**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D. C. 20549**







**FORM
      10-K**





**ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





**For
      the fiscal year ended December 31,
      2007                        Commission
      file number 1-11873**




**ACCELERATED
      BUILDING CONCEPTS CORPORATION**


**(f/k/a
      K2 DIGITAL, INC.)**


(Exact
      name of registrant as specified in its Charter)




**Delaware**
            
            13-3886065(State
                or other jurisdiction
              of
                incorporation or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)





**2910
      Bush Drive, Melbourne, FL 32935**


(Address
      of principal executive offices)


Registrant’s
      telephone number: **(321) 421-6662**





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




Title
                of each class
            
            Name
                of each exchange on which registered**None**
            
            **None**




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




Title
        of
        Class





**Common
        Stock**





Indicate
      by check mark whether the registrant is a well-known seasoned issuer, as defined
      in Rule 405 of the Securities Act.




Yes  
                o
            
            No 
                x





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




Yes  
                o
            
            No 
                x




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K (§ 229.405 of this chapter) 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-K
      or any amendment to this Form 10-K.





Yes  
                o
            
            No 
                x





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):





Large
                Accelerated Filer   o
            Accelerated
                Filer  o
            Non-accelerated
                Filer  o
            Smaller
                reporting company  x





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





Yes  
                o
            
            Nox





Aggregate
      market value of voting stock, held by non-affiliates of the Registrant as of
      December 31, 2007 - $2,977,309.





As
      of
      March 31, 2008, 8,018,465 shares of the Registrant’s common stock were
      outstanding.




Page 1








TABLE
      OF
      CONTENTS


**Page****PART
                  I**Item 1.
              Business
              3Item 1.A.
              Risk
                  Factors
              10Item 1.B.
              Unresolved
                  Staff Comments
              13Item 2.
              Properties
              13Item 3.
              Legal
                  Proceedings
              13Item 4.
              Submission
                  of Matters to a Vote of Securities Holders
              13**PART
                  II**Item 5.
              Market
                  for Registrant’s Common Equity, Related Stockholder Matters and Issuer
                  Purchases of Equity Securities
              14Item 6.
              Selected
                  Financial Data
              16Item 7.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operation
              16Item 7A.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              19Item 8.
              Financial
                  Statements and Supplementary Data
              20Item 9.
              Changes
                  in and Disagreements With Accountants on Accounting and Financial
                  Disclosure
              41Item 9A(T).
              Controls
                  and Procedures
              41Item 9B.
              Other
                  Information
              42**PART
                  III**Item 10.
              Directors,
                  Executive Officers and Corporate Governance
              42Item 11.
              Executive
                  Compensation
              44Item 12.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              44Item 13.
              Certain
                  Relationships and Related Transactions, and Director
                  Independence
              45Item 14.
              Principal
                  Accounting Fees and Services
              45**PART
                  IV**Item 15.
              Exhibits,
                  Financial Statement Schedules
              46SIGNATURES
              47INDEX
                  TO EXHIBITS
              48





Page 2










**FORWARD
      LOOKING STATEMENTS**




This
      report on Form 10-K contains forward-looking statements within the meaning
      of
      Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the
      Securities Act of 1934, as amended, that involve substantial risks and
      uncertainties. These forward-looking statements are not historical facts, but
      rather are based on current expectations, estimates and projections about our
      industry, our beliefs and our assumptions. Words such as “anticipate”,
“expects”, “intends”, “plans”, “believes”, “seeks” and “estimates” and
      variations of these words and similar expressions are intended to identify
      forward-looking statements. These statements are not guarantees of future
      performance and are subject to risks, uncertainties and other factors, some
      of
      which are beyond our control and difficult to predict and could cause actual
      results to differ materially from those expressed or forecasted in the
      forward-looking statements. You should not place undue reliance on these
      forward-looking statements, which apply only as of the date of this Form 10-K.
      Investors should carefully consider all of such risks before making an
      investment decision with respect to the Company’s stock. The following
      discussion and analysis should be read in conjunction with our financial
      statements for Accelerated Building Concepts Corporation. Such discussion
      represents only the best present assessment from our Management.





**PART
      I**





**Item
      1. Business**





**History**





Accelerated
      Building Concepts Corporation, f/k/a K2 Digital, Inc. (the "Company", "K2",
      or
“ABCC”), was founded in 1993 as a general partnership and initially operated a
      traditional graphic design business. In August 1994, the Company shifted its
      principal business to Web site design and creation. Thereafter, the Company
      incorporated as a Delaware corporation. After the Company's initial public
      offering on July 26, 1996, the Company began to develop its business as a
      full-service digital professional services company. The Company historically
      provided consulting and development services including analysis, planning,
      systems design, creative and implementation. In November 2000, the Company
      changed its name from K2 Design, Inc. to K2 Digital, Inc. As discussed below,
      the Company ceased its operations in August 2001 and began effective business
      practices upon the merger with New Century Structures, Inc. (“NCSI”), on August
      10, 2007. The Company changed its name to Accelerated Building Concepts
      Corporation in conjunction with the merger.





The
      Company's principal executive offices are located 2910 Bush Drive, Melbourne,
      Florida, 32935 and its telephone number is (321) 421-6662.





*Agreement
      and Plan of Merger*





On
      January 29, 2007, the Registrant signed a letter of intent with NCSI, a Florida
      corporation, whereby NCSI would merge with K2 Acquisition, Inc. ("Merger Sub").
      In connection with the merger, the shareholders of NCSI acquired a controlling
      interest in K2. NCSI's designees were appointed as directors of K2 and the
      Board
      and shareholders approved a 1 for 10 reverse split of K2 shares such that the
      current shareholders of K2 own approximately 500,000 post merger shares
      representing 10% of the post merger shares issued and outstanding. In connection
      with this transaction, Avante Holding Group, Inc. ("Avante") entered into an
      agreement with NPOWR Digital Media, Inc. (“NPOWR”) to acquire its 1,000,000
      shares of K2 preferred stock which is convertible into 1,500,000 common shares.
      In addition, NCSI assumed the liability of NPOWR under the NPOWR Note. Further,
      prior to closing of the transaction, K2 issued 500,000 stock options with an
      exercise price of $0.085 per share to its officers and directors. Upon effect
      of
      the 10:1 reverse split the stock options issued total 50,000 shares with an
      exercise price of $0.85.





On
      August
      10, 2007, ABCC acquired all of the outstanding common stock of NCSI. For
      accounting purposes the acquisition has been treated as a recapitalization
      of
      NCSI with NCSI as the acquirer (reverse acquisition). The historical financial
      statements prior to August 10, 2007 are those of NCSI.





**Operations
      from August 10, 2007 to December 31, 2007**





On
      August
      10, 2007, the merger with NCSI and Merger Sub were completed with NCSI being
      the
      surviving entity. The former shareholders of NCSI were issued 4,334,429 shares
      of the Company’s common stock. The Company completed its 1 for 10 reverse split
      prior to the merger. The Company changed its name from K2 Digital, Inc. to
      Accelerated Building Concepts Corporation.





*History
      of New Century Structures, Inc.*




The
      concept of NCSI started in 1995 when Joseph Sorci, Mark Anderson and Markus
      Gemsch formed Florida Architects, Inc. (FLA). The three Principal Architects
      had
      worked together for approximately 10 years, and decided the timing was right
      to
      begin their own practice, employing their own design and work philosophies.
      FLA’s first project, the Health Science Center at Indian River Community College
      is still considered a model for similar facilities. Currently, FLA also holds
      an
      indefinite quantity contract renewable for 9 years with the Smithsonian
      Institute, with NCSI as its contractor. FLA provided master planning for their
      Fort Pierce Research Station, which includes plans for concrete modular housing
      facility and research laboratory. The Smithsonian ordered its first concrete
      component building, an Aquarium/Wet Lab, in July 2005.




Page 3










In
      2001,
      FLA was contacted by a local company to provide inspections on their new,
      portable concrete classrooms, as required by the State of Florida Department
      of
      Education. Fully understanding the classroom crisis in Florida and the lack
      of
      funds to provide traditionally built classrooms, FLA's principals began to
      envision other new, exciting design solutions based on the portable concrete
      classroom. At that time, Joseph Sorci first began developing more acceptable,
      exterior aesthetics for the buildings, and then design to connect several
      "portables" into one building, followed by the ability to provide
      multi-story concrete component buildings.




In
      2002,
      FLA worked with one of the original portable concrete classroom manufacturers
      to
      produce a master set of model Florida Department of Community Affairs (“DCA”)
      approved architectural drawings for a local county. There have been more
      than 500 buildings provided to the county under that set of drawings.
      During that time, the "portable" designs became more modular in nature, and
      therefore more flexible for customization for seemingly unending functions
      and
      use. During this time, Joseph Sorci presented a multitude of concrete classroom
      configurations and design solutions to Florida school board facilities and
      construction personnel throughout the state.




It
      was
      not until 2003, when the calls started coming in for requests to help the School
      Boards develop specific building solutions for their districts using the
      concrete modular classroom concept, and to get them built quickly, that FLA
      founders understood the necessity of having the capability to manufacture its
      own products. NCSI was formed to help fill this need, and in October 2003,
      the
      School District of Osceola County issued a Request for Proposal (“RFP”) as a
      call to companies to provide various types of modular classrooms. NCSI was
      on
      the selected list, and was subsequently awarded multiple contracts for classroom
      building additions.  NCSI has continued to provide modular classrooms under
      this RFP for various other counties within the State of Florida.




*History
      of Sustainable Structures Leasing, Inc.*





On
      October 11, 2007 the Company acquired 100% of the outstanding stock of
      Sustainable Structures Leasing, LLC, (“SSL”) a Florida Limited Liability
      Company, for nominal consideration. Subsequently, the Company converted SSL
      into
      a “C” Corporation. The acquisition of SSL was made to accommodate the Company’s
      expectation to enter into an agreement with Gulfstream Aerospace Corporation,
      for the leasing of two modular buildings located in Georgia. Other school boards
      are in the process of issuing new RFPs to obtain modular educational facilities
      on a lease and lease-purchase basis.





*Overview*





The
      Company is a holding company with two operating subsidiaries; NCSI and
      SSL.





NCSI
      was
      incorporated in Florida in July 2003, and provides architectural/engineering,
      design, manufacturing and construction services for modular facilities utilizing
      concrete, steel framed and structural insulated panels (SIPS) for use in
      commercial, educational, municipalities and residential developments. The
      Company utilizes processes that meet the scrutiny for classrooms as well as
      several government agencies, including NASA and The Smithsonian.





SSL
      was
      incorporated on April 20, 2005 with its corporate offices located at 8427 South
      Park Circle, Suite 150, Orlando, Florida 32819. On October 15, 2007 SSL was
      converted from a Florida Limited Liability Company to a “C” corporation, and the
      corporate address was changed to 2910 Bush Drive, Melbourne, Florida 32935.
      Prior to the acquisition of SSL by the Company, SSL conducted limited
      operations.





The
      Company currently leases its 4-acre manufacturing site in Orlando, Florida
      where
      it has the capability to build thirty-six floor units simultaneously. This
      space
      is inadequate to meet the current needs and the projections of NCSI, the primary
      user of the site. The Company is evaluating potential new sites for relocation.
      NCSI builds modular classrooms for various Florida county school boards
      throughout central Florida under the authorization of a 2007 RFP Award (“Award”)
      with the School District of Osceola County. This Award was for a period of
      eight
      years with three remaining years. The Award can be renewed. NCSI also holds
      an
      indefinite quantity bid award with the School Board of Polk County (Florida)
      which is renewable annually for two additional years, and a separate multi-year
      award with the School District of Osceola County for steel framed modular units.
      The State of Florida previously reported requirements for capital improvements
      which included a proposed $664 million budget for 2008 and a $20 billion budget
      over the next five years.





In
      addition to the modular classrooms, NCSI has completed multiple building awards
      from the National Aeronautical Space Administration (“NASA”) contractors for the
      development of concrete facilities at The Kennedy Space Center. NCSI has
      completed commercial contracts with SeaWorld® Adventure Parks of Orlando, and is
      completing the World Headquarters for the National Semi-Trailer Corporation
      in
      Orlando, Florida.





NCSI
      has
      established itself as a quality service and product provider in a very short
      period of time. With the limited qualified companies established to meet the
      current needs in the quality modular education field, our labor forces are
      making the company a success. NCSI has self-funded its activities and is
      currently seeking additional capital in which to grow its operations.




Page 4










NCSI
      will
      sustain its current growth in the Educational School Facilities Program. There
      is a very large and expanding market in Florida educational schools facilities.
      Phenomenal growth and legislative changes in the PK-20 system and the resulting
      enrollment bubbles that will move through higher education sectors, changes
      to
      Florida Building Code requirements, impact of the Class Size Reduction
      Amendment, the Florida Pre-K initiatives, and hurricane impacts, all have
      stressed Florida citizen’s ability to meet educational, capital, and financial
      needs with respect to educational facilities. The data research we have
      conducted summarizes the growth, capital, and financial resources necessary
      to
      address this market. This information is public and can be found on various
      web
      sites hosted by the State of Florida. Much of this information was complied
      by
      Ralph A. Henry, a member of our Board of Directors, as part of his previous
      duties as the Deputy Director of the Florida’s Office of Educational Facilities
      (OEF) within the Florida Department of Education.





Special
      attention is called to the 5 and 10 year fiscal needs in education for billions
      of dollars, with shortfalls at both the state and local level to completely
      meet
      these needs. This creates special opportunities for entrepreneurs who can bring
      additional resources through long-term leasing and lease-purchase programs,
      as
      one example, as well as other solutions to these opportunities. SSL will utilize
      the services of several institutions in order to compete in various RFP leasing
      opportunities from several Florida School Districts.





One
      example of an upcoming planned RFP is the School District of Orange County,
      Florida (“OCPS”). OCPS is the 12th largest school district out of
      more than 16,000 in the country, but the 5th largest in the State of
      Florida. Growth rates have consistently been in the upper 10% nationally. The
      District utilizes an annual $1,155,839,214 general operations budget, with
      an
      additional $54,758,541 for food service and grant projects, a $922,002,514
      capital projects fund and a $150,092,563 internal service fund. The recently
      reported debt service fund is $80,088,644. Their current shortfall is
      roughly 2,000 student stations and growing every year despite the large annual
      capital projects funds.




The
      Company’s financial oversight is segmented into three categories; manufacturing,
      leasing, and corporate.









**Government
      Regulation**





NCSI
      is
      governed and licensed by the DCA, which governs the construction of modular
      building units. NCSI currently operates under license number NCS-436. In
      addition, NCSI is governed by the Florida Department of Business &
Professional Regulation, Board of Architecture (license number AA0003562) and
      the Construction Industry Licensing Board (number QB 27107).





**Products
      and Services**




The
      Company designs, manufacturers, develops and leases concrete steel and SIP
      modular structures through its wholly-owned licensed subsidiaries. The Company
      has engaged in projects that have provided success over the past several
      years developing building components that:




·
            Can
                be provided in customized multiple configurations and types,
                creating buildings of various types; educational facilities, medical
                centers, office buildings; one-story or up to three-story, buildings,
                classrooms, and as many variations as the client needs and
                dictates;




·
            Exceeds
                minimum American Society of Heating, Refrigerating and Air-Conditioning
                Engineers (“ASHRAE”) Indoor Quality
                Standards;




·
            A
                truly relocatable building, if so
                desired;




·
            Exterior
                compatibility with the site and existing
                buildings;




·
            Attractive
                leasing and lease-purchase options;




·
            Can
                be integrated with conventional construction and/or other modular
                building
                components;




·
            One
                unit, entire building or complex;








·
            Sustainable
                (“green”) building solutions;




·
            Have
                solved previous conception and perception problems of modular
                construction; and




·
            Design,
                fabricate and install with a one-stop single source of responsibility
                firm
                - minimizing a client's coordination and communication efforts between
                a
                multitude of professionals and
                vendors.


Page 5


In
      addition to providing modular facilities, ABCC offers leasing opportunities
      through it working relationships with various financing
      partners.  ABCC, through its wholly-owned subsidiaries, provides services
      in the form of architectural and engineering design, and/or review and project
      development including financing options for qualified clients.  These
      services are billed based upon projected labor hours required and vary according
      to project.  When considering multiple purchases of modular components,
      ABCC may provide architectural and engineering services as part of the
      manufacturing cost.




*Products*




·  Concrete
      modular facilities and components;




·  Steel
      framed modular facilities and components; and




·  Structural
      insulated steel panel modular facilities and components.




*Services*




·  Master
      Planning and pre-design services;




·  Architectural
      design;




·  Engineering
      review and analysis;




·  Construction
      services;




·  Installation
      and shipping;




·  Project
      development; and




·  Acquisition
      options such as leasing and
      lease-purchase to qualified clients.





**Competitive
      Strengths**




The
      construction consists of several basic sectors; government, commercial, and
      residential. ABCC considers its key element of business under the government
      sector, specifically with modular and component facilities in the educational
      field. While ABCC has been successful in obtaining commercial business and
      other
      government contracts, management believes it competes best in the education
      market primarily because of knowledgeable clients who are familiar with our
      type
      of delivery systems.




ABCC
      is a
      small business that provides custom and standard designs. Its ability to obtain
      contracts is directly associated with the design skills of its chief architect
      and CEO, Joseph J. Sorci. Mr. Sorci has won several awards in Florida for his
      innovation and designs within the educational community.





The
      Company has heavily marketed its concrete manufacturing abilities in the past.
      Some industry sectors, such as the education industry, are targeted with
      well-established catalogs, making entry by others difficult. Our
      Company has
      extensive experience in the “modified tilt wall” and modular component
      solutions, particularly with respect to concrete and panelized steel wall and
      roof systems currently being used by many school boards. Our Company has been
      at
      the forefront in vision, design, and execution of both permanent and temporary
      building solutions for educational facilities. NCSI is the only
      design/build/manufacturer that customizes their products to meet the
      requirements of each client. Our management team has been directly involved
      in
      the design, manufacturing and delivery of more than 1,700 individual classrooms
      in this arena. Mr. Sorci is the Designer of Record for many of the innovative
      design approaches, while a member of our Board of Directors, Ralph A. Henry,
      in
      a previous leadership role, has successfully supported special funding
      opportunities for the educational administrations in the State of Florida in
      both the Private and Public sectors.




*The
      Demand for Educational Buildings*




The
      market demand for educational facilities provides more than ample opportunity
      to
      keep the Company’s manufacturing facility running for the next five years. 
While ABCC continues to develop additional revenue streams through its various
      other markets, an analysis of the classroom industry demonstrates the
      marketability of the NCSI product.  The educational industry within the
      State of Florida, through recent laws and catastrophic disasters, has become
      the
      forefront of quality modular design implementation.  Many other commercial
      and government markets are projected to follow suit.




Page 6





The
      State
      of Florida Department Office of Educational Facilities (“OEF”) reports
      information in various forms from year-to-year. A recent previous report was
      compiled to reflect the following: The current K-12
        classroom facilities in the state of Florida are as follows:
        Permanent classrooms  133,528 Relocatable classrooms 18,858 Total classrooms 152,386 The total gross square feet of
        all K-12 facilities in the state of Florida is 360.1 million.
        The average age of K-12
        facilities in the state of Florida are:
        Low of
        15 years for Collier County
        High of
        37 years for Jefferson County
        An
        average of 25 years throughout the state of Florida
        The estimated annual
        requirements for the current K-12 facilities are $664 million.
        Based
        on 2% replacement value applied to year 2000 inventory  State Funding
        Only


- The estimated
      five year needs for K-12 are as follows:
- Projected five year Full Time
      Equivalency ("FTE") growth in K-12: 190,408 students
- Approximately 7,616 new classrooms
      required before the Class Size Amendment and Pre-K
- The possibility exists that
      classroom numbers could increase by more than 25%, depending on the effect
      of impacts provided for in the Class Size Amendment to the State
      Constitution and the current Pre-K legislation recently passed.



**K-12**
              
              **Colleges**
              
              **Universities**
              
              **Total*****Deferred
                  maintenance***
              
              
              3,400
              
              
              255
              
              
              1,200
              
              
              4,855***Renovation/Rebuilding***
              
              
              2,270
              
              
              487
              
              
              260
              
              
              3,017***Remodeling***
              
              
              1,591
              
              
              449
              
              
              780
              
              
              2,820***New
                  construction***
              
              
              12,438
              
              
              1,144
              
              
              1,560
              
              
              15,142**TOTAL**
              
              
              19,699
              
              
              2,335
              
              
              3,800
              
              
              25,834**Source:
                  K-12 5 year work plans. CC & SUS capital improvement
                  plans**





The
        projected needs in square feet (in millions) for schools in the next ten
        years
        are as follows:




**K-12**
              
              **Colleges**
              
              **Universities**
              
              **Total*****Deferred
                  maintenance***
              
              
              5,950
              
              
              446
              
              
              2,100
              
              
              8,496***Renovation/Rebuilding***
              
              
              3,973
              
              
              852
              
              
              455
              
              
              5,280***Remodeling***
              
              
              2,784
              
              
              786
              
              
              1,365
              
              
              4,935***New
                  construction***
              
              
              21,767
              
              
              2,002
              
              
              2,730
              
              
              26,499**TOTAL**
              
              
              34,474
              
              
              4,086
              
              
              6,650
              
              
              45,210**Source:
                  K-12 5 year work plans. CC & SUS capital improvement
                  plans**




OEF
        does
        not necessarily include revenues collected by the individual Districts at
        the
        local level, but does report planned state funding only. Each District collects
        impact fees and other bonds and millage revenues locally that they use for
        capital projects. Another circumstance is that the State and the Districts
        must
        address their facilities that are affected by several major elements: Florida
        Constitutional Amendment (Section 1003.03(2), Florida Statutes) for Class
        Size
        Reduction; Full Time Enrollment Projections (FTE); necessary maintenance
        and
        renovations; and impacts from Disasters. The accuracy of needs projections
        and
        state funding for educational capital projects is further complicated by
        the
        state’s method of assigning funding and the revenue sources. Example; PECO funds
        allocated by the state legislature are collected from statewide telephone,
        electric and gas bills gross receipts tax. CO&DS funds for capital
        improvements comes from a portion of vehicle license tag / registration fees
        and
        still another source of revenue comes from sales surtax. When the state
        experiences a slow down in growth as in 2007, the revenues available become
        affected.





OEF
        recently reported that the state has allocated $517,829,251 for new construction
        over 2008-2009 school years, and an additional $353,818,981 for maintenance,
        renovations and additions. This does not account for local funds allocated
        by
        each district. Example; Orange County Public Schools (OCPS) announced on
        March
        25, 2008 that they are moving forward with an additional $12,000,000 for
        new
        construction in 2008 and an additional $145,000,000 in 2009 from local
        funds.




Page 7







Since
        January 2008, Florida School Districts have posted 4-major concrete and steel
        modular school project RFP’s that will be opening bids in April 2008. Two of
        those four are indefinite quantity, multiple year awards. OCPS indicated
        that
        the district will also be advertising for a similar type RFP in the next
        several
        months.




*Class
        Size Amendment*





On
        February 7, 2008, the Senate Education PreK-12 Appropriations Committee provided
        an update on the Class Size Amendment. The Deputy Commissioner of the Department
        of Education indicated the state has made progress with the Class Size Amendment
        but has significant shortfalls as follows:




pg8 logo




pg81 logo




*Florida
          Schools Disaster Impact*




In
          2004,
          Florida was affected by four hurricanes. While the damage was seen almost
          weekly
          on national news as Florida was devastated by Charley, Frances, Ivan, and
          Jeanne. The impact seen on the news was the destruction of homes. But,
          not seen
          as much, was the destruction of schools.




Page 8







The
          impact on K-12 schools as of December 2004 was $550 million. Of this, insurance
          covered $85 million and FEMA (Federal Emergency Management Agency) covered
          an
          additional $34 million. The deficit fell on the shoulders of state and
          local
          governments and taxpayers. This was the financial impact of the
          destruction.




The
          impact that was more visible was that there was no replacement inventory
          which
          met the new wind load and building code requirements.




NCSI,
          with its alliances with quality subcontractors, along with the implementation
          of
          a new and adequate manufacturing facility, has worked with the counties
          and the
          state to provide these replacements that meet and exceed the requirements.




*Competitive
          Edge over Conventional Construction*




Modular
          facilities are believed to have a competitive advantage over conventional
          building products. Conventional building products are slow to construct.
          In
          regards to energy efficiency, they create thermal transition from the outer
          walls to the interior walls. These varied temperatures produce moisture
          which in
          turn develops opportunities for mold, mildew and fungus. Thermal bridges
          also
          inflict additional burdens on the HVAC units reducing efficiency. An example
          of
          this is as follows:




Buildings
          constructed with 2” x 4” studs on 16” centers create bridges of thermal transfer
          every 16”. The thickness provided by this 4” wall (actually 3.75”) will not
          permit enough insulation to compare with concrete or structural insulated
          panel
          ratings. After insulation is compressed in conventional construction, it
          loses
          its R value explaining the limitations of congenital bolt walls.




Congenital
          methods of construction also require expensive skilled labor. Contractors
          complain often about spending the time and effort to train a non-skilled
          worker
          to lay blocks and when they reach the necessary cost effective productive
          level,
          they instead become independent contractors and leave the contractor that
          has
          invested their time and money for training. Modular building systems require
          little to no skilled labor. New employees can be trained and productive
          in less
          than a day




In
          wood-type construction, many educated people understand the poor thermal
          qualities and seek alternative building methods that are high tech while
          preserving our trees and focusing on the environmental impact of building
          materials.




The
          structural advantage heavily favors modular facilities, both concrete and
          structural insulated panel.




The
          speed
          of building modular is advantageous to complete the project sooner reducing
          interest cost and permitting the end user to open their doors of cash flow
          quicker.


The
            structural insulated panel product utilized in NCSI’s building system is listed
            with ISO (insurance service organization) as a non-combustible material
            giving
            the client potential lower insurance rates.




*Future
            Opportunities*




The
            Florida Education Capital Improvement market is large and growing. With
            only a
            limited number of manufacturers and the limited funding provided by the
            state
            government, the State of Florida is behind the power curve. Growth is
            evitable.
            Companies that have positioned themselves and provided services during
            the
            current growth spurt will ensure “Most Favored” status in the future. The recent
            award of the School District of Osceola County and Polk County Schools
            RFP’s for
            the next several years secures our opportunity for contracts. The company
            also
            plans to submit bids for the new multi-year project RFP’s in April
            2008.




The
            market for modular concrete and structural insulated panel building is
            less
            limited than several years ago because more entities are seeing the value
            and
            time savings of the delivery method. While some new companies are attempting
            to
            enter into the market, it is still in its infancy. The competition will
            emerge
            as modular grows in popularity and the general public becomes aware of
            its true
            benefits. However, the competition in the Florida Education Facility
            Program is
            definable and measurable. NCSI knows its competition and has worked in
            a
            friendly environment with its competitors, in order to educate the
            populace.




If
            all
            the Company’s current competition was operating at maximum capacity, with no
            other entrances into the market, there still would not be enough work
            completion
            to meet the demands of the Florida Education requirements over the next
            five to
            ten years.




The
            Company must continue to watch for new entries into the market. With
            the current
            relationships maintained within the Florida Department of Education and
            the
            knowledge of a significant portion of all structural insulated panel
            sales
            within the State of Florida, the Company is in prime position to understand
            market penetration from new companies and the buying patterns of the
            Florida
            Department of Education.




Similar
            market opportunities exist in states outside of Florida. NCSI has proven
            that a
            sustainable approach to opening a plant capable of producing the product
            can be
            accomplished on a site within a month. The requirements for a plant on
            a
            selective site are relatively minimal and can be quickly restored to
            its
            original condition at minimal expense at the end of the building project.
            Therefore, it is the Company’s desire, at the appropriate time, to locate
            strategic opportunities of acceptable value in states outside of Florida.
            This
            potential for expansion, either permanent or project specific, would
            provide the
            Company an opportunity to expand its marketing of its products and continue
            building relationships which could potentially complement the Florida
            operations.


Page 9







**Item
            1A. Risk Factors**




***If
            we do not receive additional financing to meet sales growth and cash
            flow needs,
            the Company will not be able to support ongoing operations.***




The
            Company currently has a working capital deficit. The current cash available
            will
            not meet the current liabilities outstanding. In addition, the Company’s current
            accounts payable exceed 60 days. NCSI, the primary operating entity,
            experienced
            tremendous growth in 2005 followed by a slowdown in 2006, and a virtual
            stoppage
            of all its educational contracts in 2007. This has created a net loss
            in
            operations and has strained the Company’s ability to move forward. In addition,
            the Company is dependent on purchasing materials from outside vendors
            to
            manufacture its products. Should cash flow not be sufficient to support
            these
            relationships, in addition to financing not being available, it would
            become
            increasingly difficult to support ongoing operational expenses associated
            with
            the Company's business. There is no guarantee that we will succeed in
            obtaining
            additional financing, or if available, that it will be on terms favorable
            to us,
            or that raw and/or component material prices will be in the range necessary
            to
            support ongoing operations.




***If
            the price of raw and/or component materials increases or their availability
            decreases, it may create a reduction in our capability to produce our
            product.***




The
            key
            components to our product are concrete and steel. Steel is a commodity
            product
            therefore the Company continues to seek various suppliers, to provide
            sufficient
            source and pricing to meet our development schedule and pricing points.
            In the
            current market for concrete and steel, key ingredients to our product
            rise and
            fall in cost, which could affect our abilities to procure enough raw
            materials
            based on cash and credit availability to produce enough products to meet
            demand
            and sell finished products at a profit. With an increase in raw material
            pricing, which often fluctuates due to availability, natural disasters,
            and
            force majures, the Company may not maintain adequate cash to procure
            raw
            materials to meet current demand and expanded growth. As additional funding
            is
            required in the future, obtaining such financing is at the sole discretion
            of
            numerous third party financial institutions. Therefore, the Company cannot
            predict its ability to obtain future financing or the specific terms
            associated
            with such agreements. As such, the Company would be required to adjust
            production schedules based on cash availability and market pricing for
            its
            finished products which could therefore reduce production and limit its
            sales
            growth potential.




***In
            the event the Company is unable to pay off existing debt holders all
            of our
            assets are collateral and would cause a closure of our operations.***




Regions
            Bank holds a note in the principal amount of $500,000 (with a current
            pay-off of
            approximately $450,000) secured by all of our assets. The note originally
            existed as a revolving credit agreement but was converted into a five-year
            term
            note on July 1, 2007. The maturity date of the note is July 30, 2012.
            The note
            bears an interest rate equal to the prime rate and contains no prepayment
            penalty clause. If we become in default of the payment terms or other
            provisions
            of the note, there is no assurance that we will be able to successfully
            negotiate new terms favorable to us. In that event, the lenders may elect
            to
            accelerate the payment terms and may exercise their right against our
            collateral.




***With
            only an outdoor manufacturing facility leased on a month-by-month basis,
            the
            Company could lose substantial revenue due to down time due to inclement
            weather
            and/or having to relocate to an alternate facility.***




The
            Company currently builds in an open field with elongated concrete pads.
            While
            this meets requirements for building modular facilities, work must be
            stopped,
            or temporarily delayed when weather conditions are unfavorable. The Company
            maintains three modular units on site for administrative use, tool storage
            and
            security, and employee break rooms. The land consists of 4.3 acres and
            is
            currently on a month-by-month lease basis. In the event the company is
            required
            to vacate the premises, the Company would lose significant time and resources
            relocating to an alternate site. There is no guarantee the company will
            find
            adequate facilities in an appropriate time frame in order not to disrupt
            its
            current operations.




Our
            corporate office in Florida is located in an area subject to hurricanes
            and
            other tropical storms. We believe our insurance policies are adequate
            with the
            appropriate limits and deductibles to mitigate the potential loss exposure
            of
            our business. We do not have financial reserves for policy deductibles
            and we do
            have exclusions under our insurance policies that are customary for our
            industry, including earthquakes, flood and terrorism. If any of our facilities
            or a significant amount of our manufacturing equipment were to experience
            a
            catastrophic loss, it could disrupt our operations, delay orders, shipments
            and
            revenue recognition resulting in expenses to repair or replace the damaged
            manufacturing equipment and facility not covered by insurance.




***We
            may be required to indemnify our Directors and Officers at a high cost
            to the
            Company.***




We
            have
            authority under Section 607.0850 of the Florida Business Corporation
            Act and
            Delaware law to indemnify our directors and officers to the extent provided
            in
            that statute. Our Articles of Incorporation require the Company to indemnify
            each of our directors and officers against liabilities imposed upon them
            (including reasonable amounts paid in settlement) and expenses incurred
            by them
            in connection with any claim made against them or any action, suit or
            proceeding
            to which they may be a party by reason of their being or having been
            a director
            or officer of the company. We maintain officer's and director's liability
            insurance coverage with limits of liability of $1,000,000. Consequently,
            if such
            potential judgment exceeds the coverage under the policy, ABCC may be
            forced to
            pay such difference. We have entered into indemnification agreements
            with each
            of our officers and directors containing provisions that may require
            us, among
            other things, to indemnify our officers and directors against certain
            liabilities that may arise by reason of their status or service as officers
            or
            directors (other than liabilities arising from willful misconduct of
            a culpable
            nature) and to advance their expenses incurred as a result of any proceeding
            against them as to which they could be indemnified. Management believes
            that
            such indemnification provisions and agreements are necessary to attract
            and
            retain qualified persons as directors and executive officers.




Page 10




***Future
            changes in financial accounting standards and the applicable regulations
            by the
            various governmental regulatory agencies may cause lower than expected
            operating
            results and affect our reported results of
            operations.***




Changes
            in accounting standards and their application may have a significant
            effect on
            our reported results on a going forward basis and may also affect the
            recording
            and disclosure of previously reported transactions. New standards have
            occurred
            and will continue to occur in the future. For example, in December 2004,
            the
            Financial Accounting Standards Board issued SFAS No. 123 (revised 2004), as
            amended, “Share Based Payment” (“SFAS No. 123R”), which requires us to
            expense stock options at fair value effective January 1, 2006. Under SFAS
            No. 123R, the recognition of compensation expense for the fair value of
            stock options reduces our reported net income and net income per share
            subsequent to implementation, however, this accounting change will not
            have any
            impact on the cash flows of our business. Under the prior rules, expensing
            of
            stock options was not required and therefore, no compensation expense
            for stock
            options was included in reported net income and net income per share.




The
            Sarbanes-Oxley Act of 2002 and various new rules subsequently implemented
            by the
            Securities and Exchange Commission (“SEC”) and the NASDAQ National Market have
            imposed additional reporting and corporate governance practices on public
            companies. Since adoption of these regulations, our legal, accounting
            and
            financial compliance costs have increased and a significant portion of
            management’s time has been diverted to comply with these rules. We expect these
            additional costs and the diversion of management’s time to continue and to the
            extent additional rules and regulations are adopted, the diversion of
            resources
            may potentially increase over time, with respect to these legal
            initiatives.




In
            addition, if we do not adequately comply with or implement the requirements
            of
            Section 404 in a timely manner, we may not be able to accurately report our
            financial results or prevent fraud, which may result in sanctions or
            investigation by regulatory authorities, such as the SEC. Any such action
            could
            harm our business, financial results or investors’ confidence in our company,
            and could cause our stock price to fall.


***The
              nature of our businesses exposes us to the risk of litigation and liability
              under environmental, health and safety and products liability laws
              that could
              have a negative impact on the financial performance of the
              Company.***




Certain
              aspects of our businesses involve risks of liability. In general, litigation
              in
              our industry, including class actions that seek substantial damages,
              arises with
              increasing frequency. Claims may be asserted under environmental, labor,
              health
              and safety or product liability laws. Litigation is invariably expensive,
              regardless of the merit of the plaintiffs’ claims. We may be named as a
              defendant in the future, and there can be no assurance that regardless
              of the
              merit of such claims, we will not be required to make substantial settlement
              payments in the future.




***Conducting
              our routine businesses exposes us to risk of litigation from employees,
              vendors
              and other third parties.***




We
              are
              subject to claims arising from disputes with employees, vendors and
              other third
              parties in the normal course of business; these risks may be difficult
              to assess
              or quantify and their existence and magnitude may remain unknown for
              substantial
              periods of time. If the plaintiffs in any suits against us were to
              successfully
              prosecute their claims, or if we were to settle such suits by making
              significant
              payments to the plaintiffs, our operating results and financial condition
              would
              be harmed.




***If
              we do not effectively manage our credit risk, collect on our accounts
              receivable, or recover our rental equipment from our customers’ sites, it could
              have a material adverse effect on our operating
              results.***




We
              generally sell to customers on a 30-day payment term; however, our
              average
              collection time is 60 days. We individually perform credit evaluation
              procedures
              on our customers on each transaction and will require security deposits
              or other
              forms of security from our customers when a significant credit risk
              is
              identified.




The
              Company has implemented a policy of filing Notice to Owners (“NTO”) on each
              property in which it produces product for to alleviate the inability
              to collect.
              However, if a customer fails to pay, there could be considerable time
              between
              the need to pay our vendors and the acceptance of our final payment.
              If we are
              not able to manage credit risk issues, or if a large number of customers
              should
              have financial difficulties at the same time, our credit losses would
              increase
              above historical levels. If this should occur, our results of operations
              may be
              materially and adversely affected.




Page 11







***Failure
              by third parties to supply our raw materials to our specifications
              or on a
              timely basis may harm our reputation and financial
              condition.***




We
              are
              dependent on third parties to provide steel, concrete, and other building
              materials/components even though we are able to purchase products from
              a variety
              of third-party suppliers. In the future, we may be limited as to the
              number of
              third-party suppliers for some of our products. Currently, we do not
              have any
              long-term purchase contracts with any third-party supplier. In the
              future, we
              may not be able to negotiate arrangements with these third parties
              on acceptable
              terms, if at all. If we cannot negotiate arrangements with these third
              parties
              to produce our products or the third parties fail to produce our products
              to our
              specifications or in a timely manner, our reputation and financial
              condition
              could be harmed.




***A
              significant reduction of construction due to economic downturns, population
              growth variations and/or other definable effects on the construction
              industry
              could cause the demand for our product to decline, which could result
              in a
              reduction in our revenues and profitability.***




Sales
              of
              modular portable classrooms for the Florida public school districts
              for use as
              portable classrooms, restroom buildings, and administrative offices
              for
              kindergarten through grade twelve declined in 2007. Funding for public
              school
              facilities is derived from a variety of sources including the passage
              of both
              statewide and local facility bond measures, developer fees and various
              taxes
              levied to support school operating budgets. Many of these funding sources
              are
              subject to financial and political considerations, which vary from
              district to
              district, and are not tied to demand. Historically, we have benefited
              from the
              passage of facility bond measures and believe these are essential to
              our
              business. While all forecast reports believe 2008 to be a substantial
              year in
              the school facility market, there is no guarantee that this business
              sector will
              return to its historical 2005 levels.




To
              the
              extent public school districts’ funding is reduced for the rental and purchase
              of modular facilities, our business could be harmed and our results
              of
              operations negatively impacted. We believe that interruptions or delays
              in the
              passage of facility bond measures, changes in legislative or educational
              policies at either the state or local level, including the contraction
              or
              elimination of class size reduction programs, a lack or insufficient
              amount of
              fiscal funding, a significant reduction of funding to public schools,
              or changes
              negatively impacting enrollment, may reduce the rental and sale demand
              for our
              educational products thereby resulting in lower revenues and related
              profitability.




***Public
              policies that create demand for our products and services may change,
              stall in
              Congress or State Legislation creating a downturn in sales.***




Florida
              has passed legislation to limit the number of students that may be
              grouped in a
              single classroom for certain grade levels. School districts with class
              sizes in
              excess of these limits have been and continue to be a significant source
              of
              demand for modular classrooms. The educational priorities and policies
              were
              stalled in 2007, therefore demand for our products and services declined.
              While
              legislation still dictates the need for additional modular classrooms,
              we may
              not experience the growth levels witnessed in 2005 and 2006, therefore,
              we may
              not grow as quickly as or reach the levels that we anticipate.




Similar
              to conventionally constructed buildings, the modular building industry,
              including the manufacturers and lessors of portable classrooms, are
              subject to
              evolving regulations by multiple governmental agencies at the federal,
              state and
              local level. This oversight includes but is not limited to governing
              code
              bodies, environmental, health, safety and transportation. Failure by
              our
              customers to comply with these laws or regulations could impact our
              business.
              Compliance with building codes and regulations have always entailed
              a certain
              amount of risk as municipalities do not necessarily interpret these
              building
              codes and regulations in a consistent manner, particularly where applicable
              regulations may be unclear and subject to interpretation. Many aspects
              of the
              construction and modular industry have developed “best practices” which are
              constantly evolving.


*Our
                warranty costs may increase reducing our gross
                profit margin.*




Sales
                of
                modular buildings constructed of concrete and/or structural insulated
                panels are
                typically covered by warranties. We provide a one year warranty on
                our
                facilities. Historically, our warranty costs have not been significant,
                and we
                monitor the quality of our products closely. If a defect were to
                arise in the
                manufacturing of our modular buildings at our facility, we may experience
                increased warranty claims. Such claims could disrupt our sales operations,
                damage our reputation and require costly repairs or other remedies,
                negatively
                impacting revenues and operating income.




***Economics
                and cyclical downturns in the construction industry may result in
                periods of low
                demand for our services resulting in the reduction of our operating
                results and
                cash flows.***




The
                severity and length of any downturn on an industry may also affect
                overall
                access to capital, which could adversely affect our customers. During
                periods of
                reduced and declining demand for construction material, we are exposed
                to
                additional risk from reduced revenue and may need to rapidly align
                our cost
                structure with prevailing market conditions while at the same time
                motivating
                and retaining key employees. While the market demand for construction
                related
                products is the primary portion of the areas in our focus, especially
                with the
                devastation due to hurricanes in Florida in 2004 and 2005, no assurance
                can be
                given regarding the length or extent of the recovery, and no assurance
                can be
                given that our rates, operating results and cash flows will not be
                adversely
                impacted by the reversal of any current trends or any future downturns
                or
                slowdowns in the rate of capital investment in this industry.




Page 12







**Item
                1B. Unresolved Staff Comments**




None




**Item
                2. Properties**




The
                Company's principal executive offices are located at 2910 Bush Drive,
                Melbourne,
                Florida. This leased office space is used by the Company's executive
                management
                team as well as the administrative staff. It has a five year lease
                at $4,000 per
                month. The lease has two renewable five year options.




The
                Company's manufacturing facility for New Century Structures, Inc.
                is located at
                405 Thorpe Road, Orlando, Florida. The property consists of approximately
                four
                acres of real estate and several structures for materials, tools
                and offices. It
                has entered into a one-year lease which expired December 2007 for
                the property
                at a rate of $4,000 per month. The Company intends to continue to
                occupy this
                site on a month-to-month basis while it is seeking additional land/facility
                opportunities in which to expand its facilities to meet anticipated
                growth. The
                Company believes that the current facilities are suitable for its
                current
                needs.


*Square
                            Footage**Total*
                            Acres
                        
                        *Office*
                        
                        *Operations*
                        
                        *Total*Corporate
                            Offices1
                            Melbourne, Florida
                        
                        
                        
                        
                        
                        2,200
                        
                        
                        
                        
                        
                        2,200Manufacturing
                            Facility2
                            Orlando, Florida
                        
                        
                        4
                        
                        
                        1,600
                        
                        
                        -
                        
                        
                        1,600
  1
                        This
                            office is leased through May 31, 2012.2
                        This
                            land space was leased through December 31, 2007. It is
                            presently occupied
                            on a month-to-month
                            basis.


Item
                3. Legal Proceedings




On
                October 2, 2006, NCSI was named in a lawsuit captioned New Millennium
                Enterprises, LLC and Phoenixsurf.com, LLC v. Michael W. Hawkins, et.
                al. U.S. District Court, Middle District of Georgia, 3: 06-CV-84
                (CDC). The
                lawsuit alleges violations of the Georgia Securities Act, Georgia
                Fair Business
                Practices Act, Federal Securities laws and certain other unspecified
                laws in
                connection with the investment by Plaintiffs of $180,000 in NCSI
                and seeks
                rescission of this investment. Plaintiffs amended their complaint
                on April 11,
                2007. NCSI filed an answer to the amended complaint denying all essential
                allegations of the complaint and asserting affirmative defenses showing
                why the
                plaintiffs are not entitled to the relief sought. In addition, NCSI
                filed
                Counterclaims against the Plaintiffs and Third Party claims against
                individual
                officers and directors of Plaintiff, alleging a malicious interference
                with the
                NCSI’s business and business relations, conspiracy to interfere with our
                business, libel and slander, and violation of rights under Title
                IX of the
                Organized Crime Control Act of 1970 as amended. The Parties are to
                establish a
                consolidated plan of discovery in 2008. The Company believes it has
                meritorious
                defenses to the claims and intends to vigorously defend this lawsuit
                and to
                pursue its counterclaims.




The
                Company sold 250,000 shares of its common stock in October 2007 to
                a private
                investor for $250,000. The check paid was returned for insufficient
                funds and
                the Company was unable to collect the funds. The Company filed a
                lawsuit to
                collect the funds and additional damages created because of the failed
                transaction. Subsequent to December 31, 2007, the defendant has paid
                $100,000
                and the Company believes it will succeed in collecting the balance
                owed.




NCSI
                has
                two lawsuits related to vendors, each for less than $20,000. The
                Company
                believes that each will be settled.




The
                Company maintains a reserve for legal expenses for all cases.




**Item
                4. Submission of Matters to a Vote of Securities Holders**




On
                August
                9, 2007 at a special meeting of shareholders, the Company's shareholders
                took the following actions:




(1)
                      Approved
                          the merger of the Company's wholly-owned subsidiary with
                          and into NCSI
                          including the issuance of 4,334,429 shares of the Company's
                          common stock
                          to the shareholders of NCSI:(2)
                      Approved
                          a 1-for-10 reverse stock split of the Company's issued
                          and outstanding
                          shares:(3)
                      Approved
                          the change in the Company's name from K-2 Digital, Inc.,
                          to
                          ABCC.




Page 13







3,760,185
                votes were cast for each of the foregoing items and no votes were
                cast against
                or withheld.  There were no abstentions or broker non-votes.




**PART
                II**




**Item
                5.** **Market for Registrant’s Common Equity, Related
                Stockholder Matters and Issuer Purchases of Equity
                Securities.**




ABCC
                has
                authorized 24,000,000 common shares, issued 8,110,207 common shares,
                and
                8,018,465 outstanding, at $0.10 par value at March 31, 2008.




In
                connection with the merger and reverse stock split on August 10,
                2007, the
                Company issued 4,334,429 shares of its common stock to the former
                shareholders
                of NCSI.




On
                August
                10, 2007, the Company’s outstanding preferred stock was converted into 150,000
                (post-split) shares of common stock.




On
                September 13, 2007, the Company issued 2,444,000 shares to various
                debt holders
                in exchange for the conversion of $611,000 in debt. As part of this
                conversion
                of outstanding payables, the Company issued 444,000 shares to
                management.




On
                October 29, 2007, the Company sold 250,000 shares of common stock
                to a private
                investor for $250,000. The original check deposited was returned
                for
                insufficient funds. The Company has filed a lawsuit against the individual.
                Since that time, the Company has received $100,000 and is expected
                to receive
                the remainder in the second quarter of 2008.




Subsequent
                to December 31, 2007, on February 11, 2008, the Company issued 300,000
                shares of
                common stock to various debt holders in exchange for the conversion
                of $135,000
                in debt.




The
                Company has filed an amendment to designate its 1,000,000 shares
                of preferred stock as Series A convertible preferred
                stock convertible into 3,000,000 shares of common stock.




(a)
                *Market information.*The Company’s common stock is quoted and traded on
                the OTC Bulletin Board under the ticker symbol ABCC.OB.




The
                market price (as quoted by NASDAQ) per share of the Company’s common stock, by
                calendar quarter for the past two years is as follows:




Stock
                Activity


2007
                      
                      20064th
                      
                      3rd
                      
                      2nd
                      
                      1st
                      
                      4th
                      
                      3rd
                      
                      2nd
                      
                      1stQtr.
                      
                      Qtr.
                      
                      Qtr.
                      
                      Qtr.
                      
                      Qtr.
                      
                      Qtr.
                      
                      Qtr.
                      
                      Qtr.High
                      
                      $
                      1.74
                      
                      $
                      2.01
                      
                      $
                      1.20
                      
                      $
                      1.80
                      
                      $
                      0.90
                      
                      $
                      0.80
                      
                      $
                      1.20
                      
                      $
                      1.60Low
                      
                      $
                      0.40
                      
                      $
                      0.35
                      
                      $
                      0.50
                      
                      $
                      0.50
                      
                      $
                      0.46
                      
                      $
                      0.51
                      
                      $
                      0.60
                      
                      $
                      0.50Close
                      
                      $
                      0.95
                      
                      $
                      1.19
                      
                      $
                      0.56
                      
                      $
                      0.60
                      
                      $
                      0.60
                      
                      $
                      0.51
                      
                      $
                      0.80
                      
                      $
                      0.60


As
                of
                March 31, 2008, the Company’s common stock was held by approximately 54
                shareholders of record, which does not include shareholders whose
                shares are
                held in street or nominee name. The Company believes that when holders
                in street
                and nominee name are added, the number of holders of the Company’s stock exceeds
                500.




(b)
*Dividend
                Distributions.* We do not intend to
                distribute dividends to stockholders in the foreseeable future.




(c)
                *Securities authorized for issuance under equity compensation
                plans.* The
                Company currently has two Stock Option Plans authorized. The 1996
                Stock Option
                Plan has 22,500 shares reserved, with 8,825 underlying grants. The
                remaining
                13,675 remain unissued. The low exercise price is $8.13 per share
                and the high
                range is $58.13 per share. The second plan, known as the 1997 Stock
                Option Plan
                has 300,000 shares reserved, with 149,450 underlying grants. The
                remaining
                150,550 remain unissued. The exercise price ranges from $0.50 to
                $54.38 per
                share. The 1996 Stock Option Plan and 1997 Stock Option Plan have
                expired,
                therefore no additional grants are authorized under the Plans. The
                outstanding
                options expire as follows:


Page 14


---

Date of agreement
      # Of Shares Granted
      That Have Not Been
      Exercised
      Agreement Price
      Expiration
      Date
      Status12/9/1997
      500
      $
      17.50
      12/9/2007
      EXPIRED1/16/2001
      2,500
      $
      8.13
      1/15/2006
      EXPIRED4/14/2000
      500
      $
      58.13
      4/14/20104/14/2000
      1,700
      $
      50.00
      4/14/201012/9/1997
      500
      $
      17.50
      12/9/2007
      EXPIRED12/9/1997
      500
      $
      17.50
      12/9/2007
      EXPIRED6/16/1999
      500
      $
      25.63
      6/16/20094/1/2000
      125
      $
      58.13
      4/1/201012/9/1997
      1,000
      $
      17.50
      12/9/2007
      EXPIRED12/9/1997
      500
      $
      17.50
      12/9/2007
      EXPIRED6/16/1999
      500
      $
      25.63
      6/16/2009Total Issued
      8,825Average
      Purchase PriceTotal Current
      3,325
      $
      19.161997 Stock Option PlanDate of agreement
      # Of Shares
      Granted
      That Have Not Been
      Exercised
      Agreement Price
      Expiration
      Date
      Status12/1/2000
      100
      $
      10.9380
      12/1/20104/14/2000
      24,600
      $
      50.0000
      4/14/20101/2/2001
      10,000
      $
      7.5000
      1/2/20114/27/2007
      20,000
      $
      0.8500
      4/27/20174/27/2007
      10,000
      $
      0.8500
      4/27/20174/27/2007
      10,000
      $
      0.8500
      4/27/20177/7/1999
      1,000
      $
      25.0000
      7/7/20096/1/2000
      500
      $
      54.3750
      6/1/201012/1/2000
      500
      $
      10.9380
      12/1/201010/22/1998
      40,000
      $
      15.0000
      10/22/20086/1/2000
      500
      $
      54.3750
      6/1/20103/15/2001
      5,000
      $
      6.5620
      3/15/20117/7/1999
      1,000
      $
      25.0000
      7/7/20096/1/2000
      500
      $
      54.3750
      6/1/20108/19/2002
      4,000
      $
      0.5000
      8/19/201212/9/1997
      500
      $
      17.5000
      12/9/2007
      EXPIRED10/1/1999
      750
      $
      29.3750
      10/1/20096/1/2000
      500
      $
      54.3750
      6/1/20104/27/2007
      10,000
      $
      0.8500
      4/27/2017Total Issued
      139,450Average
      Purchase PriceTotal Current
      138,950
      $
      15.68
  Page 15


Penny
                  Stock
  Our
                  common stock is considered "penny stock" under the rules the Securities
                  and
                  Exchange Commission (the "SEC") under the Securities Exchange Act
                  of 1934. The
                  SEC has adopted rules that regulate broker-dealer practices in
                  connection with
                  transactions in penny stocks. Penny stocks are generally equity
                  securities with
                  a price of less than $5.00, other than securities registered on
                  certain national
                  securities exchanges or quoted on the NASDAQ Stock Market System,
                  provided that
                  current price and volume information with respect to transactions
                  in such
                  securities is provided by the exchange or quotation system. The
                  penny stock
                  rules require a broker-dealer, prior to a transaction in a penny
                  stock, to
                  deliver a standardized risk disclosure document prepared by the
                  Commission,
                  that:




·
                      contains
                          a description of the nature and level of risks in the market
                          for penny
                          stocks in both public offerings and secondary
                          trading;


·
                      contains
                          a description of the broker's or dealer's duties to the
                          customer and of
                          the rights and remedies available to the customer with
                          respect to a
                          violation to such duties or other requirements of Securities'
                          laws;
                          contains a brief, clear, narrative description of a dealer
                          market,
                          including bid and ask prices for penny stocks and the significance
                          of the
                          spread between the bid and ask price;


·
                      contains
                          a toll-free telephone number for inquiries on disciplinary
                          actions;


·
                      defines
                          significant terms in the disclosure document or in the
                          conduct of trading
                          in penny stocks; and


·
                      contains
                          such other information and is in such form, including language,
                          type, size
                          and format, as the Commission shall require by rule or
                          regulation.




The
                broker-dealer also must provide, prior to effecting any transaction
                in a penny
                stock, the customer with:


·
                        bid
                            and offer quotations for the penny stock;
 ·
                        the
                            compensation of the broker-dealer and its salesperson
                            in the
                            transaction;
 ·
                        the
                            number of shares to which such bid and ask prices apply,
                            or other
                            comparable information relating to the depth and liquidity
                            of the marker
                            for such stock; and
 ·
                        monthly
                            account statements showing the market value of each penny
                            stock held in
                            the customer's account.
  In
                      addition, the penny stock rules that require that prior to
                      a transaction in a
                      penny stock not otherwise exempt from those rules; the broker-dealer
                      must make a
                      special written determination that the penny stock is a suitable
                      investment for
                      the purchaser and receive the purchaser's written acknowledgement
                      of the receipt
                      of a risk disclosure statement, a written agreement to transactions
                      involving
                      penny stocks, and a signed and dated copy of a written suitably
                      statement.
 These
                      disclosure requirements may have the effect of reducing the
                      trading activity in
                      the secondary market for our stock.
 **Related
                      Stockholder Matters**
 None
 **Purchase
                      of Equity Securities**
 On
                      October 11, 2007 the Company acquired 100% of the outstanding
                      stock of SSL, a
                      Florida limited liability company in exchange for nominal consideration.
                      Subsequently, the Company converted SSL into a “C” Corporation.
 **Item
                      6. Selected Financial Data.**
 None.
 **Item
                      7. Management’s Discussion and Analysis of Financial Condition and Results
                      of
                      Operation.**
 This
                      report on Form 10-K contains forward-looking statements within
                      the meaning of
                      Rule 175 of the Securities Act of 1933, as amended, and Rule
                      3b-6 of the
                      Securities Act of 1934, as amended, that involve substantial
                      risks and
                      uncertainties. These forward-looking statements are not historical
                      facts, but
                      rather are based on current expectations, estimates and projections
                      about our
                      industry, our beliefs and our assumptions. Words such as “anticipate”,
“expects”, “intends”, “plans”, “believes”, “seeks” and “estimates” and
                      variations of these words and similar expressions are intended
                      to identify
                      forward-looking statements. These statements are not guarantees
                      of future
                      performance and are subject to risks, uncertainties and other
                      factors, some of
                      which are beyond our control and difficult to predict and could
                      cause actual
                      results to differ materially from those expressed or forecasted
                      in the
                      forward-looking statements. You should not place undue reliance
                      on these
                      forward-looking statements, which apply only as of the date
                      of this Form 10-K.
                      Investors should carefully consider all of such risks before
                      making an
                      investment decision with respect to the Company’s stock. The following
                      discussion and analysis should be read in conjunction with
                      our financial
                      statements for Accelerated Building Concepts, Inc. Such discussion
                      represents
                      only the best present assessment from our Management.
 **DESCRIPTION
                    OF COMPANY:**
 The
                      Company is a holding company which currently operates two wholly-owned
                      subsidiaries, New Century Structures, Inc. (“NCSI”) and Sustainable Structures
                      Leasing, Inc. (“SSL”).
 Page
                        16
 **OVERVIEW:**
 The
                      Company’s principal operating subsidiary, NCSI, is a manufacturing
                      and leasing
                      company engaged in the manufacturing and leasing of concrete
                      and structural
                      insulated panel modular buildings. The Company markets the
                      southeast United
                      States with its primary focus on Florida.
 The
                      following Management Discussion and Analysis should be read
                      in conjunction with
                      the financial statements and accompanying notes included in
                      this Form 10-K.
  **COMPARISON
                      OF THE YEAR ENDED DECEMBER 31, 2007 TO THE YEAR ENDED DECEMBER
                      31,
                      2006**
  **Results
                      of Operations**
 The
                      Company reports its financial results of operations under two
                      segments;
                      manufacturing and leasing. During 2007, the Company recognized
                      no revenue or
                      expenses under the leasing segment. Prior to August 10, 2007,
                      the Company was a
                      shell company and had no operations.
 On
                      August
                      10, 2007, ABCC acquired all of the outstanding common stock
                      of NCSI. For
                      accounting purposes the acquisition has been treated as a recapitalization
                      of
                      NCSI with NCSI as the acquirer (reverse acquisition). The historical
                      financial
                      statements prior to August 10, 2007 are those of NCSI.
  *Overview*
 Total revenues decreased to $1,964,509 for the year ended
                      December 31, 2007 from $6,678,617 for the year ended
                      December 31, 2006. Thedecrease resulted primarily from the
                      downturn in the educational market. The Company completed
                      a major project in 2006 that represented 66% of the total
                      revenue for that year. The inability to bond work was a
                      primary factor in the Company not receiving awards in
                      2007. While the Company has three Indefinite Quantity
                      Contracts with various school boards, the schools have not
                      ordered from them. According to the September 2007 McGraw-Hill
                      Construction (not incorporated in this Form 10-K), the
                      school markets were at a virtual standstill in 2007. SSLhad no activity
                      for 2007.
 Cost
                      of
                      sales was $1,511,514 and $4,783,727, respectively for the years
                      ended December
                      31, 2007 and 2006. The cost of sales relates solely to NCSI.
                      As a percent of
                      revenue, the cost of sales was 76.9% and 71.6% of revenue,
                      respectively. The
                      increase for 2007 was primarily due to the high cost of sales
                      related to various
                      factors, primarily the completion of one project which required
                      a higher than
                      projected cost to complete the project. Other factors associated
                      with the
                      significant cost of sales relate to the third quarter having
                      decreased revenue
                      due to limited marketing efforts in prior periods therefore
                      not providing the
                      Company with viable contracts along with the downturn in the
                      educational market.
                      This factor resulted in standard costs (i.e. depreciation,
                      payroll) to stay
                      static as the Company completed its marketing efforts which
                      should provide a
                      significant increase in revenue in 2008.
 Gross
                      profit was $452,995 and $1,894,890, respectively for the years
                      ended December
                      31, 2007 and 2006, respectively.
 Total
                      operating expenses increased to $878,217 for the year ended
                      December 31, 2007
                      from $1,440,797 for the year ended December 31, 2006. This
                      39.0% decrease was
                      mainly attributable to the reduction of unnecessary overhead
                      expenses. The
                      primary expenses for NCSI are administrative payroll, rent,
                      insurance,
                      professional fees and payroll taxes.
 On January 9, 2007 the Company reported
                      a theft to the Orange County (Florida) Police and the
                      Brevard County (Florida) Police. After review of the items
                      taken, the Company estimated approximately $700,000 was
                      stolen over a period of one year. The Company estimated,
                      in good faith, a one time write-off of approximately
                      $360,000 as it managed to recuperate some items taken. A
                      Company officer and team leaders (four total) were
                      dismissed and charge with Grand Theft. On July 15, 2008,
                      the Company received notice from the Office of the State
                      Attorney, Eighteenth Judicial Circuit, in and for Brevard
                      County, that one former employee was convicted in a plea
                      bargain to LIO Petit Theft.
 **Liquidity
                      and Capital Resources**
  As of December 31, 2007, the Company had a working capital
                      deficit of $1,735,650. Net loss was $597,593 for the year
                      ended December 31, 2007. The Company generated a negative
                      cash flow from operations of $96,669 for the year ended
                      December 31, 2007. The negative cash flow from operating
                      activities for the period is primarily attributable to the
                      decrease in revenues and the associated profits.
 Cash
                      flows used in investing activities of $9,465 for the year ended
                      December 31,
                      2007 related primarily to the acquisition of assets offset
                      by the sale of
                      equipment.
 Cash
                      flows used in financing activities for the year ended December
                      31, 2007 was
                      $352,124 primarily due to the issuance of notes payable, issuance
                      of common
                      stock offset by the conversion of preferred stock into common
                      stock, and the
                      conversion of notes payable into common stock.
 The
                      Company had a net decrease in cash of $458,258 for the year
                      ended December 31,
                      2007 compared to an increase of $377,875 for the year ended
                      December 31,
                      2006.
  Page
                        17


For the next twelve months, the Company intends to fund
                      its operations through private debt and equity financing
                      and income from operations.  However, if the pricing
                      of commodities and other raw materials prices increase
                      dramatically, sales grow rapidly, and we are not
                      successful in generating sufficient liquidity from
                      operations or in raising sufficient capital resources, on
                      terms acceptable to us, this could have a material
                      adverse effect on
                      our business, results of operations, liquidity and
                      financial condition. The Companys decision to become a
                      public entity was directly related to the need for
                      operating capital. The Company maintains a Revolving
                      Credit Line with Avante Holding Group, Inc., in order to
                      provide day-to-day operating capital. The Company is
                      seeking Purchase Order financing and contract financing as
                      required.
 The
                      effect of inflation on the Company's revenue and operating
                      results was not
                      significant. The Company's operations are located in North
                      America and there are
                      no seasonal aspects that would have a material effect on the
                      Company's financial
                      condition or results of operations.
 The
                      Company has $9 million in backlog contracts for 2008.
 *Critical
                      Accounting Policies*
 The
                      preparation of our financial statements in conformity with
                      accounting principles
                      generally accepted in the United States (“GAAP”) requires us to make estimates
                      and judgments that affect our reported assets, liabilities,
                      revenues, and
                      expenses, and the disclosure of contingent assets and liabilities.
                      We base our
                      estimates and judgments on historical experience and on various
                      other
                      assumptions we believe to be reasonable under the circumstances.
                      Future events,
                      however, may differ markedly from our current expectations
                      and assumptions.
                      While there are a number of significant accounting policies
                      affecting our
                      consolidated financial statements; we believe the following
                      critical accounting
                      policies involve the most complex, difficult and subjective
                      estimates and
                      judgments:


·
                          Revenue
                              recognition


·
                          Product
                              warranty reserve


·
                          Allowance
                              for uncollectible accounts




*Revenue
                      Recognition*
 The
                      Company recognizes revenue when persuasive evidence of an arrangement
                      exists,
                      the price to the customer is fixed, collectibility is
                      reasonably assured and title and risk of ownership is
                      passed to the customer, which is usually upon delivery.
 NCSI
                        contracts to build commercial, residential, and other infrastructures
                        to its
                        customers, none of which are related to the Company. As such,
                        they recognize
                        their revenue under the percentage of completion method as
                        work on a contract as
                        progresses. Recognition of revenue and profits generally
                        is related to costs
                        incurred in providing the services required under the contract.
                        Statement of
                        Position 81-1 discusses accounting for performance of construction
                        contracts.
                        The use of the percentage of completion method depends on
                        our ability to make
                        reasonably dependable estimates. Additionally, contracts
                        executed by the Company
                        and its customers include provisions that clearly specify
                        the enforceable rights
                        of our services that are provided to and received by our
                        customers. Our
                        estimates assume that our customers will satisfy their obligations
                        under the
                        contract and our performance requirements will be completed.
  *Product
                        Warranty Reserve*
 Currently,
                        NCSI provides one-year warranties on its contracts. Various
                        components of the
                        completed project are covered by third party warranties for
                        products, services
                        and other applicable items. Each warranty has different terms.
                        Additionally, the
                        Company provides its own warranty of its product and/or services.
                        The terms of
                        the warranty outside of the third party warranties is a standard
                        one year
                        comprehensive materials and workmanship warranty with two
                        years on roofing labor
                        and materials. This excludes damage due to a lack of standard
                        maintenance,
                        malicious acts, acts of God, and inappropriate use.
 *Allowance
                      for Uncollectible Accounts*
 We
                      are
                      required to estimate the collectibility of our trade receivables.
                      A considerable
                      amount of judgment is required in assessing the realization
                      of these receivables
                      including the current creditworthiness of each customer and
                      related aging of the
                      past due balances. In order to assess the collectibility of
                      these receivables,
                      we perform ongoing credit evaluations of our customers' financial
                      condition.
                      Through these evaluations we may become aware of a situation
                      where a customer
                      may not be able to meet its financial obligations due to deterioration
                      of its
                      financial viability, credit ratings or bankruptcy. The reserve
                      requirements are
                      based on the best facts available to us and are reevaluated
                      and adjusted as
                      additional information is received. These percentages are determined
                      by a
                      variety of factors including, but are not limited to, current
                      economic trends,
                      historical payment and bad debt write-off experience. We are
                      not able to predict
                      changes in the financial condition of our customers and if
                      circumstances related
                      to our customers deteriorate, our estimates of the recoverability
                      of our
                      receivables could be materially affected and we may be required
                      to record
                      additional allowances. Alternatively, if we provided more allowances
                      than are
                      ultimately required, we may reverse a portion of such provisions
                      in future
                      periods based on our actual collection experience. As of December
                      31, 2007, we
                      determined that there was no need for a reserve.


Page
                        18





**Item
                      7A. Quantitative and Qualitative Disclosures About Market
                      Risk.**
  Not
                      applicable.


Page 19





**Item
        8. Financial Statements and Supplementary Data.**
  **Index**
  **Page**Report
                    of Independent Registered Public Accounting Firm
                
                
                21Consolidated
                    Financial StatementsConsolidated
                    Balance Sheets as of December 31, 2007 and 2006
                
                
                22
                    - 23Consolidated
                    Statements of Operations for the Year Ended December 31, 2007
                    and
                    2006
                
                
                24Consolidated
                    Statements of Stockholders’ Equity for the Year Ended December 31, 2007
                    and 2006
                
                
                25Consolidated
                    Statements of Cash Flows for the Year Ended December 31, 2006
                    and
                    2006
                
                
                26
                    - 27Notes
                    to Consolidated Financial Statements
                
                
                28 - 40
  Page
            20




Board
        of
        Directors
 Accelerated
        Building Concepts Corporation and Subsidiaries
  We
        have
        audited the accompanying consolidated balance sheet of Accelerated Building
        Concepts Corporation (formerly known as K2 Digital, Inc.) and Subsidiaries
        as of
        December 31, 2007 and 2006, and the related consolidated statements of income,
        changes in stockholders' equity, and cash flows for the years ended December
        31,
        2007 and 2006. These financial statements are the responsibility of the
        Company's management. Our responsibility is to express an opinion on these
        financial statements based on our audit.
  On
        August
        10, 2007, Accelerated Building Concepts Corporation acquired all of the
        outstanding common stock of NCSI. For accounting purposes the acquisition
        has
        been treated as a recapitalization of NCSI with NCSI as the acquirer (reverse
        acquisition). The historical financial statements prior to August 10, 2007
        are
        those of NCSI.
  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 financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform an audit of its internal control over
        financial reporting. Our audits included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
  In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of Accelerated Building
        Concepts Corporation and Subsidiaries as of December 31, 2007, and the 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.
  The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. Additionally, as of December 31, 2007,
        the
        Company has a working capital deficiency. This factor raises substantial
        doubt
        about the Company’s ability to continue as a going concern. The consolidated
        financial statements do not include any adjustments that might result from
        the
        outcome of this uncertainty.
   LIEBMAN
        GOLDBERG & DROGIN, LLP
  Garden
        City, New York
 April
        14,
        2008
  Page
            21


***ACCELERATED
                    BUILDING CONCEPTS CORPORATION******f/k/a
                    K2 DIGITAL, INC.******and
                    SUBSIDIARIES******Consolidated
                    Balance Sheets******December
                    31,***
  **2007**
                
                **2006****ASSETS**Current
                    AssetsCash
                
                $
                394
                
                $
                458,652Accounts
                    Receivable, Net
                
                
                39,606
                
                
                385,098Prepaid
                    Expenses
                
                
                44,773
                
                
                20,473Total
                    Current Assets
                
                
                84,773
                
                
                864,223Property,
                    Plant and Equipment, Net
                
                
                500,350
                
                
                620,046Total
                    Assets
                
                $
                585,123
                
                $
                1,484,269
 
 See
                    accompanying notes to consolidated financial statements.




Page
          22


ACCELERATED BUILDING CONCEPTS CORPORATION 
    f/k/a K2 DIGITAL, INC.
    and SUBSIDIARIES
    Consolidated Balance Sheets 
    December 31,LIABILITIES AND STOCKHOLDERS' EQUITY

2007
          
          2006Current LiabilitiesNotes Payable, Current Portion
          $
          647,941
          $
          1,257,924Accounts Payable and Accrued Expenses
          
          843,328
          
          688,842Accrued Payroll and Taxes
          
          192,939
          
          234,656Billings in Excess of Costs on Uncompleted
          Contracts
          
          38,010
          
          650,771Deferred Revenue
          
          98,206
          
          -Total Current Liabilities
          
          1,820,424
          
          2,832,193Noncurrent LiabilitiesNotes Payable, Noncurrent Portion
          
          622,918
          
          442,265Total Noncurrent Liabilities
          
          622,918
          
          442,265Total Liabilities
          
          2,443,342
          
          3,274,457Stockholders' EquitySeries A convertible preferred
          stock, voting, $0.01 par value, 1,000,000shares authorized, 1,000,000 shares issued
          and outstanding
          
          -
          
          10,000Series B convertible preferred
          stock, voting, $0.315 par value, 1,000,000shares authorized, 606,944 shares issued
          and outstanding
          
          -
          
          191,794Series C convertible preferred
          stock, voting, $0.555 par value, 100,000shares authorized, 90,000 shares issued and
          outstanding
          
          -
          
          50,000Series D convertible preferred
          stock, voting, $0.665 par value, 500,000shares authorized, 424,225 shares issued
          and outstanding
          
          -
          
          282,000Common stock, $0.1 par value,
          24,000,000 shares authorized; 7,718,465shares issued, 7,676,723 shares outstanding
          
          771,844
          
          -Common stock, $0.01 par value,
          30,000,000 shares authorized, 1,600,000shares issued and outstanding
          
          -
          
          485Additional Paid In Capital
          
          12,099,150
          
          199,980Subscriptions Receivable
          
          (250,000)
          
          (57)Treasury Stock
          
          (819,296)
          
          -Distributions
          
          -
          
          (158,283)Accumulated Deficit
          
          (13,659,917)
          
          (2,366,107)Total Stockholders' Equity
          
          (1,858,219)
          
          (1,790,188)Total Liabilities and Stockholders' Equity
          $
          585,123
          $
          1,484,269See accompanying notes to
          consolidated financial statements. 
 Page 23





***ACCELERATED
                BUILDING CONCEPTS CORPORATION******f/k/a
                K2 DIGITAL, INC.******and
                SUBSIDIARIES******Consolidated
                Statements of Operations******For
                the Years Ended December 31,***





**2007**
            
            **2006**Sales
            
            $
            1,964,509
            
            $
            6,678,617Cost
                of Sales
            
            
            1,511,514
            
            
            4,783,727Gross
                Profit (Loss)
            
            
            452,995
            
            
            1,894,890Operating
                Expenses
            
            
            878,217
            
            
            1,440,797Income
                From Operations
            
            
            (425,222
            )
            
            454,093Interest
                Income / (Expense), Net
            
            
            (172,371
            )
            
            (243,145
            )Income
                (Loss) Before Extraordinary Item
            
            
            (597,593
            )
            
            210,948Extraordinary
                Item - Theft
            
            
            -
            
            
            325,000Net
                Loss After Extrordinary Item
            
            $
            (597,593
            )
            $
            (114,052
            )Basic
                and diluted based upon5,804,849
                weighted averageshares
                outstanding
            
            $
            (0.10
            )Basic
                and diluted based upon5,024,465
                weighted averageshares
                outstanding
            
            
            
            
            $
            (0.020
            )See
                accompanying notes to consolidated financial
                statements.




Page
          24







***ACCELERATED
                  BUILDING CONCEPTS CORPORATION******f/k/a
                  K2 DIGITAL, INC.******and
                  SUBSIDIARIES******Consolidated
                  Statements of Stockholders' Equity******For
                  the Year Ended December 31, 2007***
  Additional
                
                
                
                
                
                
                
                
                
                TotalCommon
                    Stock
                
                Paid-in
                
                Subscriptions
                
                
                
                Accumulated
                
                Treasury
                
                Shareholders'Series
                    A
                
                Series
                    B
                
                Series
                    C
                
                Series
                    D
                
                Shares
                
                Amount
                
                Capital
                
                Receivable
                
                Distributions
                
                Deficit
                
                Stock
                
                EquityBalance,
                    January 1, 2006
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                
                -
                
                $
                325
                
                $
                -
                
                $
                -
                
                $
                (158,283
                )
                $
                (2,252,055
                )
                $
                -
                
                $
                (2,410,013
                )Issuance
                    of Series A
                
                
                10,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                10,000Issuance
                    of Series B
                
                
                -
                
                
                191,794
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                191,794Issuance
                    of Series C
                
                
                -
                
                
                -
                
                
                50,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                50,000Issuance
                    of Series D
                
                
                -
                
                
                -
                
                
                -
                
                
                282,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                282,000Issuance
                    of Common Stock
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                160
                
                
                199,980
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                200,140Subscriptions
                    Receivable
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (57
                )
                
                -
                
                
                -
                
                
                -
                
                
                (57
                )Net
                    (loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (114,052
                )
                
                -
                
                
                (114,052
                )Balance,
                    December 31, 2006
                
                $
                10,000
                
                $
                191,794
                
                $
                50,000
                
                $
                282,000
                
                
                1,600,000
                
                $
                485
                
                $
                199,980
                
                $
                (57
                )
                $
                (158,283
                )
                $
                (2,366,107
                )
                $
                -
                
                $
                (1,790,188
                )Conversion
                    of Preferred Stock
                
                
                (10,000
                )
                
                (191,794
                )
                
                (50,000
                )
                
                (282,000
                )
                
                2,121,169
                
                
                21,212
                
                
                512,582
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Recapitalization
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,303,296
                
                
                480,747
                
                
                10,794,988
                
                
                57
                
                
                158,283
                
                
                (10,696,216
                )
                
                (819,296
                )
                
                (81,437
                )Issuance
                    of Common Stock
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                250,000
                
                
                25,000
                
                
                225,000
                
                
                (250,000
                )
                
                -
                
                
                -
                
                
                -
                
                
                -Conversion
                    of Debt
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,000,000
                
                
                200,000
                
                
                300,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                500,000Conversion
                    of Debt
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                300,000
                
                
                30,000
                
                
                45,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                75,000Conversion
                    of Debt
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                144,000
                
                
                14,400
                
                
                21,600
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                36,000Net
                    (Loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (597,593
                )
                
                -
                
                
                (597,593
                )Balance,
                    December 31, 2007
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                
                7,718,465
                
                $
                771,844
                
                $
                12,099,150
                
                $
                (250,000
                )
                $
                -
                
                $
                (13,659,916
                )
                $
                (819,296
                )
                $
                (1,858,218
                )
 See
                  accompanying independent auditors report and notes to consolidated
                  financial statements.




Page
          25







***ACCELERATED
                    BUILDING CONCEPTS CORPORATION******f/k/a
                    K2 DIGITAL, INC.******and
                    SUBSIDIARIES******Consolidated
                    Statements of Cash Flows******For
                    the Years Ended December 31,***
  **2007**
                
                **2006****Cash
                    Flows From Operating Activities:**Net
                    Loss
                
                $
                (597,593
                )
                $
                (114,052
                )*Adjustments
                    to Reconcile Net Loss to Net**Cash
                    Used By Operating Activities:*Depreciation
                    and Amortization
                
                
                124,821
                
                
                114,430Loss
                    on Sale of Property, Plant and Equipment
                
                
                4,340
                
                
                -*Changes
                    in Assets and Liabilities:*Accounts
                    Receivable, Net
                
                
                345,492
                
                
                (25,149
                )Prepaid
                    Expenses and Other Current Assets
                
                
                (24,300
                )
                
                (20,473
                )Accounts
                    Payable, Accrued Expenses and Taxes Payable
                
                
                112,769
                
                
                (1,176,640
                )Costs
                    and Estimated Billings in Excess of Billings onUncompleted
                    Contracts
                
                
                (612,761
                )
                
                650,771Deferred
                    Revenue
                
                
                98,206
                
                
                -Net
                    Cash Used In Operating Activities
                
                
                (594,026
                )
                
                (571,113
                )**Cash
                    Flows From Investing Activities:**Proceeds
                    from Sale of Property, Plant and Equipment
                
                
                84,977
                
                
                -Acquisition
                    of Property, Plant and Equipment
                
                
                (94,442
                )
                
                (592,385
                )Net
                    Cash Used In Investing Activities
                
                
                (9,465
                )
                
                (592,385
                )**Cash
                    Flows From Financing Activities:**Issuance
                    of Common Stock
                
                
                -
                
                
                200,140Stock
                    Subscriptions Receivable
                
                
                -
                
                
                (57
                )Issuance
                    of Preferred Stock - Series A
                
                
                -
                
                
                10,000Issuance
                    of Preferred Stock - Series B
                
                
                -
                
                
                191,794Issuance
                    of Preferred Stock - Series C
                
                
                -
                
                
                50,000Issuance
                    of Preferred Stock - Series D
                
                
                -
                
                
                282,000Recapitalization
                    due to Merger
                
                
                (81,437
                )
                
                -Issuance
                    of Notes Payable
                
                
                227,693Repayment
                    of Notes Payable and Line of Credit
                
                
                (46,023
                )
                
                807,496Net
                    Cash Provided By Financing Activities
                
                
                100,233
                
                
                1,541,373Net
                    Increase (Decrease) in Cash
                
                
                (458,258
                )
                
                377,875Cash
                    at Beginning of Year
                
                
                458,652
                
                
                80,777Cash
                    at End of Period
                
                $
                394
                
                $
                458,652
  See
                    accompanying notes to consolidated financial statements.
  Page
            26




***ACCELERATED
                    BUILDING CONCEPTS CORPORATION******f/k/a
                    K2 DIGITAL, INC.******and
                    SUBSIDIARIES******Consolidated
                    Statements of Cash Flows******For
                    the Years Ended December 31, 2007 and 2006******(Continued)***
  **Supplemental
                    Disclosure of Cash Flow Information:**Cash
                    paid during the period for interest
                
                $
                172,371
                
                $
                243,145Taxes
                    Paid
                
                $
                -
                
                $
                -
  On September 13, 2007 the Company converted $611,000 of debt
                    assumed in the acquisition of Century
                    Structures, Inc. for 2,444,000 shares of its common stock at
                    $0.25 per
                    share.On
                  October 29, 2007 the Company entered into a stock subscription
                  agreement to sell 250,000 shares
                  of its common stock at $1.00 per share. As of December 31, 2007,
                  the
                  balance remains unpaid.On
                    August 9, 2007, the Company's outstanding shares of Series A,
                    B, C and D
                    preferred stock were converted into common stock.
  See
                    accompanying notes to consolidated financial statements.




Page
            27







***ACCELERATED
        BUILDING CONCEPTS CORPORATION***
 ***f/k/a
        K2 DIGITAL, INC.***
 ***and
        SUBSIDIARIES***
 ***Notes
        to Consolidated Financial Statements***
 ***December
        31, 2007***
  **NOTE
        1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
  **Organization
        and Operation**
  Accelerated
        Building Concepts Corporation (“ABCC” or the “Company”), was formerly known as
        K2 Digital, Inc., a Delaware corporation formed in 1993. In August 2007,
        the
        Board approved the name change. Reference to ABCC will include the period
        prior
        to the name change.
  Through
        August 2001, ABCC (together with its wholly-owned subsidiary, collectively,
        the
        "Company") was a strategic digital services company that provided consulting
        and
        development services including analysis, planning, systems design and
        implementation. In August 2001, the Company completed the sale of fixed and
        intangible assets essential to its business operations to an unrelated party,
        Integrated Information Systems, Inc. ("IIS") and effectively became a "shell"
        company with no revenues and continuing general and administrative
        expenses.
  On
        August
        10, 2007, ABCC’s wholly-owned subsidiary, K2 Acquisition Corporation (“K2AC”),
        merged with New Century Structures, Inc. (“NCSI”), a Florida corporation, with
        NCSI the surviving entity.
  NCSI,
        incorporated in July 2001, provides architectural / engineering, manufacturing
        and construction services for modular facilities utilizing concrete and
        structural insulated panels (SIPs) for use in commercial, educational,
        municipalities and residential developments. The Company utilizes processes
        that
        meet the requirements for classrooms as well as several government agencies,
        including NASA and The Smithsonian.
  Sustainable
        Structures Leasing, LLC was incorporated in April 2005 and converted to
        Sustainable Structures Leasing, Inc. (“SSL”) in October 2007.
  **Basis
        of Consolidation**
  The
        accompanying consolidated financial statements include the accounts of the
        Company and its subsidiaries and have been prepared in accordance with U.S.
        generally accepted accounting principles (“GAAP”).
  The
        consolidated financial statements include the accounts of the Company and
        its
        wholly-owned subsidiaries, NCSI and SSL.
 On
        August
        10, 2007, ABCC acquired all of the outstanding common stock of NCSI. For
        accounting purposes the acquisition has been treated as a recapitalization
        of
        NCSI with NCSI as the acquirer (reverse acquisition). The historical financial
        statements prior to August 10, 2007 are those of NCSI.
  **Accounting
        Changes**
  In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        No.
        157, *Fair
        Value Measurements* (SFAS
        157). SFAS 157 provides a common definition of fair value and establishes
        a
        framework to make the measurement of fair value in generally accepted accounting
        principles more consistent and comparable. SFAS 157 also requires expanded
        disclosures to provide information about the extent to which fair value is
        used
        to measure assets and liabilities, the methods and assumptions used to measure
        fair value, and the effect of fair value measures on earnings. SFAS 157 is
        effective for the Company’s 2009 fiscal year, although early adoption is
        permitted. The Company is currently assessing the potential effect of SFAS
        157
        on its financial statements.
  In
        July
        2006, the FASB issued FASB interpretation No. 48, *Accounting
        for Uncertainty in Income Taxes* (FIN
        48). FIN 48 clarifies the accounting for income taxes by prescribing a minimum
        probability threshold that a tax position must meet before a financial statement
        benefit is recognized. The minimum threshold is defined in FIN 48 as a tax
        position that is more likely than not to be sustained upon examination by
        the
        applicable taxing authority, including resolution of any related appeals
        or
        litigation processes, based on the technical merits of the position. The
        tax
        benefit to be recognized is measured as the largest amount of benefit that
        is
        greater than fifty percent likely of being realized upon ultimate settlement.
        FIN 48 must be applied to all existing tax position upon initial adoption.
        The
        cumulative effect of applying FIN 48 at adoption is to be reported as an
        adjustment to beginning retained earnings for the year of adoption. FIN 48
        is
        effective for the Company’s 2008 fiscal year. While the Company is currently
        assessing the potential effect of FIN 48, it does not anticipate any impact
        to
        beginning retained earnings in fiscal year 2008.
  Page
            28




In
        accordance with Statement of Financial Standards (SFAS) No. 144, *Accounting
        for the Impairment of Disposable Long-Lived Assets,* the
        Company will record impairment losses on long-lived assets used in operations
        when events and circumstances indicate that assets might be impaired and
        the
        undiscounted cash flows estimated to be generated by those assets are less
        than
        the carrying amount of those assets. To date there has been no impairment
        of the
        Company’s long-lived assets.




**Cash
        and Cash Equivalents**




The
        Company considers all highly liquid investments with an original maturity
        of
        three months or less when purchased to be cash equivalents.




**Concentration
        of Credit Risk and Significant Customers**




Financial
        instruments which potentially subject the Company to a concentration of credit
        risk consist principally of temporary cash investments and accounts
        receivable.




The
        Company places its temporary cash investments with financial institutions
        insured by the FDIC.




Concentrations
        of credit risk with respect to trade receivables are limited due to the diverse
        group of customers to whom the Company sells. The Company establishes an
        allowance for doubtful accounts when events and circumstances regarding the
        collectability of its receivables warrant based upon factors such as the
        credit
        risk of specific customers, historical trends, other information and past
        bad
        debt history. No allowance for doubtful accounts has been recorded as of
        December 31, 2007.




For
        the
        year ended December 31, 2007, sales to the Company’s top three customers
        accounted for approximately 79.7% of revenues and 1.5% of accounts receivable
        as
        of December 31, 2007. These customers were unique to 2006 and 2007 and are
        not
        projected to be customers in 2008.




**Net
        Earnings (Loss) Per Share**




In
        accordance with SFAS No. 128, *Earnings
        Per Share* ,
        basic
        net earnings (loss) per common share is computed by dividing the net earnings
        (loss) for the period by the weighted average number of common shares
        outstanding during the period. Diluted earnings (loss) per share were computed
        using the weighted average number of common and dilutive common stock equivalent
        shares outstanding during the period. Dilutive common stock equivalent shares
        consist of convertible preferred stock and stock options which are not utilized
        when the effect is anti-dilutive.




**Revenue
        Recognition**


The Company recognizes revenue on its construction
        projects in accordance with Statement of Position 81-1, which discusses
        accounting for performance of construction contracts. The use of the
        percentage of completion method depends on our ability to make
        reasonably dependable estimates. The Company measures percentage of
        completion based upon percentage of costs associated with the job
        completed. Additionally, contracts executed by NCSI and its respective
        customers include provisions that clearly specify the enforceable rights
        of our services that are provided to and received by our customers. Our
        estimates assume that our customers will satisfy their obligations under
        the contract and our performance requirements will be completed.




**Warranty
        Reserve**




The
        Company provides warranties for their concrete modular buildings. Typically,
        the
        Company provides a one year warranty on construction whereas various components
        incorporated in the structure has the warranty of the third party manufacturer.
        Historically, the warranty costs have not been significant. The Company
        maintains a reserve for warranty related issues and evaluates it on a periodical
        basis or as necessary.




**Segment
        Information**




In
        accordance with the provisions of SFAS No. 131, *Disclosures
        about Segments of an Enterprise and Related Information,* the
        Company is required to report financial and descriptive information about
        its
        reportable operating segments. The Company identifies its operating segments
        based on how management internally evaluates separate financial information,
        business activities and management responsibility. As of December 31, 2007,
        the
        Company had two operating segments; manufacturing and leasing.




Page
            29







**NOTE
        2 - RESTATEMENT**




***Balance
        Sheet, Statement of Operations, Statement of Stockholders’ Equity and Statement
        of Cash Flows***




In
        connection with the audit as of December 31, 2007, certain errors associated
        with the Company’s recognition of the financials of the Company and NCSI for the
        third quarter 2007 were required to be restated. The errors related to the
        recording of the Company’s financials for the nine months ended September 30,
        2007 and 2006 and the period August 10, 2007 (date of merger) through September
        30, 2007. Subsequent to the filing, it was determined that the reported
        financials should have been reported as follows:




On
        August
        10, 2007, ABCC acquired all of the outstanding common stock of NCSI. For
        accounting purposes the acquisition has been treated as a recapitalization
        of
        NCSI with NCSI as the acquirer (reverse acquisition). The historical financial
        statements prior to August 10, 2007 are those of NCSI.




The
        following tables presents the impact of the misclassification on the Company’s
        previously reported consolidated balance sheets, statement of
        operations, and the statement of cash flows.




**September
                    30, 2007****As**
                
                
                
                **As****Reported**
                
                **Adjustments**
                
                **Restated****Liabilities**Current
                    LiabilitiesNotes
                    Payable, Current Portion
                
                $
                510,181
                
                $
                -
                
                $
                510,181Accounts
                    Payable and Accrued Expenses
                
                
                727,688
                
                
                -
                
                
                727,688Accrued
                    Payroll and Taxes
                
                
                224,113
                
                
                -
                
                
                224,113Deferred
                    Revenue
                
                
                98,206
                
                
                -
                
                
                98,206Total
                    Current Liabilities
                
                
                1,560,188
                
                
                -
                
                
                1,560,188Noncurrent
                    LiabilitiesNotes
                    Payable, Noncurrent Portion
                
                
                752,384
                
                
                -
                
                
                752,384Total
                    Noncurrent Liabilities
                
                
                752,384
                
                
                -
                
                
                752,384Total
                    Liabilities
                
                
                2,312,572
                
                
                -
                
                
                2,312,572**Stockholders'
                    Equity**Common
                    Stock
                
                
                71,351
                
                
                -
                
                
                71,351Distributions
                
                
                (158,283
                )
                
                158,283
                
                
                -Additional
                    Paid In Capital
                
                
                9,840,614
                
                
                (208,229
                )
                
                9,632,385Subscription
                    Receivable
                
                
                -
                
                
                -
                
                
                -Treasury
                    Stock
                
                
                (819,296
                )
                
                -
                
                
                (819,296
                )Accumulated
                    Other Comprehensive Income
                
                
                25,722
                
                
                (25,722
                )
                
                -Accumulated
                    Deficit
                
                
                (10,474,629
                )
                
                75,668
                
                
                (10,398,961
                )Total
                    Stockholders' Equity
                
                
                (1,514,521
                )
                
                -
                
                
                (1,514,521
                )Total
                    Liabilities and Stockholders' Equity
                
                $
                798,051
                
                $
                -
                
                $
                798,051


Page 30  2007
                
                2008**As**
                
                
                
                **As**
                
                **As**
                
                
                
                **As****Reported**
                
                **Adjustments**
                
                **Restated**
                
                **Reported**
                
                **Adjustments**
                
                **Restated**Sales
                
                $
                110,972
                
                $
                -
                
                $
                110,972
                
                $
                10,281
                
                $
                1,986,736
                
                $
                1,997,017Cost
                    of Sales
                
                
                265,699
                
                
                -
                
                
                265,699
                
                
                -
                
                
                1,877,392
                
                
                1,877,392Gross
                    Profit
                
                
                (154,727
                )
                
                -
                
                
                (154,727
                )
                
                10,281
                
                
                109,344
                
                
                119,625Operating
                    Expenses
                
                
                142,504
                
                
                -
                
                
                142,504
                
                
                15,101
                
                
                208,937
                
                
                224,038Income
                    from Operations
                
                
                (297,231
                )
                
                -
                
                
                (297,231
                )
                
                (4,820
                )
                
                (99,593
                )
                
                (104,413
                )Interest
                    Income / (Expense), Net
                
                
                (55,164
                )
                
                -
                
                
                (55,164
                )
                
                -
                
                
                (33,436
                )
                
                (33,436
                )Net
                    Loss
                
                $
                (352,395
                )
                $
                -
                
                $
                (352,395
                )
                $
                (4,820
                )
                $
                (133,029
                )
                $
                (137,849
                )Comprehensive
                    Loss:Net
                    Loss
                
                $
                (352,395
                )
                $
                -
                
                $
                (352,395
                )
                $
                (4,820
                )
                $
                (133,029
                )
                $
                (137,849
                )Other
                    Comprehensive Loss,unrealized
                    gain (loss) on available-for-sale
                    security
                
                
                -
                
                
                -
                
                
                -
                
                
                (480
                )
                
                480
                
                
                -Realized
                    holding gain (loss) arisingduring
                    the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Comprehensive
                    Loss
                
                $
                (352,395
                )
                $
                -
                
                $
                (352,395
                )
                $
                (5,300
                )
                $
                (132,549
                )
                $
                (137,849
                )Net
                    Income (Loss) Per Share:Basic
                    and diluted based upon5,502,639
                    weighted averageshares
                    outstanding
                
                $
                (0.05
                )
                $
                (0.01
                )
                $
                (0.06
                )Basic
                    and diluted based upon5,024,465
                    weighted averageshares
                    outstanding
                
                
                
                
                
                
                
                
                
                
                $
                (0.001
                )
                $
                (0.03
                )
                $
                (0.03
                )Note:
                    The weighted average shares outstanding has been
                    corrected.
 
 
 **Nine
                    Months Ended September 30, 2007**
                
                **Nine
                    Months Ended September 30, 2006****As**
                
                
                
                **As**
                
                **As**
                
                
                
                **As****Reported**
                
                **Adjustments**
                
                **Restated**
                
                **Reported**
                
                **Adjustments**
                
                **Restated**Sales
                
                $
                1,789,643
                
                $
                (28,662
                )
                $
                1,760,981
                
                $
                42,198
                
                $
                5,485,113
                
                $
                5,527,311Cost
                    of Sales
                
                
                1,314,469
                
                
                -
                
                
                1,314,469
                
                
                -
                
                
                4,327,693
                
                
                4,327,693Gross
                    Profit
                
                
                475,174
                
                
                (28,662
                )
                
                446,512
                
                
                42,198
                
                
                1,157,420
                
                
                1,199,618Operating
                    Expenses
                
                
                693,801
                
                
                (104,330
                )
                
                589,471
                
                
                64,106
                
                
                749,185
                
                
                813,291Income
                    from Operations
                
                
                (218,627
                )
                
                75,668
                
                
                (142,959
                )
                
                (21,908
                )
                
                408,235
                
                
                386,327Interest
                    Income / (Expense), Net
                
                
                (127,125
                )
                
                -
                
                
                (127,125
                )
                
                -
                
                
                (186,806
                )
                
                (186,806
                )Net
                    Loss
                
                $
                (345,752
                )
                $
                75,668
                
                $
                (270,084
                )
                $
                (21,908
                )
                $
                221,429
                
                $
                199,521Comprehensive
                    Loss:Net
                    Loss
                
                $
                (345,752
                )
                $
                75,668
                
                $
                (270,084
                )
                $
                (21,908
                )
                $
                221,429
                
                $
                199,521Other
                    Comprehensive Loss,unrealized
                    gain (loss) on available-for-sale
                    security
                
                
                -
                
                
                -
                
                
                -
                
                
                2,400
                
                
                (2,400
                )
                
                -Realized
                    holding gain (loss) arisingduring
                    the period
                
                
                (10,078
                )
                
                10,078
                
                
                -
                
                
                -
                
                
                -
                
                
                -Comprehensive
                    Loss
                
                $
                (355,830
                )
                $
                85,746
                
                $
                (270,084
                )
                $
                (19,508
                )
                $
                219,029
                
                $
                199,521Net
                    Income (Loss) Per Share:Basic
                    and diluted based upon5,185,608
                    weighted averageshares
                    outstanding
                
                $
                (0.05
                )
                $
                -
                
                $
                (0.05
                )Basic
                    and diluted based upon5,804,849
                    weighted averageshares
                    outstanding
                
                
                
                
                
                
                
                
                
                
                $
                (0.004
                )
                $
                0.034
                
                $
                0.03Note:
                    The weighted average shares outstanding has been
                    corrected.


Page 31







**Nine
                  Months Ended September 30, 2007****As**
              
              
              
              **As****Reported**
              
              **Adjustments**
              
              **Restated****Cash
                  Flows From Operating Activities:**Net
                  Loss
              
              $
              (345,752
              )
              $
              75,668
              
              $
              (270,084
              )Adjustments
                  to Reconcile Net Income to NetCash
                  Used By Operating Activities:Depreciation
                  and Amortization
              
              
              93,143
              
              
              -
              
              
              93,143Stock
                  Based Compensation
              
              
              5,540
              
              
              (5,540
              )
              
              -Realized
                  Gain on Sale of Available-for-Sale Security
              
              
              (22,131
              )
              
              22,131
              
              
              -Conversion
                  of Convertible Preferred Securities
              
              
              (165,000
              )
              
              165,000
              
              
              -Assumed
                  Notes Payable in Acquisition, Net
              
              
              790,686
              
              
              (790,686
              )
              
              -Distributions
                  Acquired in Acquisition
              
              
              (158,283
              )
              
              158,283
              
              
              -Accumulated
                  Deficit Acquired in Acquisition
              
              
              (2,366,108
              )
              
              2,366,108
              
              
              -Decrease
                  (Increase) In:Accounts
                  Receivable, Net
              
              
              (119,571
              )
              
              385,098
              
              
              265,527Note
                  Receivable, Net
              
              
              4,500
              
              
              (4,500
              )
              
              -Investment
                  in Available-for-Sale Security
              
              
              18,100
              
              
              (18,100
              )
              
              -Prepaid
                  Expenses and Other Current Assets
              
              
              (49,904
              )
              
              20,473
              
              
              (29,431
              )Increase
                  (Decrease) In:Accounts
                  Payable, Accrued Expenses and Taxes Payable
              
              
              879,292
              
              
              (825,267
              )
              
              54,025Billings
                  in Excess of Costs on Uncompleted Contracts
              
              
              -
              
              
              (650,771
              )
              
              (650,771
              )Deferred
                  Revenue
              
              
              98,206
              
              
              -
              
              
              98,206Net
                  Cash Used In Operating Activities
              
              
              (1,337,282
              )
              
              897,897
              
              
              (439,385
              )**Cash
                  Flows From Investing Activities:**Acquisition
                  of Property, Plant and Equipment
              
              
              (717,945
              )
              
              620,046
              
              
              (97,899
              )Net
                  Cash Used In Investing Activities
              
              
              (717,945
              )
              
              620,046
              
              
              (97,899
              )**Cash
                  Flows From Financing Activities:**Gross
                  Proceeds from Sale of Available-for-Sale Security
              
              
              20,000
              
              
              (20,000
              )
              
              -Recapitalization
                  due to Merger
              
              
              -
              
              
              (81,437
              )
              
              (81,437
              )Issuance
                  of Notes Payable
              
              
              499,337
              
              
              (308,036
              )
              
              191,301Repayment
                  of Notes Payable
              
              
              (27,458
              )
              
              -
              
              
              (27,458
              )Additional
                  Paid-in Capital
              
              
              1,493,874
              
              
              (1,493,874
              )
              
              -Net
                  Cash Provided By Financing Activities
              
              
              1,985,753
              
              
              (1,903,347
              )
              
              82,406Net
                  Increase (Decrease) in Cash
              
              
              (69,474
              )
              
              (385,404
              )
              
              (454,878
              )Cash
                  at Beginning of Year
              
              
              73,248
              
              
              385,404
              
              
              458,652Cash
                  at End of Period
              
              $
              3,774
              
              $
              -
              
              $
              3,774**Supplemental
                  Disclosure of Cash Flow Information:**Cash
                  paid during the period for interest
              
              $
              129,098
              
              $
              -
              
              $
              129,098Taxes
                  Paid
              
              $
              -
              
              $
              -
              
              $
              -


**NOTE
        3 - ACQUISITIONS, MERGERS AND NEW SUBSIDIARIES FORMED**




***K2
        Acquisition Corp.***




On
        January 29, 2007, the Company signed a letter of intent with NCSI a Florida
        corporation, whereby NCSI will merge with Merger Sub and NCSI intends to
        enter
        into a merger agreement whereby Merger Sub will merge with and into NCSI.
        In
        connection with the merger, the shareholders of NCSI will acquire a controlling
        interest in K2. NCSI's designees will be appointed as directors of K2 and
        the
        Board and shareholders will approve a 1 x 10 reverse split of K2 shares such
        that the current shareholders of K2 own approximately 500,000 post merger
        shares
        representing 10% of the post merger shares issued and outstanding. In connection
        with this transaction, Avante Holding Group, Inc. (“Avante”, see Note 6 -
        Related Parties) entered into an agreement with NPOWR Digital Media, Inc.
        to
        acquire 1,000,000 shares of K2 preferred stock which is convertible into
        1,500,000 common shares.


On
        April
        27, 2007, the Company signed a Merger Agreement with NCSI, whereby NCSI would
        merge with Merger Sub. In connection with the merger, the shareholders of
        NCSI
        would acquire a controlling interest in K2. NCSI's designees would be
        appointed as directors of K2 and the Board and shareholders would
        approve a 1 x 10 reverse split of K2 shares such that the current
        shareholders of K2 own approximately 500,000 post merger shares
        representing 10% of the post merger shares issued and outstanding.Under
        the
        terms of the termination of the agreement with NPOWR, certain amounts owed
        to K2
        under the LOI were payable in the form of a note. With the acquisition of
        the
        NPOWR preferred stock by Avante, $13,500 due under the note was assumed by
        Avante. The note was paid in full during the quarter ended June 30,
        2007.


Page 32


---

On
        August
        10, 2007, the merger between Merger Sub and NCSI was completed with NCSI
        being
        the surviving company.




***New
        Century Structures, Inc.***




NCSI
        of
        Florida was incorporated in May 2001 under the name of M3'T, Inc. In July
        2003,
        the Company changed its name to New Century Structures, Inc.  The Company
        was originally incorporated as an "S" Corporation. In 2006, the Company filed
        with the Internal Revenue Service to change its filing status to a "C"
        Corporation.




***Sustainable
        Structures Leasing, Inc.***




SSL
        of
        Florida, formerly known as Sustainable Structures Leasing, LLC, was incorporated
        on April 20, 2005. SSL was acquired by the Company on October 15, 2007, for
        $100. At the time of acquisition, SSL was converted to a C
        corporation.




**NOTE
        4 - BALANCE SHEET DETAILS**
  Property
        and equipment consist of the following:
 Useful
                
                December
                    31,
                
                December
                    31,Life
                
                2007
                
                2006Facility
                
                
                20
                
                $
                182,078
                
                $
                72,688Capital
                    Improvements
                
                
                5
                
                
                55,610
                
                
                55,610Machinery
                    & equipment
                
                
                5
                
                
                347,971
                
                
                228,681Heavy
                    equipment
                
                
                7
                
                
                107,156
                
                
                -Vehicles
                    and trailers
                
                
                4
                
                
                7,000
                
                
                10,000Computer
                    equipment
                
                
                3
                
                
                449
                
                
                450Furniture
                    and fixtures
                
                
                5
                
                
                25,773
                
                
                25,773726,038
                
                
                393,202Less:
                    accumulated depreciation
                
                
                
                
                
                (225,688
                )
                
                -Net
                    property and equipment
                
                
                
                
                $
                500,350
                
                $
                393,202
 Depreciation
        expense was $124,821 and $114,430 for the year ended December 31, 2007 and
        2006,
        respectively.




Page 33


Due
            
            December 31,Date
            
            2007Avante Holding Group, Inc., revolving
            credit,principal and interest at prime plus
            4%.
            July 2008
            $
            296,469Bank of America, line of credit,
            interest onlypayments at 11.75%. The amount is
            guaranteedby Joseph Sorci.
            February 2013
            
            100,000Caterpillar Financial Services
            Corporation,principal and interest at 2.8%.
            Monthlypayments of $1,018.49. Note
            collateralized byCaterpillar Excavator. The amount isguaranteed by Joseph Sorci.
            July 2008
            
            5,638Caterpillar Financial Services
            Corporation,principal and interest at 3.92%.
            Monthlypayments of $1,616.61. Note
            collateralized byCaterpillar Telescopic Handler. The
            amount isguaranteed by Joseph Sorci.
            July 2009
            
            31,502Regions Bank, principal and interest
            at primerate. Monthly payments of $10,002.99.
            Thebalance is guaranteed by Joseph Sorci
            andMichael W. Hawkins.
            June 2012
            
            458,851Bridge Note, issued by multiple
            individuals.Interest only payments with interest
            at 10%.
            August 2008
            
            128,000Wells Fargo, principal and interest
            at 7.99%.Monthly payment of $2,097.42. Notecollateralized by 2007 Phoenix Glider
            cementtruck. The amount is guaranteed by
            Michael W.Hawkins.
            September 2011
            
            24,493Weaver Precast of Florida, LLC,
            promissorynote and interest at 5%. Monthly
            payments of$10,767.67.
            December 2009
            
            225,9061,270,859Less: Current portion
            
            
            647,941Total long-term debt
            
            $
            622,918
 The combined
      aggregate monthly payment amount for notes payable, as of December 31,
      2007, is $26,569.85. Avante Holding Group, Inc. and Bank of America have a
      variable payback schedule that is not fixed. Therefore, it is not
      incorporated into the monthly minimum obligations schedule.
      Future minimum obligations
      for the above notes payable are as follows:
      2008
            $
            427,4542009
            
            260,5642010
            
            120,0362011
            
            120,0362012
            
            60,018Total Lease Obligations
            $
            988,108 **NOTE
      5 - COMMITMENTS**


The
      Company leases office space in Melbourne, Florida from GAMI, LLC (“GAMI”, see
      Note 7 - Related Parties). The terms of the agreement are monthly payments
      of
      $4,000 expiring May 31, 2012. There are two renewable five year
      extensions.

Page 34


The
      Company leases the property where its manufacturing operation is located. The
      lease expired on December 31, 2007 and is now a month-to-month lease. Monthly
      lease payments are $4,000.




Future
      minimum obligations for the above leases are as follows:


2008
              
              $
              48,0002009
              
              
              48,0002010
              
              
              48,0002011
              
              
              48,0002012
              
              
              20,000Total
                  Lease Obligations
              
              $
              212,000




**NOTE
        6 - BUSINESS SEGMENTS**




The
          Company operates primarily in two segments: manufacturing division (NCSI)
          and
          leasing division (SSL).




Information
          concerning the revenues and operating income (loss) for the year ended
          December
          31, 2007 and 2006, and the identifiable assets for the two segments in
          which the
          Company operates are shown in the following table:


Year
                      EndedDecember
                      31,2007
                  
                  2006OPERATING
                      REVENUEManufacturing
                  
                  $
                  1,964,509
                  
                  $
                  6,678,617Leasing
                  
                  
                  -
                  
                  
                  -Consolidated
                      Totals
                  
                  $
                  1,964,509
                  
                  $
                  6,678,617INCOME
                      (LOSS) FROM OPERATIONS (1)Manufacturing
                  
                  $
                  (344,508
                  )
                  $
                  210,948Leasing
                  
                  
                  -
                  
                  
                  -Corporate
                  
                  
                  (80,714
                  )
                  
                  -Consolidated
                      Totals
                  
                  $
                  (425,222
                  )
                  $
                  210,948IDENTIFIABLE
                      ASSETSManufacturing
                  
                  $
                  585,123
                  
                  $
                  1,484,269Leasing
                  
                  
                  -
                  
                  
                  -Corporate
                  
                  
                  -
                  
                  
                  -Consolidated
                      Totals
                  
                  $
                  585,123
                  
                  $
                  1,484,269DEPRECIATION
                      AND AMORTIZATIONManufacturing
                  
                  $
                  124,821
                  
                  $
                  114,430Leasing
                  
                  
                  -
                  
                  
                  -Corporate
                  
                  
                  -
                  
                  
                  -Consolidated
                      Totals
                  
                  $
                  124,821
                  
                  $
                  114,430(1)
                      Does not reflect the Extraordinary Loss of $325,000.





**NOTE
          7 - RELATED PARTIES**




Michael
          W. Hawkins, formerly a Director and the Vice President of Finance for NCSI,
          is
          also CEO and principal shareholder for Avante and the Managing Member for
          GAMI.
          Prior to the merger, Avante and GAMI owned in NCSI approximately 42.2%
          of the
          common stock issued, 25% of the Series A preferred stock, 100% of the Series
          B
          preferred stock, 0% of the Series C preferred stock and 28.4% of the Series
          D
          preferred stock. The preferred shares converted into common shares of NCSI,
          prior to the merger, and Avante and GAMI now own 2,595,254 shares of the
          Company.




Page 35


NCSI
          has
          contracted with Avante for certain investment banking and consulting services
          to
          be provided pursuant to two agreements between NCSI and Avante.


NCSI
          and
          Avante entered into a Consulting Agreement on January 1, 2006 to provide
          corporate guidance and financial and accounting services. As compensation,
          Avante receives $10,000 per month and bonus compensation. Under this agreement
          Avante has the unilateral authority to hire additional personnel required
          to
          perform investor relations, financial administration, and executive oversight
          and request reimbursement from NCSI on a reimbursable expense basis. The
          term of
          this agreement is for three years with one additional automatic three-year
          extension.




On
          May
          31, 2005, NCSI and Avante entered into a Revolving Credit Agreement for
          $500,000. The terms of the Agreement includes interest at the rate of prime
          plus
          4%. The Agreement terminates on May 31, 2006 with an available extension
          of one
          year at the discretion of the Lender. On May 31, 2006, Avante renewed the
          agreement for one year. An Amendment to the Agreement was executed in December
          2006 providing an additional $500,000 credit for a total of $1,000,000.
          On May
          31, 2007, Avante renewed the agreement for one year. In August 2007, various
          entities that held the Avante Revolving Credit Agreement as collateral
          to notes
          owed by Avante, elected to call the note and accept issuance of common
          stock of
          ABCC in lieu of cash. The Company issued 2,000,000 shares to six separate
          entities/individuals. Two of the individuals are related to Michael W.
          Hawkins.
          As of December 31, 2007, the balance due to Avante under this Agreement
          was
          $296,469.




NCSI
          and
          Avante entered into an Exclusive Mergers and Acquisitions Services Agreement
          on
          January 1, 2006 to provide merger and acquisition consulting services.
          The term
          of the agreement is for three years. Compensation is based upon a double
          Lehman
          Formula. As of December 31, 2007, no fees have been incurred under this
          agreement.




Michael
          W. Hawkins has personally guaranteed several obligations with the primary
          guarantee being the Regions Bank note. In addition to the various notes
          identified above, he has also personally guaranteed the Company note payable
          balance with Wells Fargo associated with the financing of a cement truck.
          The
          cement truck was sold on November 9, 2007 and the note was paid in
          full.




On
          July
          1, 2006, GAMI contracted with Alternative Construction by ProSteel Builders,
          Inc. (f/k/a ProSteel Builders Corporation) (“ACP”) for the construction of a new
          office building for GAMI located in Melbourne, Florida. ACP subcontracted
          a
          portion of the construction to NCSI. The full contract value with ACP was
          $742,500. The contract, with change orders, between ACP and NCSI was $993,930.
          All balances due to the Company as of June 30, 2007 were paid in full.
          The
          contract and all related activities were done as an arms length
          transaction.




On
          May
          31, 2006, the Company leased office space for its corporate office from
          GAMI for
          $4,000 per month for five years. The lease has two renewable five year
          periods.




Joseph
          Sorci, the CEO for the Company, is also CEO and principal shareholder for
          Florida Architects, Inc. (“FLA”). FLA performs various architectural roles for
          the Company in conjunction with evaluating, bidding, planning and actual
          building of the Company’s projects. All transactions are conducted as arms
          length transactions.




Joseph
          Sorci has personally guaranteed several obligations with vendors, banks
          and
          other business related entities. The primary guarantees are with Regions
          Bank,
          Weaver Precast of Florida, LLC, Wells Fargo and Bank of America.




On
          September 13, 2007, the Company issued 300,000 shares of common stock to
          Thomas
          G. Amon, the Company's Corporate Counsel and member of the Board of Directors
          in
          satisfaction of an outstanding payable of $75,000.




The
          Company has a payable of $9,390 and $25,471 to Alternative Construction
          Safe
          Rooms, Inc. (“ACSR”) and Alternative Construction by Revels, Inc. (“ACR”),
          respectively. ACSR and ACR are subsidiaries of Alternative Construction
          Technologies, Inc., which Michael W. Hawkins is the CEO, Chairman and
          significant shareholder.




**NOTE
          8 - STOCKHOLDERS’ EQUITY**




***Common
          Stock***




The
          Company has authorized 24,000,000, issued 7,718,465 and has outstanding
          7,676,723 common shares at $0.10 par value at December 31, 2007.




As
          part
          of the acquisition / merger and reverse stock split on August 10, 2007,
          the
          Company issued 4,334,429 shares of common stock to shareholders of
          NCSI.





On
          September 13, 2007, the Company issued 2,444,000 shares to various debt
          holders
          in exchange for the conversion of $611,000 in debt. As part of this conversion
          of outstanding payables, the Company issued 444,000 shares to officers
          and
          directors. An additional 666,668 shares were issued to individuals related
          to
          Michael W. Hawkins (see Note 6 - Related Parties) as part of a reduction
          in the
          Revolving Credit Agreement with Avante.


Page 36


On
          October 29, 2007, the Company issued 250,000 common shares for $250,000
          in a
          private placement. On December 31, 2007, the $250,000 was a subscription
          receivable. Subsequent to December 31, 2007, the Company has received only
          $100,000 of the funds purchased. The Company has filed a lawsuit against
          the
          individual to collect the outstanding funds. See Note 10 - Legal Proceedings.




***Preferred
          Stock***




The
          Company has filed an amendment to designate its preferred stock as Series
          A
          convertible preferred stock convertible into common shares on a 3 for 1
          basis.




On
          August
          9, 2007, the Series A, B, C and D preferred stock of NCSI was converted
          to
          common stock of NCSI on a 1:1 basis.




On
          August
          10, 2007, a simultaneous transaction with the merger between K2AC and NCSI,
          the
          Company’s outstanding 1,000,000 shares of preferred stock valued at $165,000
          were converted to common stock at a 1.5 for 1 rate resulting in 150,000
          shares
          of common stock being issued (post split).




***Treasury
          Stock***




Prior
          to
          January 1, 2006, the Company acquired 41,742 (post split) outstanding shares
          of
          common stock for $819,296. These shares are held in the treasury.





**NOTE
          9 - EARNINGS PER SHARE**




The
          Company presents both basic and diluted earnings per share (EPS) amounts.
          Basic
          EPS is calculated by dividing net income by the weighted average number
          of
          common shares outstanding during the year. Diluted EPS Is based upon the
          weighted average number of common and common equivalent shares outstanding
          during the year which is calculated using the treasury stock method for
          stock
          options. Common equivalent shares are excluded from the computation in
          periods
          in which they have an anti-dilutive effect.


Year
                      EndedDecember
                      31,2007
                  
                  2006**Numerator**Net
                      Loss
                  
                  $
                  (597,593
                  )
                  $
                  (114,052
                  )**Denominator**Basic
                      and dilutedWeighted
                      average common shares outstanding
                  
                  
                  5,804,849
                  
                  
                  5,024,465Denominator
                      in basic calculation
                  
                  
                  5,804,849
                  
                  
                  5,024,465**Basic
                      and diluted net income (loss) per share**
                  
                  $
                  (0.10
                  )
                  $
                  (0.02
                  )




**NOTE
          10 - INCOME TAXES**




A
          reconciliation of income tax computed at the statutory federal rate to
          income
          tax expense (benefit) is as follows:


For
                      the Year EndedDecember
                      31,2007
                  
                  2006Tax
                      expense (benefit) at the statutory rate of 35%
                  
                  $
                  (209,158
                  )
                  $
                  (39,918
                  )State
                      income taxes, net of federal income tax
                  
                  
                  -
                  
                  
                  -Change
                      in valuation allowance
                  
                  
                  209,158
                  
                  
                  39,918Total
                  
                  $
                  -
                  
                  $
                  -


The
          tax
          effects of temporary differences that give rise to significant portions
          of the
          deferred tax assets and deferred tax liabilities are presented
          below:




Page 37


December
                      31,2007Deferred
                      tax assets:Net
                      operating loss carryforward - 2006 and prior (1)
                      (2)
                  
                  $
                  8,114,052Net
                      operating loss carryforward - 2007
                  
                  
                  597,593Total
                      net operating loss carryforward
                  
                  $
                  8,711,645Total
                      deferred tax assets
                  
                  $
                  8,711,645Less
                      valuation allowance
                  
                  
                  (8,711,645
                  )Total
                      deferred tax assets
                  
                  $
                  -




(1)
                As
                    of December 31, 2006, the Company had net operating loss carryforwards
                    of
                    approximately $8.0 million for federal and state income tax purposes,
                    which are available to reduce future taxable income and will
                    expire
                    through 2025 if not utilized. In addition, a 2001 impairment
                    charge
                    related to the investment in available-for-sale securities of
                    approximately $130,000, net of approximately $1,277,000 deducted
                    (for tax
                    purposes) during the subsequent years for subsequent sales, is
                    not
                    deductible until the securities are sold. The future tax benefits
                    associated with the net operating loss carryforwards and impairment
                    charge
                    were the primary components of an estimated $3.3 million deferred
                    tax
                    asset at December 31, 2006. A valuation allowance has been established
                    for
                    the entire amount of the deferred tax asset since its realization
                    is
                    considered unlikely. Further, a change in the ownership of a
                    majority of
                    the fair market value of the Company's common stock (such as
                    the change in
                    ownership that would occur in the contemplated transaction discussed
                    in
                    Note 1) could significantly delay or limit the utilization of
                    net
                    operating loss carryforwards.




(2)
                For
                    2006 and prior, $8.0 million relates to K2 Digital, Inc. prior
                    to the
                    merger whereas $114,052 relates to NCSI for
                    2006.




In
          assessing the realizability of deferred tax assets, management considers
          whether
          it is more likely than not that some portion or all of the deferred tax
          assets
          will not be realized. The ultimate realization of deferred tax assets is
          dependent upon the generation of future taxable income during the periods
          in
          which those temporary differences become deductible. Management considers
          the
          scheduled reversal of deferred tax liabilities, projected future taxable
          income
          and tax planning strategies in making this assessment.




Because
          of the historical earnings history of the Company, the net deferred tax
          assets
          for 2007 and prior years were offset by a 100% valuation allowance. The
          valuation allowance for the remaining net deferred tax assets was $13,897,148
          as
          of December 31, 2007.




At
          December 31, 2007, the carryforwards expire in various years up through
          2027.




**NOTE
          11 - LEGAL PROCEEDINGS**




On
          October 2, 2006, NCSI was named in a lawsuit captioned New
          Millennium Enterprises, LLC and Phoenixsurf.com, LLC v. Michael
          W. Hawkins, et. al. U.S.
          District Court, Middle District of Georgia, 3: 06-CV-84 (CDC). The lawsuit
          alleges violations of the Georgia Securities Act, Georgia Fair Business
          Practices Act, Federal Securities laws and certain other unspecified laws
          in
          connection with the investment by Plaintiffs of $180,000 in NCSI and seeks
          rescission of this investment. Plaintiffs amended their complaint on April
          11,
          2007. NCSI filed an answer to the amended complaint denying all essential
          allegations of the complaint and asserting affirmative defenses showing
          why the
          plaintiffs are not entitled to the relief sought. In addition, NCSI filed
          Counterclaims against the Plaintiffs and Third Party claims against individual
          officers and directors of Plaintiff, alleging a malicious interference
          with the
          NCSI’s business and business relations, conspiracy to interfere with our
          business, libel and slander, and violation of rights under Title IX of
          the
          Organized Crime Control Act of 1970 as amended. The Parties are to establish
          a
          consolidated plan of discovery in 2008. The Company believes it has meritorious
          defenses to the claims and intends to vigorously defend this lawsuit and
          to
          pursue its counterclaims.




NCSI
          has
          been sued by two vendors, each for less than $20,000. The Company believes
          that
          each will be settled.




The
          Company maintains a reserve for legal expenses for all cases.




**NOTE 12  STOCK OPTION PLANS**




The
            Company has two stock plans, the 1996 Stock Option Plan (the "1996
            Plan"), and the 1997 Stock Incentive Plan  (the "1997 Plan",
            and together with the 1996 Plan, the "Plans"). Pursuant to the
            Plans, designated employees, including officers and directors of the
            Company and certain outside consultants, will be entitled to receive
            nonqualified stock options and qualified stock incentive
            compensation of up to 225,000 and 500,000 options under the 1996
            Plan and 1997 Plan respectively. The number of options available
            under the 1997 Plan were increased by an additional 400,000 and
            800,000 options in 1999 and 2000, respectively, to a total of
            1,700,000 options. In January 2001, the Board of Directors and
            stockholders approved an amendment to the 1997 Plan to increase the
            aggregate number of shares reserved for future issuance of the
            Company's common stock under the 1997 Plan from 1,700,000 shares to
            3,000,000 shares. The 1996 Plan expired on January 1, 2006 and the
            1997 Plan expired on June 12, 2007. On April 27, 2007 the Company
            issued 500,000 options to various directors and officers of the
            Company. On August 9, 2007 as part of the merger with New Century
            Structures, Inc., the options were reversed split on a 10:1 basis.
            Under the terms of the Plans, the minimum exercise price of options
            granted cannot be less than 100% of the fair market value of the
            common stock of the Company on the option grant date. Options
            granted under the Plan generally expire ten years after the option
            grant date. For incentive stock options granted to such persons who
            would be deemed to have in excess of a 10% ownership interest in the
            Company, the option price shall not be less that 110% of such fair
            market value for all options granted.



Page 38


---

The
            Company complies with Accounting Principles Board (APB) No. 25
            "Accounting for Stock Issued to Employees" in accounting for stock
            options issued to employees. Stock options are granted with an
            exercise price equal to the fair market value on the date of grant.
            Accordingly, no compensation expense will be recognized for options
            issued to employees.

In
            accordance with the provisions of SFAS 123(r), the Company complies
            with recognizing compensation expense related to outstanding
            options. 500,000 options were granted in fiscal 2007. Prior to
            fiscal 2007, the Company had adopted the disclosure-only provision
            of SFAS 123, Accounting for Stock-Based Compensation, as
            amended by SFAS 148, Accounting for Stock-Based Compensation,
            Transition and Disclosure, which permitted the Company to
            account for stock option grants in accordance with APB Opinion No.
            25, Accounting for Stock Issued to Employees. Under APB 25,
            compensation expense is recorded when the exercise price of the
            Companys employee stock option is less than the market price of the
            underlying stock at the date of grant.

A summary of the Plans
            at December 31, 2007 is presented in the table below:

2007WeightedAverageExerciseShares
                  
                  PriceOutstanding at the beginning of the year*
                  98,275
                  $
                  23.97Granted at fair value
                  50,000
                  $
                  0.85Forfeited
                  3,500
                  $
                  17.50Exercised
                  -
                  
                  -Currently Outstanding
                  144,775
                  $
                  24.65Options exercisable at the end of the year
                  144,775
                  $
                  24.65


* Reflect 10:1 reverse
            split completed on August 9, 2007.

The following table
            summarizes information for the current stock options outstanding:

Options Outstanding
                  Options ExercisableWeighted-
                  Weighted-
                  
                  Weighted-Range of
                  Number
                  Average
                  Average
                  Number
                  AverageExercise
                  Outstanding
                  Remaining
                  Exercise
                  Exercisable
                  ExercisePrices
                  @ 12/31/07
                  in years
                  Price
                  @ 12/31/07
                  Price$0.08 - $58.125
                  144,775
                  8.92
                  $
                  24.65
                  144,775
                  $
                  24.65




Page 39


---

NOTE 13  SUBSEQUENT EVENTS

On
              February 11, 2008, the Company issued 300,000 shares of common
              stock to various debt holders in exchange for the conversion of
              $135,000 in debt.











Page 40








**Item
      9. Changes in and Disagreements With Accountants on Accounting and Financial
      Disclosure.**




None




**Item
      9A(T). Controls and Procedures.**




**Evaluation
      of Disclosure Controls and Procedures**




Under
      the
      supervision and with the participation of the Company’s Chief Executive Officer
      (“CEO”) and Interim Chief Financial Officer (“CFO”), we conducted an evaluation
      of the effectiveness of our disclosure controls and procedures as defined in
      rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act
      of
      1934 as of December 31, 2007. Based upon that evaluation, our CEO and CFO have
      concluded that our disclosure controls and procedures were effective to ensure
      that the information required to be disclosed by the Company in this Annual
      Report on Form 10-K was (i) recorded, processed, summarized and reported
      within the time periods specified in the Securities and Exchange Commission’s
      rules and (ii) accumulated and communicated to the Company’s management,
      including the Company’s principal executive and principal financial officers, to
      allow timely decisions regarding required disclosure.




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




Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting to provide reasonable assurance regarding
      the
      reliability of our financial reporting and the preparation of financial
      statements for external purposes in accordance with generally accepted
      accounting principles. Internal control over financial reporting includes those
      policies and procedures that (i) pertain to


the
      maintenance of records that in reasonable detail accurately and fairly reflect
      the transactions and dispositions of the assets of the company; (ii) provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the company are
      being made only in accordance with authorizations of management and directors
      of
      the company; and (iii) provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      company’s assets that could have a material effect on the financial
      statements.




Management
      assessed our internal control over financial reporting as of December 31, 2007.
      Management based its assessment on criteria established in *Internal
      Control-Integrated Framework* issued
      by
      the Committee of Sponsoring Organizations of the Treadway Commission (COSO
      Framework). Management’s assessment included evaluation of such elements as the
      design and operating effectiveness of key financial reporting controls, process
      documentation, accounting policies, and our overall control
      environment.




Based
      on
      our assessment described above, management has concluded that our internal
      control over financial reporting was  effective at the reasonable assurance level during the year ended
      December 31, 2007. Management has determined that (i) insufficient staffing
      and
      supervision resources and (ii) inability to detect the inappropriate application
      of United States GAAP principles are material weaknesses in our internal control
      over financial reporting.




The
      Company historically has had limited staff and financing. In the future, we
      intend to hire additional qualified personnel to allow for adequate separation
      of duties.




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 requirements by our
      registered public accounting firm pursuant to temporary rules of the Securities
      and Exchange Commission that permit the company to provide only management’s
      report in this annual report.




**Changes
      in Internal Control over Financial Reporting**




There were no changes in our internal control over financial reporting
      that occurred during the period covered by this report that have
      materially affected, or are reasonably likely to materially affect, our
      internal control over financial reporting.




**Limitations
      on the Effectiveness of Controls**




The
      Company’s management, including the CEO and CFO, concluded that our
      disclosure controls and procedures are effective at the reasonable assurance level.
      The Companys management does not expect that our disclosure controls and
      procedures or our internal control over financial reporting will prevent
      or detect all error and all 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 the control system must reflect that there are
      resource constraints and that the benefits 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
      issues and instances of fraud, if any, within the company 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 error or mistake. Controls can also be circumvented by the
      individual acts of some persons, by collusion of two or more people, or by
      management override of controls. The design of any system of controls is
      based in part on certain assumptions about the likelihood of future
      events, and there can be no assurance that any design will succeed in
      achieving its stated goals under all potential future conditions.
      Projections of any evaluation of controls effectiveness to future periods
      are subject to risks. Over time, controls may become inadequate because of
      changes in conditions or deterioration in the degree of compliance with
      policies or procedures.




Page 41









**Item
      9B. Other Information.**




None




**PART
      III**




**Item
      10. Directors, Executive Officers and Corporate
      Governance.**




The
      following table sets forth information with respect to persons who are serving
      as directors and officers of the Company. Each director holds office until
      the
      next annual meeting of shareholders or until his successor has been elected
      and
      qualified.


**NAME**
              
              **AGE**
              
              **POSITION**
              
              **HELD
                  POSITION SINCE**Joseph
                  J. Sorci (2)
              
              51
              
              Chairman,
                  Chief Executive Officer
              
              10-Aug-07Bruce
                  Harmon (1)
              
              49
              
              Director,
                  Audit Chairman, Interim Chief Financial Officer, Director
              
              10-Aug-07Thomas
                  Amon (2)
              
              60
              
              Secretary,
                  Director
              
              10-Aug-07Ralph
                  A. Henry (1)
              
              56
              
              Director
              
              10-Aug-07Gina
                  L. Bennett (2)
              
              39
              
              Director
              
              10-Aug-07(1)Directors term expires 2008.(2)Directors term expires 2009.




**JOSEPH
        J. SORCI, AIA, NCARB, CHIEF EXECUTIVE OFFICER (CEO) AND
        CHAIRMAN.** Mr.
        Sorci is the Founder of NCSI. Mr. Sorci is a Registered Architect in Florida,
        Georgia, Louisiana, Mississippi and Texas with extensive experience in various
        aspects of design, manufacturing and building of educational, institutional,
        commercial and private structures. He has more than 20 years of experience
        in
        the architecture field where he has held positions including Principal of
        a
        Central Florida start-up architectural firm, Principal Director of the Florida
        office for a national architectural and engineering firm, and, currently
        President of Florida Architects, Inc. Mr. Sorci’s architectural experience
        encompasses all levels and complexities of educational projects throughout
        the
        State of Florida. He has been the Architect of Record for more than 50
        educational projects, from K-12 to community college to the university level.
        Mr. Sorci has a Bachelor of Design and a Masters of Architecture from the
        University of Florida.  He has passed the Florida General Contractors
        examination and is in the process of activating his General Contractors License
        in Florida. Mr. Sorci is working on the LEEDS Certification allowing him
        to
        certify the green building products offered by the Company. Additionally,
        his
        NCARB Certificate allows reciprocity for Architectural licensing in other
        states, Canada and other countries.
 
 **BRUCE
        HARMON, DIRECTOR, AUDIT CHAIRMAN AND INTERIM CHIEF FINANCIAL OFFICER
        (CFO).**  Mr.
        Harmon has been Controller or Chief Financial Officer with numerous companies,
        including SinoFresh HealthCare, Inc. (SFSH.OB) from September 2002 to September
        2003 and Avante Holding Group, Inc. and its affiliated companies Alternative
        Construction Technologies, Inc. (ACCY.OB) and Organa Technologies Group,
        Inc.
        (OGNT.PK). He currently is also a director of ACCY.OB and OGNT.PK. Additionally,
        Mr. Harmon previously served as CFO of SFSH.OB, ACCY.OB and OGNT.PK. Mr.
        Harmon
        holds a B.S. degree in Accounting from Missouri State University.
 
 **BRIAN
        GROMLICH, DIRECTOR.** Mr.
        Gromlich has worked in the modular building industry since 1983. Prior to
        joining NCSI in 2007, he was employed with Work Space Plus, Major Projects
        (2004
        - 2007) and Division Manager with Resun Leasing (1992 - 2004). Mr. Gromlich
        is a
        veteran of the United States Marine Corp. He has an Associate of Arts degree,
        is
        a graduate of The Comair Aviation Academy and is a current commercial,
        multi-engine and instrument-rated pilot.
  Page 42




**THOMAS
        G. AMON, SECRETARY AND DIRECTOR.** ****** Mr. Amon
        is a Director, Secretary and Legal Counsel to the Company and has over thirty
        years experience as a practicing attorney specializing in Venture, International
        Banking and Financial Law, Oil and Gas Law and Toxic and Mass Tort litigation
        and shareholder class actions and derivative actions. He is a member of the
        Board of Directors of Venro Petroleum Corporation, an international energy
        company located in New York City and Houston, Texas; Alternative Construction
        Technologies, Inc. (ACCY.OB), a manufacturer of structural insulated panels,
        located in Melbourne, Florida, and Encore Networks, Inc., a supplier of
        signaling conversion and network access products located in Dulles, VA. He
        is
        also General Counsel and Director of Sonic Mountain, Inc., a provider of
        digital
        media and podcasts, located in New York City and San Francisco, CA. Mr. Amon
        graduated from Harvard University and the University of Virginia School of
        Law.




**RALPH
        A. “HANK” HENRY, DIRECTOR.** Mr.
        Henry joined NCSI as the Chief Operating Officer in March 2005 and spearheaded
        the establishment of NCSI’s manufacturing plant, including plant construction,
        establishing procedures, hiring all personnel, and coordination of ramping
        up
        production of modular concrete and metal panel buildings. He resigned as
        COO in
        January 2006 and became a Director in August 2007. Mr. Henry’s extensive
        experience in all facets of educational facility construction projects, from
        the
        physical plant maintenance perspective, to facilities director, to Deputy
        Director of the Florida Department of Education Budget & Finance Office, as
        well as hands-on experience in many of the construction trades, offers unique
        and distinctively valuable abilities to the NCSI organization. Mr. Henry
        holds a
        BA in Interdisciplinary Social Sciences from University of
        South Florida.




**GINA
        L. BENNETT, DIRECTOR** .
        Ms.
        Bennett has over twelve years experience regarding compliance with HIPAA
        governmental and regulatory agencies in new and growing companies. Her
        experience includes responsibilities in risk management, corporate restructuring
        and human resources, company policy and procedures development and
        implementation. Ms. Bennett serves as the Chief Operating Officer of Avante
        Holdings Group, Inc. and has served as Chief Executive Officer and Chairman
        for
        Organa Technologies Group, Inc. (OGNT.PK) since June 2006. Ms. Bennett has
        a BS
        in Legal Studies from Nova Southeastern University.




Our
        directors are elected at the annual meeting of the shareholders, with vacancies
        filled by the Board of Directors, and serve until their successors are elected
        and qualified, or their earlier resignation or removal. Officers are appointed
        by the board of directors and serve at the discretion of the board of directors
        or until their earlier resignation or removal.




**Indemnification
        of Directors and Officers**




Delaware
        Corporation Law allows for the indemnification of officers, directors, and
        any
        corporate agents in terms sufficiently broad to indemnify such persons under
        certain circumstances for liabilities, including reimbursement for expenses,
        incurred arising under the 1933 Act. The Bylaws of the Company provide that
        the
        Company will indemnify its directors and officers to the fullest extent
        authorized or permitted by law and such right to indemnification will continue
        as to a person who has ceased to be a director or officer of the Company
        and
        will inure to the benefit of his or her heirs, executors and Consultants;
        provided, however, that, except for proceedings to enforce rights to
        indemnification, the Company will not be obligated to indemnify any director
        or
        officer in connection with a proceeding (or part thereof) initiated by such
        person unless such proceeding (or part thereof) was authorized by the Board
        of
        Directors. The right to indemnification conferred will include the right
        to be
        paid by the Company the expenses (including attorney’s fees) incurred in
        defending any such proceeding in advance of its final disposition.




The
        Company may, to the extent authorized from time to time by the Board of
        Directors, provide rights to indemnification and to the advancement of expenses
        to employees and agents of the Company similar to those conferred to directors
        and officers of the Company. The rights to indemnification and to the
        advancement of expenses are subject to the requirements of the 1940 Act to
        the
        extent applicable.




Furthermore,
        the Company may maintain insurance, at its expense, to protect itself and
        any
        director, officer, employee or agent of the Company or another company against
        any expense, liability or loss, whether or not the Company would have the
        power
        to indemnify such person against such expense, liability or loss under the
        Delaware General Corporation Law.




**Committees
        of the Board of Directors**




*Audit
        Committee*




Bruce
        Harmon serves as chairman of the Audit Committee. Additionally, Ralph A.
        Henry
        serves as an independent Audit Committee member. The Audit Committee is
        responsible for overseeing all of our financial and legal and regulatory
        compliance functions, including matters relating to the appointment and
        activities of our auditors, audit plans and procedures, various accounting
        and
        financial reporting issues and changes in accounting policies, and reviewing
        the
        results and scope of the audit and other services provided by our independent
        public accountants. The Audit Committee is also responsible for aiding our
        Board
        of Directors in fair value pricing debt and equity securities that are not
        publicly traded or for which current market values are not readily available.
        When appropriate, the Board of Directors and Audit Committee will utilize
        the
        services of an independent valuation firm to help them determine the fair
        value
        of these securities.




Page 43







*Nominating
        and Corporate Governance Committee*




The
        Nominating and Corporate Governance Committee members are Gina Bennett and
        Joseph J. Sorci. The Nominating and Corporate Governance Committee is
        responsible for identifying, researching and nominating directors for election
        by our stockholders, selecting nominees to fill vacancies on our board of
        directors or a committee of the board, developing and recommending to the
        board
        of directors a set of corporate governance principles and overseeing the
        evaluation of the board of directors and our management. Joseph J. Sorci
        serves
        as the chairman of the Nominating and Corporate Governance
        Committee.




The
        Nominating and Corporate Governance Committee considers nominees properly
        recommended by our stockholders. The Nominating and Corporate Governance
        Committee will consider qualified director nominees recommended by stockholders
        when such recommendations are submitted in accordance with the Company’s
        governing documents and any applicable law, rule or regulation regarding
        director nominations. When submitting a nomination to the Company for
        consideration, a stockholder must provide certain information that would
        be
        required under applicable Commission rules, including the following minimum
        information for each director nominee: full name, age and address; principal
        occupation during the past five years; current directorships on publicly
        held
        companies and private companies; number of shares of Company common stock
        owned,
        if any; and, a written consent of the individual to stand for election if
        nominated by the Board of Directors and to serve if elected by the
        stockholders.





*Compensation
        Committee*




The
        Compensation Committee members are Gina Bennett and Bruce Harmon.
        Mr. Harmon serves as chairman of the Compensation Committee. The
        Compensation Committee reviews and recommends to the full board for approval
        the
        compensation paid by us of our officers.




**Item
        11. Executive Compensation.**




Our
        directors do not receive any stated salary for their services as directors
        or
        members of committees of the board of directors, but by resolution of the
        board,
        a fixed fee may be allowed for attendance at each meeting. Directors may
        also
        serve the company in other capacities as an officer, agent or otherwise,
        and may
        receive compensation for their services in such other capacity. Upon their
        election to the board, non-employee directors are paid $1,500 per day on
        the day
        board meetings are held, with an annual limit of $4,000. No
        such
        fees have been paid to any director since incorporation. Reasonable travel
        expenses are reimbursed.




The
        following table sets forth all the compensation earned by the person serving
        as
        the Chief Executive Officer (Named Executive Officer) and each other executive
        officer during the calendar years ended December 31, 2007 and 2006.


NonqualifiedName
                  and
              
              
              
              
              
              
              
              
              
              
              
              Non-Equity
              
              DeferredPrincipal
              
              
              
              
              
              
              
              Stock
              
              Option
              
              Incentive
                  Plan
              
              Compensation
              
              All
                  OtherPosition
              
              Year
              
              Salary
                  (1)
              
              Bonus
              
              Awards
              
              Awards
              
              Compensation
              
              Earnings
              
              Compensation
              
              TotalJoseph
                  J. Sorci (2)
                  (6)
              
              
              2007
              
              $
              -
              
              $
              -
              
              $
              36,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              36,000Chairman
                  and CEO
              
              
              2006
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Bruce
                  Harmon (3)
              
              
              2007
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Director
                  and Interim CFO
              
              
              2006
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Ralph
                  A. "Hank" Henry (4)
              
              
              2007
              
              $
              2,885
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              2,885Director
                  and COO
              
              
              2006
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Gina
                  L. Bennett (5)
              
              
              2007
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Director
                  and COO
              
              
              2006
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
  (1)
                  The amounts reflected in the above table do not include any amounts
                  for
                  perquisites and other personal benefits extended to the named executive
                  officer.(2)
                  Compensation paid is paid to Florida Architects, Inc., as to which
                  Mr.
                  Sorci is the CEO and majority shareholder.(3)
                  Mr. Harmon receives no direct compensation for the services provided.
                  Mr.
                  Harmon is compensated through the Administrative Consulting
                  Agreement.(4)
                  Mr. Henry resigned his position as COO of NCSI in January
                  2006.(5)
                  Ms. Bennett receives no direct compensation for the services provided.
                  Mr.
                  Bennett is compensated through the Administrative Consulting
                  Agreement.Ms.
                  Bennett was the COO of NCSI from January 2006 through June
                  2007.(6)
                  Stock Awards for Mr. Sorci was the conversion of debt to common
                  stock.






Page 44





**Item
        12. Security Ownership of Certain Beneficial Owners and Management and Related
        Stockholder Matters.**
 The
        following table sets forth certain information regarding the beneficial
        ownership of our shares of voting stock as of December 31, 2007 by: (i) each
        person who is known by us to beneficially own more than 5% of the issued
        and
        outstanding shares of common stock; (ii) the Chairmanand
        Chief
        Executive Officer; (iii) the directors; and (iv) all of the executive officers
        and directors as a group. For purposes of the beneficial ownership calculations
        below, the total issued, issuable and outstanding voting stock is 7,676,723.
        Unless otherwise indicated, the persons named below have sole voting and
        investment power with respect to all shares beneficially owned by them, subject
        to community property laws where applicable.
  **Amount
                    and Nature of****Name
                    and Address of Beneficial Owner (1) (2)**
                
                **Beneficial
                    Ownership**
                
                **Percent**Joseph
                    J. Sorci, Chairman and CEO
                
                
                1,267,831
                
                
                16.5
                %Bruce
                    Harmon, Director and Interim CFO
                
                
                129,575
                
                
                1.7
                %Brian
                    Gromlich
                
                
                -
                
                
                0.0
                %Thomas
                    G. Amon, Director and Secretary
                
                
                312,500
                
                
                4.1
                %Ralph
                    A. "Hank" Henry, Director
                
                
                107,979
                
                
                1.4
                %Gina
                    L. Bennett, Director
                
                
                129,575
                
                
                1.7
                %Avante
                    Holding Group, Inc. (3)
                
                
                2,595,254
                
                
                33.8
                %All
                    officers and directors as a group
                
                
                1,947,460
                
                
                25.4
                %
 (1)
        The
        amounts reflected in the above table do not include any amounts for
        perquisites and other personal benefits extended to the named executive
        officer.
        (2)
        Compensation paid is paid to Florida Architects, Inc., as to which Mr.
        Sorci is the CEO and majority shareholder.
        (3)
        Mr.
        Harmon receives no direct compensation for the services provided. Mr.
        Harmon is compensated through the Administrative Consulting Agreement.
        (4)
        Mr.
        Henry resigned his position as COO of NCSI in January 2006.
        (5)
        Ms.
        Bennett receives no direct compensation for the services provided. Mr.
        Bennett is compensated through the Administrative Consulting Agreement.
        Ms. Bennett was the COO of NCSI from January 2006 through June 2007.
        (6)
        Stock
        Awards for Mr. Sorci was the conversion of debt to common stock.




**Item
        13. Certain Relationships and Related Transactions, and Director
        Independence.**




On
        September 13, 2007, the Company issued 300,000 shares of common stock to
        Thomas
        G. Amon, the Company's Corporate Counsel and member of the Board of Directors
        in
        satisfaction of an outstanding payable of $75,000.


On
        September 13, 2007, the Company issued 144,000 shares of common stock to
        Joseph
        J. Sorci, the Company's CEO in exchange for the outstanding payable of $36,000.




On
        September 13, 2007, Avante assigned $500,000 of its receivable from NCSI
        to six
        various individuals as settlement for its outstanding debt. Subsequently,
        the
        Company issued 2,000,000 shares of common stock to the various people including
        two family members (issued 666,668 shares) of Michael W. Hawkins, a former
        officer, director and a significant shareholder, in exchange for the outstanding
        payable on the Revolving Credit Agreement with Avante of $500,000.


The
        Law
        Offices of Thomas G. Amon, New York, New York, represents the Company on
        certain
        legal matters. Thomas G. Amon, a principal in that firm is a director of
        the Company and owns 312,500 common shares of Company stock


The
        Company has a payable of $9,390 and $25,471 to Alternative Construction Safe
        Rooms, Inc. (“ACSR”) and Alternative Construction by Revels, Inc. (“ACR”),
        respectively. ACSR and ACR are subsidiaries of Alternative Construction
        Technologies, Inc., which Michael W. Hawkins is the CEO, Chairman and
        significant shareholder.


**Item 14. Principal Accounting Fees and Services**


**Audit
        Fees**


The
        Company has paid $13,500 and $12,000 for its quarterly financial reviews,
        Form
        10-Q reviews, and Form 10-K reviews for 2007 and 2006, respectively. The
        Company
        has paid $45,000 and $14,000 for its annual financial audits for 2007 and
        2006,
        respectively.



Page 45   The Companys taxes are prepared internally therefore no fees
have been paid associated with tax preparation.
All Other Fees
The Company has no other related fees.
The Companys Audit Committee has an Audit Committee Charter
with the appropriate policies and procedures regarding approvals. The Audit
Committee has approved of all items disclosed in this section.
The Companys auditors for 2007 are Liebman, Goldberg &
Drogin, LLP, located in Garden City, New York.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
Financial Statements

See Item 8. Financial Statements and Supplementary Data.
Incorporated herein by reference.
Exhibits

See the Exhibit Index following the signature page of this
Registration Statement, which Exhibit Index is incorporated herein by reference. Page 46
  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized. /s/
    Joseph J. Sorci
    April 14, 2008Joseph
    Sorci, Chairman of the Board and Chief Executive Officer
    Date/s/
    Bruce Harmon
    April 14, 2008Bruce
    Harmon, Interim Chief Financial Officer, Audit Committee Chairman, and
    DateDirectorPursuant 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 capacitiesand on
    the dates indicated./s/
    Joseph J. Sorci
    April 14, 2008Joseph
    Sorci, Chairman of the Board and Chief Executive Officer
    Date/s/
    Bruce Harmon
    April 14, 2008Bruce
    Harmon, Audit Committee Chairman, Director and Interim Chief Financial
    DateOfficer/s/
    Thomas G. Amon
    April 14, 2008Thomas
    G. Amon, Director
    Date/s/
    Brian Gromlich
    April 14, 2008Brian
    Gromlich, Director
    Date/s/
    Ralph A. "Hank" Henry
    April 14, 2008Ralph
    A. "Hank" Henry, Director
    Date/s/
    Gina L. Bennett
    April 14, 2008Gina L.
    Bennett, Director
    Date  Page 47
  Supplemental Information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered
Securities Pursuant to Section 12 of the Act

(a) Except to the extent that the materials enumerated in (1)
and/or (2) below are specifically incorporated into this Form by reference (in
which case seeRule 12b-23(d)), every registrant which files an annual
report on this Form pursuant to Section 15(d) of the Act shall furnish to the
Commission for its information, at the time of filing its report on this Form,
four copies of the following:
(1)
Any annual report to security holders covering the registrants last fiscal
year; and
(2)
Every proxy statement, form of proxy or other proxy soliciting material sent to
more than ten of the registrants security holders with respect to any annual or
other meeting of security holders.
(b) The foregoing material shall not be deemed to be "filed"
with the Commission or otherwise subject to the liabilities of Section 18 of the
Act, except to the extent that the registrant specifically incorporates it in
its annual report on this Form by reference.
(c) If no such annual report or proxy material has been sent
to security holders, a statement to that effect shall be included under this
caption. If such report or proxy material is to be furnished to security holders
subsequent to the filing of the annual report of this Form, the registrant shall
so state under this caption and shall furnish copies of such material to the
Commission when it is sent to security holders.   Page 48


EXHIBITNUMBER
              
              DESCRIPTION
                  OF DOCUMENT3.1
              
              Certificate
                  of Incorporation of the Company*3.1(a)
              
              Amendment
                  to Certificate of Incorporation of the Company*3.1(b)
              
              Amendment
                  to Certificate of Incorporation of the Company (incorporated by
                  reference
                  from the Registrant's Form 10KSB for its fiscal year ended
                  12/31/00).*3.1(c)
              
              Amendment
                  of Certificate of Incorporation of the Company (incorporated by
                  reference
                  from the Registrant’s Form 14A filed with the Securities & Exchange
                  Commission on July 24, 2007).*3.2
              
              By-laws
                  of the Company*3.2(b)
              
              Amendment
                  to By-laws of the Company*4.1
              
              Common
                  Stock Certificate*4.2
              
              Warrant
                  Certificate*4.4
              
              Warrant
                  Agreement by and between Continental Stock Transfer & Trust Company
                  and the Company*4.5
              
              Voting
                  Agreement among Messrs. Centner, de Ganon, Cleek and
                  Szollose*10.1
              
              1996
                  Stock Incentive Plan and Rules Relating thereto*10.2
              
              1997
                  Stock Option Plan (incorporated by reference from the Registrant's
                  Form
                  10-KSB for its fiscal year ended 12/31/96).*10.3
              
              Amendment
                  to 1997 Stock Option Plan (incorporated by reference from the Registrant's
                  Form 10-KSB for its fiscal year ended 12/31/00).*10.4
              
              Consulting
                  Agreement with Harvey Berlent*10.5
              
              Employment
                  Agreement with Matthew G. de Ganon*10.6
              
              Extension
                  of Employment Agreement with Matthew G. de Ganon dated November
                  2, 1998
                  (incorporated by reference from the Registrant's Form 10-KSB for
                  its
                  fiscal year ended 12/31/98).*10.7
              
              Amendment
                  to Employment Agreement of Matthew G. de Ganon dated April 14,
                  2000
                  (incorporated by reference from the Registrant's Form 10-QSB for
                  the
                  quarterly period ended 03/31/00).*10.8
              
              Employment
                  Agreement with Douglas E. Cleek*10.9
              
              Extension
                  of Employment Agreement with Douglas E. Cleek dated January 15,
                  1999
                  (incorporated by reference from the Registrant's Form 10-KSB for
                  its
                  fiscal year ended 12/31/98).*10.10
              
              Employment
                  Agreement with Gary W. Brown dated April 14, 2000 (incorporated
                  by
                  reference from the Registrant's Form 10-QSB for the quarterly period
                  ended
                  03/31/00).*10.11
              
              Restricted
                  Stock Agreement of Gary W. Brown (incorporated by reference from
                  the
                  Registrant's Form 10-QSB for the quarterly period ended
                  03/31/00).*10.12
              
              Employment
                  Agreement with Lynn Fantom dated February 13, 2001 (incorporated
                  by
                  reference from the Registrant's Form 10-KSB for its fiscal year
                  ended
                  12/31/00).*10.13
              
              Agreement
                  of Lease dated as of April 18, 1997, between 30 Broad Associates,
                  L.P., as
                  landlord, and the Company, as tenant, relating to 30 Broad Street,
                  New
                  York, New York (incorporated by reference from the Registrant's
                  Form
                  10-KSB for its fiscal year ended
                  12/31/00).*


Page 49





10.14
              
              Amendment
                  to Lease dated as of April 1, 1998, between 30 Broad Associates,
                  L.P., as
                  landlord, and the Company, as tenant, relating to 30 Broad Street,
                  New
                  York, New York (incorporated by reference from the Registrant's
                  Form
                  10-KSB for its fiscal year ended 12/31/00).*10.15
              
              Second
                  Amendment to Lease dated as of July 10, 2000, between ASC-CSFB
                  30 Broad,
                  LLC, as landlord, and the Company, as tenant, relating to 30 Broad
                  Street,
                  New York, New York (incorporated by reference from the Registrant's
                  Form
                  10-QSB for the quarterly period ended 06/30/00).*10.16
              
              Common
                  Stock Purchase Agreement dated as of December 11, 2000 between
                  the Company
                  and Fusion Capital Fund II, LLC (incorporated by reference from
                  the
                  Registrant's Current Report on Form 8-K filed
                  12/11/00).*10.17
              
              Form
                  of Registration Rights Agreement between the Company and Fusion
                  Capital
                  Fund II, LLC (incorporated by reference from the Registrant's Current
                  Report on Form 8-K filed 12/11/00).*10.18
              
              Master
                  Transaction Agreement, dated as of August 20, 2001, between the
                  Company
                  and Integrated Information Systems, Inc. (incorporated by reference
                  from
                  the Registrant's Current Report on Form 8-K filed
                  8/30/01).*10.19
              
              Agreement
                  and Plan of Merger, dated as of January 15, 2002, by and among
                  First Step
                  Distribution Network, Inc. and its shareholders, First Step Acquisition
                  Corp. and the Company (incorporated by reference from the Registrant's
                  Current Report on Form 8-K filed 01/17/02).*10.20
              
              Side
                  Letter dated April 8, 2002, by and between the Company and First
                  Step
                  Distribution
                Network,
                  Inc. (incorporated by reference from the Registrant's Annual Report
                  on
                  Form 10-KSB filed 04/16/02).*16.1
              
              Letter
                  from Arthur Andersen LLP regarding change in certifying accountant
                  (incorporated by reference from the Registrant's Current Report
                  on Form
                  8-K filed 04/16/02).*21.1
              
              Subsidiary
                  List*23.1
              
              Consent
                  of Liebman Goldberg & Drogin, LLP**31.1**
              
              Certification
                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.31.2**
              
              Certification
                  of Principal Financial Officer pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.32.1**
              
              Certification
                  of Chief Executive Officer pursuant to Title 18, United States
                  Code,
                  Section 1350 Adopted pursuant to Section 906 of the Sarbanes-Oxley
                  Act of
                  2002.**32.2**
              
              Certification
                  of Principal Officer pursuant to Title 18, United States Code,
                  Section
                  1350 Adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                  of
                  2002.**


* Incorporated by reference from the Company's Registration Statement on
        Form SB-2, No. 333-4319.
 **
        Filed
        herewith.
 Page 50