      |   | (57,608 | ) |
|                                            |   |   |          |   |   |  |   |
| Total                  fixed assets             |   | $      | 537,131  |   | $      | 273,073 |   |

**NOTE        5 -    **
**INTANGIBLE        ASSETS**

**NOTE        6 -    **
**PROVISION        FOR INCOME TAXES**

----

|                                       |   | 2006   |       | 2005   |   | 2004       |   |
|--------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                       |   |   |       |   |   |       |   |
| Deferred                  tax assets       |   | $      | 8,680,000  |   | $      | 2,205,023  |   | $ | 192,629 |   |
| Less:                  valuation allowance |   |   | (8,680,000 | )      |   | (2,205,023 | )      |   | (192,629 | ) |
|                                       |   |   |            |   |   |            |   |   |  |   |
| Totals                                     |   | $      | -          |   | $      | -          |   | $ | - |   |

**NOTE        7 -    **
**STOCKHOLDERS’        EQUITY**

**Common        Stock**

|   | ○ | 145,709                  warrants were exercised at a price of $2.00/warrant                 |
|--------|---------|----------------------------------------------------------------------------------------------|
|   | ○ | 46,050                  warrants were exercised at a price of                  $1.60/warrant |

|   | ○ | 21,060                  warrants were exercised at a price of $0.99/warrant                  |
|--------|---------|----------------------------------------------------------------------------------------------|
|   | ○ | 37,021                  warrants were exercised at a price of                  $0.50/warrant |

|   | ○ | 89,950                  warrants were exercised at a price of $0.02/warrant                         |
|--------|---------|-----------------------------------------------------------------------------------------------------|
|   | ○ | 16,250                  employee options were exercised at a price of                  $3.07/option |

|   | ○ | 50,000                  employee options were exercised at a price of                  $3.00/option |
|--------|---------|-----------------------------------------------------------------------------------------------------|
|   | ○ | 75,000                  employee options were exercised at a price of                  $2.00/option |

|   | ○ | 765,479                  and 2,682,544 shares of Preferred Series A were voluntarily and                  manditorily converted to common,                  respectively |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ○ | 40,000                  warrants were exercised at a price of $2.00/warrant                 |
|--------|---------|---------------------------------------------------------------------------------------------|
|   | ○ | 7,100                  warrants were exercised at a price of                  $1.60/warrant |

|   | ○ | 31,200                  warrants were exercised at a price of                  $0.50/warrant |
|--------|---------|----------------------------------------------------------------------------------------------|

**Series        A Convertible Preferred Stock**

**Series        B Convertible Preferred Private Placement**

----

**Stock        Options**

|                                     |   | Jun-2006 |                     | Jun-2005 |   | Dec-2004                 |   |
|------------------------------------------|--------|----------|--------------------------|----------|--------|--------------------------|--------|
| Expected                  term           |   |     | 6.5                  yrs |     |   | 6.5                  yrs |   |   | 6.5                  yrs |   |
| Expected                  volatility     |   |     | 26                       | %        |   | 73                       | %      |   | 39 | % |
| Risk-free                  interest rate |   |     | 4.698                    | %        |   | 4.211                    | %      |   | 4.360 | % |
| Dividend                  yield          |   |     | 0                        | %        |   | 0                        | %      |   | 0 | % |

*Expected        Term*

----

*Expected        Volatility*

*Risk-Free        Interest Rate*

*Dividend        Yield*

*Forfeiture        Rate*

|                                                      |   | 2006   |      | 2005   |   |
|-----------------------------------------------------------|--------|--------|-----------|--------|--------|
| Options                  outstanding at beginning of year |   |   | 1,500,000 |   |   | 1,430,000 |   |
| Options                  granted                          |   |   | 2,733,498 |   |   | 70,000 |   |
| Options                  exercised                        |   |   | (141,250  | )      |   | 0 |   |
| Options                  forfeited or expired             |   |   | (8,750    | )      |   | 0 |   |
| Options                  outstanding at year end          |   |   | 4,083,498 |   |   | 1,500,000 |   |
| Exercisable                  options at year end          |   |   | 2,355,845 |   |   | 711,249 |   |

|                                                      |   | 2006   |    |
|-----------------------------------------------------------|--------|--------|---------|
| Options                  outstanding at beginning of year |   |   | 0       |   |
| Options                  granted                          |   |   | 236,987 |   |
| Options                  exercised                        |   |   | 0       |   |
| Options                  forfeited or expired             |   |   | 0       |   |
| Options                  outstanding at year end          |   |   | 236,987 |   |
| Exercisable                  options at year end          |   |   | 207,820 |   |

----

| Exercise    |   |        |      | Weighted                      |   |        |   | Weighted                |      |
|-------------|--------|-------------|-----------|-------------------------------|--------|-------------|--------|------------------------------|-----------|
| Price       |   | Number      |      | Average                       |   | Number      |   | Average                      |      |
| Range       |   | Outstanding |      | Remain.                  Life |   | Exercisable |   | Exer.                  Price |      |
|        |   |        |      |                          |   |        |   |                         |      |
| $0.01-$1.00 |   |        | 600,000   |                          |   | 8.02        |   |                         | 600,000   |   | $ | 1.00 |   |
| $1.01-$2.00 |   |        | 570,000   |                          |   | 8.27        |   |                         | 514,581   |   | $ | 1.61 |   |
| $2.01-$3.00 |   |        | 393,250   |                          |   | 9.13        |   |                         | 216,192   |   | $ | 2.94 |   |
| $3.01-$4.00 |   |        | 2,124,748 |                          |   | 9.25        |   |                         | 875,904   |   | $ | 3.23 |   |
| $4.01-$7.00 |   |        | 395,500   |                          |   | 9.76        |   |                         | 149,168   |   | $ | 5.11 |   |
|        |   |        |           |                          |   |             |   |                         |           |   |   |  |   |
| TOTAL       |   |        | 4,083,498 |                          |   |             |   |                         | 2,355,845 |   | $ | 2.40 |   |

| Exercise    |   |        |    | Weighted                      |   |        |   | Weighted                |    |
|-------------|--------|-------------|---------|-------------------------------|--------|-------------|--------|------------------------------|---------|
| Price       |   | Number      |    | Average                       |   | Number      |   | Average                      |    |
| Range       |   | Outstanding |    | Remain.                  Life |   | Exercisable |   | Exer.                  Price |    |
|        |   |        |    |                          |   |        |   |                         |    |
| $0.01-$1.00 |   |        | 0       |                          |   | 0.00        |   |                         | 0       |   | $ | 0.00 |   |
| $1.01-$2.00 |   |        | 25,000  |                          |   | 8.08        |   |                         | 8,333   |   | $ | 2.00 |   |
| $2.01-$3.00 |   |        | 0       |                          |   | 0.00        |   |                         | 0       |   | $ | 0.00 |   |
| $3.01-$4.00 |   |        | 108,500 |                          |   | 9.30        |   |                         | 96,000  |   | $ | 3.64 |   |
| $4.01-$7.00 |   |        | 103,487 |                          |   | 8.84        |   |                         | 103,847 |   | $ | 4.67 |   |
|        |   |        |         |                          |   |             |   |                         |         |   |   |  |   |
| TOTAL       |   |        | 236,987 |                          |   |             |   |                         | 207,820 |   | $ | 4.09 |   |

**Warrants**

----

| Exercise                                         |   | Expiration |                            | June                  30 |   | June                  30 |   |
|--------------------------------------------------|--------|------------|---------------------------------|--------------------------|--------|--------------------------|--------|
| Price                                            |   | Date       |                            | 2006                     |   | 2005                     |   |
|                                             |   |       |                            |                     |   |                     |   |
| $0.02                                            |   |       | April                  2009     |                     |   | 0                        |   |   | 89,950 |   |
| $0.50                                            |   |       | September                  2006 |                     |   | 0                        |   |   | 37,021 |   |
| $0.99                                            |   |       | September                  2006 |                     |   | 64,747                   |   |   | 75,800 |   |
| $0.99                                            |   |       | December                  2006  |                     |   | 808,539                  |   |   | 818,646 |   |
| $0.99                                            |   |       | December                  2007  |                     |   | 530,603                  |   |   | 530,603 |   |
| $0.99                                            |   |       | December                  2008  |                     |   | 530,607                  |   |   | 530,607 |   |
| $0.99                                            |   |       | April                  2009     |                     |   | 22,740                   |   |   | 22,740 |   |
| $1.60                                            |   |       | July                  2007      |                     |   | 100,000                  |   |   | 101,000 |   |
| $1.60                                            |   |       | July                  2009      |                     |   | 361,850                  |   |   | 405,350 |   |
| $2.00                                            |   |       | July                  2007      |                     |   | 374,481                  |   |   | 512,115 |   |
| $2.00                                            |   |       | October                  2007   |                     |   | 0                        |   |   | 7,075 |   |
| $3.50                                            |   |       | February                  2007  |                     |   | 7,999,449                |   |   | 7,999,449 |   |
| $3.50                                            |   |       | February                  2010  |                     |   | 227,500                  |   |   | 227,500 |   |
| $3.50                                            |   |       | February                  2016  |                     |   | 1,482,751                |   |   | 0 |   |
| $3.80                                            |   |       | December                  2010  |                     |   | 159,000                  |   |   | 0 |   |
| $3.80                                            |   |       | February                  2011  |                     |   | 2,480,264                |   |   | 0 |   |
| $3.80                                            |   |       | December                  2016  |                     |   | 412,437                  |   |   | 0 |   |
| $4.00                                            |   |       | April                  2010     |                     |   | 50,000                   |   |   | 0 |   |
|                                             |   |       |                                 |                     |   |                          |   |   |  |   |
| TOTAL                                            |   |       |                                 |                     |   | 15,604,968               |   |   | 11,357,856 |   |
|                                             |   |       |                                 |                     |   |                          |   |   |  |   |
| Exercisable                  warrants            |   |       |                                 |                     |   | 13,738,086               |   |   | 9,903,411 |   |
| Weighted                  average exercise price |   |       |                                 |                     | $      | 2.83                     |   | $ | 2.80 |   |

----

**NOTE        8 -    **
**CREDIT        LINE WITH UNIVERSAL FINANZ HOLDING AG**

**NOTE        9 -    **
**CREDIT        LINE WITH NOMURA CREDIT & CAPITAL, INC.**

**NOTE        10 -    **
**CREDIT        LINE WITH MERRILL LYNCH BANK USA (MLBU)**

----

**NOTE        11 -    **
**LOAN        PROGRAM AGREEMENTS**

----

**NOTE        12 -    ****PATENTS**

**NOTE        13 -    **
**COMMITMENTS        AND CONTINGENCIES**

**Employment        Agreements**

| NAME                                   |   | TITLE     |   | EXPIRATION                  DATE   |
|----------------------------------------|--------|-----------|--------|------------------------------------|
| Edwin                  J. McGuinn, Jr. |   | CEO       |   | November                  11, 2007 |
| Raza                  Khan             |   | President |   | April                  1, 2009     |
| Vishal                  Garg           |   | CFO       |   | April                  1, 2009     |

**Operating        Leases**

| 2007   |   |   | 539,015   |   |
|--------|--------|--------|-----------|--------|
| 2008   |   |   | 382,319   |   |
| 2009   |   |   | 159,299   |   |
| 2010   |   |   | 0         |   |
|   |   |   |           |   |
|   |   | $      | 1,080,633 |   |

**NOTE        14 -    **
**RELATED        PARTY TRANSACTIONS**

**NOTE        15 -    **
**RESTATEMENT**

*Share          Based Payments*

|   | · | Deferred                    financing fees, net of amortization as of June 30, 2006 has been                    increased                    $3,208,668, from $1,930,854 to $5,139,522. Deferred financing                    fees, net of                    amortization as of June 30, 2005 has been increased $5,235,195                    from                    $177,820 to $5,413,015. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Additional                    paid-in capital - warrants as of June 30, 2006 has been increased                    $6,079,581, from $10,369,549 to $16,449,131. Additional paid-in                    capital                    warrants as of June 30, 2005 has been increased $6,079,581, from                    $7,382,068 to $13,461,649. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Accumulated                    deficit as of June 30, 2006 has been increased $2,870,914 from                    $(49,308,141) to $(52,179,055). Accumulated deficit as of June                    30, 2005                    has been increased $844,386 from $(12,680,690) to                    $(13,525,076). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Depreciation                    and amortization for the year ended June 30, 2006 has been increased                    by                    $2,026,527, from $1,969,858 to $3,996,385. Depreciation and amortization                    for the six months ended June 30, 2005 has been increased by                    $844,386,                    from $70,595 to $914,981. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Loss                    applicable to common shares for the year ended June 30, 2006                    has increased                    $2,026,527 from $(36,595,595) to $(38,622,122). Loss applicable                    to common                    shares for the six months ended June 30, 2005 has increased $844,386,                    from                    $(10,367,249) to $(11,211,639). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net                    Loss per basic and diluted shares for the year ended June 30,                    2006 has                    increased $0.14 from $(2.42) to $(2.56). Net Loss per basic and                    diluted                    shares for the six months ended June 30, 2005 has increased $0.07                    from                    $(0.75) to $(0.82). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----