UNITED
      STATES


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, AS AMENDED


FOR
      THE
      YEAR ENDED DECEMBER 31, 2006








COMMISSION
      FILE NUMBER 0-28606








TURNAROUND
      PARTNERS, INC.








(Formerly
      EMERGE CAPITAL CORP.)





(Formerly
      NUWAVE TECHNOLOGIES, INC.)




(EXACT
      NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)





NEVADA
              22-3387630(STATE
                  OR OTHER JURISDICTION
              (IRS
                  EMPLOYER IDENTIFICATION NO.)OF
                  INCORPORATION OR ORGANIZATION)109
                  NORTH POST OAK LANE, SUITE 422
                HOUSTON,
                  TEXAS
              77024(ADDRESS
                  OF PRINCIPAL EXECUTIVE
                  OFFICES)
              (ZIP
                  CODE)


(713)
      621-2737





(REGISTRANT'S
      TELEPHONE NUMBER, INCLUDING AREA CODE)





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





NONE





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





COMMON
      STOCK PAR VALUE $0.001 PER SHARE


(TITLE
      OF
      CLASS)








Indicate
      by check mark whether the issuer is not required to file reports pursuant
      to Section 13 or 15(d) of the Exchange Act.





Yes o
      No x





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Exchange Act during the preceding twelve
      (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
      ninety (90) days.





Yes x
      No o





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-B is not contained herein, and will not be contained, to the best
      of
      registrant's knowledge, in definitive proxy or information statements incorporated
      by reference in Part III of this Form 10-KSB or any amendment to this
      Form
      10-KSB. x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act.





Yes o
      No x





The
      Company's revenues for its most recent fiscal year were $1,127,219.





The
      aggregate market value of the voting stock held by non-affiliates of the registrant
      as of April 10, 2007 was $367,702 based on a value of $0.013 per share.





The
      number of shares of common stock, par value $0.001 per share, outstanding as of
      April
      10, 2007 were 39,784,753





Transitional
      Small Business Disclosure Format (check one)  Yes
o  No
x




2








TURNAROUND
      PARTNERS, INC.





(formerly
      EMERGE CAPITAL CORP.)





FORM
      10-KSB





FOR
      THE
      YEAR ENDED DECEMBER 31, 2006





INDEX





PAGEPART
                IItem
                1. Description of Business
            4Item
                2. Description of Property
            5Item
                3. Legal Proceedings
            5Item
                4. Submission of Matters to a Vote of Security Holders
            5PART
                IIItem
                5. Market for Common Equity and Related Shareholder Matters Data
            6Item
                6. Management's Discussion and Analysis or Plan of Operation
            7Item
                7. Financial Statements
            13Item
                8. Changes in and Disagreements with Accountants on
                Accountingand
                Financial Disclosure
            14PART
                IIIItem
                9. Directors, Executive Officers, Promoters and Control
                Persons;Compliance
                with Section 16(a) of the Exchange Act
            16Item
                10. Executive Compensation
            17Item
                11. Security Ownership of Certain Beneficial Owners and
                Managementand
                Related Shareholder Matters
            18Item
                12. Certain Relationships and Related Transactions
            21Item
                13. Exhibits
            21Item
                14. Principal Accountant Fees and Services
            24Signatures
            25


3





PART
      I





ITEM
      1.
      DESCRIPTION OF BUSINESS





Overview





In
      this
      Annual Report the words “Turnaround Partners” “Turnaround Partners, Inc.”,
“Turnaround”, the "Company", "we", "our" and "us" refer to Turnaround Partners,
      Inc., (formerly Emerge Capital Corp, formerly NuWave Technologies, Inc.
      (“NuWave”)) collectively with our consolidated subsidiaries, unless the context
      indicates otherwise. Our fiscal year ends on December 31st.





On
      August
      31, 2005, NuWave entered into a merger agreement with Corporate Strategies,
      Inc.
      ("Corporate Strategies") and the shareholders of Corporate Strategies. The
      transaction was reflected as a reverse acquisition since control of the Company
      passed to the shareholders of Corporate Strategies. Subsequent to the merger,
      the Company changed its name to Emerge Capital Corp.





During
      August 2005, the shares of the equipment leasing subsidiary of Corporate
      Strategies were distributed to its shareholders. The mortgage brokerage
      subsidiary was sold in December 2005. In February 2006, the Company sold one
      of
      its real estate development subsidiaries. The Company disposed of these
      subsidiaries in order to focus primarily on the business activities of Corporate
      Strategies going forward. In November of 2006, we migrated from Delaware to
      Nevada.





Operations





Principal
      services and our market





The
      Company is an established provider of restructuring strategies, turnaround
      execution and business development services for emerging and re-emerging public
      companies. The Company markets its services to individual public companies,
      hedge funds, institutional investors and banks that have significant exposure
      in
      troubled micro-cap public companies. These companies are typically either in
      operational or financial difficulty and may be in default of lending or equity
      agreements, and as a result, they may be facing bankruptcy or liquidation if
      their operations are not turned around.





The
      Company is generally compensated with a combination of cash payments on a
      monthly or quarterly basis, and outright grants of equity in the form of common
      stock and/or warrants for purchasing common stock. We believe this compensation
      plan aligns our interests with the client company's shareholders because our
      ultimate compensation is maximized by successfully increasing shareholder value.
      This performance based compensation arrangement clearly demonstrates that our
      interests are consistent with both our clients and their
      shareholders.





The
      Company minimizes risk from our restructuring/turnaround clients by implementing
      the following policies:





o
            The
                Company will not assume the financial obligations of the
                clientcompany
                in any circumstance. In most cases, the financialinstitution
                with the greatest risk has referred the Company to thetransaction.





o
            The
                Company requires the client or their investor to provide theclient
                company with working capital necessary to execute theturnaround
                plan.





o
            The
                Company requires the client to fully indemnify the Companyagainst
                any actions, with the exception of gross negligence or
                malfeasance.





o
            If
                the client has officer and director insurance, we require theclient
                to add the Company or any of the Company's contractors asinsured
                parties under the policy.





o
            Should
                the Company consider altering any of the policies above, itwill
                require a vote of the Board of Directors to waive them andagree
                to the maximum amount of risk that the Company will
                assume.





4




Competition
      for our services





Competition
      for the services we provide comes mainly from turnaround management and
      restructuring firms, financial advisory firms, business consulting firms and
      crisis management groups, many of which have substantially more capital
      resources than the Company.





Due
      to
      the large amount of capital provided by institutional funds into the sector
      over
      the last three (3) years, the Company is optimistic that business conditions
      should result in significant growth opportunities for companies positioned
      in
      the restructuring and turnaround management sector.





To
      date,
      a significant portion of our business has come from an institutional fund
      (Cornell Capital Partners) that invests primarily in micro-cap
      companies.





Employees





As
      of
      March 20, 2007, the Company has 4 part time employees and employs the services
      of 2 others on a contract basis. The controller and data entry clerk are
      considered contract employees whom also work for an affiliated company as
      contract employees.





ITEM
      2.
      DESCRIPTION OF PROPERTY





We
      maintain our headquarters in Houston, Texas through a five (5) year lease
      effective February, 2005 which provides 2,644 square feet of office space.
      We
      believe that the property is adequate and suitable for our current needs. We
      share this space with one of our affiliates.





At
      the
      time of the August 2005 merger, the Company acquired a residential property
      consisting of land and a residential building in Jersey City, New Jersey for
      a
      total purchase price of $122,000. The purchase price was paid with $113,000
      in
      cash and $9,000 in the form of a deposit. The property was sold in December,
      2005 for $165,000 and the Company took a mortgage note in the amount of $148,500
      due December 1, 2006, which has been extended to May 1, 2007, secured by a
      mortgage on the property.





Also
      at
      the time of the merger, Turnaround Partners, through its wholly owned-subsidiary
      Lehigh Acquisition Corp. ("Lehigh"), acquired a five acre parcel of un-developed
      acreage in Cranford, New Jersey. Turnaround intended to develop the property
      into a 55 and over residential community. In February 2006, the Company sold
      Lehigh to Cornell Capital Partners LP for total proceeds of approximately
      $5,556,000, including cash of $93,000, repayment of $ 4,881,000 promissory
      notes
      and $400,000 convertible debentures to Cornell Capital and payment of $182,000
      of payables. The transaction resulted in a gain of


approximately
      $3,317,406 in February 2006.





ITEM
      3.
      LEGAL PROCEEDINGS





None.





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





On
      or
      about October 27, 2006, the Company furnished a Definitive Information Statement
      to all holders of shares of common stock and Series B and D Preferred stock
      of
      record at the close of business on October 23, 2006 with respect to the intent
      of a majority of the shareholders to approve (a) a name change of the Company
      from Emerge Capital Corp to Turnaround Partners, Inc. (b) to approve the
      migration of the Company from a Delaware corporation to a Nevada corporation,
      and (c) to approve an increase of the number of authorized shares of Common
      Stock of the Company from Nine Hundred Million (900,000,000) to Five Billion
      (5,000,000,000). The Company filed the Definitive Information Statement with
      the
      SEC on Schedule 14C on October 27, 2006. The proposals were approved and the
      Definitive Information Statement became effective on or about November 14,
      2006.





5




PART
      II


ITEM
      5.
      MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
      MATTERS





Market
      Information





Turnaround
      Partners, Inc.’s , common stock, par value $0.001 per share, is traded on the
      Over-the-Counter Bulletin Board (OTCBB) Market under the symbol TRNP.OB. The
      OTCBB is a regulated quotation service that displays real-time quotes, last-sale
      prices and volume information in over-the-counter equity securities. The
      following table sets forth the range of high and low closing bid prices for
      our
      common stock as reported on the OTCBB during each of the quarters presented.
      The
      quotations set forth below are inter-dealer quotations, without retail mark-ups,
      mark-downs or commissions and do not necessarily represent actual
      transactions.


Bid
                  Price Per ShareHigh
              
              LowThree
                  months ended March 31, 2005 (2)
              
              $
              0.065
              
              $
              0.080Three
                  months ended June 30, 2005 (2)
              
              
              0.095
              
              
              0.020Three
                  months ended September , 2005 (1)
              
              
              0.180
              
              
              0.050Three
                  months ended December 31, 2005
              
              
              0.230
              
              
              0.060Three
                  months ended March 31, 2006
              
              $
              0.170
              
              $
              0.060Three
                  months ended June 30, 2006
              
              
              0.100
              
              
              0.072Three
                  months ended September , 2006
              
              
              0.080
              
              
              0.051Three
                  months ended December 31, 2006
              
              
              0.060
              
              
              0.010





(1)
      The
      August 2005 merger by and among NuWave Technologies, Inc and Corporate


Strategies
      and its shareholders took place on August 31, 2005 (the Merger
      Date).


Any
      common stock data transactions which occurred prior to the Merger
      Date


pertain
      to NuWave Technologies, Inc.





(2)
      On
      July 21, 2003, NuWave Technologies Inc effected a 1:50 reverse
      stock


split,
      as
      previously approved by shareholders. All closing sales prices above


have
      been
      restated retroactively for the effect of the reverse stock split.





As
      of
      December 31, 2006, there were approximately 105 holders of record of the
      Company's common stock. This number does not include beneficial owners of the
      common stock whose shares are held in the names of various dealers, clearing
      agencies, banks, brokers and other fiduciaries.





The
      Company has never declared or paid any cash dividends on its common shares.





The
      Company currently intends to retain any future earnings to finance the growth
      and development of its business and future operations, and therefore does not
      anticipate paying any cash dividends in the foreseeable future.





Securities
      Authorized for Issuance under Equity Compensation Plans





On
      December 13, 2005, we established the Turnaround Partners, Inc. 2005 Stock
      Incentive Plan (the "Plan"). The Plan was adopted and approved by our
      shareholders. On a calendar year basis, an amount of shares of Common Stock
      equivalent to fifteen percent (15%) of the fully diluted shares outstanding
      on
      January 2 of any such calendar year (without taking into account outstanding
      Awards as defined in the Plan at the end of the prior calendar year) may be
      allocated, at the discretion of the Administrator, to be granted as Awards
      under
      the Plan, less Awards outstanding at the end of the prior calendar year. In
      no
      event shall the number of shares which may be allocated as Awards under the
      Plan
      be more than Ten Million (10,000,000) shares of Common Stock for a given
      calendar year. At present, there are no outstanding options.





Pursuant
      to the purchase of our interest in Kipling Holdings, Inc. (“Kipling”) as fully
      described in Item 6, and effective September 25, 2006, the Board of Directors
      approved the designation of Series D convertible preferred stock (the “Series
      D”), par value of $0.01, to consist of up to One Hundred Thousand (100,000)
      shares. As a result of the Kipling purchase, on December 31, 2006, the Board
      of Directors
      reduced the 93,334 shares of then outstanding Series D owned by our CEO, Timothy
      J. Connolly, and his spouse to Seven Hundred (700) shares of Series D. The
      Series D ranks pari passu with the common stock of the Company on an “as
      converted” basis, and senior to the Company’s Series A, B and C preferred stock.
      The holders of the Series D are entitled to receive dividends or distributions
      on a pro rata basis when and if dividends are declared on our Common Stock,
      but
      with no liquidation preference. Each share of the Series D may be convertible,
      at the option of the holder, at any time and from time to time after December
      31, 2006 through December 31, 2010, into that number of shares of Common Stock
      equal to the greater of (a) one tenth of one percent (0.1%) of the total number
      of shares of Common Stock issued and outstanding as of the last day of the
      fiscal quarter immediately preceding such date of conversion, calculated on
      a
      fully diluted basis after giving effect to the conversion of such share(s)
      of
      Series D and (b) One Hundred Thousand (100,000) shares of Common Stock. Each
      share of Series D Preferred Stock held by the Holders which has not been
      converted on or before December 31, 2010 into shares of Common Stock shall
      be
      convertible, at the option of the Holder of such share, at any time and from
      time to time after December 31, 2010 into one tenth of one percent (0.1%) of
      the
      total number of shares of Common Stock issued and outstanding on December 31,
      2010, calculated on a fully diluted basis after giving effect to the conversion
      of such share(s) of Series D Preferred Stock. The shares of Common Stock
      received upon conversion shall be fully paid and non-assessable shares of Common
      Stock.




6


ITEM
      6.
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS


OF
      OPERATIONS





This
      Annual Report on Form 10-KSB, and the accompanying MD&A, contains
      forward-looking statements.  Statements contained in this report about
      Turnaround Partners, Inc.'s future outlook, prospects, strategies and plans,
      and
      about industry conditions and demand for our financial services are
      forward-looking.  All statements that express belief, expectation,
      estimates or intentions, as well as those that are not statements of historical
      fact, are forward looking. The words "proposed," "anticipates," "anticipated,"
      "will," "would," "should," "estimates" and similar expressions are intended
      to
      identify forward-looking statements.  Forward-looking statements represent
      our reasonable belief and are based on our current expectations and assumptions
      with respect to future events. While we believe our expectations and assumptions
      are reasonable, they involve risks and uncertainties beyond our control that
      could cause the actual results or outcome to differ materially from the expected
      results or outcome reflected in our forward-looking statements.  In light
      of these risks, uncertainties and assumptions, the forward-looking events
      discussed in this annual report may not occur. Such
      risks and uncertainties include, without limitation, our continuing success
      in
      securing consulting agreements, conditions in the capital and equity markets
      that provide opportunities for our restructuring and turnaround services, our
      success in trading marketable securities, our ability to maintain contracts
      that
      are critical to our operations, actual customer demand for our financing and
      related services, collection of accounts and notes receivable and our ability
      to
      obtain and maintain normal terms with our vendors and service providers during
      the periods covered by the forward-looking statements.





The
      forward-looking statements contained in this report speak only as of the date
      hereof.  We undertake no obligation to publicly update or revise any
      forward-looking statements, whether as a result of new information, future
      events or any other reason.  All forward-looking statements attributable to
      Turnaround Partners, Inc. or any person acting on its behalf are expressly
      qualified in their entirety by the cautionary statements contained or referred
      to in this Annual Report filed on Form 10-KSB and in our future periodic reports
      filed with the SEC. The following M,D&A should be read in conjunction with
      these audited Consolidated Financial Statements of the Company, and the related
      notes thereto included elsewhere herein.





Results
      of Operations





The
      financial statements include the results of operations of Corporate Strategies
      since its inception and the results of operations of Nuwave and its subsidiaries
      beginning August 31, 2005, the date of the merger agreement (“Merger
      Agreement”).





On
      December 31, 2005, the Company sold its subsidiary, Aim American Mortgage,
      Inc.
      (“Aim”), for a convertible debenture. Aim
      is
      engaged in residential mortgage brokerage activities. Aim’s activity has been
      reflected in discontinued operations in these financial statements.





On
      October 22, 2004, the Company formed CSI Business Finance, Inc. ("CSIBF"),
      a
      corporation organized under the laws of the state of Texas, for the purpose
      of
      engaging in equipment leasing and other business finance activities. On August
      31, 2005, CSIBF was distributed to shareholders and has been reflected in
      discontinued operations in the financial statements for 2005.





In
      August
      of 2005, Corporate Strategies, Inc. entered into a share exchange agreement
      whereby it exchanged all of the common stock of its subsidiary, CSI Business
      Finance, for 100,000 restricted shares of Series A Convertible Preferred stock
      of Health Express USA Inc. (HEXS.OB) - subsequently named Natural Nutrition,
      Inc. (NNTN.OB). The preferred stock shares acquired in this transaction were
      distributed to the shareholders of Corporate Strategies in the form of a
      dividend.





On
      August
      31, 2005, NuWave Technologies, Inc. ( "NuWave" or "the Company") entered into
      a
      merger agreement (the "Agreement") with Corporate Strategies, Inc. ("Corporate
      Strategies") and the shareholders of Corporate Strategies


("Shareholders").
      The Company was subsequently renamed Turnaround Partners, Inc. The transaction
      was accounted for as a reverse acquisition since control of the merged group
      passed to the shareholders of the acquired company (Corporate
      Strategies).





Pursuant
      to the terms of the Agreement, the Company issued one (1) share of its common
      stock ("Common Stock"), par value $0.001 per share, to each holder of Corporate
      Strategies Class A common stock in exchange for two (2) shares of Corporate
      Strategies Class A common stock, par value $0.001 per share. Second, the Company
      issued one (1) share of the Company's Series C preferred stock ("Series C
      Preferred"), par value $0.01 per share, to each holder of Corporate Strategies
      Series A preferred stock for one (1) share of Corporate Strategies Series A
      preferred stock, par value $0.001 per share.





The
      Company issued and delivered shares of its Series B convertible Preferred stock
      ("Series B Preferred") to each holder of Corporate Strategies Class B common
      stock so that effectively upon conversion of the Series B Preferred into common
      shares, the common shares issued upon conversion shall be equal to ninety-five
      percent (95%) of the issued and outstanding stock of the Company (calculated
      on
      a fully diluted basis as of the date of the Merger, following the issuance
      of
      all the Merger Consideration (as such term is defined in the Agreement) and
      after giving effect to such conversion, but not including any shares of Common
      Stock issuable upon conversion of any then outstanding Company convertible
      debentures ). Therefore, the Merger Consideration for the Common Stock, Series
      C
      Preferred and Series B Preferred was the Corporate Strategies Class A common,
      Series A preferred and Class B common, respectively. The number of shares issued
      to the Shareholders in connection with the Merger was based upon a determination
      by the Company's Board of Directors (the "Board").





7





The
      terms
      of the Series B Preferred were subsequently modified. In connection with the
      Kipling purchase, 93,334 shares of Series B Preferred were exchanged for a
      like
      number of Series D Preferred, which were subsequently reduced to 700 shares
      of
      Series D Preferred. The remaining 6,666 shares of Series B Preferred are
      convertible into 4,195,445 shares of common stock. Each
      share of the Series D may be convertible, at the option of the holder, at any
      time and from time to time after December 31, 2006 through December 31, 2010,
      into that number of shares of Common Stock equal to the greater of (a) one
      tenth
      of one percent (0.1%) of the total number of shares of Common Stock issued
      and
      outstanding as of the last day of the fiscal quarter immediately preceding
      such
      date of conversion, calculated on a fully diluted basis after giving effect
      to
      the conversion of such share(s) of Series D and (b) One Hundred Thousand
      (100,000) shares of Common Stock. Each share of Series D Preferred Stock held
      by
      the Holders which has not been converted on or before December 31, 2010 into
      shares of Common Stock shall be convertible, at the option of the Holder of
      such
      share, at any time and from time to time after December 31, 2010 into one tenth
      of one percent (0.1%) of the total number of shares of Common Stock issued
      and
      outstanding on December 31, 2010, calculated on a fully diluted basis after
      giving effect to the conversion of such share(s) of Series D Preferred Stock.
      The shares of Common Stock received upon conversion shall be fully paid and
      non-assessable shares of Common Stock.





The
      Series B and D Preferred shareholders and the holders of the common stock vote
      together and the Series B and D Preferred shall be counted on an "as converted"
      basis, thereby giving the Series B and D Preferred shareholders control of
      the
      Company. The transaction was accounted for as a reverse acquisition since
      control of the merged group passed to the shareholders of the acquired company
      (Corporate Strategies).





On
      October 27, 2006, we filed a Schedule 14C Information statement. This
      information statement was furnished to all holders of shares of common stock
      and
      Series B and D convertible preferred stock of record at the close of business
      on
      October 23, 2006. Within this statement, the corporate actions involved three
      proposals providing for the following:





1.
            To
                approve a change of name of the Company to Turnaround Partners,
                Inc;


2.
            To
                approve the migration of the Company from a Delaware corporation
                to a
                Nevada corporation; and


3.
            To
                approve an increase of the number of authorized shares of Common
                Stock of
                the Company from Nine Hundred Million (900,000,000) to Five Billion
                (5,000,000,000) shares.





Lehigh
      Acquisition Corp. ("Lehigh") was a subsidiary of NuWave and is treated as if
      it
      was acquired August 31, 2005, the date of the merger. Lehigh was sold on
      February 3, 2006. The financial statements include the operations of Lehigh
      through February 3, 2006 as discontinued operations.





On
      May
      31, 2006, we filed an S-8 with the Securities and Exchange Commission for the
      Turnaround Partners, Inc. 2005 Stock Incentive Plan (the “Plan”). The document
      was submitted to register 10,000,000 shares of common stock. The purpose of
      the
      Plan is to promote the long-term growth and profitability of the Company
      by (a) providing key people with incentives to improve shareholder value
      and to contribute to the growth and financial success of the Company,
      and (b) enabling the Company to attract, retain and reward the
      best-available persons. This document is herein incorporated by reference.





On
      June
      26, 2006, we filed an SB-2 with the Securities Exchange Commission. The
      prospectus related to the registration of (a) 1,860,000 shares of common stock
      of Turnaround Partners, Inc. that would have been offered for sale from time
      to
      time by Cornell Capital Partners, LP (“Cornell Capital”), (b) 937,500 shares of
      common stock of Turnaround Partners, Inc. that would have been offered for
      sale
      from time to time by iVoice, Inc. and (c) 2,812,500 shares of common stock
      of
      Turnaround Partners, Inc. that would have been distributed by dividend by iVoice
      to all of the Class A common stockholders of iVoice. Turnaround Partners, Inc.
      was not selling any shares of common stock in this offering and therefore would
      not have received any proceeds from this offering. On August 31, 2006, we
      formally withdrew this registration statement pursuant to Rule 477(a) under
      the
      General Rules and Regulations under the Securities Act of 1933, as
      amended.





Pursuant
      to the purchase of our interest in Kipling Holdings, Inc. (“Kipling”) as fully
      described in Item 6, and effective September 25, 2006, the Board of Directors
      approved the designation of Series D convertible preferred stock (the “Series
      D”), par value of $0.01, to consist of up to One Hundred Thousand (100,000)
      shares. As a result of the Kipling purchase, on December 31, 2006, the Board
      of
      Directors reduced the 93,334 shares of then outstanding Series D owned by our
      CEO, Timothy J. Connolly, and his spouse to Seven Hundred (700) shares of Series
      D. The Series D ranks pari passu with the common stock of the Company on an
“as
      converted” basis, and senior to the Company’s Series A, B and C preferred stock.
      The holders of the Series D are entitled to receive dividends or distributions
      on a pro rata basis when and if dividends are declared on our Common Stock,
      but
      with no liquidation preference. Each share of the Series D may be convertible,
      at the option of the holder, at any time and from time to time after December
      31, 2006 through December 31, 2010, into that number of shares of Common Stock
      equal to the greater of (a) one tenth of one percent (0.1%) of the total number
      of shares of Common Stock issued and outstanding as of the last day of the
      fiscal quarter immediately preceding such date of conversion, calculated on
      a
      fully diluted basis after giving effect to the conversion of such share(s)
      of
      Series D and (b) One Hundred Thousand (100,000) shares of Common Stock. Each
      share of Series D Preferred Stock held by the Holders which has not been
      converted on or before December 31, 2010 into shares of Common Stock shall
      be
      convertible, at the option of the Holder of such share, at any time and from
      time to time after December 31, 2010 into one tenth of one percent (0.1%) of
      the
      total number of shares of Common Stock issued and outstanding on December 31,
      2010, calculated on a fully diluted basis after giving effect to the conversion
      of such share(s) of Series D Preferred Stock. The shares of Common Stock
      received upon conversion shall be fully paid and non-assessable shares of Common
      Stock.





8





On
      September 30, 2006, we completed a stock purchase agreement (the “Purchase
      Agreement”) to acquire 100% of the total issued and outstanding capital stock of
      Kipling Holdings, Inc., a Delaware corporation from Timothy J. Connolly in
      consideration of (a) our assumption of all of the liabilities of Kipling,
      subject to certain consents, (b) certain anti-dilution rights as set forth
      in
      the Purchase Agreement and (c) all legal and other costs and expenses incurred
      by Kipling in consideration with this Purchase Agreement. Mr. Connolly serves
      as
      CEO of Turnaround and therefore (i) Turnaround obtained a third party appraisal
      of the Company which valued the acquired asset at Two Million Two Hundred Fifty
      Thousand Dollars ($2,250,000) more than the liabilities assumed and (ii)
      Turnaround’s other (disinterested) Board member and CFO reviewed and approved
      this affiliate transaction. Mr. Connolly received no profit from this
      affiliated transaction. Because this transaction was between parties under
      common control, we recorded the $3,313,264 of consideration in excess of Mr.
      Connolly’s original cost basis as a deemed distribution to Mr. Connolly. The
      Purchase Agreement had been subject to the written consent of Highgate House
      Funds, Ltd. (“ Highgate ”)
      an
      affiliate of Cornell Capital Partners, which the Company and Highgate reduced
      to
      writing effective as of September 30, 2006. Kipling, at December 31, 2006,
      owned
      a thirty percent interest in a Hilton hotel, which commenced operations in
      February 2007, in West Palm Beach, Florida. Since the purchase was effective
      on
      September 30, 2006 the Company did not record any revenue or expenses during
      the
      nine months ended September 30, 2006.





In
      a
      separate agreement with an individual, the Company issued an additional
      2,000,000 shares and 3,000,000 warrants ($0.05 per warrant) in consideration
      of
      the individual’s surrender of his option, rights or other interests whatsoever
      to purchase any capital stock of Kipling Holdings, Inc. The Company has valued
      these 2,000,000 shares at $140,000. The Company used the closing price of $0.07
      per share on September 30, 2006, the date of contract execution, as the value
      assigned to these shares. This expense is included as merger expense for the
      twelve months ended December 31, 2006. The Company has valued the 3,000,000
      warrants in the amount of $141,000 using the Black Sholes method which is
      being amortized over the term of the agreement.





In
      November 2006, we migrated from a Delaware corporation to a Nevada
      corporation.





Certain
      reclassifications have been made to the 2005 financial statements to conform
      to
      the 2006 financial statement presentation.





Results
      of continuing operations for the year ended December 31, 2006 (the “2006
      Period”) as compared with December 31, 2005 (the “2005 Period”).





We
      primarily provide business restructuring, turnaround execution and business
      development advisory services for emerging and re-emerging public and private
      companies. The Company also actively trades securities and options with
      available cash. Many of these transactions contain a considerable amount of
      risk. Under our consulting agreements, we do not take positions in securities
      of
      our clients that at any one time would cause us to have an ownership interest
      in
      them of over 4.99%.





Revenues





Discount
      income decreased by approximately $143,000 to $10,425 in the 2006 Period as
      compared with the 2005 Period, reflecting decreased business volume for a major
      customer and the loss of two other customers. Management does not anticipate
      generating any significant new business in this area.





Consulting
      revenue increased by approximately $780,000 to $963,277 in the 2006 Period.
      Consulting revenues are generally one-time fees related to specific events,
      or
      contracts covering services to be rendered over a period of time. The
      Company


enters
      into contracts to provide strategic consulting services, including general
      business development, mergers, acquisitions, management advisory, and
      restructuring services. There were three such contracts at December 31, 2006.
      The contracts generally provide for a base payment equal to $6,000 - $12,000
      per
      month, which may be payable in stock, with additional fees for consulting
      services beyond a preset amount. Some contracts include warrants or success
      fees. One of our existing agreements calls for payment in stock of approximately
      $44,000 per month.





We
      recorded overall losses in marketable securities in the 2006 Period of
      approximately $51,000 versus a gain of approximately $81,000 in the 2005 Period.
      The Company accepts both compensation for its services and invests in micro
      cap
      marketable securities.
      Most of these securities are in companies defined as penny stocks and are
      volatile, trading substantially up or down in any given quarter.




9




Fee
      income represents brokerage fees of approximately $205,000 received in 2006
      on
      loans we referred to an affiliated company, CSI Business Finance Inc. Fees
      for
      the 2005 Period in the amount of $174,900 were comparable to the 2006
      Period.





General
      and Administrative Expenses





General
      and administrative expenses increased by approximately $915,000 to $2,261,933
      for the 2006 Period as compared to the 2005 Period. For the twelve months ended
      December 31, 2006, general and administrative expenses were primarily comprised
      of salaries and benefits ($892,286), and professional fees ($855,722). The
      remaining general and administrative expenses were comprised of business
      development, rent, advertising and other ordinary expenses necessary for our
      operations. For the twelve months ended December 31, 2005, general and
      administrative expenses were $1,346,723 and consisted primarily of salaries
      and
      benefits ($516,496), professional fees ($366,754), and business development,
      travel and entertainment ($134,465) and other ordinary expenses necessary for
      our operations. Our company shares office space and certain administrative
      functions and staff with an affiliated company to whom we allocate costs for
      these shared functions based on an estimate of time usage. We have not yet
      reached the size to benefit from separate office space and a full time staff.





Salaries
      and benefits increased by approximately $376,000 to $892,000 in the 2006 Period
      as compared to the 2005 Period, primarily representing new part-time employees
      added during the third quarter 2005, and the hiring of a part-time Chief
      Financial Officer in July 2006. Our CEO was paid a $100,000 bonus for the 2006
      Period.





Professional
      fees were approximately $856,000 for the twelve months ended December 31, 2006,
      an increase of approximately $489,000 as compared to the 2005 Period. The
      increase represented additional accounting, legal and consulting fees relating
      to regulatory requirements of being a public company and acquisitions due
      diligence.





We
      allocate overhead to an affiliate for items such as rent, payroll and other
      general operating expenses. For the 2006 Period we allocated approximately
      $308,000 versus $38,000 for the 2005 Period.





Other
      income and expense





We
      recorded derivative income of $3,642,080 for the twelve months ended December
      31, 2006 versus an expense of $108,357 for the same period ended December 31,
      2005. These amounts represent the change in the fair value of the net derivative
      liability.





In
      connection with the acquisition of Kipling Holdings, Inc on September 30, 2006,
      we paid $140,000 under a services contract to an individual. This expense has
      been classified as a merger expense in the results of operations for the twelve
      months ended December 31, 2006.





We
      recorded a merger expense associated with the acquisition of NuWave for the
      twelve months ended December 31, 2005 in the amount of $3,434,943.





Certain
      convertible debt was considered extinguished in the first quarter 2006 because
      of the sale of Lehigh. The extinguishment income was $130,563 for the twelve
      months ended December 31, 2006.





Interest
      expense increased by approximately $449,000 for the twelve months ended December
      31, 2006 as compared to the same period ended December 31, 2005. The increase
      is
      primarily a result of the amortization of discounts related to derivatives
      on
      our convertible debentures.





Discontinued
      Operations





During
      February 2006, the Company sold the shares of its wholly-owned subsidiary
      Lehigh. During 2005, the Company either sold or distributed the shares of its
      mortgage brokerage subsidiary and its business finance subsidiary. The loss
      from
      discontinued operations was $218,102 for the twelve months ended December 31,
      2005 and $4,688, for the twelve months ended December 31, 2006, net of
      applicable income tax.





Gain
      on
      sale of subsidiary of $3,042,406 represents the gain on the sale of Lehigh
      in
      February 2006.





During
      August 2005, Corporate Strategies distributed the shares of its business finance
      subsidiary (CSI Business Finance, Inc.) to its shareholders. On December 31,
      2005, the Company sold its mortgage brokerage subsidiary for a convertible
      debenture. Based on a review
      for collectibility at the transaction date, it was determined that
      collectibility was improbable and, accordingly no proceeds were recognized
      from
      the sale. Since the mortgage brokerage subsidiary had negative equity at the
      sale date, the Company recognized a profit to the extent of net liabilities
      assumed by the purchaser. In
      December 2006, we received $275,000 in full satisfaction of the convertible
      debenture which was recorded as a gain on sale of subsidiary at December 31,
      2006.




10




LIQUIDITY
      AND CAPITAL RESOURCES





Operating
      activities





We
      recorded net income for the twelve months ended December 31, 2006 of $4,936,074
      versus a net loss of $4,120,911 for the twelve months ended December 31, 2005.
      Our net income for the twelve months ended December 31, 2006 was primarily
      a
      result of the gain on sale of Lehigh and our net change in fair value of
      derivative liability. Net cash provided by operating activities was $146,119
      for
      the twelve months ended December 31, 2006. In addition to our gain on the sale
      of Lehigh in the amount of $3,042,406 and collection of the convertible
      debenture in the amount of $275,000, and our net change in fair value of
      derivative liability in the amount of $3,642,080, our marketable securities
      decreased in value by approximately $391,000. During the twelve months ended
      December 31, 2006, we collected approximately $344,000 on a note from an
      affiliate.





At
      December 31, 2006, the Company had a working capital deficit of approximately
      $1,934,000 including $98,452 of restricted cash. Our working capital deficit
      includes a computed liability for the fair value of derivatives of $995,940,
      which will only be realized on the conversion of the derivatives, or settlement
      of the debentures. We also have $1,696,902, net of discount, of debentures
      that
      will mature in July of 2007. The Company at its option can force conversion
      of
      these convertible debentures into the Company's common stock at maturity
      date.





We
      have a
      Standby Equity Distribution Agreement (the "SEDA") with Cornell under which
      the
      Company may, at its discretion, periodically sell to Cornell registered shares
      of the Company's common stock for a total purchase price of up to $30 million.
      For each share of common stock purchased under the SEDA, Cornell will pay
      Turnaround Partners, Inc. 99% of the lowest closing bid price on the
      Over-the-Counter Bulletin Board or other principal market on which its common
      stock is traded for the 5 days immediately following the notice date.
      Furthermore, Cornell will retain a fee of 10% of each advance made under the
      SEDA. Additionally, we have been advised that an updated registration statement
      of the SEDA may be necessary in order to draw down capital under the terms
      of
      the SEDA.





The
      amount of each advance is limited to a maximum draw down of $1,000,000 every
      seven (7) trading days up to a maximum of $4,000,000 in any 30-day period.
      The
      Company's ability to request advances is conditioned upon the Company having
      enough shares of common stock registered pursuant to the SEC rules and
      regulations. In addition, the Company may not request advances if the shares
      to
      be issued in connection with such advances would result in Cornell owning more
      than 4.99% of the Company's outstanding common stock.





Under
      our
      consulting agreements, we do not take positions in securities of our clients
      that at any one time would cause us to have an ownership interest in them of
      over 4.99%. Because of this restriction, we could be hindered in our ability
      to
      generate necessary cash for our operations.





Investing
      activities





We
      purchased fixed assets in the amount of approximately $22,000 for the twelve
      months ended December 31, 2006. Cash received from the sale of Lehigh was
      $93,396. We received cash in the amount of approximately $191,000 as a result
      of
      the purchase of Kipling Holdings, Inc, and preferred returns from this
      investment in the amount of $78,750.





Financing
      activities





For
      the
      twelve months ended December 31, 2006, we repaid approximately $64,000 on note
      payables.





We
      have
      249 shares of Series C preferred stock outstanding. The stock has a liquidation
      preference of $373,500 and is redeemable at $1,500 per share at the Company’s
      option. Dividends are cumulative and accrue at the rate of $120 per share per
      year. Although the Series C stock is redeemable at the option of the Company,
      the holder of these shares is our Chairman of the Board of Directors. Since
      these shares are held by our Chairman, who effectively has control of the
      redemption, we have classified our Series C preferred stock, and associated
      paid
      in capital, as a liability in accordance with with EITF Topic No. D-98
“Classification and Measurement of Redeemable Securities”.





11




We
      paid
      dividends on our preferred Series C stock in the amount of $31,809, $27,255
      of
      which was paid to our Chairman of the Board of Directors, and consequently
      has
      been reclassified as interest expense.





Our
      cash
      flows for the periods are summarized below:





Year
                ended
            
            Year
                endedDecember
                31, 2006
            
            December
                31, 2005Net
                cash provided by (used in) operating activities
            
            $
            146,119
            
            $
            (50,074
            )Net
                cash provided by (used in) investing activities
            
            
            599,635
            
            
            (172,405
            )Net
                cash provided by financing activities
            
            
            (68,812
            )
            
            274,804





Our
      cash
      increased by $676,942 since December 31, 2005.





Management
      believes the Company has adequate working capital and cash to be provided from
      operating activities to fund current levels of operations. We anticipate that
      our company will grow. As our business grows we believe that we will have to
      raise additional capital in the private debt and/or public equity markets to
      fund our investments. We could also potentially realize proceeds from our shelf
      registration statement.





OFF-BALANCE
      SHEET ARRANGEMENTS





The
      Company leases its office space under an operating lease. Rental expense under
      operating leases for continuing operations aggregated $76,395 and $71,819 for
      the years ended December 31, 2006 and 2005, respectively. Effective February
      10,
      2005, the Company entered into a new five year lease in a new building and
      moved
      the Company’s headquarters there, with AIM remaining in the other leased area.
      AIM was sold in December 2005 and assumed the lease on the area they
      occupy.





Future
      minimum payments under non-cancellable operating leases for continuing
      operations with initial or remaining terms of one year or more consist of the
      following at December 31, 2006:


OperatingLeases2007
              
              $
              73,5912008
              
              
              74,0322009
              
              
              74,0322010
              
              
              8,058Total
                  minimum lease payments
              
              $
              229,713


Recent
      Accounting Pronouncements





In
      June
      2006, the Financial Accounting Standards Board issued FASB Interpretation
      No. 48, *“Accounting
      for Uncertainty in Income Taxes”* (“FIN 48”) *.* FIN 48 clarifies the application of SFAS No. 109, *Accounting
      for Income Taxes* ,
      by
      establishing a threshold condition that a tax position must meet for any part
      of
      the benefit of that position to be recognized in the financial statements.
      In
      addition to recognition, FIN 48 provides guidance concerning measurement,
      derecognition, classification and disclosure of tax positions. FIN 48 is
      effective for fiscal years beginning after December 15, 2006; accordingly,
      the Company will adopt FIN 48 effective as of January 1, 2007. The
      Company does not anticipate that the adoption of FIN 48 will have a
      material impact on its effective tax rate.







In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Staff Position (“FSP”) AUG AIR-1 — Accounting for Planned Major Maintenance
      Activities. FSP AUG AIR-1 prohibits the use of the accrue-in-advance method
      of
      accounting for planned major maintenance activities because it results in the
      recognition of a liability in a period prior to the occurrence of the
      transaction or event obligating the entity. FSP AUG AIR-1 is effective for
      fiscal years beginning after December 15, 2006 and its guidance is
      applicable to entities in all industries. The Company will adopt the guidance
      in
      FSP AUG-AIR-1 as of January 1,
      2007. The Company does not believe the adoption of this guidance will have
      an
      impact on its financial position and results of operations.




12





In
      September 2006, the Securities and Exchange Commission staff issued Staff
      Accounting Bulletin (“SAB”) No. 108, *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements.* SAB 108
      provides guidance on how the effects of the carryover or reversal of prior
      year
      misstatements should be considered in quantifying a current year misstatement.
      SAB 108 established a dual approach that requires quantification of errors
      under two methods: (1) roll-over method which quantifies the amount by
      which the current year income statement is misstated, and (2) the iron
      curtain method which quantifies the error as the cumulative amount by which
      the
      current year balance sheet is misstated. In some situations, companies will
      be
      required to record errors that occurred in prior years even though those errors
      were immaterial for each year in which they arose. Companies may choose to
      either restate all previously presented financial statements or record the
      cumulative effect of such errors as an
      adjustment to retained earnings at the beginning of the period in which
      SAB 108 is applied. SAB 108 is effective for fiscal years ending after
      November 15, 2006. The adoption of this pronouncement did not have an
      impact on the Company’s financial position or results of operations.




In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (“SFAS 157”), which is intended to increase consistency and comparability
      in fair value measurements by defining fair value, establishing a framework
      for
      measuring fair value and expanding disclosures about fair value measurements.
      SFAS 157 is effective for financial statements issued for fiscal years
      beginning after November 15, 2007, and interim periods within those fiscal
      years. The Company will adopt SFAS 157 on January 1, 2008, and has not
      yet determined the impact, if any, on its consolidated financial statements.





Critical
      Accounting Policies





DERIVATIVE
      FINANCIAL INSTRUMENTS





The
      derivatives issued from 2003 through 2006 have been accounted for in accordance
      with SFAS 133 and EITF No. 00-19, "Accounting for Derivative Financial
      Instruments Indexed to, and Potentially Settled in, a Company's Own
      Stock."





The
      Company has identified that these debentures have embedded derivatives. These
      embedded derivatives have been bifurcated from their respective host debt
      contracts and accounted for as derivative liabilities in accordance with EITF
      00-19. When multiple derivatives exist within the Convertible Notes, they have
      been bundled together as a single hybrid compound instrument in accordance
      with
      SFAS No. 133 Derivatives Implementation Group Implementation Issue No. B-15,
      "Embedded Derivatives: Separate Accounting for Multiple Derivative Features
      Embedded in a Single Hybrid Instrument".





The
      embedded derivatives within the Convertible Notes have been recorded at fair
      value at the date of issuance; and are marked-to-market each reporting period
      with changes in fair value recorded to the Company's income statement as "Net
      change in fair value of derivative liabilities". The Company has utilized a
      third party valuation firm to fair value the embedded derivatives using a layered
      discounted probability-weighted cash flow approach.





The
      fair
      value of the derivative liabilities are subject to the changes in the trading
      value of the Company's common stock, as well as other factors. As a result,
      the
      Company's financial statements may fluctuate from quarter-to-quarter based
      on
      factors, such as the price of the Company's stock at the balance sheet date
      and
      the amount of shares converted by note holders. Consequently, our financial
      position and results of operations may vary from quarter-to-quarter based on
      conditions other than our operating revenues and expenses.





REVENUE
      RECOGNITION





The
      Company follows the guidance of the SEC's Staff Accounting Bulletin No. 104
      for
      revenue recognition. The Company records revenue when persuasive evidence of
      an
      arrangement exists, services have been rendered or product delivery has
      occurred, the sales price to the customer is fixed or determinable, and
      collectibility is reasonably assured.





ITEM
      7.
      FINANCIAL STATEMENTS





The
      Consolidated Financial Statements of Turnaround Partners, Inc. (formerly Emerge
      Capital Corp) required by Item 310(a)of Regulation S-B are attached to this
      Annual Report. Reference is made to Item 13 below for an Index to such
      Consolidated Financial Statements.





13





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


FINANCIAL
      DISCLOSURE





(A)
      Previous Independent Accountants:





(1)
      (i)
      Effective November 2, 2005, the Company dismissed Weiser LLP ("Weiser") as
      its
      independent registered public accounting firm.





(ii)
      Weiser's report on the Company's financial statements for the past two (2)
      fiscal years, which includes Weiser's sole report for the fiscal year ended
      December 31, 2004, did not contain an adverse opinion or a disclaimer of
      opinion, and was not qualified as to uncertainty, audit scope, or accounting
      principles; however, the report included an explanatory paragraph wherein Weiser
      expressed substantial doubt about the Registrant's ability to continue as a
      going concern.





(iii)
      The
      change of independent registered public accountants was approved by the
      Company's Board on November 2, 2005.





(iv)
      During the Company's most recent two (2) fiscal years, which includes Weiser's
      sole report on the Registrant's financial statements for the fiscal year ended
      December 31, 2004, as well as the subsequent interim period through November
      2,
      2005, there were no disagreements on any matter of accounting principles or
      practices, financial statement disclosure, or auditing scope or procedures,
      which disagreements if not resolved to their satisfaction would have caused
      them
      to make reference in connection with their opinion to the subject matter of
      the
      disagreement.





(v)
      During the Company's most recent two (2) fiscal years, which includes Weiser's
      sole report on the Registrant's financial statements for the fiscal year ended
      December 31, 2004, as well as the subsequent interim period through November
      2,
      2005, Weiser did not advise the Company of any of the matters identified in
      Item
      304(a)(1)(iv)(B) of Regulation S-B.





(B)
      New
      Independent Accountants:





On
      November 2, 2005, the Company engaged Thomas Leger & Co., L.L.P. ("Thomas
      Leger") as its independent registered public accounting firm to audit the
      Company's financial statements. The Company did not consult Thomas Leger on
      any matters
      described in Item 304(a)(2)(i) or (ii) of Regulation S-B during the Company's
      two (2) most recent fiscal years or any subsequent interim period prior to
      engaging Thomas Leger. Thomas Leger were previously the auditors of Corporate
      Strategies, Inc.





(C)
      The
      merger was treated as a reverse acquisition, with Corporate Strategies the
      surviving entity. The name of the Company was subsequently changed to Turnaround
      Partners, Inc.





**ITEM
      8A. CONTROLS AND PROCEDURES**





Because
      of its size, the Company shares its accounting staff with an affiliated company
      and is comprised of its Chief Financial Officer, who is shared with an
      affiliate, a controller and a data entry clerk. The controller and data entry
      clerk are considered contract employees whom also work for an affiliated company
      as contract employees.





As
      of the
      end of the period covered by this report, we have evaluated the effectiveness
      of
      the design and operation of our disclosure controls and procedures under the
      supervision and with the participation of our Chief Executive Officer ("CEO")
      and Chief Financial Officer (“CFO”).





In
      connection with the audit of our Consolidated Financial Statements for the
      fiscal year ended December 31, 2006, our independent registered public
      accounting firm informed us that we had significant deficiencies constituting
      material weaknesses as defined by the standards of the Public Company Accounting
      Oversight Board, which had been identified in connection with the audit of
      our
      Consolidated Financial Statements for the fiscal years ended December 31, 2006
      and 2005.





Some
      of
      the weaknesses in question were detected during the audit of our
      Consolidated Financial Statements for the fiscal year ended December 31,
      2005.





The
      material weaknesses identified by the auditor during the December 31, 2005
      and
      2006 audit were the lack of segregation of duties necessary to maintain proper
      checks and balances between functions and the lack of procedures to properly
      account for non-routine transactions and preparation of certain financial
      statement disclosures in accordance with U.S. GAAP. The absence of qualified
      full time accounting personnel was a contributing factor to the problems
      identified by the auditor. The specific circumstances giving rise to the
      weaknesses include utilizing the services of contract accountants on a part
      time
      basis in the absence of internal accounting personnel.





14





Further,
      based on the material weaknesses described herein, we concluded that our
      disclosure controls and procedures were not effective at the reasonable
      assurance level at December 31, 2006.





The
      Company has taken the following steps to address the specific problems
      identified by the auditors:





1)
            We
                have hired of a Chief Financial Officer and a contract part-time
                bookkeeper to allow us to properly implement the segregation of duties
                necessary to maintain checks and balances between accounting and
                Executive
                functions.





2)
            All
                non-routine transactions will be reviewed by our Chief Financial
                Officer and, contract controller before they are
                completed.





3)
            The
                Company will emphasize enhancement of the segregation of duties based
                on
                the limited resources the Company has, and, where practical, the
                Company
                will continue to access the cost versus benefit of adding additional
                resources that would mitigate the situation. Our Chief Financial
                Officer
                will monitor our accounting policies to assure proper accounting
                for
                financial derivatives and other unusual transactions on an ongoing
                basis.


15


PART
      III





ITEM
      9.
      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
      COMPLIANCE


WITH
      SECTION 16(A) OF THE EXCHANGE ACT





The
      Company is not aware of any legal proceedings in which any director, executive
      officer, affiliate or any owner of record or beneficial owner of more than
      five
      percent (5%) of any class of voting securities of the Company, or any associate
      of any such director, executive officer or affiliate of the Company or security
      holder is a party adverse to the Company or any of its subsidiaries or has
      a
      material interest adverse to the Company or any of its
      subsidiaries.





The
      following table sets forth the names and ages of the current directors and
      executive officers of the Company and the positions held by each person at
      the
      Company. The executive officers of the Company are elected annually by the
      Board
      of Directors (the "Board") . The Directors serve one (1) year terms until their
      successors are elected. The executive officers serve terms of one (1) year
      or
      until their death, resignation or removal by the Board.


Name
              
              Age
              
              Positions(S)Timothy
                  J. Connolly
              
              54
              
              Director/Vice
                  Chairman of the Board,President
                  and Chief Executive OfficerFred
                  S. Zeidman
              
              60
              
              Director/Chairman
                of
                the BoardWm
                  Chris Mathers
              
              47
              
              Chief Financial
                Officer





There
      are
      no family relationships among any of the directors or executive officers of
      the
      Company. Except as provided herein, none of the Company's directors or executive
      officers is a director of any company that files reports with the SEC, except
      as
      discussed below. None of the Company's directors have been involved in any
      bankruptcy or criminal proceeding (excluding traffic and other minor offenses),
      and none have been enjoined from engaging in any business during the past five
      (5) years.





Set
      forth
      below is a brief description of the background and business experience of each
      of the Company's existing Directors and executive officers for the past five
      (5)
      years:





***Timothy
      J. Connolly*** has
      served as Chief Executive Officer of the Company since August 31, 2005 and
      has
      served as a director of the Company effective October 27, 2005. Mr. Connolly
      has
      been actively engaged in the development of companies for over twenty (20)
      years, and has been the Chairman, President or CEO of numerous private and
      public companies. He is currently director and Chief Executive Officer of
      Natural Nutrition, Inc. (OTCBB:NNTN). He is also an elected official, serving
      as
      the President and Chairman of the Board of Weston Municipal Utility District
      for
      the last twenty (20) years. Mr. Connolly has been a principal or consultant
      in
      transactions over the last twenty (20) years that total in excess of $500
      million. He is particularly skilled in the areas of short and long term
      strategic planning, capital formation, mergers and acquisitions, marketing,
      sales strategy and crisis resolution. Mr. Connolly is also a nationally
      syndicated business journalist on both Business Talk Radio Network and Cable
      Radio Network.





***Fred
      S. Zeidman*** has
      served as a director of the Company effective October 27, 2005. He was appointed
      Chairman of the United States Holocaust Memorial Council by President George
      W.
      Bush in March 2002. The Council, which includes fifty-five
      Presidentially-appointed members and ten (10) members from the U.S. Congress,
      is
      the governing board of the United States Holocaust Memorial Museum. A prominent
      Houston-based business and civic leader, Mr. Zeidman is Chairman of the Board
      of
      Seitel, Inc. and Chairman of the Board of Corporate Strategies, Inc. In 2004
      he
      joined Greenberg Traurig as Senior Managing Director of Governmental Affairs.
      Mr. Zeidman also currently serves as a director of Prosperity Bank in Houston.
      Mr. Zeidman holds a Bachelor's degree from Washington University in St. Louis,
      and a Master's in Business Administration


from
      New
      York University.





***Wm.
      Chris Mathers*** has
      served as CFO and Financial Consultant to numerous public and private companies,
      including Seitel, Inc. (OTCBB: SELA), Nexus Nano Electronics, Inc. and Natural
      Nutrition, Inc. (OTCBB: NNTN). From January 1994 through January 2000, Mr.
      Mathers served as Chief Financial Officer of InterSystems, Inc., a publicly
      traded company on the American Stock Exchange. From 2000 through 2006, Mr.
      Mathers served as a contract Chief Financial Officer for Futures Commissions
      Merchants. Mr. Mathers brings substantial experience in complex GAAP and SEC
      reporting issues, as well as experience in start-up organizations. Mr. Mathers
      is also a Certified Public Accountant and began his career in the audit
      department of the accounting firm of Price Waterhouse. Mr. Mathers is a 1981
      graduate of Southwestern University in Georgetown, Texas.





16




The
      Company’s Board of Directors does not currently have an audit committee nor does
      it have a financial expert.





Members
      of our Board of Directors are not compensated.





We
      are
      currently in the process of drafting our code of ethics.





ITEM
      10.
      EXECUTIVE COMPENSATION





COMPENSATION
      OF EXECUTIVE OFFICERS





The
      following table sets forth the annual and long-term compensation for services
      in
      all capacities for the fiscal years ended December 31, 2006, 2005 and 2004
      for
      our two principal officers.


SUMMARY
                  COMPENSATION TABLEName
                  and Principal Position
              
              Year
              
              Salary
                  ($)
              
              Bonus
                  ($)
              
              Stock
                  Awards ($)
              
              Option
                  Awards ($)
              
              Non-Equity
                  Incentive Plan Compensation
              
              All
                  Other Compensation ($) (1)
              
              Total
                  ($)Timothy
                  J Connolly, CEO
              
              
              2006
              
              $
              338,500
              
              $
              100,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              13,400
              
              $
              451,9002005
              
              $
              265,000
              
              $
              20,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              12,000
              
              $
              297,0002004
              
              $
              254,583
              
              
              
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              12,000
              
              $
              266,583Wm.
                  Chris Mathers, CFO
              
              
              2006
              
              $
              29,500
              
              $
              1,500
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              31,0002005
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -2004
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -(1)
                  - Auto allowance





Stock
      Options





On
      December 13, 2005,the Turnaround Partners, Inc. 2005 Stock Incentive Plan (the
      "Plan") was adopted and approved by the shareholders. On a calendar year basis,
      an amount of shares of Common Stock equivalent to fifteen percent (15%) of
      the
      fully diluted shares outstanding on January 2 of any such calendar year may
      be
      allocated, at the discretion of the Administrator, to be granted as awards
      under
      the Plan, less awards outstanding at the end of the prior calendar year. There
      are no outstanding options at December 31, 2005.





For
      the
      years ended December 31, 2005 and 2006, there were no outstanding equity awards
      or options granted.





Employee
      Agreements





On
      September 1, 2004, Corporate Strategies entered into a five year employment
      agreement, effective June 1, 2004, with Timothy J. Connolly to serve as Chief
      Executive Officer and director of Corporate Strategies. The agreement has a
      renewal provision and provides for an annual salary and bonus upon attaining
      certain performance criteria set by the board of directors. The agreement also
      provides certain anti-dilution provisions in return for an extension of lock-up
      of the Chief Executive Officer's shares until December 31, 2007 and for certain
      other fringe benefits.





On
      September 1, 2004, Corporate Strategies entered into a three year employment
      agreement with Fred Zeidman to serve as President and a director of Corporate
      Strategies. The agreement has a renewal provision and provides for an annual
      salary and bonus upon attaining certain performance criteria set by the board
      of
      directors and certain fringe benefits; in addition, Mr. Zeidman receives 50%
      of
      all consulting fees from companies directly provided by or supervised by
      him.





On
      December 2, 2005, Kipling entered into a three year employment agreement with
      Timothy J. Connolly to serve as President and Chief Executive Officer. The
      agreement has a renewal provision and provides for an annual salary.
      Additionally, Mr. Connolly is entitled to a 10% interest in any distributions
      of
      any kind, dividends, income, bonuses or sale of the property owned by the
      Company.





17





ITEM
      11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND


RELATED
      SHAREHOLDER MATTERS





The
      table
      below sets forth information with respect to the beneficial ownership of our
      common stock and Series B and D Preferred Stock as of April 10, 2007 for (a)
      any
      person who we know is the beneficial owner of more than five percent (5%) of
      our
      outstanding common stock and Series B and D Preferred, (b) each of our directors
      and executive officers and (c) all of our directors and officers as a group.
      Other than the persons identified below, no person owned beneficially more
      than
      five percent (5%) of each of the Company's common stock and Series B and D
      Preferred. With the exception of the Company's 249 non-voting shares of Series
      C
      Preferred





Stock,
      there are no other classes or series of capital stock outstanding. As of April
      10, 2007, the Company had 39,784,753 shares of common stock, 6,666 shares of
      Series B Preferred and 700 shares of Series D Preferred issued and
      outstanding.








18





(A)
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL
                OWNERS





Amount
                    &
                
                
                
                Total
                    ofAmount
                
                Nature
                    of
                
                
                
                Direct
                    andTitle
                
                Name
                    and Address
                
                of
                    Direct
                
                Beneficial
                
                
                
                Beneficial
                
                Percentageof
                    Class
                
                of
                    Beneficial Owner
                
                Ownership
                
                Ownership
                
                
                
                Ownership
                
                of
                    ClassCommon
                
                
                Michael
                    O. Sutton
                
                
                11,500,000
                
                
                4,195,445
                
                
                (1
                )
                
                15,695,445
                
                
                35.69
                %10806
                    Briar Branch LaneHouston,
                    Tx 77024Common
                
                
                Timothy
                    J. Connolly
                
                
                -
                
                
                92,831,090
                
                
                (2
                )
                
                92,831,090
                
                
                70.00
                %109
                    N. Post Oak LaneSuite
                    422Houston,
                    TX 77024Common
                
                
                Jan
                    Carson Connolly
                
                
                -
                
                
                92,831,090
                
                
                (3
                )
                
                92,831,090
                
                
                70.00
                %8602
                    Pasture View LaneHouston,
                    TX 77024Common
                
                
                Gerald
                    Holland
                
                
                -
                
                
                20,625,000
                
                
                (4
                )
                
                20,625,000
                
                
                34.14
                %22
                    Coult LaneOld
                    Lyme, CT 07601Common
                
                
                Joanna
                    Saporito
                
                
                
                
                
                10,000,000
                
                
                (4
                )
                
                10,000,000
                
                
                20.09
                %668
                    W. Saddle River Rd.Ho-Ho-Kus,
                    NJ 07423
                
                
                -Common
                
                
                Mary-Ellen
                    Viola
                
                
                -
                
                
                10,000,000
                
                
                (4
                )
                
                10,000,000
                
                
                20.09
                %249
                    Long Hill DriveShort
                    Hills, NJ 07078Common
                
                
                David
                    Kesselbrenner
                
                
                -
                
                
                3,125,000
                
                
                (4
                )
                
                3,125,000
                
                
                7.28
                %10
                    Devonshire Rd.Livingston,
                    NJ 07039Common
                
                
                Louis
                    Kesselbrenner
                
                
                -
                
                
                3,125,000
                
                
                (4
                )
                
                3,125,000
                
                
                7.28
                %10
                    Devonshire Rd.Livingston,
                    NJ 07039Common
                
                
                Sarah
                    Kesselbrenner
                
                
                -
                
                
                3,125,000
                
                
                (4
                )
                
                3,125,000
                
                
                7.28
                %10
                    Devonshire Rd.Livingston,
                    NJ 07039Common
                
                
                Michael
                    Kesselbrenner
                
                
                1,071,702
                
                
                1,376,684
                
                
                (4
                )
                
                2,448,386
                
                
                5.95
                %10
                    Devonshire Rd.Livingston,
                    NJ 07039Common
                
                
                Adam
                    Gottbetter
                
                
                2,000,000
                
                
                -
                
                
                
                
                
                2,000,000
                
                
                5.03
                %488
                    Madison Ave.12th
                    FloorNew
                    York, NY 10022
 19





(1)
      Includes 4,195,445 shares which may be issued upon conversion of the 6,666
      shares of Series B Preferred beneficially owned by Mr. Sutton.





(2)
      Includes 78,906,427 shares of common stock which may be issued upon conversion
      of 595 shares of Series D Preferred beneficially owned by Mr. Connolly and
      13,924,663 shares of common stock which may be issued upon conversion of 105
      shares of Series D Preferred beneficially owned by his spouse.





(3)
      Includes 13,924,663 shares of common stock which may be issued upon conversion
      of 105 shares of Series D Preferred beneficially owned by Ms. Connolly and
      78,906,427 shares of common stock which may be issued upon conversion of 595
      shares of Series D Preferred beneficially owned by spouse.





(4)
      These
      shares represent the approximate number of shares underlying convertivle
      debentures at an assumed price of $0.008 per share (i.e. eighty percent (80%)
      of
      a recent five (5) day average price of $0.01 per share). Certain of these
      debentures are subject to an ownership limitation of nine and nine-tenths
      percent (9.9%) contained in the convertible debentures. Because the conversion
      price will fluctuate based on the market price of the Company's stock, the
      actual number of shares to be issued upon conversion of the debentures may
      be
      higher or lower.





(5)
      Applicable percentages of ownership are based on 39,784,753 shares of common
      stock and 100,000 shares each of Series B and D Preferred outstanding on April
      10, 2007 for each shareholder. Beneficial ownership is determined in accordance
      within the rules of the SEC and generally includes voting of investment power
      with respect to the securities. Shares subject to securities exercisable or
      convertible into shares of common stock that are currently exercisable or
      exercisable within sixty (60) days of April 10, 2007 are deemed to be
      beneficially owned by the person holding such options for the purpose of
      computing the percentage of ownership of such persons, but are not treated
      as
      outstanding for the purpose of computing the percentage ownership of any other
      person.





(B)
      SECURITY OWNERSHIP OF MANAGEMENT




Amount
                  &
              
              
              
              Total
                  ofAmount
              
              Nature
                  of
              
              
              
              Direct
                  andTitle
              
              Name
                  and Address
              
              of
                  Direct
              
              Beneficial
              
              
              
              Beneficial
              
              Percentageof
                  Class
              
              of
                  Beneficial Owner
              
              Ownership
              
              Ownership
              
              
              
              Ownership
              
              of
                  Class (1)Common
              
              
              Timothy
                  J. Connolly
              
              
              -
              
              
              92,831,090
              
              
              (2
              )
              
              92,831,090
              
              
              70.00
              %109
                  N. Post Oak LaneSuite
                  422Houston,
                  TX 77024Common
              
              
              Fred
                  S. Zeidman
              
              
              -
              
              
              -
              
              
              
              
              
              -
              
              
              0.00
              %109
                  N. Post Oak LaneSuite
                  422Houston,
                  TX 77024Common
              
              
              Wm.
                  Chris Mathers
              
              
              -
              
              
              -
              
              
              
              
              
              -
              
              
              0.00
              %109
                  N. Post Oak LaneSuite
                  422Houston,
                  TX 77024ALL
                  DIRECTORS ANDEXECUTIVE
                  OFFICERSAS
                  A GROUP (3)
              
              
              
              
              
              92,831,090
              
              
              
              
              
              92,831,090
              
              
              70.00
              %





(1)
      Applicable percentages of ownership are based on 39,784,753 shares of common
      stock and 6,666 and 700 shares of Series B and D Preferred, respectively,
      outstanding on April 10, 2007 for each shareholder. Beneficial ownership is
      determined in accordance within the rules of the SEC and Generally includes
      voting of investment power with respect to the securities. Shares subject to
      securities exercisable or convertible into shares of common stock that are
      currently exercisable or exercisable within sixty (60) days of April 10, 2007
      are deemed to be Beneficially owned by the person holding
      such options for the purpose of computing the percentage of ownership of such
      persons, but are not treated as outstanding for the purpose of computing the
      percentage ownership of any other person.





20


(2)
      Includes 78,906,427 shares of common stock which may be issued upon conversion
      of 585 shares of Series D Preferred beneficially owned by Mr. Connolly and
      13,924,663 shares of common stock which may be issued upon conversion of 105
      shares of Series D Preferred beneficially owned by his spouse.




ITEM
      12.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





CONCENTRATION
      OF TRANSACTIONS WITH CORNELL CAPITAL PARTNERS, LP





At
      December 31, 2006, $7,950,000 of the convertible debentures are owed to Cornell
      Capital and to Highgate House Funds, Ltd., an affiliate of Cornell.





Cornell
      Capital was the principal lender to Nuwave both before and after the
      merger.





Cornell
      Capital acquired Lehigh Acquisition Corp., formerly a wholly-owned subsidiary
      of
      NuWave, in February 2006. Lehigh owns the land held for development and sale.
      Proceeds from the sale of $5,556,356 reduced indebtedness to Cornell Capital
      by
      $5,281,274.





Cornell
      Capital has significant relationships with affiliated companies, both as a
      purchaser and lender.





ITEM
      13.
      EXHIBITS





(a)
      Documents Filed As Part Of This Report:





See
      Index
      to Consolidated Financial Statements attached which are filed as
      part


of
      this
      Annual Report.





(b)
      Exhibits:


**Exhibit
                  No.**
              **Description**
              
              **Location**2.1
              Agreement
                  and Plan of Merger, dated as of November 22, 2006, by and between
                  Emerge
                  Capital Corp. (the Delaware corporation) and Turnaround Partners,
                  Inc.
                  (the Nevada corporation)
              
              Incorporated
                  by reference as Exhibit 2.1 to the Company’s Current Report on Form 8-K as
                  filed with the SEC on January 5, 20072.2
              Certificate
                  of Ownership and Merger of Emerge Capital Corp. with and into Turnaround
                  Partners, Inc.
              
              Incorporated
                  by reference as Exhibit 2.2 to the Company’s Current Report on Form 8-K as
                  filed with the SEC on January 5, 20072.3
              Articles
                  of Merger of Turnaround Partners, Inc. and Emerge Capital Corp.
              
              Incorporated
                  by reference as Exhibit 2.3 to the Company’s Current Report on Form 8-K as
                  filed with the SEC on January 5, 20073.1
              Articles
                  of Incorporation of Turnaround Partners, Inc.
              
              Incorporated
                  by reference as Exhibit 3.1 to the Company’s Current Report on Form 8-K as
                  filed with the SEC on January 5, 20073.2
              Bylaws
                  of Turnaround Partners, Inc.
              
              Incorporated
                  by reference as Exhibit 3.2 to the Company’s Current Report on Form 8-K as
                  filed with the SEC on January 5, 20074.1
              2005
                  Stock Incentive Plan
              
              Incorporated
                  by reference as Appendix A to the Company's Definitive Information
                  Statement as filed with the SEC on December 13, 200510.1
              Assignment
                  and Amendment Agreement, dated January 26, 2004, related to the
                  Secured
                  Note Payable dated December 22, 2003, by and between Stone Street
                  Asset
                  Management, LLC and NuWave Technologies, Inc.
              
              Incorporated
                  by reference as Exhibit 99.7 to the Company’s Current Report on Form 8-K
                  as filed with the SEC on January 27, 200510.2
              Convertible
                  Debenture, dated May 6, 2004, issued by Corporate Strategies, Inc.
                  to
                  Cornell Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 10.2 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the SEC on April
                  17,
                  200610.3
              Convertible
                  Debenture, dated June 24, 2004, issued by Corporate Strategies,
                  Inc. to
                  iVoice, Inc.
              
              Incorporated
                  by reference as Exhibit 10.3 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the SEC on April
                  17,
                  200610.4
              Employment
                  Agreement, dated September 1, 2004, by and between Corporate Strategies,
                  Inc. and Timothy J. Connolly
              
              Incorporated
                  by reference as Exhibit 10.4 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the SEC on April
                  17,
                  200610.5
              Employment
                  Agreement, dated September 1, 2004, by and between Corporate Strategies,
                  Inc. and Fred Zeidman
              
              Incorporated
                  by reference as Exhibit 10.5 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the SEC on April
                  17,
                  2006
  21
  
 10.6
              Convertible
                  Debenture, dated September 28, 2004, issued by Corporate Strategies,
                  Inc.
                  to Cornell Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 10.6 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the SEC on April
                  17,
                  200610.7
              Termination
                  Agreement, dated January 26, 2005, related to the Standby Equity
                  Distribution dated as of May 2004 by and between the Company and
                  Cornell
                  Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 99.1 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on January 27, 200510.8
              Standby
                  Equity Distribution Agreement, dated as of January 26, 2005, between
                  the
                  Company and Cornell Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 99.2 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on January 27, 200510.9
              Registration
                  Rights Agreement, dated as of January 26, 2005, by and between
                  the Company
                  and Cornell Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 99.3 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on January 27, 200510.10
              Placement
                  Agent Agreement, dated as of January 26, 2005, by and among the
                  Company,
                  Cornell Capital Partners, LP and Newbridge Securities
                  Corporation
              
              Incorporated
                  by reference as Exhibit 99.4 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on January 27, 200510.11
              Termination
                  Agreement, dated January 26, 2005, related to the Convertible Debenture
                  issued by the Company to Cornell Capital Partners, LP on December
                  22,
                  2003
              
              Incorporated
                  by reference as Exhibit 99.5 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on January 27, 200510.12
              Promissory
                  Note, dated as of January 2, 2005, issued by the Company to Cornell
                  Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 99.6 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on January 27, 200510.13
              Convertible
                  Debenture, dated April 6, 2005, issued by Corporate Strategies,
                  Inc. to
                  Cornell Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 10.13 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the SEC
                  on April
                  17, 200610.14
              $250,000
                  Convertible Debenture, dated as of May 5, 2005, issued to Cornell
                  Capital
                  Partners, LP
              
              Incorporated
                  by reference as Exhibit 99.1 to Company's Current Report on Form
                  8-K as
                  filed with the SEC on May 10, 200510.15
              Letter
                  of Intent, dated June 3, 2005, by and between the Company and Corporate
                  Strategies, Inc.
              
              Incorporated
                  by reference as Exhibit 99.1 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on June 16, 200510.16
              $150,000
                  Convertible Debenture, dated as of July 20, 2005, issued to Cornell
                  Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 99.1 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on July 28, 2005
  22
  
 10.17
              Merger
                  Agreement, dated as of August 31, 2005, by and among NuWave Technologies,
                  Inc., Strategies Acquisition Corp., Corporate Strategies Inc. and
                  the
                  Shareholders listed therein
              
              Incorporated
                  by reference as Exhibit 99.1 to the Company's Current Report on
                  Form 8-K/A
                  as filed with the SEC on September 8, 200510.18
              Services
                  Agreement, dated October 1, 2005, by and between Timothy J. Connolly
                  and
                  Sagamore Holdings, Inc.
              
              Incorporated
                  by reference as Exhibit 10.18 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the SEC
                  on April
                  17, 200610.19
              Stock
                  Purchase Agreement, dated as of November 11, 2005, by and among
                  Corporate
                  Strategies, Inc., Mr. Robert P. Farrell and Mr. Joseph W. Donohue,
                  Jr.
              
              Incorporated
                  by reference as Exhibit 10.1 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on January 30, 200610.20
              Letter,
                  dated November 18, 2005, from Cornell Capital Partners, LP to modify
                  certain Debentures
              
              Incorporated
                  by reference as Exhibit 10.21 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the SEC
                  on April
                  17, 200610.21
              Consulting
                  Agreement, dated December 14, 2005, by and between Timothy J. Connolly
                  on
                  behalf of Corporate Strategies, Inc. and Elite Flight Solutions,
                  Inc.
              
              Incorporated
                  by reference as Exhibit 10.22 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the SEC
                  on April
                  17, 200610.22
              Convertible
                  Debenture, issued December 31, 2005, by Elite Flight Solutions,
                  Inc. to
                  Corporate Strategies, Inc.
              
              Incorporated
                  by reference as Exhibit 10.23 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the SEC
                  on April
                  17, 200610.23
              Consulting
                  Agreement, dated January 1, 2006, by and between Timothy J. Connolly
                  and
                  Power Technology, Inc.
              
              Incorporated
                  by reference as Exhibit 10.24 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the SEC
                  on April
                  17, 200610.24
              Consulting
                  Agreement, dated January 1, 2006, by and between Timothy J. Connolly
                  on
                  behalf of Corporate Strategies, Inc. and TRAC Financial Group,
                  Inc.
              
              Incorporated
                  by reference as Exhibit 10.25 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the SEC
                  on April
                  17, 200610.25
              Assumption
                  Agreement, dated February 7, 2006, by and between Lehigh and Cornell
                  Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 10.2 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on February 15, 200610.26
              Stock
                  Purchase Agreement, dated as of February 3, 2006, by and between
                  the
                  Company and Cornell Capital Partners, LP
              
              Incorporated
                  by reference as Exhibit 10.1 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on February 15, 2006
  23
  
 10.27
              Joinder
                  Agreement, dated as of February 11, 2006, effective as of December
                  31,
                  2005 by Elite Flight Solutions, Inc.
              
              Incorporated
                  by reference as Exhibit 10.5 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on February 28, 200610.28
              Security
                  Agreement, dated as of February 11, 2006, effective as of December
                  31,
                  2005, by and between Elite Flight Solutions, Inc. and Corporate
                  Strategies, Inc.
              
              Incorporated
                  by reference as Exhibit 10.4 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on February 28, 200610.29
              Secured
                  Convertible Debenture, dated as of February 11, 2006, effective
                  as of
                  December 31, 2005 issued to Corporate Strategies, Inc.
              
              Incorporated
                  by reference as Exhibit 10.3 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on February 28, 200610.30
              Registration
                  Rights Agreement, dated as of February 11, 2006, effective as of
                  December
                  31, 2005 by and between Elite Flight Solutions, Inc. and Corporate
                  Strategies, Inc.
              
              Incorporated
                  by reference as Exhibit 10.2 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on February 28, 200610.31
              Securities
                  Purchase Agreement, dated as of February 11, 2006, effective as
                  of
                  December 31, 2005, by and between Elite Flight Solutions, Inc.
                  and
                  Corporate Strategies, Inc.
              
              Incorporated
                  by reference as Exhibit 10.1 to the Company's Current Report on
                  Form 8-K
                  as filed with the SEC on February 28, 200610.32
              Purchase
                  Agreement, dated as of September 30, 2006, by and among Emerge
                  Capital
                  Corp., Kipling Holdings, Inc. and Timothy J. Connolly
              
              Incorporated
                  by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  as filed with the SEC on October 6, 200610.33
              First
                  Amendment to Purchase Agreement, dated October 5, 2006, by and
                  among
                  Emerge Capital Corp., Kipling Holdings, Inc. and Timothy J.
                  Connolly
              
              Incorporated
                  by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
                  as filed with the SEC on October 6, 200610.34
              Second
                  Amendment to Purchase Agreement, effective as of December 31, 2006,
                  by and
                  among Emerge Capital Corp., Kipling Holdings, Inc. and Timothy
                  J.
                  Connolly
              
              Provided
                  herewith16.1
              Letter,
                  dated November 9, 2005, from Weiser LLP
              
              Incorporated
                  by reference as Exhibit 99.1 to the Company's Current Report on
                  Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on November
                  14,
                  200531.1
              Certification
                  by Chief Executive Officer pursuant to 15.U.S.C. Section 7241,
                  as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
              
              Provided
                  herewith31.2
              Certification
                  by Chief Financial Officer pursuant to 15.U.S.C. Section 7241,
                  as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
              
              Provided
                  herewith
  24
  
 32.1
              Certification
                  by Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
              
              Provided
                  herewith32.2
              Certification
                  by Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
              
              Provided
                  herewith





ITEM
      14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES





(1)
      Audit
      Fees. Turnaround Partners, Inc. paid to Thomas Leger & Co., L.L.P. ("Leger")
      audit fees of $38,685 for the audit of fiscal year 2006 and $78,775 for fiscal
      year 2005. The Company paid Leger audit fees of $48,195 and $20,510 for the
      2006
      and 2005 quarterly reviews, respectively. The 2006 audit fees above represent
      fees billed through March 12, 2007 and do not include the final billing for
      the
      2006 audit.





(2)
      Audit-related fees. Turnaround Partners, Inc. paid Leger audit-related fees
      of
      $46,728 in 2005 which are costs associated with the merger of Corporate
      Strategies, Inc. with NuWave Technologies, Inc., including the filings of Form
      8-K. The Company also paid Leger $3,950 for costs associated with our S-8 filing
      in 2006.





(3)
      Tax
      Fees. The Company has not paid for tax services to Leger.





(4)
      All
      Other Fees. The Company has not paid for any other services to Leger.





(5)
      Audit
      Committee pre-approval policies and procedures. The Company does not currently
      have an audit committee. Fred S. Zeidman, Chairman of The Board of Emerge
      Capital Corp., approved the engagement of Leger.




25


**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the Company has caused
      this Annual Report on Form 10-KSB to be signed on its behalf by the undersigned,
      thereunto duly authorized.




Date:
                April 17, 2007
            Turnaround
                Partners, Inc.
              (formerly
                Emerge Capital Corp)(Registrant)/s/
                Timothy J ConnollyTimothy
                J. Connolly
              Chief
                Executive Officer








Date:
                April 17, 2007
            Turnaround
                Partners, Inc.
              (formerly
                Emerge Capital Corp)(Registrant)/s/
                Wm Chris MathersWm
                Chris Mathers
              Chief
                Financial Officer





26





INDEX
      TO
      CONSOLIDATED FINANCIAL STATEMENTS





TABLE
      OF
      CONTENTS


Report
                  of Independent Registered Public Accounting Firm
              
              F-1Consolidated
                  Balance Sheet as of December 31, 2006
              
              F-2Consolidated
                  Statements of Operations for the Years EndedDecember
                  31, 2006 and 2005
              
              F-4Consolidated
                  Statements of Changes in Shareholders' Deficitfor
                  the Years Ended December 31, 2005 and 2006
              
              F-6Consolidated
                  Statements of Cash Flows for the Years EndedDecember
                  31, 2006 and 2005
              
              F-7Notes
                  to the Consolidated Financial Statements
              
              F-9
                  to F-28











REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FRIM








To
      the
      Shareholders


Turnaround
      Partners, Inc. (formerly Emerge Capital Corp.) and Subsidiaries


Houston,
      Texas








We
      have
      audited the accompanying consolidated balance sheet of Turnaround Partners,
      Inc.
      (formerly Emerge Capital Corp.) and Subsidiaries as of December 31, 2006 and
      the
      related consolidated statements of operations, changes in shareholders' deficit,
      and cash flows for the years ended December 31, 2006 and 2005. These
      consolidated financial statements are the responsibility of the Company's
      management. Our responsibility is to express an opinion on these consolidated
      financial statements based on our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated 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 audit provides a reasonable basis for our
      opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects the financial position of Turnaround Partners, Inc.
      (formerly Emerge Capital Corp.) and Subsidiaries as of December 31, 2006, and
      the consolidated results of their operations and their cash flows for the years
      ended December 31, 2006 and 2005 in conformity with accounting principles
      generally accepted in the United States of America.





/s/
      Thomas Leger & Co., L.L.P.


Thomas
      Leger & Co., L.L.P.





April
      8,
      2006


Houston,
      Texas


F-1


**TURNAROUND
                  PARTNERS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEET****December
                  31, 2006**
  **ASSETS****CURRENT
                  ASSETS**Cash
                  and cash equivalents
              
              $
              1,055,341Restricted
                  cash
              
              
              98,452Notes
                  and accounts receivable
              
              
              418,230Investment
                  in marketable securities
              
              
              153,851Due
                  from affiliate
              
              
              106,089Prepaid
                  expense and deferred financing costs
              
              
              235,958Total
                  current assets
              
              
              2,067,921**NONCURRENT
                  ASSETS**Investment
                  in real estate partnership and other investments, at cost
              
              
              4,069,067Note
                  receivable
              
              
              900,000Fixed
                  assets, net
              
              
              69,787Total
                  noncurrent assets
              
              
              5,038,854**TOTAL
                  ASSETS**
              
              $
              7,106,775**LIABILITIES
                  AND SHAREHOLDERS' DEFICIT****CURRENT
                  LIABILITIES**Accounts
                  payable and accrued liabilities
              
              $
              762,303Convertible
                  debentures--net of $137,794 discount
              
              
              1,696,902Notes
                  payable
              
              
              104,259Unearned
                  income
              
              
              222,222Series
                  C Preferred stock including associated paid in capital; liquidation
                  preference of $373,500,redeemable
                  at $1,500 per share at Company option, cumulative dividends of
                  $120per
                  share per year, non-voting, par value $.01, 1,000 shares
                  authorized,249
                  shares issued and outstanding
              
              
              220,547Derivative
                  liabilities
              
              
              995,940Total
                  current liabilities
              
              
              4,002,173Convertible
                  debentures--net of $1,896,717 discount
              
              
              4,728,283Note
                  payable
              
              
              186,955Accrued
                  interest payable
              
              
              500,335Total
                  liabilities
              
              
              9,417,746**COMMITMENTS
                  AND CONTINGENCIES**
              
              
              -


F-2




**TURNAROUND
                  PARTNERS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEET****December
                  31, 2006**
 **(Continued)**
 **SHAREHOLDERS'
                  DEFICIT**Preferred
                  Stock, par value $.01, 2,000,000 shares authorized:Series
                  A Convertible Preferred Stock, noncumulative, $.01 par
                  value;400,000
                  shares authorized; none issued
              
              
              -Series
                  B Convertible Preferred Stock, $.01 par value; 100,000 shares
                  authorized;6,666
                  shares issued and outstanding; no liquidation or redemption
                  value
              
              
              67Series
                  D Convertible Preferred Stock, $.01 par value; 100,000 shares
                  authorized;700
                  shares issued and outstanding; no liquidation or redemption
                  value
              
              
              7Common
                  stock, $.001 par value; 5,000,000,000 shares authorized;29,447,504
                  shares issued and outstanding
              
              
              29,447Additional
                  paid-in capital
              
              
              742,855Retained
                  deficit
              
              
              (3,083,347
              )Total
                  shareholders' deficit
              
              
              (2,310,971
              )**TOTAL
                  LIABILITIES AND SHAREHOLDERS' DEFICIT**
              
              $
              7,106,775See
                  accompanying Notes to Consolidated Financial Statements
  F-3


**TURNAROUND
                  PARTNERS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF OPERATIONS**
                **FOR
                  THE YEARS ENDED DECEMBER
                  31,**
  **2006**
              
              **2005****REVENUE**Discount
                  income
              
              $
              10,425
              
              $
              153,108Consulting
                  revenue
              
              
              963,277
              
              
              183,000Marketable
                  securities gain (loss)
              
              
              (51,093
              )
              
              80,600Fee
                  income
              
              
              204,610
              
              
              174,900Total
                  revenue
              
              
              1,127,219
              
              
              591,608**GENERAL
                  AND ADMINISTRATIVE EXPENSES**Salaries
                  and benefits
              
              
              892,286
              
              
              516,496Advertising
              
              
              120,155
              
              
              58,622Business
                  development, travel and entertainment
              
              
              86,685
              
              
              134,465Rent
              
              
              76,395
              
              
              71,819Depreciation
                  and amortization
              
              
              23,874
              
              
              20,232Professional
                  fees
              
              
              855,722
              
              
              366,754Bad
                  debt
              
              
              243,302
              
              
              78,787Other
                  expenses
              
              
              271,995
              
              
              137,548Allocated
                  overhead to affiliated entity
              
              
              (308,481
              )
              
              (38,000
              )Total
                  general and administrative expenses
              
              
              2,261,933
              
              
              1,346,723**OPERATING
                  LOSS**
              
              
              (1,134,714
              )
              
              (755,115
              )Other
                  (income) expense:Net
                  change in fair value of derivative liability
              
              
              (3,642,080
              )
              
              108,357Income
                  (loss) on debt extinguishment
              
              
              (130,563
              )
              
              (392,017
              )Merger
                  expense
              
              
              140,000
              
              
              3,434,943Interest
                  expense
              
              
              273,802
              
              
              192,543Interest
                  expense - derivatives
              
              
              600,071
              
              
              232,423Interest
                  income
              
              
              (54,790
              )
              
              (36,909
              )Recovery
                  of bad debts
              
              
              -
              
              
              (169,456
              )Loss
                  from investment in real estate partnership
              
              
              78,095
              
              
              -Gain
                  on sale of property
              
              
              -
              
              
              (28,625
              )Other
                  income (expense) - net
              
              
              (22,605
              )
              
              18,357Total
                  other (income) expense
              
              
              (2,758,070
              )
              
              3,359,616Income
                  (loss) before income tax
              
              
              1,623,356
              
              
              (4,114,731
              )**INCOME
                  TAX PROVISION**Current
                  income tax benefit
              
              
              -
              
              
              (50,570
              )Deferred
                  income tax expense (benefit )
              
              
              -
              
              
              -Total
                  income tax expense (benefit)
              
              
              -
              
              
              (50,570
              )**INCOME
                  (LOSS) FROM CONTINUING OPERATIONS**
              
              
              1,623,356
              
              
              (4,064,161
              )
 See
                    accompanying Notes to Consolidated Financial Statements
 F-4
   **TURNAROUND
                  PARTNERS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF OPERATIONS****FOR
                  THE YEARS ENDED****(continued)**
  **2006**
              
              **2005****LOSS
                  FROM DISCONTINUED OPERATIONS**Loss
                  from discontinued operations
              
              
              (4,688
              )
              
              (218,102
              )Gain
                  on sale of subsidiaries
              
              
              3,317,406
              
              
              61,020**NET
                  INCOME (LOSS)**
              
              
              4,936,074
              
              
              (4,221,243
              )Preferred
                  dividends paid
              
              
              4,554
              
              
              60,196**INCOME
                  (LOSS) AVAILABLE TO COMMON SHARES**
              
              $
              4,931,520
              
              $
              (4,281,439
              )Basic
                  income (loss) per share:Income
                  (loss) from continuing operations
              
              
              0.06
              
              
              (0.20
              )Income
                  (loss) from discontinued operations
              
              
              (0.13
              )
              
              (0.01
              )$
              0.19
              
              $
              (0.21
              )Diluted
                  income (loss) per share:Income
                  (loss) from continuing operations
              
              
              0.02
              
              
              (0.20
              )Income
                  (loss) from discontinued operations
              
              
              0.03
              
              
              (0.01
              )0.05
              
              $
              (0.21
              )Basic
                  average shares outstanding
              
              
              25,505,662
              
              
              20,863,605Diluted
                  average shares outstanding
              
              
              98,411,949
              
              
              20,863,605
  See
                  accompanying Notes to Consolidated Financial Statements





F-5
 
 **TURNAROUND
                    PARTNERS, INC. AND SUBSIDIARIES****CONSOLIDATED
                    STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT****For
                    the Years Ended December 31, 2005 and
                    2006**
  ****
                    ****
                    **Series
                        A**
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ****
                    ********
                    ****
                    **Preferred
                        Stock**
                    ****
                    **Class
                        A Common Stock**
                    ****
                    **Class
                        B Common Stock**
                    ****
                    **Series
                        B Preferred**
                    ****
                    **Series
                        C Preferred**
                    ****
                    **Series
                        D Preferred**
                    ****
                    **Common
                        Stock**
                    ****
                    **Additional**
                      **Paid-in**
                    ****
                    **Retained**
                    ****
                    ****
                    ********
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Shares**
                    ****
                    **Amount**
                    
                    **Shares**
                    ****
                    **Amount**
                    ****
                    **Capital**
                    ****
                    **Deficit**
                    ****
                    **Total**
                    ****Balance,
                        December 31, 2004
                    
                    
                    599
                    
                    $
                    1
                    
                    
                    14,880,000
                    
                    $
                    14,880
                    
                    
                    51,750,000
                    
                    $
                    51,750
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    -
                    
                    $
                    -
                    
                    $
                    741,302
                    
                    $
                    (457,887
                    )
                    $
                    350,046Exchange
                        of Class B common stock for
                      Class
                        A common stock
                    
                    
                    -
                    
                    
                    -
                    
                    
                    25,000,000
                    
                    
                    25,000
                    
                    
                    (8,333,333
                    )
                    
                    (8,333
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (16,667
                    )
                    
                    -
                    
                    
                    -Recapitalization
                        through reverse merger
                      and
                        acquisition of Nuwave Technologies, Inc.
                    
                    
                    (570
                    )
                    
                    (1
                    )
                    
                    (39,880,000
                    )
                    
                    (39,880
                    )
                    
                    (43,416,667
                    )
                    
                    (43,417
                    )
                    
                    100,000
                    
                    
                    1,000
                    
                    
                    570
                    
                    
                    6
                    
                    
                    -
                    
                    
                    -
                    
                    
                    22,710,816
                    
                    
                    22,711
                    
                    
                    51,046
                    
                    
                    -
                    
                    
                    (8,535
                    )Distribution
                        of CSI Business Finance, Inc.
                      preferred
                        stock to shareholders
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,000
                    )
                    
                    37,723
                    
                    
                    36,723Redemption
                        of preferred stock
                    
                    
                    (29
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (34
                    )
                    
                    (1
                    )
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (55,043
                    )
                    
                    -
                    
                    
                    (55,044
                    )Net
                        Loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (4,221,243
                    )
                    
                    (4,221,243
                    )Preferred
                        dividends paid
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (60,196
                    )
                    
                    (60,196
                    )Balance,
                        December 31, 2005
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    100,000
                    
                    
                    1,000
                    
                    
                    536
                    
                    
                    5
                    
                    
                    -
                    
                    
                    -
                    
                    
                    22,710,816
                    
                    
                    22,711
                    
                    
                    719,638
                    
                    
                    (4,701,603
                    )
                    
                    (3,958,249
                    )Issuance
                        of common stock:For
                        services
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    4,800,000
                    
                    
                    4,800
                    
                    
                    287,700
                    
                    
                    -
                    
                    
                    292,500Conversion
                        of debentures
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,936,688
                    
                    
                    1,936
                    
                    
                    62,065
                    
                    
                    
                    
                    
                    64,001Issuance
                        of 3,000,000 warrants
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    141,000
                    
                    
                    -
                    
                    
                    141,000for
                        services
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -Redemption
                        of preferred stock
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (282
                    )
                    
                    (3
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (243,498
                    )
                    
                    -
                    
                    
                    (243,501
                    )Transfer
                        preferred stock to
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -
                    
                    
                    -current
                        liability
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (254
                    )
                    
                    (2
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (224,976
                    )
                    
                    
                    
                    
                    (224,978
                    )Exchange
                        of series B
                      preferred
                        for
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -series
                        D preferred
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    
                    
                    
                    (93,334
                    )
                    
                    (933
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    93,334
                    
                    
                    933
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Reduction
                        in series D
                      preferred
                        shares
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (92,634
                    )
                    
                    (926
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    926
                    
                    
                    -
                    
                    
                    -Deemed
                        distribution to shareholder
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (3,313,264
                    )
                    
                    (3,313,264Net
                        income
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    4,936,074
                    
                    
                    4,936,074Preferred
                        dividends paid
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (4,554
                    )
                    
                    (4,554
                    )Balance,
                        December 31, 2006
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    6,666
                    
                    $
                    67
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    700
                    
                    $
                    7
                    
                    
                    29,447,504
                    
                    $
                    29,447
                    
                    $
                    742,855
                    
                    $
                    (3,083,347
                    )
                    $
                    (2,310,971
                    )
 See
            accompanying Notes to Consolidated Financial Statements


F-6
 
 **TURNAROUND
                  PARTNER INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS**
  **Year
                  Ended December 31,****2006**
              
              **2005****CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  income (loss)
              
              $
              4,936,074
              
              $
              (4,120,911
              )Adjustment
                  to reconcile net income (loss) to net cash provided by(used
                  in) operating activities:Depreciation
                  and amortization
              
              
              23,874
              
              
              20,232Amortization
                  of deferred expenses
              
              
              60,638
              
              
              132,801Bad
                  debts
              
              
              243,302
              
              
              78,787Loss
                  from discontinued operations
              
              
              4,688
              
              
              218,102Non-cash
                  stock issued for services
              
              
              62,077
              
              
              -Non-cash
                  merger expense
              
              
              140,000
              
              
              3,420,633Non-cash
                  expense for redemption of preferred stock
              
              
              3,072
              
              
              39,457Non-cash
                  expenses
              
              
              88,095Non-cash
                  interest expense-derivatives
              
              
              600,071
              
              
              232,423Net
                  change in fair value of derivative liability
              
              
              (3,642,080
              )
              
              108,357Non-cash
                  debt modification gain
              
              
              (130,563
              )
              
              (392,017
              )Non-cash
                  gain on sale of land
              
              
              -
              
              
              (25,776
              )Non-cash
                  gain on sale of subsidary
              
              
              (3,317,406
              )
              
              (61,020
              )Non-cash
                  income
              
              
              (541,527
              )
              
              -(Increase)
                  decrease in assets:Purchased
                  accounts receivable
              
              
              -
              
              
              491,269Other
                  accounts receivable
              
              
              (245,186
              )
              
              (36,405
              )Notes
                  receivable
              
              
              211,142
              
              
              (2,298
              )Deferred
                  tax asset
              
              
              -
              
              
              (28,110
              )Prepaid
                  and other
              
              
              102,412
              
              
              (13,176
              )Investment
                  in marketable securities
              
              
              391,060
              
              
              295,623Increase
                  (decrease) in liabilities:Accounts
                  payable
              
              
              (8,588
              )
              
              (7,012
              )Accrued
                  liabilities
              
              
              241,405
              
              
              (268,567
              )Margin
                  loans
              
              
              -
              
              
              (466,986
              )Unearned
                  income
              
              
              717,749
              
              
              46,000Due
                  to clients
              
              
              (19,608
              )
              
              61,799Accrued
                  interest
              
              
              225,418
              
              
              226,721Net
                  cash provided by (used in) operating activities
              
              
              146,119
              
              
              (50,074
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Purchases
                  of fixed assets
              
              
              (21,784
              )
              
              (78,097
              )Cash
                  received in merger
              
              
              -
              
              
              35,853Cash
                  received in purchase of subsidiary
              
              
              191,346
              
              
              -Cash
                  distributed at sale of subsidiary
              
              
              -
              
              
              (130,161
              )Cash
                  received for sale of subsidiary
              
              
              368,396
              
              
              -Cash
                  paid for purchase of subsidiary
              
              
              (10,000
              )
              
              -Investment
                  purchases
              
              
              (7,073
              )
              
              -Preferental
                  returns on capital of partnership
              
              
              78,750
              
              
              -Net
                  cash provided by (used) in investing activities
              
              
              599,635
              
              
              (172,405
              )
  F-7


**TURNAROUND
                    PARTNER INC. AND SUBSIDIARIES****CONSOLIDATED
                    STATEMENTS OF CASH FLOWS****(Continued)**
  **Year
                    Ended December 31,****2006**
                
                **2005****CASH
                    FLOWS FROM FINANCING ACTIVITIES**Principal
                    payments on note payable
                
                
                (64,258
                )
                
                -Net
                    proceeds from sale of convertible debentures
                
                
                -
                
                
                335,000Dividends
                    paid on preferred stock
                
                
                (4,554
                )
                
                (60,196
                )Net
                    cash (used in) provided by financing activities
                
                
                (68,812
                )
                
                274,804Net
                    cash used by operating activities of discontinued
                    operations
                
                
                -
                
                
                33,383**NET
                    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
                
                
                676,942
                
                
                85,708**CASH
                    AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
                
                
                476,851
                
                
                391,143**CASH
                    AND CASH EQUIVALENTS, END OF PERIOD**
                
                $
                1,153,793
                
                $
                476,851**SUPPLEMENTAL
                    INFORMATION**Interest
                    paid
                
                $
                14,689
                
                $
                10,977Taxes
                    paid
                
                $
                9,882
                
                $
                -Redemption
                    and purchase of preferred stock:Decrease
                    in accounts receivable
                
                $
                22,500
                
                $
                94,500Increase
                    in notes payable
                
                $
                240,000
                
                $
                -Decrease
                    in paid-in capital
                
                $
                243,498
                
                $
                55,043Sale
                    of subsidiary:Assets
                    sold
                
                $
                2,906,001
                
                $
                -Liabilities
                    assumed by buyer
                
                $
                5,861,821
                
                $
                -Purchase
                    of subsidiary:Assets
                    purchased
                
                $
                5,081,476
                
                $
                -Liabilities
                    assumed
                
                $
                3,906,744
                
                $
                -Deemed
                    distribution
                
                $
                3,313,264
                
                $
                -Common
                    stock and warrants issued for services:Increase
                    in prepaids
                
                $
                221,423
                
                $
                -Increase
                    in common stock
                
                $
                3,800
                
                $
                -Increase
                    in paid-in-capital
                
                $
                279,700
                
                $
                -Common
                    stock issued for services
                
                $
                -
                
                $
                19,800Reserve
                    for bad debts
                
                $
                -
                
                $
                78,787Conversion
                    of convertible debentures and accrued interest:Decrease
                    in debentures and accrued interest
                
                $
                63,996
                
                $
                -Increase
                    in common stock
                
                $
                1,936
                
                $
                -Increase
                    in paid-in-capital
                
                $
                62,065
                
                $
                -Acquired
                    in merger:Assets
                    acquired in merger
                
                $
                -
                
                $
                3,128,348Liabilities
                    acquired in merger
                
                $
                -
                
                $
                6,456,805Merger
                    expenses
                
                $
                -
                
                $
                3,328,457Discounted
                    operations:Assets
                
                $
                -
                
                $
                490,720Liabilites
                
                $
                -
                
                $
                136,133
  See
                    accompanying Notes to Condensed Consolidated Financial Statements
                    (unaudited)
  F-8





TURNAROUND
      PARTNERS, INC. AND SUBSIDIARIES





(formerly
      EMERGE CAPITAL CORP. AND SUBSIDIARIES)





NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS





DECEMBER
      31, 2006 And 2005





NOTE
      1 -
      DESCRIPTION OF MERGER, NATURE OF OPERATIONS AND CONSOLIDATION





On
      August
      31, 2005, NuWave Technologies, Inc. ( "NuWave" or "the Company") entered into
      a
      merger agreement (the "Agreement") with Corporate Strategies, Inc. ("Corporate
      Strategies") and the shareholders of Corporate Strategies ("Shareholders").
      The Company was subsequently renamed Turnaround Partners, Inc. The transaction
      was accounted for as a reverse acquisition since control of the merged group
      passed to the shareholders of the acquired company (Corporate
      Strategies).





Pursuant
      to the terms of the Agreement, the Company issued one (1) share of its common
      stock ("Common Stock"), par value $0.001 per share, to each holder of Corporate
      Strategies Class A common stock in exchange for two (2) shares of Corporate
      Strategies Class A common stock, par value $0.001 per share. Second, the Company
      issued one (1) share of the Company's Series C preferred stock ("Series C
      Preferred"), par value $0.01 per share, to each holder of Corporate Strategies
      Series A preferred stock for one (1) share of Corporate Strategies Series A
      preferred stock, par value $0.001 per share.





The
      Company issued and delivered shares of its Series B convertible Preferred stock
      ("Series B Preferred") to each holder of Corporate Strategies Class B common
      stock so that effectively upon conversion of the Series B Preferred into common
      shares, the common shares issued upon conversion shall be equal to ninety-five
      percent (95%) of the issued and outstanding stock of the Company (calculated
      on
      a fully diluted basis as of the date of the Merger, following the issuance
      of
      all the Merger Consideration (as such term is defined in the Agreement) and
      after giving effect to such conversion, but not including any shares of Common
      Stock issuable upon conversion of any then outstanding Company convertible
      debentures ). Therefore, the Merger Consideration for the Common Stock, Series
      C
      Preferred and Series B Preferred was the Corporate Strategies Class A common,
      Series A preferred and Class B common, respectively. The number of shares issued
      to the Shareholders in connection with the Merger was based upon a determination
      by the Company's Board of Directors (the "Board").





The
      terms
      of the Series B Preferred were subsequently modified. In connection with the
      Kipling purchase, 93,334 shares of Series B Preferred were exchanged for a
      like
      number of Series D Preferred, which were subsequently reduced to 700 shares
      of
      Series D Preferred. The remaining 6,666 shares of Series B Preferred are
      convertible into 4,195,445 shares of common stock. Each
      share of the Series D may be convertible, at the option of the holder, at any
      time and from time to time after December 31, 2006 through December 31, 2010,
      into that number of shares of Common Stock equal to the greater of (a) one
      tenth
      of one percent (0.1%) of the total number of shares of Common Stock issued
      and
      outstanding as of the last day of the fiscal quarter immediately preceding
      such
      date of conversion, calculated on a fully diluted basis after giving effect
      to
      the conversion of such share(s) of Series D and (b) One Hundred Thousand
      (100,000) shares of Common Stock. Each share of Series D Preferred Stock held
      by
      the Holders which has not been converted on or before December 31, 2010 into
      shares of Common Stock shall be convertible, at the option of the Holder of
      such
      share, at any time and from time to time after December 31, 2010 into one tenth
      of one percent (0.1%) of the total number of shares of Common Stock issued
      and
      outstanding on December 31, 2010, calculated on a fully diluted basis after
      giving effect to the conversion of such share(s) of Series D Preferred Stock.
      The shares of Common Stock received upon conversion shall be fully paid and
      non-assessable shares of Common Stock.





The
      Series B and D Convertible Preferred Stockholders and the holders of the common
      stock vote together and the Preferred Stock shall be counted on an "as
      converted" basis, thereby giving the Preferred Shareholders control of the
      Company.





In
      November 2006, we migrated from a Delaware corporation to a Nevada corporation
      and changed the name of the Company to Turnaround Partners, Inc.





NATURE
      OF
      OPERATIONS AND ORGANIZATION





We
      primarily provide business restructuring, turnaround execution and business
      development advisory services for emerging and re-emerging public and private
      companies. The Company also actively trades securities and options with
      available cash. Many of these transactions contain a considerable amount of
      risk. Under our consulting agreements, we do not take positions in securities
      of
      our clients that at any one time would cause us to have an ownership interest
      in
      them of over 4.99%.





F-9




The
      Company owned Aim American Mortgage, Inc. ("Aim"), from February 18, 2003 to
      December 31, 2005. Aim engaged in residential mortgage brokerage activities.
      The
      consolidated financial statements of the Company include the results of the operations
      of Aim through December 31, 2005. Aim was sold on December 31, 2005 and has
      been
      reflected in discontinued operations in the financial statements.





On
      October 22, 2004, the Company formed CSI Business Finance, Inc. ("CSIBF"),
      incorporated in Texas, for the purpose of engaging in equipment leasing and
      other business finance activities. The consolidated financial statements of
      the
      Company include the results of operations of CSIBF through August 31, 2005,
      the
      date CSIBF was distributed to shareholders. The results are presented in
      discontinued operations.





CONSOLIDATION
      AND PRESENTATION





The
      accompanying consolidated financial statements include the accounts of the
      Company and its subsidiaries. All significant inter-company balances and
      transactions have been eliminated.





Since
      Corporate Strategies is the surviving entity of the reverse merger, the
      financial statements include the results of operations since the merger (August
      31, 2005) for NuWave and its consolidated subsidiaries, and the operations
      of
      Corporate Strategies since its inception.





NOTE
      2
      -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





REVENUE
      RECOGNITION





The
      Company's revenue recognition policies are in compliance with Staff Accounting
      Bulletin 104. Revenue is recognized at the date a formal arrangement exists,
      the
      price is fixed or determinable, the delivery is complete, no other significant
      obligation of the Company exists and collectibility is reasonably
      assured.





Revenues
      from sales of real estate are recorded when title is conveyed to the buyer,
      adequate cash payment has been received and there is no continued involvement.
      One of our subsidiaries holding real estate was sold in February
      2006.





Commission
      income from the brokering of loans is recognized when all of the services
      required to be performed for such revenues have been completed. Incremental
      direct costs include credit reports appraisal fees, document preparation fees,
      wire fees, filing fees, and commissions, and are included in operating expenses,
      net of reimbursements. The mortgage brokerage subsidiary was sold in December
      2005, and the results are included in discontinued operations.





Discount
      income from purchased receivables represents a percentage of the purchased
      invoice. The discount percentage earned is determined by the number of days
      the
      invoice is outstanding.





Consulting
      revenue is recognized as services are performed.





Marketable
      securities gains (losses) is both trading gains or losses and the change in
      market value of the trading securities owned by the Company, including related
      puts and calls, in accordance with Financial Accounting Standard 115 "Accounting
      for Certain Investments in Debt and Equity Securities."





Lease
      agreements, under which the Company recovers substantially all its investment
      from the minimum lease payments are accounted for as finance leases. At lease
      commencement, the Company records a minimum lease payment receivable and
      unearned lease income. The remaining unearned income is recognized as revenue
      over the term of receivables using the interest method. The leasing subsidiary
      was distributed to shareholders in August 2005, and the results are included
      in
      discontinued operations.





USE
      OF
      ESTIMATES





The
      preparation of consolidated financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect certain reported amounts and disclosures. Accordingly,
      actual results could differ from those estimates.





CASH
      AND
      CASH EQUIVALENTS





For
      purposes of the consolidated statement of cash flows, the Company considers
      all
      short-term securities purchased with a maturity date of three months or less
      to
      be cash equivalents.





F-10




COLLECTIBILITY
      OF ACCOUNTS AND NOTES RECEIVABLE





The
      accounts and notes receivable are reviewed monthly for aging and quarterly
      credit evaluation of the customer's financial condition to determine
      collectibility. Write-offs or an increase in the allowance for doubtful accounts
      are made based on this evaluation. The allowance for doubtful accounts was
      approximately $0 and $138,000 for the years ended December 31, 2006 and 2005,
      respectively.





FIXED
      ASSETS





Fixed
      assets are stated at cost. Depreciation is computed using the straight-line
      method over estimated useful lives of three to five years. Leasehold
      improvements are amortized on a straight-line basis over the shorter of the
      useful life of the improvement or the term of the lease.





When
      assets are retired or otherwise disposed of, the cost and related accumulated
      depreciation are removed from the accounts, and any resulting gain or loss
      is
      recognized in operations for the period. The cost of maintenance and repairs
      is
      charged to expense as incurred; significant renewals and betterments are
      capitalized.





LAND
      HELD
      FOR DEVELOPMENT AND SALE





Land
      held
      for development and sale is stated at the seller's historical cost basis, plus
      the costs of improvements. The subsidiary holding the land was sold in February
      2006.





INTEREST
      CAPITALIZATION





The
      Company follows SFAS No. 34, "Capitalization of Interest Costs", which provides
      for the capitalization of interest as part of the historical cost of acquiring
      certain assets. Interest is capitalized on assets that require a period of
      time
      to get them ready for their intended use, such as real estate development
      projects. Interest is capitalized from the period activities begin, such as
      planning and permitting, until such time as the project is complete. Interest
      costs include interest recognized on obligations having explicit rates, as
      well
      as the amortization of discounts that result from imputing interest on
      convertible debentures over the life of the obligation. Interest is capitalized
      on only the net book value of the land and improvements, net of the discount
      recorded on the acquisition of the land. Interest on specific borrowings
      associated with the land, that are in excess of its net book value are expensed
      as incurred.





IMPAIRMENT
      OF LONG-LIVED ASSETS





The
      Company periodically assesses the recoverability of long-lived assets, including
      property and equipment, and the investment in the real estate partnership,
      when
      there are indications of potential impairment, based on estimates of
      undiscounted future cash flows. The amount of impairment is calculated by
      comparing anticipated discounted future cash flows with the carrying value
      of
      the related asset. In performing this analysis, management considers such
      factors as current results, trends, and future prospects, in addition to other
      economic factors.





DERIVATIVE
      FINANCIAL INSTRUMENTS





Derivatives
      are accounted for in accordance with SFAS 133 and EITF No. 00-19, "Accounting
      for Derivative Financial Instruments Indexed to, and Potentially Settled in,
      a
      Company's Own Stock.





FAIR
      VALUE DISCLOSURE AT DECEMBER 31, 2006





The
      carrying value of cash, notes and accounts receivable, accounts payable, accrued
      liabilities and notes payable are reasonable estimates of their fair value
      because of short-term maturity.





F-11





INCOME
      TAXES





The
      Company accounts for income taxes under SFAS No. 109, "Accounting for Income
      Taxes," which requires an asset and liability approach to financial accounting
      and reporting for income taxes. The difference between the financial statement
      and tax basis of assets and liabilities is determined annually. Deferred tax
      assets and liabilities are computed for those differences that have future
      tax
      consequences using the currently enacted tax laws and rates that apply to the
      periods in which they are expected to affect taxable income. Valuation
      allowances are established, if necessary, to reduce the deferred tax asset
      to
      the amount that will assure full realization. Income tax expense is the current
      tax payable or refundable for the period plus or minus the net change in the deferred
      tax assets and liabilities.





ADVERTISING





Advertising
      costs are expensed as incurred. Advertising expense on continuing operations
      was
      $120,155 and $58,622 for the years ended December 31, 2006 and 2005,
      respectively.








NET
      INCOME (LOSS) PER SHARE





Basic
      income (loss) per share is computed by dividing the net income (loss) available
      to common shareholders by the weighted average of common shares outstanding
      during the year. Diluted per share amounts assume the conversion, exercise,
      or
      issuance of all potential common stock instruments unless the effect is
      anti-dilutive, thereby reducing the loss or increasing the income per share.








RECLASSIFICATIONS





The
      accompanying consolidated financial statements for prior years contain certain
      reclassifications to conform with current year presentation.


F-12


Recent
      Accounting Pronouncements








In
      June
      2006, the Financial Accounting Standards Board issued FASB Interpretation
      No. 48, *“Accounting
      for Uncertainty in Income Taxes”* (“FIN 48”) *.* FIN 48 clarifies the application of SFAS No. 109, *Accounting
      for Income Taxes* ,
      by
      establishing a threshold condition that a tax position must meet for any part
      of
      the benefit of that position to be recognized in the financial statements.
      In
      addition to recognition, FIN 48 provides guidance concerning measurement,
      derecognition, classification and disclosure of tax positions. FIN 48 is
      effective for fiscal years beginning after December 15, 2006; accordingly,
      the Company will adopt FIN 48 effective as of January 1, 2007. The
      Company does not anticipate that the adoption of FIN 48 will have a
      material impact on its effective tax rate.







In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Staff Position (“FSP”) AUG AIR-1 — Accounting for Planned Major Maintenance
      Activities. FSP AUG AIR-1 prohibits the use of the accrue-in-advance method
      of
      accounting for planned major maintenance activities because it results in the
      recognition of a liability in a period prior to the occurrence of the
      transaction or event obligating the entity. FSP AUG AIR-1 is effective for
      fiscal years beginning after December 15, 2006 and its guidance is
      applicable to entities in all industries. The Company will adopt the guidance
      in
      FSP AUG-AIR-1 as of January 1, 2007. The Company does not believe the
      adoption of this guidance will have an impact on its financial position and
      results of operations.







In
      September 2006, the Securities and Exchange Commission staff issued Staff
      Accounting Bulletin (“SAB”) No. 108, *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements.* SAB 108
      provides guidance on how the effects of the carryover or reversal of prior
      year
      misstatements should be considered in quantifying a current year misstatement.
      SAB 108 established a dual approach that requires quantification of errors
      under two methods: (1) roll-over method which quantifies the amount by
      which the current year income statement is misstated, and (2) the iron
      curtain method which quantifies the error as the cumulative amount by which
      the
      current year balance sheet is misstated. In some situations, companies will
      be
      required to record errors that occurred in prior years even though those errors
      were immaterial for each year in which they arose. Companies may choose to
      either restate all previously presented financial statements or record the
      cumulative effect of such errors as an
      adjustment to retained earnings at the beginning of the period in which
      SAB 108 is applied. SAB 108 is effective for fiscal years ending after
      November 15, 2006. The adoption of this pronouncement did not have an
      impact on the Company’s financial position or results of operations.







In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (“SFAS 157”), which is intended to increase consistency and comparability
      in fair value measurements by defining fair value, establishing a framework
      for
      measuring fair value and expanding disclosures about fair value measurements.
      SFAS 157 is effective for financial statements issued for fiscal years
      beginning after November 15, 2007, and interim periods within those fiscal
      years. The Company will adopt SFAS 157 on January 1, 2008, and has not
      yet determined the impact, if any, on its consolidated financial statements.





NOTE
      3 -
      INCOME (LOSS) PER COMMON SHARE





In
      accordance with the Financial Accounting Standards Board (the “FASB”) Statement
      of Financial Accounting Standards No. 128 (“SFAS 128”), "Earnings per Share",
      basic earnings per share are computed based on the weighted average shares
      of
      common stock outstanding during the periods.  Diluted earnings per share
      are computed based on the weighted average shares of common stock plus the
      assumed issuance of common stock for all potentially dilutive
      securities.





F-13





The
      computations for basic and diluted net income (loss) per share consist of the
      following:




Twelve
                  Months EndedDecember
                  31,2006
              
              2005Income
                  (loss) from continuing operations
              
              $
              1,623,356
              
              $
              (4,064,161
              )Less
                  effect of derivatives, preferred stock and convertible
                  debenture
              
              
              -
              
              
              -Adjusted
                  income (loss) from continuing operations
              
              $
              1,623,356
              
              $
              (4,064,161
              )Income
                  (loss) from discontinued operations
              
              
              (4,688
              )
              
              (218,102
              )Gain
                  on sale of subsidiary
              
              
              3,317,406
              
              
              61,020Net
                  income (loss)
              
              $
              4,936,074
              
              $
              (4,221,243
              )Basic
                  weighted average shares
              
              
              25,505,662
              
              
              20,863,605Effect
                  of dilutive securities:Series
                  B preferred stock
              
              
              4,195,445
              
              
              -Series
                  D preferred stock
              
              
              68,710,842
              
              
              -Diluted
                  weighted average shares
              
              
              98,411,949
              
              
              20,863,605Income
                  (loss) per share:Basic:Income
                  (loss) from continuing operations
              
              $
              0.06
              
              $
              (0.20
              )Income
                  (loss) from discontinued operations
              
              
              0.13
              
              
              (0.01
              )Net
                  income (loss)
              
              $
              0.19
              
              $
              (0.21
              )Diluted:Income
                  (loss) from continuing operations
              
              $
              0.02
              
              $
              (0.20
              )Income
                  (loss) from discontinued operations
              
              
              0.03
              
              
              (0.01
              )Net
                  Income (loss)
              
              $
              0.05
              
              $
              (0.21
              )





(1)
            A
                weighted average year-to-date number of Convertible Debentures to
                convert
                into 51,383,109 shares of common stock were outstanding during the
                twelve
                months ended December 31, 2006, but were not included in the computation
                of diluted per share net income for the twelve months ended December
                31,
                2006 because they were anti-dilutive. All potential dilutive shares
                were
                excluded from the computation of diluted earnings per share for the
                year
                ended December 31, 2005 because they were anti-dilutive. In addition
                there
                were 3,000,000 warrants that were not included because of their
                anti-dilutive effect.





F-14





NOTE
      4 -
      CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS





Financial
      instruments, which potentially subject the Company to concentrations of credit
      risk consist principally of cash, accounts and notes receivable and marketable
      securities. The Company maintains its cash accounts in high quality FDIC insured
      banks in Texas and in money market brokerage accounts. The Company's accounts
      receivables consist of receivables for consulting from companies located in
      the
      United States. The Company performs ongoing credit evaluations of its customers'
      financial conditions to ensure collections and minimize losses. The Company
      reduces its credit risk relating to marketable securities
      through diversification of marketable securities held.





For
      the
      years ended December 31, 2006 and 2005, the Company had sales as a percent
      of
      annual revenues from continuing operations to the following
      customers:


2006
              
              2005Customer
                  A
              
              
              --
              %
              
              26Customer
                  B
              
              
              31
              %
              
              10
              %Customer
                  C
              
              
              25
              %
              
              --Customer
                  D
              
              
              19
              %
              
              21
              %





No
      other
      customers accounted for more than 10% of revenue during the year.





NOTE
      5 -
      CONCENTRATION OF TRANSACTIONS WITH CORNELL CAPITAL PARTNERS, L. P.





At
      December 31, 2006 , $7,925,000 of the convertible debentures are owed to Cornell
      Capital Partners, L.P ("Cornell") and Highgate House Funds, Ltd., an affiliate
      of Cornell.





Cornell
      was the principal lender to Nuwave both before and after the
      merger.





In
      February 2006, the Company sold its wholly-owned subsidiary, Lehigh, to Cornell
      Capital Partners, LP ("Cornell") for total proceeds of $5,948,407 including
      the
      assumption of $4,881,274 promissory notes, $400,000 of convertible debentures,
      $573,737 of accrued expense and interest and cash of $93,396. The transaction
      resulted in a gain of $3,042,406.





Cornell
      has significant relationships with affiliated companies, both as a purchaser
      and
      lender.





NOTE
      6 -
      FIXED ASSETS


Fixed
                  assets consisted of the following at December 31, 2006:Computer
                  equipment
              
              $
              26,499Furniture
                  and fixtures
              
              
              46,735Leasehold
                  improvements
              
              
              36,328109,562Less
                  accumulated depreciation
              
              
              (39,775
              )Fixed
                  assets, net
              
              $
              69,787




Depreciation
      expense for the years ended December 31, 2006 and 2005 was $23,874 and $20,232,
      respectively.





NOTE
      7 -
      INVESTMENT IN MARKETABLE SECURITIES





Investments
      in marketable securities primarily include shares of common stock in various
      companies. The investments are considered trading securities, and accordingly
      any changes in market value are reflected in the consolidated statement of
      operations. At December 31, 2006 and 2005, the Company had unrealized gains
      (losses) of ($158,809) and $27,930, respectively, related to marketable
      securities held on those dates. These unrealized gains and losses are included
      in the consolidated statements of operations for the respective
      years.




F-15




Investments
      include shares of common stock in companies which do not have a readily
      determinable fair market value and are accounted for using the cost method.
      Once
      a quarter, the financial statements, operations and any other information needed
      to evaluate these investments are reviewed to determine if an impairment needs
      to be recorded. At December 31, 2006, the Company had $82,673 of investment
      in
      preferred stock carried at cost.





NOTE
      8 -
      ACQUISITION OF KIPLING HOLDINGS, INC.





On
      September 30, 2006, we completed a stock purchase agreement (the “Agreement”) to
      acquire 100% of the total issued and outstanding capital stock of Kipling
      Holdings, Inc. (“Kipling”), a Delaware corporation from Timothy J. Connolly in
      consideration of (a) our assumption of all of the liabilities of Kipling,
      subject to certain consents, (b) certain anti-dilution rights as set forth
      in
      the Agreement and (c) all legal and other costs and expenses incurred by Kipling
      in consideration with this Agreement. Mr. Connolly serves as CEO of Turnaround
      and therefore (i) Turnaround obtained a third party appraisal of the Company
      which valued the acquired assets at Two Million Two Hundred Fifty Thousand
      Dollars ($2,250,000) more than the liabilities assumed and (ii)
      Turnaround’s other (disinterested) Board member and CFO reviewed and approved
      this affiliate transaction. Mr. Connolly received no profit from this
      affiliated transaction. Because this transaction was between parties under
      common control, we recorded the $3,313,264 of consideration in excess of Mr.
      Connolly’s original cost basis as a deemed distribution to Mr. Connolly. The
      Agreement had been subject to the written consent of Highgate House Funds,
      Ltd.
      (“ Highgate ”),
      which
      the Company and Highgate reduced to writing effective as of September 30, 2006.
      Kipling primarily provides capital for investments in the hospitality industry.
      Kipling, at December 31, 2006, owned a thirty percent interest in a Hilton
      hotel
      under construction in West Palm Beach, Florida. Since the purchase was effective
      on September 30, 2006 the Company did not record any revenue or expenses during
      the nine months ended September 30, 2006. The loss for the period, October
      1
      through December 31, 2006 had been included in the statement of
      operations.





In
      a
      separate agreement with an individual, the Company issued an additional
      2,000,000 shares and 3,000,000 warrants ($0.05 per warrant) in consideration
      of
      the individual’s surrender of his option, rights or other interests whatsoever
      to purchase any capital stock of Kipling Holdings, Inc. The Company has valued
      these 2,000,000 shares at $140,000. The Company used the closing price of $0.07
      per share on September 30, 2006, the date of contract execution, as the value
      assigned to these shares. This expense is included as merger expense for the
      twelve months ended December 31, 2006. The Company has valued the 3,000,000
      warrants in the amount of $141,000 using the Black Sholes method and is
      amortized over the term of the agreement.





Assets
      and liabilities acquired in the acquisition





The
      Company has a thirty percent limited partnership interest in Worthington
      Hospitality, L.L.L.P. (Worthington) totaling $4,500,000. The investment was
      funded on December 7, 2005. The partnership currently has a Hilton hotel, which
      became operational in February 2007, in West Palm Beach, Florida. The
      partnership agreement provides for a preferential return of seven percent per
      annum on the capital contributions funded by the investors until such time
      as
      the hotel/partnership secures a temporary or permanent certificate of occupancy,
      at which time the preferential return shall cease to accrue. As of September
      30,
      2006, the $4,500,000 Investment in Worthington has been reduced by $257,825
      for
      the preferential return on capital and $98,336 for the cumulative partnership
      loss through September 30, 2006. The Company will receive thirty percent of
      any
      monetary amounts paid out by the partnership and will be allocated thirty
      percent of all operating profits, non-operating profits and losses of the
      partnership.





Worthington
      started its operations September 14, 2005. At December 31, 2006 Worthington
      had
      a book value of $3,930,656 consisting of cash, land, building, furniture and
      fixtures, equipment and other assets of $12,570,302 and accounts payable and
      debt of $8,639,646. Another limited partner of Worthington is committed by
      terms
      of the partnership agreement to fund the additional $9,000,000 necessary to
      complete the construction and begin operation of the hotel.





The
      general partner has exclusive responsibility for management of the partnership
      including the power to sell the hotel and land. Limited partners have no right
      or authority to conduct partnership business. The partnership agreement provides
      that, without the unanimous consent of the limited partners, the general partner
      cannot transfer less than 100% of the partnership interests. If the general
      partner decides to transfer 100% of the partnership interest in an
“arm’s-length” transaction, he may require all of the partners to transfer all
      of their respective interest. Limited partners are not responsible for the
      expenses, liabilities or obligations of the partnership except as expressly
      assumed or guaranteed.





This
      investment is accounted for using the equity method. Upon completion of the
      hotel’s construction, the Company will calculate the difference between the book
      value of the investment and the underlying equity in the net assets per the
      Partnership and will appropriately account for such difference.





Debenture
      Payable from the acquisition




F-16





The
      Company is the issuer of a $6,225,000 Secured Convertible Debenture (“the
      Debenture”) payable to Highgate House Funds, Ltd (“Holder”), dated December 2,
      2005. The Debenture bears interest at the rate of 7%, which is accrued until
      maturity. The Debenture is due and payable in full, including accrued interest
      from inception, on December 1, 2010. Associated deferred debenture costs in
      the
      amount of $43,725, net of $9,474 amortization as of December 31, 2006, has
      been
      recorded as a non-current asset.





The
      Debenture is convertible, at the option of the Holder, into common stock of
      the
      Company at a price per share equal to the lower of (i) $.50 (the “Fixed Price”)
      or (ii) eighty percent (80%) of the lowest closing bid price for the five (5)
      trading days immediately preceding the date of conversion or, if a special
      event
      of default occurs, at a price per share equal to eighty percent (80%) of the
      lowest closing bid price for the thirty (30) trading days immediately preceding
      the date of conversion. The shares of common stock issuable by the Company
      to
      the investor upon conversion of shares of the Debentures will not be registered
      initially under the Securities Act of 1933. The Company is obligated to register
      the resale of the conversion shares under the Securities and Exchange Act,
      pursuant to the terms of the Investor Registration Rights Agreement dated
      December 2, 2005. The Registration Rights Agreement called for the Company
      to
      register the underlying securities no later than 180 after the execution of
      the
      Debenture agreement (this requirement has been extended to June 30, 2007) and
      use its best efforts to have the Initial Registration statement declared
      effective by the SEC no later than ninety days after the date
      filed.





Per
      the
      original agreement, in the event the Registration Statement is not filed by
      December 6, 2006 or is not declared effective within ninety days of the filing
      date, the Company will pay liquidated damages, to the Holder, a cash amount
      equal to two percent per month of the outstanding principal amount of the
      Debenture outstanding. The holder has verbally agreed to extend the registration
      filing requirement date to June 30, 2007.





The
      debenture is secured by all of the assets and property of the Company including
      the investment in Worthington.





The
      following unaudited pro forma financial information presents the consolidated
      results of operations for the twelve months ended December 31, 2006, as if
      the
      acquisition had occurred on January 1, 2006, after giving effect to certain
      adjustments. The pro forma information does not necessarily reflect the results
      of operations that would have occurred had the entities been a single company
      during this period. Kipling was not in existence for the period ending December
      31, 2005.




December
                31, 2006(unaudited)Net
                sales
            
            $
            1,127,219Net
                income (loss)
            
            $
            1,591,354Weighted
                average number of common shares outstanding - basic
            
            
            25,505,662Weighted
                average number of common shares outstanding - diluted
            
            
            98,411,945Income
                per common share - basic
            
            $
            0.19Income
                per common share - diluted
            
            $
            0.05





NOTE
      9 -
      NOTES PAYABLE





On
      November 20, 2002, the Company obtained an unsecured revolving line of credit
      of
      $100,000 at prime plus 2% with an open maturity date. At December 31, 2006,
      the
      prime rate was 8.25% and amount borrowed was $89,708. At December 31, 2006,
      all
      payments under the terms of the note were current.





NOTE
      10
      -CONVERTIBLE DEBENTURES - DERIVATIVE FINANCIAL INSTRUMENTS





The
      Convertible Debentures issued from 2003 through 2006 have been accounted for in
      accordance with SFAS 133 and EITF No. 00-19, "Accounting for Derivative Financial
      Instruments Indexed to, and Potentially Settled in, a Company's Own Stock."





The
      Company has identified the following instruments have derivatives requiring evaluation
      and accounting under the relevant guidance applicable to financial derivatives:





F-17




Cornell
      Debenture issued 5/6/04 in the face amount of $400,000


Cornell
      Debenture issued 6/24/04 in the face amount of $500,000


Cornell
      Debenture issued 9/28/04 in the face amount of $400,000


Cornell
      Debenture issued 4/6/05 in the faceamount of $400,000


Holland
      et. al. Debentures issued 12/8/03 in the face amountof $135,000


Holland
      et. al. Debentures issued 12/22/03 in the face amount of$250,000


Saporito
      Debenture issued 1/29/04 in the face amount of $100,000


ViolaDebenture
      issued 10/12/04 in the face amount of $100,000


Highgate
      House issued 12/02/05 in the face amount of $6,225,000








The
      Company has identified the above debentures have embedded derivatives.
      These


embedded
      derivatives have been bifurcated from their respective host debt


contracts
      and accounted for as derivative liabilities in accordance with EITF


00-19.
      When multiple derivatives exist within the Convertible Notes, they
      have


been
      bundled together as a single hybrid compound instrument in accordance
      with


SFAS
      No.
      133 Derivatives Implementation Group Implementation Issue No. B-15,


"Embedded
      Derivatives: Separate Accounting for Multiple Derivative Features


Embedded
      in a Single Hybrid Instrument."





The
      embedded derivatives within the Convertible Notes have been recorded at
      fair


value
      at
      the date of issuance; and are marked-to-market each reporting
      period


with
      changes in fair value recorded to the Company's income statement as
      "Net


change
      in
      fair value of derivative liabilities." The Company has utilized a


third
      party valuation firm to fair value the embedded derivatives using a


layered
      discounted probability-weighted cash flow approach.





The
      fair
      value of the derivative liabilities are subject to the changes in
      the


trading
      value of the Company's common stock, as well as other factors. As a


result,
      the Company's financial statements may fluctuate from
      quarter-to-quarter


based
      on
      factors, such as the price of the Company's stock at the balance
      sheet


date
      and
      the amount of shares converted by note holders. Consequently, our


financial
      position and results of operations may vary from quarter-to-quarter


based
      on
      conditions other than our operating revenues and expenses.





CORNELL
      5/06/04 CONVERTIBLE DEBENTURE





On
      May 6,
      2004, Corporate Strategies entered into a Secured Debenture
      agreement


with
      Cornell Capital Partners LP, pursuant to which the Company sold $400,000
      of


convertible
      notes due May 5, 2007.





The
      notes
      bear interest at 5%, which is accrued until maturity on May 5,
      2007.


The
      notes
      are convertible, at the option of the holders, into common stock of


the
      Company at a price of $0.18 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest closing bid price for the five


trading
      days prior to conversion. The Holder has the right to cause the notes
      to


be
      converted into common stock, subject to an ownership limitation of 4.99%
      of


the
      outstanding stock. The Company has the right to repurchase the Notes at
      120%


of
      the
      face amount. The conversion feature, reset provision and the
      Company's


optional
      early redemption right have been bundled together as a single
      compound


embedded
      derivative liability, and fair valued using a layered discounted


probability-weighted
      cash flow approach.





F-18




CORNELL
      6/24/04 CONVERTIBLE DEBENTURE





On
      June
      24, 2004, Corporate Strategies entered into a Secured Debenture


agreement
      with I-Voice, pursuant to which the Company sold $500,000 of


convertible
      notes due May 1, 2007. The notes were subsequently assigned to


Cornell
      Capital Partners, L.P.





The
      notes
      bear interest at 5%, which is accrued until maturity on May 1,
      2007.


The
      notes
      are convertible, at the option of the holders, into common stock of


the
      Company at a price of $0.114 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest closing bid price for the five


trading
      days prior to conversion. The Holder has the right to cause the notes
      to


be
      converted into common stock, subject to an ownership limitation of 4.99%
      of


the
      outstanding stock. The Company has the right to repurchase the Notes at
      120%


of
      the
      face amount. The conversion feature, reset provision and the
      Company's


optional
      early redemption right have been bundled together as a single
      compound


embedded
      derivative liability, and fair value using a layered discounted


probability-weighted
      cash flow approach.





CORNELL
      9/28/04 CONVERTIBLE DEBENTURE





On
      September 28, 2004, Corporate Strategies entered into a Secured
      Debenture


agreement
      with Cornell Capital Partners, L.P., pursuant to which the Company


sold
      $400,000 of convertible notes due September 28, 2007.





The
      notes
      bear interest at 5%, which is accrued until maturity on September
      28,


2007.
      The
      notes are convertible, at the option of the holders, into common
      stock


of
      the
      Company at a price of $0.084 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest closing bid price for the five


trading
      days prior to conversion. The Holder has the right to cause the notes
      to


be
      converted into common stock, subject to an ownership limitation of 4.99%
      of


the
      outstanding stock. The Company has the right to repurchase the Notes at
      120%


of
      the
      face amount. The conversion feature, reset provision and the
      Company's


optional
      early redemption right have been bundled together as a single
      compound


embedded
      derivative liability, and fair valued using a layered discounted


probability-weighted
      cash flow approach.





CORNELL
      4/06/05 CONVERTIBLE DEBENTURE





On
      April
      6, 2005, Corporate Strategies entered into a Secured Debenture


agreement
      with Cornell Capital Partners, L.P., pursuant to which the Company


sold
      $400,000 of convertible notes due April 6, 2008.





The
      notes
      bear interest at 5%, which is accrued until maturity on April 6,
      2008.


The
      notes
      are convertible, at the option of the holders, into common stock of


the
      Company at a price of $0.108 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest closing bid price for the five


trading
      days prior to conversion. The Holder has the right to cause the notes
      to


be
      converted into common stock, subject to an ownership limitation of 4.99%
      of


the
      outstanding stock. The Company has the right to repurchase the Notes at
      120%


of
      the
      face amount. The conversion feature, reset provision and the
      Company's


optional
      early redemption right have been bundled together as a single
      compound


embedded
      derivative liability, and fair valued using a layered discounted


probability-weighted
      cash flow approach.




F-19





HOLLAND
      ET. AL. 12/08/03 SECURED CONVERTIBLE NOTES





On
      December 8, 2003, NuWave entered into a Secured Debenture agreement with
      five


investors
      (Holland et. al) pursuant to which NuWave sold $135,000 of 5%


convertible
      notes due December 8, 2005.





The
      notes
      bear interest at 5%, which is accrued until maturity on December 8,


2005.
      The
      notes are convertible, at the option of the holders, into common
      stock


of
      the
      Company at a price of $0.216 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest daily volume weighted average
      price


("VWAP")
      for the five trading days prior to conversion. The Holder has the
      right


to
      cause
      the notes to be converted into common stock. The Company has the
      right


to
      repurchase the Notes at 110% of the face amount. The notes are
      unsecured


general
      obligations of the Company and are subordinated to all other


indebtedness
      of the Company unless the other indebtedness is expressly made


subordinate
      to the notes. The notes were acquired by the Company effective


August
      31, 2005 as part of the reverse merger between NuWave and the
      Corporate


Strategies.
      The notes were amended on November 30, 2005 to defer the maturity


date
      to
      January 31, 2007 and were further amended on January 23, 2007 to defer the


maturity
      date to June 30, 2007. The conversion feature, reset provision and
      the


Company's
      optional early redemption right have been bundled together as a
      single


compound
      embedded derivative liability, and fair valued using a layered


discounted
      probability-weighted cash flow approach. The modification was


determined
      to be substantial and the Company accounted for the modification as


an
      extinguishment of debt, under EITF 96-19 and recorded the replacement
      note.


The
      single compound embedded derivative liability was valued using the
      same


methodology
      for the replacement note.





HOLLAND
      ET. AL. 12/22/03 SECURED CONVERTIBLE NOTES





On
      December 22, 2003, NuWave entered into a Secured Debenture agreement with
      two


investors
      (Holland et. al) pursuant to which Nuwave sold $250,000 of
      convertible


notes
      due
      December 22, 2005.





The
      notes
      bear interest at 5%, which is accrued until maturity on December
      22,


2005.
      The
      notes are convertible, at the option of the holders, into common
      stock


of
      the
      Company at a price of $0.168 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest daily volume weighted average
      price


("VWAP")
      for the five trading days prior to conversion. The Holder has the
      right


to
      cause
      the notes to be converted into common stock. The Company has the
      right


to
      repurchase the Notes at 110% of the face amount. The notes are
      unsecured


general
      obligations of the Company and are subordinated to all other


indebtedness
      of the Company unless the other indebtedness is expressly made


subordinate
      to the notes. The notes were acquired by the Company effective


August
      31, 2005 as part of the reverse merger between NuWave and Corporate


Strategies
      The notes were amended on November 30, 2005 to defer the maturity


date
      to
      January 31, 2007 and were further amended on January 23, 2007 to defer


the
      maturity date to June 30, 2007. The conversion feature, reset provision and
      the


Company's
      optional early redemption right have been bundled together as a
      single


compound
      embedded derivative liability, and valued using a layered
      discounted


probability-weighted
      cash flow approach. The modification was determined to be


substantial
      and the Company accounted for the modification as an extinguishment


of
      debt
      under EITF 96-19, and recorded the replacement note. The single
      compound


embedded
      derivative liability was valued using the same methodology for the


replacement
      note.




F-20




SAPORITO
      CONVERTIBLE DEBENTURE





On
      January 29, 2004, NuWave entered into a Secured Debenture agreement
      with


Joanna
      Saporito pursuant to which NuWave sold $100,000 of convertible notes
      due


January
      29, 2006.





The
      notes
      bear interest at 5%, which is accrued until maturity on January 29,


2006.
      The
      notes are convertible, at the option of the holders, into common
      stock


of
      the
      Company at a price of $0.156 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest daily volume weighted average
      price


("VWAP")
      for the five trading days prior to conversion. The Holder has the
      right


to
      cause
      the notes to be converted into common stock. The Company has the
      right


to
      repurchase the Notes at 110% of the face amount. The notes are
      unsecured


general
      obligations of the Company and are subordinated to all other


indebtedness
      of the Company unless the other indebtedness is expressly made


subordinate
      to the notes. The notes were acquired by the Company effective


August
      31, 2005 as part of the reverse merger between NuWave Technologies
      and


Corporate
      Strategies. The notes were amended on November 30, 2005 to defer
      the


maturity
      date to January 31, 2007 and were further amended on January 23, 2007


to
      defer
      the maturity date to June 30, 2007. The conversion feature, reset provision
      and


the
      Company's optional early redemption right have been bundled together as
      a


single
      compound embedded derivative liability, and fair valued using a
      layered


discounted
      probability-weighted cash flow approach. The modification was


determined
      to be substantial and the Company accounted for the modification as


an
      extinguishment of debt under EITF 96-19, and recorded the replacement
      note.


The
      single compound embedded derivative liability was valued using the
      same


methodology
      .





VIOLA
      CONVERTIBLE DEBENTURE





On
      October 12, 2004, NuWave Technologies entered into a Secured
      Debenture


agreement
      with Mary-Ellen Viola pursuant to which NuWave sold $100,000 of


convertible
      notes due October 12, 2006.





The
      notes
      bear interest at 5%, which is accrued until maturity on October 12,


2006.
      The
      notes are convertible, at the option of the holders, into common
      stock


of
      the
      Company at a price of $0.078 per share, subject to standard
      anti-dilution


provisions
      relating to splits, reverse splits and other transactions plus a


reset
      provision whereby the conversion price may be adjusted downward to a
      lower


price
      per
      share based on 80% of the lowest closing bid price for the five


trading
      days prior to conversion. The Holder has the right to cause the notes
      to


be
      converted into common stock, subject to an ownership limitation of 9.99%
      of


the
      outstanding stock. The Company has the right to repurchase the Notes at
      110%


of
      the
      face amount. The notes were acquired by the Company effective August
      31,


2005
      as
      part of the reverse merger between NuWave and Corporate Strategies.


The
      notes
      were amended on January 23, 2007 to defer the maturity date to June 30, 2007.


The
      conversion feature, reset provision and the Company's optional early
      redemption


right
      have been bundled together as a single compound embedded derivative


liability,
      and fair valued using a layered discounted probability-weighted
      cash


flow
      approach.





F-21





HIGHGATE
      HOUSE 12/02/05 CONVERTIBLE DEBENTURE





The
      Company is the issuer of a $6,225,000 Secured Convertible Debenture (“the
      Debenture”)


payable
      to Highgate House Funds, Ltd (“Holder”), dated December 2, 2005. The Debenture


bears
      interest at the rate of 7%, which is accrued until maturity. The Debenture
      is
      due and


payable
      in full, including accrued interest from inception, on December 1, 2010.





The
      Debenture is convertible, at the option of the Holder, into common stock of
      the
      Company


at
      a
      price per share equal to the lower of (i) $.50 (the “Fixed Price”) or (ii)
      eighty percent (80%)


of
      the
      lowest closing bid price for the five (5) trading days immediately preceding
      the
      date of


conversion
      or, if a special event of default occurs, at a price per share equal to eighty
      percent (80%)


of
      the
      lowest closing bid price for the thirty (30) trading days immediately preceding
      the date of


conversion.
      The shares of common stock issuable by the Company to the investor upon
      conversion


of
      shares
      of the Debentures will not be registered initially under the Securities Act
      of
      1933. The


Company
      is obligated to register the resale of the conversion shares under the
      Securities and Exchange


Act,
      pursuant to the terms of the Investor Registration Rights Agreement dated
      December 2, 2005. The


Registration
      Rights Agreement called for the Company to register the underlying securities
      no
      later than


180
      after
      the execution of the Debenture agreement (this requirement has been extended
      to
      June 30, 2007)


and
      use
      its best efforts to have the Initial Registration statement declared effective
      by the SEC no later than


ninety
      days after the date filed. The
      conversion feature and the Company's optional early redemption


right
      have been bundled together as a single compound embedded derivative liability,
      and fair valued


using
      a
      layered discounted probability-weighted cash flow approach.





DERIVATIVE
      VALUATIONS





The
      fair
      value model utilized to value the various embedded derivatives in
      the


convertible
      notes, comprises multiple probability-weighted scenarios under


various
      assumptions reflecting the economics of the Convertible Debentures, such
      as


the
      risk-free interest rate, expected Company stock price and
      volatility,


likelihood
      of conversion and or redemption, and likelihood default status and


timely
      registration. At inception, the fair value of this single compound


embedded
      derivative was bifurcated from the host debt contract and recorded as
      a


derivative
      liability which resulted in a reduction of the initial notional


carrying
      amount of the Convertible Debentures (as unamortized discount which will
      be


amortized
      over the term of the note under the effective interest method).





The
      following is a summary of the Convertible Debentures and the adjustments
      made


based
      on
      the embedded derivatives:


Summary
                  of Derivative ValuesDerivative
                  Liabilities-Value as of:Convertible
                  Debentures
              
              12/31/2006Holland
                  et. al. Debentures issued 12/8/03
              
              $
              91,097Holland
                  et. al. Debentures issued 12/22/03
              
              
              178,288Saporito
                  Debenture issued 1/29/04
              
              
              70,641Cornell
                  Debentures issued 5/6/04
              
              
              33,617Cornell
                  Debentures issued 6/24/04
              
              
              29,948Cornell
                  Debentures issued 9/28/04
              
              
              30,072Viola
                  Debenture issued 10/12/04
              
              
              42,537Cornell
                  Debentures issued 4/6/05
              
              
              39,542Highgate
                  Debenture issued 12/2/05
              
              
              480,198Total
              
              $
              995,940
 F-22





DEBT
      DISCOUNTS





For
      the
      period from inception of the Convertible Debentures through each
      balance


sheet
      date, the amortization of unamortized discount on the Convertible
      Debentures


has
      been
      classified as interest expense in the accompanying statements of


operations.
      The following table summarizes the debt discount as of December 31,


2006
      from
      the amortization of the embedded derivatives for each


convertible
      debenture:





Summary
      of Debt Discount


Debt
                  DiscountConvertible
                  Debentures
              
              12/31/2006Holland
                  et. al. Debentures issued 12/8/03
              
              $
              14,386Holland
                  et. al. Debentures issued 12/22/03
              
              
              27,434Saporito
                  Debenture issued 1/29/04
              
              
              10,662Cornell
                  Debentures issued 5/6/04
              
              
              15,988Cornell
                  Debentures issued 6/24/04
              
              
              9,421Cornell
                  Debentures issued 9/28/04
              
              
              14,634Viola
                  Debenture issued 10/12/04
              
              
              45,269Cornell
                  Debentures issued 4/6/05
              
              
              63,560Highgate
                  Debenture issued 12/2/05
              
              
              1,833,157Total:
              
              $
              2,034,511


Annual
      maturities of notes payable and convertible debentures at December
      31,


2006
      are
      as follows:




Year
                  Ending December 31,
              
              Amount2007
              
              
              1,938,9552008
              
              
              475,9762009
              
              
              50,9732010
              
              
              6,280,2042011
              
              
              4,8028,750,910Less:
                  unamortized debt discount
              
              
              (2,034,511
              )Total
                  notes payable andconvertible
                  debentures
              
              $
              6,716,399




NOTE
      11 -
      DEBT EXTINGUISHMENT





The
      Company accounts for modifications to debt instruments based on the accounting
      guidance found in EITF 96-19, Debtor's Accounting for a Modification or Exchange
      of Debt Instruments. Several of the convertible notes were modified in November,
      2005 to extend the maturity to January 31, 2007. These convertible notes were
      further modified in January, 2007 to extend the maturity to June 30, 2007.
      In
      addition, two (2) convertible notes were extinguished as part of the proceeds
      for the sale of Lehigh in February, 2006. Upon modification, each of the
      convertible notes were tested for extinguishment under the guidance of EITF
      96-19. The modification was determined to be substantial for the following
      notes
      and the Company accounted for the modification as an extinguishment of debt
      and
      recorded the following gains (losses):





F-23


Convertible
                  Note
              
              Gain
                  on Extinguishment12/31/05
              
              12/31/06Holland
                  et. al. Debentures issued 12/8/03
              
              $
              113,268
              
              $
              -Holland
                  et. al. Debentures issued 12/22/03
              
              
              194,414
              
              
              -Saporito
                  Debenture issued 1/29/04
              
              
              68,571
              
              
              -Cornell
                  Debentures issued 5/5/05
              
              
              7,071
              
              
              36,194Cornell
                  Debenture issued 7/20/05
              
              
              8,693
              
              
              58,171Viola
                  Debenture issued 10/12/04
              
              
              -
              
              
              36,198Total
              
              $
              392,017
              
              $
              130,563




NOTE
      12 -
      DESCRIPTION OF CAPITAL STOCK





The
      current authorized capital stock of the Company consists of Five Billion
      (5,000,000,000) shares of Common Stock, par value $0.001 per share, Four Hundred
      Thousand (400,000) shares of Series A convertible preferred, par value $.01
      per
      share, One Hundred Thousand (100,000) shares each of convertible Series B and
      D
      Preferred, par value $0.01 per share and One Thousand (1,000) non-voting shares
      of Series C Preferred, par value $0.01 per share. As of December 31, 2006,
      29,447,504 shares of Common Stock, Six thousand six hundred and sixty-six
      (6,666) shares of Series B Preferred, two hundred forty-nine (249) shares of
      Series C Preferred and seven hundred (700) shares of Series D Preferred stock
      were issued and outstanding. The following description is a summary of the
      capital stock and contains the material terms of voting capital
      stock.





Each
      share of Common Stock entitles the holder to one (1) vote on each matter
      submitted to a vote of our shareholders, including the election of Directors.
      There is no cumulative voting. Subject to preferences that may be applicable
      to
      any outstanding preferred stock, Shareholders are entitled to receive ratably
      such dividends, if any, as may be declared from time to time by the Board of Directors.
      Shareholders have no preemptive, conversion or other subscription
      rights.





The
      Company is authorized to issue two billion (2,000,000,000) shares of preferred
      stock. The holder of the Company's Series B Preferred is entitled to convert
      into 4,195,445 shares of common stock and is entitled to cast votes equal to
      these shares on all matters submitted to the shareholders. The series C
      preferred shares have no voting rights, except as required under Nevada general
      corporation law. We have
      249 shares of Series C preferred stock outstanding. The stock has a liquidation
      preference of $373,500 and is redeemable at $1,500 per share at the Company’s
      option. Dividends are cumulative and accrue at the rate of $120 per share per
      year. Although the Series C stock is redeemable at the option of the Company,
      the holder of these shares is our Chairman of the Board of Directors. Since
      these shares are held by our Chairman, who effectively has control of the
      redemption, we have classified our Series C preferred stock, and associated
      paid
      in capital, as a liability in accordance with EITF Topic No. D-98
“Classification and Measurement of Redeemable Securities”.





Pursuant
      to the purchase of our interest in Kipling Holdings, Inc. (“Kipling”) as fully
      described in Item 6, and effective September 25, 2006, the Board of Directors
      approved the designation of Series D convertible preferred stock (the “Series
      D”), par value of $0.01, to consist of up to One Hundred Thousand (100,000)
      shares. As a result of the Kipling purchase, on December 31, 2006, the Board
      of
      Directors reduced the 93,334 shares of then outstanding Series D owned by our
      CEO, Timothy J. Connolly, and his spouse to Seven Hundred (700) shares of Series
      D. The Series D ranks pari passu with the common stock of the Company on an
“as
      converted” basis, and senior to the Company’s Series A, B and C preferred stock.
      The holders of the Series D are entitled to receive dividends or distributions
      on a pro rata basis when and if dividends are declared on our Common Stock,
      but
      with no liquidation preference. Each share of the Series D may be convertible,
      at the option of the holder, at any time and from time to time after December
      31, 2006 through December 31, 2010, into that number of shares of Common Stock
      equal to the greater of (a) one tenth of one percent (0.1%) of the total number
      of shares of Common Stock issued and outstanding as of the last day of the
      fiscal quarter immediately preceding such date of conversion, calculated on
      a
      fully diluted basis after giving effect to the conversion of such share(s)
      of
      Series D and (b) One Hundred Thousand (100,000) shares of Common Stock. Each
      share of Series D Preferred Stock held by the Holders which has not been
      converted on or before December 31, 2010 into shares of Common Stock shall
      be
      convertible, at the option of the Holder of such share, at any time and from
      time to time after December 31, 2010 into one tenth of one percent (0.1%) of
      the
      total number of shares of Common Stock issued and outstanding on December 31,
      2010, calculated on a fully diluted basis after giving effect to the conversion
      of such share(s) of Series D Preferred Stock. The shares of Common Stock
      received upon conversion shall be fully paid and non-assessable shares of Common
      Stock.





F-24





NOTE
      13 -
      WARRANTS





At
      December 31, 2005 warrants were outstanding to purchase 200,000 shares of the
      Company's common stock for $1.00 per common share. The warrants expire in
      September 2008. At September 30, 2006, the Company issued 3,000,000 warrants
      to
      purchase the Company’s common stock at an exercise price of $.05 per share until
      December 31, 2007.





NOTE
      14 -
      STOCK OPTIONS





On
      December 13, 2005, the Turnaround Partners, Inc. 2005 Stock Incentive Plan
      (the
      Plan) was adopted and approved by shareholders. On a calendar year basis, an
      amount of shares of Common Stock equivalent to the greater of 10 million common
      shares or fifteen percent (15%) of the fully diluted shares outstanding on
      January 2 of any such calendar year may be allocated, at the discretion of
      the
      Administrator, to be granted as awards under the Plan, less awards outstanding
      at the end of the prior calendar year. There are no outstanding options at
      December 31, 2006.





NOTE
      15 -
      COMMITMENTS AND CONTINGENCIES





EMPLOYMENT
      CONTRACTS





On
      September 1, 2004, the Company entered into a five year employment agreement,
      effective June 1, 2004, with Tim Connolly, Chief Executive Officer and Vice
      Chairman of the Board. The agreement has a renewal provision and provides for
      an
      annual salary and bonus upon attaining certain performance criteria set by
      the
      board of directors. The agreement also provides certain anti-dilution provisions
      in return for an extension of lock-up of the Chief Executive Officer's shares
      until December 31, 2007 and for certain other fringe benefits.





On
      September 1, 2004, Corporate Strategies entered into a three year employment
      agreement with Fred Zeidman, Chairman of the Board. The agreement has a renewal
      provision and provides for an annual salary and bonus upon attaining certain
      performance criteria set by the board of directors and certain fringe benefits;
      in addition, Mr. Zeidman receives 50% of all consulting fees from companies
      directly provided by or supervised by him.





On
      December 2, 2005, Kipling entered into a three year employment agreement with
      Timothy J. Connolly to serve as President and Chief Executive Officer. The
      agreement has a renewal provision and provides for an annual salary.
      Additionally, Mr. Connolly is entitled to a 10% interest in any distributions
      of
      any kind, dividends, income, bonuses or sale of the property owned by the
      Company.





LEASES





The
      Company leases its office space under an operating lease. Rental expense under
      operating leases for continuing operations aggregated $76,395 and $71,819 for
      the years ended December 31, 2006 and 2005, respectively. Effective February
      10,
      2005, the Company entered into a new five year lease in a new building and
      moved
      the Company’s headquarters there, with AIM remaining in the other leased area.
      AIM was sold in December 2005 and assumed the lease on the area they
      occupy.





Future
      minimum payments under non-cancellable operating leases for continuing
      operations with initial or remaining terms of one year or more consist of the
      following at December 31, 2006:


OperatingLeases2007
              
              $
              73,5912008
              
              
              74,0322009
              
              
              74,0322010
              
              
              8,058Total
                  minimum lease payments
              
              $
              229,713




NOTE
      16 -
      STANDBY EQUITY DISTRIBUTION AGREEMENT





The
      Company entered into a Standby Equity Distribution Agreement "SEDA " with
      Cornell under which the Company may, at its discretion, periodically sell to
      Cornell registered shares of the Company's common stock for a total purchase
      price of up to
      $30
      million. For each share of common stock purchased under the SEDA, Cornell will
      pay the Company 99% of the volume weighted average price on the Over-the-Counter
      Bulletin Board or other principal market on which its common stock is traded
      for
      the 5 days immediately following the notice date. Further, Cornell will retain
      a
      fee of 10% of each advance under the SEDA. Pursuant to the terms of the SEDA,
      the Company is restricted from raising capital from the sale of securities
      at a
      price less than the market price of the Company's common stock on the date
      of
      issuance or granting additional security interests in the Company's
      assets.




F-25




The
      amount of each advance is limited to a maximum draw down of $1,000,000 every
      7
      trading days up to a maximum of $4,000,000 in any 30-day period. The amount
      available under the SEDA is not dependent on the price or volume of the
      Company's common stock. The Company's ability to request advances is conditioned
      upon the Company having enough shares of common stock registered pursuant to
      the
      SEC rules and regulations. In addition, the Company may not request advances
      if
      the shares to be issued in connection with such advances would result in Cornell
      owning more than 4.9% of the Company's outstanding common stock.





NOTE
      17 -
      RELATED PARTY TRANSACTIONS





Turnaround
      Partners, Inc. and Natural Nutrition, Inc. are two separate public entities
      that
      are under common control. This common control has the potential for altering
      operating results or financial position in a manner significantly different
      from
      those that would have been obtained if the entities were autonomous. Common
      management has developed certain controls to minimize potential conflicts by
      segregating types of transactions between the two entities, and limiting
      transactions between the two entities to those contractually
      permitted.





BROKERAGE
      FEES





The
      Company has an arrangement whereby it introduces prospective financing clients
      to CSI Business Finance (Finance), a wholly-owned subsidiary of Natural
      Nutrition, Inc.; if a transaction is consummated, the Company earns a fee which
      is paid by the customer. For the twelve months ended December 31, 2006 and
      2005,
      such fees have totaled $204,610 and $174,900, respectively.





ALLOCATION
      OF OPERATING EXPENSES





The
      Company performs certain administrative and management functions for Finance.
      Based on an estimation of efforts expended, Finance was allocated approximately
      $305,000 and $38,000 for the years ended December 31, 2006 and 2005,
      respectively.





NOTE
      18 -
      INCOME TAXES





The
      following table sets forth a reconciliation of the statutory federal income
      tax
      for the year ended December 31, 2006 and 2005:


2006
              
              2005Income
                  (loss) before taxes
              
              $
              4,936,074
              
              $
              (4,271,813
              )Income
                  tax benefit computed at statutory rates
              
              $
              1,678,265
              
              $
              (1,452,416
              )Permanent
                  differences, nondeductible expenses
              
              
              8,390
              
              
              47,608Increase
                  in valuation allowance
              
              
              365,207
              
              
              173,247Net
                  increase in fair value of derivative liability, net of amortizationand
                  debt modification gain
              
              
              (1,078,674
              )
              
              (17,420
              )Gain
                  on sale of subsidiary
              
              
              (1,034,418
              )
              
              118,048Merger
                  expense
              
              
              47,600
              
              
              1,062,767Net
                  operating loss allocable to a subsidiary that was sold
              
              
              1,594
              
              
              96,668Other
              
              
              12,036
              
              
              22,068Tax
                  (liability) benefit
              
              $
              -
              
              $
              50,570




F-26





The
      Company will file a consolidated tax return with its subsidiaries.





DEFERRED
      INCOME TAXES





The
      tax
      effects of the temporary differences between financial statement
      income


and
      taxable income are recognized as a deferred tax asset and
      liability.


Significant
      components of the deferred tax asset and liability as of December


31,
      2006
      is set out below:


Deferred
                  tax assetNet
                  operating loss
              
              $
              639,872Valuation
                  allowance
              
              
              (808,505
              )Unrealized
                  loss on security transactions
              
              
              53,995Fixed
                  asset tax basis difference
              
              
              114,638Net
                  deferred tax asset (liability)
              
              $
              -





The
      Company has a net operating loss carry forward estimated at $1,881,974
      which


expires
      through 2027. The loss may be limited under Internal Revenue Code
      section


382.





NOTE
      19 -
      SEGMENT REPORTING





The
      Company had four segments: business services (which consists of turnaround
      execution services, management restructuring services, and business development
      services) and real estate development which were continuing at December 31,
      2005, and mortgage brokerage, previously through its 85% owned subsidiary,
      Aim
      American Mortgage, Inc., (Aim was sold on December 31, 2005.), and equipment
      leasing and business finance, through its wholly owned subsidiary, CSI Business
      Finance, Inc. (which was distributed to the shareholders of CSI effective August
      31, 2005.) The mortgage brokerage and equipment leasing and business finance
      segments are treated as discontinued operations in the financial
      statements.





The
      Company primarily provides business restructuring, turnaround execution and
      business development advisory services for emerging and re-emerging public
      companies.








The
      Company evaluates segment performance and allocates resources based on several
      factors, of which revenue and income before federal income tax are the primary
      financial measures. The accounting policies of the reportable segments are
      the
      same as those described in the footnote entitled "Summary of Significant
      Accounting Policies" of the Notes to the Consolidated Financial
      Statements.





F-27





The
      Company's operations are conducted in the United States.


Discontinued
                  OperationsBusiness
              
              Real
              
              Mortgage
              
              EquipmentServices
              
              Estate
              
              Brokerage
              
              LeasingYear
                  ended December 31, 2005Revenue
              
              $
              591,608
              
              $
              -
              
              $
              932,330
              
              $
              -Interest
                  expense/(income)
              
              
              347,581
              
              
              43,428
              
              
              (3,358
              )
              
              6,371Loss
                  before income tax, mergerexpense
                  and discontinued operations
              
              
              (665,542
              )
              
              (14,426
              )
              
              -
              
              
              -Loss
                  from discontinued operations
              
              
              -
              
              
              -
              
              
              (268,053
              )
              
              (38,791
              )Segment
                  assets
              
              
              1,913,194
              
              
              3,032,531
              
              
              -
              
              
              -Additions
                  to long-term assets
              
              
              78,097
              
              
              -
              
              
              -
              
              
              -Depreciation
                  and amortization
              
              
              20,232
              
              
              -
              
              
              -
              
              
              -Year
                  ended December 31, 2006Revenue
              
              $
              1,127,219
              
              $
              -
              
              $
              -
              
              $
              -Interest
                  expense/(income)
              
              
              624,089
              
              
              194,494
              
              
              -
              
              
              -Income
                  (loss) before income tax, mergerexpense
                  and discontinued operations
              
              
              (1,269,423
              )
              
              3,032,779
              
              
              -
              
              
              -Loss
                  from discontinued operations
              
              
              -
              
              
              4,688
              
              
              -
              
              
              -Segment
                  assets
              
              
              1,909,239
              
              
              5,197,536
              
              
              -
              
              
              -Additions
                  to long-term assets
              
              
              28,958
              
              
              5,043,239
              
              
              -
              
              
              -Depreciation
                  and amortization
              
              
              23,874
              
              
              -
              
              
              -
              
              
              -





NOTE
      20 -
      NEXUS NANO ELECTRONICS TRANSACTIONS





As
      part
      of a restructuring consulting arrangement, the Company received 70% of the
      then
      outstanding stock of Nexus Nano Electronics, Inc. ("Nexus") for a nominal price
      ($100), in order to exercise temporary control. A major creditor has indicated
      their intent to convert indebtedness into stock, and the plan is for Nexus
      to
      issue additional shares to satisfy this indebtedness, which would equal
      approximately 85% of the common stock ownership of Nexus. This fact and the
      indicated future conversion of $8.5 million of convertible debt and preferred
      stock outstanding, is expected to result in a change of majority control of
      Nexus. Nexus has a history of operating losses, and future profitability depends
      on the success of restructuring. Based on temporary control, the minimal
      investment with no commitments for additional capital from the Company, and
      the
      history of significant losses, the Company has determined it is appropriate
      to
      treat Nexus as an investment, recorded under the equity method. Accordingly,
      Nexus is not consolidated in the accompanying financial statements.





NOTE
      21 -
      SUBSEQUENT EVENTS - UNAUDITED





On
      December 7, 2005 the Company executed an unsecured convertible promissory note
      to Robjay Worthington, L.L.L.P., (“Worthington”) a Florida Limited Liability
      Limited Partnership (Borrower), in the principal sum of $900,000 at a three
      percent interest rate and term not to exceed ten years. Interest is payable
      quarterly at the Borrower’s option. The note provides a feature allowing the
      Company to convert the entire note into a five percent limited partnership
      interest in Worthington Hospitality, L.L.L.P. The conversion privilege period
      is
      January 2, 2007 to April 2, 2007. On
      January 2, 2007, the Company notified the borrower that we intended to convert
      the December 7, 2005 Promissory Note in the principal amount of $900,000 into
      a
      5% limited partnership interest in Worthington. We received acknowledgement
      of
      the conversion from Worthington on January 17, 2007.





F-28