SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

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

For the fiscal year ended June 30, 2005

                               MRU HOLDINGS, INC.
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                 (Name of small business issuer in its charter)

                        Commission file number 000-33487

          Delaware                                 33-0954381
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(State of incorporation)                  (Employer Identification No.)

1114 Avenue of the Americas, 30th Floor , New York, New York            10036
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(Address of principal executive offices)                            (Zip Code)

                                 (212) 754-0774
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                (Issuer's telephone number, including area code)

            600 Lexington Avenue, 3rd Floor, New York, New York 10022
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              (Former name, former address and former fiscal year,
                         if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act: None.

Securities Registered Pursuant to Section 12(g) of the Act: common stock, $0.001
par value per share

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

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

Issuer's revenues for the year ended June 30, 2005 were approximately $239,000.

The aggregate market value of the voting stock held by non-affiliates of the
registrant, based on the average bid and asked prices on NASD's OTC Bulletin
Board on August 22, 2005 was approximately $39,735,000.
<PAGE>

The number of shares outstanding of the issuer's common stock, $0.001 par value,
as of the latest practicable date: 13,701,720 shares as of August 22, 2005.

                       DOCUMENTS INCORPORATED BY REFERENCE

None.

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

<PAGE>

                                TABLE OF CONTENTS

PART I

   ITEM 1.   DESCRIPTION OF BUSINESS..........................................1
   ITEM 2.   DESCRIPTION OF PROPERTY..........................................9
   ITEM 3.   LEGAL PROCEEDINGS................................................9
   ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............10

PART II

   ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........10
   ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS............................10
   ITEM 7.   FINANCIAL STATEMENTS............................................13
   ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
               AND FINANCIAL DISCLOSURE .....................................13
   ITEM 8A.  CONTROLS AND PROCEDURES.........................................13
   ITEM 8B.  OTHER INFORMATION...............................................14

PART III

   ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS................................14
   ITEM 10.  EXECUTIVE COMPENSATION..........................................20
   ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT ...................................................21
   ITEM 12   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................22
   ITEM 13   EXHIBITS AND REPORTS ON FORM 8-K................................23
   ITEM 14   PRINCIPAL ACCOUNTANT AND FEES AND SERVICES......................24

   EXHIBIT INDEX ............................................................26
   FINANCIAL STATEMENTS.....................................................F-1
<PAGE>

          SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This report contains "forward-looking" information within the meaning of the
federal securities laws. The forward-looking information includes statements
concerning our outlook for the future, as well as other statements of beliefs,
future plans and strategies or anticipated events, and similar expressions
concerning matters that are not historical facts. Forward-looking information
and statements are subject to many risks and uncertainties that could cause
actual results to differ materially from those expressed in, or implied by, the
statements. These risks and uncertainties include:

      o     our ability to implement our loan guarantee product;

      o     our ability to accurately predict loan default rates;

      o     the availability of other higher education financing alternatives;

      o     legal regulation of our business and the cost of compliance with
            laws that may become applicable to our business; and

      o     other risks and uncertainties described in our reports and filings
            with the U.S. Securities and Exchange Commission.

You are cautioned not to place undue reliance on forward-looking statements
because actual results may differ materially from those expressed in, or implied
by, the statements. Any forward-looking statement that we make speaks only as of
the date of such statement, and we undertake no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise. Comparisons of results for current and any prior periods
are not intended to express any future trends or indications of future
performance, unless expressed as such, and should only be viewed as historical
data.

When used in our documents or presentations, the words "anticipate," "estimate,"
"expect," "objective," "projection," "forecast," "goal" or similar words are
intended to identify forward-looking statements. We qualify any such
forward-looking statements entirely by these cautionary factors.

                                     PART I

Item 1. Description of Business

Company History

We were incorporated under the laws of the State of Delaware on March 2, 2000.
MRU Holdings is a specialty finance company who profiles and provides students
with funds for higher education using a blend of current market credit practices
as well as our own proprietary analytic models and decision tools. We have a
prominent brand name "MyRichUncle(TM)" and highly scalable loan origination
infrastructure. We utilize these assets to provide federally guaranteed and
private loans to students on a referral basis. We have entered into the student
lending market as a lender and originator of private student loans and plan to
enter the market for federally guaranteed student loans.

On July 8, 2004, we completed a share exchange ("Share Exchange") with the stock
holders of Iempower, Inc., a Delaware corporation doing business as
MyRichUncle(TM) ("Iempower"), pursuant to which we acquired 100% of the
outstanding capital stock of Iempower in exchange for 6,863,433 shares of our
common stock, par value $.001 per share (the "Common Stock") and 2,136,567
Common Stock purchase warrants issued to Iempower's warrant holders (each
warrant is exercisable to purchase one share of Common Stock with a weighed
average exercise price of $0.45 per share) (the "Share Exchange"). In
conjunction with the Share Exchange, we changed our name to MRU Holdings, Inc.
Although we acquired Iempower as a result of the Share Exchange, the
stockholders of Iempower hold a majority of our voting interests. Additionally,
the Share Exchange resulted in Iempower's management and Board of Directors
assuming operational control of the Company.

<PAGE>

On February 4, 2005, MRU Lending, Inc. ("MRU Lending"), an indirect wholly-owned
subsidiary of the Company, entered into a credit agreement (the "Credit
Agreement") with Nomura Credit & Capital, Inc. ("Nomura") which provides for a
$165 million secured revolving credit facility for the origination and
warehousing of private student loans (the "Student Loan Credit Facility"). The
loans under the Credit Agreement are secured by, among other things, a lien on
all of the student loans financed under the Credit Agreement and any other
student loans owned by MRU Lending and not otherwise released, together with a
pledge of 100% of the capital stock of MRU Lending. The Student Loan Credit
Facility has a term of three years. Upon execution of the Credit Agreement,
Nomura received warrants to purchase 7,999,449 shares of our Common Stock (the
"Nomura Warrants"), equal to 27.5% beneficial ownership of the Company on a
diluted basis, with an initial exercise price of $3.50 per share and which are
subject to standard weighted average anti-dilution protection for issuances of
securities below the initial exercise price. 22.5% of the Nomura Warrants vested
on February 4, 2005 and the remaining 5% will vest on the second anniversary of
the closing date of the Credit Agreement. Contemporaneously with and as a
condition to the execution of the Credit Agreement, the Company sold in a
private placement offering (the "Private Placement Offering") to accredited
investors 3,250,006 shares of its Series A Convertible Preferred Stock at a
price of $3.50 per share. In connection with the completion of the Private
Placement Offering, the Company issued to its placement agents warrants to
purchase 227,500 shares of Common Stock at an exercise price of $3.50 per share.

On July 25, 2005, MRU Lending and Doral Bank NY, FSB, a federally chartered
savings bank in the business of originating various types of consumer loans
including student loans (the "Bank"), entered into a definitive agreement
providing for the Bank's origination of private student loans to qualified
applicants participating in MRU Lending's private student loan program, the
marketing of such program and solicitation and qualification of such applicants
by MRU Lending and the sale by the Bank and purchase by MRU Lending of such
student loans.

On May 12, 2005, the Company entered into a Sublease dated April 26, 2005 with
ISID Finance of America, Inc. (the "Sub-landlord") providing for the sublease of
7,685 square feet of additional office space located at 1114 Avenue of the
Americas, New York, New York. The term of the Sublease ends on May 30, 2009,
unless sooner terminated or canceled pursuant to the terms of the Sublease.
Rental payments under the Sublease amount to $353,510.00 per annum. The
obligations of the Company under the Sublease are guaranteed by, Edwin McGuinn,
the Company's Chief Executive Officer, in accordance with a Guaranty dated April
26, 2005 executed by Mr. McGuinn in favor of the Sub-landlord.

The Business

We are a specialty finance company that facilitates and provides students with
funds for higher education. Equipped with proprietary analytical models and
decision tools, we are able to profile and provide customized financial products
to each student. We receive financing requests from students which we then refer
to lenders. We have entered into the student lending market as a lender and
originator of private student loans and plan to enter the market for federally
guaranteed student loans.

We offer three primary financial products to students and financial institutions
participating in the specialty finance educational lending sector. These
products include private alternative student loans; guarantees for students with
certain credit challenges such as the lack of a co-signor or such as a foreign
resident seeking credit support to obtain domestic educational financing while
attending school in the U.S.; and federally-guaranteed student loans originated
by us on behalf of other lenders. We generate revenues from (i) referral or sale
of federal loans, (ii) origination fees and guaranty fees, (iii) residual cash
flows from the sale or securitizations of portfolios of our alternative student
loans and (iv) interest surcharges related to our guarantees of student loans.

We use a unique and proprietary underwriting model which we believe provides us
with a compelling competitive advantage. By combining traditional credit scoring
methods with our proprietary underwriting matrix, which considers the loan
applicant's GPA, academic concentration, prior work experience, and the
educational institution which they are attending, we generate our own credit
index which we believe is more insightful and robust regarding an applicant's
future repayment capabilities. Our approach may offer students who would
otherwise be disqualified under traditional credit scoring methods an
opportunity to obtain funding for their education. Conversely, we may disqualify
or price-adjust loans for students that otherwise would be viewed as viable or
of a certain credit risk under traditional methods. We believe that no other
educational finance company currently uses a similar approach to evaluating loan
applicants or determining loan pricing. Our underwriting process adds another
layer of analytical precision to traditional evaluation tools and helps us make
more informed lending decisions.


                                       2
<PAGE>

In addition to our unique underwriting methodology, we take a highly focused
approach to our marketing while maintaining one of the most diverse sourcing
channels in the industry. Of the approximately 6,400 accredited institutions of
higher education in the United States, we focus only on the top 1,500
undergraduate and professional graduate institutions. The professional graduate
disciplines that we target include law, business administration, engineering and
medicine. We have also set limits on geographic concentrations of the loans as
well as the institution-specific concentration of the loan portfolio. These
criteria define our lending and marketing methods. We believe that this targeted
approach will consistently yield the optimal mix of attractive pricing,
acceptable credit risk and a sufficiently deep base of potential customers. In
contrast, we use a highly diverse approach to sourcing potential customers which
we believe will create more sustainable distribution channels than our
competitors. We are one of the few companies in this sector to market directly
to students. Our direct marketing channels include Internet marketing and
advertising campaigns, direct mail campaigns, and our branded MyRichUncle(TM)
web site. In addition, we have developed indirect origination sources including
referrals from schools and universities and third party referral companies. In
the future, we may also enter into private label lending arrangements with large
banks and financial institutions. Equipped with our unique credit model, our
focused marketing and diverse distribution channels, we are well positioned to
grow in the market for higher educational products and services.

Industry Background

The federal government determines what a family should contribute toward a
student's education costs. This is called the Expected Family Contribution
("EFC"). Financial aid administrators determine an applicant's need for federal
student aid from the U.S. Department of Education ("DoE") and other non-federal
sources of assistance by subtracting the EFC from the student's cost of
attendance.

Families submit the Free Application for Federal Student Aid ("FAFSA"). The data
provided is processed through the EFC formula and is used to determine the need
for assistance from the following types of federal student financial assistance:
Federal Pell Grants ("Pell Grants"), subsidized William D. Ford Federal Direct
Loans made under the Direct Loan Program ("Direct Loans"), subsidized Federal
Family Education Loans ("FFELP"), and assistance from the "campus-based"
programs--Federal Supplemental Educational Opportunity Grants ("SEO Grants") and
Federal Perkins Loans, and Federal Work-Study ("FWS"). The methodology for
determining the EFC is found in Part F of Title IV of the Higher Education Act
of 1965, as amended ("HEA").

However, over the last decade, the increasing cost of higher education and
decreasing government support for higher education has generated a substantial
gap between viable sources of education funding and increasing tuition costs
which results in a mismatch between what the government expects families to be
able to contribute and what families can actually afford or are willing to pay.

Historically, grant programs such as the Pell Grant was the foundation of
college financial aid. Pell Grants are given to families with annual incomes
below $20,000, while SEO Grants are reserved for even needier students. However,
most students do not qualify for Pell Grants. The amount available under a Pell
Grant increases as a student's income decreases and the cost of attendance
increases. Nonetheless, the maximum amount available is $4,050. We estimate that
such aid covers approximately 29% of the average fixed costs (tuition and fees,
room and board) at a four-year public college and approximately 14% at a private
four-year college.

As a result of very specific eligibility requirements and/or limits available on
grants and loans, the amount of funds made available to students may be
insufficient to cover the total cost of higher education. This gap, sometimes
called the "unmet need," occurs when the sum of the EFC and total available
financial aid is less than the cost of attendance. In order to bridge this unmet
need students are forced to finance education through private loans or other
debt.

Consequently, students increasingly rely on private loans (not guaranteed by the
government) and credit cards to fund their education expenses. The loan limits
for government-guaranteed FFELP loans are $23,500 over 4 years for
undergraduates and $18,500 per year for graduate students. Average private
university tuition is $40,000 + per year.


                                       3
<PAGE>

Federal Loans - The federal education loan programs offer lower interest rates
and more flexible repayment plans than most consumer loans, making them an
attractive way to finance education. Students may be able to deduct up to $2,500
in student loan interest each year.

These federal loans are offered through two programs with different delivery
systems: the William D. Ford Federal Direct Loan Program ("Direct Loans") and
the Federal Family Education Loan Program ("FFELP"). Although the borrower's
eligibility is the same under either program, the procedures for each are
different because funds for Direct Loans are provided directly to the school by
the federal government, while loan funds under FFELP are usually provided by a
private lender and are guaranteed by a state guaranty agency and reinsured by
the federal government.

The federal guaranty on the FFELP loans replaces the security (the collateral)
usually required for long-term loans from banks and credit unions. Although the
guaranty agency's procedures and policies must conform to the FFELP
requirements, individual guaranty agencies may have additional procedures and
policies. Several thousand financial institutions participate in the FFELP
program. In addition, some schools have opted to become lenders in the FFELP
program.

The following types of loans are available through the Direct Loan and FFELP
programs:

o     Subsidized Stafford Loans: awarded to students who demonstrate financial
      need. Because the DoE subsidizes the interest, borrowers are not charged
      interest while they are enrolled in school at least half time or during
      grace and deferment periods.

o     Unsubsidized Stafford Loans: awarded to students regardless of financial
      need. Borrowers are responsible for paying the interest as it accrues.
      Independent students and students whose parents are not eligible for a
      PLUS Loan (see below) have higher unsubsidized loan limits.

o     PLUS Loans: allow parents to borrow on behalf of their dependent
      undergraduate children who are enrolled at least half time. As with
      unsubsidized Stafford Loans, borrowers are responsible for the interest
      that accrues on PLUS Loans throughout the life of the loan.

o     Consolidation Loans: allow a borrower to combine one or more federal
      education loans into a single loan to facilitate repayment. Because the
      repayment period is longer, Consolidation Loans may be a way to reduce the
      borrower's monthly payments; however, the total interest repaid over the
      life of the loan is usually higher. The consolidation process usually does
      not directly involve the school because generally the consolidating lender
      purchases qualifying student loans from other lenders.

FFELP loans are presently offered by a large number of financial institutions.
Sallie Mae, Nellie Mae, Citibank, Zions Bank, Bank One, JP Morgan Chase Bank,
Educaid, PNC, Wells Fargo, AES, Bank of America, and Key Bank are a few of the
many providers of FFELP loans.

Stafford Loans allow dependent undergraduates to borrow up to $2,625 their
freshman year, $3,500 their sophomore year and $5,500 for each remaining year
(independent students and students whose parents have been turned down for a
PLUS loan can borrow an additional unsubsidized $4,000 the first two years and
$5,000 the remaining years). Graduate students can borrow $18,500 per year,
although only $8,500 of that is subsidized. There are also cumulative limits of
$23,000 for an undergraduate education and a $65,500 combined limit for
undergraduate and graduate. (For independent students and for students whose
parents were denied a PLUS loan the cumulative limits are $46,000 and $138,500,
respectively.)

Private Loans -- Private loans, also known as alternative loans or supplemental
loans, help bridge the gap between the actual cost of education and the limited
amount the government allows students to borrow through its programs. Private
loans are offered by private lenders without federal forms to complete.

Private loans are used for many reasons: to fill the gap between a student's
financial aid package and the actual cost of attendance, to help cover the EFC
calculated under financial aid formulas, or to pay for additional expenses not
normally covered by other forms of aid. In many cases, the EFC may be
unaffordable as it does not factor in non-collateralized loans such as credit
card debt. Parents may also prefer that students be responsible for the
financing.


                                       4
<PAGE>

With the growing gap between the amount students and families are willing or
able to pay for college and actual college costs after governmental and
institutional aid are considered--often referred to as "unmet financial
need"--private loans are becoming increasingly important as a mechanism for
financing postsecondary education. Some families turn to private loans when the
federal loans do not provide enough money or when they need more flexible
repayment options. For example, a parent might want to defer repayment until the
student graduates, an option that is only available to parents in particular
circumstances who request deferral.

Chase, CitiBank, Key Bank, Wachovia, Bank of America, AccessGroup, Chela, and
FirstMarblehead are a few of the key players providing different types of
private loans products and services depending on the student's level of study.
The interest rates on private loans tend to be higher than on the loans offered
by the federal government.

Under Title IV of the Higher Education Act, the federal government has created a
provision that private loans which are guaranteed by a non-profit corporation
are non-dischargeable in the event of bankruptcy. As a result, private lenders
seek to have their loans guaranteed by a non-profit guaranty agency. The
Education Resources Institute ("TERI") is a provider of such guaranties.
Citizens Bank, Educaid, Fleet National Bank, National City Bank, Bank of
America, HSBC Bank, Charter One Bank and Allfirst Bank are among the banks that
have their loans guaranteed by TERI. In exchange for TERI's guaranty, TERI
receives guaranty fees which can be passed on to the borrower. These fees vary
based on the credit quartiles TERI determines the borrower to be in.

MRU Product Offerings

We created a suite of products to appeal to and satisfy the needs of students,
their families, and participating financial institutions and to address the
overall inefficiencies within the student loan market. We aim to be a one-stop
shop that provides traditional and merit-based financing for higher education
financing needs. Our range of products will make it possible for qualified
students to obtain private and federal loans. These products include:

o     Private Student Loans - Private student loans supplement financing for
      qualified students beyond what they can obtain through the federal
      government and are not guaranteed by the government. To facilitate this
      product, we established the Student Loan Credit Facility with Nomura which
      we anticipate will provide substantially all of the financing we estimate
      will be required. We originate loans through partnerships with selected
      commercial banks, purchase the originated loans after a relatively short
      holding period, and warehouse these loans. It is anticipated that these
      loans will then be either sold to loan purchasers, or to other larger
      financial institutions, or may be securitized. We expect to derive
      revenues from an origination fee generated upon the execution of the loan
      and our share of residual cash flows generated through the securitization
      or sale of the loans. Revenues from the sale of loans can either be paid
      upon the sale of the loan or paid over time in the form of a residual.
      Securitizations can provide us with residual cash flows that are paid over
      time. However, if we receive residuals that are paid over the life of the
      loan, current accounting rules allow us to book the net present value of
      the revenues in the period that the sale or securitization occurred.

o     Loan Guaranties -Through our subsidiary MRUG we intend to guarantee loans
      provided by third-party lenders to students with particular credit
      challenges. We plan to enable students, with or without co-signors, to
      have their loans guaranteed if they meet our credit index requirements. It
      is anticipated that students will pay fees to us for this service, which
      includes an upfront guaranty fee and an annual interest surcharge over the
      life of the loan. We plan to support MRUG with $50 million in equity
      raised by the sale of MRUG preferred stock to Universal Finanz Holding AG.
      Subject to the execution of definitive documentation, Universal Finanz
      Holding AG has committed to invest up to $50 million into MRUG to serve as
      the equity reserve against which MRUG will guaranty loans. Revenues
      generated from the guaranty fees and surcharges will be divided between
      Universal Finanz Holding AG and MRUG with Universal Finanz Holding AG
      receiving 65% and MRUG receiving the remainder. Universal Finanz Holding
      AG will hold preferred stock in MRUG currently equal to 65% of the
      ownership interest in MRUG on a diluted basis.

o     Federal Loans - We refer students' federal loan needs to other lenders. We
      receive a premium from such lenders for funded applications. We expect, at
      the appropriate time, to originate federal loans that we will sell for a
      larger premium to secondary market purchasers of federal loans. We will
      follow the government's guidelines for originating and servicing federal
      loans. The servicing function will be outsourced to third-party servicing
      providers.


                                       5
<PAGE>

Private Loans

We originate private student loans, through our bank partners, using a blend of
established credit market practices as well as our own proprietary underwriting
criteria, analytical models and decision tools. We established a $165 million
Student Loan Credit Facility with Nomura. This facility will be used to finance
our alternative student loan products. The loans eligible under the facility
will be loans originated by our bank partners and purchased and held by us that
meet our underwriting criteria. Eligible loans can remain under the facility for
no more than 15 months at which time these loans will either be sold to a third
party, repurchased by us or be securitized. The term of the Student Loan Credit
Facility is three years.

We will warehouse our alternative private loans through the Student Loan Credit
Facility. We will receive fees for the origination of the loans as well as
revenues in the form of residuals from the sale or securitization of the loans
which we will split with Nomura under the terms described herein.

Loan Guarantees

With respect to private loans, in many cases students must have a credit worthy
co-signor. Many students are unable to procure private student loans because
they are unable to provide such a co-signor. We plan to make available to
students a loan guaranty product by having our guaranty agency co-sign on behalf
of such students enabling them to procure student loans. In exchange for this
guaranty service, students will pay a guaranty fee and an annual interest
surcharge over the life of the loan. Guaranty funds would be provided through a
credit support facility with Universal Finanz Holding AG.

In October 2004, we announced that Universal Finanz Holding AG "Universal"
committed to provide up to $50 million of credit support for MRUG, our guaranty
subsidiary, to serve as the equity reserve against which MRUG will guaranty
loans. Under the terms of the financing, Universal will have the right to
purchase up to a 65% ownership interest in MRUG and pay the purchase price for
such ownership interest by releasing MRUG from its obligation to repay an equal
amount of its outstanding obligations to Universal under the credit support
facility. If fully funded and the purchase right exercised, Universal will have
a 65% ownership interest in MRUG in the form of Series "A" Perpetual Preferred
Stock of MRUG. Eligible borrowers who require a guaranty will pay an upfront
guaranty fee and be charged an annual fee for the term of their loan. We intend
to sell the cash flows from the annual fees for their NPV. All of the fees will
be divided between us and Universal at 35% and 65%, respectively, after
Universal receives its reserve amount.

FFELP Loans

To provide a "one-stop shop" for higher education finance, we plan to provide
students with FFELP loans. With respect to FFELP loans, we will be required to
meet federal requirements for the eligibility of borrowers.

We plan to serve initially as a referrer of federal loans by directing students
to lenders. We will receive a premium for all funded student applications. We
intend to ultimately be an originator of federal loans and sell the loans we
originate to secondary market purchasers. The sale of loans to secondary market
purchasers requires us to use our balance sheet to originate loans as well has
handle the origination process. As a result, we receive a higher premium than if
we were simply referring loans. Premiums are computed based on the nature of the
loan and purchasers specific pricing grid. To proceed, we must appoint a Trustee
Lender. We have chosen Deutsche Bank as our Trustee Lender. A final agreement is
pending. We must have a government guarantor willing to guaranty the loans. We
must execute an agreement with the guarantor and meet the guarantor's
requirements and procedures. Thereafter, we will be required to have a Lender
Identification Number ("LID") from the DoE. Once we are assigned an LID we may
commence lending through our trust.

At this time, we intend to outsource both origination and servicing to companies
with expertise in the origination and servicing of FFELP loans. These companies
handle any borrower inquiries, electronic signatures, recordkeeping
requirements, and procedures for the assignment, sale or transfer of loans. In
addition, the companies perform all reporting functions including informing the
guarantor, credit bureaus and the National Student Loan Data System ("NSLDS").
Loan origination and servicing is an established, efficient industry and we can
choose from a wide range of providers. At this time, we are in discussions with
an established, independent third-party originator and servicer of student
loans.


                                       6
<PAGE>

Company Operations

Marketing

We intend to leverage our brand identity in the higher education financing
space. As a result of our unique name and offerings, to date we have received
approximately $55 million in financing requests with minimal marketing
expenditures through June 30, 2005 and approximately $425 million through the
date of this filing.

We originate loans in a variety of ways. We have established a school channel
sales force to reach out to high schools, colleges and universities. We focus on
certain institutions and continue to nurture key relationships with individuals
who opine credibly about available financing options, universities, independent
researchers and institutions, as well as to work closely with people in the
education finance industry.

We also form referral relationships with third-parties who wish to provide
private loan products to their customer base. Many of these third-parties have a
proven track-record of referring loan volume to other lenders and are interested
in working with us, due to our ability to provide competitive rates and
alternative sources of funding to the existing marketplace.

Additionally, rather than rely exclusively on third-party channels to originate,
we market directly to students. We use a variety of direct marketing strategies
to originate substantial volumes from direct interaction with students and
further build a substantial customer database of individuals seeking out
financing for higher education. In addition, this approach provides MRU with
greater control of its distribution channels relative to its competitors who may
ultimately compete with their current distribution partners.

Our website, www.MyRichUncle.com, is currently the primary means by which we
convey information about our products and interacting with students. In various
sections of the website, students, the financial aid community and others can
learn about our products, read press pieces, and submit questions. Students can
also apply online and receive customer services.

Credit Model

Current traditional credit scoring takes into account only an individual's
history, not his or her future potential. Corporate credit markets take into
account not only a borrower's payment history, but also the expectations of a
borrower's future cash flow as well to determine both credit worthiness and
credit limits. Similarly, we take a more holistic approach to consumer credit by
assessing not only an individual's credit score, but also his or her expected
future repayment capability. We developed a robust proprietary data system that
analyzes a wider range of data to compute an individual's estimated future
repayment capability. This estimate can be used in a variety of ways, including
determining an individual's ability to service debt. This innovation enables us
to more intelligently profile consumers and provide them with customized
financial products. We focus initially on top tier schools in each discipline
because of the predictability and excellent performance of their students, and
will expand into successively lower tiered schools upon improving our
underwriting methodology. Top tier schools are those ranked in the top 1,500
nationally for their disciplines. The median starting salary for our target
schools will be well above national averages. We concentrate on the loan
applicant's future employment prospects and have discovered that unemployment
rates for professional graduate degree holders are extremely low. We take a more
disciplined approach to the market, initially, particularly in our first year
and target highly qualified, professionally inclined students attending top
universities.

Customer Service

We employ a staff of customer service and technical support personnel who
provide support to all users of our services. Our staff provides support via
email and telephone. The responsibilities of our customer service and technical
support personnel include:

o     responding to consumers' questions about the how to use our website

o     following up with consumers on the status of their credit request

o     providing support to technical and systems questions


                                       7
<PAGE>

Additionally, our on-line origination platform offers students the opportunity
to obtain the loan products and other services we intend to provide. Our website
is the primary means by which students request funds. Students access the
website and receive information about the products. Students download
applications or apply directly online. Prior to submission of the student's
application, each student verifies under penalty of perjury that the information
provided in his or her student financing application is true and correct to the
best of his or her knowledge and belief and is made in good faith. The student
authorizes the institution for which he or she is applying for funds to certify
his or her academic status for the purpose of confirming eligibility for funds.
The student also authorizes us, or a servicing agent, to investigate
creditworthiness and to furnish information concerning the application to
consumer reporting agencies and other persons who may legally receive such
information.

Servicing and Collections

At this time we are acting purely as a loan originator and are not actively
servicing our loan portfolio. We have outsourced the servicing function to a
third party, who remits funds collected to us along with monthly activity
reports.

Privacy Policy

We believe that issues relating to privacy and use of personal information of
Internet users are becoming increasingly important as the Internet and its
commercial use grow. As a result, we have adopted a detailed privacy policy that
outlines how we use consumer information and the extent to which lenders and
other third parties may access this information. This policy is prominently
noted on our website. We do not sell, license or rent any personally
identifiable information about our consumers to any third party, and will use
the information about its customers for internal purposes only.

Generally, the privacy provisions of the recently enacted Gramm-Leach-Bliley Act
include the following:

o     prohibit financial institutions from disclosing to unaffiliated third
      parties nonpublic personal information collected from consumers, subject
      to several exceptions;

o     require financial institutions to develop and disclose consumer privacy
      policies;

o     empower federal regulators with the authority to regulate information
      sharing and enforce the provisions of the law; and

o     allow states to pass stricter financial privacy laws.

Compliance with the Gramm-Leach-Bliley Act became mandatory on July 1, 2001. We
work with our lenders to assist them in complying with their obligations under
the act, to the extent possible, through our website.

Intellectual Property

We regard our intellectual property as important to our success. We rely on a
combination of patent, trademark, copyright law, and trade secret protection to
protect our proprietary rights. We have applied for a U.S. patent and filed a
Patent Cooperation Treaty international patent application on our online loan
market process. We are also pursuing the protection of our intellectual property
through trademark and copyright registrations. We have filed an application to
register MyRichUncle(TM) as a trademark in the United States. We consider the
protection of our trademarks to be important for maintenance of our brand
identity and reputation. We cannot assure you that any of these registrations or
applications will not be successfully challenged by others or invalidated
through administrative process or litigation. Further, if our trademark
applications are not approved or granted due to the prior issuance of trademarks
to third parties or for other reasons, there can be no assurance that we would
be able to enter into arrangements with such third parties on commercially
reasonable terms allowing us to continue to use such trademarks. It is possible
that our patent applications will be denied or granted in a very limited manner
such that they offer little or no basis for us to deter competitors from
employing similar technology or processes or allow us to defend ourselves
against third-party claims of patent infringement. In addition, we seek to
protect our proprietary rights through the use of confidentiality agreements and
other contractual arrangements with our employees, affiliates, clients,
licensees, and others.


                                       8
<PAGE>

Employees

As of August 22, 2005 we had 30 full time employees. Our employees are not
represented under any collective bargaining agreements. We consider our
relations with our employees to be good.

Competition

We operate an online loan origination platform. The primary competitive factors
for our origination platform model are:

o     Brand awareness: To be competitive as an origination platform, we must
      have the ability to attract consumer demand in high volumes. We will need
      to make significant investments to build and maintain a compelling brand
      that will compete against current lenders, such as JPMorgan Chase, Bank of
      America and Citibank;

o     Online relationships: To develop our market shares we must provide
      consumers with access to our website from other major portals or Internet
      sites; and

o     Friendliness: We must provide our consumers and lenders with ease of use
      and convenience.

Our success depends upon capturing and maintaining a significant share of
students who obtain loans through the Internet. In order to do this, we must
grow brand awareness among customers. Many of our current competitors, however,
have longer operating histories, larger customer bases, and significantly
greater financial, technical, and marketing resources than we do. In addition,
participants in other areas of the financial services industry may enter the
student loan marketplace without significant barriers to entry.

We believe that our primary competitors are traditional lending institutions.
The loan origination market has a large number of competitors and is dominated
by a number of large institutions including Wells Fargo, Bank of America,
JPMorgan Chase, Citibank, First Marblehead Corp. (through its facilitation
services for leading originators of private loans), and Sallie Mae. Established
entities such as JPMorgan Chase, Pennsylvania Higher Education Administration
and Citibank have also entered the online lending business as a way to diversify
their revenue streams, maintain growth and broaden their appeal to a wider base
of consumers.

Additional competition comes from lending websites, including Citibank and Wells
Fargo. These lenders originate the bulk of their loans via their websites, and
are considered "e-lenders." In addition, some online financial services
companies, including the online brokerages and Internet banks, have extended
consumer products to include online educational lending. These companies
typically operate a consumer-branded website and attract consumers via online
banner ads, key word placement on search engines, partnering with affiliates and
business development deals with other Internet properties, including major
portals. They may also attract consumers via off-line advertising.

Item 2.  Description of Property.

The Company's executive offices are located at 1114 Avenue of the Americas, New
York, New York. The Company has a sub-lease for this property that expires in
May of 2009, unless sooner terminated or canceled pursuant to the terms of the
sub-lease. Rental payments under the sublease amount to $353,510.00 per annum.
The obligations of the Company under the sublease are guaranteed by, Edwin
McGuinn, the Company's Chief Executive Officer, in accordance with a Guaranty
dated April 26, 2005 executed by Mr. McGuinn in favor of the sub-landlord.

The Company also leases additional office space at 600 Lexington Avenue, New
York, New York. The Company has a sub-lease for this property that expires
September 30, 2007. Rental payments under the sublease amount to $139,425 per
annum.

Item 3.  Legal Proceedings.

From time to time, the Company may be involved in litigation relating to claims
arising out of its operations in the normal course of business. We currently are
not a party to any legal proceedings, the adverse outcome of which, in
management's opinion, individually or in the aggregate, would have a material
adverse effect on our results of operations or financial position.


                                       9
<PAGE>

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

None.

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

Our Common Stock has been quoted on the OTC Bulletin Board under the symbol
"MHOI.OB" since July 21, 2004. Prior to that time, our Common Stock was not
actively traded in the public market and was quoted on the OTC Bulletin Board
under the symbol "PCFT.OB," representing Pacific Technology, Inc. The following
table sets forth, for the periods indicated, the high and low bid price
information for the Common Stock as reported on the OTC Bulletin Board. The
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.

                                                           High          Low
Fiscal year 2005
Quarter ended June 30, 2005.............................  $5.06        $3.00
Quarter ended March 31, 2005............................  $6.75        $3.83

Fiscal year 2004
Quarter ended December 31, 2004.........................  $5.50        $3.89
Quarter ended September 30, 2004 .......................  $4.30        $0.01
Quarter ended June 30, 2004............................. $0.065        $0.01
Quarter ended March 31, 2004............................  $0.02        $0.01

As of August 22, 2005, there were approximately 54 holders of record of our
Common Stock.

It is our present policy not to pay cash dividends and to retain future earnings
to support our growth. We do not anticipate paying any cash dividends in the
foreseeable future.

Item 6.  Management's Discussion and Analysis.

Forward Looking Statements

This Form 10-KSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. This Report on Form 10-KSB includes statements regarding
our plans, goals, strategies, intent, beliefs or current expectations. These
statements are expressed in good faith and based upon a reasonable basis when
made, but there can be no assurance that these expectations will be achieved or
accomplished. Sentences in this document containing verbs such as "believe,"
"plan," "intend," "anticipate," "target," "estimate," "expect," and the like,
and/or future-tense or conditional constructions ("will," "may," "could,"
"should," etc.) constitute forward-looking statements that involve risks and
uncertainties. Items contemplating or making assumptions about, actual or
potential future sales, market size, collaborations, and trends or operating
results also constitute such forward-looking statements.

Although forward-looking statements in this Report on Form 10-KSB reflect the
good faith judgment of management, such statements can only be based on facts
and factors currently known by management. Consequently, forward-looking
statements are inherently subject to risks and uncertainties, and actual results
and outcomes may differ materially from the results and outcomes discussed in,
or anticipated by, the forward-looking statements. Factors that could cause or
contribute to such differences in results and outcomes, include without
limitation, those discussed in our Registration Statement on Form SB-2 field
with the Securities and Exchange Commission on August 23, 2004 and in our
definitive Information Statement on Schedule 14C, dated June 15, 2004, as filed
with the Securities and Exchange Commission on June 15, 2004. Readers are urged
not to place undue reliance on these forward-looking statements, which speak
only as of the date of this Quarterly Report. We undertake no obligation to
revise or update any forward-looking statements in order to reflect any event or
circumstance that may arise after the date of this Quarterly Report, other than
as may be required by applicable law or regulation. Readers are urged to
carefully review and consider the various disclosures made by us in the
above-referenced Registration Statement and Information Statement, which attempt
to advise interested parties of the risks and factors that may affect our
business, financial condition, results of operation and cash flows.


                                       10
<PAGE>

Results of Operations

The Company executed on the following major elements of its business plan during
the fiscal year ending June 30, 2005:

      -     Completed 3,250,000 million share offering of the Company's Series
            "A" Preferred Stock resulting in gross proceeds of $11.375 million.


      -     Completed $165 million credit facility with Nomura Credit and
            Capital, Inc. ("NCCI").

      -     Successfully launched the Company's private student loan product
            offering to the public in May, 2005, with the first funded loan
            occurring during June, 2005. The Company closed the fiscal year with
            approximately $158,000 in funded student loans.

      -     Of the Company's $4,047,219 operating expenses for the fiscal year
            ended June 30, 2005, $1,646,143 were non-recurring and related to
            financing and legal fees for the establishment of the NCCI credit
            facility, technology/operations consulting for the development of
            the Company's proprietary loan application, and funds distribution
            platform. The Company is confident that the majority of the costs to
            establish the foundation of its business plan are complete.


                                       11
<PAGE>

      -     The Company established originating bank relationships with Webbank,
            a Utah state chartered bank.

FOR THE FISCAL YEAR ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE
30, 2004.

GROSS REVENUES. For the fiscal year ended June 30, 2005, the Company generated
$239,353 in operating revenues, $238,175 from referral marketing for federally
guaranteed loans. This is compared to $932 in fee revenue for the six months
ended June 30, 2004.

COST OF GOODS SOLD. For the fiscal year ended June 30, 2005, the Company
incurred $189,725 in referral marketing generation fees, $10,185 in originating
bank fees, and $25,070 for third-party servicer. The Company had no cost of
goods sold for the six months ended June 30, 2004.

OPERATING EXPENSES AND NET LOSS. For the fiscal year ended June 30, 2005, our
total operating expenses were $4,117,814, compared to $201,666 for the six
months ended June 30, 2004. The majority of the operating expenses incurred for
the fiscal year were for operations consulting of $855,132 primarily
attributable for outsourcing development of the Company's proprietary loan
application, processing, and funds distribution technology, $762,331 in legal
expenses primarily attributable to legal costs of establishing the NCCI credit
facility and legal review of Company documents for compliance with federal and
state lending requirements, and $28,680 in amortization of deferred NCCI
financing fees. Therefore, our loss from operations for the fiscal period ending
June 30, 2005 was $4,103,441. The Company also had $67,905 in interest expense
and $83,398 in interest income making our net loss before provision for income
taxes $4,071,163. This is compared with the six months ended June 30, 2004 where
the Company had total operating expenses of $201,666, consisting primarily of
$73,936 for founders' salaries and benefits and $61,260 for operational and
development consulting. Therefore, for the six months ended June 30, 2004, the
Company experienced a net loss from operations of $200,734.

LIQUIDITY AND CAPITAL RESOURCES. The Company had cash of $6,894,522, accounts
receivable of $20,246, and total current assets of $7,456,787 as of June 30,
2005. The Company also had $273,073 in net property and equipment, making our
total assets $8,300,643. Our total current liabilities were $973,897 as of June
30, 2005. The Company had $639,326 in accounts payable and $225,644 in accrued
payroll.

For June 30, 2004, the Company had cash of $475,421, accounts receivable of $0,
and total current assets of $567,950. The Company also had $25,357 in net
property and equipment, making our total assets $595,807. The Company has no
long-term commitments, debt, or contingencies.

OUR PLAN OF OPERATIONS FOR THE NEXT TWELVE MONTHS. In the near term, we intend
to use our cash on hand to support the ongoing operating and financing
requirements of implementing our business plan. We believe that our current
liquidity should be sufficient to meet our cash needs for working capital
through the next twelve months. However, if cash generated from operations and
cash on hand are not sufficient to satisfy liquidity requirements, we will seek
to obtain additional debt or equity financing. Additional funding may not be
available when needed or not available at terms acceptable to the Company. If
the Company is required to raise additional financing and if adequate funds are
not available or not available on acceptable terms, the ability to fund
expansion, develop and enhance products and services, or otherwise respond to
competitive pressures may be severely limited. Such a limitation could have a
material adverse effect on our business, financial conditions, results of
operations, and cash flow.

Our long-term liquidity will depend on the Company's ability to execute on our
business plan and to commercialize our financial products and services.

The Company is focused on generating private student loan volume from its three
primary volume channels: direct to consumer, third-party referral marketing
partners, school as lender channels. In the direct to consumer channel, the
Company is also actively focusing on refining its marketing message and the
mediums in which it communicates its message. In the third-party referral
marketing partner channel, the Company is working with referral marketing
partners to train partner staffs and implement processes and systems to enable
referral marketing partners' customers to easily connect to the Company's
products. In the school as lender channel, the Company is continuing efforts to
establish relationships with large volume universities that originate loans to
their students.


                                       12
<PAGE>

Operationally, the Company is refining its internal processes and systems to
shorten the time frame from when a customer initiates a credit request to when
the Company funds the credit request. The Company continues to hone its customer
service experience so that prospective and current borrowers can readily
understand the terms and conditions of the Company's products and more easily
comply with the Company's information requests required to underwrite their
credit requested.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICY AND ESTIMATES

The Company's Management Discussion and Analysis of Financial Condition and
Results of Operations section discusses our condensed consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. On an on-going basis, management evaluates its estimates
and judgments, including those related to revenue recognition, accrued expenses,
financing operations, and contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. The most
significant accounting estimates inherent in the preparation of our financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other sources. These
accounting policies are described at relevant sections in this discussion and
analysis and in the notes to the condensed consolidated financial statements
included in this annual report.

Item 7.  Financial Statements.

The financial statements and related financial statement schedule are included
herein and filed as a part of this report. See Index on page F-1.

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

None.

Item 8A.  Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). This term refers to the controls and procedures of a company that are
designed to ensure that information required to be disclosed by a company in the
reports that it files under the Exchange Act is recorded, processed, summarized,
and reported within the required time periods. Our Chief Executive Officer and
our Chief Financial Officer have evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this annual
report. They have concluded that, as of that date, our disclosure controls and
procedures were effective at ensuring that required information will be
disclosed on a timely basis in our reports filed under the Exchange Act.


                                       13
<PAGE>

(b) Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the period
covered by this report that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

Item 8B.  Other Information

None

                                    PART III

Item 9.  Directors and Executive Officers.

Set forth below is certain information regarding our directors, executive
officers, key personnel, and members of our advisory board.

                        Directors and Executive Officers

Name                      Age     Positions Held and Principal Occupations
                                  During the Past Five Years

Edwin J. McGuinn, Jr.     54      Chairman and CEO - In addition to his duties
                                  at MRU, Mr. McGuinn is also the President of
                                  eLOT, Inc and its subsidiary interest
                                  eLottery.com (formerly known as Executone,
                                  Inc), a telephony services and e-commerce
                                  provider for the governmental lottery
                                  industry. Prior to joining eLOT, Mr. McGuinn
                                  was President and CEO of Automated Trading
                                  Systems, Inc. (LimiTrader.com), an
                                  institutional electronic trading system for
                                  new issue and secondary corporate bonds. From
                                  1992 to 1997, Mr. McGuinn was Senior Managing
                                  Director and Head of the Equity Products for
                                  Rodman & Renshaw and Mabon Securities
                                  specializing in mid-cap research and corporate
                                  finance for consumer services, specialty
                                  finance, health care and technology companies.
                                  From 1981 to 1992, Mr. McGuinn was a managing
                                  director and member of Lehman Brothers Fixed
                                  Income Operating Committee. While at Lehman
                                  Brothers, Mr. McGuinn was responsible for
                                  developing Lehman's global presence in U.S.
                                  fixed income arbitrage and international fixed
                                  income trading, sales and research. During
                                  1973 to 1981, Mr. McGuinn was a Senior Manager
                                  with Ernst & Young in the audit and management
                                  consulting divisions. Mr. McGuinn sits on the
                                  advisory board of a venture capital company,
                                  and the board of directors of eLot, Inc. and
                                  Enigma Software Group, Inc., a New York City
                                  based public company developer of software and
                                  Internet-based systems. Mr. McGuinn received a
                                  Bachelor of Arts in Mathematics and Economics
                                  from Colgate University and a Master of
                                  Science in Accounting from New York
                                  University. He holds NASD Series 7, 8, and 24
                                  licenses along with a CPA license from the
                                  State of New York.


                                       14
<PAGE>

Raza Khan                 27      Co-Founder, President, and Director - Prior to
                                  MRU, Mr. Khan co-founded Silk Road
                                  Interactive, a consulting company advising
                                  clients on business and financial strategy,
                                  brand development and marketing, and
                                  technology. Mr. Khan worked with clients such
                                  as Sony Music, the White House Historical
                                  Association, Computers4Sure, Blades Board
                                  Skate, and RMH, a subsidiary of Advanta, among
                                  others. Mr. Khan has collaborated on the
                                  development of various innovations in the
                                  financial services sector including the
                                  development of human capital based investment
                                  instruments for which he has been cited in
                                  numerous articles and news segments including
                                  the Financial Times and CNN. He has lectured
                                  at the CATO Institute and the Harvard Business
                                  Club regarding investing in human capital. Mr.
                                  Khan also attended New York University.

Vishal Garg               27      Co-Founder, CFO, and Director - Prior to MRU,
                                  Mr. Garg was a Founder & Managing Partner at
                                  1/0 Capital LLC and Schwendiman Technology
                                  Partners LLC - hedge funds focused on
                                  investments in emerging markets with
                                  approximately $125 million in combined firm
                                  assets. At Schwendiman, Mr. Garg managed a
                                  group of funds focused on emerging markets for
                                  large clients such as Bank Julius Baer, Credit
                                  Suisse Group, Republic National Bank / HSBC,
                                  Pictet & Cie., among others. In addition, he
                                  was the portfolio manager for a $15 million
                                  frontier markets managed account for Goldman,
                                  Sachs Commodities Corp. Prior to 1/0 and
                                  Schwendiman, Mr. Garg was with Morgan Stanley
                                  in the Latin America Investment Banking and
                                  M&A groups with a focus on telecom, technology
                                  and media companies. Prior to Morgan Stanley,
                                  he was with VZB Partners, as the Asia Pacific
                                  Portfolio Manager for the Strategos Fund,
                                  managing an investment portfolio of
                                  approximately $50 million, and co-managing a
                                  $10 million managed account for Rockefeller &
                                  Co. Mr. Garg graduated Beta Gamma Sigma with
                                  highest honors from the Stern School of
                                  Business at New York University.

M. Paul Tompkins          45      Director - Mr. Tompkins is the President of
                                  Tompkins Insurance Services Ltd. of Toronto,
                                  Canada, an insurance broker and advisor for
                                  life insurance and related services in estate
                                  planning and for pension and other benefit
                                  programs. He has served in this capacity since
                                  1990.

Richmond T. Fisher        47      Director - Mr. Fischer is the Co-Founder and
                                  the Managing Director of RaceRock Capital
                                  Partners, LLC, a closely held private equity
                                  firm located in Stamford Connecticut that
                                  provides expansion and acquisition capital to
                                  growth companies. Prior to joining RaceRock
                                  Capital Partners, Mr. Fisher was Founder and
                                  Managing Partner of Race Point Partners, LLC,
                                  a specialized business consulting firm serving
                                  private equity, venture capital, banks, and
                                  other organizations in need of specialized
                                  executive skills in the area of risk
                                  assessment, stressed ands distressed portfolio
                                  assessment, interim executive leadership and
                                  business turnaround. Prior to founding Race
                                  Point Partners, Mr. Fisher was Senior Vice
                                  President of Global Sales with Standard and
                                  Poors Investment Services and a member of
                                  their senior operating committee from January
                                  2000 through April 2002. In addition, Mr.
                                  Fisher Held the position of President and
                                  Chief Executive Officer at Standard and Poors
                                  Securities, Inc. in 1998 and 1999. Mr. Fisher
                                  currently holds NASD Series 7, 24 and 63
                                  licenses.

                                       15
<PAGE>

C. David Bushley          58      Director - Mr. Bushley was elected to the
                                  Board on July 8, 2005. Mr. Bushley is the
                                  National Compensation Practice Leader for the
                                  Financial Services Industry at Mellon
                                  Financial Corporation and was formerly on the
                                  Board of Directors at Education Lending Group,
                                  Inc. Prior to joining Mellon Financial Corp.,
                                  Mr. Bushley served as the Senior Vice
                                  President and Chief Financial Officer of
                                  Amdura Corporation and as the Senior Vice
                                  President and the Chief Lending Officer for
                                  Mortgage Banking at the Dime Savings Bank.
                                  Prior to this, Mr. Bushley spent 9 years with
                                  Merrill Lynch & Co. where he held a variety of
                                  senior management positions, including the
                                  position of President of Merrill Lynch
                                  Mortgage Company.

                               Key Personnel

Name                      Age       Position
Phillip J. Sbrochi        56        Special Securitization Advisor
Randall E. Tokar          37        Senior Vice President of Operations
Keith A. Landis           41        Managing Director of Special Product Sales
Walter B. Balmas          38        Senior Vice President of Origination
Jason M. Hare             31        Vice President of Capital Markets
Robert Shaughnessy        53        Vice President of Customer Service
Randy L. Rasmussen        40        Managing Director of Finance & Controller

Phillip J. Sbrochi, Special Securitization Advisor - Mr. Sbrochi spent 29 years
at Bank One Corp. where he was most recently the Head of National Retail
Lending, which included the Student Loan Business for Bank One Ohio Corp. Bank
One was the second largest Federal Loan player after Sallie Mae. Mr. Sbrochi is
presently working as a consultant for a Midwestern regional bank, guiding the
development of a liquidation model for delinquent and charged-off loans. Prior
to consulting, Mr. Sbrochi founded Break-Thru Financial Company, LLC. At Bank
One, Mr. Sbrochi previously served as Manager in Installment Loans and Vice
President of the Retail Loan Division, managing the origination and servicing of
all retail loan products, such as Student Loans. Later, Mr. Sbrochi became
Executive Vice President and Manager of the National Retail Lending Division and
moved to Banc One Capital Corporation as Managing Director of the Specialty
Finance Mezzanine Fund. Mr. Sbrochi holds an MBA from Capital University in
Columbus Ohio and a BS in Business Administration from The Ohio State
University.

Randall E. Tokar, Senior Vice President of Operations - From July 2001 to
joining the Company, Mr. Tokar held various operations and finance positions
within General Electric's Consumer Finance business. Most recently, he was
responsible for the quality of new product introduction and retail partner
integration across the company's North and South American business units. Prior
to that time, Mr. Tokar was Director of Business Performance Management for
Adero, Inc. (Business units later acquired by Inktomi and Colt Telecom), a
venture stage Internet infrastructure firm. His role there was implementation of
Business Process Design, Management and Re-engineering across the enterprise,
focusing on Operations, Application Engineering and IT. Mr. Tokar was also an
Associate with Booz-Allen & Hamilton's New York City office, where he led client
work addressing enterprise capabilities that foster and drive successful
strategic change. Mr. Tokar has progressive operational and nuclear engineering
experience from the United States Navy. Mr. Tokar has a BA from The Pennsylvania
State University and an MBA from Harvard Business School.

Keith A. Landis, Managing Director of Special Product Sales - Mr. Landis is a
highly successful executive in the student loan and financial services industry.
He was an executive at Campus Door, which he helped to build into a major player
in the alternative student loan business, with over 200% growth and annual loan
originations of over $400 million. Prior to Campus Door, Mr. Landis was the
President and CEO of Lancorp Mortgage Services, which he built to over 100
employees and $300 million in sales from 1988 to 1999. Lancorp had licenses in
26 states, 6 offices and $80 million in lines of credit from banks. Prior to
Lancorp, Mr. Landis was the President and CEO of Willow Abstract, a title search
agency which he grew to over $100 million in revenues. Mr. Landis has a BA from
Messiah College and an MBA from the University of Phoenix.


                                       16
<PAGE>

Walter B. Balmas, Senior Vice President of Origination - Prior to MRU, Mr.
Balmas was the Director of Loan Origination at Allstudent, a leading federal
student loan company in California. Mr. Balmas managed all aspects of
origination and servicing, helping to grow Allstudent to over $200 million in
originations with a portfolio of over $1 billion in loans. Prior to Allstudent,
Mr. Balmas was a Project Manager at ACS; Assistant Director of Financial Aid at
the University of Southern California, which is one of the largest private loan
originating schools in the United States; and he was the Vice President of
Lending at the University of Southern California Federal Credit Union, which he
grew from zero to over $50 million in originations within a 2 year period. Mr.
Balmas has a BA from the University of Southern California.

Jason Hare, Vice President of Capital Markets - Prior to MRU Holdings Inc., Mr.
Hare was an Assistant Vice-President in the Asset Finance Group at Financial
Security Assurance ("FSA"). Mr. Hare was responsible for originating,
underwriting, and structuring domestic asset-backed securitizations and lending
facilities, primarily for consumer receivables. While in the Asset Finance
Group, Mr. Hare was responsible for underwriting approximately $10 billion of
sub-prime and near-prime auto receivables. He also participated in underwriting
$500 million of other assets including small-medium size ticket equipment
leases, manufactured housing, and credit cards. Mr. Hare was also responsible
for managing the relationships among FSA, issuers, bankers, and rating agencies.
Prior to joining the Asset Finance Group, Mr. Hare served a member of a group
that supported the Asset Finance Group through monthly monitoring and reporting
of transaction performance. Mr. Hare has a Bachelors Degree in Finance from
Boston College and a MBA from Fordham University.

Robert Shaughnessy, Vice President of Customer Service - Prior to MRU Holdings,
Inc., Mr. Shaughnessy led the Customer Service Department for FreshDirect, a
successful venture-backed on-line grocery concern based in New York with
operations in the New York metro area. Before that, Mr. Shaughnessy held
progressive positions in Customer Service departments for Fortune 100 companies
including United Airlines and Virgin Atlantic Airlines as well as in start-up
enterprises. Mr. Shaughnessy has received corporate and industry accolades for
his customer service management prowess, including the prestigious Call Center
Magazine Award for Call Center of the Year.

Randy L. Rasmussen, Managing Director of Finance & Controller - From May 2001 to
joining the Company, Mr. Rasmussen held the position of Controller for several
New York based companies including Waterfront Media, Inc., a capitalized
venture-stage Internet media company, and venture-stage software companies
CapitalThinking, Inc. (acquired by CapitalStream, Inc.) and NewVision
Hypersystems, Inc. (acquired by SS&C Technologies). Prior to that time, Mr.
Rasmussen was Director of Finance and Administration for Always-On Inc.
(acquired by Veracicom Inc.), a venture stage Internet applications service
provider. Mr. Rasmussen has progressive financial experience from The Associated
Press, Knight-Ridder, Roadway Express and KPMG. Mr. Rasmussen has a BSBA in
Accounting and Finance from Creighton University and an MBA from the University
of Pittsburgh. Additionally, Mr. Rasmussen is a CPA from the State of
Pennsylvania.

                                 Advisory Board

Stan Davis - Mr. Davis is an independent author and public speaker based in
Boston as well as the senior research fellow at the Ernst & Young Center for
Business Innovation in Cambridge, Massachusetts. With a doctorate in the social
sciences and an honorary doctorate in humanities, he then spent two decades on
the faculties of the Harvard Business School, and Columbia and Boston
University. He is well known as a visionary business thinker who advises leading
companies and fast-growing enterprises around the world, and as the author of
many influential, best-selling books including Blur, Future Perfect, 2020
Vision, and The Monster Under the Bed. Future Wealth, his tenth book, speaks
about the securitization of human capital.

Robert A. Farmer - Mr. Farmer is chairman of the board of directors and chief
executive officer of AMG International. Mr. Farmer was the vice chairman and is
still a director of International Data Group (IDG), the world's largest
information technology publishing firm. Mr. Farmer was treasurer of the
Democratic National Committee from 1989 to 1991, when he resigned to become
treasurer of the first Clinton/Gore presidential campaign. Following Mr.
Clinton's election, Mr. Farmer resigned from IDG to become chairman and chief
executive officer of GEC Alsthom, N.A., a manufacturer of high-speed rail
equipment, power plants and cruise ships. Mr. Farmer was subsequently appointed
the U.S. Consul General to Bermuda, a position he held from 1994 to 1999. Mr.
Farmer holds a law degree from Harvard Law School and a BA from Dartmouth
College.


                                       17
<PAGE>

Mark Kantrowitz - Mark Kantrowitz is the founder and publisher of Finaid.org,
the definitive site for financial aid and the director of advanced projects for
FastWeb, the largest and most popular free scholarship search. FinAid has a
stellar reputation in the educational and financial aid community as the best
Web site of its kind. Every major newspaper and personal finance magazine in the
country has reviewed the site. Previously, Mr. Kantrowitz was a research
scientist at Just Research, the US software laboratory for Justsystem
Corporation of Japan and a Ph.D. candidate in computer science at Carnegie
Mellon University (CMU). He has Bachelor of Science degrees in mathematics and
philosophy from MIT and a Master of Science degree in computer science from CMU.
He has previously been employed at the MIT Artificial Intelligence Laboratory,
the Center for Excellence in Education, Bitstream Inc., and the Planning
Research Corporation.

Michael L. Robertson - Michael L. Robertson is a highly successful and widely
recognized entrepreneur focusing on new markets. He spearheaded revolutions in
the media and software business and is currently the founder and chief executive
officer of Lindows.com, a consumer software company that creates choice in the
operating system marketplace. Mr. Robertson served as Chief Executive Officer
and Chairman of the Board at MP3.com since March 1998.

Gobind Sahney - Gobind Sahney is the founder of GO Services, a leading servicing
and collections agency. Mr. Sahney also founded YES, Inc. a successful consumer
finance (credit card) marketing organization affiliated with MBNA America Bank.
He is also the founder of Sahney and Company, an investment management firm
specializing in private equity and alternative investment deal/transaction
evaluation and valuation for companies interested in the Asia-Europe-USA
corridor. He also advises clients in the specific functions of corporate finance
and mergers and acquisitions. Mr. Sahney has over 15 years experience in
corporate finance, credit and business management; has past experience in public
and private accounting; in mortgage banking, and with a private investment
partnership. He serves as director of Herbonics, Inc. and International Metal
Products (Asia) Pte.Ltd.(Singapore). Mr. Sahney is also a member of the Babson
College Board of Trustees, the Babson College Asian Advisory Board, and a
trustee of The Scripps Whittier Institute for Diabetes (Chairman, 2001).

Code of Ethics

We have adopted a Code of Ethics which applies to our Chief Executive Officer
("CEO"), Chief Financial Officer ("CFO") and other senior financial and embodies
principles to which such officers are expected to adhere and advocate. These
tenets for ethical business conduct encompass rules regarding both individual
and peer responsibilities, as well as responsibilities to the Company's
employees, the public and other stockholders. Our Code of Ethics is available at
the Company's website at www.mruholdings.com.

We will continue to review and, when appropriate, take additional steps in the
future to continue to strengthen and develop our corporate governance practices
to ensure that we are focused on the long-term benefit of our stockholders.

Board of Directors

Communications with the Board of Directors. The Board has established a process
for stockholders to communicate questions or concerns about the Company directly
to the Board. Such communications may be confidential or anonymous and may be
submitted in writing to the Company's Corporate Secretary, Louis W. Zehil, at
1345 Avenue of the Americas, New York, New York 10105.

Compensation of Directors. We reimburse the non-employee directors for their
reasonable out-of-pocket expenses related to attending meetings of the Board.
Management directors do not receive any compensation for their services as
directors other than the compensation they receive as our officers.

Committees. The Board has established three standing committees comprised
entirely of independent directors and has adopted written charters for each of
these committees. Charters for each standing committee are available at the
Company's website at www.mruholdings.com.


                                       18
<PAGE>

Audit Committee and Audit Committee Financial Expert. The Audit Committee was
established on May 11, 2005 and is primarily concerned with the integrity of the
Company's financial statements, compliance with legal and regulatory
requirements, independence and qualifications of our independent auditor and
performance of the company's internal audit function. The Audit Committee is
chaired by Mr. Fisher who the Board has determined is an "audit committee
financial expert" as defined under applicable rules of the Securities and
Exchange Commission. The Audit Committee will meet four times in fiscal year
2005/2006.

Nominating Committee. The Nominating Committee was established on July 21, 2005
and is responsible for the establishing criteria for director nominees and
identifying qualified individuals for nomination as director nominees, annual
reviews of director compensation and benefits, oversight of annual
self-evaluations of the Board and its committees as well as director performance
and Board dynamics. The Nominating Committee makes recommendations to the entire
board concerning the structure and membership of the Board and its committees.
The Nominating Committee will consider stockholder recommendations for director
nominees which should be sent to the Nominating Committee c/o our Corporate
Secretary, Louis W. Zehil, at 1345 Avenue of the Americas, New York, New York
10105. Mr. Tompkins is the Chairman of the Nominating Committee. The Nominating
Committee is expected to meet once in fiscal year 2005/2006.

Compensation Committee. The Compensation Committee was established on July 21,
2005 and is responsible for reviewing and approving executive compensation and
monitoring management resources, structure, succession planning, development,
selection process and performance of key executives. The Compensation Committee
administers the Company's equity compensation plans. The Chairman of the
Compensation Committee is Mr. Bushley. The Compensation Committee is expected to
meet twice in fiscal year 2005/2006.

Procedure for the Consideration of Board Candidates Submitted by Stockholders.
The Board of Directors has adopted procedures for the submission of director
nominees by stockholders for consideration by the Board. If a determination is
made that an additional director is required, the Board will consider nominees
submitted by the Company's stockholders. Stockholders can submit qualified names
of nominees for director by writing to our Corporate Secretary, Louis W. Zehil
at 1345 Avenue of the Americas, New York, New York 10105. For such nominee to be
considered, the nomination must be received by the Corporate Secretary not less
than 90 days prior to the date of the Company's proxy materials for the
preceding year's annual meeting and the nomination must include the following
information:

      o     the name and address of the proposing stockholder as it appears on
            the Company's books and the number of shares of Common Stock that
            are owned beneficially by such stockholder (if the stockholder is
            not a holder of record appropriate evidence of the stockholder's
            ownership must be submitted with the nomination);

      o     the name, address and contact information of the nominee;

      o     a statement of the nominee' business and educational experience;

      o     detailed information about any relationship or understanding between
            the proposing stockholder and the nominee or any other stockholder
            or group of stockholders; and

      o     a statement that the nominee is willing to be considered and willing
            to serve as a director if nominated and elected.


                                       19
<PAGE>

Item 10.  Executive Compensation.

Summary Compensation Table

The following table summarizes the annual compensation paid to the Company'
named executive officers for the three years ended December 31, 2005, 2004 and
2003:

<TABLE>
<CAPTION>
                                                                                                Securities
                                                                                                Underlying
                                                            Annual                             Options/SARs
          Name and Position                   Year          Salary           Bonus                 (#)
---------------------------------------      -----        ---------       ------------     ---------------------
<S>                                           <C>          <C>              <C>                 <C>
Ed McGuinn                                    2005         $200,000         $50,000
Chief Executive Officer                       2004         $83,500            --                 410,000
                                              2003            --              --                    --

Raza Khan                                     2005         $150,000         $50,000
President                                     2004         $120,332           --                 200,000
                                              2003            --              --                    --

Vishal Garg                                   2005         $150,000         $50,000
Executive Vice President and                  2004         $120,332           --                 200,000
Chief Financial Officer                       2003            --              --                    --
</TABLE>


Option/SAR Grants in Last Fiscal Year

<TABLE>
<CAPTION>
                                         No. of          Percent of Total
                                       Securities         Options Granted        Exercise Of
                                       Underlying         to Employees in         Base Price        Expiration
Name and Position                        Options            Fiscal Year             ($/SH)             Date
---------------------------------     --------------    --------------------    ---------------    -------------
<S>                                      <C>                  <C>                   <C>              <C> <C>
Edwin J. McGuinn                         410,000              42.26%                $1.60            7/8/2014
Chief Executive Officer
Raza Khan                                200,000               20.6%                $1.00            7/8/2014
President
Vishal Garg
Chief Financial Officer                  200,000               20.6%                $1.00            7/8/2014
</TABLE>

Aggregate Option Exercises in Last Fiscal Year

None of our named executive officers exercised stock options in 2005.

Employment Agreements

We have entered into an executive employment agreement with our Chairman and
CEO, Edwin J. McGuinn, Jr. The employment agreement provides for an initial
annual base salary of $200,000. The agreement provides for a minimum annual
increase in base salary of 10% and additional increases at the discretion of the
Board of Directors. The employment agreement also provides for a minimum annual
performance-based bonus of $50,000 and bonuses in excess thereof at the
discretion of the Board of Directors. Under the agreement, Mr. McGuinn will also
receive options to purchase up to 410,000 shares of our common stock made
available under our 2004 Omnibus Incentive Plan (the "Plan"), which vest
quarterly and become fully exercisable on November 1, 2005. Subsequent grants of
stock options shall vest and be exercisable pursuant to the terms and conditions
of the Plan. The exercise price of the 410,000 options will be $1.60 per share
and the exercise price of any future option will be the fair market value of our
common stock on the date such options are granted. Under the agreement, the
Company is required to grant Mr. McGuinn 250,000 options at an exercise price of
$3.00 per share, 25% of which vest and become exercisable on the grant date and
an additional 12.5% vesting and becoming exercisable on the first day of each
quarter thereafter, if the Company increases the number of shares of Common
Stock available under the Plan.


                                       20
<PAGE>

Mr. McGuinn's employment agreement expires on November 11, 2007, subject to
extension or earlier termination. The agreement provides that if Mr. McGuinn is
terminated by us without cause or if he terminates his employment agreement for
good reason, he will be entitled to his base salary, guaranteed bonus and all
health and benefits coverage until the expiration date of his employment
agreement, plus one year of severance pay. At the election of Mr. McGuinn, in
the event of such termination, his base salary and guaranteed bonus is payable
by the Company within 45 days after his last day of employment. Additionally,
all stock options granted to him will immediately vest.

Under the agreement, good reason includes any of the following occurring without
the consent of Mr. McGuinn: an adverse change resulting in a diminution in his
duties and responsibilities; an adverse change in his title; a change in control
of the Company, or a significant relocation of the Company's office. His
employment agreement prohibits Mr. McGuinn from competing with us, or soliciting
our customers or employees, in the United States for a period of two years from
the date of their termination of employment.

We have also entered into executive employment agreements with Vishal Garg and
Raza Khan. Each employment agreement provides for an initial annual base salary
of $150,000. The agreements provide for a minimum annual increase in base salary
of 10% and additional increases at the discretion of the Board of Directors.
Each employment agreement also provides for a minimum annual performance-based
bonus of $50,000 and bonuses in excess thereof at the discretion of the Board of
Directors. Under the agreements, each executive will also receive options to
purchase up to 20% of the shares of our common stock made available under the
Plan, 50% of which will vest immediately and the remaining 50% will vest on the
first anniversary of the grant date. Subsequent grants of stock options shall
vest and be exercisable pursuant to the terms and conditions of the Plan.
Additionally, during each calendar quarter during the term of the agreement,
each executive will receive options to purchase an additional 5% of the shares
of our common stock made available under the Plan. The exercise price of all
options will be the fair market value of our common stock on the date such
options are granted.

Each employment agreement expires on April 1, 2009, subject to extension or
earlier termination. Each employment agreement provides that if Messrs. Garg and
Khan are terminated by us without cause or if they terminate their employment
agreements for good reason, they will be entitled to their base salary,
guaranteed bonus and all health and benefits coverage until the expiration date
of their employment agreements, plus one year of severance pay. At the election
of the executive in the event of such termination, the executives base salary
and guaranteed bonus is payable by the Company within 45 days after his last day
of employment. Additionally, all stock options granted to them will immediately
vest.

Under the agreements, good reason includes any of the following occurring
without the consent of the executive: an adverse change resulting in a
diminution in the executive's duties and responsibilities; an adverse change in
the executive's title; or a change in control of the Company. Each employment
agreement prohibits Messrs. Garg and Khan from competing with us, or soliciting
our customers or employees, in the United States for a period of one year from
the date of their termination of employment.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information regarding the beneficial
ownership of our Common Stock on a diluted basis including the exercise of all
options and warrants as of August 22, 2005 by (i) each person who, to our
knowledge, beneficially owns, or upon completion of the Offering will
beneficially own, more than 5% of our Common Stock; (ii) each of our directors
and executive officers of the Company; and (iii) all of our executive officers
and directors as a group:


                                       21
<PAGE>

<TABLE>
<CAPTION>
                                                                                           Percent
                        Name of Beneficial Owner                   Amount (1)              of Class
-----------------------------------------------------------    -------------------     ---------------
<S>                                                                        <C>                    <C>
Edwin J. McGuinn, Jr.(2)                                                   555,670                1.89
Raza Khan(3)                                                             3,440,569               13.44
Vishal Garg(4)                                                           3,286,238               12.84
M. Paul Tompkins(5)                                                         79,434                   *
Richmond T. Fisher                                                               0                   *
C. David Bushley                                                                 0                   *
Nomura Credit & Capital, Inc. (6)                                        6,545,004               25.57
                                                               ---------------------------------------
All directors and named executive officers as a group                    7,361,911               28.17
</TABLE>

      (1)   Beneficial ownership is calculated based on 29,356,959 shares of our
            Common Stock on a diluted basis including the exercise of all
            options and warrants exercisable within 60 days of August 22, 2005.
            Beneficial ownership is determined in accordance with Rule 13d-3 of
            the Securities and Exchange Commission. The number of shares
            beneficially owned by a person includes shares of common stock
            subject to options or warrants held by that person that are
            currently exercisable or exercisable within 60 days of August 22,
            2005. The shares issuable pursuant to those options or warrants are
            deemed outstanding for computing the percentage ownership of the
            person holding these options and warrants but are not deemed
            outstanding for the purposes of computing the percentage ownership
            of any other person. The persons and entities named in the table
            have sole voting and sole investment power with respect to the
            shares set forth opposite the stockholder's name, subject to
            community property laws, where applicable.

      (2)   Includes 98,785 shares of Common Stock underlying warrants and
            410,000 shares of Common Stock underlying options exercisable within
            60 days of August 22, 2005.

      (3)   Includes 858,006 shares of Common Stock underlying warrants and
            100,000 shares of Common Stock underlying options exercisable within
            60 days of August 22, 2005.

      (4)   Includes 865,586 shares of Common Stock underlying warrants and
            100,000 shares of Common Stock underlying options exercisable within
            60 days of August 22, 2005.

      (5)   Includes 9,434 shares of Common Stock underlying warrants and 20,000
            shares of Common Stock underlying options exercisable within 60 days
            of August 22, 2005.

      (6)   Includes 6,545,004 shares of Common Stock underlying warrants
            exercisable within 60 days of August 22, 2005.

Equity Compensation Plan Information

The following table sets forth, as of June 30, 2005, the number of securities
outstanding under the Company's stock option plan, the weighted average exercise
price of such options, and the number of options available for grant under such
plan:

<TABLE>
<CAPTION>
                                                                                                         (c)
                                                                                                 Number of securities
                                                                                                 remaining available
                                                     (a)                                         for future issuance
                                                  Number of                      (b)                 under equity
                                               securities to be          Weighted average            compensation
                                              issued on exercise          exercise price of        plans (excluding
                                                of outstanding               outstanding              securities
                                              options, warrants           options, warrants          reflected in
                                                  and rights                  and rights              column(a))
                                             ---------------------      ---------------------     -------------------
<S>                                                <C>                         <C>                     <C>
Equity compensation plans approved by
security holders                                   978,500                     $1.13                   530,000
Equity compensation plans non approved
by security holders                                   --                         --                       --

Totals                                             978,500                     $1.13                   530,000
</TABLE>

Item 12.  Certain Relationships and Related Transactions.

On March 28, 2003, the Company issued for cash, a convertible note payable in
the amount of $110,000 to a related party. Pursuant to the terms of the
agreement, the note accrued interest at the rate of 8% per annum and was due and
payable, together with interest, on May 26, 2004. The note contained a
conversion feature allowing the related party, with proper notice, to convert
the note into 5,500,000 shares of the Company's Common Stock at $0.02 per share.
In connection with the Share Exchange this note was forgiven and is no longer
outstanding.


                                       22
<PAGE>

Item 13.  Exhibits and Reports on Form 8-K.

(a) The following exhibits are to be filed as part of this report:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                                     Incorporated by Reference to Filings Indicated
Exhibit No.      Description
-----------------------------------------------------------------------------------------------------------------------
<S>              <C>                                                 <C>
3.1              Certificate of Incorporation                        Exhibit 3.1 to Company's Registration Statement
                                                                     on Form SB-2 (No. 333-67222)
-----------------------------------------------------------------------------------------------------------------------
3.2              Certificate of Amendment to the Certificate of      Exhibit 3.1 to Company's Form 8-K dated March 7,
                 Incorporation                                       2003
-----------------------------------------------------------------------------------------------------------------------
3.3              Certificate of Designation                          Exhibit 4.1 to Company's Current Report on Form
                                                                     8-K filed on February 10, 2005 (No. 001-33487)
-----------------------------------------------------------------------------------------------------------------------
3.4              By-laws                                             Exhibit 3.2 to Company's Registration Statement
                                                                     on Form SB-2 (File No. 333-67222)
-----------------------------------------------------------------------------------------------------------------------
4                2004 Ominibus Incentive Plan                        Exhibit 4(c) to Company's Registration Statement
                                                                     on Form SB-2 filed on August 24, 2004
-----------------------------------------------------------------------------------------------------------------------
10.1             Credit Agreement between MRU Lending, Inc. and      Exhibit 10.1 to Company's Registration Statement
                 Nomura Credit & Capital, Inc., dated February 4,    on Form SB-2 filed on March 22, 2005
                 2005
-----------------------------------------------------------------------------------------------------------------------
10.2             Employment Agreement dated November 17, 2004        Exhibit 10 to Company's Pre-Effective Amendment
                 between the Company and Edwin J. McGuinn, Jr.       No. 1 to Form SB-2 filed on November 18, 2004
-----------------------------------------------------------------------------------------------------------------------
10.3             Loan Program Agreement dated July 25, 2005          Exhibit 10.1 to Company's Current Report on Form
                 between MRU Lending, Inc. and Doral Bank NY, FSB    8-K filed on July 29, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.4             Loan Sale Agreement dated July 25, 2005 between     Exhibit 10.2 on Company's Current Report on Form
                 MRU Lending, Inc. and Doral Bank NY, FSB            8-K filed on July 29, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.5             Sublease between ISID Finance of America, Inc.      Exhibit 10.1 to Company's Current Report on From
                 and MRU Holdings, Inc. dated April 26, 2005         8-K filed on May 18, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.6             Guaranty of Edwin McGuinn in favor of ISID          Exhibit 10.2 to Company's Current Report on Form
                 Finance of America, Inc. dated April 26, 2005       8-K filed on May 18, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.7             Consent to Sublease of 1114 Trizechahn-Swig,        Exhibit 10.3 to Company's Current Report on Form
                 L.L.C.                                              8-K filed on May 18, 2005.
-----------------------------------------------------------------------------------------------------------------------
14               Code of Ethics                                      Exhibit 14 to Company's Annual Report on Form
                                                                     10-KSB filed on March 22, 2005 (File No.
                                                                     000-33487)
-----------------------------------------------------------------------------------------------------------------------
21               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               Consent of Bagell, Josephs & Company, LLC           Exhibit 23(a) to Company's Annual Report on Form
                                                                     10-KSB filed on March 22, 2005 (File No.
                                                                     000-33487)
-----------------------------------------------------------------------------------------------------------------------
31.1             Rule 13a-14(a)/15d-14(a) Certification of Chief
                 Executive Officer*
-----------------------------------------------------------------------------------------------------------------------
31.2             Rule 13a-14(a)/15d-14(a) Certification of Chief
                 Executive Officer*
-----------------------------------------------------------------------------------------------------------------------
32               Section 1350 Certifications*
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

----------------
* filed herewith


                                       23
<PAGE>

Item 14.  Principal Accountant Fees and Services

Bagell, Josephs & Company, L.L.C. was the independent registered public
accounting firm that audited the Company's financial statements for the fiscal
years ending June 30, 2005 and December 31, 2004. The aggregate fees billed by
Bagell, Josephs & Company in connection with audit and non-audit services
rendered for fiscal years 2005 and 2004 are as follows:

--------------------------------------------------------------------------------
                                Fiscal Year 2005          Fiscal Year 2004
--------------------------------------------------------------------------------
Audit Fees(1)                        $57,500                   $10,070
--------------------------------------------------------------------------------
Audit-related Fees(2)                  $0                        $0
--------------------------------------------------------------------------------
Tax Fees(3)                            $0                        $0
--------------------------------------------------------------------------------
All Other Fees(4)                      $0                      $18,437
--------------------------------------------------------------------------------
TOTAL                                $57,500                   $28,508
--------------------------------------------------------------------------------

(1)   Represents fees for professional services rendered in connection with the
      audit of our annual financial statements, reviews of our quarterly
      financial statements and advice provided on accounting matters that arose
      in connection with audit services.

(2)   Represents fees for professional services related to the audits of our
      employee benefit plan and other statutory or regulatory filings.

(3)   Represents fees for tax services provided in connection with general tax
      matters.

(4)   All other fees represent fees for services provided to the Company that
      are not otherwise included in the categories above which consist of fees
      for professional services related to the review of our annual and
      quarterly financial statements for various filings made by the Company
      with the Commission.


                                       24
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company has duly caused this report to be
signed on its behalf by the undersigned, thereby duly authorized on September
28, 2005.

                                      MRU HOLDINGS, INC.


                                      /s/ Edwin J. McGuinn, Jr.
                                      ------------------------------------------
                                      By: Edwin J. McGuinn, Jr.
                                      Its: Chief Executive Officer

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


                                      /s/ Edwin J. McGuinn, Jr.
Date: September 28, 2005              ------------------------------------------
                                      By: Edwin J. McGuinn, Jr.
                                      Its:  Chief Executive Officer and Director


                                      /s/ Vishal Garg
Date: September 28, 2005              ------------------------------------------
                                      By: Vishal Garg
                                      Its:  Chief Financial Officer and Director


                                      /s/ Raza Khan
Date: September 28, 2005              ------------------------------------------
                                      By: Raza Khan
                                      Its:  President and Director


                                       25
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                                     Incorporated by Reference to Filings Indicated
Exhibit No.      Description
-----------------------------------------------------------------------------------------------------------------------
<S>              <C>                                                 <C>
3.1              Certificate of Incorporation                        Exhibit 3.1 to Company's Registration Statement
                                                                     on Form SB-2 (No. 333-67222)
-----------------------------------------------------------------------------------------------------------------------
3.2              Certificate of Amendment to the Certificate of      Exhibit 3.1 to Company's Form 8-K dated March 7,
                 Incorporation                                       2003
-----------------------------------------------------------------------------------------------------------------------
3.3              Certificate of Designation                          Exhibit 4.1 to Company's Current Report on Form
                                                                     8-K filed on February 10, 2005 (No. 001-33487)
-----------------------------------------------------------------------------------------------------------------------
3.4              By-laws                                             Exhibit 3.2 to Company's Registration Statement
                                                                     on Form SB-2 (File No. 333-67222)
-----------------------------------------------------------------------------------------------------------------------
4                2004 Ominibus Incentive Plan                        Exhibit 4(c) to Company's Registration Statement
                                                                     on Form SB-2 filed on August 24, 2004
-----------------------------------------------------------------------------------------------------------------------
10.1             Credit Agreement between MRU Lending, Inc. and      Exhibit 10.1 to Company's Registration Statement
                 Nomura Credit & Capital, Inc., dated February 4,    on Form SB-2 filed on March 22, 2005
                 2005
-----------------------------------------------------------------------------------------------------------------------
10.2             Employment Agreement dated November 17, 2004        Exhibit 10 to Company's Pre-Effective Amendment
                 between the Company and Edwin J. McGuinn, Jr.       No. 1 to Form SB-2 filed on November 18, 2004
-----------------------------------------------------------------------------------------------------------------------
10.3             Loan Program Agreement dated July 25, 2005          Exhibit 10.1 to Company's Current Report on Form
                 between MRU Lending, Inc. and Doral Bank NY, FSB    8-K filed on July 29, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.4             Loan Sale Agreement dated July 25, 2005 between     Exhibit 10.2 on Company's Current Report on Form
                 MRU Lending, Inc. and Doral Bank NY, FSB            8-K filed on July 29, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.5             Sublease between ISID Finance of America, Inc.      Exhibit 10.1 to Company's Current Report on From
                 and MRU Holdings, Inc. dated April 26, 2005         8-K filed on May 18, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.6             Guaranty of Edwin McGuinn in favor of ISID          Exhibit 10.2 to Company's Current Report on Form
                 Finance of America, Inc. dated April 26, 2005       8-K filed on May 18, 2005.
-----------------------------------------------------------------------------------------------------------------------
10.7             Consent to Sublease of 1114 Trizechahn-Swig,        Exhibit 10.3 to Company's Current Report on Form
                 L.L.C.                                              8-K filed on May 18, 2005.
-----------------------------------------------------------------------------------------------------------------------
14               Code of Ethics                                      Exhibit 14 to Company's Annual Report on Form
                                                                     10-KSB filed on March 22, 2005 (File No.
                                                                     000-33487)
-----------------------------------------------------------------------------------------------------------------------
21               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               Consent of Bagell, Josephs & Company, LLC           Exhibit 23(a) to Company's Annual Report on Form
                                                                     10-KSB filed on March 22, 2005 (File No.
                                                                     000-33487)
-----------------------------------------------------------------------------------------------------------------------
31.1             Rule 13a-14(a)/15d-14(a) Certification of Chief
                 Executive Officer*
-----------------------------------------------------------------------------------------------------------------------
31.2             Rule 13a-14(a)/15d-14(a) Certification of Chief
                 Executive Officer*
-----------------------------------------------------------------------------------------------------------------------
32               Section 1350 Certifications*
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

----------------
* filed herewith

<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                        PAGE(S)

Consolidated Financial Statements:

Report of Independent Registered Public Accounting Firm                  F-1

Consolidated Balance Sheet as of June 30, 2005                           F-2

Consolidated Statements of Operations for the Six Months Ended
    June 30, 2005 (Audited) and 2004 (Unaudited) and the Years
    Ended December 31, 2004 and 2003 (Audited)                           F-3

Consolidated Statements of Changes in Stockholders' Equity (Deficit)
    For the Six Months Ended June 30, 2005 (Audited)
    and the Years Ended December 31, 2004 and 2003 (Audited)             F-4

Consolidated Statements of Cash Flow for the Six Months Ended
    June 30. 2005 (Audited) and 2004 (Unaudited) and the Years
    Ended December 31, 2004 and 2003 (Audited)                           F-5

Notes to Financial Statements                                            F-6


                                      F-1
<PAGE>

                        BAGELL, JOSEPHS & COMPANY, L.L.C.
                          Certified Public Accountants

                               High Ridge Commons
                                 Suites 400-403
                           200 Haddonfield Berlin Road
                           Gibbsboro, New Jersey 08026
                        (856) 346-2828 Fax (856) 346-2882

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
MRU Holdings, Inc.
New York, New York

We have audited the accompanying consolidated balance sheet of MRU Holdings,
Inc. and Subsidiaries (the "Company) as of June 30, 2005 and the related
consolidated statements of operations, consolidated changes in stockholders'
equity (deficit), and consolidated cash flows for the six months ended June 30,
2005 and the years ended December 31, 2004 and 2003. We have also included for
comparative purposes, the unaudited related consolidated statement of
operations, and the consolidated cash flows for the six months ended June 30,
2004. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of MRU
Holdings, Inc. and Subsidiaries as of June 30, 2005 and the results of its
operations, changes in stockholders' equity (deficit) and cash flow for the six
months June 30, 2005 and the years ended December 31, 2004 and 2003 in
conformity with accounting principles generally accepted in the United States of
America.

BAGELL, JOSEPHS & COMPANY, L.L.C.
BAGELL, JOSEPHS & COMPANY, L.L.C.
Certified Public Accountants
Gibbsboro, New Jersey
September 21, 2005

                 MEMBER OF:
                         AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
                         NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
                         PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS


                                      F-2
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLDIATED BALANCE SHEET
                               AS OF JUNE 30. 2005

                                      ASSETS

<TABLE>
<CAPTION>
                                                                           2005
                                                                       ------------
<S>                                                                    <C>
CURRENT ASSETS:
  Cash and cash equivalents                                            $  6,894,522
  Accounts receivable                                                        20,246
  Student loans receivable                                                  158,479
  Collateral deposit - student loans                                        250,000
  Prepaid expenses and other current assets                                 133,540
                                                                       ------------

    Total Current Assets                                                  7,456,787
                                                                       ------------

  Fixed assets, net of depreciation                                         273,073
                                                                       ------------

OTHER ASSETS:
  Security deposits                                                         392,963
  Deferred financing fees, net                                              177,820
                                                                       ------------

    Total Other Assets                                                      570,783
                                                                       ------------

TOTAL ASSETS                                                           $  8,300,643
                                                                       ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                                $    748,253
  Accrued payroll                                                           225,644
                                                                       ------------

      Total Current Liabilities                                             973,897
                                                                       ------------

LONG-TERM LIABILITIES:
  Deferred origination fee revenue                                            7,388
                                                                       ------------

      Total Long-term Liabilities                                             7,388
                                                                       ------------

      Total Liabilities                                                     981,285
                                                                       ------------

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, $.001 par value; 5,000,000 shares authorized  and        3,250,006
   shares issued and outstanding                                              3,250
Common  Stock, $.001 par value; 50,000,000 shares authorized,
   13,664,502 issued and outstanding                                         13,664
Additional paid-in capital                                               13,808,134
Accumulated deficit                                                      (6,505,690)
                                                                       ------------

      Total Stockholders' Equity (Deficit)                                7,319,358
                                                                       ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)                    $  8,300,643
                                                                       ============
</TABLE>

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


                                      F-3
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          SIX MONTHS ENDED JUNE 30, 2005 (AUDITED) AND 2004 (UNAUDITED)
            AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (AUDITED)

<TABLE>
<CAPTION>
                                                       Six Months Ended                     Years Ended
                                                       ----------------                     -----------
                                                  June 30,         June 30,        December 31,      December 31,
                                                    2005             2004              2004              2003
                                                 (Audited)        (Unaudited)        (Audited)         (Audited)
                                               ------------      ------------      ------------      ------------
<S>                                            <C>               <C>               <C>               <C>
OPERATING REVENUE:
   Referral income                             $    238,175      $         --      $         --      $         --
   Referral marketing fee income                        881                --                --                --
   Loan portfolio interest income                       297                --                --                --
   Consulting income                                     --               932             8,177             2,406
                                               ------------      ------------      ------------      ------------

       Total Operating Revenue                      239,353               932             8,177             2,406
                                               ------------      ------------      ------------      ------------

COST OF SALES                                       224,980                --                --                --
                                               ------------      ------------      ------------      ------------

GROSS PROFIT                                         14,373               932             8,177             2,406
                                               ------------      ------------      ------------      ------------

OPERATING EXPENSES
   General and administrative expenses            4,047,219           200,574         1,855,634            48,633
   Depreciation and amortization                     70,595             1,092            13,782             1,547
                                               ------------      ------------      ------------      ------------

       Total Operating Expenses                   4,117,814           201,666         1,869,416            50,180
                                               ------------      ------------      ------------      ------------

NET LOSS                                         (4,103,441)         (200,734)       (1,861,239)          (47,774)
                                               ------------      ------------      ------------      ------------

OTHER INCOME (LOSS)
   Interest income                                   83,398             1,345            13,931                --
   Interest expense                                 (67,905)               --           (22,133)               --
   Other expenses                                    (2,000)               --            (1,992)               --
   Unrealized (loss) on investment                       --            (1,500)               --            (1,500)
   Other gain                                        18,785                --                --                --
                                               ------------      ------------      ------------      ------------

        Total Other Income (Loss)                    32,278              (155)          (10,194)           (1,500)
                                               ------------      ------------      ------------      ------------

NET LOSS BEFORE PROVISION FOR INCOME TAXES       (4,071,163)         (200,889)       (1,871,433)          (49,274)
   Provision for income taxes                            --                --                --                --
                                               ------------      ------------      ------------      ------------

NET (LOSS)                                       (4,071,163)         (200,889)       (1,871,433)          (49,274)

LESS PREFERRED STOCK DIVIDEND                      (121,086)               --                --                --
                                               ------------      ------------      ------------      ------------

LOSS APPLICABLE TO COMMON SHARES               $ (4,192,249)     $   (200,889)     $ (1,871,433)     $    (49,274)
                                               ============      ============      ============      ============

NET LOSS PER BASIC AND DILUTED SHARES          $      (0.31)     $      (0.01)     $      (0.14)     $      (0.01)
                                               ============      ============      ============      ============

WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING                            13,608,511        10,300,000        13,209,331        10,300,000
                                               ============      ============      ============      ============
</TABLE>

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


                                      F-4
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE SIX MONTHS ENDED
           JUNE 30. 2005 (AUDITED) AND 2004 (UNAUDITED) AND THE YEARS
                   ENDED DECEMBER 31, 2004 AND 2003 (AUDITED)


<TABLE>
<CAPTION>
                                                                   Preferred Stock                 Common Stock
                                                            ---------------------------    ---------------------------
                                                                Shares        Amount          Shares          Amount
                                                            ------------   ------------    ------------    ------------
<S>                                                         <C>            <C>                <C>          <C>
Balance, December 31, 2002
Old Company (Pacific Technology)                                      --   $         --       6,030,000    $      6,030

Acquisition, March 28, 2003                                           --             --       6,895,000           6,895

Expenses paid by officer                                              --             --              --              --

Net (loss)                                                            --             --              --              --
                                                            ------------   ------------    ------------    ------------

Balance, December 31, 2003                                    12,925,000         12,925          29,786         (48,500)

Net (loss) for the six months ended
  June 30, 2004 before recapitalization - net                         --             --              --              --
                                                            ------------   ------------    ------------    ------------

   Subtotal                                                           --             --      12,925,000          12,925

Recapitilization elimination of
Pacific Technology                                                    --     (9,325,000)         (9,325)        (29,786)
                                                            ------------   ------------    ------------    ------------

   Subtotal                                                           --             --       3,600,000           3,600

Common shares issued in share exchange
  with Iempower for recapitalization                                  --             --       6,863,433           6,863

Additional common stock issued to shareholders
  of Iempower attributable to the recapitalization
  of July 8, 2004                                                     --             --         466,519             466

Issuance of shares in conversion
  of bridge loan and accrued interest                                 --             --         468,750             469

Common stock issued for cash, July 2004 - net of expenses             --             --       2,150,000           2,150

Common stock issued for cash, October 2004                            --             --          37,500              38

Net (loss) for the year ended December 31, 2004                       --             --              --              --
                                                            ------------   ------------    ------------    ------------

Balance, December 31, 2004                                            --   $         --      13,586,202    $     13,586
                                                            ------------   ------------    ------------    ------------

Issuance of preferred stock                                    3,250,006   $      3,250              --              --

Exercise of warrants at $2.00 per share                               --             --          40,000              40

Exercise of warrants at $1.60 per share                               --             --           7,100               7

Exercise of warrants at $0.50 per share                               --             --          31,200              31

Net (loss) for the six months
  ended June 30, 2005                                                 --             --              --              --
                                                            ------------   ------------    ------------    ------------

Balance, June 30, 2005                                         3,250,006   $      3,250      13,664,502    $     13,664
                                                            ============   ============    ============    ============

<CAPTION>
                                                            Additional
                                                              Paid-In       Accumulated
                                                              Capital        (Deficit)          Total
                                                            ------------    ------------    ------------
<S>                                                         <C>             <C>             <C>
Balance, December 31, 2002
Old Company (Pacific Technology)                            $     (3,020)   $     (8,738)   $     (5,728)

Acquisition, March 28, 2003                                       30,450              --          37,345

Expenses paid by officer                                           2,356              --           2,356

Net (loss)                                                            --         (39,762)        (39,762)
                                                            ------------    ------------    ------------

Balance, December 31, 2003                                        (5,789)

Net (loss) for the six months ended
  June 30, 2004 before recapitalization - net                         --        (113,800)       (113,800)
                                                            ------------    ------------    ------------

   Subtotal                                                       29,786        (162,300)       (119,589)

Recapitilization elimination of
Pacific Technology                                               162,300         123,189
                                                            ------------    ------------    ------------

   Subtotal                                                           --              --           3,600

Common shares issued in share exchange
  with Iempower for recapitalization                             470,150        (442,008)         35,005

Additional common stock issued to shareholders
  of Iempower attributable to the recapitalization
  of July 8, 2004                                                   (466)             --              --

Issuance of shares in conversion
  of bridge loan and accrued interest                            749,531              --         750,000

Common stock issued for cash, July 2004 - net of expenses      2,455,674              --       2,457,824

Common stock issued for cash, October 2004                        59,962              --          60,000

Net (loss) for the year ended December 31, 2004                       --      (1,871,433)     (1,871,433)
                                                            ------------    ------------    ------------

Balance, December 31, 2004                                  $  3,734,851    $ (2,313,441)   $  1,434,996
                                                            ------------    ------------    ------------

Issuance of preferred stock                                    9,965,601              --       9,968,851

Exercise of warrants at $2.00 per share                           79,960              --          80,000

Exercise of warrants at $1.60 per share                           12,153              --          12,160

Exercise of warrants at $0.50 per share                           15,569              --          15,600

Net (loss) for the six months
  ended June 30, 2005                                                 --      (4,192,249)     (4,192,249)
                                                            ------------    ------------    ------------

Balance, June 30, 2005                                      $ 13,808,134    $ (6,505,690)   $  7,319,358
                                                            ============    ============    ============
</TABLE>

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


                                      F-5
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE SIX MONTHS ENDED
           JUNE 30. 2005 (AUDITED) AND 2004 (UNAUDITED) AND THE YEARS
                   ENDED DECEMBER 31, 2004 AND 2003 (AUDITED)

<TABLE>
<CAPTION>
                                                                             Six Months Ended                  Years Ended
                                                                             ----------------                  -----------
                                                                        June 30,        June 30,       December 31,    December 31,
                                                                           2005           2004              2004           2003
                                                                         (Audited)     (Unaudited)       (Audited)       (Audited)
                                                                       ------------    ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                            $ (4,192,249)   $   (200,889)   $ (1,871,433)   $    (49,274)
                                                                       ------------    ------------    ------------    ------------
   Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                                           70,595           1,092          13,782           1,547
     Unrealized gain (loss) on investment                                        --           1,500              --           1,500

  Changes in assets and liabilities
     (Increase) in accounts receivable                                      (20,246)             --              --              --
     (Increase) in student loans receivable                                (158,479)             --              --              --
     (Increase) decrease in prepaid expenses and other current assets        41,016          (1,451)       (180,032)          4,476
     (Increase) in security deposits                                       (386,938)        (95,000)             --              --
     (Increase) in collateral deposit - student loans                      (250,000)             --              --              --
     Increase in accrued payroll                                            225,644              --              --              --
     Increase in deferred loan origination fee revenue                        7,388              --              --              --
     Increase (decrease) in accounts payable and accrued expenses           286,670            (849)        458,482           1,100
                                                                       ------------    ------------    ------------    ------------

     Total adjustments                                                     (184,350)        (94,708)        292,232           8,623
                                                                       ------------    ------------    ------------    ------------

     Net cash used in operating activities                               (4,376,599)       (295,597)     (1,579,201)        (40,651)
                                                                       ------------    ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Acquisition of fixed assets                                           (247,867)         (9,081)        (70,409)         (6,928)
     Increase (decrease) in investment                                           --          (1,500)             --          (1,500)
                                                                       ------------    ------------    ------------    ------------

      Net cash used in investing activities                                (247,867)        (10,581)        (70,409)         (8,428)
                                                                       ------------    ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITES
    Proceeds from conversion of warrants                                    107,760          31,550              --              --
    Proceeds from bridge loan                                                    --         750,000         750,000              --
    Proceeds from sale of stock and equity - net of expenses                     --              --       2,548,438              --
    (Increase) in deferred financing fees                                  (206,500)             --              --              --
    Proceeds from issuance of preferred stock shares - net                9,968,851              --              --              --
                                                                       ------------    ------------    ------------    ------------

       Net cash provided by financing activities                          9,870,111         781,550       3,298,438              --
                                                                       ------------    ------------    ------------    ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      5,245,645         475,372       1,648,828         (49,079)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                           1,648,877              49              49          49,128
                                                                       ------------    ------------    ------------    ------------

CASH AND CASH EQUIVALENTS - END OF PERIOD                              $  6,894,522    $    475,421    $  1,648,877    $         49
                                                                       ============    ============    ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

CASH PAID DURING THE PERIOD FOR:
    Interest expense                                                   $     67,786    $         --    $         --    $         --
                                                                       ============    ============    ============    ============

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
    Issuance of common stock for conversion of bridge loan             $         --    $         --    $    750,000    $         --
                                                                       ============    ============    ============    ============
</TABLE>

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


                                      F-6
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 1 -    ORGANIZATION AND BASIS OF PRESENTATION

            The Company was incorporated in Delaware on March 2, 2000 as Dr.
            Protein.Com, Inc. and on March 7, 2003 changed its name to Pacific
            Technology, Inc. On July 6, 2004 the Company changed its name to MRU
            Holdings, Inc. On May 20, 2005, the Board of Directors of the
            Company approved a change in the Company's year-end from December
            31st to June 30th.

            On July 8, 2004 the Company acquired 100% of the outstanding capital
            stock of Iempower, Inc., a privately-held Delaware corporation doing
            business as MyRichUncle ("Iempower"), pursuant to a Share Exchange
            Agreement dated as of April 13, 2004 with Iempower and it
            stockholders in exchange for 6,863,433 shares of common stock $0.001
            par value per share, which the Company issued to the stockholders of
            Iempower, together with 2,136,567 common stock purchase warrants to
            the warrant holders of Iempower (each warrant is exercisable to
            purchase one share of common stock, and the warrants have a weighted
            average exercise price of $0.45 per share). Concurrently, and in
            connection with the exchange of shares, the Company also sold 100%
            of the outstanding capital stock of its Nevada subsidiary, Pacific
            Technology, Inc., to four of the Company's principal stockholders
            prior to the exchange of shares in exchange for 9,325,000 shares of
            the Company's common stock, which has been retired. Although the
            Company acquired Iempower as a result of the share exchange, the
            stockholders of Iempower hold a majority of the voting interest in
            the Company. Additionally, the share exchange resulted in Iempower's
            management and Board of Directors assuming operational control of
            the company.

            The Company has permanently discontinued the business of selling and
            distributing optical storage devices and has adopted the Iempower
            business plan directed primarily at providing students with funds
            for higher education using a proprietary approach of analyzing
            future repayment potential to profile and provide customized
            financial products to students. The Company partners with lenders to
            market, process and originate student loans. The Company also plans
            to originate federal loans, which are student loans guaranteed by
            the federal government and private loans. The Share Exchange has
            been accounted for as a reverse merger under the purchase method of
            accounting. Accordingly, Iempower will be treated as the continuing
            entity for accounting purposes and the historical financial
            statements presented will be those of Iempower.

NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Principles of Consolidation

            The consolidated financial statements include the accounts of the
            Company and all its wholly owned subsidiaries. All significant
            intercompany accounts and transactions have been eliminated in
            consolidation.

            Use of Estimates

            The preparation of financial statements in conformity with
            accounting principles generally accepted in the United States of
            America requires management to make estimates and assumptions that
            affect the reported amounts of assets and liabilities and
            disclosures of contingent assets and liabilities at the date of the
            financial statements and the reported amounts of revenues and
            expenses during the reporting period. Actual results could differ
            from those estimates.


                                      F-7
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            Revenue Recognition

            The Company records its revenue on the accrual basis, whereby
            revenue is recognized when earned and expenses recognized when
            incurred.

            The Company follows SFAS 91, "Accounting for Nonrefundable Fees and
            Costs Associated with Originating or Acquiring Loans and Initial
            Direct Costs of Leases", whereby loan origination fees are deferred
            and recognized over the life of the loan as an adjustment of yield
            (interest income).

            Cash and Cash Equivalents

            The Company considers all highly liquid debt instruments and other
            short-term investments with an initial maturity of three months or
            less to be cash equivalents.

            The Company maintains cash and cash equivalent balances at a
            financial institution that is insured by the Federal Deposit
            Insurance Corporation up to $100,000. At June 30, 2005, the
            Company's uninsured cash balance was $6,805,965.

            Fixed Assets

            Fixed assets are stated at cost. Depreciation is computed primarily
            using the straight-line method over the estimated useful life of the
            assets.

            Computer network equipment                  3-5 Years

            Leasehold improvements                      3 Years

            Furniture and fixtures                      5 Years

            Income Taxes

            The income tax benefit is computed on the pretax income (loss) based
            on the current tax law. Deferred income taxes are recognized for the
            tax consequences in future years of differences between the tax
            basis of assets and liabilities and their financial reporting
            amounts at each year-end based on enacted tax laws and statutory tax
            rates.

            Advertising

            The Company expenses the costs associated with advertising and
            marketing as incurred. Advertising and marketing expenses, included
            in the statements of operations for the six months ended June 30,
            2005 and 2004 were $124,504 and $42,432, respectively, and for the
            years ended December 31, 2004 and 2003 were $17,577 and $0,
            respectively.

            (Loss) Per Share of Common Stock

            Historical net (loss) per common share is computed using the
            weighted average number of common shares outstanding. Diluted
            earnings per share (EPS) includes additional dilution from common
            stock equivalents, such as stock issuable pursuant to the exercise
            of stock options and warrants.


                                      F-8
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            (Loss) Per Share of Common Stock (Continued)

            The following is a reconciliation of the computation for basic and
            diluted EPS:

<TABLE>
<CAPTION>
                                                                 Six Months Ended                Years Ended
                                                                 ----------------                -----------
                                                             June 30,        June 30,      December 31,    December 31,
                                                               2005            2004             2004           2003
                                                             (Audited)      (Unaudited)      (Audited)      (Audited)
                                                           ------------    ------------    ------------    ------------
<S>                                                        <C>             <C>             <C>             <C>
            Net (loss)                                     $ (4,192,249)   $   (200,889)   $ (1,871,433)   $    (49,274)
                                                           ============    ============    ============    ============

            Weighted - average common                        13,608,511      10,300,000      13,209,331      10,300,000
                 shares Outstanding (Basic)

            Weighted - average common stock equivalents:
                  Stock options                                      --              --              --              --
                  Warrants                                           --              --              --              --
                                                           ------------    ------------    ------------    ------------

            Weighted - average common
               shares outstanding (Diluted)                  13,608,511      10,300,000      13,209,331      10,300,000
                                                           ============    ============    ============    ============
</TABLE>

            For June 30, 2005 and 2004 and December 31, 2004 and 2003, warrants
            and options were not included in the computation of diluted EPS
            because inclusion would have been antidilutive.

            Fair Value of Financial Instruments

            The carrying amount reported in the balance sheet for cash and cash
            equivalents, accounts payable and accrued expenses approximate fair
            value because of the immediate or short-term maturity of these
            financial instruments.

            Stock Based Compensation

            The Company has elected to follow Accounting Principles Board
            Opinion No. 25 "Accounting for Stock Issued to Employees" (APB No.
            25), and related interpretations, in accounting for their employee
            stock options rather than the alternative fair value accounting
            allowed by SFAS No. 123, "Accounting for Stock- Based Compensation",
            and has adopted the enhanced disclosure provisions of SFAS No. 148,
            "Accounting for Stock Base Compensation - Transition and
            Disclosures", an amendment of SFAS No. 123. APB No. 25 provides that
            the compensation expense relative to the Company's employee stock
            options is measured based on the intrinsic value of the stock
            option. SFAS No.123 requires companies that continue to follow APB
            No. 25 to provide a pro-forma disclosure of the impact of applying
            the fair value method of SFAS No. 123 and, as amended, SFAS 148.


                                      F-9
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            Recent Accounting Pronouncements

            In December 2004, the FASB issued Financial Accounting Standards No.
            123 (revised 2004) (FAS 123R), "Share-Based Payment, " FAS 123R
            replaces FAS No. 123, "Accounting for Stock-Based Compensation", and
            supersedes APB Opinion No. 25, "Accounting for Stock Issued to
            Employees." FAS 123R requires compensation expense, measured as the
            fair value at the grant date, related to share-based payment
            transactions to be recognized in the financial statements over the
            period that an employee provides service in exchange for the award.
            The Company intends to adopt FAS 123R using the "modified
            prospective" transition method as defined in FAS 123R. Under the
            modified prospective method, companies are required to record
            compensation cost prospectively for the unvested portion, as of the
            date of adoption, of previously issued and outstanding awards over
            the remaining vesting period of such awards. FAS 123R is effective
            January 1, 2006. The Company is evaluating the impact of FAS 123R on
            its' results and financial position.

            Recent Accounting Pronouncements (Continued)

            In May 2003, the FASB issued SFAS No. 150, "Accounting for certain
            Financial Instruments with Characteristics of both Liabilities and
            Equity" ("SFAS No. 150"). SFAS 150 requires that certain financial
            instruments issued in the form of shares that are mandatorily
            redeemable as well as certain other financial instruments be
            classified as liabilities in the financial statements. SFAS No. 150
            is effective for financial instruments entered into or modified
            after May 31, 2003. The adoption of SFAS No. 150 did not have a
            material affect on the Company's reported financial results.

NOTE 3-     FIXED ASSETS

            Fixed assets consist of the following at June 30, 2005:

                                                                  2005
                                                               ---------

            Equipment                                          $ 302,803
            Leasehold improvements                                21,994
            Furniture and fixtures                                 5,884
                                                               ---------
                                                                 330,681
            Less: accumulated depreciation                       (57,608)
                                                               ---------

            Total fixed assets                                 $ 273,073
                                                               =========

            Depreciation expense for the six months ended June 30, 2005 and 2004
            was $41,915 and $1,092, respectively. Depreciation expense for the
            years ended December 31, 2004 and 2003 was $13,782 and $1,547,
            respectively.


                                      F-10
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 4-     PROVISION FOR INCOME TAXES

            Income taxes are provided for the tax effects of transactions
            reported in the financial statements and consist of taxes currently
            due. Deferred taxes related to differences between the basis of
            assets and liabilities for financial and income tax reporting will
            either be taxable or deductible when the assets or liabilities are
            recovered or settled. The difference between the basis of assets and
            liabilities for financial and income tax reporting are not material
            therefore, the provision for income taxes from operations consist of
            income taxes currently payable.

            There was no provision for income taxes for the six months ended
            June 30, 2005 and 2004 and the years ended December 31, 2004 and
            2003.

            At June 30, 2005 and 2004, the Company had accumulated deficits
            approximating $6,505,690 and $642,098 respectively, available to
            offset future taxable income through 2023.

                                            2005           2004
                                        -----------    -----------

            Deferred tax assets         $ 1,951,707    $   192,629
            Less: valuation allowance    (1,951,707)      (192,629)
                                        -----------    -----------

            Totals                      $        --    $        --
                                        ===========    ===========

            Common Stock

            There were 50,000,000 and 22,100,000 shares of common stock
            authorized, with 13,664,502 and 10,300,000 shares issued and
            outstanding at June 30, 2005 and 2004, respectively. The par value
            for the common stock is $.001 per share.

            The following details the stock transactions for the six months
            ended June 30, 2005.

            The Company issued 40,000 shares of common stock upon the exercise
            of warrants at a value of $2.00 per share.

            The Company issued 7,600 shares of common stock upon the exercise of
            warrants at a value of $1.60 per share.

            The Company issued 31,200 shares of common stock upon the exercise
            of warrants at a value of $0.50 per share.


                                      F-11
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 5-     STOCKHOLDERS' EQUITY (CONTINUED)

            Preferred Stock

            There were 5,000,000 and 3,000,000 shares of preferred stock
            authorized, with 3,250,006 and 900,000 issued and outstanding as of
            June 30, 2005 and 2004. The par value for the preferred shares is
            $.001 per share.

            On January 27, 2005, the Company filed a Designation of Powers,
            Preferences and Rights of Series A Convertible Preferred Stock, par
            value $0.001 per share (the Certificate of Designation) with the
            Secretary of State of the State of Delaware. Pursuant thereto, the
            Company authorized 4,500,000 shares of its preferred stock to be
            designated as Series A Convertible Preferred Stock and issued or
            offered at a purchase price equal to $3.50 per share. A total of
            3,250,006 shares of the Series A Preferred Stock has been sold by
            the Company in the private placement transaction

            The Series A Preferred Stock is convertible at any time into common
            stock of the Company at a price of $3.50 per share subject to
            adjustment for future stock issuances, splits, dividends, and
            recapitalizations. Cumulative dividends on the Series A Preferred at
            a rate equal to 1) 7% of the Series A Original Issue Price annually
            through the first anniversary of the Original Issue Date and 2) 4%
            of the Series A Original Issue Price annually thereafter, are
            payable quarterly in arrears in cash or, at the option of the
            Company, in additional shares of the Series A Preferred. The Series
            A Preferred Stock has no voting rights except on certain defaults in
            payment of dividends and as otherwise required by law.

            The Company has the right to redeem the Series A Preferred Stock at
            any time if the common stock into which the shares of Series A
            Preferred Stock are to be converted has been registered and listed
            for trading on the market where the common stock of the Company is
            then traded and the closing price of the common stock exceeds a 15%
            premium of the conversion price per share for 20 out of 30
            consecutive trading days.

            In the event of a change in control of the Company, the holders of
            the shares of Series A Preferred Stock will have the right to
            request and receive, within the specified periods, redemption of
            their shares of Preferred Stock at $3.50 per share plus any accrued
            and unpaid dividends.

            On February 4, 2005, contemporaneously with and as a condition to
            the transaction described, the Company sold 3,250,006 shares of its
            Series A Convertible Preferred Stock (Series A Preferred Stock) at a
            price of $3.50 per share to certain accredited investors in a
            private placement transaction. The Company received gross aggregate
            proceeds of $11,375,000 from the sale of these securities.

Warrants

            At June 30, 2005 and 2004 there were 11,413,906 and 4,228,000
            warrants outstanding respectively.


                                      F-12
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 6-     LONG TERM DEBT

            On April 1, 2004, the Company received a bridge loan in the amount
            of $750,000, bearing interest at 5% per year based on a 360 day
            year. The note was to mature the earliest of 1.) September 30, 2004
            or 2.) Consummation of the Share Exchange. If the Share Exchange was
            consummated prior to the maturity date, the Lender shall cause
            Pacific Technology and Brean Murray & Company to exchange the note
            for the number of units equal to the quotient obtained by dividing
            (a) the sum of the outstanding principal and all other amounts due
            hereunder on the date of the Share Exchange by (b) $1.60 (the per
            unit price of a unit sold to an investor in the offering. As of July
            8, 2004, the entire principal and accrued interest on the bridge
            loan was converted in connection with the Share Exchange into
            475,000 shares of the Company's common stock at $1.60 per share and
            warrants to acquire 88,433 shares of the common stock at an exercise
            price of $2.00 per share.

NOTE 7 -    CREDIT LINE WITH UNIVERSAL FINANZ HOLDING AG.

            On, October 25, 2004 the Company entered into a commitment letter
            with Universal Finanz Holding AG ("Universal") under which Universal
            offered to provide up to $50 million of credit support to be used as
            collateral security for the obligations of MRU Universal Guarantee
            Agency, Inc. (the "Guarantor"), a wholly owned subsidiary of the
            Company, as a guarantor of student loans and lines of credit
            arranged by the Company or banks and other financial institutions.
            Universal's commitment is conditioned on the satisfaction of certain
            conditions including the execution of an agreement providing
            Universal the right to purchase up to 65% ownership interest in the
            Guarantor and pay the purchase price for such ownership interest by
            releasing the Guarantor from its obligation to repay an equal amount
            of its outstanding obligations to Universal.

NOTE 8-     CREDIT LINE WITH NOMURA CREDIT & CAPITAL, INC.

            On February 4, 2005, MRU Lending, Inc. ("MRU Lending"), a
            wholly-owned subsidiary of MRU Holdings, Inc. ("the Company")
            entered into a credit agreement (the "Credit Agreement"), by and
            among Nomura Credit & Capital, Inc. as Agent ("Nomura"), a
            subsidiary of Nomura Holdings, Inc., and the institutions from time
            to time party thereto as lenders, pursuant to which the lenders have
            agreed to provide MRU Lending with a $165 million secured revolving
            credit facility for the origination and warehousing of private
            student loans. The loans under the Credit Agreement are secured by,
            among other things, a lien on all of the student loans financed
            under the Credit Agreement and any other student loans owned by MRU
            Lending and not otherwise released, together with a pledge of 100%
            of the capital stock of MRU Lending. The Credit Agreement contains
            terms and provisions (including representations, covenants and
            conditions) customary for transactions of this type. The Company
            paid $206,500 in deferred financing fees in association with the
            Credit Agreement. Amortization expense of $28,680 associated with
            the financing fees was included in the Statement of Operations for
            the six months ended June 30, 2005.

            The Credit Agreement also provides for customary events of default,
            including failure to pay principal, interest or fees when due,
            failure to comply with covenants, breaches of certain
            representations and warranties, the bankruptcy of MRU Lending or MRU
            Lending Holdco LLC, MRU Lending's direct parent and wholly-owned
            subsidiary of the Company, failure to maintain certain net worth
            ratios, a material adverse change in MRU Lending's ability to
            originate student loans, and failure of the Company to indirectly
            own 100% of the outstanding capital stock of MRU Lending. The
            facility will have a term of three years. As a result of this
            transaction, Nomura was granted a warrant, subject to certain terms
            and conditions, to purchase common stock of the Company equal to
            27.5% ownership interest in the Company on a diluted basis.


                                      F-13
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 9-     PATENTS

            The Company has a patent pending for a business method. This
            business method enables the company to provide customized financial
            products to consumers.

NOTE 10-    COMMITMENTS AND CONTINGENCIES

            Employment Agreements

            The Company has four employment agreements with key management
            personnel. The terms of these agreements range between one and five
            years.

            Operating Leases

            The Company leases office and other corporate space under leases
            with terms between one and four years. Monthly payments under the
            current leases range between $1,525 and $29,459. The Company is
            required to pay its pro-rata share of costs relating to certain of
            the leased facilities.

            The following is a schedule by years of future minimum rental
            payments required under the operating leases which have an initial
            or remaining non-cancelable lease term in excess of one year as of
            June 30, 2005:

            For the Years Ending June 30,

                     2006                    $  561,072
                     2007                       502,226
                     2008                       390,689
                     2009                       324,050
                                             ----------
                                             $1,778,037
                                             ==========


                                      F-14
<PAGE>

                       MRU HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30. 2005 AND 2004
                 AND THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 11-    SUBSEQUENT EVENTS

            On July 25, 2005, MRU Lending, Inc. ("MRUL"), a wholly-owned
            subsidiary of the Company entered into a definitive agreement with
            Doral Bank NY, FSB, ("the Bank"). The agreement provides for the
            Bank's origination of private student loans to qualified applicants
            participating in MRUL's private student loan program, the marketing
            of such program and solicitation and qualification of such
            applicants by MRUL and the sale by the Bank and purchase by MRUL of
            such student loans. The agreement between MRUL and the Bank is
            evidenced by a Loan Program Agreement and a Loan Sale Agreement both
            dated July 25, 2005. Pursuant to the Loan Program Agreement, the
            Bank has agreed to not originate or sell private student loans for
            or to any party other than MRUL. The Agreements have a 36 month term
            and are automatically renewable for up to two successive terms of 12
            months.

            On September 20, 2005, the 2005 Annual Meeting of Stockholders was
            held at the principal offices of the Company. At the Annual Meeting
            the Company's stockholders voted on, and approved by requisite
            stockholder vote, the following matters: 1) the election of six
            directors to the Company's Board of Directors, 2) Adoption of the
            2005 Consultant Incentive Plan, 3) Adoption of an Amendment and
            Restatement to the 2004 Omnibus Incentive Plan, and 4) Approval of
            an Amendment to the Company's Certificate of Incorporation to
            increase the number of authorized shares of common stock from
            50,000,000 shares to 200,000,000 shares and the number of authorized
            shares of preferred stock from 5,000,000 shares to 25,000,000.


                                      F-15