**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**







FORM
      10-KSB





(Mark
      One)




x**ANNUAL
      REPORT
      UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**




For
      the
      fiscal year ended August 31, 2007




o**TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**




For
      the
      transition period from _______________ to_______________




Commission
      file number 333-139395









**LOCATION
      BASED TECHNOLOGIES, INC. (fka Springbank Resources,
      Inc.)**


(Name
      of
      small business issuer in its charter)




**Nevada**
            
            **20-4854758**(State
                or other jurisdictionof
              incorporation
                or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)




**4989
      E. La Palma Avenue, Anaheim, California**


(Address
      of principal executive offices)




**92807**


Zip
      Code




**800-615-0869**


(Issuer’s
      telephone number)







Securities
      registered under Section 12(b) of the Exchange Act:




**Title
                of Each Class**
            
            **Name
                of Each Exchange**
              **on
                Which Registered**None
            
            None




Securities
      registered under Section 12(g) of the Exchange Act:  None




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.  o




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




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




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes o No
x




State
      issuer’s revenues for its most recent fiscal year. $26,928.




1




State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of a
      specified date within the past 60 days. $24,137,400.




**APPLICABLE
      ONLY TO CORPORATE REGISTRANTS**




The
      number of shares outstanding of the issuer’s common equity, as of November 20,
      2007 was 22,722,000.




**DOCUMENTS
      INCORPORATED BY REFERENCE**




If
      the
      following documents are incorporated by reference, briefly describe them and
      identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which
      the document is incorporated: (1) any annual report to security holders; (2)
      any
      proxy or information statement; and (3) any prospectus filed pursuant to Rule
      424(b) or (c) of the Securities Act of 1933 (“Securities Act”). The listed
      documents should be clearly described for identification purposes (e.g., annual
      report to security holders for fiscal year ended December 24,
      1990).  None




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









**Item
      1.  Description of Business.**




**Our
      Background.**  We are a corporation incorporated in Nevada on
      April 20, 2006.  We are qualified to do business in
      California.  Our shares of common stock are currently traded in the
      over-the-counter market and our stock price is reported on the OTC Bulletin
      Board under the symbol “LBAS.”  The previous symbol was
“SPRG.”




Springbank
      Resources, Inc. (“SRI”) was formed for the purpose of the exploration and
      development of oil and gas opportunities.  On October 11, 2007, in a
      stock-for-stock exchange transaction, SRI acquired 99.7% of the outstanding
      stock of Location Based Technologies, Corp. (“Old LBT”) (the “Exchange
      Transaction”).  On that same date, Old LBT was merged into SRI in a
      short form merger under Nevada law.  In that merger, SRI’s name was
      changed to Location Based Technologies, Inc. (“SRI/New LBT” or “New
      LBT”).  As a result of the Exchange Transaction and the short form
      merger, all shareholders of Old LBT received one share of SRI/New LBT common
      stock for each one share of Old LBT common stock held by them.  Prior
      to the Exchange Transaction, all of SRI’s assets and liabilities were disposed
      of, leaving it a “shell company.”  The remainder of the disclosure in
      this report will be about the business of Old LBT which became our only business
      after the Exchange Transaction.  References to “we,” “us,” “our” or
“the company” are references only to that business and not to any business of
      SRI prior to the Exchange Transaction.




Since
      the
      inception of Old LBT in 2005, our business has predominantly focused on research
      and development, or R&D, and is now preparing to shift from R&D to a
      marketing and customer driven stage of operations.  Through August 31,
      2007, we have spent approximately $514,000 in our R&D
      activities.  We have focused our business development on the
      following:




Ÿ
            In
                2005, we conducted technical feasibility studies and analyzed market
                data.


Ÿ
            In
                2006, we built our first prototypes, and began development of our
                website
                and mapping interface services.


Ÿ
            In
                2007, we developed pre-production personal location devices, completed
                the
                website development (mapping interfaces, back office support, etc.),
                and
                the Interactive Voice Customer Interface system.  We are now
                preparing to seek Federal Communication Commission, or FCC, Industry
                Canada, or IC, and Conformite Europeenne, or CE, approvals prior
                to sales
                which we hope to commence in early
                2008.




We
      reported net losses of $1,505,747 for the twelve months ending August 31, 2007,
      and have reported net losses of $783,596 for the fiscal year ended August 31,
      2006.  We anticipate that we will continue to incur losses until
      product sales begin.




2




We
      have
      not been a party to any bankruptcy, receivership or similar
      proceeding.  Except for acquisition of all of the stock of Old LBT in
      the Exchange Transaction described above, we have not undertaken any material
      reclassification, consolidation, or purchase or sale of a significant amount
      of
      assets not in the ordinary course of our business.




Our
      offices are located at 4989 E. La Palma Avenue, Anaheim, California
      92807.  Our telephone number is 800-615-0869.  Our website
      is www.locationbasedtech.com.  None of the information on our website
      is deemed included in this report.




**Our
      Business.**  We are in the development stage of creating
*PocketFinder*TM personal locators.  *PocketFinder*TM
devices are small personal location devices designed
      to give parents, guardians
      and pet owners peace of mind.  Utilizing the U.S. Department of
      Defense’s multi-billion dollar Global Positioning System (GPS) satellites and
      existing wireless technology, our team of engineers have developed technology
      which allows our network of members to locate anyone carrying our device,
      whether that person is inside of a building/structure or in the great outdoors
      (Systems and Method Patent pending).  *PocketFinder*TM devices
      are small, rugged and water right.  The devices can be used to locate
      children, elderly or disabled persons and pets, as well as tracking of valued
      personal property.




Life
      is
      becoming more congested and our safety less predictable.  Single
      parents or dual income families no longer have the ability to be at home to
      ensure that the children are where they are supposed to be when they are
      supposed to be there.  Time management, coordination, and safety are
      more important than ever.  The device can be carried in a pocket,
      backpack, purse, or other ways.  It is the size of a vanilla wafer or
      Oreo cookie and weighs under two ounces.  Our expected primary market
      evolved from the desire of parents to ensure the safety and well-being of their
      children in a world filled with ever-increasing threats.  This
      increased concern has been fueled by many factors, including an increase in
      hostile kidnappings, high profile kidnapping cases, divorced parent abductions,
      terrorist attacks, and violence in the school place.




The
      government-owned global positioning satellite, or GPS, system is neither
      patentable nor exclusive in source.  As a result, other entrants may
      utilize the same capability as well as existing wireless
      technologies.  However, it is not GPS and wireless technologies that
      differentiate our product from the competition.  Rather, it is the
      proprietary software that transforms available technologies into an intuitive
      and user-friendly interface that offers greater value, capabilities, and
      convenience to the customer.




**Our
      Personal Locator Services.**  We are in the process of the
      original equipment development of the *PocketFinder Personal Locator* or
*PocketFinder*TM.  We plan to have the *PocketFinder*TM
device manufactured by an original equipment
      manufacturer (OEM) with facilities
      in China, Mexico and Europe although we have not yet entered into any
      manufacturing contracts.  We will provide end-user customer service
      and support through 24-7 INtouch headquartered in Toronto, ON.  We
      anticipate exploring multiple vertical markets including the
      following:




Ÿ
            Parents
                of young children (primarily 5 to 12 years of age) who seek the peace
                of
                mind of being able to know that their children are where they are
                supposed
                to be when they are supposed to be
                there.


Ÿ
            Families
                with members who are Autistic or have Downs Syndrome, Alzheimer’s,
                etc.


Ÿ
            Elder
                Care support and applications.


Ÿ
            Pet
                care and location capability.


Ÿ
            Asset
                tracking and location capability:  cars, trucks, fleet
                management, luggage, and other personal
                assets.




We
      intend
      for our products to offer wide network coverage throughout North America
      utilizing the largest GSM carrier networks in the United States and
      Canada.  We also intend for our personal locators to have the ability
      to roam seamlessly on the networks of 290 wireless providers in over 130
      countries and to work on any GSM network in the world.  We are
      currently in the final stages of negotiations with a reputable provider of
      the
      necessary network coverage.




**Our
      Intellectual Property Investment.**  We have invested
      significantly in intellectual properties, which consists of apparatus patents
      and applications and system and method patents and applications.  We
      have filed claims that cover all aspects of the personal locator, its operating
      system and user interface.  Set forth below is a list of our patents
      and patent applications.




3




*U.S.
      Patent Holdings*




1.
            U.S.
                Patent No. 6,879,244 title:  “Call Receiving System Apparatus
                and Method having a Dedicated Switch.” filed 02/04/2000, expiration
                approximately 02/04/2020 or 05/21/2017 (or a combination thereof
                on a
                claim-by-claim basis) based on priority
                applications.


2.
            U.S.
                Patent No. 7,005,963 title:  “Call Receiving Method and
                Apparatus having Two-way Text Messaging and Automatic Retrieval of
                Call
                Numbers Making Calls to Apparatus,” filed 08/15/2000, expiration date
                approximately 08/15/2020 based on CIP application, or approximately
                02/04/2020 or 05/21/2017 (or combination thereof on a claim by claim
                basis) based on priority
                applications.


3.
            U.S.
                Patent No. 7,218,242 title:  “Communication System and Method
                Including Communication Channel Mobility,” filed 9/27/2004, issued
                5/15/2007, expiration approximately (based on priority applications)
                02/04/2020 or 05/21/2017 (or a combination thereof on a claim-by-claim
                basis).


4.
            U.S.
                Patent No. D/445,777, Serial No. 29/127,952, title:  “Oval
                Shaped Pager/Phone Device,” filed 08/15/2007, issued 07/31,2001, expires
                approximately 07/31/2015.


5.
            U.S.
                Patent No. D/401930, Serial No. 74,733, title:  “Pager Phone
                with Removable Clip,” filed 08/04/1997, issued 12/1/1998, expires
                approximately 12/1/2012.


6.
            U.S.
                Patent No. D/401395, Serial No. 74,734, title:  “Pager Phone
                having Belt Loop,” filed 08/04/1997, issued 12/1/1998, expires
                approximately 12/1/2012.


7.
            U.S.
                Patent No. D/401,936, Serial No. 80,117, title:  “Pager Phone
                having Top and Side Detents,” filed 08/04/1997, issued 12/1/1998, expires
                approximately 12/1/2012.


8.
            U.S.
                Patent No. D/402,291, Serial No. 74,390, title:  “Pager Phone
                Having Recessed Thumb Grip and Power Button Located in Base,” filed
                08/04/1997, issued 12/8/1998, expires approximately
                12/8/2012.


9.
            U.S.
                Patent No. D/405,084, Serial No. 87,015, title:  “Pager Phone
                Having Four Button Options,” filed 04/24/1998, issued 02/02/1999, expires
                approximately 02/02/2013.




*Published/Filed
      Patent Applications*




10.
            U.S.
                Pub. No. US 2005-0101291, U.S. Patent Appl. S. N. 10/705,414,
                title:  “Wireless Telephone Service,” filed 11/10/2003 (Notice
                of Allowance -- Approved for Issuance after paying Issue
                Fee).


11.
            U.S.
                Patent Appl. S. N. 11/048,395 (Confidential -- Not Published by USPTO),
                title:  “System for Locating Individuals and Objects”, filed
                02/01/2005.


12.
            U.S.
                Pub. No. 2006-0211405, U.S. Patent Appl. S. N.. 11/441,563,
                title:  “Call Receiving Apparatus and Method having a Dedicated
                Switch”, filed on 5/27/2006.


13.
            U.S.
                Pub. No. 2006-XXXXXXX, U.S. Patent Appl. S. N. 11/XXX,XXX, title
                “Apparatus and Method for Locating Individuals and Objects Using Tracking
                Devices,” filed 07/21/2006.


14.
            U.S.
                Pub. No. 2007-XXXXXXX, U.S. Patent Appl. Serial No. 11/XXX,XXX,
                title:  “Communication System and Method including Dual Mode
                Capability,” filed 04/05/2007.


15.
            U.S.
                Patent Application, Serial No. 11/XXX,XXX (Confidential – Not Published by
                the USPTO) title:  “Communication System and Method including
                Communication Billing Options,” filed on
                04/05/2007.


16.
            U.S.
                Pub. No. 2007-XXXXXXX, U.S. Patent Application, Serial No. 11/XXX,XXX,
                title:  “Apparatus and Method for Providing Location Information
                on Individuals and Objects Using Tracking Devices,” filed
                05/25/2007.


17.
            US
                Patent Application, Serial No. 29/XXX,XXX (Confidential -- Not Published
                by the USPTO) title: “Location Tracking Device”, filed
                10/03/2007.


18.
            US
                Patent Application, Serial No. 11/XXX,XXX (Confidential -- Not Published
                by the USPTO), title “Apparatus and Method for Manufacturing an Electronic
                Package”, filed 11/09/2007.


19.
            US
                Patent Application, Serial No. 11/XXX,XXX (Confidential -- Not Published
                by the USPTO), title “Apparatus and Method to Provide Secure Communication
                Over an Insecure Communication Channel for Location Information Using
                Tracking Devices”, filed
                10/18/2007.


20.
            US
                Patent Application, Serial No. 11/XXX,XXX (Confidential -- Not Published
                by the USPTO), title “System and Method for Creating and Managing a
                Personalized Web Interface for Monitoring Location Information on
                Individuals and Objects Using Tracking Devices “, filed
                11/08/2007.




4




*Foreign
      Patent Holdings*




1.
            International
                Patent Application PCT/US07/XXXXX, filing date 06/29/2007, (Confidential
–
                Not Published by the USPTO).  No National Stage at this
                time.




In
      addition, we have or have applied for U.S. and foreign trademark protection
      for
      the following marks we expect to use in our business:  “PocketFinder”
(word) which has been issued; “Linking People Through Technology” (words); “Your
      World Located” (words); “ITALK” (word); “PocketFinder” (word and design);
“PocketFinder” (design with two persons); and “Luggage Tracker”
(words).




We
      own
      the Internet domain name www.pocketfinder.com as well as the names of
      other related domains that could have use in future business and vertical
      marketing initiatives.  Under current domain name registration
      practices, no one else can obtain an identical domain name, but someone might
      obtain a similar name, or the identical name with a different suffix, such
      as
“.org,” or with a country designation.  The regulation of domain names
      in the United States and in foreign countries is subject to change, and we
      could
      be unable to prevent third parties from acquiring domain names that infringe
      or
      otherwise decrease the value of our domain names.




**Our
      Revenue Sources.**  We expect our revenues to be based on the
      following sales and revenue sources:




Ÿ
            Personal
                Locator device sales to Retailers.


Ÿ
            Personal
                Locator device sales through Affinity groups and through our web
                site.


Ÿ
            Personal
                Locator device accessories.


Ÿ
            Monthly
                re-occurring service fees.


Ÿ
            Potential
                licensing fees.


Ÿ
            Organizations
                that will self-brand the PocketFinder for specialized niche markets
                (so-called “white label”
affiliates).




**Our
      Industry.**  After several years of fitful industry interest,
      location-based services are once again central to the wireless
      industry.  Technological challenges have been resolved with 2.5G and
      3G network speeds now consistent with higher-speed coverage that is widely
      available.  In our ever-mobile society, it helps to know where we are
      and where we are going.  Due to the demands of families with dual
      earners, and the number of single parent homes, many children are left without
      a
      parent home during the day.  Parents in those situations desire the
      ability to know where their children are and where they are
      going.  Having such information is possible when we have access to
      real-time information delivered on-demand.  The technology that makes
      this possible has provided us the ability to move faster than ever before.
      As a
      result, according to a 2006 study authored for International Data Corporation
      (IDC) by Rena Bhattacharyya and Scott Ellison and entitled*U.S. Market for
      Wireless Location Based Studies*, the demand for Global Positioning System
      (GPS) devices is growing rapidly.




According
      to a research report released by the Consumer Electronics Association (CEA),
      overall satisfaction among owners of such devices is high and consumer interest
      for the technology is quickly increasing.  The report, “GPS –
Exploring Ownership and Interest,” revealed that the owner satisfaction rate is
      at 80 percent, strongly influenced by the ease of use and display quality of
      devices. Navigation assistance in a vehicle was the primary use of the
      technology in consumer devices.




Since
      2002, IDC research has consistently shown very high levels of consumer interest
      in location based services – especially in family/friend locator
      devices.  Access, controlled by the parent and permission-based among
      other adults, gives the parents the means to stay connected to their children
      as
      well as the opportunity to use the geofencing technology to control access
      to
      particular areas.  The results of this study indicate that there is
      significant opportunity for GPS manufacturers and marketers throughout multiple
      industries.  The key will be to respond with products that include GPS
      capability in easy-to-use formats and devices to speed adoption.  We
      believe our *PocketFinder*TM products will be well received when taken to
      the market, although there can be no assurance that will be true.




**Our
      Target Markets and Marketing Strategy.**  We believe that our
      primary target market will consist of parents with vulnerable school-aged
      children from ages five to thirteen.  When evaluating the needs of
      this age group, additional opportunities also become apparent,
      including:  scouting organizations, amusement parks, school field
      trips and similar situations.




5




Secondary
      markets are expansive and include medical and elder care providers, campers,
      hikers, backpackers, adventure seekers, extreme sports enthusiasts, freight
      and
      cargo carriers, delivery services, pet owners, vehicle finance companies, auto
      dealerships, law enforcement agencies, military organizations and individuals
      wishing to track valuable personal items.




Drawing
      from current census information, there are over 37,000,000 children in our
      5 to
      13 year old market segment in the United States with an additional 4,000,000
      in
      the prime focus areas in Canada.  The European Community has an
      additional 42,500,000 children in this primary age group.  This
      represents a target market of more than 109,200,000 potential customers in
      our
      focus age group.




Closely
      related to family/personal locators is the concept of pet locators.  A
      locator device would allow its owner the ability to locate the pet if it were
      to
      become lost or be missing in the neighborhood as well as to ensure that services
      paid for are received, *i.e.*, that a walking service or pet care
      facility actually provide the outdoor activity contractually agreed
      to.




Our
      marketing initiatives will include:




Ÿ
            Establish
                relationships with key retail distributors who are recognized for
                providing high quality electronics with high volume family
                traffic.


Ÿ
            Utilize
                direct response print public relations outreach in special interest
                magazines and newsletters.


Ÿ
            Affinity
                group marketing and outreach.


Ÿ
            “White
                label” affiliates which will target niche markets such as court controlled
                parolees.




**Growth
      Strategy.**  Our objective is to become one of the major
      providers of personal and asset location services to the mass consumer
      market.  Our strategy is to provide high quality devices that meet the
      mass market consumer requirements whether it be for their children, their pets,
      or asset tracking (luggage, vehicles, boats and the like).  Key
      elements of our strategy include:




Ÿ
            A
                mass market retail price of under
                $150.00;


Ÿ
            A
                basic monthly service fee of under $20.00 with multiple convenient
                access
                points (mobile phone, land line, or via the
                internet);


Ÿ
            Ease
                of use at the location interface point as well as with the
                device;


Ÿ
            Rugged
                design that meets the rigors of an active child.  It is
                waterproof and handles weather extremes of heat and
                cold.




**Our
      Website.**  Our corporate website,
www.locationbasedtech.com, provides a description of our corporate
      business along with our contact information including address, telephone number
      and e-mail address.  Our website also provides prospective customers
      with relevant information about our products, pricing and payment options,
      ordering capability, frequently asked questions and access to corporate investor
      relations information.  Information contained on our website is not a
      part of this report.




**Our
      Competition.**  Personal location and property tracking devices
      are just beginning to significantly penetrate the marketplace.  We
      believe this condition represents a tremendous opportunity as customers will
      be
      attracted in large numbers once the intrinsic value of such devices is
      recognized and mass market adoption begins.




Competitors
      include Geospatial Platform Providers, Application Developers, Wherify Wireless,
      Incorporated and Global Pet Finder.  This may be better financed, or
      have greater marketing and scientific resources than we do.




In
      related markets, GPS devices have become widely used for automotive and marine
      applications where line-of-sight to GPS satellites is not a significant
      issue.  Manufacturers such as Garmin, Navman, Magellan, TomTom,
      Pharos, NovAtel and DeLorne are finding a market interested in using these
      products for both business and leisure purposes.  As a result, use of
      GPS technology in devices such as chart plotters, fitness and training devices,
      fish finders, laptop computers, and PDA location devices are gaining significant
      market acceptance and commercialization.  Prices range from $350.00 to
      several thousand dollars.  We expect that increasing consumer demand
      in these markets will drive additional applications and lower price
      points.




6




**Government
      Regulation.**  We are subject to federal, state and local laws
      and regulations applied to businesses generally as well as FCC, IC and CE
      wireless device regulations and controls.  We believe that we are in
      conformity with all applicable laws in all relevant jurisdictions.  We
      do not believe that we are subject to any environmental laws and regulations
      of
      the United States and the states in which we operate.




**Our
      Research and Development.**  We are currently in full
      development mode with completion of the locator device projected to be
      accomplished late in the fourth calendar quarter of 2007 and certification
      processes to begin immediately thereafter (initial certifications will be FCC,
      PTCRB, and Carrier certification).  Engineer prototype testing began
      in October of 2007.  Additionally, we are working with several other
      entities who are conducting research on key aspects of the device itself
      (including expanded antennae capability, battery capacity, and enhanced location
      reliability and accuracy).  We anticipate ongoing involvement with
      such developmental activities throughout the foreseeable future.




**Employees
      and Outsourced Assistance.**  As of November 15, 2007 we have
      three full-time employees, one part-time employee, and a range of eleven to
      twenty contracted employees engaged in hardware and software development
      projects depending on the scale and nature of the time of
      development.  Mr. Scalisi, our Co-President and Chief Development
      Officer, Mr. Morse, our Co-President and Chief Executive Officer, and Ms. Mejia,
      our Chief Operating Officer, currently devote 100% of their business time to
      our
      operations.  We anticipate that we will hire two to four key employees
      in the next six months, with selective and controlled growth commensurate with
      significant increases in our revenues.




In
      furtherance of our product design and marketing efforts, we have entered into
      the following contracts with independent service providers:




Ÿ
            Consulting
                Agreement, dated July 10, 2006, with Roger Anderson to receive encryption,
                data compression and IVR consulting services from Mr. Anderson regarding
                the design and implementation of the PocketFinderTM device.  The
                agreement remains in effect until the assigned tasks are completed,
                but in
                any event no longer than ten years.  Mr. Anderson receives an
                hourly amount for his services and is entitled to earn up to 250,000
                shares of our common stock upon reaching certain
                benchmarks.  Shares issued to Mr. Anderson will be issued in
                reliance on the exemption provided by Section 4(2) of the Securities
                Act
                of 1933.  Such shares will be “restricted” securities as defined
                in SEC Rule 144.


Ÿ
            PocketFinder
                Branding and Website – Contract Agreement with Coregenic LLC, as of
                September 20, 2006, wherein Coregenic is to provide website development,
                technical software and marketplace research and analysis, including
                branding services.  Such services are to be rendered in four
                phases for a total of $23,900.


Ÿ
            Coregenic
                Professional Services Contract, dated September 27, 2006, was entered
                into
                so that Coregenic could provide us with personnel necessary to facilitate
                development of our product and business.  Such personnel include
                programmers, administrative staff, technical advisors, security advisors,
                security auditors, and network topology provisioning
                specialists.  The agreement terminates upon satisfactory
                completion of agreed upon services.  Personnel are provided at
                the rate of $100 per hour.


Ÿ
            Consulting
                Agreement, dated October 3, 2006, with Michael Beydler for “back office”
                network and platform design consulting services in relation to the
                development and implementation of our PocketFinderTM device, as well as our
                website.  The agreement remains in effect until such time as the
                development of the website is complete, but in no event longer than
                ten
                years.  Mr. Beydler’s compensation is 250,000 shares of our
                common stock:  100,000 shares being issued an acceptance of the
                agreement, 100,000 additional shares issued when the PocketFinder
                website
                is consumer ready, and an additional 50,000 shares upon completion
                of the
                PocketFinder website being fully consumer ready with no less than
                four
                languages.  Shares issued to Mr. Beydler will be issued in
                reliance on the exemption provided by Section 4(2) of the Securities
                Act
                of 1933.  Such shares will be “restricted” securities as defined
                in SEC Rule 144.




7




Ÿ
            Product
                Design Agreement, dated May 1, 2007, with Aero Technology UK Ltd.
                for the
                purpose of assisting us with the required circuitry, software, mechanics
                and radio frequency generation and reception functions required to
                make
                the PocketFinderTM device usable.  The contractor is entitled to
                payments totaling $1,200,000 plus 250,000 shares of our common stock
                payable in five increments based on product production commencing
                August
                31, 2007 and ending January 4, 2008.  Payments will be made when
                milestones are achieved.  Shares issued to the contractor will
                be issued in reliance on the exemption provided by Section 4(2) of
                the
                Securities Act of 1933.  Such shares will be “restricted”
                securities as defined in SEC Rule
                144.




**RISK
      FACTORS**




*Investing
      in our common stock is highly speculative and involves a high degree of risk.
      Any potential investor should carefully consider the risks and uncertainties
      described below before purchasing any shares of our common stock.  The
      risks described below are those we currently believe may materially affect
      us.  If any of them occur, our business, financial condition,
      operating results or cash flow could be materially harmed.  As a
      result, the trading price for our stock could decline, and you might lose all
      or
      part of your investment.*




**Risks
      Related to our Business**




*We
      have had operating losses since formation and expect to incur net losses for
      the
      foreseeable future.*




We
      reported net losses of $1,505,747 for the 12 months ended August 31, 2007 and
      had net losses of $783,596 for the fiscal year ended August 31,
      2006.  We anticipate that we will lose money in the foreseeable future
      and we may not be able to achieve profitable operations.  In order to
      achieve profitable operations, we need to complete development, achieve required
      federal and carrier certifications, and achieve significant sales revenues
      in
      order to establish our customer base.  We cannot be certain that our
      business will be successful or that we will generate significant revenues and
      become profitable.




*We
      may not be successful in developing our new products and
      services.*




We
      are a
      technology and telecommunications company whose purpose is to develop, market
      and provide a new wireless communications product and system which combines
      the
      features of pocket pagers with cellular telephones.  The market for
      telecommunications products and services is characterized by rapid technological
      change, changing customer needs, frequent new product introductions and evolving
      industry standards.  These market characteristics are exacerbated by
      the emerging nature of this market and the fact that many companies are expected
      to introduce continually new and innovative products and
      services.  Our success will depend partially on our ability to
      introduce new products, services and technologies continually and on a timely
      basis and to continue to improve the performance, features and reliability
      of
      our products and services in response to both evolving demands of prospective
      customers and competitive products.




There
      can
      be no assurance that any of our new or proposed products or services will
      maintain the market acceptance already established.  Our failure to
      design, develop, test, market and introduce new and enhanced products,
      technologies and services successfully so as to achieve market acceptance could
      have a material adverse effect upon our business, operating results and
      financial condition.




There
      can
      be no assurance that we will not experience difficulties that could delay or
      prevent the successful development, introduction or marketing of new or enhanced
      products and services, or that our new products and services will adequately
      satisfy the requirements of prospective customers and achieve significant
      acceptance by those customers.  Because of certain market
      characteristics, including technological change, changing customer needs,
      frequent new product and service introductions and evolving industry standards,
      the continued introduction of new products and services is
      critical.  Delays in the introduction of new products and services may
      result in customer dissatisfaction and may delay or cause a loss of
      revenue.  There can be no assurance that we will be successful in
      developing new products or services or improving existing products and services
      that respond to technological changes or evolving industry
      standards.




8




Additionally,
      there can be no assurance that we will not experience difficulties that could
      delay or prevent the successful development, introduction and marketing of
      new
      or improved products and services, or that our new products and services will
      adequately satisfy the requirements of prospective customers and achieve
      acceptance by those customers.  In addition, new or enhanced products
      and services introduced by us may contain undetected errors that require
      significant design modifications.  This could result in a loss of
      customer confidence which could adversely affect the use of our products, which
      in turn, could have a material adverse effect upon our business, results of
      operations or financial condition.  If we are unable to develop and
      introduce new or improved products or services in a timely manner in response
      to
      changing market conditions or customer requirements, out business, operating
      results and financial condition will be materially adversely
      affected.




*We
      have no experience or history of operations or earnings.*




We
      are
      wholly dependent on our ability to develop, market and sell our products and
      services for future earnings.  The continued development of our
      products and services involves significant risks, which a combination of
      experience, knowledge and careful evaluation may not be able to
      overcome.  There can be no assurance that unanticipated problems will
      not occur which would result in material delays in our continued product
      development or that our efforts will result in successful product
      commercialization.  An investment in New LBT is highly speculative and
      no assurance can be given that the shareholders will realize any return on
      their
      investment or that they will not lose their entire investment.




*Our
      future financial results are uncertain and we can expect fluctuations in
      revenue.*




We
      have
      not yet begun sales.  We expect that we will be able to begin purchase
      order negotiations late in the 4th calendar quarter 2007 or early 2008
      coincidental with delivery of package ready personal locator
      devices.  If our relationships with any of these retailers and
      affinity groups were disrupted, we could lose a significant portion of our
      anticipated revenues.




Our
      results of operations may vary from period to period because of a variety of
      factors, including our R&D costs, our introduction of new products and
      services, cost increases from third-party service providers, or product
      manufacturers, production interruptions, the availability of industry service
      providers, changes in marketing and sales expenditures, acceptance of our
      websites, competitive pricing pressures, the interest in *PocketFinder*
      and general economic and industry conditions that affect customer demand and
      preferences.




As
      with
      any relatively new business enterprise operating in a specialized and intensely
      competitive market, we are subject to many business risks which include, but
      are
      not limited to, unforeseen marketing, promotional and development expenses,
      unforeseen negative publicity, competition, product liability and lack of
      operating experience.  Many of the risks may be unforeseeable or
      beyond our control.  There can be no assurance that we will
      successfully implement our business plan in a timely or effective manner, or
      generate sufficient interest in PocketFinder, or that we will be able to market
      and sell enough products and services to generate sufficient revenues to
      continue as a going concern.




*There
      are risks of international sales and operations.*




We
      anticipate that revenue from the sale of our products and services may be
      derived from customers located outside the United States.  As such, a
      portion of our sales and operations could be subject to tariffs and other
      import-export barriers, currency exchange risks and exchange controls, foreign
      product standards, potentially adverse tax consequences and the possibility
      of
      difficulty in accounts receivable collection.  There can be no
      assurance that any of these factors will not have a material effect on our
      business, financial condition and results of operations.




Although
      we will monitor our exposure to currency fluctuations, there can be no assurance
      that exchange rate fluctuations will not have an adverse effect on our results
      of operations or financial condition.  In the future, we could be
      required to sell our products and services in other currencies, which would
      make
      the management of currency fluctuations more difficult and expose our business
      to greater risks in this regard.




Our
      products may be subject to numerous foreign government standards and regulations
      that are continually being amended.  Although we will endeavor to
      satisfy foreign technical and regulatory standards, there can be no assurance
      that we will be able to comply with foreign government standards and
      regulations, or changes thereto, or that it will be cost effective for us to
      redesign our products to comply with such standards or
      regulations.  Our inability to design or redesign products to comply
      with foreign standards could have a material adverse effect on our business,
      financial condition and results of operations.




9




In
      addition to the uncertainty as to our ability to generate revenues from foreign
      operations, there are certain risks inherent in doing business internationally,
      such as unexpected changes in regulatory requirements, export restrictions,
      trade barriers, difficulties in staffing and managing foreign operations, longer
      payment cycles, problems in collecting accounts receivable, political
      instability, fluctuations in currency exchange rates, software piracy, seasonal
      reductions in business activity in certain other parts of the world and
      potentially adverse tax consequences, which could adversely impact the success
      of our international operations.  There can be no assurance that one
      or more of such factors will not have a material adverse effect on our potential
      future international operations and, consequently, on our business, operating
      results and financial condition.




Because
      of the global nature of the telecommunications business, it is possible that,
      although transmissions by us originate primarily in the State of California,
      the
      governments of other states and foreign countries might attempt to regulate
      our
      transmissions or prosecute us for violations of their laws.  There can
      be no assurance that violations of local laws will not be alleged or changed
      by
      state or foreign governments, that we might not unintentionally violate such
      law, or that such laws will not be modified, or new laws enacted, in the
      future.  Any of the foregoing development could have a material
      adverse effect on our business, results of operations, and financial
      condition.




*We
      may have substantial future cash requirements but no assured financing source
      to
      meet such requirements.*




We
      will
      continue our research and development activities which require working
      capital.  To date, we have received no revenues from any sales of our
      products or services.  Our continuing research and development
      activities will require a commitment of substantial additional
      funds.  Our future capital requirements will depend on many factors,
      including continued progress in its research and development programs, the
      magnitude of these programs, the time and costs involved in obtaining any
      required regulatory approvals, the costs involved in preparing, filing,
      prosecuting, maintaining and enforcing patents, successful completion of
      technological, manufacturing and market requirements, changes in existing
      research relationships, establishing collaborative arrangements, and the cost
      of
      finalizing licensing agreements to produce licensing revenues.




We
      do not
      know whether additional financing will be available when needed, or on terms
      favorable to us or our stockholders.  We may raise any necessary funds
      through public or private equity offerings, debt financings or additional
      corporate collaboration and licensing arrangements.  To the extent we
      raise additional capital by issuing equity securities, our stockholders will
      experience dilution.  If we raise funds through debt financings, we
      may become subject to restrictive covenants.  To the extent that we
      raise additional funds through collaboration and licensing arrangements, we
      may
      be required to relinquish some rights to our technologies or product candidates,
      or grant licenses on terms that are not favorable to us.




If
      adequate funds are not available, we may be required to delay, scale-back or
      eliminate our research and development programs or obtain funds through
      collaborative partners or others that may require us to relinquish rights to
      certain of our potential products that we would not otherwise relinquish. There
      can be no assurance that additional financing will be available on acceptable
      terms or at all, if and when required.




*If
      we
      have to pay off our convertible notes after this offering, we may need
      additional financing to complete our business plan in a timely
      manner.  Such financing might not be available, or if available, the
      terms might not be satisfactory.*




We
      had
      $4,892,000 of convertible notes outstanding as of August 31, 2007.  As
      of November 20, 2007, $3,880,000 of such notes are in the process of being
      converted into 3,880,000 shares of New LBT common stock.  Upon
      completion of such conversion, we expect $1,012,000 of such notes to be
      outstanding.  By their terms, if the unconverted notes are not
      converted to common stock, they must be repaid, with accrued and unpaid interest
      by June 2008.  We expect that most, if not all, of the noteholders
      will convert their convertible notes to common stock before the end of calendar
      year 2007.  However, there can be no assurance that they will do
      so.  If we have to pay noteholders that choose not to convert to
      common stock, we will need additional financing within the next 12 months to
      pay
      that debt and complete our business plan in a timely manner.  There
      can be no assurance that such additional financing will be available to us
      in a
      form, or on terms, satisfactory to us.




10




*We
      are dependent on third-party providers and consultants for development,
      marketing and other services.*




We
      may
      become dependent upon various consultants for one or more significant services
      required for PocketFinder which services will be provided to our business
      pursuant to agreements with such providers.  Inasmuch as the capacity
      for certain services by certain consultants may be limited, our inability,
      for
      economic or other reasons, to continue to receive services from existing
      providers in a timely manner or to obtain similar products or services form
      additional providers in a timely manner could have a material adverse effect
      on
      our business.




*We
      do
      not have manufacturing capability.  To meet our product cost goals, we
      will rely on Chinese manufacturing companies to produce our
      product.  Any problems experienced by such suppliers could negatively
      affect our operations.*




We
      have
      conducted substantial negotiations with a prospective Chinese manufacturing
      company.  However, we have not entered into a final agreement for the
      manufacture of our product.  We expect to contract with one
      manufacturing company in China for the production of the *PocketFinder*TM
device.  Any significant problem one of those companies or its
      suppliers experiences could result in a delay or interruption in the supply
      of
      materials to us until that supplier cures the problem or until we locate an
      alternative source of supply.  Any delay or interruption would likely
      lead to a delay or interruption in the production and could negatively affect
      our operations.  In addition, while we will make every effort to
      protect our intellectual property in the hands of such manufacturers, in the
      past there have been many instances reported of the unauthorized use of
      intellectual property, or theft of such, by some Chinese manufacturing companies
      or persons working for them.




*If
      product liability lawsuits are successfully brought against us, we may incur
      substantial damages and demand for the potential products may be eliminated
      or
      reduced.*




Faulty
      operation of our *PocketFinder*TM device could result in product liability
      claims.  Regardless of their merit or eventual outcome, product
      liability claims may result in




Ÿ           decreased
      demand for the *PocketFinder*TM device or its withdrawal from the
      market;


Ÿ           injury
      to our reputation and significant media attention;


Ÿ           costs
      of litigation; and


Ÿ           substantial
      monetary awards to plaintiffs.




We
      have
      arranged to procure product liability insurance in the amount of $10,000,000
      at
      launch.  Although this meets retailer requirements for product
      liability coverage, this coverage may not be sufficient to fully protect us
      against product liability claims.  We intend to expand our product
      liability insurance coverage as sales of our products expand.  Our
      inability to obtain sufficient product liability insurance at an acceptable
      cost
      to protect against product liability claims could prevent or limit the
      commercialization of our products and expose us to liability in excess of our
      coverage.




*If
      we
      fail to adequately protect our intellectual property rights, our competitors
      may
      be able to take advantage of our research and development efforts to develop
      competing devices.*




Our
      intellectual property rights cover certain products and methods of manufacturing
      and using these products.  Our commercial success will depend in part
      on our success in obtaining patent protection for our key products or
      processes.  Our patent position, like that of other technology
      companies, is highly uncertain.  One uncertainty is that the United
      States Patent and Trademark Office, or USPTO, may deny or require significant
      narrowing of claims made under our patent applications.




The
      USPTO, as well as patent offices in other jurisdictions, has often required
      that
      patent claims reciting technology-related inventions be limited or narrowed
      substantially to cover only the specific innovations exemplified in the patent
      application, thereby limiting their scope of protection. Further, technology
      that is disclosed in patent applications is ordinarily published before it
      is
      patented. As a result, if we are not able to get patent protection, we will
      not
      be able to protect that technology through trade secret protection. Thus, if
      we
      fail to obtain patents having sufficient claim scope or fail to adequately
      protect our trade secrets, we may not be able to exclude competitors from using
      our key products or processes.




11




Even
      if
      the USPTO grants patents with commercially valuable claim scope, our ability
      to
      exclude competitors will subsequently depend on our successful assertion of
      these patents against third party infringers and our successful defense of
      these
      patents against possible validity challenges.  Our competitors, many
      of which have substantial resources and have made significant investments in
      competing technologies, may make, use or sell our proprietary products or
      processes despite our intellectual property.  Litigation may be
      necessary to enforce our issued patents or protect our trade
      secrets.  The prosecution of intellectual property lawsuits is costly
      and time- consuming, and the outcome of such lawsuits is
      uncertain.  An adverse determination in litigation could result in
      narrowing of our scope of protection or the loss of our intellectual property,
      thereby allowing competitors to design around or make use of our intellectual
      property and sell our products in some or all markets.  Thus, if any
      of our patents are invalidated or narrowed in litigation, we may not be able
      to
      exclude our competitors from using our key technologies.




Another
      risk regarding our ability to exclude competitors is that our issued patents
      or
      pending applications could be lost or narrowed if competitors with overlapping
      technologies provoke an interference proceeding (determination of first to
      invent) at the USPTO.  The defense and prosecution of interference
      proceedings are costly and time-consuming to pursue, and their outcome is
      uncertain.  Similarly, a third party may challenge the validity of one
      or more of our issued patents by presenting evidence of prior publications
      to
      the USPTO and requesting reexamination of such patent(s).  Thus, even
      if we are able to obtain patents that cover commercially significant
      innovations, one or more of our patents may be lost or substantially narrowed
      by
      the USPTO through an interference or reexamination
      proceeding.  Consequently, we may not be able to exclude our
      competitors from using our technologies.




*Third
      party patents, or extensions of third party patents beyond their normal
      expiration dates, could prevent us from making, using or selling our preferred
      products and processes, or require us to take license(s), or require us to
      defend against claims of patent infringement.*




We
      may
      have a limited opportunity to operate freely.  Our commercial success
      will depend in part on our freedom to make, use and sell our
      products.  If third party patents have claims that cover any of these
      products, then we will not be free to operate as described in our business
      plan,
      without invalidating or obtaining license(s) to such patents.  We may
      not be successful in identifying and invalidating prior claims of
      invention.  Similarly, a license may be unavailable or prohibitively
      expensive. In either case, we may have to redesign our products.  Such
      redesign efforts may take significant time and money, and such redesign efforts
      may fail to yield commercially feasible options.  If we are unable to
      develop products or processes that lie outside the scope of the third party’s
      patent claims, and we continue to operate, then we may be faced with claims
      of
      patent infringement, wherein the third party may seek to enjoin us from
      continuing to operate within our claim scope and seek monetary compensation
      for
      commercial damages resulting from our infringing activity.




The
      technology industry has been characterized by extensive patent litigation and
      companies have employed intellectual property litigation to gain a competitive
      advantage.




The
      defense of patent infringement suits is costly and time-consuming and their
      outcome is uncertain.  An adverse determination in litigation could
      subject us to significant liabilities, require us to obtain licenses from third
      parties, or restrict or prevent us from selling our products in certain
      markets.  Although patent and intellectual property disputes are often
      settled through licensing or similar arrangements, costs associated with such
      arrangements may be substantial and could include ongoing
      royalties.  Furthermore, the necessary licenses may not be available
      to us on satisfactory terms, if at all.  Thus, as discussed above, if
      third party patents cover any aspect of our products, then we may lack freedom
      to operate in accordance with our business plan.  Among such patents
      are various patents owned by third parties that cover the manufacture, sale
      and
      use of various forms of wireless technology.  If necessary, we believe
      we can avoid possible infringement of these patents by designing around them,
      obtaining licenses or delaying entry into certain markets, until expiration
      of
      the relevant patents. Nevertheless, there remains some risk arising from these
      patents.




12




*If
      any of our key senior executives discontinue their employment with us, our
      efforts to develop our business may be delayed.*




We
      are
      highly dependent on the principal members of our management team and the loss
      of
      our Co-President and Chief Executive Officer, David Morse, or our Co-President
      and Chief Development Officer, Joseph Scalisi, or our Chief Operating Officer
      and Secretary, Desiree Mejia, could significantly impede the achievement of
      our
      development efforts and objectives.




*We
      may not be able to obtain the licenses and consents from governmental agencies
      or other holders of intellectual property that are necessary for our business
      plan to be accomplished.*




The
      utilization or other exploitation of the products and services developed by
      us
      may require us to obtain licenses or consents from government regulatory
      agencies or from other producers or other holders of patents, copyrights or
      other similar rights relating to our products and services.  In the
      event we are unable, if so required, to obtain any necessary license or consent
      on terms and conditions which we consider to be reasonable, we may be required
      to stop developing, utilizing, or exploiting products and services affected
      by
      government regulation or by patents, copyrights or similar rights.  In
      the event we are challenged by a government regulatory agency, or by the holders
      of patents, copyrights or other similar rights, there can be no assurance that
      we will have the financial or other resources to defend any resulting legal
      action, which could be significant.




We
      may
      rely on certain proprietary technologies, trade secrets, and know-how that
      are
      not patentable.  Although we may take steps to protect our unpatented
      trade secrets, our technology and our proprietary information, in part, by
      the
      use of confidentiality agreements with our employees, consultants and certain
      of
      our contractors.  There can be no assurance that (i) these agreements
      will not be breached, (ii) we would have adequate remedies for any breach;
      or
      (iii) our proprietary trade secrets and know-how will not otherwise become
      known
      or be independently developed or discovered by competitors.  There is
      also no assurance that our actions will be sufficient to prevent imitation
      or
      duplication of either of our products and services by others or prevent others
      from claiming violations of their trade secrets and proprietary
      rights.




*Rapid
      technological advances, changes in customer requirements and frequent new
      product introductions and enhancements which characterize the telecommunications
      industries, would adversely affect our financial condition if we are not able
      to
      respond with upgrades or changes that are acceptable to the
      market.*




Our
      future success will depend upon its ability to enhance the technologies and
      to
      develop and introduce new products and technologies that keep pace with
      technological developments, respond to evolving customer requirements and
      achieve market acceptance.  We may determine that, in order to remain
      competitive, it is in its best interests to introduce new products and
      technologies and to cease exploitation of the technologies.  It is
      doubtful that we would be able to maintain operations should changes render
      the
      technologies obsolete or should we determine that the technologies are
      unexploitable.




*Our
      financial success will depend on continued growth in use of wireless
      telecommunications products, as well as the ability of the wireless networks
      we
      plan to use to withstand natural and other disasters.*




Our
      future success is at least partially dependent upon continued growth in the
      use
      of wireless telecommunications products.  The *PocketFinder*TM
may not prove to be viable commercial products for a number of reasons,
      including lack of acceptable functionality, potentially inadequate development
      of the necessary infrastructure, or timely development and commercialization
      of
      performance improvements.  To the extent that *PocketFinder*
      experiences significant growth in the number of users and use, there can be
      no
      assurance that our infrastructure will continue to be able to support the
      demands placed upon it by such potential growth or that the performance or
      reliability of our system will not be adversely affected by this continued
      growth.  If use of the *PocketFinder*TM does not increase, or if
      our infrastructure does not effectively support growth that may occur, our
      business, operating results and financial condition may be materially and
      adversely affected.




Our
      systems may fail due to natural disasters, telecommunications failures and
      other
      events, any of which would limit the use of our products.  Fire,
      floods, earthquakes, power loss, telecommunications failures, break-ins and
      similar events could damage our communications hardware and computer hardware
      operations for our products and services and cause interruptions in our
      services.  If any of these circumstances were to occur, our business
      could be harmed.  Our insurance policies may not adequately compensate
      us for any losses that may occur due to any failures of or interruptions in
      our
      systems.




13




*The
      potential for conflicts of interest exists among the company and affiliated
      persons for future business opportunities that may not be presented to the
      company.*




The
      company’s officers and Managing Members may engage in other
      activities.  Our officers and employees may have conflicts of interest
      in allocating time, services, and functions between other business ventures
      in
      which those persons may be or may become involved.  Our officers,
      however, believe that we will have sufficient staff, consultants, employees,
      agents, contractors and managers to adequately conduct our
      business.




*An
      investor might lose its entire investment if the company is dissolved and
      liquidated.*




In
      the
      event of dissolution of the company, the proceeds realized form the liquidation
      of the company’s assets, if any, will be distributed to our Shareholders only
      after satisfaction of claims of our creditors.  The ability of the
      Shareholder to recover all or any portion of his or her purchase price for
      the
      Shares in that event will depend on the amount of funds realized and the claims
      to be satisfied therefrom.




We
      may
      require additional cash to implement our business strategies, including cash
      for
      (i) payment of increased operating expense and (ii) additional implementation
      of
      those business strategies.  No assurance can be given, however, that
      we will have access to additional funds in the future, or that additional funds
      will be available on acceptable terms and conditions to satisfy our cash
      requirements to implement our business strategies.  Our inability to
      obtain acceptable financing could have a material adverse effect on our results
      of operations and financial condition.




*Our
      production and operating costs may be greater than
      anticipated.*




We
      have
      used reasonable efforts to assess and predict costs and
      expenses.  However, there can be no assurance that implementing our
      business plan may not require more employees, capital equipment, supplies or
      other expenditure items than management has predicted.  Similarly, the
      cost of compensating additional management, employees and consultants or other
      operating costs may be more than our estimated, which could result in sustained
      losses.




**Risks
      Related to Owning Our Common Stock**




*Our
      common stock is quoted on the OTC Bulletin Board for trading, and we expect
      that
      the price of our common stock will fluctuate substantially.*




Our
      stock
      will be available for trading on the OTC Bulletin Board for the foreseeable
      future.  An active public trading market may not develop or, if
      developed, may not be sustained.  The market prices for securities of
      technology companies historically have been highly volatile, and the market
      has
      from time to time experienced significant price and volume fluctuations that
      are
      unrelated to the operating performance of particular companies.  The
      market price of our common stock will be affected by a number of factors,
      including:




Ÿ           product
      liability claims or other litigation;


Ÿ           the
      announcement of new products or product enhancements by us or our
      competitors;


Ÿ           quarterly
      variations in our or our competitors’ results of operations;


Ÿ           changes
      in earnings estimates or comments by securities analysts;


Ÿ           developments
      in our industry;


Ÿ           developments
      in patent or other proprietary rights;


Ÿ           general
      market conditions; and


Ÿ           future
      sales of common stock by existing stockholders.




14




If
      any of
      the above-listed risks occur, it could cause our stock price to fall
      dramatically and may expose us to class action securities lawsuits which, even
      if unsuccessful, would be costly to defend and a distraction to
      management.




*A
      sale of a substantial number of shares of our common stock may cause the price
      of our common stock to decline.*




Sales
      of
      a substantial number of shares of our common stock in the public market
      following this report could harm the market price of our common
      stock.  There are approximately 18,384,500 shares of our common stock
      currently available for resale under Rule 144.  In total, there are
      approximately 31,539,544 shares of our common stock (either outstanding or
      issuable upon conversion of our convertible notes and outstanding options or
      warrants) that will be available for resale under Rule 144 in the last calendar
      quarter of 2008.  As additional shares of our common stock become
      available for resale in the public market, the supply of our common stock will
      increase, which could decrease the price.




*Our
      principal shareholders have significant voting power and may take actions that
      may not be in the best interests of our other stockholders.*




Our
      officers, directors and principal stockholders together control approximately
      73.92% of our outstanding common stock.  These shareholders intend to
      act together although they have not signed an agreement to do so.  If
      they act together, they will be able to control our management and affairs
      in
      all matters requiring shareholder approval, including the election of directors
      and approval of significant corporate transactions.  This
      concentration of ownership may have the effect of delaying or preventing a
      change in control and might adversely affect the market price of our common
      stock.  This concentration of ownership may not be in the best
      interest of our other shareholders.




*In
      selling our convertible notes, we may have violated the registration
      requirements of the Securities Act of 1933 (“Securities Act”) which, if it
      occurred, would give noteholders a right to rescind their
      purchases.*




In
      2007,
      we sold convertible notes each bearing interest at a rate of 8%.  The
      proceeds raised from the sale of these notes have been used for research and
      development, as well as operating costs.  The notes were sold to
      accredited investors.  We made these sales in reliance on an exemption
      from registration provided by Section 4(2) of the Securities Act and similar
      state exemptions.  Our counsel has advised us that the availability of
      those exemptions cannot be determined with legal certainty due to the fact
      that
      we may not have complied with all of the provisions of exemption safe-harbors
      for such sales offered by rules promulgated under the Securities Act by the
      SEC.  Thus, it is possible that the sale of the convertible notes may
      have violated the registration requirements of the Securities Act. As to those
      sales, a right of rescission may exist on which the statute of limitations
      has
      not run.  For those noteholders that elect to convert to common stock,
      we may have a contingent liability arising from the original purchase of the
      convertible notes that such noteholders converted.  Assuming all
      noteholders convert their notes to common stock, if these sales had to be
      rescinded, our total potential liability could be $4,892,000 plus interest
      that
      may be accrued.  That liability would extend for up to three years
      (five years in California) after the date of the sale of the applicable
      convertible note that was converted to common stock.




*We
      incur substantial costs as a result of being a public company.*




As
      a
      public company, we incur significant legal, accounting and other
      expenses.  In addition, the Sarbanes-Oxley Act of 2002, as well as
      rules subsequently implemented by the SEC, have required changes in corporate
      governance practices of public companies.  We expect these rules and
      regulations to increase our legal and financial compliance costs and to make
      some activities more time-consuming and costly.  For example, as a
      result of being a public company, we intend to add independent directors, create
      additional board committees and adopt policies regarding internal controls
      and
      disclosure controls and procedures.  In addition, we will incur
      additional costs associated with our public company reporting
      requirements.  We also expect these rules and regulations to make it
      difficult and more expensive for us to obtain director and officer liability
      insurance and we may be required to accept reduced policy limits and coverage
      or
      incur substantially higher costs to obtain the same or similar
      coverage.  As a result, it may be more difficult for us to attract and
      retain qualified persons to serve on our board of directors or as executive
      officers.  We cannot predict or estimate the amount of additional
      costs we may incur or the timing of such costs.




15




*If
      our common stock becomes subject to the SEC’s penny stock rules, our
      stockholders may find it difficult to sell their stock.*




If
      the
      trading price of our common stock is less than $5.00 per share, our common
      stock
      will be subject to the SEC’s penny stock rules.  Before a
      broker-dealer can sell a penny stock, the penny stock rules require the firm
      to
      first approve the customer for the transaction and receive from the customer
      a
      written agreement to the transaction.  The firm must furnish the
      customer a document describing the risks of investing in penny
      stocks.  The broker-dealer must tell the customer the current market
      quotation, if any, for the penny stock and the compensation the firm and its
      broker will receive for the trade.  Finally, the firm must send
      monthly account statements showing the market value of each penny stock held
      in
      the customer’s account.  These disclosure requirements tend to make it
      more difficult for a broker-dealer to make a market in penny stocks, and could,
      therefore, reduce the level of trading activity in a stock that is subject
      to
      the penny stock rules.  Consequently, if our common stock becomes
      subject to the penny stock rules, our stockholders may find it difficult to
      sell
      their shares.




**Item
      2.  Description of Property**




Our
      executive, administrative and operating offices are located at 4989 East La
      Palma Avenue, Anaheim, California 92807.  Our office space is
      approximately 3,697 square feet and consists of six offices and eight work
      area
      cubicles.  The term of our lease is three years beginning in June 2006
      and ending June 30, 2009.  We currently pay rent of $6,092.65 per
      month (increasing to $6,275 as of July 1, 2008) plus reasonable utilities and
      associated common space costs.  We believe that our facilities are
      adequate for our needs and that additional suitable space will be available
      on
      acceptable terms as required.  Our facility also offers the ability to
      piggyback onto onsite and well established medical and assisted living
      fulfillment and distribution capacity if we desire.




**Item
      3.  Legal Proceedings**




There
      are
      no legal actions pending against us nor are any legal actions contemplated
      by us
      at this time.




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




None




**PART
      II**




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


**Small
      Business Issuer Purchases of Equity Securities.**




**Market
      Information.**  Our common shares are traded in the
      over-the-counter market on the OTC Bulletin Board under the symbol
“LBAS.”  This market is extremely limited and the prices quoted are
      not a reliable indication of the value of our common stock.




The
      following table sets forth the high and low bid prices for our stock on a
      quarterly basis since trading commenced and is based on information available
      from the Research Library Department of Pink Sheets LLC.  The
      quotations reflect inter-dealer prices, without retail mark-up, mark-down or
      conversion, and may not represent actual transactions.  All trading
      activity, if any, was based solely on the business of SRI as it existed prior
      to
      closing the Exchange Transaction which resulted in the business of Old LBT
      becoming the only business of SRI/New LBT.




**Inception
                of Trading**
            ********
            ****
            **through
                August 31, 2007**
            ********
            ****
            **High
                Bid**
            ****
            ****
            **Low
                Bid**Fiscal
                Quarter ended February 28
            
            
            *
            
            
            
            *Fiscal
                Quarter ended May 31
            
            
            .65
            
            
            
            .65Fiscal
                Quarter ended August 31
            
            
            3.02
            
            
            
            2.99


*
      No
      trading information reported.




16




**Reports
      to Security Holders.**  We are a reporting company pursuant to
      the Securities and Exchange Act of 1934.  As such, we provide an
      annual report to our security holders, which will include audited financial
      statements, and quarterly reports, which will contain unaudited financial
      statements.




**Securities
      Authorized for Issuance Under Equity Compensation Plans.**  The
      following table provides information with respect to outstanding options and
      warrants as of November 20, 2007, pursuant to compensation plans (including
      individual compensation arrangements) under which equity securities of New
      LBT
      are authorized for issuance.




**Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
            ****
            ****
            **Weighted-average
                exercise price of outstanding options, warrants and
                rights**
            ****
            ****
            **Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))**(a)
            
            
            
            (b)
            
            
            
            (c)Equity
                compensation plans approved by security holders
            
            
            (1)
            
            
            
            --
            
            
            
            --Equity
                compensation plans not approved by security holders
            
            
            6,750,000(1)(2)
            
            
            
            1.04
            
            
            
            750,000(3)Total




(1)
            Pursuant
                to stock options granted by Old LBT to Messrs, Morse and Scalisi,
                and Ms.
                Mejia, which options were assumed by New LBT when Old LBT was merged
                into
                New LBT, each holds an option to purchase up to 2,000,000 shares
                of New
                LBT common stock at $1 per share.  Options to purchase 1,000,000
                shares each are exercisable when we achieve 100,000 customers, and
                the
                remaining options to purchase 1,000,000 shares each are exercisable
                when
                we achieve a total of 250,000 customers.  All such options vest
                on a change of control of New LBT.  The options expire ten years
                from the date of  performance goal
                achieved.


(2)
            Pursuant
                to warrants issued by Old LBT to Northstar Investments, Inc. for
                certain
                consulting services, which warrants were assumed by New LBT when
                Old LBT
                was merged into New LBT.  Northstar Investments, Inc. holds one
                warrant to purchase 500,000 shares at $1 per share, and one warrant
                to
                purchase 250,000 shares at $2 per share.  These warrants are
                currently exercisable.  Both are void at the end of five years,
                or August 14, 2012, and contain standard anti-dilution
                provisions.


(3)
            The
                plan was assumed by New LBT when Old LBT was merged into SRI/New
                LBT.  The plan reserves 750,000 shares for issuance pursuant to
                options or stock awards.  No awards have been made under the
                plan as of the date of this report.




**Record
      Holders.**As
      of
      November 20, 2007, there were 42 holders of record of our common stock. Many
      of
      such holders of record are brokers, dealers, bank and other entities (so-called
      "street name" holders) that hold our stock as nominees in a fiduciary capacity
      for the beneficial owners of such stock. We do not know how many beneficial
      holders are represented by such "street name" holders. However, pursuant to
      applicable SEC rules, as of November 20, 2007, 525 of such beneficial owners
      had
      not objected to the disclosure of their individual identities to us.


**Recent
      Sales of Unregistered Securities.**  Previously reported in
      Current Report on Form 8-K filed with the SEC on October 12, 2007, as amended
      and filed with the SEC on October 31, 2007.




**Re-Purchase
      of New LBT Equity Securities.**  None




**Item
      6.  Management’s Discussion and Analysis or Plan of
      Operation**




Information
      in this registration statement contains “forward looking statements” which may
      be identified by the use of forward-looking terminology, such as “may”, “shall”,
“will”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”,
“possible”, “should”, “continue”, or similar terms, variations of those terms or
      the negative of those terms. The forward-looking statements specified in the
      following information have been compiled by our management on the basis of
      assumptions made by management and considered by management to be reasonable.
      Our future operating results, however, are impossible to predict and no
      representation, guaranty, or warranty is to be inferred from those
      forward-looking statements.




17




The
      assumptions used for purposes of the forward-looking statements specified in
      the
      following information represent estimates of future events and are subject
      to
      uncertainty as to possible changes in economic, legislative, industry, and
      other
      circumstances. As a result, the identification and interpretation of data and
      other information and their use in developing and selecting assumptions from
      and
      among reasonable alternatives require the exercise of judgment. To the extent
      that the assumed events do not occur, the outcome may vary substantially from
      anticipated or projected results, and, accordingly, no opinion is expressed
      on
      the achievability of those forward-looking statements. No assurance can be
      given
      that any of the assumptions relating to the forward-looking statements specified
      in the following information are accurate, and we assume no obligation to update
      any such forward-looking statements.




**RESULTS
      OF OPERATIONS**




For
      the
      year ended August 31, 2007 as compared to the year ended August 31,
      2006.




**Revenues.**




We
      have
      not generated revenues for the years ended August 31, 2007 or August 31,
      2006.




**Operating
      Expenses.**




For
      the
      year ended August 31, 2007, our total operating expenses were $1,183,733 as
      compared to total operating expenses of $728,461 for the year ended August
      31,
      2006.  The increase in operating expenses is attributed to the
      following:




Ÿ
            A
                significant increase in research and development costs for the year
                ended
                August 31, 2007, to $447,022 as compared to $66,564 for the year
                ended
                August 31, 2006 as significant efforts were made to develop and build
                the
                first prototypes and development of the website and mapping interface
                services.


Ÿ
            An
                increase in financing commissions related to raising capital to finance
                our business plan.  Such financing commissions totaled $189,184
                for the year ended August 31, 2007, while there were no such commissions
                for the year ended August 31, 2006.


Ÿ
            An
                increase in general and administrative costs to $188,016 for the
                year
                ended August 31, 2007 as compared to $22,326 for the year ended August
                31,
                2006, is mainly due to an overall increase in professional legal,
                accounting and consulting professional
                fees.


Ÿ
            A
                decrease in officer compensation to $360,000 for the year ended August
                31,
                2007, as compared to $495,000 for the year ended August 31,
                2006.  During the year ended August 31, 2006, officers received
                $150,000 of non-cash compensation whereas there was no such compensation
                for the year ended August 31, 2007.


Ÿ
            An
                increase in rent to $71,992 for the year ended August 31, 2007, as
                compared to $27,242 for the year ended August 31, 2006.  The
                increase is the result of a full year of rent for the year ended
                August
                31, 2007, as compared to a partial year of rent for the year ended
                August
                31, 2006.




**Other
      Income.**




For
      the
      year ended August 31, 2007, we reported net interest expense of $320,414 as
      compared to $53,535 for the year ended August 31, 2006.  The reported
      increase is attributed to the recognition of a full year of interest on a
      certain note payable for the year ended August 31, 2007, as compared to a
      partial year of interest recognized for the year ended August 31,
      2006.




**Net
      Loss.**




For
      the
      year ended August 31, 2007, we reported a net loss of $1,505,747 as compared
      to
      a net loss of $783,596 for the year ended August 31, 2006, due to an increase
      in
      operating expenses as discussed above.




18




**Liquidity
      and Capital Resources.**




We
      had
      cash and cash equivalents of $3,671,900 as of August 31, 2007, as compared
      to
      cash of $3,568 as of August 31, 2006.  We had significantly more cash
      as of August 31, 2007, as a result of capital raising efforts whereby the
      Company executed $4,892,000 in convertible notes payable during the year ended
      August 31, 2007.  Prepaid expenses totaled $53,526 as of August 31,
      2007, and primarily consisted of various professional fee
      retainers.  Deferred offering costs totaling $446,776 were recognized
      as of August 31, 2007, as a result of the aforementioned capital raising
      efforts.




As
      of
      August 31, 2007, the total of our property and equipment, less accumulated
      depreciation, was a net value of $371,566, compared to the net value of $1,650
      for our property and equipment, less accumulated depreciation, as of August
      31,
      2006.  The increase is primarily due to the development of the website
      and database during the year ended August 31, 2007.




Other
      assets, consisted of patents, trademarks and deposits, amounted to $1,001,357
      as
      of August 31, 2007, as compared to $922,000 as of August 31,
      2006.  The increase is the result of increased legal fees to obtain
      and secure additional patents and trademarks.




Our
      total
      assets as of August 31, 2007, were $5,545,125 as compared to our total assets
      as
      of August 31, 2006, which were $927,218.  The increase in our total
      assets as between the two years was due primarily to an increase in cash and
      cash equivalents, deferred offering costs, and property and equipment as of
      August 31, 2007.




As
      of
      August 31, 2007, our accounts payable and accrued expenses, including accrued
      officer compensation, were $1,133,975 as compared to $319,694 as of August
      31,
      2006.  The increase in accounts payable and accrued expenses,
      including accrued officer compensation, as of August 31, 2007 is primarily
      due
      to the accrual of significant financing commissions, legal and accounting
      fees.




Notes
      payable and convertible notes payable, including related accrued interest,
      totaled $5,874,305 as of August 31, 2007, as compared to $975,035 as of August
      31, 2006.  The increase is primarily due to the execution of
      convertible note payable agreements totaling $4,892,000 during the year ended
      August 31, 2007.  We had no other long term liabilities, commitments
      or contingencies.




Other
      than the proposed increases in research and development expenses and the
      increases in legal and accounting costs we expect due to the reporting
      requirements of becoming a reporting company, we are not aware of any other
      known trends, events or uncertainties, which may affect our future
      liquidity.




**PLAN
      OF OPERATIONS**




**Cash
      Requirements.**




We
      are a
      wireless technology company focused on development of a new personal location
      device system (the *PocketFinder Personal Locator* or
*PocketFinder*TM) for retail distribution.  We are a
      development-stage company, and we expect the initial launch of the
*PocketFinder*TM during the first calendar quarter of
      2008.  Since our inception, we have generated significant
      losses.  As of August 31, 2007, we had an accumulated deficit of
      $2,289,343.  We expect to incur continual losses until sometime in
      calendar year 2009, although we expect to begin generating revenues sometime
      during the first six months of calendar 2008.




We
      have a
      limited history of operations.  To date, we have funded our operations
      primarily through personal loans by the founders and the private placement
      of
      our common stock and convertible notes.




As
      of
      August 31, 2007, we had $3,671,900 in cash, cash equivalents and short-term
      investments.  We believe that our available cash and cash equivalents
      will be sufficient to fund anticipated levels of operations for the next six
      months only, assuming that essentially all of our remaining outstanding
      convertible notes which are convertible at the option of those Noteholders
      are
      converted in fact to common stock.  If such conversion does not occur,
      we will need to obtain extensions from those Noteholders who do not convert
      or
      raise up to approximately $2,100,000 to repay those notes.




19




Over
      the
      next six months, we expect to devote approximately $1,500,000 to complete our
      research and development efforts to include all aspects of hardware, software
      and interface customization, and website development.  In addition,
      during that time period we expect to expend approximately $331,000 (exclusive
      of
      cooperative advertising costs of approximately five percent which costs are
      included in the cost of goods sold) to develop our sales, marketing and
      manufacturing programs associated with the commercialization and launch of
      the
*PocketFinder*TM.  We expect to fund general overhead
      requirements through anticipated cash starting sometime in the first four months
      of calendar 2008 although there is no assurance that we will be successful
      in
      that regard.




We
      expect
      to have to raise additional funds in the coming 12 months to purchase and
      maintain inventory and for related purposes such as packaging, shipping and
      direct sales and marketing costs.  We are not able to estimate the
      amount of funds necessary as it will be determined by the volume represented
      by
      purchase orders from major retailers who desire to sell our
      product.




Our
      funding requirements will depend on numerous factors, including:




Ÿ
            Costs
                involved in the completion of the hardware, software and interface
                customization, and website necessary to commence the commercialization
                of
                the *PocketFinder Personal
                Locator*;


Ÿ
            The
                costs of outsourced manufacturing;


Ÿ
            The
                costs of commercialization activities, including product marketing,
                sales
                and distribution; and


Ÿ
            Our
                revenues, if any from successful commercialization of the *PocketFinder
                Personal Locator*.




As
      noted
      above, based on budgeted expenditures, we believe that we will have sufficient
      liquidity to satisfy our cash requirements through April, 2008.  If
      our existing resources prove to be insufficient to satisfy our liquidity
      requirements during that timeframe, we will need to raise additional external
      funds through the sale of additional equity or debt securities.  Our
      financing requirements would be accelerated to the extent that convertible
      notes
      are not converted as expected.  In any event, as noted above, we will
      need to raise additional funds during the next 12 months to finance the
      acquisition of initial inventory and related expenses.  The sale of
      additional equity securities will result in additional dilution to our
      shareholders.  Sale of debt securities could involve substantial
      operational and financial covenants that might inhibit our ability to follow
      our
      business plan.  Additional financing may not be available in amounts
      or on terms acceptable to us or at all.  If we are unable to obtain
      additional financing, we may be required to reduce the scope of, delay or
      eliminate some or all of our planned research, development and commercialization
      activities, which could harm our financial conditions and operating
      results.




**Proposed
      Product Research and Development.**




During
      the last calendar quarter of 2007, we plan to complete all development necessary
      for the initial launch of the *PocketFinder*TM and to prepare for its
      production and manufacture.  Concurrently, stress testing of our “back
      office” systems will be conducted and sales and marketing efforts will
      commence.  We expect that our first purchase orders will be secured
      late in 2007 and that we will be prepared to deliver product to retailers in
      the
      first quarter 2008, although there can be no assurance that we will meet that
      target time period.




**Plant
      and Equipment; Employees.**




We
      do not
      plan to purchase or sell any significant equipment, plant or properties during
      the foreseeable future.  Our business operations are based on a
      strategic outsourcing model, thereby negating the need for additional plant
      and
      equipment, or employees.  Thus, we do not anticipate hiring any
      significant number of additional employees during the next 12
      months.




20




**Off-Balance
      Sheet Arrangements.**




We
      do not
      have any relationships with unconsolidated entities or financial partnerships,
      such as entities often referred to as structured finance or special purpose
      entities, which would have been established for the purpose of facilitating
      off-balance sheet arrangements or other contractually narrow or limited
      purposes.




**Item
      7.  Financial Statements**




As
      noted
      in “Item 1. Description of Business,” Springbank Resources, Inc. acquired the
      stock of Location Based Technologies, Corp. in October 2007, shortly after
      the
      end of its fiscal year.  Immediately prior to that acquisition,
      Springbank Resources, Inc. disposed of substantially all of its assets so that,
      as of the date of the acquisition, it was a shell company. Immediately after
      the
      acquisition, Location Based Technologies, Corp. was merged into Springbank
      Resources, Inc., and the name of the business was changed to Location Based
      Technologies, Inc.  In order to provide readers with a complete
      financial picture, we are including the audited financial statements of both
      Springbank Resources, Inc. at August 31, 2007 and the audited financial
      statements of Location Based Technologies, Corp. at August 31, 2007. As noted
      in
“Item 1. Description of Business,” on a going forward basis, the only business
      of the company is the business of Location Based Technologies, Inc.






**LOCATION
        BASED TECHNOLOGIES CORP.**
 **(FORMERLY
        POCKETFINDER, INC.)**
 **AND
        SUBSIDIARY**
 **(A
        Development Stage Company)**
 
 **FINANCIAL
        STATEMENTS**
 **AND
        REPORT OF INDEPENDENT REGISTERED**
 **ACCOUNTING
        FIRM**
 
 **FOR
        THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **AND
        FOR THE PERIOD FROM INCEPTION**
 **(SEPTEMBER
        16, 2005) THROUGH August 31, 2007**
  21
 
 **TABLE
        OF CONTENTS**
  
 Report
                    of Independent Registered Public Accounting Firm
                23Financial
                    StatementsBalance
                    Sheets
                24Statements
                    of Operations
                25Statements
                    of Changes in Stockholders’ Equity (Deficit)
                26Statements
                    of Cash Flows
                27Notes
                    to Financial Statements
                28
 
  22
  **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 To
        the
        Board of Directors and Stockholders
 Location
        Based Technologies Corp. (formerly PocketFinder, Inc.) and
        Subsidiary
 Anaheim,
        California
 
 We
        have
        audited the accompanying balance sheets of Location Based Technologies Corp.
        (a
        development stage company) and subsidiary, as of August 31, 2007 and 2006,
        and
        the related statements of operations, stockholders’ equity (deficit) and cash
        flows for years then ended and the period from inception (September 16, 2005)
        through August 31, 2007.  These financial statements are the
        responsibility of the Companies’ management.  Our responsibility is to
        express an opinion on these financial statements based on our
        audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).  Those standards require
        that we plan and perform the audits to obtain reasonable assurance about
        whether
        the financial statements are free of material misstatement.  The
        Companies are not required to have, nor were we engaged to perform, an audit
        of
        their 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 Companies’
internal control over financial reporting.  Accordingly, we express no
        such opinion.  An audit includes examining, on a test basis, evidence
        supporting the amounts and disclosures in the financial
        statements.  An audit also includes 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 financial statements referred to above present fairly, in all
        material respects, the financial position of Location Based Technologies
        Corp.
        and subsidiary, as of August 31, 2007 and 2006, and the results of operations
        and cash flows for the years then ended and the period from inception (September
        16, 2005) through August 31, 2007 in conformity with accounting principles
        generally accepted in the United States of America.
 
 **Mendoza
        Berger & Company, LLP**
  Irvine,
        California
 November
        7, 2007
  23
  **LOCATION
          BASED TECHNOLOGIES CORP. (Formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **BALANCE
          SHEETS**
 **ASSETS**
 **August
                  31,**
                **2007**
              
              
              **August
                  31,**
                **2006**Current
                  assetsCash
                  and cash equivalents
              
              $
              3,671,900
              
              
              $
              3,568Prepaid
                  expenses
              
              
              53,526
              
              
              
              -Deferred
                  offering costs
              
              
              446,776
              
              
              
              -Total
                  current assets
              
              
              4,172,202
              
              
              
              3,568Property
                  and equipment, net of accumulated depreciation
              
              
              371,566
              
              
              
              1,650Other
                  assetsPatents
                  and trademarks
              
              
              994,297
              
              
              
              914,940Deposits
              
              
              7,060
              
              
              
              7,060Total
                  other assets
              
              
              1,001,357
              
              
              
              922,000Total
                  assets
              
              $
              5,545,125
              
              
              $
              927,218**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY
                  (DEFICIT)**
 Current
                  liabilities:Accounts
                  payable and accrued expenses
              
              $
              680,000
              
              
              $
              15,269Accrued
                  officer compensation
              
              
              453,975
              
              
              
              304,425Advances
                  from officer
              
              
              25,020
              
              
              
              19,085Notes
                  payable, related party
              
              
              803,500
              
              
              
              50,000Accrued
                  interest, related party notes payable
              
              
              120,599
              
              
              
              -Convertible
                  notes payable
              
              
              4,892,000
              
              
              
              -Accrued
                  interest, convertible notes payable
              
              
              58,206
              
              
              
              -Total
                  current liabilities
              
              
              7,033,300
              
              
              
              388,779Notes
                  payable, related party
              
              
              -
              
              
              
              871,500Accrued
                  interest, related party
              
              
              -
              
              
              
              53,535Total
                  liabilities
              
              
              7,033,300
              
              
              
              1,313,814Commitments
                  and Contingencies
              
              
              -
              
              
              
              -Stockholders’
                  equity (deficit)Common
                  stock, $0.00001 stated value; 200,000,000 sharesauthorized;
                  17,575,000 and 75,000 shares issued and outstandingat
                  August 31, 2007 and 2006, respectively
              
              
              176
              
              
              
              1Common
                  stock to be issued
              
              
              -
              
              
              
              2Additional
                  paid-in capital
              
              
              800,992
              
              
              
              396,997Deficit
                  accumulated during development stage
              
              
              (2,289,343
              )
              
              
              (783,596
              )Total
                  stockholders’ equity (deficit)
              
              
              (1,488,175
              )
              
              
              (386,596
              )Total
                  liabilities and stockholders’ equity
              
              $
              5,545,125
              
              
              $
              927,218
  **See
          accompanying notes to financial statements**
  24
  **LOCATION
          BASED TECHNOLOGIES CORP. (Formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **STATEMENTS
            OF OPERATIONS**
 **For
                  the period****from
                  inception****Year
                  Ended August 31,**
              
              
              **(Sept.
                  16, 2005)****2007**
              
              
              **2006**
              
              
              **to
                  Aug. 31, 2007**Net
                  revenue
              
              $
              -
              
              
              $
              -
              
              
              $
              -Operating
                  expensesGeneral
                  and administrative
              
              
              188,016
              
              
              
              22,326
              
              
              
              210,342Officer
                  compensation
              
              
              360,000
              
              
              
              495,000
              
              
              
              855,000Professional
                  fees
              
              
              116,703
              
              
              
              117,329
              
              
              
              234,032Rent
              
              
              71,992
              
              
              
              27,242
              
              
              
              99,234Research
                  and development
              
              
              447,022
              
              
              
              66,564
              
              
              
              513,586Total
                  operating expenses
              
              
              1,183,733
              
              
              
              728,461
              
              
              
              1,912,194Other
                  income (expense)Interest
                  expense, net
              
              
              (320,414
              )
              
              
              (53,535
              )
              
              
              (373,949
              )Net
                  loss before income taxes
              
              
              (1,504,147
              )
              
              
              (781,996
              )
              
              
              (2,286,143
              )Provision
                  for income taxes
              
              
              1,600
              
              
              
              1,600
              
              
              
              3,200Net
                  loss
              
              $
              (1,505,747
              )
              
              $
              (783,596
              )
              
              $
              (2,289,343
              )
  See
        accompanying notes to financial statements
  25
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **STATEMENT
          OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)**
 **FOR
            THE PERIOD FROM INCEPTION (SEPTEMBER 16, 2005) THROUGH AUGUST 31,
            2007**
 **Deficit****Common
                  Stock**
              
              
              
              
              
              
              
              
              **Accumulated**
              
              
              **Total****Number**
                **of**
                **Shares**
              
              
              **Common**
                **Stock
                  To**
                **Be
                  Issued**
              
              
              **Amount**
              
              
              **Additional**
                **Paid-In**
                **Capital**
              
              
              **During
                  Development Stage**
              
              
              **Stockholders’**
                **Equity**
                **(Deficit)**Balance,
                  September 16, 2005
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cash
                  received for 20,000 shares of common stock to be issued, November
                  30,
                  2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              20,000
              
              
              
              -
              
              
              
              20,000Cash
                  received for 30,000 shares of common stock to be issued for services,
                  November 30, 2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              30,000
              
              
              
              -
              
              
              
              30,000Cash
                  received for 25,000 shares of common stock to be issued, March
                  14,
                  2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              25,000
              
              
              
              -
              
              
              
              25,000Cash
                  received for 50,000 shares of common stock to be issued, August
                  4, 2006,
                  net of offering costs
              
              
              -
              
              
              
              1
              
              
              
              -
              
              
              
              46,999
              
              
              
              -
              
              
              
              47,000Cash
                  received for 50,000 shares of common stock to be issued, August
                  18,
                  2006
              
              
              -
              
              
              
              1
              
              
              
              -
              
              
              
              49,999
              
              
              
              -
              
              
              
              50,000Issuance
                  of common stock for services, July 2006
              
              
              75,000
              
              
              
              -
              
              
              
              1
              
              
              
              74,999
              
              
              
              -
              
              
              
              75,000Additional  paid-in
                  capital in exchange for services
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              150,000
              
              
              
              -
              
              
              
              150,000Net
                  loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (783,596
              )
              
              
              (783,596
              )Balance,
                  August 31, 2006
              
              
              75,000
              
              
              
              2
              
              
              
              1
              
              
              
              396,997
              
              
              
              (783,596
              )
              
              
              (386,596
              )Issuance
                  of common stock, net of offering costs,  for cash, September
                  2006
              
              
              150,000
              
              
              
              -
              
              
              
              2
              
              
              
              110,748
              
              
              
              -
              
              
              
              110,750Issuance
                  of common stock, net of offering costs,
                for
                  cash, November 2006
              
              
              30,000
              
              
              
              -
              
              
              
              -
              
              
              
              22,500
              
              
              
              -
              
              
              
              22,500Issuance
                  of common stock, net of offering costs,
                for
                  cash, February 2007
              
              
              250,000
              
              
              
              -
              
              
              
              2
              
              
              
              181,998
              
              
              
              -
              
              
              
              182,000Issuance
                  of common stock, net of offering costs,
                for
                  cash, March 2007
              
              
              25,000
              
              
              
              -
              
              
              
              -
              
              
              
              18,750
              
              
              
              -
              
              
              
              18,750Issuance
                  of 175,000 shares of common stock, June 2007
              
              
              175,000
              
              
              
              (2
              )
              
              
              2
              
              
              
              -
              
              
              
              -
              
              
              
              -Issuance
                  of 55,000 shares of common stock for cash proceeds of $55,000,
                  June
                  2007
              
              
              55,000
              
              
              
              -
              
              
              
              1
              
              
              
              54,999
              
              
              
              -
              
              
              
              55,000Issuance
                  of 16,800,000 shares of common stock for cash proceeds of $168,
                  June
                  2007
              
              
              16,800,000
              
              
              
              -
              
              
              
              168
              
              
              
              -
              
              
              
              -
              
              
              
              168Issuance
                  of common stock  for conversion of note payable, August
                  2007
              
              
              15,000
              
              
              
              -
              
              
              
              -
              
              
              
              15,000
              
              
              
              -
              
              
              
              15,000Net
                loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,505,747
              )
              
              
              (1,505,747
              )Balance,
                August 31, 2007
              
              
              17,575,000
              
              
              $
              -
              
              
              $
              176
              
              
              $
              800,992
              
              
              $
              (2,289,343
              )
              
              $
              (1,488,175
              )
 
 See
        accompanying notes to financial statements
  26
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **STATEMENTS
            OF CASH FLOWS**
 **For
                  the period****from
                  inception****For
                  the years ended August 31,**
              
              
              **(Sept.
                  16, 2005)****2007**
              
              
              **2006**
              
              
              **to
                  Aug. 31, 2007**Cash
                  flows from operating activitiesNet
                  loss
              
              $
              (1,505,747
              )
              
              $
              (783,596
              )
              
              $
              (2,289,343
              )Adjustments
                  to reconcile net loss to net cash provided by (used in) operating
                  activitiesDepreciation
              
              
              1,951
              
              
              
              150
              
              
              
              2,101Issuance
                  of shares of common stock for services
              
              
              -
              
              
              
              255,000
              
              
              
              255,000Changes
                  in operating assets and liabilitiesIncrease
                  in prepaid expenses
              
              
              (53,526
              )
              
              
              -
              
              
              
              (53,526
              )Increase
                  in deferred offering costs
              
              
              (446,776
              )
              
              
              -
              
              
              
              (446,776
              )Increase
                  in deposits
              
              
              -
              
              
              
              (7,060
              )
              
              
              (7,060
              )Increase
                  in accounts payable and accrued expenses
              
              
              664,731
              
              
              
              15,269
              
              
              
              680,000Increase
                  in accrued officer compensation
              
              
              149,550
              
              
              
              304,425
              
              
              
              453,975Increase
                  in accrued interest
              
              
              125,270
              
              
              
              53,535
              
              
              
              178,805Net
                  cash used in operating activities
              
              
              (1,064,547
              )
              
              
              (162,277
              )
              
              
              (1,226,824
              )Cash
                  flows from investing activitiesPurchase
                  of property and equipment
              
              
              (371,867
              )
              
              
              (1,800
              )
              
              
              (373,667
              )Additions
                  to patent and trademarks
              
              
              (79,357
              )
              
              
              (14,940
              )
              
              
              (94,297
              )Net
                  cash used in investing activities
              
              
              (451,224
              )
              
              
              (16,740
              )
              
              
              (467,964
              )Cash
                  flows from financing activitiesProceeds
                  from issuance of common stock, net of offering costs
              
              
              404,168
              
              
              
              -
              
              
              
              404,168Proceeds
                  from common stock to be issued
              
              
              -
              
              
              
              142,000
              
              
              
              142,000(Repayments)
                  / advances from officer
              
              
              5,935
              
              
              
              19,085
              
              
              
              25,020Proceeds
                  from convertible notes payable
              
              
              4,892,000
              
              
              
              -
              
              
              
              4,892,000Proceeds
                  from notes payable, related party
              
              
              -
              
              
              
              50,000
              
              
              
              50,000Repayment
                  on notes payable, related party
              
              
              (118,000
              )
              
              
              (28,500
              )
              
              
              (146,500
              )Net
                  cash provided by financing activities
              
              
              5,184,103
              
              
              
              182,585
              
              
              
              5,366,688Net
                  increase in cash and cash equivalents
              
              
              3,668,332
              
              
              
              3,568
              
              
              
              3,671,900Cash
                  and cash equivalents, beginning of period
              
              
              3,568
              
              
              
              -
              
              
              
              -Cash
                  and cash equivalents, end of period
              
              $
              3,671,900
              
              
              $
              3,568
              
              
              $
              3,671,900
 **Supplemental
                  disclosure of cash flow information**Income
                  taxes paid
              
              $
              -
              
              
              $
              800
              
              
              $
              800Interest
                  paid
              
              $
              -
              
              
              $
              -
              
              
              $
              -**Supplementary
                  disclosure of  noncash financing and investing
                  activities:**Issuance
                  of shares of common stock for services
              
              $
              -
              
              
              $
              255,000
              
              
              $
              255,000Acquisition
                  of patents for note payable
              
              $
              -
              
              
              $
              900,000
              
              
              $
              900,000Issuance
                  of common stock for conversion of note payable
              
              $
              15,000
              
              
              $
              255,000
              
              
              $
              270,000
  See
        accompanying notes to financial statements
  27
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **1.**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                  POLICIES**
 
 **Organization**
 
 Location
        Based Technologies Corp. (formerly PocketFinder, Inc.) (the “Company” “LBT”) was
        incorporated under the laws of the State of California on September 16, 2005.
        On
        July 7, 2006, the Company established PocketFinder, LLC (“LLC”), a California
        Limited Liability Company.  On May 29, 2007, PocketFinder, Inc. filed
        amended articles with the Secretary of State to change its name to Location
        Based Technologies Corp.
 
 **Merger**
 
 On
        August
        24, 2007, Location Based Technologies Corp. (formerly PocketFinder, Inc.)
        merged
        with PocketFinder, LLC.  The merger was approved by the shareholders
        of Location Based Technologies Corp. and PocketFinder, LLC by unanimous written
        consent.  Location Based Technologies Corp. was the survivor of the
        merger with PocketFinder, LLC.
 
 Each
        Class A Membership Unit of the LLC was converted into 50,000 shares of common
        stock of the Company or fraction thereof and each Class C Membership Unit
        of the
        LLC was cancelled.  Upon consummation of the merger, 10.9 Class A
        Membership Units of the LLC were converted into 545,000 shares of common
        stock
        of the Company.
 
 **Nature
        of Business**
 
 The
        Company is in the development stage of creating *PocketFinder* personal
        locators. *PocketFinders* are small personal location devices designed to
        give parents, guardians, and pet owners peace of mind. Utilizing the U.S.
        Department of Defense’s multi-billon dollar Global Positioning System (GPS)
        satellites and existing wireless technology, our team of engineers have
        developed technology which allows our network of members to locate anyone
        carrying our device, whether that person is inside of a building/structure
        or in
        the great outdoors (Systems and Method Patent pending). *PocketFinders*
        are small, rugged, and water tight. The devices can be used to locate children,
        elderly or disabled persons and pets as well as for the tracking of valued
        personal property.
  28
 
 **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **1.**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                  (Continued)
 
 **Use
        of Estimates**
 
 The
        preparation of combined financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities and disclosure of contingent assets and liabilities
        at
        the date of the financial statements, and the reported amounts of revenues
        and
        expenses during the reported periods.  Actual results could materially
        differ from those estimates.
 
 **Fair
        Value of Financial Instruments**
 
 Pursuant
        to SFAS No. 107, “*Disclosures About Fair Value of Financial
        Instruments*”, the Company is required to estimate the fair value of all
        financial instruments included on its balance sheet.  The carrying
        value of cash, accounts payable and accrued expenses approximate their fair
        value due to the short period to maturity of these instruments.
 
 **Cash
        and Cash Equivalents**
 
 For
        purposes of the balance sheets and statements of cash flows, the Company
        considers all highly liquid debt instruments purchased with maturity of three
        months or less to be cash equivalents.
 
 **Concentration
        of Credit Risk**
 
 The
        cash
        and cash equivalent balances at August 31, 2007 are principally held by one
        institution which insures our aggregated accounts with the Federal Deposit
        Insurance Corporation ("FDIC") up to $100,000.  At August 31, 2007,
        the Company had uninsured cash deposits in excess of the Federal Deposit
        Insurance Corporation insurance limit totaling $3,606,332.
  29
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **1**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT****ACCOUNTING****POLICIES** (Continued)
 
 **Property
        and Equipment**
 
 Property
        and equipment are stated at cost less accumulated depreciation and amortization.
        Depreciation and amortization are calculated using the straight-line method
        and
        with useful lives used in computing depreciation ranging from 3 to 5 years.
        When
        property and equipment are retired or otherwise disposed of, the related
        cost
        and accumulated depreciation are removed from the respective accounts, and
        any
        gain or loss is included in operations. Expenditures for maintenance and
        repairs
        are charged to operations as incurred; additions, renewals and betterments
        are
        capitalized.
 
 **Intangible
        Assets – Patents and Trademarks**
 
 The
        Company capitalizes internally developed assets related to certain costs
        associated with patents and trademarks. These costs include legal and
        registration fees needed to apply for and secure patents. As of August 31,
        2007
        and 2006, the Company has capitalized $79,357 and $12,540 for patent related
        expenditures, respectively. As of August 31, 2007 and 2006, the Company has
        capitalized $3,725 and $2,400 for trademark related expenditures, respectively.
        The Company has not yet recorded amortization expense related to the patents
        because the patents are not subject to amortization until issued by the United
        States Patent Office  and placed in service by the
        Company.  Intangible assets will be amortized in accordance with
        Statement of Financial Accounting Standards No. 142, “Goodwill and Other
        Intangible Assets,” ("SFAS 142") using the straight-line method over the shorter
        of their estimated useful lives or remaining legal life. The Intangible assets
        acquired from other enterprises or individuals in an “arms length” transaction
        are recorded at cost.
 
 **Long-Lived
        Assets**
 
 The
        Company accounts for its long-lived assets in accordance with SFAS No. 144,
        "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No.
        144
        requires that long-lived assets be reviewed for impairment whenever events
        or
        changes in circumstances indicate that the historical cost carrying value
        of an
        asset may no longer be appropriate. The Company assesses recoverability of
        the
        carrying value of an asset by estimating the future net cash flows expected
        to
        result from the asset, including eventual disposition. If the future net
        cash
        flows are less than the carrying value of the asset, an impairment loss is
        recorded equal to the difference between the asset's carrying value and fair
        value or disposable value. As of August 31, 2007, the Company did not deem
        any
        of its long-term assets to be impaired.
  30
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **1.**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                  (Continued)
 
 **Research
        and Development**
 
 Research
        and development costs are clearly identified and are expensed as incurred
        in
        accordance with FASB statement No. 2, "Accounting for Research and Development
        Costs."  For the years ended August 31, 2007 and 2006, the Company
        incurred $447,022, and $66,564 of research and development costs,
        respectively.
 
 **Provision
        for Income Taxes**
 
 The
        Company accounts for income taxes under SFAS 109, “*Accounting for Income
        Taxes*”.  Under the asset and liability method of SFAS 109,
        deferred tax assets and liabilities are recognized for the future tax
        consequences attributable to differences between the financial statements’
carrying amounts of existing assets and liabilities and their respective
        tax
        bases.  Deferred tax assets and liabilities are measured using enacted
        tax rates expected to apply to taxable income in the years in which those
        temporary differences are expected to be recovered or settled.  Under
        SFAS 109, the effect on deferred tax assets and liabilities of a change in
        tax
        rates is recognized in income in the period the enactment occurs.  A
        valuation allowance is provided for certain deferred tax assets if it is
        more
        likely than not that the Company will not realize tax assets through future
        operations.  The Company has included its $800 franchise fee in its
        provision for income taxes for each of the years ended August 31, 2007 and
        2006.
 
 The
        LLC
        has elected to be treated as a partnership for tax
        purposes.  Accordingly, income taxes are borne by the members and the
        LLC is subject to state limited liability company fees.  The LLC has
        accrued and included its minimum tax of $800 in its provision for income
        taxes
        for each of the years ended August 31, 2007 and 2006.
  31
 
 **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **1.**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                  (Continued)
 
 **Recent
        Accounting Pronouncements**
 
 FASB
        Interpretation No. 48– In July 2006, the FASB issued Interpretation No. 48,
“*Accounting for Uncertainty in Income Taxes*” (FIN 48), which
        supplements SFAS No. 109, “*Accounting for Income Taxes*”, by defining
        the confidence level that a tax position must meet in order to be recognized
        in
        the financial statements.  The Interpretation requires that the tax
        effects of a position be recognized only if it is “more-likely-than-not” to be
        sustained based solely on its technical merits as of the reporting
        date.  The more-likely-than-not threshold represents a positive
        assertion by management that a company is entitled to the economic benefits
        of a
        tax position.  If a tax position is not considered
        more-likely-than-not to be sustained based solely on its technical merits,
        no
        benefits of the position are to be recognized.  This Interpretation is
        effective for fiscal years beginning after December 15, 2006.  The
        Company is currently assessing the potential effect of FIN 48 on its financial
        statements.
 
 SFAS
        No. 157– In September 2006, the FASB issued Statement 157, “*Fair Value
        Measurements*”.  This Statement defines fair value, establishes a
        framework for measuring fair value in generally accepted accounting principles
        (GAAP), and expands disclosures about fair value measurements.  This
        Statement applies under other accounting pronouncements that require or permit
        fair value measurements, the Board having previously concluded in those
        accounting pronouncements that fair value is the relevant measurement
        attribute.  Accordingly, this Statement does not require any new fair
        value measurements.  However, for some entities, the application of
        this Statement will change current practice.  This Statement is
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007, and interim periods within those fiscal
        years.  Earlier application is encouraged, provided that the reporting
        entity has not yet issued financial statements for that fiscal year, including
        financial statements for an interim period within that fiscal
        year.  The Company is currently assessing the potential effect of SFAS
        157 on its financials statements.
  32
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **1.**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                  (Continued)
 
 **Recent
        Accounting Pronouncements** (Continued)
 
 SFAS
        No. 158– In September 2006, the FASB issued Statement No. 158
“*Employers’ Accounting for Defined Benefit Pension and Other Postretirement
        Plans - an amendment of FASB Statements No. 87, 88, 106, and
        132(R*)”.  This Statement improves financial reporting by
        requiring an employer to recognize the overfunded or underfunded status of
        a
        defined benefit postretirement plan (other than a multiemployer plan) as
        an
        asset or liability in its statement of financial position and to recognize
        changes in that funded status in the year in which the changes occur through
        comprehensive income of a business entity or changes in unrestricted net
        assets
        of a not-for-profit organization.  This Statement also improves
        financial reporting by requiring an employer to measure the funded status
        of a
        plan as of the date of its year-end statement of financial position, with
        limited exceptions.  An employer with publicly traded equity
        securities is required to initially recognize the funded status of a defined
        benefit postretirement plan and to provide the required disclosures as of
        the
        end of the fiscal year ending after December 15, 2006.  An employer
        without publicly traded equity securities is required to recognize the funded
        status of a defined benefit postretirement plan and to provide the required
        disclosures as of the end of the fiscal year ending after June 15,
        2007.  The Company believes that the adoption of this standard will
        not a have a material impact on its financial statements.
 
 SAB No. 108–
        In September 2006, the Securities and Exchange Commission issued Staff
        Accounting Bulletin No. 108 (SAB No. 108), “Considering the
        Effects of Prior Year Misstatements when Quantifying Misstatements in Current
        Year Financial Statements.” The guidance in SAB No. 108 requires
        Companies to base their materiality evaluations on all relevant quantitative
        and
        qualitative factors. This involves quantifying the impact of correcting all
        misstatements, including both the carryover and reversing effects of prior
        year
        misstatements, on the current year financial statements. The Company has
        adopted
        this standard.
  33
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **1.**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                  (Continued)
 
 **Recent
        Accounting Pronouncements** (Continued)
 
 SFAS
        No. 159– In February 2007, the FASB issued Statement No. 159, *The Fair
        Value Option for Financial Assets and Financial Liabilities—Including an
        amendment of FASB Statement No. 115***.**This Statement
        permits entities to choose to measure many financial instruments and certain
        other items at fair value. The objective is to improve financial reporting
        by
        providing entities with the opportunity to mitigate volatility in reported
        earnings caused by measuring related assets and liabilities differently without
        having to apply complex hedge accounting provisions. This Statement is expected
        to expand the use of fair value measurement, which is consistent with the
        Board’s long-term measurement objectives for accounting for financial
        instruments. This Statement applies to all entities, including not-for-profit
        organizations. Most of the provisions of this Statement apply only to entities
        that elect the fair value option.
 
 **2.**
              **PROPERTY
                  AND EQUIPMENT**
 
 Property
        and equipment at August 31, consists of the following:
  **2007**
                ****
                ****
                **2006**Website
                    development costs
                
                $
                361,825
                
                
                $
                -Computer
                    and video equipment
                
                
                10,076
                
                
                
                1,800Office
                    furniture
                
                
                1,766
                
                
                
                -373,667
                
                
                
                1,800Less:
                    accumulated depreciation
                
                
                (2,101
                )
                
                
                (150
                )Total
                    property and equipment
                
                $
                371,566
                
                
                $
                1,650
  Depreciation
        expense for the years ended August 31, 2007 and 2006 amounted to $1,951 and
        $150, respectively.
  34
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
   **3.**
              **CONVERTIBLE
                  NOTES PAYABLE**
 
 From
        March 2007 through August 2007, the LLC entered into convertible note agreements
        totaling $4,892,000.  Under the terms of the agreements, amounts
        borrowed must be repaid by March 31, 2008 and accrue interest at the rate
        of 8%
        per annum.  At the option of the Company or the convertible note
        holder, the notes plus any accrued and unpaid interest may be converted into
        shares of the Company’s common stock on the basis of $1.00 per share or Class A
        Membership Units of the LLC on the basis of one Class A Membership Unit for
        each
        $50,000 of principal and/or interest converted.  The notes may be
        prepaid at any time, at the option of the Company, in whole or in part without
        penalty.
 
 **4.**
              **NOTES
                  PAYABLE – RELATED
                  PARTY**
 
 On
        November 28, 2005, the Company entered into a promissory note agreement with
        the
        Company’s CEO and stockholder for $900,000 in exchange for the assignment of
        certain intellectual property and trademark rights. Under the terms of the
        promissory note agreement, the principal and any unpaid interest shall not
        become due until the Company attains financial stability, defined as strong
        revenue generation and cash flow.  Up to twelve quarterly payments may
        be made to fulfill payment of this note.  The note may be prepaid
        without premium or penalty. The note bears interest at 8% per annum and is
        payable at any time before the repayment date.  The note payable
        balance and accrued interest amounted to $803,500 and $871,500, respectively,
        at
        August 31, 2007. The note is secured by all intellectual property, trademarks,
        ongoing research and development and all other assets owned by the Company.
        (See
        Subsequent Events, Note 9)
 
 On
        July
        26, 2006, the Company entered into a promissory note agreement with a
        stockholder to obtain a loan for $50,000. Under the terms of the promissory
        note
        agreement, the principal and any unpaid interest shall be repaid at the earlier
        of six months, or when the Company raises funds in excess of $100,000 towards
        the current funding round.  The note may be prepaid without premium or
        penalty. The note bears interest at 10% per annum and is payable at any time
        before the repayment date.  Payments made on this note totaled $35,000
        for the year ended August 31, 2007.  In August 2007, the $15,000 note
        payable balance was converted into 15,000 shares of common stock.
  35
 **LOCATION
            BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
            SUBSIDIARY**
 **(A
            Development Stage Company)**
 **NOTES
            TO FINANCIAL STATEMENTS**
 **FOR
              THE YEARS ENDED AUGUST 31, 2007 AND 2006**
   **5.**
              **COMMITMENTS
                  AND CONTINGENCIES**
 
 **Consulting
        Agreement**
 
 In
        July
        2007, the LLC entered into a financial consulting agreement whereby the
        consultant will be compensated as follows: a) 2% of the Company’s first Ten
        Million Dollars of sales and 1% of the second Ten Million Dollars of Sales,
        b)
        assuming a change to corporate form for the LLC, grant of options or warrants
        to
        purchase 500,000 common  shares at $1.00 per share, expiring five
        years after date of grant and options or warrants to purchase 250,000 common
        shares at $2.00 per unit, expiring five years after date of grant. The agreement
        expires July 16, 2010.
 
 **Operating
        Leases**
 
 The
        Company leases its office space under an operating lease expiring on June
        30,
        2009.
 
 Total
        rental expense on operating leases for the year ended August 31, 2007 and
        2006
        was $71,992 and $27,242, respectively.
 
 As
        of
        August 31, 2007 the future minimum lease payments are as follows:
  **For
                    the Years Ending August 31,**2008
                
                $
                82,6622009
                
                
                70,598Total
                
                $
                153,260
  **6.**
              **EQUITY**
 
 **Common
        Stock**
 
 All
        shares of common stock for amounts received during the period from inception
        (September 16, 2005) through August 31, 2006 were issued in June
        2007.
 
 In
        November 2005, the Company performed a private placement and agreed to issue
        20,000 shares of common stock at $1.00 per share for an aggregate total of
        $20,000.
 
 In
        November 2005, the Company agreed to issue 30,000 shares of its common stock
        in
        exchange for legal services related to patents.  The shares were
        valued at $30,000, which represents the fair market value on the date the
        services were rendered.
  36
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **6.**
              **EQUITY**
                  (Continued)
 
 **Common
        Stock**(Continued)
 
 In
        March
        2006, the Company performed a private placement and agreed to issue 25,000
        shares of common stock at $1.00 per share for an aggregate total of
        $25,000.
 
 In
        August
        2006, the Company performed a private placement and agreed to issue 100,000
        shares of common stock at $1.00 per share for an aggregate total of
        $100,000.  The Company received cash proceeds totaling
        $97,000.
 
 In
        July
        2006, the Company issued 75,000 shares of common stock in exchange for $25,000
        of accounting services and $50,000 in legal services.  The shares were
        valued at $75,000, which represents the fair market value of the services
        provided on the date of issuance.
 
 In
        July
        2006, the Company received services valued at $150,000 and treated it as
        additional paid-in capital.
 
 In
        September 2006, the Company issued 150,000 shares of common stock for net
        cash
        of $110,850 which is net of offering costs of $39,250, in cash
        proceeds.
 
 In
        November 2006, the Company issued 30,000 shares of common stock for net cash
        of
        $22,500, which is net of offering costs of $7,500, in cash
        proceeds.
 
 In
        February 2007, the Company issued 250,000 shares of common stock in exchange
        for
        net cash of $182,000, which is net of offering costs of $68,000, in cash
        proceeds.
 
 In
        March
        2007, the Company issued 25,000 shares of common stock in exchange for net
        cash
        of $18,750, which is net of offering costs of $6,250 in cash
        proceeds.
 
 In
        June
        2007, the Company issued 55,000 shares of common stock for $55,000 in cash
        proceeds.
 
 In
        June
        2007, the Company issued 16,800,000 shares of its common stock for cash proceeds
        of $168.
 
 In
        August
        2007, the Company issued 15,000 shares of common stock in exchange for the
        conversion of a $15,000 note payable.
  37
 **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 
 **6.**
              **EQUITY**
                  (Continued)
 
 **Merger**
 
 On
        August
        29, 2007, to complete the merger of PocketFinder LLC into Location Based
        Technologies, Corp., the Company issued 545,000 shares of its common stock
        to
        the members of the LLC in exchange for the 10.9 Class A Membership Units
        then
        outstanding. Accordingly, the outstanding common stock amounts have been
        retroactively stated to reflect the merger within the Company’s financial
        statements.
 
 **7.**
              **STOCK
                  OPTIONS AND WARRANTS**
 
 On
        August
        15, 2007, the Company issued a “Series A” warrant to a consultant to purchase
        500,000 shares of the Company’s common stock at $1 per share and a “Series B”
warrant to purchase 250,000 shares of the Company’s common stock at $2 per
        share.  Both warrants terminate at the earlier of August 14, 2012 or
        upon the Company’s sale and issuance of stock in a public offering with gross
        proceeds in excess of $10 million.  No warrants were exercised as of
        August 31, 2007.
  **8.**
              **PROVISION
                  FOR INCOME TAXES**
 
 Deferred
        income taxes are reported using the liability method.  Deferred tax
        assets are recognized for deductible temporary differences and deferred tax
        liabilities are recognized for taxable temporary
        differences.  Temporary differences arise from the difference between
        the reported amounts of assets and liabilities and their tax
        basis.  Deferred tax assets are reduced by a valuation allowance when,
        in the opinion of management, it is more likely than not that some portion
        or
        all of the deferred tax assets will not be realized.
 
 Deferred
        tax assets and liabilities are adjusted for the effects of changes in tax
        laws
        and tax rates on the date of enactment.
 
 The
        Company did not provide any current or deferred U.S. federal income taxes
        or
        benefits for any of the periods presented because the Company has experienced
        operating losses since inception. The Company provided a full valuation
        allowance on the net deferred tax asset, consisting of net operating loss
        carry
        forwards, because management has determined that it is more likely than not
        that
        we will not earn sufficient income to realize the deferred tax assets during
        the
        carry forward period.
  38
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **8.**
              **PROVISION
                  FOR INCOME TAXES**
                  (Continued)
 
 The
        components of the Company’s deferred tax asset as of August 31, 2007 are as
        follows:
  Net
                    operating loss carry forward
                
                $
                911,000Valuation
                    allowance
                
                
                (911,000
                )Net
                    deferred tax asset
                
                $
                -
  A
        reconciliation of the combined federal
        and state statutory income taxes rate and the effective rate is as
        follows:
  Tax
                    at statutory rate
                
                $
                39.83
                %Valuation
                    allowance
                
                
                (39.83
                %)$
                -
  As
        of
        August 31, 2007, the Company had federal and state net operating loss
        carryforwards of approximately $2,289,000 which can be used to offset future
        federal income tax.  The federal and state net operating loss
        carryforwards expire at various dates through 2027.  Deferred tax
        assets resulting from the net operating losses are reduced by a valuation
        allowance, when, in the opinion of management, utilization is not reasonably
        assured. These carryforwards may be limited upon a change in ownership or
        consummation of a business combination under IRC Sections 381 and
        382.
 
 **9.**
              **SUBSEQUENT
                  EVENTS**
 
 **Stock
        Exchange Agreement**
 
 On
        August
        31, 2007, the Company and its stockholders have agreed to enter into a stock
        exchange agreement and plan of reorganization (the “Agreement”) with Springbank
        Resources, Inc. (“SRI”) whereby SRI will acquire all of the issued and
        outstanding shares of the Company in exchange for shares of SRI’s common
        stock.
 
 Subject
        to the terms and conditions of the Agreement, SRI agrees to issue, and the
        stockholders of the Company agree to accept 18,384,500 shares of SRI’s common
        stock in consideration for all of the issued and outstanding shares of the
        Company.  The shares of SRI’s common stock will be allocated to the
        shareholders of the Company in accordance with the Agreement. The stock exchange
        agreement was effectiveOctober 11, 2007.
  39
  **LOCATION
          BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
          SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **FOR
            THE YEARS ENDED AUGUST 31, 2007 AND 2006**
   **9.**
              **SUBSEQUENT
                  EVENTS** (Continued)
 
 **Stock
        Exchange Agreement** (Continued)
 
 The
        former shareholders of LBT acquired control of the Company upon the closing
        of
        the share exchange transaction. The exchange was accounted for as a reverse
        acquisition. Accordingly, for financial statement purposes, LBT was considered
        the accounting acquiror, and the related business combination was considered
        a
        recapitalization of LBT rather than an acquisition by SRI. The historical
        financial statements prior to the agreement will be those of LBT, and the
        name
        of the consolidated company going forward will be Location Based Technologies,
        Inc.
 
 **Subsequent
        Events in Recapitalized Location Based Technologies,
        Inc.**
 
 On
        October 29, 2007, the Company elected to convert the outstanding balance
        on the
        promissory note agreement with the Company’s CEO and stockholder into common
        stock of the Company.  The note payable balance at August 31, 2007,
        totaling $803,500 was converted into 803,500 shares of the Company’s common
        stock.  In addition, interest on the note stopped accruing as of
        August 31, 2007.
 
 On
        September 10, 2007, the directors and shareholders adopted a 2007 Stock
        Incentive Plan.  The plan reserves 750,000 shares for issuance
        pursuant to options, grants of restricted stock or other stock-based
        awards.  The plan is administered by the board of directors which has
        the power, pursuant to the plan, to delegate the administration of the plan
        to a
        committee of the board.
 
 In
        September and October 2007, the Company entered into convertible note agreements
        totaling $350,000.  Under the terms of the agreements, amounts
        borrowed must be repaid by March 31, 2008 and accrue interest at the rate
        of 8%
        per annum.  At the option of the Company or the convertible note
        holder, the notes plus any accrued and unpaid interest may be converted into
        shares of the Company’s common stock on the basis of $1.00 per share or Class A
        Membership Units of the LLC on the basis of one Class A Membership Unit for
        each
        $50,000 of principal and/or interest converted.  The notes may be
        prepaid at any time, at the option of the Company, in whole or in part without
        penalty.
  40
 **LOCATION
            BASED TECHNOLOGIES CORP. (formerly PocketFinder, Inc.)**
 **AND
            SUBSIDIARY**
 **(A
            Development Stage Company)**
 **NOTES
            TO FINANCIAL STATEMENTS**
 **FOR
              THE YEARS ENDED AUGUST 31, 2007 AND 2006**
 **9.**            
          **SUBSEQUENT EVENTS** (Continued)
 
 **Subsequent
          Events in Recapitalized Location Based Technologies, Inc.**
          (Continued)
  On
            October 9, 2007, a total of 6,000,000 stock options were issued to certain
            officers of the Company. Under
            the
            terms of the stock options, each officer was granted an option to purchase
            a
            total of 2,000,000 shares of the Company’s common stock at $1.00 per
            share.  Each officer’s options will vest at a rate of 1,000,000
            options when the Company achieves 100,000 customers and the remaining
            1,000,000
            options when the Company achieves 250,000 customers.  All options vest
            on a change of control and expire ten years from the date of when the
            performance goal is achieved.  None of the options were exercisable as
            of August 31, 2007.
     41


REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Board
      of
      Directors




Springbank
      Resources, Inc.




We
      have
      audited the accompanying balance sheet of Springbank Resources, Inc. as of
      August 31, 2007, and the related statements of operations, changes in
      stockholders’ equity and cash flows for the year then ended, for the initial
      period ended August 31, 2006, and for the period from April 20, 2006 (inception)
      to August 31, 2007.  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 audits.




We
      conducted our audits 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 includes examining, on a test basis, evidence
      supporting the amounts and disclosures in the financial
      statements.  An audit also includes 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 financial statements referred to above present fairly, in all
      material respects, the financial position of Springbank Resources, Inc. as
      of
      August 31, 2007, and the results of its operations and its cash flows for the
      year then ended, for the initial period ended August 31, 2006, and for the
      period from April 20, 2006 (inception) to August 31, 2007, in conformity with
      generally accepted accounting principles of the United States of
      America.




The
      accompanying financial statements are presented assuming the company will
      continue as a going concern. As more fully described in Note 3 to the financial
      statements, the Company has sustained accumulated losses from operations
      totaling $205,000 at August 31, 2007, and has determined to sell its only
      operational asset. This condition, and the fact that the Company has had no
      significant sales of its products to  date, raise substantial doubt
      about its ability to continue as a going concern.  Management's plans
      to address these conditions are also set forth in Note 3 to the financial
      statements. The accompanying financial statements do not include any adjustments
      which might be necessary if the Company is unable to continue.




Denver,
      Colorado


November
      14, 2007


/s/
      Comiskey & Company


PROFESSIONAL
      CORPORATION




42




**Springbank
      Resources, Inc.**


**(A
      Development Stage Company)**


**BALANCE
      SHEET**


**August
      31, 2007**




**ASSETS*****CURRENT
                ASSETS***Cash
                and cash equivalents
            
            $
            4,476Accounts
                receivable
            
            
            4,827Prepaid
                rent
            
            
            1,100**Total
                current assets**
            
            
            10,403Oil
                and Gas Properties held for sale (at net realizable value)
            
            
            67,135**TOTAL
                ASSETS**
            
            $
            77,538**LIABILITIES
                AND STOCKHOLDERS' EQUITY*****CURRENT
                LIABILITIES***Accounts
                payable
            
            $
            9,984Accounts
                payable - JIB
            
            
            67,135**Total
                current liabilities**
            
            
            77,119**STOCKHOLDERS'
                EQUITY**Preferred
                stock, $0.01 par value, 10,000,000 sharesauthorized;
                no shares issued or outstanding
            
            
            -Common
                stock, no par value; 100,000,000shares
                authorized; 5,162,500 shares issued and outstanding
            
            
            205,423Deficit
                accumulated during the development
            
            
            (205,004
            )stage**Total
                stockholders' equity**
            
            
            419**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            77,538




**The
      accompanying notes are an integral part of the financial
      statements**




43




**Springbank
      Resources, Inc.**


**(A
      Development Stage Company)**


**STATEMENT
      OF OPERATIONS**


**For
      the years ended August 31, 2007 and 2006,**


**and
      for the period from Inception (April 20, 2006) to August 31,
      2007**




**Inception**
            
            
            **For
                the**
            
            
            **For
                    the initial****(April
                20,****2006)**
            
            
            **year
                ended**
            
            
            **Period
                  ended****to
                August 31,**
            
            
            **August
                31,**
            
            
            **August
                31,****2007**
            
            
            **2007**
            
            
            **2006****Revenues**
            
            $
            26,928
            
            
            $
            26,928
            
            
            $
            -**Expenses**Selling,
                general & administrative
            
            
            83,224
            
            
            
            82,602
            
            
            
            622Impairment
                of oil and gas properties
            
            
            148,708
            
            
            
            148,708
            
            
            
            -Total
                expenses
            
            
            231,932
            
            
            
            231,310
            
            
            
            622**Net
                Loss**
            
            
            (205,004
            )
            
            
            (204,382
            )
            
            
            (622
            )Accumulated
                DeficitBalance,
                beginning of period
            
            
            -
            
            
            
            (622
            )
            
            
            -Balance,
                end of period
            
            $
            (205,004
            )
            
            $
            (205,004
            )
            
            $
            (622
            )**Net
                Loss Per Share**
            
            $
            (0.05
            )
            
            $
            (0.04
            )
            
            $
            (0.00
            )**Weighted
                Average Number of****Shares
                Outstanding**
            
            
            3,887,374
            
            
            
            4,706,765
            
            
            
            1,825,000




**The
      accompanying notes are an integral part of the financial
      statements**




44




**Springbank
      Resources, Inc.**


**(A
      Development Stage Company)**


**STATEMENT
      OF CHANGES IN STOCKHOLDERS’ EQUITY**


**For
      the period from Inception (April 20, 2006) to August 31,
      2007**




**Deficit****Accumulated****Preferred
                Stock**
            
            
            **Common
                Stock**
            
            
            **Common**
            
            
            **Stock**
            
            
            **During
                the**
            
            
            **Total****Number**
            
            
            
            
            
            **Number**
            
            
            
            
            
            **Stock**
            
            
            **Subscriptions**
            
            
            **Development**
            
            
            **Stockholders****Shares**
            
            
            **Amount**
            
            
            **Shares**
            
            
            **Amount**
            
            
            **Subscribed**
            
            
            **Receivable**
            
            
            **Stage**
            
            
            **Equity**Balance
                April 20, 2006
            
            
            -
            
            
            $
            -
            
            
            
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Issuance
                of stock for cash,April
                20, 2006, $0.0127 per share
            
            
            -
            
            
            
            -
            
            
            
            1,825,000
            
            
            
            23,250
            
            
            
            -
            
            
            
            (23,250
            )
            
            
            -
            
            
            
            -Stock
                subscriptionsreceived,
                August 2006,$0.085
                per share
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            114,538
            
            
            
            (110,396
            )
            
            
            -
            
            
            
            4,142Net
                loss for the period
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (622
            )
            
            
            (622
            )Balance,
                August 31, 2006
            
            
            -
            
            
            
            -
            
            
            
            1,825,000
            
            
            
            23,250
            
            
            
            114,538
            
            
            
            (133,646
            )
            
            
            (622
            )
            
            
            3,520Issuance
                of stock foroil
                and gas properties,September
                30, 2006
            
            
            -
            
            
            
            -
            
            
            
            1,475,000
            
            
            
            25,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            25,000Issuance
                of stock for cashand
                subscriptions receivable,November
                15, 2006
            
            
            -
            
            
            
            -
            
            
            
            1,862,500
            
            
            
            157,173
            
            
            
            (114,538
            )
            
            
            84,683
            
            
            
            -
            
            
            
            127,318Collection
                of stocksubscriptions
                receivableDecember
                2006 andJanuary
                2007
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            48,963
            
            
            
            -
            
            
            
            48,963Net
                loss for the period
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (204,382
            )
            
            
            (204,382
            )Balance,
                August 31, 2007
            
            
            -
            
            
            
            -
            
            
            
            5,162,500
            
            
            $
            205,423
            
            
            $
            -
            
            
            $
            -
            
            
            $
            (205,004
            )
            
            $
            419




**The
      accompanying notes are an integral part of the financial
      statements**




45


**Springbank
          Resources, Inc.**
 **(A
          Development Stage Company)**
 **STATEMENT
          OF CASH FLOWS**
 **For
          the years ended August 31, 2007 and 2006,**
 **and
          for the period from Inception (April 20,2 006) to August 31,
          2007**
  **Inception**
                
                
                **For
                    the**
                
                
                **For
                    the Initial****(April
                    20, 2006)**
                
                
                **Year
                    ended**
                
                
                **Period
                      ended****to
                      August 31,**
                
                
                **August
                    31,**
                
                
                **August
                    31,****2007**
                
                
                **2007**
                
                
                **2006****Cash
                    Flows from Operating Activities**Net
                    Loss
                
                $
                (205,004
                )
                
                $
                (204,382
                )
                
                $
                (622
                )Adjustment
                    to reconcilenet
                    loss to net cash flowfrom
                    operating activitiesDepletion
                
                
                1,305
                
                
                
                1,305
                
                
                
                -Impairment
                    of oil and gas properties
                
                
                148,708
                
                
                
                148,708Increase
                    in accounts receivable
                
                
                (4,827
                )
                
                
                (4,827
                )
                
                
                -Increase
                    in prepaid rent
                
                
                (1,100
                )
                
                
                (1,100
                )
                
                
                -Increase
                    in accounts payable
                
                
                9,984
                
                
                
                8,605
                
                
                
                -Net
                    Cash Flow from Operating Activities
                
                
                (50,934
                )
                
                
                (51,691
                )
                
                
                (622
                )**Cash
                    Flow from Investing Activities**Purchase
                    of oil and gas properties
                
                
                (125,013
                )
                
                
                (125,013
                )
                
                
                -Net
                    Cash Flow from Investing Activities
                
                
                (125,013
                )
                
                
                (125,013
                )
                
                
                -**Cash
                    Flow from Financing Activities**Shareholder
                    Advances
                
                
                -
                
                
                
                (682
                )
                
                
                682Issuance
                    of Common Stock
                
                
                180,423
                
                
                
                176,281
                
                
                
                4,142Net
                    Cash Flow from Financing Activities
                
                
                180,423
                
                
                
                175,599
                
                
                
                4,824**Net
                    Increase in Cash****and
                    Cash Equivalents**
                
                
                4,476
                
                
                
                (1,105
                )
                
                
                4,202**Cash
                    and Cash Equivalents,****Beginning
                    of Period**
                
                
                -
                
                
                
                4,202
                
                
                
                -**Cash
                    and Cash Equivalents,****End
                    of Period**
                
                $
                4,476
                
                
                $
                3,097
                
                
                $
                4,202**Non
                    Cash Investing and Financing Activities:**In
                    fiscal 2007, the Company issued stock valued at $25,000 in partial
                    payment
                    for an investment in oil and gas
                    properties.
  **The
          accompanying notes are an integral part of the financial
          statements**
  46
  **Springbank
            Resources, Inc.**
 **NOTES
            TO FINANCIAL STATEMENTS**
 **August
            31, 2007**




**1.**
              **Summary
                  of Significant Accounting
                  Policies**
  **Development
        Stage Company**
 Springbank
        Resources, Inc. (a development stage company) (the "Company") was incorporated
        under the laws of the State of Nevada on April 20, 2006.  The
        principal office of the corporation is 28581 Front Street, Suite 100, Temecula,
        CA 92590.
  The
        Company is in the development stage as defined by Statement No. 7 of the
        Financial Accounting Standards Board since it has generated only limited
        revenue
        from its planned operational activities to date. In September 2006 and December
        2006, the Company acquired working interests in five oil and gas wells in
        Pawnee
        County, Oklahoma.  The Company participated as a working interest
        owner of these wells from December 2006 to September 2007.  On August
        31, 2007, the Company entered into an agreement with Energy Capture Corporation
        to sell all of its working interests in the oil and gas wells in exchange
        for
        the assumption by Energy Capture Corporation of approximately $67,135 of
        operating liabilities owed by the Company to the operator of the
        wells.
  **Loss
        per Share**
 Loss
        per
        share was computed using the weighted average number of shares outstanding
        during the period.  Shares issued to insiders in anticipation of a
        public offering have been accounted for as outstanding since
        inception.
  **Financial
        Instruments**
 Unless
        otherwise indicated, the fair value of all reported assets and liabilities
        that
        represent financial instruments (none of which are held for trading purposes)
        approximate the carrying values of such amount.
  **Statements
        of Cash Flows**
 For
        purposes of the statements of cash flows, the Company considers all highly
        liquid debt instruments purchased with an original maturity of three months
        or
        less to be cash equivalents.
  **Oil
        and Gas Properties**
 Oil
        and
        gas properties were amortized using the units of production method based
        on
        management's estimate of the amount of reserves remaining to be
        produced.
  As
        of the
        balance sheet date, management had determined to sell its investment in oil
        and
        gas wells and has written down its investment in the wells to the amount
        of
        proceeds to be received in the sale.
  **Asset
        Retirement Obligations**
  Management's
        estimate of the future costs associated with dismantlement, abandonment and
        restoration of oil and gas properties has been determined to be immaterial
        to
        the financial statements.
  **Income
        Taxes**
 Income
        taxes are accounted for in accordance with SFAS No. 109 Accounting for Income
        Taxes. Provisions for income taxes include deferred taxes resulting primarily
        from temporary differences due to different reporting methods for oil and
        natural gas properties for financial reporting purposes and income tax purposes,
        and for the effects of startup costs and non-benefited net operating loss
        carryforwards.
  **Use
        of Estimates**
 The
        preparation of the Company's financial statements in conformity with generally
        accepted accounting principles requires the Company's management to make
        estimates and assumptions that effect the amounts reported in these financial
        statements and accompanying notes.  Actual results could differ from
        those estimates.
  47
 **Springbank
              Resources, Inc.**
 **NOTES
              TO FINANCIAL STATEMENTS**
 **August
              31, 2007**
 **1.**
              **Summary
                  of Significant Accounting Policies
                  (continued)**
  **Consideration
        of Other Comprehensive Income Items**
 SFAS
        130
        -- Reporting Comprehensive Income, requires companies to present comprehensive
        income (consisting primarily of net income plus other direct equity changes
        and
        credits) and its components as part of the basic financial
        statements.  For the period ended June 30, 2006, the Company’s
        financial statements do not contain any changes in equity that are required
        to
        be reported separately in comprehensive income.
  **2.**
              **Recently
                  Issued Accounting
                  Pronouncements**
  In
        June
        2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes” (an interpretation of FASB Statement No. 109) (“FIN 48”). This
        interpretation prescribes a more likely than not recognition threshold and
        a
        measurement attribute for the financial statement recognition and measurement
        of
        a tax position taken or expected to be taken in a tax return. FIN 48 also
        provided guidance on derecognition of a tax position, classification of a
        liability for unrecognized tax benefits, accounting or interest and penalties,
        accounting in interim periods, and expanded income tax disclosures. FIN 48
        becomes effective for the Company on September 1, 2007.
  In
        September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
        157).  The changes to current practice resulting from the application
        of this Statement relate to the definition of fair value, the methods used
        to
        measure fair value, and the expanded disclosures about fair value
        measurements.  This issuance is effective for fiscal year ends
        beginning after November 15, 2007.
  In
        February 2007, the FASB issued SFAS No. 159 "The Fair Value Option for Financial
        Assets and Financial Liabilities." SFAS No. 159 permits companies to choose
        to
        measure certain financial instruments and certain other items at fair value.
        SFAS No. 159 requires reporting in earnings of unrealized gains and losses
        on
        items for which the fair value option is elected. The provisions of SFAS
        No. 159
        are effective for the first fiscal quarter in fiscal 2009, although the FASB
        permits earlier adoption.
  **3.**
              **Going
                  Concern**
  Since
        inception, the Company has incurred $205,004 in cumulative losses from
        operations and has a working capital deficit of $66,716.  These
        conditions raise substantial doubt about the Company's ability to continue
        as a
        going concern.  As discussed in notes 6 and 7 of the financial
        statements, the Company sold its investment in oil and gas property and entered
        into a share exchange agreement with Location Based Technologies,
        Inc.
  **4.**
              **Stockholders’
                  Equity**
  The
        Company has authorized a total of 100,000,000 common shares and 10,000,000
        preferred shares.  The preferred shares, par value $0.01, may be
        issued in series by the Board of Directors and may include such rights, voting
        power, preferences, relative participation and designations as may be determined
        by the Board.
  During
        the year ended August 31, 2007, the Company raised approximately $176,000
        via a
        private placement in which it sold 1,862,500 shares of its common stock to
        a
        group of private investors for CN$0.10 per share.
  48
 **Springbank
              Resources, Inc.**
 **NOTES
              TO FINANCIAL STATEMENTS**
 **August
              31, 2007**
 **5.**
              **Related
                  Party Transactions**
  As
        of May
        1, 2006, two shareholders were acting as officers of the Company, and were
        the
        owner of 1,825,000 share of its issued and outstanding common
        stock.  Clint R. Black owned 650,000 shares and was the President,
        Chief Executive Officer and a Director; Philip F. Grey owned 1,175,000 shares
        and was the Secretary and Treasurer.
  During
        the year ended August 31, 2006, Philip F Grey advanced $682 of capital to
        the
        Company for the initial bank deposit and to fund expenses related to the
        organization of the Company.
  **6.**
              **Income
                  Taxes**
  The
        Company has net operating losses and deductible temporary differences of
        $203,000 comprising $682 of startup costs amortized over 60 months for tax
        and
        deducted currently for financial statement purposes, $148,708 of impairment
        loss
        on oil and gas properties recorded for financial statement purposes and deferred
        for tax purposes, and a net operating tax loss of approximately $53,746
        available to reduce future taxable earnings.  The tax benefit of the
        net operating loss and deductible temporary differences is approximately
        $69,000
        and has been offset by a full allowance for realization, as the Company
        considers it more likely than not that the tax benefit of these items will
        not
        be realized.  The Company's future utilization of net operating losses
        will be limited upon a change in control of the Company pursuant to Internal
        Revenue Code Section 382.
  **7.**
              **Oil
                  and Gas Activity**
  On
        September 20, 2006, the Company consummated its agreement, entered into on
        July
        11, 2006, to purchase, through a cash payment of $100,000 plus the issuance
        of
        1,475,000 of its common shares, a 32.5% working interest, 26% net revenue
        interest, in and to the oil and gas lease known as Glencoe #1-31 located
        in
        Pawnee County, Oklahoma. A well had been drilled on the lease and completed
        on
        November 4, 2005. The well's initial production was 15 BOPD and vented 70
        MCF of
        gas and was produced for approximately 4 months which during 3 of those months
        oil was sold. The well has been operated by Southstar Oil and Gas,
        Inc.
  The
        working interest was purchased from Futures Investment Corporation, a company
        controlled by Mr. Cory Dosdall, a former officer and director of the Company.
        Mr. Dosdall resigned as officer and director on May 2, 2006. The Glencoe
        #1-31
        lease was recorded on the Company's books at an amount not exceeding the
        seller's original cost of the asset.
  Effective
        December 18, 2006, the Company acquired a 5% working interest in five newly
        drilled Glencoe wells operated by Southstar Oil and Gas, Inc, as well as
        additional drilling sites that will be held by production of these wells.
        The
        Company acquired its interest in these wells by assigning 27.5% of its existing
        working interest in Glencoe #1-31, plus a cash payment of $20,000 to Southstar
        Oil and Gas, Inc. After the assignment, the Company has a 5% working interest
        in
        6 wells, namely, the original Glencoe #1-31, Glencoe #2-31, Glencoe #3-31,
        Glencoe #4-31, Glencoe #1-32 and Glencoe #5-31, additional drill site acreage,
        and a 5% interest in the newly constructed gas gathering system on the Glencoe
        leases.  Through August 31, 2007, the Company received approximately
        $27,000 in oil and gas revenue from its Glencoe investments.
  On
        August
        31, 2007 the Company entered into an agreement, to be effective October 1,
        2007,
        to sell all leasehold interests, equipment, and intangibles related to its
        Oklahoma oil and gas investments to Energy Capture Corp.  The $67,135
        purchase price for the wells is to be paid by Energy Capture Corp. through
        its
        assumption of $67,135 owed by the Company to the operator of the
        wells.  Energy Capture Corp.  is entitled to all proceeds
        from the sale of any oil or gas produced from the wells after October 1,
        2007
        and is responsible for all expenses pertaining to the wells subsequent to
        that
        date.  As a result of the sale, the Company recorded a loss from
        impairment of its oil and gas properties in the amount of $148,708, which
        is the
        amount by which its investment in the oil and gas wells at August 31, 2007
        exceeded the debt to be assumed by Energy Capture Corp.  The Company
        decided to sell its interest in the wells because it was of the opinion that
        the
        wells would never be profitable.
  49
 **Springbank
              Resources, Inc.**
 **NOTES
              TO FINANCIAL STATEMENTS**
 **August
              31, 2007**
 After
        the
        sale of the oil and gas properties, the Company had no material assets or
        liabilities.
  **8.**
              **Subsequent
                  Events**
  On
        October 1, 2007, the Company completed the sale of its investment in oil
        and gas
        properties.
  On
        October 11, 2007, the Company completed its acquisition of all of the
        outstanding stock of Location Based Technologies, Corp., a California
        corporation ("Old LBT") through the issuance of 18,384,500 shares of the
        Company's common stock in a one for one exchange with the shareholders of
        Old
        LBT.
  Prior
        to
        the acquisition, the Company's CEO and CFO agreed to return 150,000 and 675,000
        shares, respectively, to Springbank for cancellation.  After the
        cancellation of these shares Springbank had 4,337,500 outstanding shares
        of
        common stock.  At the closing, new directors were appointed and the
        existing officers and directors resigned.  After the exchange, the
        former shareholders of Old LBT owned at least 80% of the outstanding stock
        of
        the Company.
  Immediately
        following the acquisition of Old LBT, the Company merged Old LBT into itself
        pursuant to the short form merger rules of Nevada corporation law, and, in
        the
        process, changed its name to Location Based Technologies, Inc.
           50




**Item
      8.  Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure**




None




**Item
      8A.  Controls and Procedures**




**Evaluation
      of disclosure controls and procedures.**




We
      maintain controls and procedures designed to ensure that information required
      to
      be disclosed in the reports that we file or submit under the Securities Exchange
      Act of 1934 is recorded, processed, summarized and reported within the time
      periods specified in the rules and forms of the Securities and Exchange
      Commission. Based upon their evaluation of those controls and procedures
      performed as of the date of this report, our chief executive officer and the
      principal financial officer concluded that our disclosure controls and
      procedures were effective.




**Changes
      in internal controls.**




In
      the
      period subsequent to the date of evaluation, a change in control of the Company
      occurred, including a change of management of the issuer.




**Item
      8B.  Other Information**




None.




**PART
      III**




**Item
      9.  Directors, Executive Officers, Promoters, Control Persons and
      Corporate Governance**




**Executive
      Officers and Directors.**  Each of our directors is elected by
      the stockholders for a term of one year and serves until his or her successor
      is
      elected and qualified.  At present, no director is compensated for his
      or her services as director.  The company has not adopted any formal
      procedure by which a stockholder may recommend nonissuers to serve on our board
      of directors.




51




The
      board
      of directors has no nominating, audit or compensation committee at this
      time.




Each
      of
      our three executive officers serve pursuant to employment contracts which
      terminate in October 2012 subject to the automatic and successive one-year
      extensions if not cancelled by either party.  See “Item 10, Executive
      Compensation – Employment Contracts.”




The
      following table sets forth information regarding our executive officer and
      directors.




**Name**
            **Age**
            **Position**David
                M. Morse
            54
            Co-President
                and Chief Executive Officer and DirectorJoseph
                F. Scalisi
            44
            Co-President
                and Chief Development Officer and DirectorDesiree
                Mejia
            36
            Chief
                Operating Officer, Secretary and
                Director




*Dr.
      Morse* has been Co-President, Chief Executive Officer and Chairman of the
      Board of Directors since October 8, 2007.  Since September 16, 2005,
      he held similar positions in the operating company that was merged into New
      LBT
      on August 24, 2007.  From late 2001 to 2005, Dave was involved in
      several start up ventures providing consulting services (People Basics from
      August 2001 to April, 2002 and ESP Networks from April, 2002 to July,
      2004).  Early development work on the *PocketFinder*TM began in
      2004 and resulted in the establishment of New LBT in September of
      2005.  Dr. Morse brings 20 years of executive-level experience to New
      LBT.  The majority of his career (1982 to 2001) has focused on the
      consumer market, leading him to serve as Vice President of Consumer Billing
      Services from 2000 to 2001 and his passion for customer service led to his
      appointment as Chief Customer Officer for Pacific Bell (1997 to 2000) where
      he
      worked directly with the Chairman and the Executive Committee to establish
      the
      alignment of corporate strategy and process management
      objectives.  Prior to then, he served as Vice President of Sales and
      Service for SBC, now AT&T, the second largest telecommunications company in
      the United States from 1991 to 1997.  While at SBC, he led an
      organization of more than 4,000 employees in 23 locations, serving 7,000,000
      households.  Subsequent to leading the consumer organization, he
      served as Vice President of Product Marketing responsible for SBC’s core billing
      product.




Dr.
      Morse
      received a PhD in Organizational Behavior from Columbia Pacific University,
      a
      Master of Arts degree in Psychology from the University of Northern Colorado
      and
      a Bachelor of Science degree from Brigham Young University.




Dr.
      Morse
      has given keynote addresses on education and business management to several
      organizations and has lectured at University of California at Berkeley,
      University of California at Davis, University of California at Los Angeles
      and
      Massachusetts Institute of Technology and serves as Chair for the University
      of
      California’s Board focused on Mathematics, Engineering, and Science Achievement
      (MESA).




*Mr.
      Scalisi* has been Co-President, Chief Development Officer and a director
      since October 11, 2007.  Since September 16, 2005, he held the same
      positions in the operating company that was merged into New LBT on
      August 24, 2007.  As co-founder of the operating company that was
      merged into New LBT, Mr. Scalisi designed the first generation
*PocketFinder*TM device.  With vast of knowledge of the
      communications industry, including expertise in patents and trademarks, Mr.
      Scalisi is responsible for filing intellectual property applications,
      architecting the *PocketFinder*TM design team (interactive voice
      recognition, or IVR, mapping interface, man-machine user interface, and hardware
      design) and participates in the negotiation of contracts.




Prior
      to
      becoming involved with the *PocketFinder*TM device, from February 2000 to
      November 2004, Mr. Scalisi was employed by ESP Networks doing wireless
      development for a restricted use cellular phone with an automated pager
      system.




*Mr.
      Scalisi* has received 14 domestic issued patents along with four
      international patents.  He is currently working on 12 additional
      patent applications filed over the past four years.  He has attended
      Fullerton College.




Ms.
      Mejia
      has been Chief Operating Officer, Secretary and a director since October 11,
      2007.  Since September 16, 2005, she held the same positions in the
      operating company that was merged into New LBT on August 24, 2007.  As
      a co-founder of the operating company that was merged into New LBT, Ms. Mejia
      is
      responsible for running the day-to-day operations at New LBT and directly
      interacts with the Accounting and Marketing departments.




52




Ms.
      Mejia
      developed the *PocketFinder*TM concept after realizing that a true need
      exists to “see” your children even when you can’t be with them.  With
      co-founder Joseph Scalisi, Ms. Mejia then took the concept of using a GSM/GPRS
      tracking platform, combining it with a mapping service and creating a
      revolutionary tracking system.  Thus the *PocketFinder*TM system
      was born.




For
      the
      five years prior to becoming our Chief Operating Officer, Ms. Mejia worked
      for
      ESP Networks from December 2000 through November 2004.  Prior to that,
      Ms. Mejia worked with venture capital firms to help raise funds for the
      technology sector prior to 2000.  She also consulted with a wireless
      manufacturing company to assist the launch of a new wireless
      device.  Prior to this, Ms. Mejia worked with Deloitte and Touche, LLP
      where her specialties were in the technology and telecommunications
      field.  Previously, Ms. Mejia acted as the head researcher and
      assistant to the Chairman at MESA Research, whose clients included AT&T,
      Motorola, Nortel, 3Com and Phillips.  She has a Bachelor of Arts
      degree in Sociology from California State University, Dominguez Hills,
      California.




*Ms.
      Florance*, a consultant to New LBT, is expected to become a contracted,
      part-time Chief Financial Officer as of December 2007.  She has
      been the President of Florance Accountancy Corp. since March
      2006.  She specializes in preparing SEC registrants for financial
      statement audits and reviews.  Prior to forming Florance Accountancy
      Corp., from October 2003 to February 2006, Ms. Florance worked as a financial
      consultant for Hall & company, an Irvine, California, based accounting firm
      providing consulting and audit services for small to medium sized public and
      private companies.  From September 1997 to September 2003, Ms.
      Florance worked as a manager for KPMG in their Los Angeles and New York
      offices.  She is a member of the American Institute of Certified
      Public Accountants, the California Society of Certified Public Accountants
      and a
      member of the board of Northwestern Mutual Financial Network
      Advisors.  She holds a Bachelor of Science in Accounting from the
      University of Southern California and is a Certified Public Accountant in the
      State of California.




There
      are
      no orders, judgments, or decrees of any governmental agency or administrator,
      or
      of any court of competent jurisdiction, revoking or suspending for cause any
      license, permit or other authority to engage in the securities business or
      in
      the sale of a particular security or temporarily or permanently restraining
      any
      of our officers or directors from engaging in or continuing any conduct,
      practice or employment in connection with the purchase or sale of securities,
      or
      convicting such person of any felony or misdemeanor involving a security, or
      any
      aspect of the securities business or of theft or of any felony, nor are any
      of
      the officers or directors of any corporation or entity affiliated with us so
      enjoined.  There have been no bankruptcy petitions filed by or against
      any business in which any of our executive officers or directors was an
      executive officer or general partner.  None of our executive officers
      or directors has been convicted in a criminal proceeding (excluding traffic
      violations) and none is subject to a pending criminal proceeding.




**Other
      Persons Expected to Make Significant Contributions to New
      LBT.**




*Lee
      Ackrich* provides us with sales consulting services.  For more
      than five years, he has been the President of Ackrich & Associates
      International Marketing providing global sales and marketing expertise to its
      clients.




*David
      Bulter*, through our agreement with Aero Technology UK Ltd., provides us
      with wireless product development consulting services.  For more than
      five years, he has been Managing Director of Aero Technology UK Ltd., a British
      company, providing international wireless communications expertise to its
      clients.




*Roger
      Anderson* provides us with encryption, data compression and IVR consulting
      services.  For more than five years, he has been the President or
      Manager of Call Knowing, LLC, providing encryption, data compression and IVR
      expertise to its clients.




*Michael
      Beydler* is responsible for our “back office” network and platform design
      through a consulting agreement with LBT.  For more than five years, he
      has been the President or Manager of Coregenic LLC providing wireless network,
      engineering and design services to its clients.




53




Any
      compensation received by our officers directors, and management personnel will
      be determined from time to time by our Board of Directors.  Our
      officers, directors, and management personnel will be reimbursed for any
      out-of-pocket expenses incurred on the company’s behalf.




**Code
      of Ethics.**  We have adopted a Code of Ethics (the “Code”)
      that applies to our directors, officers and employees, including our principal
      executive officer and principal financial and accounting officer,
      respectively.  A written copy of the Code is available on written
      request to the company.




**Item
      10. Executive Compensation**




**Summary
      Compensation Table.**  The table set forth below summarizes the
      annual and long-term compensation for services in all capacities to us for
      the
      year ended payable to our President and our other executive officers during
      the
      years ending August 31, 2006 and 2007.  Our board of directors may
      adopt an incentive stock option plan for our executive officers which would
      result in additional compensation.




**Summary
                Compensation Table****Name
                and****Principal****Position**
            
            **Fiscal**
              **Year**
              **Ended**
              **8/31(1)**
            ****
            **Salary**
              **($)**
            ****
            ****
            **Bonus**
              **($)**
            ****
            ****
            **Stock
                Awards**
              **($)**
            ****
            ****
            **Option
                Awards**
              **($)**
            ****
            ****
            **Non-Equity
                Incentive Plan Compensation ($)**
            ****
            ****
            **Nonqualified
                Deferred Compensation Earnings**
              **($)**
            ****
            ****
            **All
                Other Compensation**
              **($)**
            ****
            ****
            **Total**
              **($)**David
                Morse
            
            2006
            
            
            115,000
            (3)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            115,000
            (2)Co-President,
            
            2007
            
            
            120,000
            (3)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            120,000
            (2)Chief
                Executive Officer andChairman
                of the BoardJoseph
                Scalisi
            
            2006
            
            
            115,000
            (4)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            115,000
            (3)Co-President,
            
            2007
            
            
            120,000
            (4)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            120,000
            (3)Chief
                Development Officer andDirectorDesiree
                Mejia
            
            2006
            
            
            115,000
            (5)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            115,000
            (4)Chief
                Operating Officer and
            
            2007
            
            
            120,000
            (5)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            120,000
            (4)Board
                Member




(1)
            The
                information on this table relates to amounts paid to our executive
                officers in their  capacities as such in the predecessor
                operating company (Old LBT) that was merged into New LBT effective
                August
                24, 2007.  Prior to that merger, the officers and directors of
                New LBT (fka Springbank Resources, Inc.) resigned.  The minimal
                assets, liabilities and operations of New LBT prior to that merger
                were
                disposed of prior to the merger.  Prior to their resignation,
                the executive officers and directors of Springbank Resources, Inc.
                had
                received no cash compensation.  Current management believes that
                disclosures relating to the ongoing business of New LBT are more
                meaningful.


(2)
            In
                2006, $0 was actually paid and $115,000 was accrued for future
                payment.


(3)
            In
                2006, $26,075 was actually paid and $88,925 was accrued for future
                payment.


(4)
            In
                2006, $14,500 was actually paid and $100,500 was accrued for future
                payment.




54




**Outstanding
      Equity Awards.**  The table below summarizes the outstanding
      equity awards to our executive offices as of August 31, 2007.




**Outstanding
                Equity Awards at Fiscal Year-End****Name**
            ****
            **Number
                of Securities Underlying Unexercised Options (#)
                Exercisable**
            ****
            ****
            **Number
                of Securities Underlying Unexercised Options (#)
                Unexercisable**
            ****
            ****
            **Equity
                Incentive**
              **Plan
                Awards****:**
              **Number
                of Securities Underlying Unexercised Unearned
                Options**
              **(#)**
            ****
            **Option**
              **Exercise**
              **Price**
              **($)**
            
            **Option**
              **Expiration**
              **Date**
            ****
            **Number
                of Shares or Units of Stock That Have Not Vested**
              **(#)**
            ****
            ****
            **Market
                Value of Shares or Units of Stock That Have Not
                Vested**
              **($)**
            ****
            ****
            **Equity**
              **Incentive**
              **Plan
                Awards:**
              **Number
                of Unearned Shares, Units or Other rights That Have Not
                Vested**
              **(#)**
            ****
            ****
            **Equity
                Incentive**
              **Plan
                Awards:**
              **Market
                or Payout Value of Unearned Shares, Units or Other Rights That Have
                Not
                Vested**
              **($)**David
                Morse
            
            
            --
            
            
            
            2,000,000
            (1)
            
            
            --
            
            $1/share
            
            2017
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Joseph
                Scalisi
            
            
            --
            
            
            
            2,000,000
            (1)
            
            
            --
            
            $1/share
            
            2017
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Desiree
                Mejia
            
            
            --
            
            
            
            2,000,000
            (1)
            
            
            --
            
            $1/share
            
            2017
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --




(1)
            Pursuant
                to stock options granted by Old LBT to Messrs, Morse and Scalisi,
                and Ms.
                Mejia, which options were assumed by New LBT when Old LBT was merged
                into
                New LBT, each holds an option to purchase up to 2,000,000 shares
                of New
                LBT common stock at $1 per share.  Options to purchase 1,000,000
                shares each are exercisable when we achieve 100,000 customers, and
                the
                remaining options to purchase 1,000,000 shares each are exercisable
                when
                we achieve a total of 250,000 customers.  None of such options
                is presently exercisable.  All such options vest on a change of
                control of New LBT.  The options expire ten years from the date
                of performance goal achieved.




**Long-Term
      Incentive Plans.**  There are no arrangements or plans in which
      we provide pension, retirement or similar benefits for directors or executive
      officers.  We do have a Stock Incentive Plan that will be governed by
      the board of directors.




**Compensation
      of Directors.**  Our directors who are also our employees
      receive no extra compensation for their service on our board of
      directors.




**Employment
      Contracts.**




*David
      Morse*, our Chief Executive Officer, is employed pursuant to a written
      agreement.  The agreement expires on October 11, 2012; provided
      however, that it is automatically extended for additional one-year periods
      unless either party provides written notice to the contrary at least 60 days
      prior to the end of the term then in effect.  Mr. Morse is entitled to
      a base salary of $10,000 per month and is entitled to adjustments to his base
      salary based on certain performance standards.  He may participate in
      any general bonus plan established by the board of directors and is entitled
      to
      participate in the stock incentive plan of the company on such terms as the
      board deems appropriate from time to time.  He will also be entitled
      to participate in any and all benefits and perquisites as are generally provided
      for the benefit of executive employees.  The agreement terminates on
      his death, incapacity (after 180 days), resignation, good cause as defined
      and
      good cause.  If he is terminated without cause, he is entitled to base
      salary, all bonuses otherwise applicable, and medical benefits for two
      years.




*Joseph
      Scalisi*, our Co-President and Chief Development Officer, is employed
      pursuant to a written agreement.  The agreement expires on October 11,
      2012; provided however, that it is automatically extended for additional
      one-year periods unless either party provides written notice to the contrary
      at
      least 60 days prior to the end of the term then in effect.  Mr.
      Scalisi is entitled to a base salary of $10,000 per month and is entitled to
      adjustments to his base salary based on certain performance
      standards.  He may participate in any general bonus plan established
      by the board of directors and is entitled to participate in the stock incentive
      plan of the company on such terms as the board deems appropriate from time
      to
      time.  He will also be entitled to participate in any and all benefits
      and perquisites as are generally provided for the benefit of executive
      employees.  The agreement terminates on his death, incapacity (after
      180 days), resignation, good cause as defined and good cause.  If he
      is terminated without cause, he is entitled to base salary, all bonuses
      otherwise applicable, and medical benefits for two years.




55




*Desiree
      Mejia*, our Chief Operating Officer and Secretary, is employed pursuant to a
      written agreement.  The agreement expires on October 11, 2012;
      provided however, that it is automatically extended for additional one-year
      periods unless either party provides written notice to the contrary at least
      60
      days prior to the end of the term then in effect.  Ms. Mejia is
      entitled to a base salary of $10,000 per month and is entitled to adjustments
      to
      her base salary based on certain performance standards.  She may
      participate in any general bonus plan established by the board of directors
      and
      is entitled to participate in the stock incentive plan of the company on such
      terms as the board deems appropriate from time to time.  She will also
      be entitled to participate in any and all benefits and perquisites as are
      generally provided for the benefit of executive employees.  The
      agreement terminates on her death, incapacity (after 180 days), resignation,
      good cause as defined and good cause.  If she is terminated without
      cause, she is entitled to base salary, all bonuses otherwise applicable, and
      medical benefits for two years.




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


**Management
      and Related Stockholder Matters**




The
      following table sets forth certain information as of November 20, 2007,
      regarding the beneficial ownership of our common stock by (i) each stockholder
      known by us to be the beneficial owner of more than five percent of our common
      stock, (ii) by each of our executive officers and (iii) by all of our executive
      officers and directors as a group.  Each of the persons named in the
      table has sole voting and investment power with respect to common stock
      beneficially owned.  Unless otherwise noted in the table, the address
      for each of the persons identified is 4989 East La Palma Avenue, Anaheim,
      California 92807.




**Name
                and Address**
              **of
                Beneficial Owner**
            ****
            **Amount
                and Nature**
              **of
                Beneficial Ownership**
            ****
            **Percent**
              **of
                Common Stock**David
                M. Morse
              Co-President,
                CEO andChairman
                of the Board
            
            5,600,000
                shares
            
            24.64%Joseph
                F. Scalisi
              Co-President
                andChief
                Development Officerand
                Director
            
            5,600,000
                shares
            
            24.64%Desiree
                Mejia
              Chief
                Operating Officer,Secretary
                andDirector
            
            5,600,000
                shares
            
            24.64%All
                directors and named executive officers as a group
            
            16,800,000
                shares
            
            73.92%




**Changes
      in Control.**  We are not aware of any arrangements which may
      result in “changes in control” as that term is defined by the provisions of Item
      403 of Regulation S-B.




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




There
      have been no related party transactions, or any other transactions or
      relationships required to be disclosed pursuant to Item 404 of Regulation S-B,
      except as follows:




On
      November 28, 2005, Old LBT (fka PocketFinder, Inc.) issued its promissory note
      to David Morse in the amount of $900,000 for funds loaned to Old LBT by Dr.
      Morse.  The note was secured by a pledge of the patents and trademarks
      owned by Old LBT.  As of the date hereof, the principal balance of the
      note has been reduced to zero through a combination of cash payments in the
      amount of $96,500 and the issuance of 803,500 shares of Old LBT common stock
      at
      $1 per share.  As of August 31, 2007, there remained outstanding
      accrued but unpaid interest in the amount of $120,599.




From
      the
      inception of the predecessor of Old LBT to August 31, 2007, each of David Morse,
      Joseph Scalisi and Desiree Mejia were paid salaries or other compensation
      totaling $235,000 (of which $225,000 was accrued for future payment), $235,000
      (of which $105,000 was accrued for future payment) and $235,000 (of which
      $143,000 was accrued for future payment), respectively.




56




Dr.
      Morse, Mr. Scalisi and Ms. Mejia have employment contracts with New LBT and
      each
      holds an option to purchase up to 2,000,000 shares at $1 per share upon New
      LBT
      achieving certain operational benchmarks.  (See “Directors, Executive
      Officer, Promoters and Control Persons – Outstanding Equity Awards;” and “Item
      10.  Executive Compensation – Employment Contracts” for
      details.)




With
      regard to any future related party transaction, we plan to fully disclose any
      and all related party transactions in the following manor:




Ÿ           disclosing
      such transactions in reports where required;


Ÿ           disclosing
      in any and all filings with the SEC, where required;


Ÿ           obtaining
      disinterested directors consent; and


Ÿ           obtaining
      shareholder consent where required.




All
      members of the Board of Directors are also employees at the present
      time.  Independent Board members will be brought onto the Board within
      90 days of product launch.




**Item
      13.  Exhibits**




**Exhibit
                No.***
            **Description**2.1
            Stock
                Exchange Agreement and Plan of Reorganization among Springbank Resources,
                Inc., Location Based Technologies, Corp. and the Shareholders of
                Location
                Based Technologies, Corp., dated August 31, 2007(3)3.1
            Articles
                of Incorporation of Springbank Resources, Inc. (now known as Location
                Based Technologies, Inc.)(1)3.2
            By-Laws
                of Springbank Resources, Inc. (now known as Location Based Technologies,
                Inc.)(2)4.1
            Form
                of Convertible Note (convertible at the option of the company) issued
                by
                PocketFinder, LLC, a company the liabilities of which were assumed
                by the
                registrant ($3,175,000 represented by six of such notes, were
                issued)(3)4.2
            Form
                of Convertible Note (convertible at the option of the noteholder)
                issued
                by PocketFinder, LLC, a company the liabilities of which were assumed
                by
                the registrant ($2,067,000 represented by 26 of such notes, were
                issued)(3)10.1
            Executive
                Employment Agreement, dated October 11, 2007, between New LBT and
                David
                Morse(3)10.2
            Executive
                Employment Agreement, dated October 11, 2007, between New LBT and
                Joseph
                Scalisi(3)10.3
            Executive
                Employment Agreement, dated October 11, 2007, between New LBT and
                Desiree
                Mejia(3)10.4
            Stock
                Option Award Agreement between Location Based Technologies, Corp.
                and
                David Morse, dated August 30, 2007 (obligation assumed by New
                LBT)(3)10.5
            Stock
                Option Award Agreement between Location Based Technologies, Corp.
                and
                Joseph Scalisi, dated August 30, 2007 (obligation assumed by New
                LBT)(3)10.6
            Stock
                Option Award Agreement between Location Based Technologies, Corp.
                and
                Desiree Mejia, dated August 30, 2007 (obligation assumed by New
                LBT)(3)10.7
            Series
                A Warrant, dated August 15, 2007, in favor of Northstar Investments,
                Inc.,
                issued by Location Based Technologies, Corp. (obligation assumed
                by New
                LBT)(3)10.8
            Series
                B Warrant dated August 15, 2007, in favor of Northstar Investments,
                Inc.
                (obligation assumed by New LBT)(3)10.9
            Finders
                Fee Agreement, dated March 9, 2007, between Northstar Investments,
                Inc.
                and PocketFinder, LLC (obligation assumed by New
                LBT)(3)10.10
            Consulting
                Agreement, dated July 16, 2007, between Northstar Investments, Inc.
                and
                PocketFinder, LLC (obligation assumed by New LBT)(3)10.11
            2007
                Stock Incentive Plan of Location Based Technologies, Corp., adopted
                September 10, 2007 (obligation assumed by New LBT)(3)10.12
            Product
                Design Agreement, dated May 1, 2007, between PocketFinder, LLC and
                Aero
                Technology UK, Ltd. (obligation assumed by New
                LBT)(3)




57




10.13
            PocketFinder
                Branding and Website – Control Agreement, dated September 20, 2006,
                between Coregenic LLC and PocketFinder, LLC (obligation assumed by
                New
                LBT)(3)10.14
            Coregenic
                Professional Services Contract, dated September 27, 2006, between
                Coregenic LLC and PocketFinder, LLC (obligation assumed by New
                LBT)(3)10.15
            Consulting
                Agreement, dated October 3, 2006, between PocketFinder, LLC and Michael
                Beydlar (obligation assumed by New LBT)(3)10.16
            Consulting
                Agreement, dated July 10, 2006, between PocketFinder, LLC and Roger
                Anderson (obligation assumed by New LBT)(3)10.17
            Loan
                Promissory Note in the amount of $900,000, dated November 28, 2005,
                with
                PocketFinder, Inc. as maker and David Morse as payee, secured by
                the
                intellectual property of maker (obligation assumed by New
                LBT)(3)31.1
            Sarbanes
                Oxley Act Section 302 Certification of Chief Executive
                Officer31.2
            Sarbanes
                Oxley Act Section 302 Certification of Principal Financial
                Officer32
            Sarbanes
                Oxley Act Section 906 Certification of Chief Executive Officer and
                Principal Financial Officer99.1
            Code
                of Ethics(4)




(1)
            Filed
                as Exhibit 3.(I) to registrant’s registration statement on Form SB-2 filed
                with the SEC December 15, 2006 (Commission File No. 333-139395) (the
“SRI
                SB-2”) and incorporated herein by this
                reference.


(2)
            Filed
                as Exhibit 3.(II) to the SRI SB-2 and incorporated herein by this
                reference.


(3)
            Filed
                as like-numbered exhibits to the registrant’s Current Report on Form 8-K
                filed with the SEC on October 12, 2007 (the “October 12, 2007 8-K”) and
                incorporated herein by this
                reference.


(4)
            Filed
                as Exhibit 99.4 to the October 12, 2007
                8-K.


*
            Exhibit
                numbers follow the numbering pattern for exhibits set forth in Item
                601 of
                Regulation S-B




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




*Audit
      Fees.*  The aggregate fees for the fiscal year ended August 31,
      2007 and 2006 for professional services rendered by the principal accountant
      for
      the audit of our annual financial statements were $12,065 and $4,782,
      respectively.




*Audit-Related
      Fees.*  In the fiscal year ended August 31, 2007, there were fees
      billed for services reasonably related to the performance of the audit or review
      of the financial statements outside of those fees disclosed above under “Audit
      Fees.”  In the fiscal year ended August 31, 2007, we were billed a
      total of $9,125 by a separate accountant for consulting services in preparation
      for the annual audit of the financial statements.  No such fees were
      incurred in the fiscal year ended August 31, 2006.




*Tax
      Fees.*  None.




*All
      Other Fees.*  None.







**Pre-Approval
      Policies and Procedures.**  Prior to engaging our accountants
      to perform a particular service, our board of directors obtains an estimate
      for
      the service to be performed.  All of the services described above were
      approved by the board of directors in accordance with its
      procedures.




58




**Signatures**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the company caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




**LOCATION
                BASED TECHNOLOGIES, INC.**
              **(Registrant)**Date:
                November
                29, 2007
            By:
            /s/ David
              M. MorseDavid
              M. MorseCo-
              President and Chief Executive
              Officer






In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the company and in the capacities and on the
      dates indicated.




Date:
                November
                29, 2007
            By:
            /s/ David
              M. MorseDavid
              M. MorseDirector




Date:
                November 29, 2007
            By:
            /s/ Joseph
              ScalisiJoseph
              ScalisiDirector




Date:
                November
                29, 2007
            By:
            /s/ Desiree
              MejiaDesiree
              MejiaDirector






**SUPPLEMENTAL
      INFORMATION TO BE FURNISHED WITH REPORTS FILED**


**PURSUANT
      TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING
      ISSUERS**




1.
            No
                annual report to security holders covering the company’s last fiscal year
                has been sent as of the date of this
                report.




2.
            No
                proxy statement, form of proxy, or other proxy soliciting material
                has
                been sent to any of the company’s security holders with respect to any
                annual or other meeting of security
                holders.




3.
            If
                such report or proxy material is furnished to security holders subsequent
                to the filing of this Annual Report on Form 10-KSB, the company will
                furnish copies of such material to the Commission at the time it
                is sent
                to security holders.