UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION





WASHINGTON,
      D.C. 20549








FORM
      10-KSB/A





ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(D)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934, AS AMENDED


FOR
      THE
      YEAR ENDED DECEMBER 31, 2007





COMMISSION
      FILE NUMBER 0-28606





TURNAROUND
      PARTNERS, 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 422HOUSTON,
                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
oNo
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
xNo
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
oNo
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, 2008 was $197,694 based on a value of $0.0004 per share.





The
      number of shares of common stock, par value $0.001 per share, outstanding
      as of
      April
      10, 2008 were 494,236,058.





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










**EXPLANATORY
      NOTE**





***The
      purpose of this Amendment No. 1 on Form 10-KSB/A is to respond to comments
      received by Turnaround Partners, Inc., from the Securities and Exchange
      Commission’s Division of Corporation Finance in a letter dated July 21, 2008
      ("Comment Letter") regarding our previously filed Annual Report on Form 10-KSB
      for the year ended December 31, 2007, filed with the Securities and Exchange
      Commission on April 14, 2008 (“Original Form 10-KSB”). In accordance with the
      suggestions made in the Comment letter, in this amendment, Item 8A(T). "Controls
      and Procedures," beginning on page 17 of this Amendment, is revised to
      include management's assessment of internal control over financial reporting.
      Similarly, in addition, Exhibit 31.1 (Certification) has been revised to include
      inadvertently omitted representations in paragraph number
      four.***





***Furthermore,
      as required by Rule 12b-15 under the Securities Exchange Act of 1934, as
      amended,  all new certifications (Exhibits 31.1 and 32.1) by our Principal
      Executive Officer and Principal Financial and Accounting Officer are being
      filed
      as exhibits to this Amendment No. 1 on Form 10-KSB/A.***





***There
      are no other changes to the Original Form 10-KSB other than those outlined
      above. Except as required to reflect the changes noted above, this Amendment
      No.
      1 on Form 10-KSB/A does not attempt to modify or update any other disclosures
      set forth in our Original Form 10-KSB. Furthermore, this Amendment No. 1 on
      Form
      10-KSB/A does not purport to provide a general update or discussion of any
      other
      developments of Turnaround Partners, Inc. to the filing of the Original Form
      10-KSB.***










**TURNAROUND
      PARTNERS, INC.**





**FORM
      10-KSB/A**





**FOR
      THE YEAR ENDED DECEMBER 31, 2007**





**INDEX**





PAGEPART
                IItem
                1. Description of Business
            
            4Item
                2. Description of Property
            
            7Item
                3. Legal Proceedings
            
            7Item
                4. Submission of Matters to a Vote of
                Security Holders
            
            7PART
                IIItem
                5. Market for Common Equity and Related Shareholder
                Matters Data
            
            8Item
                6. Management's Discussion and Analysis or Plan of Operation
            
            9Item
                7. Financial Statements
            
            17Item
                8(T). Changes in and Disagreements with
                Accountants on Accounting And Financial Disclosure
            
            17Item
                8A(T). Controls And Procedures
            
            17PART
                IIIItem
                9. Directors, Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(a) of the Exchange Act
            
            20Item
                10. Executive Compensation
            
            21Item
                11. Security Ownership of Certain Beneficial Owners and Management
                and
                Related Shareholder Matters
            
            22Item
                12. Certain Relationships and Related Transactions
            
            24Item
                13. Exhibits
            
            24Item
                14. Principal Accountant Fees and Services
            
            27Signatures
            
            28







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 (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 June 30, 2009, 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 June 30, 2009 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 June 30, 2009 into one tenth of one percent (0.1%)
      of
      the total number of shares of Common Stock issued and outstanding on June 30,
      2009, 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. Due
      to
      the change in control of the Company, Mr. Connolly and his spouse may not
      convert debentures that would result in ownership of more than 4.99% of the
      Company at the time of conversion.





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.





On
      May
      31, 2006, we filed an S-8 with the Securities and Exchange Commission for the
      Emerge Capital Corp. 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.
      As of December 31, 2007 there were 7,250,000 shares available under the Plan.




4





On
      September 30, 2006, we completed a stock purchase agreement (the “Agreement”)
      with Kipling Holdings, Inc. (“Kipling”) and Timothy J. Connolly, to acquire 100%
      of the total issued and outstanding capital stock of Kipling, a Delaware
      corporation. Kipling holds a limited partnership interest in a hotel in West
      Palm Beach, Florida.





On
      December 5, 2007 (the “ Closing
      Date ”),
      the
      Company filed on Form 8-K Current Report, as amended on December 14, 2007 and
      February 20, 2008, disclosing that the Company entered into a Stock Purchase
      Agreement (the “ Purchase
      Agreement ”)
      with
      Mr. Timothy J. Connolly, an individual, and Viewpoint Capital, LLC, a Nevada
      limited liability company (the “ Investor ”)
      pursuant to which the Company issued to the Investor one (1) share of the
      Company’s Series E convertible preferred stock, par value $0.01 per share
      (“ Series
      E Preferred ”),
      which
      such Series E Preferred is convertible into Three Hundred Million Shares
      (300,000,000) of common stock of the Company, par value $0.001 per share
      (“ Common
      Stock ”)
      in
      exchange for the transfer by the Investor to the Company of Four Million
      (4,000,000) unrestricted, free-trading shares of common stock of Asset Capital
      Group, Inc., a Nevada corporation (“ ACGU
      Common Stock ”)
      having
      a value of Three Million Four Hundred Thousand Dollars ($3,400,000) based on
      the
      closing price of ACGU Common Stock as of the Closing Date as reported on the
      Pink Sheets, LLC. ACGU Common Stock trades under the symbol “ACGU.PK”. As a
      result of this transaction, the Investor acquired a 63.66% controlling interest
      in the Company’s Common Stock by virtue of the Investor’s ownership of the
      Series E Preferred.





On
      February 13, 2008, the Investor delivered to the Company a notice to convert
      the
      one (1) shares of Series E Preferred to Three Hundred Million (300,000,000)
      shares of Common Stock. On February 14, 2008, the Company issued to the Investor
      Three Hundred Million (300,000,000) shares of Common Stock, all of which are
      restricted, and canceled the One (1) share of Series E Preferred. As a result
      of
      this transaction, the Investor acquired a 63.66% controlling interest in the
      Common Stock of the Company.





During
      the month of March 2008, we sold our investment in stock of ACGU for
      approximately $7,700. Consequently, our investment in marketable securities
      as
      of December 2007 includes the net realizable value of these securities sold
      in
      March 2008.





Effective
      as of the Closing Date, Mr. Connolly resigned as Vice Chairman of the Board
      and
      as President and Chief Executive Officer of the Company, however Mr. Connolly
      shall continue to serve as President and Chief Executive Officer of Corporate
      Strategies, Inc., a Texas corporation and wholly-owned subsidiary of the Company
      (“ CSI ”)
      with
      the understanding that the business of CSI will be discontinued or spun off
      to
      its stockholders. In addition, Mr. Connolly shall continue to receive the same
      compensation as he has received through the Closing Date for his aforementioned
      continued services to CSI through December 31, 2008, which such date may be
      extended by mutual agreement by and among the parties to the Purchase Agreement.





Furthermore,
      Mr. Connolly (and his spouse) agreed on the Closing Date to relinquish certain
      non-dilutive rights in favor of Mr. Connolly (and his spouse) contained in
      Seven
      Hundred (700) shares of Series D convertible preferred stock held by Mr.
      Connolly (and his spouse) effective June 30, 2009 (instead of the previous
      date
      of December 31, 2010) in exchange for the Company conveying all rights to the
      names “Turnaround Partners, Inc.”, “Corporate Strategies, Inc.” and “Kipling
      Holdings, Inc.”, as well as all title to all furniture and equipment in the
      Houston office of the Company. The parties to the Purchase Agreement also agreed
      that the names of these companies shall be changed within sixty (60) days
      following the Closing Date.





In
      connection with the Purchase Agreement, Mr. Russell Kidder was appointed to
      serve as President, Chief Executive Officer and as a Director of the Company
      effective as of the Closing Date.




As
      disclosed in the Form 8-K Current Report referred to above, the Company
      disclosed that effective as of December 27, 2007, the Board of Directors of
      the
      Registrant (the “ Board ”)
      accepted the resignation of (a) Wm. Chris Mathers from his position as Chief
      Financial Officer of the Registrant and (b) Fred Zeidman from his position
      as a
      member of the Board. Mr. Russell Kidder, the Registrant’s current President,
      Chief Executive Officer and member of the Board, shall serve as interim Chief
      Financial Officer, effective as of December 27, 2007.





As
      filed
      on Form 8-K Current Report on January 3, 2008, the Company disclosed that
      effective as of December 31, 2007, Corporate Strategies, Inc. (“ CSI ”),
      a
      Texas corporation and wholly-owned subsidiary of Turnaround Partners, Inc.,
      a
      Nevada corporation (the “ Registrant ”)
      entered into a Purchase Agreement (the “ Agreement ”)
      with
      Natural Nutrition, Inc., a Nevada corporation (“ NN ”)
      and
      CSI Business Finance, Inc., a Texas corporation and wholly-owned subsidiary
      of
      NN (together with NN, the “ Buyer ”)
      pursuant to which CSI conveyed, transferred and assigned to the Buyer all of
      its
      title to and rights in CSI’s ten percent (10%) interest in the total issued and
      outstanding capital stock of Interactive Nutrition International, Inc., a
      company organized under the laws of Canada (“ INII ”)
      in
      exchange for the conveyance, transfer and assignment to CSI by the Buyer of
      certain Notes held by the Buyer (as such term is defined in the Agreement)
      plus
      a cash payment equal to One Hundred Ninety-Eight Thousand Eight Hundred
      Ninety-Nine Dollars and Ten Cents ($198,899.10). In addition, NN assumed payment
      for all of CSI’s office lease, equipment payments and any other payments related
      to the office space at 109 N. Post Oak Lane, Suite 422, Houston, Texas 77024
      for
      the remainder of the lease term and any renewals.




5




Operations





Principal
      services and our market





The
      discussion below regarding our principal services and market assumes the Company
      will continue with its current business plan, however, in
      light
      of the Company’s change in control of ownership, the Company is contemplating a
      new business model. Currently, the Company believes the new business plan going
      forward will be to focus on alternative and clean technologies.





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 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. 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%.





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:





·
            The
                Company will not assume the financial obligations of the client company
                in
                any circumstance. In most cases, the financial institution with the
                greatest risk has referred the Company to the
                transaction.





·
            The
                Company requires the client or their investor to provide the client
                company with working capital necessary to execute the turnaround
                plan.





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





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





·
            Should
                the Company consider altering any of the policies above, it will
                require a
                vote of our Board of Directors to waive them and agree to the maximum
                amount of risk that the Company will
                assume.





The
      Company also actively trades securities and options with available cash. Many
      of
      these transactions contain a considerable amount of risk.





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





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.





To
      date,
      a significant portion of our business and financing has come from an
      institutional fund (YA Global Investments, LP (“YA Global”), (formerly Cornell
      Capital Partners, LP) that invests primarily in micro-cap
      companies.





Employees





As
      of
      April 10, 2008, the Company has 1 part time employee and employs the services
      of
      2 others on a contract basis. The controller and data entry clerk are considered
      contract employees whom also work as contract employees for a company sharing
      an
      office suite with Turnaround Partners, Inc.




6




ITEM
      2.
      DESCRIPTION OF PROPERTY





We
      maintain our headquarters in Houston, Texas in a 2,644 square foot office space
      shared with our then affiliated company, Natural Nutrition, Inc. We believe
      that
      the property is adequate and suitable for our current needs.





At
      the
      time of the August 2005 merger, the Company, through its wholly owned subsidiary
      WH Acquisition Corp (“WH”), 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 was extended to May 1, 2007, secured by a mortgage on the property. The
      debtor has subsequently filed for bankruptcy protection. The property is in
      danger of condemnation and we may abandon our claim with the bankruptcy court
      as
      we have reserved our entire investment in this property. This note receivable
      has been fully reserved.





ITEM
      3.
      LEGAL PROCEEDINGS





None.





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





None.




7





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, 2006
            
            $
            0.170
            
            $
            0.060Three
                months ended June 30, 2006
            
            
            0.100
            
            
            0.072Three
                months ended September 30, 2006
            
            
            0.080
            
            
            0.051Three
                months ended December 31, 2006
            
            
            0.060
            
            
            0.010Three
                months ended March 31, 2007
            
            $
            0.070
            
            $
            0.009Three
                months ended June 30, 2007
            
            
            0.020
            
            
            0.003Three
                months ended September 30, 2007
            
            
            0.008
            
            
            0.001Three
                months ended December 31, 2007
            
            
            0.006
            
            
            0.001





As
      of
      December 31, 2007, there were approximately 220 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. The following
      table
      below sets forth the securities available for issuance under the
      Plan:




8





Equity
      Compensation Plan Information





Number or securitiesremaining available forNumber of securities to be
            
            
            
            future issuance underissued upon exercise of
            
            Weighted-average exercise
            
            equity compensation plansoutstanding options, warrants
            
            price of outstanding options,
            
            (excluding securitiesPlan
                category
            
            and rights
            
            warrants and rights
            
            reflected in column (a))(a)
            
            (b)
            
            (c)Equity
                compensation plans approved by security holders
            
            
            -
            
            
            -
            
            
            1,583,333Equity
                compensation plans not approved by security holders
            
            
            -
            
            
            -
            
            
            -





There
      were no sales of unregistered securities or purchases of equity securities
      by
      the small business issuer and affiliated purchasers.




ITEM
      6.
      MANAGEMENT'S DISCUSSION AND ANALYSIS (“MD&A”) 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 MD&A should be read in conjunction with
      these audited Consolidated Financial Statements of the Company, and the related
      notes thereto included elsewhere herein.





Overview





The
      discussion below regarding our results of operations, liquidity and capital
      resources are for the business of providing restructuring and turnaround
      services. In light of the Company’s change in control of ownership, the Company
      is contemplating a new business model. Currently, the Company believes that
      the
      new business plan going forward will be to focus on alternative and clean
      technologies.





Through
      December 31, 2007, we had primarily provided 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 did 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%.




9




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").





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 June 30, 2009, 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 June 30, 2009 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 June 30, 2009 into one tenth of one percent (0.1%)
      of
      the total number of shares of Common Stock issued and outstanding on June 30,
      2009, 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. Due to the change in control of the Company, Mr. Connolly and his spouse
      may not convert debentures that would result in ownership of more than 4.99%
      of
      the Company at the time of conversion.





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.




10




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 YA Global, (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 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 June 30, 2009, 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 June 30, 2009 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 June 30, 2009 into one tenth of one
      percent (0.1%) of the total number of shares of Common Stock issued and
      outstanding on June 30, 2009, 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. Due to the change in control of the
      Company, Mr. Connolly and his spouse may not convert debentures that would
      result in ownership of more than 4.99% of the Company at the time of conversion.





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. 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 YA Global, 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 and is
      amortized over the term of the agreement.





On
      December 5, 2007 (the “ Closing
      Date ”),
      the
      Company filed on Form 8-K Current Report, as amended on December 14, 2007 and
      February 20, 2008, disclosing that the Company entered into a Stock Purchase
      Agreement (the “ Purchase
      Agreement ”)
      with
      Mr. Timothy J. Connolly, an individual, and Viewpoint Capital, LLC, a Nevada
      limited liability company (the “ Investor ”)
      pursuant to which the Company issued to the Investor one (1) share of the
      Company’s Series E convertible preferred stock, par value $0.01 per share
      (“ Series
      E Preferred ”),
      which
      such Series E Preferred is convertible into Three Hundred Million Shares
      (300,000,000) of common
      stock of the Company, par value $0.001 per share (“ Common
      Stock ”)
      in
      exchange for the transfer by the Investor to the Company of Four Million
      (4,000,000) unrestricted, free-trading shares of common stock of Asset Capital
      Group, Inc., a Nevada corporation (“ ACGU
      Common Stock ”)
      having
      a value of Three Million Four Hundred Thousand Dollars ($3,400,000) based on
      the
      closing price of ACGU Common Stock as of the Closing Date as reported on the
      Pink Sheets, LLC. ACGU Common Stock trades under the symbol “ACGU.PK”. As a
      result of this transaction, the Investor acquired a 63.66% controlling interest
      in the Company’s Common Stock by virtue of the Investor’s ownership of the
      Series E Preferred.




11





On
      February 13, 2008, the Investor delivered to the Company a notice to convert
      the
      one (1) shares of Series E Preferred to Three Hundred Million (300,000,000)
      shares of Common Stock. On February 14, 2008, the Company issued to the Investor
      Three Hundred Million (300,000,000) shares of Common Stock, all of which are
      restricted, and canceled the One (1) share of Series E Preferred. As a result
      of
      this transaction, the Investor acquired a 63.66% controlling interest in the
      Common Stock of the Company.





During
      the month of March 2008, we sold our investment in stock of ACGU for
      approximately $7,700. Consequently, our investment in marketable securities
      as
      of December 2007 includes the net realizable value of these securities sold
      in
      March 2008.





Effective
      as of the Closing Date, Mr. Connolly resigned as Vice Chairman of the Board
      and
      as President and Chief Executive Officer of the Company, however Mr. Connolly
      shall continue to serve as President and Chief Executive Officer of Corporate
      Strategies, Inc., a Texas corporation and wholly-owned subsidiary of the Company
      (“ CSI ”)
      with
      the understanding that the business of CSI will be discontinued or spun off
      to
      its stockholders. In addition, Mr. Connolly shall continue to receive the same
      compensation as he has received through the Closing Date for his aforementioned
      continued services to CSI through December 31, 2008, which such date may be
      extended by mutual agreement by and among the parties to the Purchase Agreement.





Furthermore,
      Mr. Connolly (and his spouse) agreed on the Closing Date to relinquish certain
      non-dilutive rights in favor of Mr. Connolly (and his spouse) contained in
      Seven
      Hundred (700) shares of Series D convertible preferred stock held by Mr.
      Connolly (and his spouse) effective June 30, 2009 (instead of the previous
      date
      of December 31, 2010) in exchange for the Company conveying all rights to the
      names “Turnaround Partners, Inc.”, “Corporate Strategies, Inc.” and “Kipling
      Holdings, Inc.”, as well as all title to all furniture and equipment in the
      Houston office of the Company. The parties to the Purchase Agreement also agreed
      that the names of these companies shall be changed within sixty (60) days
      following the Closing Date.





As
      disclosed in the Form 8-K Current Report referred to above, the Company
      disclosed that effective as of December 27, 2007, the Board of Directors of
      the
      Registrant (the “ Board ”)
      accepted the resignation of (a) Wm. Chris Mathers from his position as Chief
      Financial Officer of the Registrant and (b) Fred Zeidman from his position
      as a
      member of the Board. Mr. Russell Kidder, the Registrant’s current President,
      Chief Executive Officer and member of the Board, shall serve as interim Chief
      Financial Officer, effective as of December 27, 2007.





In
      connection with the Purchase Agreement, Mr. Russell Kidder was appointed to
      serve as President, Chief Executive Officer and as a Director of the Company
      effective as of the Closing Date.




As
      filed
      on Form 8-K Current Report on January 3, 2008, the Company disclosed that
      effective as of December 31, 2007, Corporate Strategies, Inc. (“ CSI ”),
      a
      Texas corporation and wholly-owned subsidiary of Turnaround Partners, Inc.,
      a
      Nevada corporation (the “ Registrant ”)
      entered into a Purchase Agreement (the “ Agreement ”)
      with
      Natural Nutrition, Inc., a Nevada corporation (“ NN ”)
      and
      CSI Business Finance, Inc., a Texas corporation and wholly-owned subsidiary
      of
      NN (together with NN, the “ Buyer ”)
      pursuant to which CSI conveyed, transferred and assigned to the Buyer all of
      its
      title to and rights in CSI’s ten percent (10%) interest in the total issued and
      outstanding capital stock of Interactive Nutrition International, Inc., a
      company organized under the laws of Canada (“ INII ”)
      in
      exchange for the conveyance, transfer and assignment to CSI by the Buyer of
      certain Notes held by the Buyer (as such term is defined in the Agreement)
      plus
      a cash payment equal to One Hundred Ninety-Eight Thousand Eight Hundred
      Ninety-Nine Dollars and Ten Cents ($198,899.10). In addition, NN assumed payment
      for all of CSI’s office lease, equipment payments and any other payments related
      to the office space at 109 N. Post Oak Lane, Suite 422, Houston, Texas 77024
      for
      the remainder of the lease term and any renewals.





Results
      of continuing operations for the year ended December 31, 2007 (the “2007
      Period”) as compared with December 31, 2006 (the “2006
      Period”).





Revenues





Total
      revenue for the 2007 Period decreased by approximately $19,800 as compared
      to
      the 2006 Period.





Discount
      income was approximately $10,425 in the 2006 Period as compared with zero
      discount income for the 2007 Period. Management does not anticipate generating
      any significant new business in this area.




12




Consulting
      revenue increased by approximately $392,883 to $1,356,160 in the 2007 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 was one such contracts at December 31, 2007.
      The
      contract fee was prepaid in stock of the client company. The deferred revenue
      is
      being recognized through the period ending January 2008 at an amount of
      approximately $9,100 per month. In the past our contracts generally called
      for a
      base payment equal to approximately $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. Because of the possible
      change in our fundamental business model, no new contracts have been procured
      at
      the time of this filing, and it is possible that no new contracts will be sought
      in the future.





We
      recorded overall losses in marketable securities in the 2007 Period of
      approximately $303,373 versus a loss of approximately $51,093 for the 2006
      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. Realized gains and (losses) for the 2007 and 2006 Periods
      were ($278,020) versus $107,716, respectively, and unrealized gains and (losses)
      for the 2007 and 2006 Periods of ($25,353) versus ($158,809),
      respectively.





Fee
      income represents brokerage fees of approximately $54,650 received or accrued
      in
      2007 on loans we referred to a then affiliated company, CSI Business Finance
      Inc. Fees for the 2007 Period and the 2006 Period totaled $54,650 and $204,610,
      respectively. Management does not anticipate generating any significant new
      business in this area.





General
      and Administrative Expenses





General
      and administrative expenses decreased by approximately $216,000 to $2,045,663
      for the 2007 Period as compared to $2,261,933 for the 2006 Period. For the
      twelve months ended December 31, 2007, general and administrative expenses
      were
      primarily comprised of salaries and benefits ($831,214), professional fees
      ($479,161) and bad debts in the amount of $524,414, primarily as a result of
      a
      mortgage note in the amount of $148,500 due to the Company from an individual
      who declared bankruptcy, a loan in the amount of $100,000 to a company in
      Vermont that is deemed uncollectible and a loan to another microcap company
      that
      is deemed uncollectible in the amount of $200,000. 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, 2006, general and administrative expenses
      were
      $2,261,933 and consisted primarily of salaries and benefits ($892,286),
      professional fees ($855,722) and bad debts in the amount of $243,302. The
      remaining general and administrative expenses were comprised of business
      development, rent, advertising and other ordinary expenses necessary for our
      operations. Our company shared 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 reached the size
      to
      benefit from separate office space and a full time staff. Beginning in 2008,
      the
      leased premises were assumed by the then affiliated company, Natural Nutrition,
      Inc.





Salaries
      and benefits decreased by approximately $61,000 to $831,214 in the 2007 Period
      as compared to the 2006 Period, primarily as a result of our acquisition
      specialist leaving our employment in May 2007.





Professional
      fees were approximately $479,161 for the twelve months ended December 31, 2007,
      a decrease of approximately $376,000 as compared to the 2006 Period. The
      decrease was primarily a result of acquisition due diligence fees incurred
      in
      the 2006 Period not similarly incurred in the 2007 Period. The remainder of
      the
      professional fees for the 2007 Period represents accounting, legal and
      consulting fees relating to regulatory requirements of being a public
      company.





We
      allocated overhead to a then affiliated company for items such as rent, payroll
      and other general operating expenses. For the 2007 Period we allocated
      approximately $244,000 versus $308,000 for the 2006 Period. There are no such
      allocations beginning in 2008.





Other
      income and expense





We
      recorded derivative income of $141,664 for the 2007 Period and $3,642,080 for
      the 2006 Period. 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.





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.





During
      the first quarter of 2007, certain individuals converted their debentures into
      our common stock. As a result, we recorded a gain on debt extinguishment in
      the
      amount of $450,650 for the 2007 Period.




13




Interest
      expense increased by approximately $547,207 for the 2007 Period as compared
      to
      the 2006 Period. The increase is primarily a result of the amortization of
      discounts related to derivatives on our convertible debentures and interest
      expense incurred on our investment in Kipling.





For
      the
      2007 Period, we recorded an operating loss and impairment on our investment
      in
      the West Palm Beach hotel within Kipling Holdings, Inc. in the amount of
      $685,136. Included in this amount is $540,000 for impairment of long-lived
      asset. During the fourth quarter of 2007 there was a proposed sale of the hotel
      that would have resulted in a loss to the Company of approximately $540,000.
      The
      sale of the hotel did not occur, but the asset was written down to estimated
      net
      realizable value nevertheless. The business segment affected is our “Hotel
      Investment” as found in Footnote 19 of the consolidated financial
      statements.





Discontinued
      Operations





During
      February 2006, the Company sold the shares of its wholly-owned subsidiary
      Lehigh. This resulted in a loss from discontinued operations for the 2006 in
      the
      amount of $4,688, 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.





LIQUIDITY
      AND CAPITAL RESOURCES





Operating
      activities





We
      recorded a net loss for the twelve months ended December 31, 2007 in the amount
      of $2,604,975 versus net income in the amount of $4,936,074 for the twelve
      months ended December 31, 2006. 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 used in operating
      activities was $1,598,439 for the twelve months ended December 31, 2007. We
      expensed $524,414 in bad debts primarily as a result of a mortgage note in
      the
      amount of $148,500 due to the Company from an individual who declared
      bankruptcy, a loan in the amount of $100,000 to a company in Vermont that was
      deemed uncollectible and a loan to another microcap company that is deemed
      uncollectible in the amount of $200,000. We recorded interest expense and net
      change in derivative liability in the amount of $692,908. In the fourth quarter
      of 2007 we recorded an operating loss and impairment in our investment in the
      West Palm Beach hotel (Kipling) in the amount of $685,136. We recorded income
      in
      the amount of $889,804 as a non-cash merger expense for the sale of our 10%
      interest in Natural Nutrition, Inc., a then affiliated company. Certain
      debentures were converted that resulted in a gain on debt modification in the
      amount of $450,250.





At
      December 31, 2007, the Company had a working capital deficit of approximately
      $2,174,851. Our working capital deficit includes a computed liability for the
      fair value of derivatives of $282,181, which will only be realized on the
      conversion of the derivatives, or settlement of the debentures. Our convertible
      debenture liability in the amount of $1,932,475 is classified as a current
      liability however it is our option to force conversion of these convertible
      debentures into the Company's common stock at any time.





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
      received preferential returns and distributions of capital from our investment
      in the West Palm Beach hotel in the amount of $481,250. We also received net
      proceeds from disposition of an investment in the amount of
      $198,899





As
      of
      December 31, 2007, $500,000 of our short-term investments was invested in
      auction rate securities, or ARSs. The $500,000 we have invested in ARSs at
      April
      28, 2008 is collateralized by portfolios of AAA municipal obligations.
 Through the date of this filing, auctions of these securities were not
      successful, resulting in our continuing to hold these securities and the issuers
      paying interest at the maximum contractual rate. Based on current market
      conditions, it is likely that auctions related to these securities will be
      unsuccessful in the near term. Unsuccessful auctions will result in our
      holding securities beyond their next scheduled auction reset dates and limiting
      the short-term liquidity of these investments. While these failures in the
      auction process have affected our ability to access
      these funds in the near term, we do not believe that the underlying securities
      or collateral have been affected. We believe that the higher reset rates on
      failed auctions provide sufficient incentive for the security issuers to address
      this lack of liquidity. If the credit rating of the security issuers
      deteriorates, we may be required to adjust the carrying value of these
      investments through an impairment charge. Excluding ARSs, at April 28, 2008,
      we
      had approximately $231,877 in cash and short-term investments. We believe the
      working capital available to us will be sufficient to meet our cash requirements
      for at least the next 12 months, however if the ARS’ are not converted into
      cash within the next 12 months the Company could experience working capital
      difficulties.




14





Financing
      activities





For
      the
      twelve months ended December 31, 2007, we repaid approximately $84,233 on note
      payables.





We
      have
      225 shares of Series C preferred stock outstanding. The stock has a liquidation
      preference of $337,380 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. Under the purchase agreement dated December 5, 2007, the series C
      preferred stock was to have been paid off by December 31, 2007 therefore, the
      full liquidation value of $337,380 is recorded as a current
      liability.





Our
      cash
      flows for the periods are summarized below:





Year ended
            
            Year endedDecember 31, 2007
            
            December 31, 2006Net
                cash provided by (used in) operating activities
            
            $
            (1,490,657
            )
            $
            146,119Net
                cash provided by investing activities
            
            
            677,058
            
            
            599,635Net
                cash used in financing activities
            
            
            84,233
            
            
            68,812





Our
      cash
      decreased by $897,832 since December 31, 2006.





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.





OFF-BALANCE
      SHEET ARRANGEMENTS





Until
      December 31, 2007, we leased our office space under an operating lease. Rental
      expense under operating leases for continuing operations aggregated $87,453
      and
      $76,395 for the years ended December 31, 2007 and 2006, 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. Beginning January 1, 2008,
      this leased has been assumed by our then affiliate company, Natural Nutrition,
      Inc.





RECENT
      ACCOUNTING PRONOUNCEMENTS





In
      June
      2006, the Financial Accounting Standards Board (“ FASB ”)
      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 adopted FIN 48 effective as of January 1, 2007. The
      adoption of FIN 48 did not have a material impact on its effective tax
      rate.





In
      September 2006, the SEC 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.




15




In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (“ SFAS
      No. 157 ”).
      This
      statement defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles, and expands disclosures about
      fair
      value measurements. This statement clarifies how to measure fair value as
      permitted under other accounting pronouncements but does not require any new
      fair value measurements. SFAS No. 157 was originally effective for financial
      statements issued for fiscal years beginning after November 15, 2007, and
      interim periods within those fiscal years. On February 12, 2008, the FASB issued
      Final FASB Staff Position (“ FSP ”)
      No.
      Financial Accounting Standard (“ FAS ”)
      157-2, *Effective
      Date of FASB Statement*  *No.
      157* (“ FSP
      No. 157-2 ”).
      FSP
      No. 157-2, which was effective upon issuance, delays the effective date of
      SFAS
      No. 157 for nonfinancial assets and nonfinancial liabilities, except for items
      that are recognized or disclosed at fair value at least once a year, to fiscal
      years beginning after November 15, 2008. The Company expects to adopt FAS No.
      157 on January 1, 2008 and 2009 for financial assets and financial liabilities
      and nonfinancial assets and nonfinancial liabilities, respectively. The Company
      does not believe that the adoption of FAS No. 157 will have a material effect
      on
      the Company’s consolidated financial statements.





In
      July
      2006, the FASB issued FIN 48, which clarifies the accounting for uncertainty
      in
      tax positions. This Interpretation requires that the Company recognize in our
      financial statements, the impact of a tax position, if that position is more
      likely than not of being sustained on audit, based on the technical merits
      of
      the position. The provisions of FIN 48 are effective as of the beginning of
      our
      2007 fiscal year, with the cumulative effect of the change in accounting
      principle recorded as an adjustment to opening retained earnings. The adoption
      of FIN 48 did not have a material effect on the Company’s financial condition or
      results of operations for the year ended December 31, 2007.




In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Liabilities Including an amendment
      of
      FASB Statement No. 115* (“ SFAS
      No. 159 ”).
      SFAS
      No. 159 permits entities to choose to measure many financial instruments and
      certain other items at fair value that ** are
      not
      currently required to be measured at fair value. SFAS No. 159 also establishes
      presentation and disclosure requirements designed to facilitate ** comparisons
      between entities that choose different measurement attributes for similar types
      of assets and liabilities. SFAS No. 159 is effective as of the ** beginning
      of an entity’s first fiscal year that begins after November 15, 2007. The
      Company expects to adopt SFAS No. 159 on January 1, 2008. The Company has
      evaluated the impact of adopting SFAS No. 159 and has determined that it will
      not elect the fair value option under SFAS No.159 for any financial instruments
      that are not required to be presented at fair value under generally accepted
      accounting principles.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements - an amendment of ARB No. 51” (“ SFAS
      160 ”).
      SFAS
      160 establishes new accounting and reporting standards for the noncontrolling
      interest in a subsidiary and for the deconsolidation of a subsidiary. Before
      this statement, limited guidance existed for reporting noncontrolling interests
      (minority interest). As a result, diversity in practice exists. In some cases
      minority interest is reported as a liability and in others it is reported in
      the
      mezzanine section between liabilities and equity. Specifically, SFAS 160
      requires the recognition of a noncontrolling interest (minority interest) as
      equity in the consolidated financials statements and separate from the parent’s
      equity. The amount of net income attributable to the noncontrolling interest
      will be included in consolidated net income on the face of the income statement.
      SFAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary
      that do not result in deconsolidation are equity transactions if the parent
      retains its controlling financial interest. In addition, this statement requires
      that a parent recognize gain or loss in net income when a subsidiary is
      deconsolidated. Such gain or loss will be measured using the fair value of
      the
      noncontrolling equity investment on the deconsolidation date. SFAS 160 also
      includes expanded disclosure requirements regarding the interests of the parent
      and its noncontrolling interests. SFAS 160 is effective for the Company on
      January 1, 2009. Earlier adoption is prohibited. The Company is currently
      evaluating the impact, if any, of the adoption of SFAS 160 will have on its
      consolidated financial statements.





In
      December 2007, the FASB issued SFAS No. 141R, *Business
      Combinations* .
      SFAS
      No. 141R provides companies with principles and requirements on how an acquirer
      recognizes and measures in its financial statements the identifiable assets
      acquired, liabilities assumed, and any noncontrolling interest in the acquiree
      as well as the recognition and measurement of goodwill acquired in a business
      combination. SFAS No. 141R also requires certain disclosures to enable users
      of
      the financial statements to evaluate the nature and financial effects of the
      business combination. Acquisition costs associated with the business combination
      will generally be expensed as incurred. SFAS 141R is effective for business
      combinations occurring in fiscal years beginning after December 15, 2008. Early
      adoption of SFAS No. 141R is not permitted. The Company is currently evaluating
      the impact SFAS No. 141R will have on any future business
      combinations.





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".




16





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. 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.





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


FINANCIAL
      DISCLOSURE





There
      have been no changes in accountants or disagreements on any matter of accounting
      principles or practices, financial statement disclosure, or auditing scope
      or
      procedures with the Company’s independent accountants during the two (2) fiscal
      years ended December 31, 2007.





ITEM
      8A(T). CONTROLS AND PROCEDURES


Because
        of its size, the Company shares its accounting staff with another company
        located in the same suite in Houston, Texas and the accounting staff is
        comprised of a controller and a data entry clerk. The controller and data
        entry
        clerk are considered contract employees whom also work for the other company
        within the office suite as contract employees. We currently do not have the
        resources to hire full-time accounting personnel and do not anticipate hiring
        any full-time accounting personnel in the near future.
 
 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").
 
 In
        connection with the audit of our Consolidated Financial Statements for the
        fiscal year ended December 31, 2007, 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,
        2007
        and 2006.
 
 The
        material weaknesses identified by the auditor during the December 31, 2006
        and
        2007 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 including the write down of stock
        investment, impairment of an investment in a partnership and recording of
        the
        additional liability at the liquidation value for a series of preferred stock
        which was to be completely liquidated at December 31, 2007.
 
 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.
 
 Further,
        based on the material weaknesses described herein, we concluded that our
        disclosure controls and procedures were not effective at December 31, 2007.




**The
      Company Has**  **Material
      Weaknesses in Its Internal Control over Financial Reporting that May Prevent
      The
      Company from Being Able to Accurately Report Its Financial Results or Prevent
      Fraud, which Could Harm Its Business and Operating Results.**


****


Effective
      internal controls are necessary for us to provide reliable and accurate
      financial reports and prevent fraud. In addition, Section 404 under the
      Sarbanes-Oxley Act of 2002 requires that the Company assess, and its independent
      registered public accounting firm attest to, the design and operating
      effectiveness of internal control over financial reporting. If the Company
      cannot provide reliable and accurate financial reports and prevent fraud, its
      business and operating results could be harmed. The Company has in the past
      discovered, and may in the future discover, areas of its internal controls
      that
      need improvement. The Company has identified material weaknesses in its
      internal control as of December 31, 2007 as a result of an evaluation of those
      controls conducted in August 2008. These matters and the Company’s efforts
      regarding remediation of these matters, as well as efforts regarding internal
      controls generally are discussed in detail in Part II, Item 8A(T) Controls
      and
      Procedures, of this Annual Report on Form 10-KSB.  However, as the
      Company’s material weaknesses in its internal controls demonstrate, the Company
      cannot be certain that the remedial measures it has taken to date will ensure
      that the Company designs, implements, and maintains adequate controls over
      its
      financial processes and reporting in the future.





Additionally,
      since the requirements of Section 404 are ongoing and apply for future years,
      the Company cannot be certain that it or its independent registered public
      accounting firm will not identify additional deficiencies or material weaknesses
      in its internal controls in the future, in addition to those identified as
      of
      December 31, 2007. Attempts to remedy the material weaknesses that have been
      identified and any additional deficiencies, significant deficiencies or material
      weaknesses that the Company or its independent registered public accounting
      firm
      may identify in the future, could require the Company to incur significant
      costs, hire additional personnel, expend significant time and management
      resources or make other changes. Any delay or failure to design and implement
      new or improved controls, or difficulties encountered in their implementation
      or
      operation, could harm our operating results, cause the Company to fail to meet
      its financial reporting obligations, or prevent the Company from providing
      reliable and accurate financial reports or avoiding or detecting fraud.
      Disclosure of the Company’s material weaknesses, any failure to remediate such
      material weaknesses in a timely fashion or having or maintaining ineffective
      internal controls could cause investors to lose confidence in our reported
      financial information, which could have a negative effect on the trading price
      of the Company’s stock and its access to capital.




17




**Management’s
      Report on Internal Control over Financial Reporting**




Management
      is responsible for establishing and maintaining adequate internal control
      structure and procedures over financial reporting (as defined in
      Rules 13a-15(e) and 15d-15(e)) under the Exchange Act. Management conducted
      an assessment of the effectiveness of the Company’s internal control over
      financial reporting as of December 31, 2007 based on the framework set
      forth in Internal Control — Integrated Framework issued by the Committee of
      Sponsoring Organizations of the Treadway Commission (COSO). Internal control
      over financial reporting cannot provide absolute assurance of achieving
      financial reporting objectives because of its inherent limitations. Internal
      control over financial reporting is a process that involves human diligence
      and
      compliance and is subject to lapses in judgment and breakdowns resulting from
      human failures. Because of such limitations, there is a risk that material
      misstatements may not be prevented or detected on a timely basis by internal
      control over financial reporting. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.




A
      material weakness in internal control over financial reporting is defined by
      the
      Public Company Accounting Oversight Board’s Audit Standard No. 2 as being a
      significant deficiency, or combination of significant deficiencies, that results
      in more than a remote likelihood that a material misstatement of the financial
      statements would not be prevented or detected. A significant deficiency is
      a
      control deficiency, or combination of control deficiencies, that adversely
      affects the Company’s ability to initiate, authorize, record, process or report
      external financial data reliably in accordance with generally accepted
      accounting principles (GAAP) such that there is more than a remote likelihood
      that a misstatement of the Company’s annual or interim financial statements that
      is more than inconsequential will not be prevented or detected.





Management
      identified the following material weaknesses as of December 31, 2007 to the
      Company’s internal control over financial reporting:





1.
            Deficiencies
                in the Company’s Control Environment. The Company’s control environment
                did not sufficiently promote effective internal control over financial
                reporting throughout the organization. This material weakness exists
                because of the aggregate effect of multiple deficiencies in internal
                control which affect the Company's control environment, including:
                (a) the
                lack of an audit committee, (b) the lack of independent financial
                expertise on the Board of Directors, and (c) the absence of a
                whistleblower hotline. The Company has no current plans, however,
                to
                establish an audit committee or to enter into a contract with an
                independent whistleblower hotline service provider, and accordingly,
                expects to continue to lack an audit committee, financial expertise
                on the
                Board of Directors, and a whistleblower
                hotline.





2.
            Deficiencies
                in the Company’s Accounting System Controls. The Company failed to perform
                certain control procedures designed to ensure that the financial
                statement
                presentations and related disclosures were complete and in accordance
                with
                GAAP. These deficiencies include: (a) inadequate review of journal
                entries
                and wire transfers, (b) the lack of independent review of balance
                sheet
                account reconciliations and supporting calculations, (c) inadequate
                communication between management and the accounting department.





Based
      on
      the material weaknesses described above and the criteria set forth by the COSO
      Framework, our Principal Executive Officer and Interim Principal Financial
      and
      Accounting Officer (one individual) has concluded that the Company did not
      maintain effective internal control over financial reporting at a reasonable
      assurance level as of December 31, 2007 or at the date of this filing as a
      result of an evaluation of those controls conducted in August 2008.





This
      Annual Report does not include an attestation report of the company’s registered
      public accounting firm regarding internal control over financial reporting.
      Management’s report was not subject to attestation by the company’s registered
      public accounting firm pursuant to temporary rules of the SEC that permit the
      company to provide only management’s report in this Annual Report.




**Remediation**





During
      fiscal 2008, we plan to implement remediation measures (to the extent that
      financial resources are available) to address the material weaknesses described
      in item number 2 above. These process changes will improve our internal controls
      environment and increase the likelihood of our identifying non-routine and
      non-systematic transactions.  The Company's remediation plans include
      implementing procedures for the adequate review and approval of wire transfers.
      These plans, while improving our internal control environment, will not
      eliminate all of the material weaknesses described above due to our limited
      accounting staff comprised of one professional and one part-time contract
      payroll and accounts payable clerk.





Management
      recognizes that these enhancements require continual monitoring and evaluation
      for effectiveness. The development of these actions is an iterative process
      and
      will evolve as the Company continues to evaluate and improve our internal
      controls over financial reporting.




18





Management
      will review progress on these activities on a consistent and ongoing basis
      at
      the Chief Executive Officer and senior management level. We also plan to take
      additional steps to elevate Company awareness about and communication of these
      important issues through improved communication.




The
      continued remediation of the material weaknesses described above is a priority.
      Our Board of Directors will continually assess the progress and sufficiency
      of
      these initiatives and make adjustments as and when necessary. As of the date
      of
      this report, our management believes that our efforts, when completed, will
      mitigate, but not eliminate the material weaknesses in internal control over
      financial reporting as described above. Our management and the Board of
      Directors do not expect that our disclosure controls and procedures or internal
      control over financial reporting will prevent all errors or all instances of
      fraud. A control system, no matter how well designed and operated, can provide
      only reasonable, not absolute, assurance that the control system’s objectives
      will be met. Further, the design of a control system must reflect the fact
      that
      there are resource constraints, and the benefits of controls must be considered
      relative to their costs. Because of the inherent limitations in all control
      systems, no evaluation of controls can provide absolute assurance that all
      control gaps and instances of fraud have been detected. These inherent
      limitations include the realities that judgments in decision-making can be
      faulty, and that breakdowns can occur because of simple errors or mistakes.
      Controls can also be circumvented by the individual acts of some persons, by
      collusion of two or more people, or by management override of the controls.
      The
      design of any system of controls is based in part upon certain assumptions
      about
      the likelihood of future events, and any design may not succeed in achieving
      its
      stated goals under all potential future conditions.





**Subsequent
      Changes in Internal Control over Financial Reporting**





Except as disclosed above, there were no changes in our internal control over
      financial reporting that occurred during our last fiscal quarter that have
      materially affected, or are reasonably likely to materially affect, the
      Company’s internal control over financial reporting.




19




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 director and
        executive officersof the Company and the positions held at the Company. The
        executive officer of the Company is 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)Russell
                  Kidder
              
              61
              
              Director,
                  President, Chief Executive OfficerInterim
                  Chief Financial Officer
 
 There
        are
        no family relationships among the director or executive officer of the Company.
        Except as provided herein, the Company's director or executive officer is
        not a
        director of any company that files reports with the SEC, except as discussed
        below. The Company's director has not been involved in any bankruptcy or
        criminal proceeding (excluding traffic and other minor offenses), and nor
        has he
        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
        the
        Company's existing Director and executive officer for the past five (5)
        years:
 
 ***Russell
        Kidder.*** From
        1989 to present, Mr. Kidder has served as a consultant to a number of small
        private and public companies, assisting them in capital formation, mergers
        and
        acquisitions, securities reporting compliance issues and general corporate
        administration. Mr. Kidder did not serve as an officer or a director of any
        company from December 2002 through December 2005. In December 2005, Mr. Kidder
        was named Secretary of TRAC Financial Group, Inc. He continued to serve in
        that
        capacity following a change in control of the company and name change to
        FINI
        Group, Inc. on July 28, 2006, until July 2007. From July 2007 through October
        2007, Mr. Kidder served as Secretary of Asset Capital Group, Inc. (“ACGU.PK”).
        Mr. Kidder earned his B.A. in Political Science and his Juris Doctor Degree
        from
        the University of Southern California.
 
 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.
  20
  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, 2007, 2006 and 2005
        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
                  ($)Russell
                  Kidder
              
              
              2007
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -President,
                  CEO andInterim
                  CFOTimothy
                  J Connolly, Former CEO
              
              
              2007
              
              $
              551,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              551,0002006
              
              $
              338,500
              
              $
              100,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              13,400
              
              $
              451,9002005
              
              $
              265,000
              
              $
              20,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              12,000
              
              $
              297,000Wm
                  Chris Mathers,
              
              
              2007
              
              $
              60,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              60,000Former
                  CFO
              
              
              2006
              
              $
              29,500
              
              $
              1,500
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              31,000(1)
                  - Auto allowance
 
 Stock
        Incentive Plan
 
 On
        May
        31, 2006,Turnaround Partners, Inc. 2006 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. The number
        of
        shares allocated to this plan was 10,000,000 shares. As of December 31, 2007,
        there were 7,250,000 shares available under the Plan.
 
 For
        the
        years ended December 31, 2006 and 2007, 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. Effective
        as of the Closing Date (December 5, 2007) of the agreement with ACGU, Mr.
        Connolly resigned as Vice Chairman of the Board and as President and Chief
        Executive Officer of the Company, however Mr. Connolly shall continue to
        serve
        as President and Chief Executive Officer of Corporate Strategies, Inc., a
        Texas
        corporation and wholly-owned subsidiary of the Company (“ CSI ”)
        with
        the understanding that the business of CSI will be discontinued or spun off
        to
        its stockholders. In addition, Mr. Connolly shall continue to receive the
        same
        compensation as he has received through the Closing Date for his aforementioned
        continued services to CSI through December 31, 2008, which such date may
        be
        extended by mutual agreement by and among the parties to the Purchase Agreement.
 
 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 received
        50% of
        all consulting fees from companies directly provided by or supervised by
        him.
        The employment agreement with Mr. Zeidman has not been renewed as of the
        date of
        this filing and Mr. Zeidman no longer receives compensation from Corporate
        Strategies.
 
 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.
  21
  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 February 14, 2008 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
        Preferred. With the exception of the Company's 225 non-voting shares of Series
        C
        Preferred Stock, there are no other classes or series of capital stock
        outstanding. As of February 14, 2008, the Company had 494,236,058 shares
        of
        common stock, 6,666 shares of Series B Preferred and 700 shares of Series
        D
        Preferred issued and outstanding.
 
 Title
                  of Class****
              
              Name
                  and Address of
                Beneficial
                  Owner****
              
              Amount
                  of
                Direct
                Ownership****
              
              Amount
                  &
                Nature
                  of
                Indirect
                Beneficial
                Ownership****
              
              Total
                  of Direct
                and
                Beneficial
                Ownership****
              
              Percentage
                of
                  Class(1)Common
              
              
              Viewpoint
                  Capital, LLC
                2470
                  Evening Twilight Lane
                Henderson,
                  Nevada 89044
              
              
              300,000,000
              
              
              —
              
              
              300,000,000
              
              
              63.66
              %Common
              
              
              Michael
                  O. Sutton
                10806
                  Briar Branch Lane
                Houston,
                  TX 77024
              
              
              10,723,600
              
              
              4,395,445
              (2)
              
              15,119,045
              
              
              3.21
              %Common
              
              
              Timothy
                  J. Connolly
                109
                  N. Post Oak Lane
                Suite
                  422
                Houston,
                  TX 77024
              
              
              —
              
              
              13,050,000
              (3)
              
              13,050,000
              
              
              9.99
              %Common
              
              
              Jan
                  Carson Connolly
                8602
                  Pasture View Lane
                Houston,
                  TX 77024
              
              
              —
              
              
              13,050,000
              (4)
              
              13,050,000
              
              
              9.99
              %Common
              
              
              Gerald
                  Holland
                22
                  Coult Lane
                Old
                  Lyme, CT 07601
              
              
              5,113,636
              
              
              177,740,511
              (5)
              
              182,854,147
              
              
              38.80
              %Common
              
              
              Joanna
                  Saporito
                668
                  W. Saddle River Rd.
                Ho-Ho-Kus,
                  NJ 07423
              
              
              —
              
              
              72,421,863
              (5)
              
              72,421,863
              
              
              15.37
              %Common
              
              
              Mary-Ellen
                  Viola
                249
                  Long Hill Drive
                Short
                  Hills, NJ 07078
              
              
              —
              
              
              13,050,000
              (5)
              
              13,050,000
              
              
              9.99
              %Common
              
              
              David
                  Kesselbrenner
                10
                  Devonshire Rd.
                Livingston,
                  NJ 07039
              
              
              —
              
              
              8,560,816
              (5)
              
              8,560,816
              
              
              1.82
              %Common
              
              
              Louis
                  Kesselbrenner
                10
                  Devonshire Rd.
                Livingston,
                  NJ 07039
              
              
              —
              
              
              29,447,378
              (5)
              
              29,447,378
              
              
              6.25
              %Common
              
              
              Sarah
                  Kesselbrenner
                10
                  Devonshire Rd.
                Livingston,
                  NJ 07039
              
              
              —
              
              
              29,447,378
              (5)
              
              29,447,378
              
              
              6.25
              %Common
              
              
              Joseph
                  Kesselbrenner
                10
                  Devonshire Rd.
                Livingston,
                  NJ 07039
              
              
              —
              
              
              9,216,738
              (5)
              
              9,216,738
              
              
              1.96
              %Common
              
              
              YA
                  Global Investments LP
                101
                  Hudson Street
                Suite
                  3700
                Jersey
                  City, NJ 07302
              
              
              —
              
              
              6,120,000
              (5)
              
              6,120,000
              
              
              4.99
              %Common
              
              
              Highgate
                  House Funds, Ltd.
                101
                  Hudson Street
                Suite
                  3700
                Jersey
                  City, NJ 07302
              
              
              —
              
              
              6,120,000
              (5)
              
              6,120,000
              
              
              4.99
              %
  22
 
 (1)
              Applicable
                  percentages of ownership are based on 471,236,054 shares of Common
                  Stock
                  on February 14, 2008 for each stockholder. 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 February 14, 2008 are deemed to be beneficially owned by the
                  person
                  holding such derivative securities 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.(2)
              Includes
                  4,195,445 shares which may be issued upon conversion of the 6,666
                  shares
                  of Series B Preferred Stock beneficially owned by Mr. Sutton and
                  200,000
                  shares directly held by his spouse.(3)
              Includes
                  shares of Common Stock which may be issued upon conversion of 595
                  shares
                  of Series D Preferred Stock beneficially owned by Mr. Connolly
                  and shares
                  of Common Stock which may be issued upon conversion of 105 shares
                  of
                  Series D Preferred Stock beneficially owned by his spouse, subject
                  to a
                  9.99% ownership limitation set forth in the amended and restated
                  Certificate of Designation of Series D Preferred Stock.(4)
              Includes
                  shares of Common Stock which may be issued upon conversion of 105
                  shares
                  of Series D Preferred Stock beneficially owned by Ms. Connolly
                  and shares
                  of Common Stock which may be issued upon conversion of 595 shares
                  of
                  Series D Preferred Stock beneficially owned by her spouse, subject
                  to a
                  9.99% ownership limitation set forth in the amended and restated
                  Certificate of Designation of Series D Preferred Stock.(5)
              These
                  shares represent the approximate number of shares underlying convertible
                  debentures at an assumed price of $0.001 in light of the fact that
                  the
                  Company is prohibited from issuing shares of Common Stock at a
                  price per
                  share below par. 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 lower but cannot
                  be
                  higher.
 
 (B)
        Security Ownership of Management
  Title of Class
              
              Name and Address of Beneficial Owner
              
              Amount of
                Direct
                Ownership
              
              Amount & Nature
                of Beneficial
                Ownership
              
              Total of
                Direct and
                Beneficial
                Ownership
              
              Percentage
                of Class(1)Common
              
              
              Russell
                  Kidder, President,
                Chief
                  Executive Officer and Director
                109
                  North Post Oak Lane
                Suite
                  422
                Houston,
                  TX 77024
              
              
              
              
              
              —
              
              
              
              
              
              —
              
              
              
              
              
              —
              
              
              0
              %Common
              
              
              Richard
                  P. McLaughlin, Secretary
                109
                  North Post Oak Lane
                Suite
                  422
                Houston,
                  TX 77024
              
              
              
              
              
              —
              
              
              
              
              
              —
              
              
              
              
              
              —
              
              
              0
              %ALL
                  DIRECTORS AND
                EXECUTIVE
                  OFFICERS AS
                A
                  GROUP (TWO PERSONS)(3)
              
              
              
              
              
              —
              
              
              
              
              
              —
              
              
              
              
              
              —
              
              
              **0**
              **%**
  (1)
              Applicable
                  percentages of ownership are based on 471,236,054 shares of Common
                  Stock
                  outstanding on February 14, 2008 for each stockholder. 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 February 14, 2008 are deemed to be beneficially
                  owned by the person
  23
  ITEM
        12.
        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
 CONCENTRATION
        OF TRANSACTIONS WITH YA GLOBAL
 
 At
        December 31, 2007, $7,826,100 of the convertible debentures are owed to YA
        Global and to Highgate House Funds, Ltd., an affiliate of YA
        Global.
 
 YA
        Global
        was the principal lender to Nuwave both before and after the
        merger.
 
 YA
        Global
        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 YA Global by
        $5,281,274.
 
 YA
        Global
        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 to Exhibit 2.1 to the Company’s Current Report on Form 8-K as
                  filed with the U.S. Securities and Exchange Commission on January
                  5,
                  2007.2.2
              
              Certificate
                  of Ownership and Merger of Emerge Capital Corp. with and into Turnaround
                  Partners, Inc.
              
              Incorporated
                  by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K as
                  filed with the U.S. Securities and Exchange Commission on January
                  5,
                  2007.2.3
              
              Articles
                  of Merger of Turnaround Partners, Inc. and Emerge Capital
                  Corp.
              
              Incorporated
                  by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K as
                  filed with the U.S. Securities and Exchange Commission on January
                  5,
                  2007.3.1
              
              Articles
                  of Incorporation of Turnaround Partners, Inc.
              
              Incorporated
                  by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as
                  filed with the U.S. Securities and Exchange Commission on January
                  5,
                  2007.3.2
              
              Bylaws
                  of Turnaround Partners, Inc.
              
              Incorporated
                  by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K as
                  filed with the U.S. Securities and Exchange Commission on January
                  5,
                  2007.4.1
              
              2005
                  Stock Incentive Plan
              
              Incorporated
                  by reference to Appendix A to the Company's Definitive Information
                  Statement as filed with the U.S. Securities and Exchange Commission
                  on
                  December 13, 20054.2
              
              Amended
                  and Restated Certificate of Designation of Series D Preferred
                  Stock
              
              Incorporated
                  by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K as
                  filed with the U.S. Securities and Exchange Commission on December
                  14,
                  2007.10.1
              
              Assignment
                  and Amendment Agreement, dated January 26, 2004, related to the
                  Secured
                  Note Payable Agreement dated December 22, 2003, by and between
                  Stone
                  Street Asset Management, LLC and NuWave
              
              Incorporated
                  by reference to Exhibit 99.7 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  27,
                  2005.10.2
              
              Convertible
                  Debenture, issued on May 6, 2004, by Corporate Strategies, Inc
                  to Cornell
                  Capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the U.S. Securities
                  and
                  Exchange Commission on April 17, 200610.3
              
              Convertible
                  Debenture, issued on June 24, 2004, by Corporate Strategies, Inc.
                  to
                  iVoice, Inc.
              
              Incorporated
                  by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the U.S. Securities
                  and
                  Exchange Commission on April 17, 200610.4
              
              Employment
                  Agreement, dated September 1, 2004, by and between Corporate Strategies,
                  Inc. and Timothy J. Connolly
              
              Incorporated
                  by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the U.S. Securities
                  and
                  Exchange Commission on April 17,
                  2006
  24
 
 10.5
              
              Employment
                  Agreement, dated September 1, 2004, by and between Corporate Strategies,
                  Inc. and Fred Zeidman
              
              Incorporated
                  by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the U.S. Securities
                  and
                  Exchange Commission on April 17, 200610.6
              
              Convertible
                  Debenture, issued on September 28, 2004, by Corporate Strategies,
                  Inc. to
                  Cornell Capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-KSB
                  for the year ended December 31, 2005 as filed with the U.S. Securities
                  and
                  Exchange Commission 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 to Exhibit 99.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  27,
                  2005.10.8
              
              Standby
                  Equity Distribution Agreement, dated as of January 26, 2005, between
                  the
                  Company and Cornell Capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  27,
                  2005.10.9
              
              Registration
                  Rights Agreement, dated as of January 26, 2005, by and between
                  the Company
                  and Cornell Capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  27,
                  2005.10.10
              
              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 to Exhibit 99.4 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  27,
                  2005.10.11
              
              Termination
                  Agreement, dated January 26, 2005, related to the Convertible Debenture
                  issued by the Company and Cornell Capital Partners, LP on December
                  22,
                  2003
              
              Incorporated
                  by reference to Exhibit 99.5 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  27,
                  2005.10.12
              
              Promissory
                  Note, dated as of January 2, 2005, issued by the Company to Cornell
                  Capital Partner, LP
              
              Incorporated
                  by reference to Exhibit 99.6 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  27,
                  2005.10.13
              
              Convertible
                  Debenture, issued on April 6, 2005, by Corporate Strategies, Inc.
                  to
                  Cornell Capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 10.13 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the U.S.
                  Securities and Exchange Commission on April 17, 200610.14
              
              $250,000
                  Convertible Debenture, dated as of May 5, 2005, issued to Cornell
                  Capital
                  Partners, LP
              
              Incorporated
                  by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on May
                  10,
                  2005.10.15
              
              Letter
                  of Intent, dated June 3, 2005, by and between the Company and Corporate
                  Strategies, Inc.
              
              Incorporated
                  by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on June
                  16,
                  2005.10.16
              
              $150,000
                  Convertible Debenture, dated as of July 20, 2005, issued to Cornell
                  Capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on July
                  28,
                  2005.10.17
              
              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 to Exhibit 99.1 to the Company’s Current Report on Form 8-K/A
                  as filed with the U.S. Securities and Exchange Commission on September
                  8,
                  2005.10.18
              
              Services
                  Agreement, dated October 1, 2005, by and between Timothy J. Connolly
                  and
                  Sagamore Holdings, Inc.
              
              Incorporated
                  by reference to Exhibit 10.18 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the U.S.
                  Securities and Exchange Commission 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 to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on January
                  30,
                  2006.10.20
              
              Letter,
                  dated November 18, 2005, from Cornell Capital Partners, LP to modify
                  certain Debentures
              
              Incorporated
                  by reference to Exhibit 10.21 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the U.S.
                  Securities and Exchange Commission 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 to Exhibit 10.22 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the U.S.
                  Securities and Exchange Commission on April 17,
                  2006
  25
 
 10.22
              
              Convertible
                  Debenture, issued December 31, 2005, by Elite Flight Solutions,
                  Inc. to
                  Corporate Strategies, Inc.
              
              Incorporated
                  by reference to Exhibit 10.23 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the U.S.
                  Securities and Exchange Commission on April 17, 200610.23
              
              Consulting
                  Agreement, dated January 1, 2006, by and between Timothy J. Connolly
                  and
                  Power Technology, Inc.
              
              Incorporated
                  by reference to Exhibit 10.24 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the U.S.
                  Securities and Exchange Commission 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 to Exhibit 10.25 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2005 as filed with the U.S.
                  Securities and Exchange Commission on April 17, 200610.25
              
              Assumption
                  Agreement, dated February 7, 2006, by and between Lehigh and Cornell
                  capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on February
                  15,
                  2006.10.26
              
              Stock
                  Purchase Agreement, dated as of February 3, 2006, by and between
                  the
                  Company and Cornell Capital Partners, LP
              
              Incorporated
                  by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on February
                  15,
                  2006.10.27
              
              Joinder
                  Agreement, dated as of February 11, 2006, effective as of December
                  31,
                  2005, by Elite Flight Solutions, Inc.
              
              Incorporated
                  by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on February
                  28,
                  2006.10.28
              
              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 to Exhibit 10.4 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on February
                  28,
                  2006.10.29
              
              Secured
                  Convertible Debenture, dated as of February 11, 2006, effective
                  as of
                  December 31, 2005, issued to Corporate Strategies, Inc.
              
              Incorporated
                  by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on February
                  28,
                  2006.10.30
              
              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 to Exhibit 10.2 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on February
                  28,
                  2006.10.31
              
              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 to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on February
                  28,
                  2006.10.32
              
              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 U.S. Securities and Exchange Commission on October
                  6,
                  2006.10.33
              
              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 U.S. Securities and Exchange Commission on October
                  6,
                  2006.10.34
              
              Second
                  Amendment to Purchase Agreement, effective as of December 31, 2006,
                  by and
                  among Emerge Capital Corp, Kipling Holdings, Inc. and Timothy J.
                  Connolly
              
              Incorporated
                  by reference to Exhibit 10.34 to the Company’s Annual Report on Form
                  10-KSB for the year ended December 31, 2006 as filed with the U.S.
                  Securities and Exchange Commission on April 17, 200710.35
              
              Letter
                  Agreement, dated October 9, 2007, by and between Corporate Strategies,
                  In.
                  and YA Global Investments, L.P.
              
              Incorporated
                  by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on October
                  15,
                  2007.10.36
              
              Stock
                  Purchase Agreement, dated December 5, 2007, by and among Turnaround
                  Partners, Inc., Mr. Timothy J. Connolly and Viewpoint Capital,
                  LLC
              
              Incorporated
                  by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  as filed with the U.S. Securities and Exchange Commission on December
                  11,
                  2007.16.1
              
              Letter
                  dated November 9, 2005, from Weiser LLP
              
              Incorporated
                  by reference to 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,
                  2005, 2005.31.1
              
              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
              
              Included
                  herein32.1
              
              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
              
              Included
                  herein
  26
 
 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 $0.00 for the audit of fiscal year 2007 and $93,625 for fiscal
        year 2006. The Company paid Leger audit fees of $28,040 and $48,195 for the
        2007
        and 2006 quarterly reviews, respectively. We have not received any invoices
        for
        the 2007 audit fees through April 17, 2008.
 
 (2)
        Audit-related fees. Turnaround Partners, Inc. paid Leger audit-related fees
        of
        $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 paid $4,910 for other services to Leger.
 
 (5)
        Audit
        Committee pre-approval policies and procedures. The Company does not currently
        have an audit committee. Russell Kidder, Director of Turnaround Partners,
        Inc.,
        approved the engagement of Leger.
  27
 
 **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:
                  September 4, 2008
              
              Turnaround
                  Partners, Inc.(Registrant)/s/
                  Russell KidderRussell
                  Kidder
                President,
                  Chief Executive Officer and Interim CFO
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been
        signed below by the following persons on behalf of the registrant and in
        the
        capacities and on the dates indicated.
  */s/
                  Russell Kidder*
              
              September
                  4, 2008Name:
                  Russell Kidder
                Titles:
                  Chief Executive Officer, Interim Chief Financial Officer,
                Principal
                  Executive Officer, Interim Principal Financial and
                Accounting
                  Officer and Director
  28


INDEX
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
  TABLE
        OF
        CONTENTS


PAGEReport
                of Independent Registered Public Accounting Firm
            F-1Consolidated
                Balance Sheet as of December 31, 2007
            F-2Consolidated
                Statements of Operations for the Years EndedDecember
                31, 2007 and 2006
            F-4Consolidated
                Statements of Changes in Shareholders' Deficitfor
                the Years Ended December 31, 2007 and 2006
            F-6Consolidated
                Statements of Cash Flows for the Years EndedDecember
                31, 2007 and 2006
            F-7Notes
                to the Consolidated Financial Statements
            F-9 to F-28







REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Shareholders


Turnaround
      Partners, Inc. and Subsidiaries


Houston,
      Texas





We
      have
      audited the accompanying consolidated balance sheet of Turnaround Partners,
      Inc.
      and Subsidiaries as of December 31, 2007 and the related consolidated statements
      of operations, changes in shareholders' deficit, and cash flows for the years
      ended December 31, 2007 and 2006. 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.
      and
      Subsidiaries as of December 31, 2007, and the consolidated results of their
      operations and their cash flows for the years ended December 31, 2007 and 2006
      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
      30,
      2008


Houston,
      Texas


F-1




**TURNAROUND
      PARTNERS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEET**


**December
      31, 2007**





**ASSETS****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            255,961Notes
                and accounts receivable, net of allowance accounts of
                $482,686
            
            
            299,576Investment
                in marketable securities
            
            
            510,791Prepaid
                expense and deferred financing costs
            
            
            23,208Total
                current assets
            
            
            1,089,536**NONCURRENT
                ASSETS**Investment
                in real estate partnership and other investments, at cost
            
            
            3,749,859Deferred
                debenture costs
            
            
            25,506Total
                noncurrent assets
            
            
            3,775,365**TOTAL
                ASSETS**
            
            $
            4,864,901**LIABILITIES
                AND SHAREHOLDERS' DEFICIT****CURRENT
                LIABILITIES**Accounts
                payable and accrued liabilities
            
            $
            607,181Unearned
                income
            
            
            9,167Convertible
                debentures
            
            
            1,932,475Notes
                payable
            
            
            96,003Series
                C Preferred stock including associated paid in capital; liquidation
                preference of $337,380,**redeemable
                at $1,500 per share at Company option, cumulative dividends of $120
                per
                share per year, non-voting, par value $.01, 1,000 shares authorized,
                225
                shares issued and outstanding
            
            
            337,380Derivative
                liability
            
            
            282,181Total
                current liabilities
            
            
            3,264,387Convertible
                debentures—net of $1,136,193 discount
            
            
            5,088,807Note
                payable
            
            
            110,978Accrued
                interest payable
            
            
            903,746Total
                liabilities
            
            
            9,367,918**COMMITMENTS
                AND CONTINGENCIES**
            
            
            -




F-2





**TURNAROUND
      PARTNERS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEET**


**December
      31, 2007**


**(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
            
            
            7Series
                E Convertible Preferred Stock, $.001 par value; 1 shares authorized;
                1
                share issued and outstanding; no liquidation or redemption
                value
            
            
            -Common
                stock, $.001 par value; 5,000,000,000 shares authorized; 135,236,054
                shares issued and outstanding
            
            
            135,235Additional
                paid-in capital
            
            
            1,049,994Retained
                deficit
            
            
            (5,688,320
            )Total
                shareholders' deficit
            
            
            (4,503,017
            )**TOTAL
                LIABILITIES AND SHAREHOLDERS' DEFICIT**
            
            $
            4,864,901





See
      accompanying Notes to Consolidated Financial Statements




F-3





**TURNAROUND
      PARTNERS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**FOR
      THE YEARS ENDED**





**2007**
            
            **2006****REVENUE**Discount
                income
            
            $
            -
            
            $
            10,425Consulting
                revenue
            
            
            1,356,160
            
            
            963,277Marketable
                securities loss
            
            
            (303,373
            )
            
            (51,093
            )Fee
                income
            
            
            54,650
            
            
            204,610Total
                revenue
            
            
            1,107,437
            
            
            1,127,219**GENERAL
                AND ADMINISTRATIVE EXPENSES**Salaries
                and benefits
            
            
            831,214
            
            
            892,286Advertising
            
            
            69,455
            
            
            120,155Business
                develeopment, travel and entertainment
            
            
            62,828
            
            
            86,685Rent
            
            
            87,453
            
            
            76,395Depreciation
                and amortization
            
            
            24,041
            
            
            23,874Professional
                fees
            
            
            479,161
            
            
            855,722Bad
                debt
            
            
            524,414
            
            
            243,302Other
                expenses
            
            
            211,048
            
            
            271,995Allocated
                overhead to affiliated entity
            
            
            (243,951
            )
            
            (308,481
            )Total
                general and administrative expenses
            
            
            2,045,663
            
            
            2,261,933**OPERATING
                LOSS**
            
            
            (938,226
            )
            
            (1,134,714
            )Other
                (income) expense:Net
                change in fair value of derivative liabilities
            
            
            (141,664
            )
            
            (3,642,080
            )Income
                on debt extinguishment
            
            
            (450,650
            )
            
            (130,563
            )Merger
                expense
            
            
            -
            
            
            140,000Interest
                expense
            
            
            586,508
            
            
            273,802Interest
                expense - derivatives
            
            
            834,572
            
            
            600,071Interest
                Income
            
            
            (17,455
            )
            
            (54,790
            )Loss
                from operations and impairment of investment in real estate
                partnership
            
            
            685,136
            
            
            78,095Other
                (income) expense
            
            
            170,302
            
            
            (22,605
            )Total
                other (income) expense
            
            
            1,666,749
            
            
            (2,758,070
            )Income
                (loss) before income tax
            
            
            (2,604,975
            )
            
            1,623,356**INCOME
                TAX PROVISION**Current
                income tax benefit
            
            
            -
            
            
            -Deferred
                income tax expense (benefit )
            
            
            -
            
            
            -Total
                income tax expense (benefit)
            
            
            -
            
            
            -**INCOME
                (LOSS) FROM CONTINUING OPERATIONS**
            
            
            (2,604,975
            )
            
            1,623,356




F-4




**TURNAROUND
      PARTNERS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**FOR
      THE YEARS ENDED**


**(continued)**





**2007**
            
            **2006****INCOME
                (LOSS) FROM DISCONTINUED OPERATIONS**Loss
                from discontinued operations
            
            
            -
            
            
            (4,688
            )Gain
                on sale of subsidiaries
            
            
            -
            
            
            3,317,406**NET
                INCOME (LOSS)**
            
            
            (2,604,975
            )
            
            4,936,074Preferred
                dividends paid
            
            
            -
            
            
            4,554**INCOME
                (LOSS) AVAILABLE TO COMMON SHARES**
            
            $
            (2,604,975
            )
            $
            4,931,520Basic
                income (loss) per share:Income
                (loss) from continuing operations
            
            
            (0.04
            )
            
            0.06Income
                (loss) from discontinued operations
            
            
            -
            
            
            0.13$
            (0.04
            )
            $
            0.19Diluted
                income (loss) per share:Income
                (loss) from continuing operations
            
            
            -
            
            
            0.02Income
                (loss) from discontinued operations
            
            
            -
            
            
            0.03$
            -
            
            $
            0.05Basic
                average shares outstanding
            
            
            63,733,188
            
            
            25,505,662Diluted
                average shares outstanding
            
            
            63,733,188
            
            
            98,411,949




See
      accompanying Notes to Consolidated Financial Statements




F-5




**TURNAROUND
      PARTNERS, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT**


**For
      the Years Ended December 31, 2006 and 2007**





**Additional****Series B Preferred**
            
            **Series C Preferred**
            
            **Series D Preferred**
            
            **Series E Preferred**
            
            **Common Stock**
            
            **Paid-in**
            
            **Retained****Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Capital**
            
            **Deficit**
            
            **Total**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 warrantsfor
                services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            141,000
            
            
            -
            
            
            141,000Redemption
                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 forseries
                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
            )
            
            (3,313,264
            )Net
                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
            
            
            (3,083,345
            )
            
            (2,310,969
            )Issuance
                of common stock:For
                services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,192,307
            
            
            1,192
            
            
            14,308
            
            
            -
            
            
            15,500Conversion
                of debentures
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            104,596,247
            
            
            104,596
            
            
            285,673
            
            
            
            
            
            390,269Proceeds
                for sale of stock received for Series E preferred stock
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1
            
            
            -
            
            
            -
            
            
            -
            
            
            7,158
            
            
            -
            
            
            7,158Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,604,975
            )
            
            (2,604,975
            )Balance,
                December 31, 2007
            
            
            6,666
            
            $
            67
            
            
            -
            
            $
            -
            
            
            700
            
            $
            7
            
            
            1
            
            $
            -
            
            
            135,236,058
            
            $
            135,235
            
            
            1,049,994
            
            $
            (5,688,320
            )
            $
            (4,503,017
            )





See
      accompanying Notes to Consolidated Financial Statements




F-6





**TURNAROUND
      PARTNER INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





**Year Ended December 31,****2007**
            
            **2006****CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                income (loss)
            
            $
            (2,604,975
            )
            $
            4,936,074Adjustment
                to reconcile net income (loss) to net cash provided by (used in)
                operating
                activities:Depreciation
                and amortization
            
            
            24,041
            
            
            23,874Amortization
                of deferred expenses
            
            
            324,918
            
            
            60,638Bad
                debts
            
            
            484,414
            
            
            243,302Loss
                from discontinued operations
            
            
            -
            
            
            4,688Non-cash
                stock issued for services
            
            
            15,500
            
            
            62,077Non-cash
                consulting fees
            
            
            (889,804
            )
            
            -Non-cash
                merger expense
            
            
            -
            
            
            140,000Non-cash
                expense for redemption of preferred stock
            
            
            152,834
            
            
            3,072Non-cash
                expenses
            
            
            75,853
            
            
            88,095Non-cash
                interest expense-derivatives
            
            
            860,233
            
            
            600,071Net
                change in fair value of derivative liability
            
            
            (167,325
            )
            
            (3,642,080
            )Non-cash
                debt modification gain
            
            
            (450,250
            )
            
            (130,563
            )Non-cash
                gain on sale of subsidary
            
            
            -
            
            
            (3,317,406
            )Non-cash
                income
            
            
            (289,722
            )
            
            (541,527
            )Loss
                from and impairment of investment in real estate
                partnership
            
            
            685,136
            
            
            -(Increase)
                decrease in assets:Other
                accounts receivable
            
            
            295,216
            
            
            (245,186
            )Notes
                receivable
            
            
            6,415
            
            
            211,142Prepaid
                and other
            
            
            (89,562
            )
            
            102,412Investment
                in marketable securities
            
            
            (246,137
            )
            
            391,060Increase
                (decrease) in liabilities:Accounts
                payable
            
            
            (37,623
            )
            
            (8,588
            )Accrued
                liabilities
            
            
            (152,236
            )
            
            241,405Unearned
                income
            
            
            76,667
            
            
            717,749Due
                to clients
            
            
            -
            
            
            (19,608
            )Accrued
                interest
            
            
            435,750
            
            
            225,418Net
                cash provided by (used in) operating activities
            
            
            (1,490,657
            )
            
            146,119**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchases
                of fixed assets
            
            
            (3,091
            )
            
            (21,784
            )Cash
                received in purchase and from sale of subsidiary
            
            
            -
            
            
            559,742Cash
                received for sale of investment
            
            
            198,899
            
            
            -Cash
                paid in purchase of subsidiary
            
            
            -
            
            
            (10,000
            )Investment
                purchases
            
            
            -
            
            
            (7,073
            )Preferental
                returns on capital of and distribution from partnership
            
            
            481,250
            
            
            78,750Net
                cash provided by investing activities
            
            
            677,058
            
            
            599,635




F-7




**TURNAROUND
      PARTNER INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Continued)**





**Year Ended December 31,****2007**
            
            **2006****CASH
                FLOWS FROM FINANCING ACTIVITIES**Principal
                payments on note payable
            
            
            (84,233
            )
            
            (64,258
            )Dividends
                paid on preferred stock
            
            
            -
            
            
            (4,554
            )Net
                cash used in financing activities
            
            
            (84,233
            )
            
            (68,812
            )**NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
            
            
            (897,832
            )
            
            676,942**CASH
                AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
            
            
            1,153,793
            
            
            476,851**CASH
                AND CASH EQUIVALENTS, END OF PERIOD**
            
            $
            255,961
            
            $
            1,153,793**SUPPLEMENTAL
                INFORMATION**Interest
                paid
            
            $
            50,040
            
            $
            14,689Taxes
                paid
            
            $
            -
            
            $
            9,882Decrease
                in notes receivable
            
            $
            900,000
            
            $
            -Acquisition
                of investment
            
            $
            1,789,804
            
            $
            -Conversion
                of convertible debentures and accrued interest:Decrease
                in debentures and accrued interest
            
            $
            390,265
            
            $
            63,996Increase
                in common stock
            
            $
            104,596
            
            $
            1,936Increase
                in paid-in-capital
            
            $
            285,673
            
            $
            62,065Sale
                of Preferred Stock - Series EIncrease
                in Accounts Receivable
            
            $
            7,158
            
            $
            -Increase
                in Paid-in-capital
            
            $
            7,158
            
            $
            -Disposition
                of investmentPurchase
                of notes receivable
            
            $
            586,000
            
            $
            -Collection
                of affiliate receivable
            
            $
            106,905
            
            $
            -Decrease
                in investment exchanged for notes receivable and affiliate
                receivable
            
            $
            889,804
            
            $
            -Redemption
                of preferred stock
            
            $
            36,000
            
            $
            -Disposition
                of furniture and fixtures
            
            $
            48,837
            
            $
            -Exercise
                of investment of stock warrants
            
            $
            11,000
            
            $
            -Redemption
                and purchase of preferred stock:Decrease
                in accounts receivable
            
            $
            -
            
            $
            22,500Increase
                in notes payable
            
            $
            -
            
            $
            240,000Decrease
                in paid-in capital
            
            $
            -
            
            $
            243,498Sale
                of subsidiary:Assets
                sold
            
            $
            -
            
            $
            2,906,001Liabilities
                assumed by buyer
            
            $
            -
            
            $
            5,861,821Purchase
                of subsidiary:Assets
                purchased
            
            $
            -
            
            $
            5,081,476Liabilities
                assumed
            
            $
            -
            
            $
            3,906,744Deemed
                distribution
            
            $
            -
            
            $
            3,313,264Common
                stock and warrants issued for services:Increase
                in prepaids
            
            $
            -
            
            $
            221,423Increase
                in common stock
            
            $
            -
            
            $
            3,800Increase
                in paid-in-capital
            
            $
            -
            
            $
            279,700





See
      accompanying Notes to Consolidated Financial Statements




F-8


TURNAROUND
        PARTNERS, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 DECEMBER
        31, 2007 and 2006
 
 NOTE
        1 -
        DESCRIPTION OF MERGER, NATURE OF OPERATIONS AND CONSOLIDATION
 
 On
        August
        31, 2005, NuWave 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 June 30, 2009, 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 June 30, 2009 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 June
        30,
        2009, 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. Due to the change in control of the Company, Mr. Connolly and his
        spouse
        may not convert debentures that would result in ownership of more than 4.99%
        of
        the Company at the time of conversion.
 
 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.
 
 On
        May
        31, 2006, we filed an S-8 with the Securities and Exchange Commission for
        the
        Emerge Capital Corp. 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. As of December 31, 2007
        there
        were 7,250,000 shares available under the Plan.
 
 On
        September 30, 2006, we completed a stock purchase agreement (the “Agreement”)
        with Kipling Holdings, Inc. (“Kipling”) and Timothy J. Connolly, to acquire 100%
        of the total issued and outstanding capital stock of Kipling Holdings, Inc.
        (“Kipling”), a Delaware corporation. Kipling holds a limited partnership
        interest in a hotel in West Palm Beach, Florida.




F-9
  On
        December 5, 2007 (the “ Closing
        Date ”),
        the
        Company filed on Form 8-K Current Report, as amended on December 14, 2007
        and
        February 20, 2008, disclosing that the Company entered into a Stock Purchase
        Agreement (the “ Purchase
        Agreement ”)
        with
        Mr. Timothy J. Connolly, an individual and Viewpoint Capital, LLC, a Nevada
        limited liability company (the “ Investor ”)
        pursuant to which
        the
        Company issued to the Investor one (1) share of the Company’s Series E
        convertible preferred stock, par value $0.01 per share (“ Series
        E Preferred ”),
        which
        such Series E Preferred is convertible into Three Hundred Million Shares
        (300,000,000) of common stock of the Company, par value $0.001 per share
        (“ Common
        Stock ”)
        in
        exchange for the transfer by the Investor to the Company of Four Million
        (4,000,000) unrestricted, free-trading shares of common stock of Asset Capital
        Group, Inc., a Nevada corporation (“ ACGU
        Common Stock ”)
        having
        a value of Three Million Four Hundred Thousand Dollars ($3,400,000) based
        on the
        closing price of ACGU Common Stock as of the Closing Date as reported on
        the
        Pink Sheets, LLC. ACGU Common Stock trades under the symbol “ACGU.PK”. As a
        result of this transaction, the Investor acquired a 63.66% controlling interest
        in the Company’s Common Stock by virtue of the Investor’s ownership of the
        Series E Preferred.
 
 On
        February 13, 2008, the Investor delivered to the Company a notice to convert
        the
        one (1) shares of Series E Preferred to Three Hundred Million (300,000,000)
        shares of Common Stock. On February 14, 2008, the Company issued to the Investor
        Three Hundred Million (300,000,000) shares of Common Stock, all of which
        are
        restricted, and canceled the One (1) share of Series E Preferred. As a result
        of
        this transaction, the Investor acquired a 63.66% controlling interest in
        the
        Common Stock of the Company.
 
 During
        the month of March 2008, we sold our investment in stock of ACGU for
        approximately $7,700. Consequently, our investment in marketable securities
        as
        of December 2007 includes the net realizable value of these securities sold
        in
        March 2008.
 
 Effective
        as of the Closing Date, Mr. Connolly resigned as Vice Chairman of the Board
        and
        as President and Chief Executive Officer of the Company, however Mr. Connolly
        shall continue to serve as President and Chief Executive Officer of Corporate
        Strategies, Inc., a Texas corporation and wholly-owned subsidiary of the
        Company
        (“ CSI ”)
        with
        the understanding that the business of CSI will be discontinued or spun off
        to
        its stockholders. In addition, Mr. Connolly shall continue to receive the
        same
        compensation as he has received through the Closing Date for his aforementioned
        continued services to CSI through December 31, 2008, which such date may
        be
        extended by mutual agreement by and among the parties to the Purchase Agreement.
 
 Furthermore,
        Mr. Connolly (and his spouse) agreed on the Closing Date to relinquish certain
        non-dilutive rights in favor of Mr. Connolly (and his spouse) contained in
        Seven
        Hundred (700) shares of Series D convertible preferred stock held by Mr.
        Connolly (and his spouse) effective June 30, 2009 (instead of the previous
        date
        of December 31, 2010) in exchange for the Company conveying all rights to
        the
        names “Turnaround Partners, Inc.”, “Corporate Strategies, Inc.” and “Kipling
        Holdings, Inc.”, as well as all title to all furniture and equipment in the
        Houston office of the Company. The parties to the Purchase Agreement also
        agreed
        that the names of these companies shall be changed within sixty (60) days
        following the Closing Date.
 
 As
        disclosed in the Form 8-K Current Report referred to above, the Company
        disclosed that effective as of December 27, 2007, the Board of Directors
        of the
        Registrant (the “ Board ”)
        accepted the resignation of (a) Wm. Chris Mathers from his position as Chief
        Financial Officer of the Registrant and (b) Fred Zeidman from his position
        as a
        member of the Board. Mr. Russell Kidder, the Registrant’s current President,
        Chief Executive Officer and member of the Board, shall serve as interim Chief
        Financial Officer, effective as of December 27, 2007.
 
 In
        connection with the Purchase Agreement, Mr. Russell Kidder was appointed
        to
        serve as President, Chief Executive Officer and as a Director of the Company
        effective as of the Closing Date.
  As
        filed
        on Form 8-K Current Report on January 3, 2008, the Company disclosed that
        effective as of December 31, 2007, Corporate Strategies, Inc. (“ CSI ”),
        a
        Texas corporation and wholly-owned subsidiary of Turnaround Partners, Inc.,
        a
        Nevada corporation entered into a Purchase Agreement with Natural Nutrition,
        Inc., a Nevada corporation (“ NN ”)
        and
        CSI Business Finance, Inc., a Texas corporation and wholly-owned subsidiary
        of
        NN (together with NN, the “ Buyer ”)
        pursuant to which CSI conveyed, transferred and assigned to the Buyer all
        of its
        title to and rights in CSI’s ten percent (10%) interest in the total issued and
        outstanding capital stock of Interactive Nutrition International, Inc. (“INII”),
        a company organized under the laws of Canada in exchange for the conveyance,
        transfer and assignment to CSI by the Buyer of certain Notes held by the
        Buyer
        (as such term is defined in the Agreement) plus a cash payment equal to One
        Hundred Ninety-Eight Thousand Eight Hundred Ninety-Nine Dollars and Ten Cents
        ($198,899.10). In addition, NN assumed payment for all of CSI’s office lease,
        equipment payments and any other payments related to the office space in
        Houston, Texas for the remainder of the lease term and any renewals.
 
 NATURE
        OF
        OPERATIONS AND ORGANIZATION
 
 The
        discussion below regarding the nature of operations and organization assumes
        the
        Company will continue with the current business plan, however in light of
        the
        Company’s change in control of ownership, the Company is contemplating a new
        business model. Currently, the Company believes the new business plan going
        forward is to focus on alternative and clean technologies.
 
 F-10
  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 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. 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%.
 
 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:
 
 ·
            The
                Company will not assume the financial obligations of the client company
                in
                any circumstance. In most cases, the financial institution with the
                greatest risk has referred the Company to the
                transaction. 
 ·
            The
                Company requires the client or their investor to provide the client
                company with working capital necessary to execute the turnaround
                plan. 
 ·
            The
                Company requires the client to fully indemnify the Company against
                any
                actions, with the exception of gross negligence or
                malfeasance. 
 ·
            If
                the client has officer and director insurance, we require the client
                to
                add the Company or any of the Company's contractors as insured parties
                under the policy. 
 ·
            Should
                the Company consider altering any of the policies above, it will
                require a
                vote of our Board of Directors to waive them and agree to the maximum
                amount of risk that the Company will
                assume. 
 The
        Company also actively trades securities and options with available cash.
        Many of
        these transactions contain a considerable amount of risk.
 
 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. These financial statements include the operations of Lehigh
        through February 3, 2006 as 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.
 
 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.
 
 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. Management does not anticipate generating any
        significant new business in this area.
 
 F-11
  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. The Company accounts for marketable securities in accordance
        with Financial Accounting Standard 115 "Accounting for Certain Investments
        in
        Debt and Equity Securities."
 
 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.
 
 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 $482,686 for the year ended December 31, 2007.
 
 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.
 
 The
        Company did not have any fixed assets as of December 31, 2007. As part of
        the
        December 2007 transaction with ACGU, title to all furniture and equipment
        in the
        Houston office of the Company was conveyed to the ex-Vice Chairman of the
        Board
        of Directors and ex-CEO, Tim Connolly.
 
 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.
 
 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.
 
 For
        the
        2007 Period, we recorded an operating loss and impairment on our investment
        in
        the West Palm Beach hotel within Kipling Holdings, Inc. in the amount of
        $685,136. Included in this amount is $540,000 for impairment of long-lived
        asset. During the fourth quarter of 2007 there was a proposed sale of the
        hotel
        that would have resulted in a loss to the Company of approximately $540.000.
        The
        sale of the hotel did not occur, but the asset was written down to estimated
        net
        realizable value nevertheless. The business segment affected is our “Hotel
        Investment” as found in Footnote 20 of the consolidated financial
        statements.
 
 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.
 
 F-12
  FAIR
        VALUE DISCLOSURE AT DECEMBER 31, 2007
 
 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.
 
 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
        $69,455 and $120,155 for the years ended December 31, 2007 and 2006,
        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.
  F-13
  RECENT
        ACCOUNTING PRONOUNCEMENTS
 
 In
        June
        2006, the Financial Accounting Standards Board (“ FASB ”)
        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 adopted FIN 48 effective as of January 1, 2007. The
        adoption of FIN 48 did not have a material impact on its effective tax
        rate.
  In
        September 2006, the SEC 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
        No. 157 ”).
        This
        statement defines fair value, establishes a framework for measuring fair
        value
        in generally accepted accounting principles, and expands disclosures about
        fair
        value measurements. This statement clarifies how to measure fair value as
        permitted under other accounting pronouncements but does not require any
        new
        fair value measurements. SFAS No. 157 was originally effective for financial
        statements issued for fiscal years beginning after November 15, 2007, and
        interim periods within those fiscal years. On February 12, 2008, the FASB
        issued
        Final FASB Staff Position (“ FSP ”)
        No.
        Financial Accounting Standard (“ FAS ”)
        157-2, *Effective
        Date of FASB Statement*  *No.
        157* (“ FSP
        No. 157-2 ”).
        FSP
        No. 157-2, which was effective upon issuance, delays the effective date of
        SFAS
        No. 157 for nonfinancial assets and nonfinancial liabilities, except for
        items
        that are recognized or disclosed at fair value at least once a year, to fiscal
        years beginning after November 15, 2008. The Company expects to adopt FAS
        No.
        157 on January 1, 2008 and 2009 for financial assets and financial liabilities
        and nonfinancial assets and nonfinancial liabilities, respectively. The Company
        does not believe that the adoption of FAS No. 157 will have a material effect
        on
        the Company’s consolidated financial statements.
 
 In
        July
        2006, the FASB issued FIN 48, which clarifies the accounting for uncertainty
        in
        tax positions. This Interpretation requires that the Company recognize in
        our
        financial statements, the impact of a tax position, if that position is more
        likely than not of being sustained on audit, based on the technical merits
        of
        the position. The provisions of FIN 48 are effective as of the beginning
        of our
        2007 fiscal year, with the cumulative effect of the change in accounting
        principle recorded as an adjustment to opening retained earnings. The adoption
        of FIN 48 did not have a material effect on the Company’s financial condition or
        results of operations for the year ended December 31, 2007.
  In
        February 2007, the FASB issued SFAS No. 159, *The
        Fair Value Option for Financial Assets and Liabilities Including an amendment
        of
        FASB Statement No. 115* (“ SFAS
        No. 159 ”).
        SFAS
        No. 159 permits entities to choose to measure many financial instruments
        and
        certain other items at fair value that ** are
        not
        currently required to be measured at fair value. SFAS No. 159 also establishes
        presentation and disclosure requirements designed to facilitate ** comparisons
        between entities that choose different measurement attributes for similar
        types
        of assets and liabilities. SFAS No. 159 is effective as of the ** beginning
        of an entity’s first fiscal year that begins after November 15, 2007. The
        Company expects to adopt SFAS No. 159 on January 1, 2008. The Company has
        evaluated the impact of adopting SFAS No. 159 and has determined that it
        will
        not elect the fair value option under SFAS No.159 for any financial instruments
        that are not required to be presented at fair value under generally accepted
        accounting principles.
 
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements – an amendment of ARB No. 51”
(“ SFAS
        160 ”).
        SFAS
        160 establishes new accounting and reporting standards for the noncontrolling
        interest in a subsidiary and for the deconsolidation of a subsidiary. Before
        this statement, limited guidance existed for reporting noncontrolling interests
        (minority interest). As a result, diversity in practice exists. In some cases
        minority interest is reported as a liability and in others it is reported
        in the
        mezzanine section between liabilities and equity. Specifically, SFAS 160
        requires the recognition of a noncontrolling interest (minority interest)
        as
        equity in the consolidated financials statements and separate from the parent’s
        equity. The amount of net income attributable to the noncontrolling interest
        will be included in consolidated net income on the face of the income statement.
        SFAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary
        that do not result in deconsolidation are equity transactions if the parent
        retains its controlling financial interest. In addition, this statement requires
        that a parent recognize gain or loss in net income when a subsidiary is
        deconsolidated. Such gain or loss will be measured using the fair value of
        the
        noncontrolling equity investment on the deconsolidation date. SFAS 160 also
        includes expanded disclosure requirements regarding the interests of the
        parent
        and its noncontrolling interests. SFAS 160 is effective for the Company on
        January 1, 2009. Earlier adoption is prohibited.
        The Company is currently evaluating the impact, if any, of the adoption of
        SFAS
        160 will have on its consolidated financial statements.
 
 F-14
  In
        December 2007, the FASB issued SFAS No. 141R, *Business
        Combinations* .
        SFAS
        No. 141R provides companies with principles and requirements on how an acquirer
        recognizes and measures in its financial statements the identifiable assets
        acquired, liabilities assumed, and any noncontrolling interest in the acquiree
        as well as the recognition and measurement of goodwill acquired in a business
        combination. SFAS No. 141R also requires certain disclosures to enable users
        of
        the financial statements to evaluate the nature and financial effects of
        the
        business combination. Acquisition costs associated with the business combination
        will generally be expensed as incurred. SFAS 141R is effective for business
        combinations occurring in fiscal years beginning after December 15, 2008.
        Early
        adoption of SFAS No. 141R is not permitted. The Company is currently evaluating
        the impact SFAS No. 141R will have on any future business
        combinations.
 
 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-15




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




Years
                EndedDecember
                31,2007
            
            2006Income
                (loss) from continuing operations
            
            $
            (2,604,975
            )
            $
            1,623,356Less
                effect of derivatives, preferred stock and convertible
                debenture
            
            
            828,766
            
            
            -Adjusted
                income (loss) from continuing operations
            
            $
            (1,776,209
            )
            $
            1,623,356Income
                (loss) from discontinued operations
            
            
            -
            
            
            (4,688
            )Gain
                on sale of subsidiary
            
            
            -
            
            
            3,317,406Net
                income (loss)
            
            $
            (1,776,209
            )
            $
            4,936,074Basic
                weighted average shares
            
            
            63,733,188
            
            
            25,505,662Effect
                of dilutive securities:Series
                B preferred stock
            
            
            -
            
            
            4,195,445Series
                D preferred stock
            
            
            -
            
            
            68,710,842Diluted
                weighted average shares
            
            
            63,733,188
            
            
            98,411,949Income
                (loss) per share:Basic:Income
                (loss) from continuing operations
            
            $
            (0.04
            )
            $
            0.06Income
                (loss) from discontinued operations
            
            
            -
            
            
            0.13Net
                income (loss)
            
            $
            (0.04
            )
            $
            0.19Diluted:Income
                (loss) from continuing operations
            
            $
            -
            
            $
            0.02Income
                (loss) from discontinued operations
            
            
            -
            
            
            0.03Net
                income (loss)
            
            $
            -
            
            $
            0.05




(1)
            A
                weighted average year-to-date number of Convertible Debentures to
                convert
                into 52,502,492 and 51,383,109 shares of common stock were outstanding
                during the twelve months ended December 31, 2007 and 2006, respectively,
                but were not included in the computation of diluted per share net
                income
                (loss) for the twelve months ended December 31, 2007 or 2006 because
                they
                were anti-dilutive. In addition, because they were anti-dilutive,
                4,195,445 of Series B preferred stock and 94,665,241 of Series D
                preferred
                stock were not included in the computation of diluted per share.
                In
                addition there were 3,000,000 warrants that were not included because
                of
                their anti-dilutive effect.


F-16


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. See Note 7 - Investment in
      Marketable Securities for risks associated with a short-term investment in
      auction rate securities.





For
      the
      years ended December 31, 2007 and 2006, the Company had sales as a percent
      of
      annual revenues from continuing operations from the following
      customers:





2007
            
            2006Customer
                A
            
            
            63
            %
            
            0
            %Customer
                B
            
            
            9
            %
            
            31
            %Customer
                C
            
            
            0
            %
            
            25
            %Customer
                D
            
            
            9
            %
            
            19
            %Customer
                E
            
            
            19
            %
            
            0
            %





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





NOTE
      5 -
      CONCENTRATION OF TRANSACTIONS WITH YA GLOBAL INVESTMENTS, LP (“YA Global”) (fka
      Cornell Capital Partners, LP).





At
      December 31, 2007, $7,826,100 of the convertible debentures are owed to YA
      Global and Highgate House Funds, Ltd., an affiliate of YA Global.





YA
      Global
      is the principal lender to the Company.





In
      February 2006, the Company sold its wholly-owned subsidiary, Lehigh, to YA
      Global 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.





NOTE
      6 -
      FIXED ASSETS





The
      Company did not have any fixed assets as of December 31, 2007. As part of the
      December 2007 transaction with ACGU, title to all furniture and equipment in
      the
      Houston office of the Company was conveyed to the ex-Vice Chairman of the Board
      of Directors and CEO, Tim Connolly.





Depreciation
      expense for the years ended December 31, 2007 and 2006 was $24,041 and $23,874,
      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, 2007 and 2006, the Company had unrealized losses
      of
      $25,353 and $158,809, 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.





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, 2007, the Company had $29,852 of investment
      in
      preferred stock carried at cost.





As
      of
      December 31, 2007, $500,000 of our short-term investments was invested in
      auction rate securities, or ARSs. The $500,000 we have invested in ARSs at
      April
      28, 2008 is collateralized by portfolios of AAA municipal obligations.
 Through the date of this filing, auctions of these securities were not
      successful, resulting in our continuing to hold these securities and the issuers
      paying interest at the maximum contractual rate. Based on current market
      conditions, it is likely that auctions related to these securities will be
      unsuccessful in the near term. Unsuccessful auctions will result in our
      holding securities beyond their next scheduled auction reset dates and limiting
      the short-term liquidity of these investments. While these failures in the
      auction process have affected our ability to access these funds in the near
      term, we do not believe that the underlying securities or collateral have been
      affected. We believe that the higher reset rates on failed auctions provide
      sufficient incentive for the security issuers to address this lack of liquidity.
      If the credit rating of the security issuers deteriorates, we may be
      required to adjust the carrying value of these investments through an impairment
      charge.


F-17





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 required 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
      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, 2007, 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, and for the entire year ended December 31, 2007
      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 $3,720,007. The initial investment
      of $4,500,000 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
      December 31, 2007, the $4,500,000 Investment in Worthington has been reduced
      by
      $481,250 for the preferential return and distributions of capital, cumulative
      partnership income and loses and a $540,000 impairment through December 31,
      2007. The Company receives 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. This investment is
      accounted for using the equity method.





Worthington
      started its operations September 14, 2005. At December 31, 2007 Worthington
      had
      a book value of $2,648,223 consisting of cash, land, building, furniture and
      fixtures, equipment and other assets of $12,199,936 and accounts payable and
      debt of $9,551,713. The difference between the book value of the investment
      and
      the underlying equity in the net assets per the partnership at the date of
      completion of the hotel in the amount of $2,694,557 is being depreciated over
      25
      years which is the same as the depreciable life of the building.





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.


F-18


Debenture
      Payable from the acquisition





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 $18,219 amortization as of December 31, 2007, 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, 2008) 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 had verbally agreed to extend the registration
      filing requirement date to June 30, 2008. The requirement under the Registration
      Rights Agreement for this debenture has now been verbally waived.





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
            
            
            98,411,949Income
                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, 2007,
      the
      prime rate was 7.50% and amount borrowed was $48,936. At December 31, 2007,
      all
      payments under the terms of the note were current.





NOTE
      10
      -CONVERTIBLE DEBENTURES - DERIVATIVE FINANCIAL INSTRUMENTS





The
      Convertible Debentures issued from 2003 through 2007 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."


F-19


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





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


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


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


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


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.





YA
      GLOBAL
      5/06/04 CONVERTIBLE DEBENTURE





On
      May 6,
      2004, Corporate Strategies entered into a Secured Debenture agreement with
      YA
      Global, 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-20




YA
      GLOBAL
      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 YA Global.





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.





YA
      GLOBAL
      9/28/04 CONVERTIBLE DEBENTURE





On
      September 28, 2004, Corporate Strategies entered into a Secured Debenture
      agreement with YA GLobal., 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.





YA
      GLOBAL
      4/06/05 CONVERTIBLE DEBENTURE





On
      April
      6, 2005, Corporate Strategies entered into a Secured Debenture agreement with
      YA
      Global, 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-21




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.





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.




F-22




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.





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.





The
      debentures for YA Global, Holland, Saparito and Viola have been verbally
      extended to June 30, 2008. At December 31, 2007, $1,932,475 of debentures are
      classified as a current liability, however the Company can force conversion
      of
      the debentures into common stock at any time.





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).





F-23




The
      following is a summary of the Convertible Debentures and the adjustments made
      based on the embedded derivatives:





Summary
                of Derivative Values
            
            Derivative Liabilities - Value as of:Convertible
                Debentures
            
            12/31/2007Holland
                et. al. Debentures issued 12/22/03
            
            $
            1,284Saporito
                Debenture issued 1/29/04
            
            
            2,045YA
                Global Debentures issued 5/6/04
            
            
            1,881YA
                Global Debentures issued 6/24/04
            
            
            3,134YA
                Global Debentures issued 9/28/04
            
            
            2,508Viola
                Debenture issued 10/12/04
            
            
            202YA
                Global Debentures issued 4/6/05
            
            
            2,504Highgate
                Debenture issued 12/2/05
            
            
            268,623Total
            
            $
            282,181





DEBT
      DISCOUNTS





For
      the
      period from inception of the Convertible Debentures through each balance sheet
      date, the amortization of unamortized discount on the Convertible Notes has
      been
      classified as interest expense in the accompanying statements of operations.
      As of December 31, 2007 there were no discounts associated with the Convertible Debentures.





Annual
      maturities of notes payable and convertible debentures at December 31, 2007
      are
      as follows :





Year
                Ending December 31,
            
            Amount2008
            
            $
            475,9762009
            
            
            50,9732010
            
            
            6,280,2042011
            
            
            4,802Total
            
            $
            6,811,955





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.
      None
      of the debentures were extended past June 30, 2007. All debentures are
      classified as a current liability, however the Company can force conversion
      of
      the debentures into common stock at any time. 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-24





Summary
      of Debt Extinguishment:





Convertible
                Note
            
            Gain
                on
            
            Extinguishment12/31/07
            
            12/31/06Holland
                et. al. Debentures issued 12/8/03
            
            $
            133,425
            
            $
            0.00Holland
                et. al. Debentures issued 12/22/03
            
            
            213,545
            
            
            0.00Saporito
                Debenture issued 1/29/04
            
            
            103,680
            
            
            0.00YA
                Global Debentures issued 5/5/05
            
            
            0.00
            
            
            36,194YA
                Global Debenture issued 7/20/05
            
            
            0.00
            
            
            58,171Viola
                Debenture issued 10/12/04
            
            
            0.00
            
            
            36,198Total
            
            $
            450,650
            
            $
            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, One Thousand (1,000) non-voting shares
      of
      Series C Preferred, par value $0.01 per share and one (1) share of Series E
      Preferred, par value $0.001. As of December 31, 2007, 135,236,054 shares of
      Common Stock, Six thousand six hundred and sixty-six (6,666) shares of Series
      B
      Preferred, two hundred twenty-five (225) shares of Series C Preferred, seven
      hundred (700) shares of Series D Preferred stock, and one (1) share of Series
      E
      preferred 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 million (200,000,000) 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 225 shares of Series C preferred stock outstanding.
      The
      stock has a liquidation preference of $337,380 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. Under the purchase agreement dated December 5,
      2007,
      the series C preferred stock was to have been paid off by December 31, 2007.
      Therefore, the full liquidation value of $337,380 is recorded as a current
      liability.





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 June 30, 2009, 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 June 30, 2009 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
      June
      30, 2009 into one tenth of one percent (0.1%) of the total number of shares
      of
      Common Stock issued and outstanding on June 30, 2009, 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. Due to the change in
      control of the Company, Mr. Connolly and his spouse may not convert debentures
      that would result in ownership of more than 4.99% of the Company at the time
      of
      conversion.


F-25


Pursuant
      to the closing date with Viewpoint Capital, LLC on December 5, 2007 (the
“ Closing
      Date ”),
      the
      Company disclosed that the Company entered into a Stock Purchase Agreement
      (the
“ Purchase
      Agreement ”)
      with
      Mr. Timothy J. Connolly, an individual and Viewpoint Capital, LLC, a Nevada
      limited liability company (the “ Investor ”)
      pursuant to which the Company issued to the Investor one (1) share of the
      Company’s Series E convertible preferred stock, par value $0.01 per share
      (“ Series
      E Preferred ”),
      which
      such Series E Preferred is convertible into Three Hundred Million Shares
      (300,000,000) of common stock of the Company, par value $0.001 per share
      (“ Common
      Stock ”)
      in
      exchange for the transfer by the Investor to the Company of Four Million
      (4,000,000) unrestricted, free-trading shares of common stock of Asset Capital
      Group, Inc., a Nevada corporation (“ ACGU
      Common Stock ”)
      having
      a value of Three Million Four Hundred Thousand Dollars ($3,400,000) based on
      the
      closing price of ACGU Common Stock as of the Closing Date as reported on the
      Pink Sheets, LLC. ACGU Common Stock trades under the symbol “ACGU.PK”. As a
      result of this transaction, the Investor acquired a 63.66% controlling interest
      in the Company’s Common Stock by virtue of the Investor’s ownership of the
      Series E Preferred. During the month of March 2008, we sold our investment
      in
      stock of ACGU for approximately $7,700.





On
      February 13, 2008, the Investor delivered to the Company a notice to convert
      the
      one (1) shares of Series E Preferred to Three Hundred Million (300,000,000)
      shares of Common Stock. On February 14, 2008, the Company issued to the Investor
      Three Hundred Million (300,000,000) shares of Common Stock, all of which are
      restricted, and canceled the One (1) share of Series E Preferred. As a result
      of
      this transaction, the Investor acquired a 63.66% controlling interest in the
      Common Stock of the Company.





NOTE
      13 -
      WARRANTS





At
      December 31, 2007 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. These warrants were not exercised as of December 31,
      2007.





NOTE
      14 -
      STOCK OPTIONS





No
      options remain outstanding as of December 31, 2007.





NOTE
      15 – STOCK INCENTIVE PLAN





On
      May
      31, 2006, 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. At December 31, 2007 there were 7,250,000 shares
      available under the Plan.





NOTE
      16 -
      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. As a result
      of
      the agreement of December 5, 2007 with ACGU, Mr. Connolly resigned as Vice
      Chairman of the Board and as President and Chief Executive Officer of the
      Company, however Mr. Connolly shall continue to serve as President and Chief
      Executive Officer of Corporate Strategies, Inc., a Texas corporation and
      wholly-owned subsidiary of the Company (“ CSI ”)
      with
      the understanding that the business of CSI will be discontinued or spun off
      to
      its stockholders. In addition, Mr. Connolly shall continue to receive the same
      compensation as he has received through the Closing Date for his aforementioned
      continued services to CSI through December 31, 2008, which such date may be
      extended by mutual agreement by and among the parties to the Purchase Agreement.





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 received 50%
      of
      all consulting fees from companies directly provided by or supervised by him.
      The employment agreement with Mr. Zeidman has not been renewed as of the date
      of
      this filing and Mr. Zeidman no longer receives compensation from Corporate
      Strategies.





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.


F-26





LEASES





Until
      December 31, 2007, we leased our office space under an operating lease. Rental
      expense under operating leases for continuing operations aggregated $87,453
      and
      $76,395 for the years ended December 31, 2007 and 2006, respectively. Beginning
      January 1, 2008, this leased has been assumed by our then affiliate company,
      Natural Nutrition, Inc.





NOTE
      17 -
      RELATED PARTY TRANSACTIONS





ALLOCATION
      OF OPERATING EXPENSES





The
      Company performed certain administrative and management functions for CSI
      Business Finance, know known as iNutrition, Inc. Based on an estimation of
      efforts expended, Finance was allocated approximately $244,000 and $308,000
      for
      the years ended December 31, 2007 and 2006, respectively. For the years
      beginning 2008, the Company no longer provides these administrative
      services.





NOTE
      18 -
      INCOME TAXES





The
      following table sets forth a reconciliation of the statutory federal income
      tax
      for the year ended December 31, 2007 and 2006:





2007
            
            2006Income
                (loss) before taxes
            
            $
            (2,604,976
            )
            $
            4,936,074Income
                tax benefit computed at statutory rates
            
            $
            (885,692
            )
            $
            1,678,265Permanent
                differences, nondeductible expenses
            
            
            279,288
            
            
            8,390Increase
                in valuation allowance
            
            
            527,936
            
            
            365,207Net
                increase in fair value of derivative liability, net of amortization
                and
                debt modification gain
            
            
            82,368
            
            
            (1,078,674
            )Gain
                on sale of subsidiary
            
            
            -
            
            
            (1,034,418
            )Merger
                expense
            
            
            -
            
            
            47,600Net
                operating loss allocable to a subsidiary that was sold
            
            
            -
            
            
            1,594Other
            
            
            (3,900
            )
            
            12,036Tax
                (liability) benefit
            
            $
            -
            
            $
            -





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,
      2007
      is set out below:


F-27





Net
                operating loss
            
            $
            11,312,332Valuation
                allowance
            
            
            (11,327,878
            )Revised
                net operating loss
            
            
            (290,696
            )Bad
                debt expense
            
            
            164,113Intangible
                asset tax basis difference
            
            
            123,462Unrealized
                loss on security transactions
            
            
            8,620Charitable
                contributions carried forward
            
            
            10,047Net
                deferred tax asset (liability)
            
            $
            -





The
      Company has a net operating loss carry forward estimated at $32,416,578 which expires
      through 2028. This loss is limited under Internal Revenue Code section 382.





NOTE
      19 -
      SEGMENT REPORTING





The
      Company had two segments: business services (which consists of turnaround
      execution services, management restructuring services, and business development
      services) and hotel investment.





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.





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


**Business**
            
            **Hotel****Services**
            
            **Investment****Year
                ended December 31, 2006**Revenue
            
            $
            1,127,219
            
            $
            -Interest
                expense, net of interest income
            
            
            624,089
            
            
            194,494Income
                (loss) before income tax,merger
                expense and discontinuedoperations
            
            
            (1,269,423
            )
            
            3,032,779Income
                from discontinued operations
            
            
            -
            
            
            4,688Segment
                assets
            
            
            1,909,239
            
            
            5,197,536Additions
                to long-term assets
            
            
            28,958
            
            
            5,043,239Depreciation
                and amortization
            
            
            23,874
            
            
            -**Year
                ended December 31, 2007**Revenue
            
            $
            1,107,437
            
            $
            -Interest
                expense, net of interest income
            
            
            606,175
            
            
            797,450Loss
                before income tax,merger
                expense and discontinuedoperations
            
            
            (775,063
            )
            
            (1,829,912
            )Segment
                assets
            
            
            691,273
            
            
            4,173,628Additions
                to long-term assets
            
            
            3,091
            
            
            -Depreciation
                and amortization
            
            
            24,041
            
            
            -




F-28