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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

                        For year ended December 31, 2005

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

                  For the transition period from _____ to _____

                              LISKA BIOMETRY, INC.
                              --------------------
             (Exact name of registrant as specified in its charter)

            Florida                      333-94265               061562447
            -------                      ---------               ---------
(State or other jurisdiction of   (Commission File Number)    (I.R.S Employer
        incorporation)                                       Identification No.)

                   100 Main Street Dover, New Hampshire 03820
                   ------------------------------------------
                    (Address of principal executive offices)

                                 1 877 77 LISKA
                                 --------------
                (Issuer's telephone number, including area code)

   Securities registered pursuant to Section 12(g) of the Act: Not Applicable

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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. |X| Yes |_| No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. |_|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes |_| No |X|

State issuer's revenues for its most recent fiscal year. $0.

<PAGE>

The aggregate market value of the voting and non-voting equity held by
non-affiliates computed by reference to the price at which common equity was
sold, or the average bid and asked price of such common equity (i.e., does not
include directors, executive officers or ten percent stockholders identified in
Item 11 hereof) of the issuer as of December 31, 2005 was approximately $0 based
upon the average bid and ask price as reported on the Over the Counter Market as
of December 31, 2005.

As of December 31, 2005, there were 34,141,263 shares of our common stock issued
and outstanding. As of April 17, 2006, there were 36,023,036 shares of our
common stock issued and outstanding.

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

DOCUMENTS INCORPORATED BY REFERENCE

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<PAGE>

                TABLE OF CONTENTS TO ANNUAL REPORT ON FORM 10-KSB
                          YEAR ENDED DECEMBER 31, 2004

PART I

Item 1      Description of Business                                            4
Item 2      Description of Property                                           17
Item 3      Legal Proceedings                                                 17
Item 4      Submission of Matters to a Vote of Security Holders               18

PART II

Item 5      Market for Common Equity and Related Stockholder Matters          18
Item 6      Management's Discussion and Analysis or Plan of Operation         20
Item 7      Financial Statements                                              27
Item 8      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure                                         40
Item 8A     Controls and Procedures                                           41

PART III

Item 9      Directors, Executive Officers, Promoters and Control Persons;     41
               Compliance with Section 16(a) of the Exchange Act
Item 10     Executive Compensation                                            41
Item 11     Security Ownership of Certain Beneficial Owners and Management    41
Item 12     Certain Relationships and Related Transactions                    41
Item 13     Exhibits and Reports on Form 8-K                                  42
Item 14     Principal Accountant Fees and Services                            42

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<PAGE>

PART I

FORWARD-LOOKING STATEMENTS:

This annual report on Form 10-KSB contains forward-looking statements. Liska
Biometry, Inc. is referred to in this report as "Liska", "the Company", "we",
"us" or "our." The words or phrases "would be," "will allow," "intends to,"
"will likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," or similar expressions are intended to identify
"forward-looking statements." Actual results could differ materially from those
projected in the forward-looking statements as a result of a number of risks and
uncertainties including the following: (a) Our ability to continue as a going
concern is contingent upon our ability to attain profitable operations and
secure financing; if we fail to do so, we will be forced into liquidation and
you will lose your entire investment; (b) Because we have no operating history
pertaining to our biometrics based business, it will be difficult for you to
evaluate our business and financial prospects; (c) We have no revenues; (d) Our
business is a new business, which subjects us to financial and operational
risks; (e) Our operations are subject to all of the risks inherent in a new
business enterprise; (f) We are an early stage business in a new and rapidly
evolving market; (g) If we fail to keep pace with the rapidly changing market of
fingerprint identification, our revenues and financial condition will be
negatively affected; (h) We may be unable to overcome competitive forces in
industry; (i) We are subject to substantial regulation; (j) We face patent
protection risks; (k) Our management has significant control over stockholder
matters; and (l) Our operations are subject to possible conflicts of interest;

Item 1. DESCRIPTION OF BUSINESS

OVERVIEW

Liska Biometry develops revolutionary fingerprint biometric solutions enabling
fast individual authentication, precise identification searches, and
cross-platform data interoperability. Our innovative, scalable technology
generates a short, repeatable, unique, numerical identifier from an individual's
fingerprint. This short number becomes a precise and universal biometric
identifier number (BIN(TM)) capable of being embedded in credit cards, driver's
licenses, travel documents such as visas and passports, and a host of other
personal identification credentials. Liska's innovative technology allows for
seamless, integrated identification searches across disparate databases at all
levels of government and law enforcement.

Biometric technology is the science involving the identification of individuals
through the measurement of distinguishing biological characteristics.

Our fingerprint biometric software solutions enable identification of
individuals in large ID management systems and disparate legacy databases.
Offerings can be used for:

      o     National ID Card Programs
      o     Secure Identification Documents (Visas, Passports)
      o     Transaction Authentication (ATMs, Credit Cards)
      o     Controlled access to secure areas and networks.

Our initial business plan was to develop, manufacture, market and integrate
computer-based products and services pertaining to the identification of
individuals by employing our fingerprint biometric technology. Our current
business plan is to:

      o     License our fingerprint biometric software product offering to
            OEM's, System Integrators and Value Added Resellers; and
      o     Develop customized product applications utilizing the Company's core
            software technology.


                                       4
<PAGE>

MARKET OVERVIEW

The attitudes and needs of governments and private enterprise towards
establishing the positive identity of its citizens, employees and foreign
visitors using high level security applications dramatically changed as a
consequence of the terrorist attacks of September 11, 2001. Identity
confirmation, once required only in highly sensitive areas, is now given much
more consideration in a myriad of scenarios involving access to borders and many
public and private venues.

Civil administrative projects involving national security have been accelerated
on a worldwide basis; proper and secure identification is viewed as critical to
national defense and homeland security. Several national ID and border control
projects, such as US VISIT, utilizing biometrics (e. g. fingerprints, facial and
iris recognition, palm prints, voice) to identify citizens and control entry of
foreign visitors have already progressed beyond conceptual stages toward
contract procurement. Increased public awareness, and indeed demand, for more
pervasive security protocols has become one of the biggest drivers of the
biometrics industry as a whole. In the face of this strong demand, adoption of
biometric technology is hindered by several key factors:

o     The inability of current technology to facilitate rapid identification and
      verification of subjects;
o     The lack of efficient methods to allow data interchange and
      interoperability; and
o     Strong concerns about privacy, accuracy and data integrity.

TECHNOLOGY

The Company's revolutionary fingerprint biometric software solutions build on
the established fact that every person's fingerprints are unique to that
individual. Our technique captures the invariant elements of an individual's
fingerprint pattern and generates a short, repeatable but unique fixed length
number that represents the measurement of selected invariant elements of the
fingerprint. This short, fixed number that the Company terms the "Biometric
Identifier Number" (BIN(TM)) can be encrypted and embedded in machine-readable
travel documentation such as visas, passports and drivers licenses for
one-to-one authentication. Using a BIN(TM) substantially accelerates accurate
identification searches against disparate databases such as immigration data
repositories and terrorist/law enforcement watch lists. Importantly and critical
to all users and the individual, the BIN(TM) cannot be reverse-engineered, and
thus an individual's biometric data integrity is kept private and secured.

Utilizing this technology, the Company has developed and continues to develop,
software applications and integrated solutions.

CURRENT OFFERINGS

The following is a description of the status of each of the Company's current
software offerings:

The BIN(TM) 1.0 Descriptor Authentication Software

The Company's BIN(TM) Descriptor Authentication Software is a means of
delivering its patent-pending fingerprint Biometric Identifier Number Algorithm
as an integrated software solution that can be retrofitted to existing hardware
and IT infrastructure deployments for 1:1 biometric authentication and 1:N
database search. The BIN(TM) Descriptor Authentication Algorithm is a software
application that is licensed to original equipment manufacturers, systems
integrators and value added resellers for use within their existing security
infrastructure solution or integrated as part of a new application solution.


                                       5
<PAGE>

The BIN(TM) 1.0 Descriptor Enrollment Software

The Company's BIN(TM) Descriptor Enrollment Software is a means of delivering
its patent-pending fingerprint Biometric Identifier Number Algorithm as an
integrated software solution that can be retrofitted to existing hardware and IT
infrastructure deployments for biometric and credential enrollment, token
generation and database population, with 1:N database watch list search
functionality. The BIN(TM) Descriptor Enrollment Algorithm is a software
application that is licensed to original equipment manufacturers, systems
integrators, and value added resellers for use within their existing security
infrastructure solution or integrated as part of a new application solution.

The BIN(TM) 1.0 Database Management Software

The Company's BIN(TM) Database Management Software is a means of delivering its
patent-pending fingerprint Biometric Identifier Number Algorithm as an
integrated software solution that can be retrofitted to existing hardware and IT
infrastructure deployments for centralized BIN(TM) based ID management and
legacy database interoperability functionality. The BIN(TM) Database Management
Algorithm is a software application that is licensed to original equipment
manufacturers, systems integrators, and value added resellers for use within
their existing security infrastructure solution or integrated as part of a new
application solution.

ORGANIZATIONAL BACKGROUND AND HISTORY

We are a development stage company that was incorporated in the State of Florida
on October 26, 1999. We are authorized to issue 100,000,000 shares of common
stock. As of April 17th, 2006, there were 36,023,036 shares of our common stock
outstanding. We are authorized to issue 10,000,000 shares of preferred stock, of
which no shares are outstanding.

We have earned no significant revenues since our inception and, as a result, we
have sustained losses since our inception. We have never been the subject of a
bankruptcy, receivership or similar proceeding.

Our principal executive offices are currently located at 100 Main Street, Suite
230, Dover NH 03820. Our telephone number at this address is 1 877 77 LISKA. On
November 2, 2004 we formed a Canadian subsidiary, Liska Biometry (Canada) Inc.
to focus on research and development of our products and to manage our Canadian
marketing and sales program. On November 23, 2005 we formed Liska Biometry
(Saudi Arabia) to focus on the sale of our products throughout the Middle East.

BUSINESS DEVELOPMENT:

On October 26, 1999, we were incorporated in the State of Florida under the name
3045 Corporation to sell mortgage related products on the Internet.

In January 2001, we acquired all of the issued and outstanding common shares of
H2O International, Inc. from its shareholders, in exchange for 500,042 shares of
our common stock (approximately 83% of our issued and outstanding shares after
this issuance), so that we could obtain H2O International, Inc.'s licensing
rights to a cleaning process technology for large-scale water and fluid
treatment, filtering, and storage facilities, which H2O International, Inc. had
obtained from Floran Technologies, Inc. In connection with the acquisition of
H2O International, Inc., the following occurred:

o We changed our name to Floran International, Inc. to reflect our new proposed
business plan based upon the licensing rights held by H2O International, Inc.;

o Kim Naimoli, our then sole officer and director and our then majority
shareholder, resigned all positions she held with us and sold an aggregate of
925,000 shares of our common stock to Michael Mitchell, Todd Moore and Apollo
Holdings LLC, which is owned by Chris Bonvini, in exchange for aggregate
proceeds of $425,000;


                                       6
<PAGE>

o In January 2001, we appointed Lyndell F. Parks, Frederick J. Jarosz, Terry L.
Pancake, Dennis Gordon, Dr. Javaid Sheik, and G. Bryan Thomas to our Board of
Directors. We appointed Frederick J. Jarosz as our President; and

o We enacted a ten (10) share for one (1) share forward split of our common
stock so that our shareholders as of January 9, 2001 received ten (10) shares of
our common stock for each share held.

On April 30, 2001, Floran Technologies, Inc. notified us that we were in default
of our license agreement for failure to make required payments, and Floran
terminated our license agreement. On June 26, 2001: (a) we changed our name to
FTLA, Inc.; (b) we abandoned our business plan which had been based on the
license agreement; and (c) Floran Technologies, Inc. returned 90,000 shares to
us which we had issued to it as a shareholder in connection with our purchase of
H2O International, Inc.'s licensing rights.

On May 10, 2001 we enacted a one hundred (100) for one (1) reverse split of our
common stock. From May of 2001 until March of 2002 we were inactive.

On March 26, 2002, Paragon Management and Marketing, Inc., our majority
shareholder at the time, sold 9,000,000 shares of our common stock to Kojon
Biometrics, Inc., a Canadian Corporation, in exchange for $100,000. Of this
amount, Kojon Biometrics, Inc. paid $40,000 in cash. Paragon Management and
Marketing, Inc. exchanged the remaining balance due for 100,000 shares of Kojon
Biometric, Inc.'s common stock. Lam Ko Chau, our former President and sole
director, was the majority shareholder of Kojon Biometrics, Inc. through his
ownership of 3,500,000 shares or 60% of Kojon Biometrics, Inc.'s common stock.
Lam Ko Chau was the President and a Director of Kojon Biometrics, Inc. As a
result of the transaction:

o Kojon Biometrics, Inc. then held 9,000,000 shares of our common stock which
represented approximately ninety-one percent (91%) of our common stock;

o Lyndell Parks, our then President and Director, and Audra Parks, our then
Secretary, Treasurer and Director, resigned all positions they held with us and
Lam Ko Chau was appointed as our President and sole member of our Board of
Directors to fill the vacancies created by their resignations; and

o We changed our name to Liska Biometry, Inc. to reflect our new proposed
business plan of fingerprint encoding and authentication.

From the March 26, 2002 stock sale to Kojon Biometrics, Inc., Lam Ko Chau was
our controlling shareholder, President, and sole director September 15, 2004.

At the time Kojon Biometrics, Inc. purchased the 9,000,000 shares, Lam Ko Chau
was an officer, director and the majority shareholder of Kojon Biometrics, Inc.
through his ownership of 3,500,000 shares or sixty percent (60%) of Kojon
Biometrics, Inc.'s common stock. Lam Ko Chau, our former President, founded
Kojon Biometrics, Inc. and had been its President and Chief Executive Officer
since April 17, 2001. On April 5, 2003, Kojon Biometrics, Inc. distributed the
9,000,000 shares of our common stock it had purchased on March 26, 2002 to its
fifteen (15) shareholders.

MATERIAL AGREEMENTS

Letter of Intent with Digital Card Systems

On December 21st, 2005 the company entered into a letter of intent to merge its
operations with Digital Card Systems of Acton, Massachusetts. The company filed
form 8k on December 21st, 2005 which includes the agreement.

Definitive Agreement

On February 8th, 2006 the company entered into a definitive agreement to merge
operations with Digital Card Systems of Acton, Massachusetts. The company filed
form 8k on February 8th, 2006 which includes the entire agreement.


                                       7
<PAGE>

Executive Employment Agreements

On April 1, 2005, we entered into several employment agreements with key
individuals: Mr. Chris LeClerc was reinstated to serve as our Chief Executive
Officer and Mr. Manoj Hippola was reinstated to serve as the Company's Chief
Financial Officer and Chief Operating Officer. As further described below, on
March 8th, 2006, Hippola resigned, his successor has not yet been appointed

Election of Board of Directors

On August 18, 2005, we held our Annual General Meeting in Manchester, NH and
elected five directors:

General Jean E. Boyle (ret.), was elected Chairman of the Board. General Boyle
retired as Chief of Defense Staff of Canada's Armed Forces following a
distinguished 30-year military career including serving as Assistant Deputy
Minister (Personnel) for National Defense, Commander 1 Canadian Air Division
(Europe) and Commandant of the Royal Military College of Canada. Following his
retirement, he joined the Boeing Company as Vice-President of International
Business Development and as Managing Director of Boeing International - Europe.
In 2001, General Boyle joined the SPECTRUM GROUP, a Washington, DC-based
strategic consulting organization serving defense, aerospace and high technology
companies. He is the President and CEO of JEBtek International located in
Ottawa.

Brian F. Hynes. is a Partner with Shefsky & Froelich of Chicago, IL where he
advises clients on a variety of legal matters ranging from general corporate
concerns to litigation, real estate and government relations. He also serves as
a principal at Illinois Governmental Consulting Group, LLC, a government
relations firm. He has served as litigation counsel for the Illinois Housing
Development Authority and is an invited lecturer on matters of municipal
importance, including electric deregulation and public medical aid. Mr. Hynes
serves on the Board of Directors for the International Visitors' Center of
Chicago and Chicago Gateway Green and previously served on the Board of
Directors of the Illinois Development Finance Authority and as Commissioner for
the Southwest Home Equity Assurance Commission. A member of the Illinois Supreme
Court Bar, he holds a BA from the University of Illinois and a JD from Loyola
University of Chicago.

Christopher J. LeClerc, is the President and Chief Executive Officer of the
company. He joined the company from Andover Brokerage LLC, where he was
responsible for a 12-member proprietary trading desk specializing in a wide
range of investment strategies. He has been a Director of Business Development
and Head of OTC trading at Mercer Partners L.P., a New York-based investment
bank and securities underwriter. Previously, he has served as financial
consultant and equities trader for Merrill Lynch, M.H. Meyerson and ETG LLC.

Dr. Javaid I. Sheikh, is the Chief of Staff of the Veterans Affairs Palo Alto
Health Care System (VAPAHCS) and is a Professor of Psychiatry and Behavioral
Sciences as well as Associate Dean for Veterans Affairs at Stanford University
School of Medicine. He is also the Medical Director of the National Center on
the Psychology of Terrorism (NCPT). The NCPT works closely with the Naval
Postgraduate Institute in Monterey, California, as part of the Homeland Security
Leadership Development Program. Dr. Sheikh was listed in the "Best Doctors in
America" from 1997 to 2001.

G. Bryan Thomas, is the President, Chief Executive Officer and Chairman of
Cochran Management Services, Inc. (CCMSI). He joined CCMSI in 1987 and, as
Account Executive, was responsible for marketing and program development for
large individual self-insured groups and major associations. Promoted to
Executive Vice-President and Chief Marketing Officer in 1998, he oversaw all
sales and marketing efforts of the company. In addition, he specializes in
developing risk financing and cost-containment alternatives for large employers
and association insurance plans with emphasis on employee benefits and workers'
compensation programs.


                                       8
<PAGE>

Employment Agreements

Brian Walsh: In April of 2005 the company entered into an employment contract
with Brian Walsh to serve as Vice President of Global Solutions. The approximate
annual cost of this position is $80,000

Peter Wrage: In October of 2005 the company entered into an employment agreement
with Peter Wrage to serve as Vice President of Product Operations. The
approximate annual cost of this position is C$93,000

Will Hansen: In October of 2005 the company entered into an employment agreement
with Will Hansen to serve as Vice President Of Sales (Canada). The approximate
annual cost of this position is C$75,000

Departure of Principal Officers. Appointment of Principal Officers.

On March 8, 2006, Liska issued a press release announcing the resignations of
Jean Boyle, Chairman, Manoj Hippola, Chief Financial and Chief Operating
Officer, and John Hollander, Corporate Secretary. The resignations were
effective immediately. Christopher J. LeClerc, Chief Executive Officer, replaced
Mr. Boyle as Chairman of the Board. Brian Hynes replaced John Hollander as
Secretary. At present the company is interviewing candidates to replace Mr.
Hippola.

Technology Licensing Agreement

On September 30, 2004, we announced a one-year, US$5 Million technology
licensing agreement with European Launch Pad SA (ELP) of Geneva, Switzerland. We
were to provide ELP the right to use and market our proprietary fingerprint
biometric services within the United Arab Emirates. On February 15, 2005 Liska
Biometry, Inc. terminated the agreement for non-performance.

Capital Financing

On October 26th, 2005 the company issued Mercatus Partners Limited 5,000,000
shares of restricted stock for equity priced at $.275. The funds to date have
not yet been received, the shares are currently held in escrow as Brown Brothers
Harriman.

These transactions were exempt from registration pursuant to Section 4(2) and
Regulation S of the Securities Act of 1933, as amended.

Investment Banking Engagement

On November 1, 2004, we signed a Letter of Engagement with Westminster
Securities Corporation of New York City, NY. to act as advising agent to Liska
Biometry, Inc. in its merger negotiations with Digital Card Systems. On December
23rd ,2005 the company engaged Lane Capital Markets to act as placement agent
for Liska Biometry Inc, as per the agreement LCM is due $30,000 and was paid
200,000 restricted shares of stock.

Unsolicited Tender Offer from Galton Biometrics

On January 12, 2005, the Board of Directors of Liska Biometry, Inc. was notified
by Galton Biometrics Inc. of Geneva, Switzerland (`Galton') of its intent to
make an unsolicited offer to purchase all of the Company's issued and
outstanding shares. Galton concurrently issued a press release announcing its
intent. We are unable to determine if Galton made the necessary filing with the
SEC prior to making the public announcement of its intent to make the offer.

Galton's associated company, European Launch Pad ("ELP"), defaulted on the first
payment due under its contractual obligations to Liska pursuant to licensing
agreement announced September 30, 2004. As a result of ELP's default, the
license agreement was terminated on February 14, 2005. It also appears that
Galton relies heavily on Liska's proprietary technology, operating under a
sub-license agreement with ELP. Said sub-license agreement became null and void
upon the termination date of the ELP license agreement.


                                       9
<PAGE>

Liska's Board of Directors has reviewed Galton's offer and has determined that
acceptance of its offer is not in the best interest of Liska or its
shareholders.

Termination of Technology License

On January 14, 2005 we informed Mr. Edward Fitzpatrick, President of European
Launch Pad SA (`ELP) that ELP was in violation of the technology licensing
agreement dated September 29, 2004 for failure to make requisite payments in
accordance with said agreement. The technology license was officially terminated
on February 14th, 2005. Pursuant to said termination, Mr. Fitzpatrick, ELP and
the recipient of a sub-license, Galton Biometrics, Ltd., were advised of the
following:

1. All rights granted under the Agreement are immediately relinquished

2. To immediately cease and discontinue use of the Company's Trade Marks, trade
names, designations and slogans owned or used by the Company and take no action
that would make it appear to the public that you are authorized to use the trade
names or name.

3. Immediately deliver to the Company all price lists, bulletins, manuals,
catalogues, and other literature and publications relating to sales and product
information.

4. Immediately cease promoting and marketing the Services as described in the
Agreement.

At April 19, 2005, Mr. Fitzpatrick, ELP and Galton Biometrics, Ltd., have failed
to acknowledge termination of the agreement or act on the aforementioned.

Strategic Alliance with Marcomm Fibre-Optics, Inc.

On February 22, 2005, Liska Biometry (Canada) Inc., a wholly-owned subsidiary of
the Company, announced a strategic alliance with Marcomm Fibre-Optics, Inc. of
Ottawa, Canada. The strategic alliance and co-marketing arrangement will allow
us to integrate our BIN(TM) Descriptor Software applications with Marcomm's
high-level security software, DYNATROL. Marcomm Fibre Optics, Inc, a privately
held Canadian company, is a leading provider of fully integrated security
systems and services to government and large institutional clients. Its
proprietary DYNATROL software solution provides a platform for the transparent
integration of independent peripheral security and operating systems, such as
CCTV, Access Control, PLC, Alarm Monitoring, DVR's, Intercom, VOIP, Fire Alarm,
Building Automation, Lighting Control, Output Control, and Locking Control
systems into one fully redundant central control and display interface.
Marcomm's client list includes:

      o     House of Commons, Parliament Hill
      o     Department of National Defense
      o     Senate of Canada, Parliament Hill
      o     Royal Canadian Mounted Police (RCMP)
      o     Public Works Canada
      o     Nuclear Facilities
      o     Municipal Water Purification Facilities
      o     Correctional Services Canada
      o     Canadian Museum Association
      o     Secure-Note Printing Facilities


                                       10
<PAGE>

MATERIAL RISKS

We are subject to the following risks:

OUR ABILITY TO CONTINUE AS A GOING CONCERN IS CONTINGENT UPON OUR ABILITY TO
ATTAIN PROFITABLE OPERATIONS AND SECURE FINANCING; IF WE FAIL TO DO SO, WE WILL
BE FORCED INTO LIQUIDATION AND YOU WILL LOSE YOUR ENTIRE INVESTMENT.

Our independent auditors, Stark Winter Schenkein & Co. LLP, have issued their
report and opinion regarding our balance sheet as of December 31, 2005, and
related statements of operations, stockholders' (deficit) and cash flows for the
years ended December 31, 2004 and 2005, expressing substantial doubt about our
ability to continue as a going concern. For the year ended December 31, 2005 and
for the period from our inception to December 31, 2005, we incurred net losses
of $2,942,852 and $10,942,245 respectively. Accordingly, our ability to continue
as going concern is contingent upon our ability to attain profitable operations
and secure financing and must be considered in light of the problems, expenses,
and complications frequently encountered by entrance into established markets
and the competitive forces in which we operate. Although we will attempt to
obtain equity financing for our operations, if we fail to do so, we may be
unable to pay our obligations, pursue our Plan of Operations, or attain
revenue-producing operations, and we will be forced into liquidation, in which
case you will lose your entire investment.

BECAUSE WE HAVE NO OPERATING HISTORY PERTAINING TO OUR BIOMETRICS BASED
BUSINESS, IT WILL BE DIFFICULT FOR YOU TO EVALUATE OUR BUSINESS AND FINANCIAL
PROSPECTS.

Although we have formulated our Plan of Operations, we cannot implement a
biometrics based business into our operations until we have adequate financing.
Because we have not fully implemented our Plan of Operations, you will have
difficulty evaluating our business and future prospects.

OUR BUSINESS IS A NEW BUSINESS, WHICH SUBJECTS US TO FINANCIAL AND OPERATIONAL
RISKS.

Our operations are subject to all of the risks inherent in a new business
enterprise. We currently have no revenues or products and we have no operating
history. As a new business enterprise, we are subject to risks of cash
shortages, substantial product development expenses and increasing losses. We do
not anticipate positive cash flow at any time in the foreseeable future; even if
we obtain positive cash flow, we cannot give assurances that we will be
operating at break-even levels at that time or in the future.

FUTURE GROWTH BEYOND PRESENT CAPACITY WILL REQUIRE SIGNIFICANT EXPENDITURES FOR
EXPANSION, MARKETING AND RESEARCH AND DEVELOPMENT.

We are an early stage business in a new and rapidly evolving market, which makes
it difficult for investors to determine whether we will accomplish our
objectives. We have only recently begun our biometrics business and it will not
become operational until we receive adequate funding, if ever. As a result, we
have no operating history on which you may base an evaluation of our business
and prospects. You should consider our prospects in light of the risks,
uncertainties, expenses and difficulties we will face as an early stage
business, given that we operate in new and rapidly evolving markets and that we
are using a new and unproven business model. These risks may include our
potential inability to reach profitability and our lack of operating history.


                                       11
<PAGE>

IF WE FAIL TO KEEP PACE WITH THE RAPIDLY CHANGING MARKET OF FINGERPRINT
IDENTIFICATION, OUR REVENUES AND FINANCIAL CONDITION WILL BE NEGATIVELY
AFFECTED.

We believe that the market for our potential products is rapidly changing with
evolving industry standards. Our future success will depend in part upon our
ability to introduce new products and features to meet changing customer
requirements and emerging industry standards. There can be no assurance that we
will successfully complete the development of future products or that our
current or future products will achieve market acceptance. Any delay or failure
of these products to achieve market acceptance would adversely affect our
business. In addition, there can be no assurance that products or technologies
developed by others will not render our products or technologies non-competitive
or obsolete.

WE MAY BE UNABLE TO OVERCOME COMPETITIVE FORCES IN OUR INDUSTRY, WHICH WOULD
NEGATIVELY AFFECT OUR OPERATIONS AND OUR ABILITY TO GENERATE REVENUES.

We are in competition with numerous competitors in the fingerprint
identification field. These companies offer technologies for the same purposes
to which we plan to develop and market our technologies. These companies have
substantially greater financial and other resources available to them. There can
be no assurance that we can compete successfully with such other companies.
Competitive pressures or other factors could cause us to lose market share if it
develops at all, or result in significant price erosion, all of which would have
a material adverse effect on our results of operations. For further information
regarding our competition, please see page 16 of this Form 10-KSB.

WE ARE SUBJECT TO SUBSTANTIAL REGULATION, WHICH MAY INCREASE OUR COSTS AND
NEGATIVELY AFFECT OUR POTENTIAL PROFITABILITY.

Our operations may be subject to varying degrees of federal, state or local laws
and regulations. Our operations may be subject to federal, state and local laws
and regulations controlling the development of technologies. Any of these
regulations may increase our costs and negatively affect our potential
profitability.

WE FACE PATENT PROTECTION RISKS THAT MAY NEGATIVELY AFFECT OUR BRAND NAME
REPUTATION, REVENUES AND POTENTIAL PROFITABILITY.

Even though we have applied for patent protection of a method and system for
fingerprint encoding and authentication with the United States Patent and
Trademark Office, that government agency may never approve of this patent. Our
patent may violate the proprietary rights of others, which may subject us to
damage awards or judgments prohibiting the use of our technology. There is no
assurance that any of our rights in any of our intellectual property will be
enforceable, even if registered, against any prior users of similar intellectual
property. In addition, if we fail to provide adequate proprietary protection,
our names, our brand name reputation, revenues and potential profitability may
be negatively affected.

OUR MANAGEMENT HAS SIGNIFICANT CONTROL OVER STOCKHOLDER MATTERS, WHICH MAY
AFFECT THE ABILITY OF MINORITY STOCKHOLDERS TO INFLUENCE OUR ACTIVITIES.

Officer and director Christopher J. LeClerc has beneficial ownership 9.5% of our
outstanding common stock. As such, Mr. LeClerc controls the outcome of all
matters submitted to a vote by the holders of our common stock, including the
election of our directors, amendments to our Articles of Incorporation and
approval of significant corporate transactions. Additionally, Mr. LeClerc could
delay, deter or prevent a change in our control that might be beneficial to our
other stockholders.

Former officer and director Lam Ko Chau, owns 12.7% of our outstanding common
stock. As such, Mr. Chau controls the outcome of all matters submitted to a vote
by the holders of our common stock, including the election of our directors,
amendments to our Articles of Incorporation and approval of significant
corporate transactions. Additionally, Mr. Chau could delay, deter or prevent a
change in our control that might be beneficial to our other stockholders.


                                       12
<PAGE>

BECAUSE OUR STOCK IS A PENNY STOCK FOR WHICH THERE MAY NEVER BE A MARKET, ANY
INVESTMENT IN OUR STOCK IS A HIGH-RISK INVESTMENT AND IS SUBJECT TO RESTRICTIONS
ON MARKETABILITY; YOU MAY BE UNABLE TO SELL YOUR SHARES.

Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks, like shares of our stock, generally are equity
securities with a price of less than $5.00, other than securities registered on
certain national securities exchanges or quoted on NASDAQ. The penny stock rules
require a broker-dealer, prior to transaction in a penny stock not otherwise
exempt from the rules, to deliver a standardized risk disclosure document that
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and, if the broker-dealer
is the sole market maker, the broker-dealer must disclose this fact and the
broker-dealer's presumed control over the market, and monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, broker-dealers who sell these securities to persons other than
established customers and "accredited investors" must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. Consequently,
these requirements may have the effect of reducing the level of trading
activity, if any, in the secondary market for a security subject to the penny
stock rules, and investors in our stock may find it difficult to sell their
shares.

REVENUES:

We have had no revenues in connection with our fingerprint encoding business.

OUR CUSTOMERS:

As of December 31, 2005, and as of the date of this Form 10-KSB, we have had no
customers. Although we plan to engage in the fingerprint encoding and
authentication business, there are no assurances that we will develop any
customers for our products. Because our customers potentially include United
States government agencies, including branches of the United States military,
there is a risk that we will become dependent upon one or a few customers.

GEOGRAPHIC MARKETS:

As of December 31, 2005, and as of the date of this Form 10-KSB, we have
developed our marketing plan for our fingerprint encoding and authentication
business; these markets at present include North America and the Middle East.

TARGET MARKETS:

Our target markets include the following:

Our target markets include federal, state, and local government agencies,
including:

o     All branches of the United States military;
o     Federal Bureau of Investigation;
o     Office of Homeland Security;
o     Immigration and Naturalization Service;
o     Local police and sheriff's departments;
o     Department of Defense Biometrics Management Office
o     United States Army Communication Electronics Command;
o     National Security Agency;
o     Justice Department Management Office;
o     Airport authorities;
o     State corrections departments;
o     State judiciary departments;
o     Education departments; and
o     State Probation and Parole departments.


                                       13
<PAGE>

Corporations

o     Financial institutions;
o     Transportation Industry
o     Childcare;
o     Securities and gaming agencies; and
o     Large retail organizations.

MARKETING:

As of April 17th, 2006 we have developed a marketing program for our proposed
fingerprint encoding and authentication operations. At present we have four
employees working to execute the plan, two members handle the US, one member,
Canada, and one member the Middle East. In June of 2005 we also engaged Jebtek
International to assist the company in its implementation of the company's
marketing program.

SOURCES AND AVAILABILITY OF RAW MATERIALS/PRINCIPAL SUPPLIERS:

We will rely upon third party manufacturers to manufacture our hardware computer
technology components that comprise our fingerprint biometric applications and
other products. As such, we do not anticipate being dependent upon raw materials
or suppliers for our proposed fingerprint encoding and authentication
operations.

PATENTS, TRADEMARKS AND LICENSES:

On August 16, 2001, Lam Ko Chau, our former President, filed a provisional
United States (U.S.) patent application in the U.S. Patent and Trademark Office
(USPTO), entitled "Method and System for Fingerprint Encoding and
Authentication" and having serial number No. 60/312,371. On October 1, 2001, Lam
Ko Chau, our former President, filed a non-provisional U.S. patent application
in the USPTO, entitled "Method and System for Fingerprint Encoding and
Authentication", having serial number No. 09/965,809 and claiming the benefit of
said provisional U.S. patent application. On August 15, 2002, Lam Ko Chau, our
former President, filed a PCT International Patent Application with the Canadian
Intellectual Property Office (CIPO) acting as Receiving Office under the Patent
Cooperation Treaty (PCT), entitled "Method and System for Fingerprint Encoding
and Authentication", having serial number PCT/CA02/01274 and claiming priority
from said provisional U.S. patent application and said non-provisional U.S.
patent application. A Petition to Make Special (PTMS) was filed in the USPTO on
December 23, 2002 in order to accelerate the examination proceedings in respect
of said non-provisional U.S. patent application and said petition was granted on
September 2, 2003. On February 27, 2003, Lam Ko Chau, our former President,
assigned the right, title and interest in and to all of the aforementioned
patent applications to Liska Biometry, Inc. for consideration of $1. On July 18,
2003, we assigned the right, title and interest in and to all of the
aforementioned patent applications to Liska Biometry Inc., a Florida Corporation
for consideration of $1. The two aforementioned assignments were recorded with
the USPTO on March 20, 2003 and on July 23, 2003, respectively. On February 16,
2004, said PCT International Patent Application entered the National Phase in
Canada in the name of Liska Biometry, Inc. On June 25, 2004, we received word
that the U.S. Patent Office had granted U.S. patent 6,757,411 on the
above-identified application. As of March 22, 2005, said the Canadian National
Phase patent application was pending before, with no official actions having yet
been received.

On November 23, 2004, Manoj Hippola, our Chief Financial Officer and Chief
Operating Officer, filed, on behalf of the Company, a trademark application with
the Canadian Patent and Trademark Office for `BIN" the Company's acronym for
Biometric Identifier Number having docket number 1 240 590.


                                       14
<PAGE>

On December 16, 2004, Dr. Peter Wrage, our Vice President of Product Operations,
filed, on behalf of Liska, a non-provisional United States (U.S.) patent
application in the U.S. Patent and Trademark Office (USPTO), entitled "Method
and Apparatus for Determining a Stable Repeatable Code From Biometric
Information" having docket number 246-03 US. A Petition to Make Special (PTMS)
was filed concurrently with the USPTO on December 16, 2004 in order to
accelerate the examination proceedings in respect of said non-provisional U.S.
patent application.

On December 16, 2004, Dr. Peter Wrage, our Vice President of Product Operations,
filed, on behalf of Liska, a non-provisional United States (U.S.) patent
application in the U.S. Patent and Trademark Office (USPTO), entitled "Database
Employing Biometric Indexing and Method Therefore" having docket number 246-04
US. A Petition to Make Special (PTMS) was filed concurrently with the USPTO on
December 16, 2004 in order to accelerate the examination proceedings in respect
of said non-provisional U.S. patent application.

Our ability to compete in the biometrics industry will depend on our ability to
maintain the proprietary nature of our technology, products and manufacturing
processes. We will rely upon patent, trademark, copyright, trade secret and
contract law to establish and protect our proprietary rights; however, there are
no assurances that we will have adequate protection of our proprietary rights or
that our proprietary rights will not be challenged. The loss or circumvention of
our proprietary rights would have a material adverse affect upon our operations
and financial condition.

COMPETITION:

The markets for our potential products are increasingly competitive. Our
competitors have substantially longer operating histories, greater name
recognition, larger customer bases and greater financial and technical resources
than us. Because we are financially and operationally smaller than our
competitors, we will encounter difficulties in capturing market share. Our
competitors are able to conduct extensive marketing campaigns and create more
attractive pricing of their target markets than we are. In addition, we do not
have an established brand name or reputation while our competitors have
significantly greater brand recognition, customer bases, operating histories and
financial and other resources. In addition, our markets are characterized by
rapid technological change, which lead to frequent introductions of new features
in products to respond to changing consumer needs and preferences. Our
competitors will have greater financial and operational resources by which to
respond to these consumer needs and preferences. At the present time, we have
not formulated a plan to overcome the competitive advantages of our competitors,
and we will not do so until we develop our product or products.

REGULATORY MATTERS/EFFECT OF EXISTING GOVERNMENTAL REGULATIONS:

As of December 31, 2005 and through the date of this Form 10-KSB, we have not
been subject to government regulations pertaining to our business. Our future
operations will be subject to extensive and ever changing federal, state and
local laws and regulations.

COST OF COMPLIANCE WITH ENVIRONMENTAL MATTERS:

As of December 31, 2005 and through the date of this Form 10-KSB, we were not
subject to environmental regulations or costs. Because the fingerprint encoding
and authentication business does not involve the emission of pollutants or other
dangerous substances, we do not anticipate being subject to environmental
regulations or costs relating to our proposed fingerprint encoding and
authentication operations.

RESEARCH AND DEVELOPMENT:

During fiscal year 2005, we spent $941,321 on research and development.

EMPLOYEES:

As of April 17, 2006, on a consolidated basis we had eleven (11) employees, of
whom four (4) were engaged in research, development and engineering, four (4) in
sales, marketing and field service and three (3) in general administration,
finance and legal. The Company also has two engineering consultants who work on
a part time basis.


                                       15
<PAGE>

REPORTS TO SECURITY HOLDERS:

We are subject to the informational requirements of the Securities Exchange Act
of 1934. Accordingly, we file annual, quarterly and other reports and
information with the Securities and Exchange Commission. You may read and copy
these reports and other information we file at the Securities and Exchange
Commission's public reference rooms in Washington, D.C.; New York, New York; and
Chicago, Illinois. Our filings are also available to the public

from commercial document retrieval services and the Internet website maintained
by the Securities and Exchange Commission at www.sec.gov.

Item 2. DESCRIPTION OF PROPERTY:

During approximately May 2003, we moved our offices to 100 Sussex Drive, Ottawa,
Ontario, Canada K1A 0R6. Our Canadian subsidiary, Liska Biometry (Canada) Inc
(LBC) continues to occupy six offices plus shared lab space totaling 977 square
feet. We have a one-year lease agreement with the National Research Council of
Canada that expires on March 31, 2005. LBC does not intend to renew the lease
with National Research Council upon its expiration. LBC pays a total of $2,220
Canadian Dollars (C$) per month to the National Research Council of Canada,
which consists of: (a) C$25 per square foot per year; and (b) C$40 per month for
one external Internet address.

During approximately January 2005, we moved our U.S. head office to 100 Main
Street, Suite 230, Dover, NH 03820. We occupy three offices and a conference
room totaling 1,950 square feet. We have a five-year lease agreement with Dover
Mills, LLC expiring on January 1, 2010. We pay a total of $2,250 per month to
Dover Mills, LLC, which consists of $13.84 per square foot and (b) $2.46 per
square foot operating costs plus escalation. Our offices are sufficient to
conduct our operations and we have no future plans to operate from any other
offices.

On April 1, 2005 LBC moved our Canadian offices to 1900 City Park Drive, Ottawa,
Ontario K1J 9L8 LBC will occupy fifteen offices totaling 5,570 square feet under
a five-year lease agreement with bcIMC Realty Corporation expiring on March 31,
2010. LBC pays a total of C$10,754 (US$8,800) per month consisting of: (a) C$9
(US$7.38) per square foot per year plus escalation; and (b) C$15.17 (US$12.44)
per month for operational costs. LBC's offices will be sufficient to conduct our
Canadian operations and it has no future plans to operate from any other
offices.

We do not own any real property or intend to own any real property in the
future. We do not intend to renovate, improve or develop properties. We are not
subject to any competitive conditions for property and currently have no
property other than office equipment to insure. We have no policy with respect
to investments in real estate or interests in real estate and no policy with
respect to investments in real estate mortgages. Further, we have no policy with
respect to investments in securities of or interests in persons primarily
engaged in real estate activities.

Item 3. LEGAL PROCEEDINGS

There are no material legal proceedings pending or, to our knowledge, threatened
against us.

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

On August 18th, 2005 the Shareholders voted on the appointment of the Board of
Directors for a twelve month term. The shareholders also voted to increase the
option plan to 2.3MM issueable options on August 18th, 2005.


                                       16
<PAGE>

PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock had been previously quoted on the OTC Bulletin Board under the
symbol "FLONE". In October 2001, our common stock was de-listed from the OTC
Bulletin Board for failure to file required periodic filings with the Securities
and Exchange Commission. Since that time and until May 2004, our common stock
was quoted on the "Gray Sheets."

In February 2004 we filed Form 15C-211 to have our shares re-listed on the OTC
Bulletin Board, having updated all of our requisite Securities and Exchange
Commission filings. On May 17, 2004, the National Association for Securities
Dealers approved our Form 15C-211 and we subsequently re-listed our common stock
on the OTC Bulletin Board on May 18, 2004.

The high and low bid information for each quarter, if applicable, for the last
fiscal year is presented below. The quotations are inter-dealer prices without
adjustment for retail markups, markdowns or commissions and do not necessarily
represent actual transactions. These prices may not necessarily be indicative of
any reliable market value.

Quarter                                 High              Low

Fiscal Year Ended 12/31/01
First Quarter                         $  3.75           $  0.50
Second Quarter                        $  0.50           $  0.04
Third Quarter                         $ 0.025           $ 0.018
Fourth Quarter                        $  0.01           $0.0001

Fiscal Year Ended 12/31/02
First Quarter                         $  0.00           $  0.00
Second Quarter                        $  0.00           $  0.00
Third Quarter                         $  0.00           $  0.00
Fourth Quarter                        $  0.00           $  0.00

Fiscal Year Ended 12/31/03
First Quarter                         $  0.00           $  0.00
Second Quarter                        $  0.00           $  0.00
Third Quarter                         $  0.00           $  0.00
Fourth Quarter                        $  0.00           $  0.00

Fiscal Year Ended 12/31/04
First Quarter                         $  0.00           $  0.00
Second Quarter                        $  3.00           $  0.80
Third Quarter                         $  2.05           $  0.62
Fourth Quarter                        $  1.25           $  0.31

Fiscal Year Ended 12/31/05
First Quarter                         $  0.95           $  0.26
Second Quarter                        $  0.75           $  0.21
Third Quarter                         $  0.75           $  0.31
Fourth Quarter                        $  0.51           $  0.32

We obtained the above stock information from an Internet-based website,
http://finance.yahoo.com.

HOLDERS:

As of December 31, 2005, we had approximately 370 holders of record of our
common stock.

                                       17
<PAGE>

ISSUED AND OUTSTANDING STOCK:

As of December 31, 2005, there were 34,141,263 shares of common stock issued and
outstanding. As of April 17, 2006, there were 36,023,036 shares of common stock
outstanding and held by 370 holders of record. Each share of common stock
entitles the holder to one vote on each matter that may come before a meeting of
the shareholders. We currently have one class of common stock outstanding.

We are authorized to issue 10,000,000 shares of preferred stock, of which no
shares are issued and outstanding.

OPTIONS:

The following table sets forth stock options granted to the members of the
Company in the Summary Compensation Table during fiscal 2004 and 2005 under the
Company's two employee stock option plans. Since inception, the Company has not
granted any stock appreciation rights.

<TABLE>
<CAPTION>
Date of Grant     Name                   Options Granted        Exercise Price        Expiration
<S>               <C>                         <C>                    <C>               <C>
   3/11/2005      Verlise Walker              100000                 0.39              3/11/2010
   3/11/2005      Peter Wrage                 250000                 0.39              3/11/2010
   3/11/2005      Khaled Maamoun               25000                 0.39              3/11/2010
   3/11/2005      Dong Li Zhang                25000                 0.39              3/11/2010
   3/11/2005      Yiming Zhang                150000                 0.39              3/11/2010
   3/11/2005      Will Hansen                  25000                 0.39              3/11/2010
   3/11/2005      Colin Jia                    25000                 0.39              3/11/2010
   3/11/2005      Song Guo                     50000                 0.39              3/11/2010
   4/28/2005      Song Guo                     50000                 0.32              4/28/2010
   4/28/2005      Will Hansen                  10000                 0.32              4/28/2010
   4/28/2005      Peter Wrage                 150000                 0.32              4/28/2010
   4/28/2005      Dong Li Zhang                35000                 0.32              4/28/2010
   4/28/2005      Colin Jia                    25000                 0.32              4/28/2005
   4/28/2005      Khaled Maamoun               25000                 0.32              4/28/2010
    7/9/2005      Khaled Maamoun               15000                 0.61               7/9/2010
    7/9/2005      Will Hansen                  15000                 0.61               7/9/2010
    7/9/2004      Jean Boyle                   50000                 0.64               7/9/2009
    7/9/2004      G. Bryan Thomas              50000                 0.64               7/9/2009
    7/9/2004      Javaid Sheikh                50000                 0.64               7/9/2009
    7/9/2004      Gary Gaulding                50000                 0.64               7/9/2009
    7/9/2004      Brian Metcalfe              150000                 0.65               7/9/2009
</TABLE>

WARRANTS:

As per the loan with CAMOFI Ltd, we issued 200,000 warrants on February 3rd,
2006 with an exercise price of $0.33. These warrants are exercisable on a
cashless basis and will expire 3 years from date of issuance.


                                       18
<PAGE>

DIVIDENDS:

We have not declared any cash dividends on our common stock since our inception
and do not anticipate paying dividends in the foreseeable future. We plan to
retain future earnings, if any, for use in our proposed business operations. Any
decisions as to future payment of dividends will be at the discretion of our
Board of Directors.

RECENT SALES OF UNREGISTERED SECURITIES:

The Company issued the following unregistered securities during the twelve
months ended December 31, 2005

These transactions were exempt from registration pursuant to Section 4(2) and
Regulation S of the Securities Act of 1933, as amended.

Date                                    Shares Issued          Purchase Price
1/1/05-3/31/05                                 160000                   48000
4/1/05-6/30/05                                1273402                  403500
7/1/05-9/30/05                                 790110                  273000
10/1/05-12/31/05                              2575000                  593750

None of the above issuances involved underwriters, underwriting discounts. We
relied upon Section 4(2) of the Securities Act of 1933, as amended, and Rule 506
of Regulation D in offering these shares. We believed these exemptions were
available because:

      o     We are not a blank check company;
      o     Total sales did not exceed $1,000,000;
      o     Our officers or directors made all sales of our common stock to the
            above persons;
      o     Sales were not made by general solicitation or advertising;
      o     Sales were made to persons with pre-existing relationships to the
            Company, our officers or directors; and
      o     Sales were made to investors who were either accredited investors or
            who represented that they were sophisticated enough to evaluate the
            risks of the investment.

Item 6. Management Discussion and Analysis or Plan of Operations

FORWARD LOOKING STATEMENTS

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and
related notes. For purposes of this Management's Discussion and Analysis, the
words "we" or "our" refer to Liska Biometry, Inc. This discussion and analysis
contains forward-looking statements based on our current expectations,
assumptions, estimates and projections overview. The words or phrases "believe,"
"expect," "may," "should," "anticipates," or similar expressions are intended to
identify "forward-looking statements". Actual results could differ materially
from those projected in the forward-looking statements as a result of a number
of risks and uncertainties pertaining to our business, including those risks
summarized on pages 9-11 of this Form 10-KSB.


                                       19
<PAGE>

PLAN OF OPERATIONS

We plan to complete our current Plan of Operations over a period of six to 12
months. At the present time we do not have sufficient cash resources to complete
our Plan of Operations. We have not had sufficient cash resources to conduct our
Plan of Operations since we adopted our new business plan of developing
fingerprint encoding and authentication technology. Therefore, full
implementation of our Plan of Operations is contingent upon receiving adequate
financing to meet the remaining costs of our estimate of $1,823,500.

Our Plan of Operations for the Next 12 Months:

RESEARCH AND DEVELOPMENT

In January 2003 we developed a preliminary demonstration model of our proposed
fingerprint technology, which provided only a conceptual guide for future
development. We continued our development throughout 2003 and attempted to
improve our core technology and implement changes in our core software; however,
most of our development occurred from September 2004 to March 2006, in which we
made further changes to our core software. As reflected below in our Plan of
Operations, we will continue to develop our core technology as financing becomes
available.

SOFTWARE ALGORITHM DEVELOPMENT

Using third party live-scan fingerprint scanners, we can now demonstrate the
proof of concept of our proprietary software concepts, illustrating the
differentiating features of embedded software algorithms - that is, the
capability to measure the stable content of a fingerprint image and to express
it as a numeric output and match that number with the numeric output from both
live and stored finger scans to authenticate individuals. A workable prototype
has been developed and is now in final productization, which is contingent upon
us receiving financing, which we may be unable to obtain.

GENERAL & ADMINISTRATIVE EXPENSES

We intend to expend funds for general and administrative expenses such as:
insurance expense, payroll tax, rent expense, legal expenses, professional fees,
telephony and internet access, travel & entertainment, payroll expenses,
professional fees and offices expenses. We have centralized management of the
corporation in Dover, NH, and over the period of this plan will consolidate
resources and space in Ottawa, Ontario Canada, where we will lower our costs of
rent and manpower, focusing totally on Research and Development of our BIN-2
technology, with limited marketing support for Canada and the Middle East. Our
chief business activity will occur in Dover NH.

The remaining estimated annual costs associated with these expenditures is
approximately $625,000

DEVELOP AND INITIATE MARKETING EFFORT

Our marketing personnel have conducted a preliminary market analysis and have
developed a market segmentation strategy that allows for product diversification
and expansion which uses our existing technical developments as leverage and
allows us to demonstrate our unique product within market verticals and
horizontal segments that span them.

      o     Horizontal Segmentation: the Company intends to promote wide-spread
            acceptance of the BIN(TM) concept for large scale ID management
            projects via a software product offering and IP licensing model. The
            focus is on large government contracts, both in North America and
            abroad.


                                       20
<PAGE>

      o     Vertical Segmentation: the Company intends to build its industry
            credibility by providing customized niche applications for specific
            BIN(TM) related applications in direct response to customer
            requests. These applications will be industry specific and will
            entail a large service component. The focus is on high probability
            pilot contracts for large-scale identity management, transportation
            and fleet security.

We will continue to develop strategic partner alliances to collaborate on our
marketing and technological integration efforts. Such strategic partners may
include the following:

      o     Fingerprint biometrics hardware system vendors;
      o     Systems Integrators, defense contractors
      o     Original Equipment Manufacturers (OEMs), Channel Partners
      o     Other distribution channels that target military and commercial
            security markets.

We intend to intensify our foreign sales and marketing efforts in Europe, Canada
and the Middle East where we have received a significant reception for our
customized solutions offerings.

In addition, we will acquire other market information and contacts by joining
key industry groups and hiring industry analysts, attending trade shows,
traveling to meet potential clients/partners and designing print media/web based
promotional strategies.

The annual cost associated with this marketing effort is approximately $555,000.

PRODUCT APPLICATIONS RESEARCH AND DEVELOPMENT INITIATIVE FOCUS

We will continue to develop our proprietary software algorithms, with focused
R&D program milestones and deliverables planned for 2006. Our goal in this
regard is to deliver a demonstrable, error-free application for identity
authentication as well as the baseline BIN-2 product software development kit
(SDK), which will allow us to integrate our product in a variety of systems
already fielded. The remaining annual cost associated with expanding the product
application and R&D functions is approximately $250,000.

SUMMARY OF ESTIMATED COSTS

----------------------------------------------------
CEO                                       $   90,000
----------------------------------------------------
Capital Expenditures                          84,500
----------------------------------------------------
Sr. VP Operations                             80,000
----------------------------------------------------
VP Global Solutions                           80,000
----------------------------------------------------
Chief Software Architect                      64,500
----------------------------------------------------
Chief Engineer                                64,500
----------------------------------------------------
R&D Engineer                                  60,000
----------------------------------------------------
Administration Manager                        40,000
----------------------------------------------------
Director of Business Development              80,000
----------------------------------------------------
Marketing Effort                             555,000
----------------------------------------------------
General & Administrative                     625,000
----------------------------------------------------
TOTAL                                     $1,823,500
----------------------------------------------------


                                       21
<PAGE>

REVENUES

We cannot determine whether our revenues, if any, will ever be sufficient to
produce a positive cash flow or result in net profits. You should carefully
consider the discussion appearing below under "Liquidity and Capital Resources".
Since our inception through December 31, 2005, and as of the date of this Form
10-KSB, we have earned no revenues. We do not expect to earn significant
operating revenues in the foreseeable future. Our losses are expected to
continue, principally as a result of our estimated expenditures of $1,823,500 as
reflected above.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2005, we had limited cash resources of only $33,715. We do
not have any other internal sources of working capital. We did not receive any
revenues during our fiscal year 2005 or thereafter. We do not anticipate earning
revenues until such time that we obtain financing to implement our Plan of
Operations, if ever. Even if we complete our Plan of Operations, there are no
assurances that we will successfully develop a marketable product.

Since our inception, our operating expenses have exceeded our revenues. We have
insufficient working capital to fund our planned growth and ongoing operating
expenses. As a result, we expect to continue to experience significant negative
operating cash flow for the foreseeable future. Our existing working capital
will not be sufficient to fund the continued implementation of our Plan of
Operations during the next 12 months and to meet our general operating expenses.
If we do not have sufficient working capital to implement our Plan of
Operations, we may have to cease operations.

We have no alternative Plan of Operations. In the event that we do not receive
financing, if our financing is inadequate or if we do not adequately implement
an alternative Plan of Operations that enables us to conduct operations without
having received adequate financing, we may have to liquidate our business and
undertake any or all of the following actions:

o     Sell or dispose of our assets, if any;

o     Pay our liabilities in order of priority, if we have available cash to pay
      such liabilities;

o     If any cash remains after we satisfy amounts due to our creditors,
      distribute any remaining cash to our shareholders in an amount equal to
      the net market value of our net assets;

o     File a Certificate of Dissolution with the State of Florida to dissolve
      our corporation and close our business; and

o     Make the appropriate filings with the Securities and Exchange Commission
      so that we will no longer be required to file periodic and other required
      reports with the Securities and Exchange Commission, if, in fact, we are a
      reporting company at that time.

Based upon our current assets, however, we will not have the ability to
distribute any cash to our shareholders.

If we have any liabilities that we are unable to satisfy and we qualify for
protection under the U.S. Bankruptcy Code, we may voluntarily file for
reorganization under Chapter 11 or liquidation under Chapter 7. Our creditors
may also file a Chapter 7 or Chapter 11 bankruptcy action against us. If our
creditors or we file for Chapter 7 or Chapter 11 bankruptcy, our creditors will
take priority over our shareholders. If we fail to file for bankruptcy under
Chapter 7 or Chapter 11 and we have creditors, such creditors may institute
proceedings against us seeking forfeiture of our assets, if any.

We do not know and cannot determine which, if any, of these actions we will be
forced to take.


                                       22
<PAGE>

If any of these foregoing events occur, you could lose your entire investment in
our shares.

There is substantial doubt about our ability to continue as a going concern as
we have suffered recurring losses from operations and have no established source
of revenue. Accordingly, our independent auditors included an explanatory
paragraph in their report on our December 31, 2005 financial statements
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure by our independent auditors.

Item 7. Financial Statements

Liska Biometry, Inc.

Liska Biometry, Inc.
Table of Contents

                                                                            Page
                                                                            ----

Report of Independent Registered Public Accounting Firm                     25

Consolidated Balance Sheet                                                  26

Consolidated Statements of Operations                                       27

Consolidated Statement of Stockholders' (Deficit)                           28

Consolidated Statements of Cash Flows                                       29

Notes to Consolidated Financial Statements                                  30


                                       23
<PAGE>

                         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors
Liska Biometry, Inc.

We have audited the accompanying consolidated balance sheet of Liska Biometry,
Inc. (A Development Stage Company) as of December 31, 2005, and the related
consolidated statements of operations, stockholders' (deficit) and cash flows
for the years ended December 31, 2005 and 2004. 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 auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Liska Biometry, Inc.
(A Development Stage Company) as of December 31, 2005, and the results of its
operations, and its cash flows for the years ended December 31, 2005 and 2004,
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered losses from operations and is in
the development stage. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are also discussed in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


Stark Winter Schenkein & Co., LLP
Denver, Colorado
April 19, 2006


                                       24
<PAGE>

                              Liska Biometry, Inc.
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                                December 31, 2005

Assets

Current assets:
    Cash                                                           $     33,715
    Prepaid expenses                                                     36,677
    Deposit on acquisition                                              100,000
    Miscellaneous receivables                                            28,263
                                                                   ------------
         Total Current Assets                                           198,655
                                                                   ------------

Fixed assets, net                                                        50,574
                                                                   ------------

                                                                   $    249,229
                                                                   ============

Liabilities and stockholders' (deficit)

Current liabilities:
   Accounts payable & accrued expenses                             $    353,161
   Due to investors                                                      64,000
                                                                   ------------
          Total current liabilities                                     417,161
                                                                   ------------

Stockholders' (deficit):

   Preferred stock, no par value,
      10,000,000 shares authorized, none outstanding                         --
   Common stock, no par value,
      100,000,000 shares authorized,
        34,141,263 shares issued and outstanding                     10,764,300

   Receivable for common stock                                       (1,375,000)
   Common stock subscriptions                                           481,172
   Additional paid in capital                                           933,203

  (Deficit) accumulated during the development stage                (10,942,245)
                                                                   ------------
                                                                       (138,570)

  Other comprehensive income:
    Currency translation adjustment                                     (29,362)
                                                                   ------------
                                                                       (167,932)
                                                                   ------------

                                                                   $    249,229
                                                                   ============

See the accompanying notes to the consolidated financial statements.


                                       25
<PAGE>

                              Liska Biometry, Inc.
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                   Years Ended December 31, 2005 and 2004 ,and
                 Inception (August 1, 2000) to December 31, 2005

<TABLE>
<CAPTION>
                                                        Year Ended         Year Ended        Inception to
                                                       December 31,       December 31,       December 31,
                                                           2005               2004               2005
                                                       ------------       ------------       ------------

<S>                                                    <C>                <C>                <C>
Sales                                                  $         --       $         --       $      8,000

Cost of goods sold                                               --                 --                892
                                                       ------------       ------------       ------------

Gross profit                                                     --                 --              7,108
                                                       ------------       ------------       ------------

Operating expenses:

   Impairment of license                                         --                 --             58,812
   Selling, general and administrative expenses -
     Non cash stock compensation                          1,405,967          3,695,934          8,128,540
   Selling, general and administrative expenses           1,536,885            535,245          2,762,251
                                                       ------------       ------------       ------------
                                                          2,942,852          4,231,179         10,949,603
                                                       ------------       ------------       ------------

(Loss) from operations                                   (2,942,852)        (4,231,179)       (10,942,495)
                                                       ------------       ------------       ------------

Other income (expense):
   Other income                                                  --                 --                250
                                                       ------------       ------------       ------------

Net (loss)                                               (2,942,852)        (4,231,179)       (10,942,245)

Comprehensive income:
   Currency translation adjustment                          (23,089)            (4,942)           (29,362)
                                                       ------------       ------------       ------------

Comprehensive (loss)                                   $ (2,965,941)      $ (4,236,121)      $(10,971,607)
                                                       ============       ============       ============

Per share information - basic and fully diluted:
  Weighted average shares outstanding                    27,255,588         19,705,827
                                                       ============       ============
  Net (loss) per share                                 $      (0.11)      $      (0.21)
                                                       ============       ============
</TABLE>

See notes accompanying the consolidated financial statements


                                       26
<PAGE>

                              Liska Biometry, Inc.
                          (A Development Stage Company)
                Consolidated Statement of Stockholders' (Deficit)
                 Inception (August 1, 2000) to December 31, 2005

<TABLE>
<CAPTION>
                                                                     Common Stock              Additional
                                                            -----------------------------        Paid in          Stock
                                                               Shares           Amount           Capital      Subscriptions
                                                            ------------     ------------     ------------     ------------
<S>                                                           <C>            <C>              <C>              <C>
Inception                                                             --     $         --     $         --     $         --

Issuance of founders shares for services
 at $.25 per share                                               110,000           27,500               --               --
Issuance of founders shares for expense
 reimbursement at $.25 per share                                 200,000           50,100               --               --
Common shares issued for license and
 rights at $.25 per share                                        190,000           47,500               --               --
Common stock issued for services
 at $.25 per share                                                    42              104               --               --

Net (loss) for the  period                                            --               --               --               --
                                                            ------------     ------------     ------------     ------------

Balance at December 31, 2000                                     500,042          125,204               --               --

Common shares issued for recapitalization                        103,200            5,350               --               --

Reclassification of accumulated deficit                               --               --          (31,345)              --
Stock and options issued to consultants
 for services                                                         --               --        1,079,670               --
Shares issued for services at $19.34
 per share                                                        12,229          236,621               --               --

Shares returned and retired                                     (130,000)              --               --               --
Shares issued to settle debt at $.65
 per share                                                       410,400          270,000               --               --

Net (loss) for the year                                               --               --               --               --
                                                            ------------     ------------     ------------     ------------

Balance at December 31, 2001                                     895,871          637,175        1,048,325               --

Shares issued for services at $.001
 per share                                                     9,002,404            9,001               --               --
Contributed services                                                  --               --            6,000               --
Contributed capital                                                   --               --              665               --

Net (loss) for the year                                               --               --               --               --
                                                            ------------     ------------     ------------     ------------

Balance at December 31, 2002                                   9,898,275          646,176        1,054,990               --

Shares issued for services at $.055 per share                  2,900,000          159,500               --               --
Shares issued for expense reimbursement at
 $.428 per share                                                 150,000           64,152               --               --

Shares issued for services at $.50 per share                   2,300,000        1,150,000               --               --
Shares issued for cash at $.50 per share                         186,000           93,000               --               --
Common shares subscribed for services                                 --               --               --          365,000
Contributed capital                                                   --               --            5,213               --

Currency translation adjustment                                       --               --               --               --

Net (loss) for the year                                               --               --               --               --
                                                            ------------     ------------     ------------     ------------

Balance at December 31, 2003                                  15,434,275        2,112,828        1,060,203          365,000

Shares issued for services from $.14 to $.42 per share           175,000           58,000               --               --

Shares issued for services at $.50 per share                   4,245,000        2,487,500               --         (365,000)

Shares issued for services from $.51 to $1.00 per share          225,000          178,600               --               --
Shares issued for services from $1.10 to $2.05 per share         806,545        1,348,151               --               --
Shares issued for cash from $.14 to $.42 per share             1,762,892          517,785               --               --
Shares issued for cash at $.50 per share                         590,000          295,000               --               --
Shares issued for cash at $1.10 per share                         45,455           50,000               --               --
Contributed capital                                                   --               --            3,000               --
Common shares subscribed for cash                                     --               --               --          138,708
Common shares subscribed for services                                 --               --               --           56,100

Purchase of treasury shares at $.11 per share                         --               --               --               --

Currency translation adjustment                                       --               --               --               --

Net (loss) for the year                                               --               --               --               --
                                                            ------------     ------------     ------------     ------------

Balance at December 31, 2004                                  23,284,167        7,047,864        1,063,203          194,808

Issuance of shares subscribed for                                621,346          185,808               --         (185,808)

Subscriptions cancelled                                               --               --               --           (9,000)
Amortization of deferred compensation                                 --               --               --               --

Shares issued in escrow for a receivable                       5,000,000        1,375,000               --               --
Shares issued for the conversion of a note payable
  at $.20 per share                                              250,000           50,000
Shares issued for services at $.30 to $.40 per share           1,733,904          619,378               --               --
Shares issued for services at $.41 to $.60 per share             325,000          168,000               --               --
Shares issued for cash at $.20 to $.28 per share               3,130,499          793,750               --               --
Shares issued for cash at $.30 to $.38 per share               1,668,013          524,500               --               --
Increase in intrinsic value of stock options                          --               --           70,000               --

Cancellation of treasury shares                               (1,871,666)              --         (200,000)              --
Common shares subscribed for services                                 --               --               --          481,172

Currency translation adjustment                                       --               --               --               --

Net (loss) for the year                                               --               --               --               --
                                                            ------------     ------------     ------------     ------------

                                                              34,141,263     $ 10,764,300     $    933,203     $    481,172
                                                            ============     ============     ============     ============

<CAPTION>
                                                                                              Receivable
                                                                                                  for           Currency
                                                              Treasury         Deferred         Common         Translation
                                                                Stock        Compensation        Stock         Adjustment
                                                            ------------     ------------     ------------    ------------
<S>                                                         <C>              <C>              <C>             <C>
Inception                                                   $         --     $         --     $         --    $         --

Issuance of founders shares for services
 at $.25 per share                                                    --               --                               --
Issuance of founders shares for expense
 reimbursement at $.25 per share                                      --               --                               --
Common shares issued for license and
 rights at $.25 per share                                             --               --                               --
Common stock issued for services
 at $.25 per share                                                    --               --                               --

Net (loss) for the  period                                            --               --               --              --
                                                            ------------     ------------     ------------    ------------

Balance at December 31, 2000                                          --               --               --              --

Common shares issued for recapitalization                             --               --                               --

Reclassification of accumulated deficit                               --               --                               --
Stock and options issued to consultants
 for services                                                         --               --                               --
Shares issued for services at $19.34
 per share                                                            --               --                               --

Shares returned and retired                                           --               --                               --
Shares issued to settle debt at $.65
 per share                                                            --               --                               --

Net (loss) for the year                                               --               --               --              --
                                                            ------------     ------------     ------------    ------------

Balance at December 31, 2001                                          --               --               --              --

Shares issued for services at $.001
 per share                                                            --               --               --              --
Contributed services                                                  --               --               --              --
Contributed capital                                                   --               --               --              --

Net (loss) for the year                                               --               --               --              --
                                                            ------------     ------------     ------------    ------------

Balance at December 31, 2002                                          --               --               --              --

Shares issued for services at $.055 per share                         --               --                               --
Shares issued for expense reimbursement at
 $.428 per share                                                      --               --                               --

Shares issued for services at $.50 per share                          --               --                               --
Shares issued for cash at $.50 per share                              --               --                               --
Common shares subscribed for services                                 --               --                               --
Contributed capital                                                   --               --

Currency translation adjustment                                       --               --                           (1,331)

Net (loss) for the year                                               --               --               --              --
                                                            ------------     ------------     ------------    ------------

Balance at December 31, 2003                                          --               --               --          (1,331)

Shares issued for services from $.14 to $.42 per share                --          (22,000)                              --

Shares issued for services at $.50 per share                          --               --                               --

Shares issued for services from $.51 to $1.00 per share               --          (35,000)                              --
Shares issued for services from $1.10 to $2.05 per share              --          (10,417)                              --
Shares issued for cash from $.14 to $.42 per share                    --               --                               --
Shares issued for cash at $.50 per share                              --               --                               --
Shares issued for cash at $1.10 per share                             --               --                               --
Contributed capital                                                   --               --                               --
Common shares subscribed for cash                                     --               --                               --
Common shares subscribed for services                                 --               --                               --

Purchase of treasury shares at $.11 per share                   (200,000)              --                               --

Currency translation adjustment                                       --               --                           (4,942)

Net (loss) for the year                                               --               --               --              --
                                                            ------------     ------------     ------------    ------------

Balance at December 31, 2004                                    (200,000)         (67,417)              --          (6,273)#

Issuance of shares subscribed for                                     --               --                               --

Subscriptions cancelled                                               --               --                               --
Amortization of deferred compensation                                 --           67,417                               --

Shares issued in escrow for a receivable                              --               --       (1,375,000)             --
Shares issued for the conversion of a note payable
  at $.20 per share
Shares issued for services at $.30 to $.40 per share                  --                                                --
Shares issued for services at $.41 to $.60 per share                  --               --                               --
Shares issued for cash at $.20 to $.28 per share                      --                                                --
Shares issued for cash at $.30 to $.38 per share                      --               --                               --
Increase in intrinsic value of stock options                          --               --                               --

Cancellation of treasury shares                                  200,000               --                               --
Common shares subscribed for services                                 --               --                               --

Currency translation adjustment                                       --               --                          (23,089)

Net (loss) for the year                                               --               --                               --
                                                            ------------     ------------     ------------    ------------

                                                            $         --     $         --     $ (1,375,000)   $    (29,362)
                                                            ============     ============     ============    ============

<CAPTION>
                                                             (Deficit)
                                                            Accumulated
                                                             During the
                                                            Development
                                                               Stage            Total
                                                            ------------     ------------
<S>                                                         <C>              <C>
Inception                                                   $         --     $         --

Issuance of founders shares for services
 at $.25 per share                                                    --           27,500
Issuance of founders shares for expense
 reimbursement at $.25 per share                                      --           50,100
Common shares issued for license and
 rights at $.25 per share                                             --           47,500
Common stock issued for services
 at $.25 per share                                                    --              104

Net (loss) for the  period                                      (151,383)        (151,383)
                                                            ------------     ------------

Balance at December 31, 2000                                    (151,383)         (26,179)

Common shares issued for recapitalization                        (31,345)         (25,995)

Reclassification of accumulated deficit                           31,345               --
Stock and options issued to consultants
 for services                                                         --        1,079,670
Shares issued for services at $19.34
 per share                                                            --          236,621

Shares returned and retired                                           --               --
Shares issued to settle debt at $.65
 per share                                                            --          270,000

Net (loss) for the year                                       (1,702,618)      (1,702,618)
                                                            ------------     ------------

Balance at December 31, 2001                                  (1,854,001)        (168,501)

Shares issued for services at $.001
 per share                                                            --            9,001
Contributed services                                                  --            6,000
Contributed capital                                                   --              665

Net (loss) for the year                                          (40,746)         (40,746)
                                                            ------------     ------------

Balance at December 31, 2002                                  (1,894,747)        (193,581)

Shares issued for services at $.055 per share                         --          159,500
Shares issued for expense reimbursement at
 $.428 per share                                                      --           64,152

Shares issued for services at $.50 per share                          --        1,150,000
Shares issued for cash at $.50 per share                              --           93,000
Common shares subscribed for services                                 --          365,000
Contributed capital                                                                 5,213

Currency translation adjustment                                       --           (1,331)

Net (loss) for the year                                       (1,873,467)      (1,873,467)
                                                            ------------     ------------

Balance at December 31, 2003                                  (3,768,214)        (231,514)

Shares issued for services from $.14 to $.42 per share                --           36,000

Shares issued for services at $.50 per share                          --        2,122,500

Shares issued for services from $.51 to $1.00 per share               --          143,600
Shares issued for services from $1.10 to $2.05 per share              --        1,337,734
Shares issued for cash from $.14 to $.42 per share                    --          517,785
Shares issued for cash at $.50 per share                              --          295,000
Shares issued for cash at $1.10 per share                             --           50,000
Contributed capital                                                   --            3,000
Common shares subscribed for cash                                     --          138,708
Common shares subscribed for services                                 --           56,100

Purchase of treasury shares at $.11 per share                         --         (200,000)

Currency translation adjustment                                       --           (4,942)

Net (loss) for the year                                       (4,231,179)      (4,231,179)
                                                            ------------     ------------

Balance at December 31, 2004                                  (7,999,393)#         32,792

Issuance of shares subscribed for                                     --               --

Subscriptions cancelled                                               --           (9,000)
Amortization of deferred compensation                                 --           67,417

Shares issued in escrow for a receivable                              --               --
Shares issued for the conversion of a note payable
  at $.20 per share                                                                50,000
Shares issued for services at $.30 to $.40 per share                  --          619,378
Shares issued for services at $.41 to $.60 per share                  --          168,000
Shares issued for cash at $.20 to $.28 per share                      --          793,750
Shares issued for cash at $.30 to $.38 per share                      --          524,500
Increase in intrinsic value of stock options                          --           70,000

Cancellation of treasury shares                                       --               --
Common shares subscribed for services                                 --          481,172

Currency translation adjustment                                       --          (23,089)

Net (loss) for the year                                       (2,942,852)      (2,942,852)
                                                            ------------     ------------

                                                            $(10,942,245)    $   (167,932)
                                                            ============     ============
</TABLE>

See accompanying notes to the consolidated financial statements


                                       27
<PAGE>

                              Liska Biometry, Inc.
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                   Years Ended December 31, 2005 and 2004, and
                 Inception (August 1, 2000) to December 31, 2005

<TABLE>
<CAPTION>
                                                                    Year Ended         Year Ended         Inception to
                                                                   December 31,       December 31,       December 31,
                                                                       2005               2004               2005
                                                                   ------------       ------------       ------------
<S>                                                                <C>                <C>                <C>
Cash flows from operating activities:
Net (loss)                                                         $ (2,942,852)      $ (4,231,179)      $(10,942,245)
  Adjustments to reconcile net (loss) to net cash
  (used in) operating activities:
  Depreciationa and amortization                                         16,570              1,466             56,724

  Common stock and options issued and subscribed for services         1,405,967          3,695,934          8,128,540
  Common stock issued for expenses paid by founders                          --                 --             50,100
  Shares issued pursuant to recapitalization                                 --                 --            (25,995)
  Contribution of services                                                   --              3,000              9,000
  Loss on impairment of license                                              --                 --             58,812

  Increase in prepaid expenses and miscellaneous receivables            (30,047)           (34,895)           (64,940)

  Increase in accounts payable and accrued expenses                     164,901             (9,096)           594,049
                                                                   ------------       ------------       ------------

Net cash (used in) operating activities                              (1,385,461)          (574,770)        (2,135,955)
                                                                   ------------       ------------       ------------

Cash flows from investing activities:
  Payment for license                                                        --                 --            (50,000)

  Deposit on acquisition                                               (100,000)                --           (100,000)

  Purchase of fixed assets                                              (44,074)           (24,535)          (107,298)
                                                                   ------------       ------------       ------------

Net cash (used in) investing activities                                (144,074)           (24,535)          (257,298)
                                                                   ------------       ------------       ------------

Cash flows from financing activities:
  Capital contributions                                                      --                 --              8,878
  Common shares issued and subscriptions for cash                     1,318,250          1,001,493          2,542,452

  Cancelled subscription                                                 (9,000)                --             (9,000)

  Common shares repurchased for cash                                         --           (200,000)          (200,000)
  Proceeds from notes payable                                            50,000                 --             50,000

  Proceeds (repayment) investor loans                                   (18,552)            47,552             64,000
                                                                   ------------       ------------       ------------
Net cash provided by financing activities                             1,340,698            849,045          2,456,330
                                                                   ------------       ------------       ------------

Net increase (decrease) in cash                                        (188,837)           249,740             63,077

Effect of currency translation on cash                                  (23,089)            (4,942)           (29,362)

Beginning - cash balance                                                245,641                843                 --
                                                                   ------------       ------------       ------------

Ending - cash balance                                              $     33,715       $    245,641       $     33,715
                                                                   ============       ============       ============

Supplemental cash flow information:
  Cash paid for income taxes                                       $         --       $         --       $         --
                                                                   ============       ============       ============
  Cash paid for interest                                           $         --       $         --       $         --
                                                                   ============       ============       ============

Non cash investing and financing activities:
  Common stock issued for license                                  $         --       $         --       $     47,500
                                                                   ============       ============       ============
  License acquired in exchange for payable                         $         --       $         --       $  1,450,000
                                                                   ============       ============       ============
  Write off of license and related payable                         $         --       $         --       $  1,450,000
                                                                   ============       ============       ============
  Common stock issued to settle notes payable                      $     50,000       $         --       $    205,200
                                                                   ============       ============       ============
  Common stock issued for receivable                               $  1,375,000       $         --       $  1,375,000
                                                                   ============       ============       ============
  Cancellation of treasury shares                                  $    200,000       $         --       $    200,000
                                                                   ============       ============       ============
</TABLE>

See notes accompanying the financial statements


                                       28
<PAGE>

                              Liska Biometry, Inc.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The Company was incorporated as 3045 Corporation under the laws of the State of
Florida on October 26, 1999. On January 19, 2001 the name was changed to Floran
International, Inc., on June 15, 2001, the name was changed to FTLA, Inc., and
on April 1 2002, the name was changed to Liska Biometry, Inc. The Company is in
the development stage and its business plan consists of providing biometric
identification services, specifically products and technology for the
identification and authentication of individuals using live scan fingerprints.

On January 9, 2001, the Company acquired all of the issued and outstanding
common shares of H2O International, Inc. ("H2O") (See Note 3) in exchange for
500,042 shares of its common stock (approximately 83% of the issued and
outstanding shares of the Company after this issuance).

H2O was a development stage company formed for the purpose of marketing a
cleaning process for large-scale water and fluid treatment filtering and storage
facilities. This acquisition of H2O, the accounting acquirer, by the Company, a
non-operating entity, was considered in substance a capital transaction and has
been accounted for as a reverse acquisition, and no goodwill or other intangible
assets have been recorded. On this basis, the historical financial statements as
of and prior to the acquisition date represented the operations of H2O.

On November 2, 2004, the Company formed and acquired all of the issued and
outstanding common shares of a Canadian subsidiary, Liska Biometry (Canada) Inc.
That company's primary purpose is to carry out research and development of the
Company's products and to generate sales in Canada for any resulting products.

Consolidation

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

Revenue Recognition

In general, the Company records revenue when persuasive evidence of an
arrangement exists, services have been rendered or product delivery has
occurred, the sales price to the customer is fixed or determinable, and
collectability is reasonably assured. The following policies reflect specific
criteria for the various revenues streams of the Company:

Revenue is recognized from sales when a product is shipped and from services
when they are performed. The Company has not generated significant revenue to
date.

Cash and Cash Equivalents

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

Property, Equipment and Depreciation

Property and equipment are stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the assets of three to
five years.


                                       29
<PAGE>

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of December 31, 2005. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash,
miscellaneous receivables, and accounts payable and accrued expenses. Fair
values were assumed to approximate carrying values for these financial
instruments because they are short term in nature and their carrying amounts
approximate fair values or they are receivable or payable on demand.

Long Lived Assets

The carrying value of long-lived assets, including goodwill and intangibles, is
reviewed on a regular basis for the existence of facts and circumstances that
suggest impairment. Should there be impairments in the future, the Company will
measure the amount of the impairments based on the undiscounted expected future
cash flows from the impaired assets.

Net Income (Loss) per Common Share

The Company calculates net income (loss) per share as required by Statement of
Financial Accounting Standards ("SFAS") 128, "Earnings per Share." Basic
earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding for the period. Diluted
earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares and dilutive common stock equivalents
outstanding. During the periods when they would be anti-dilutive, common stock
equivalents, if any, are not considered in the computation.

Foreign Currency Translation

The Company has a wholly owned Canadian subsidiary and maintains a Canadian
dollar bank account. Assets and liabilities will be translated using the
exchange rate in effect at the balance sheet date. Income and expenses are
translated at the average exchange rate for the year. Translation adjustments
are reported as a separate component of stockholders' equity.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Segment Information

The Company follows SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information." Certain information is disclosed, per SFAS 131, based on
the way management organizes financial information for making operating
decisions and assessing performance. The Company currently operates in a single
segment and will evaluate additional segment disclosure requirements as it
expands its operations.


                                       30
<PAGE>

Income Taxes

The Company follows SFAS 109, "Accounting for Income Taxes" for recording the
provision for income taxes. Deferred tax assets and liabilities are computed
based upon the difference between the financial statement and income tax basis
of assets and liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or settled. Deferred
income tax expenses or benefits are based on the changes in the asset or
liability each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the deferred tax assets to
the amount that is more likely than not to be realized. Future changes in such
valuation allowance are included in the provision for deferred income taxes in
the period of change.

Research and Development

The Company expenses research and development costs as incurred. Such costs
include certain prototype products, test parts, consulting fees, and costs
incurred with third parties to determine feasibility of products. Costs incurred
for research and development were $941,321 and $82,861 in 2005 and 2004 and are
included in selling, general and administrative expenses.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees for services
based on the fair value of the equity instruments issued and accounts for equity
instruments issued to other than employees based on the fair value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable.

The Company accounts for stock based compensation in accordance with SFAS 123,
"Accounting for Stock-Based Compensation." The provisions of SFAS 123 allow
companies to either expense the estimated fair value of stock options or to
continue to follow the intrinsic value method set forth in Accounting Principles
Board Opinion 25, "Accounting for Stock Issued to Employees" ("APB 25") but
disclose the pro forma effects on net income (loss) had the fair value of the
options been expensed. The Company has elected to continue to apply APB 25 in
accounting for its stock option incentive plans.

Reclassifications

Certain items previously reported in the prior year have been reclassified to
conform to current year presentation.

Recent Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151 "Inventory Costs". This Statement amends the guidance in ARB No. 43, Chapter
4, "Inventory Pricing, to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and wasted material (spoilage). In
addition, this Statement requires that allocation of fixed production overhead
to the costs of conversion be based on the normal capacity of the production
facilities. The provisions of this Statement will be effective for the Company
beginning with its fiscal year ending December 31, 2006. The Company is
currently evaluating the impact this new Standard will have on its operations,
but believes that it will not have a material impact on the Company's financial
position, results of operations or cash flows.


                                       31
<PAGE>

In December 2004, the FASB issued SFAS 153 "Exchanges of Non monetary Assets -
an amendment of APB Opinion No. 29". This Statement amended APB Opinion 29 to
eliminate the exception for non monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non monetary assets
that do not have commercial substance. A non monetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. The adoption of this Standard is not
expected to have any material impact on the Company's financial position,
results of operations or cash flows.

In December 2004, the FASB issued SFAS 123 (revised 2004) "Share-Based Payment".
This Statement requires that the cost resulting from all share-based
transactions be recorded in the financial statements. The Statement establishes
fair value as the measurement objective in accounting for share-based payment
arrangements and requires all entities to apply a fair-value-based measurement
in accounting for share-based payment transactions with employees. The Statement
also establishes fair value as the measurement objective for transactions in
which an entity acquires goods or services from non-employees in share-based
payment transactions. The Statement replaces SFAS 123 "Accounting for
Stock-Based Compensation" and supersedes APB Opinion No. 25 "Accounting for
Stock Issued to Employees". The provisions of this Statement will be effective
for the Company beginning with its fiscal year ending December 31, 2006. The
Company is currently evaluating the impact this new Standard will have on its
financial position, results of operations or cash flows.

In March 2005, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No.107 (SAB 107) which provides guidance regarding the
interaction of SFAS 123(R) and certain SEC rules and regulations. The new
guidance includes the SEC's view on the valuation of share-based payment
arrangements for public companies and may simplify some of SFAS 123(R)'s
implementation challenges for registrants and enhance the information investors
receive.

In March 2005, the FASB issued FIN 47, Accounting for Conditional Asset
Retirement Obligations, which clarifies that the term 'conditional asset
retirement obligation' as used in SFAS 143, Accounting for Asset Retirement
Obligations, refers to a legal obligation to perform an asset retirement
activity in which the timing and/or method of settlement are conditional on a
future event that may or may not be within the control of the entity. FIN 47
requires an entity to recognize a liability for the fair value of a conditional
asset retirement obligation if the fair value can be reasonably estimated. FIN
47 is effective no later than the end of the fiscal year ending after December
15, 2005. The Company does not believe that FIN 47 will have a material impact
on its financial position or results from operations.

In August 2005, the FASB issued SFAS 154, Accounting Changes and Error
Corrections. This statement applies to all voluntary changes in accounting
principle and to changes required by an accounting pronouncement if the
pronouncement does not include specific transition provisions, and it changes
the requirements for accounting for and reporting them. Unless it is
impractical, the statement requires retrospective application of the changes to
prior periods' financial statements. This statement is effective for accounting
changes and correction of errors made in fiscal years beginning after December
15, 2005.


                                       32
<PAGE>

New pronouncements

SFAS 155 - `Accounting for Certain Hybrid Financial Instruments--an amendment of
FASB Statements No. 133 and 140'

This Statement, issued in February 2006, amends FASB Statements No. 133,
Accounting for Derivative Instruments and Hedging Activities, and No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities. This Statement resolves issues addressed in Statement 133
Implementation Issue No. D1, "Application of Statement 133 to Beneficial
Interests in Securitized Financial Assets."

This Statement:

      a.    Permits fair value remeasurement for any hybrid financial instrument
            that contains an embedded derivative that otherwise would require
            bifurcation
      b.    Clarifies which interest-only strips and principal-only strips are
            not subject to the requirements of Statement 133
      c.    Establishes a requirement to evaluate interests in securitized
            financial assets to identify interests that are freestanding
            derivatives or that are hybrid financial instruments that contain an
            embedded derivative requiring bifurcation
      d.    Clarifies that concentrations of credit risk in the form of
            subordination are not embedded derivatives
      e.    Amends Statement 140 to eliminate the prohibition on a qualifying
            special-purpose entity from holding a derivative financial
            instrument that pertains to a beneficial interest other than another
            derivative financial instrument.

This Statement is effective for all financial instruments acquired or issued
after the beginning of our first fiscal year that begins after September 15,
2006.

The fair value election provided for in paragraph 4(c) of this Statement may
also be applied upon adoption of this Statement for hybrid financial instruments
that had been bifurcated under paragraph 12 of Statement 133 prior to the
adoption of this Statement. Earlier adoption is permitted as of the beginning of
the fiscal year, provided the Company have not yet issued financial statements,
including financial statements for any interim period, for that fiscal year.
Provisions of this Statement may be applied to instruments that are held hold at
the date of adoption on an instrument-by-instrument basis.

The Company is currently reviewing the effects of adoption of this statement but
it is not expected to have a material impact on our financial statements.

SFAS 156 - `Accounting for Servicing of Financial Assets--an amendment of FASB
Statement No. 140'


                                       33
<PAGE>

This Statement, issued in March 2006, amends FASB Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, with respect to the accounting for separately recognized servicing
assets and servicing liabilities. This Statement:

      1.    Requires an entity to recognize a servicing asset or servicing
            liability each time it undertakes an obligation to service a
            financial asset by entering into a servicing contract in certain
            situations.
      2.    Requires all separately recognized servicing assets and servicing
            liabilities to be initially measured at fair value, if practicable.
      3.    Permits an entity to choose either the amortization method or the
            fair value measurement method for each class of separately
            recognized servicing assets and servicing liabilities.
      4.    At its initial adoption, permits a one-time reclassification of
            available-for-sale securities to trading securities by entities with
            recognized servicing rights, without calling into question the
            treatment of other available-for-sale securities under Statement
            115, provided that the available-for-sale securities are identified
            in some manner as offsetting the entity's exposure to changes in
            fair value of servicing assets or servicing liabilities that a
            servicer elects to subsequently measure at fair value.
      5.    Requires separate presentation of servicing assets and servicing
            liabilities subsequently measured at fair value in the statement of
            financial position and additional disclosures for all separately
            recognized servicing assets and servicing liabilities.

Adoption of this Statement is required as of the beginning of the first fiscal
year that begins after September 15, 2006. The adoption of this statement is not
expected to have a material impact on the Company's financial statements.

Note 2. BASIS OF REPORTING

The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.

The Company has experienced a significant loss from operations as a result of
its investment necessary to achieve its operating plan, which is long-range in
nature. For the year ended December 31, 2005, and the period from inception to
December 31, 2005, the Company incurred net losses of $2,942,852 and $10,942,465
and has working capital and stockholders' deficits of $218,506 and $167,932 at
December 31, 2005. In addition, the Company has no revenue generating
operations.

The Company's ability to continue as a going concern is contingent upon its
ability to attain profitable operations and secure financing. In addition, the
Company's ability to continue as a going concern must be considered in light of
the problems, expenses and complications frequently encountered by entrance into
established markets and the competitive environment in which the Company
operates.

The Company is pursuing equity financing for its operations. Failure to secure
such financing or to raise additional capital or borrow additional funds may
result in the Company depleting its available funds and not being able pay its
obligations.


                                       34
<PAGE>

The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.

Note 3. RECAPITALIZATION

On January 9, 2001, the Company acquired the entire issued and outstanding
common shares of H2O in exchange for 500,042 shares of its common stock. The
transaction was treated as a recapitalization of the Company and issuance of
103,200 common shares by H2O for the net assets of the Company. The net assets
of H2O consisted of the following at December 31, 2000, and the acquisition
date.

      Licenses and rights          $ 1,547,500
      Current liabilities           (1,573,679)
                                   -----------
                                   $   (26,179)
                                   ===========

H2O was a development stage company on the acquisition date and had no revenue
generating operations and an accumulated deficit from inception (August 1, 2000)
to December 31, 2001 aggregating $151,383.

Note 4. STOCKHOLDERS' EQUITY

Common Stock

At December 31, 2005, the Company's no par value common stock authorized was
100,000,000 shares with 34,141,263 shares issued and outstanding and the
Company's no par value preferred stock authorized was 10,000,000 shares. During
January 2001 the Company effected a 10 for 1 forward stock split and during May
2001 the Company effected a 1 for 100 reverse stock split. All share and per
share amounts have been restated to give effect to these splits.

At inception the Company issued 110,000 shares of common stock to its founders
for services valued at $27,500 which management believes is the fair value of
the services provided. In addition, the Company issued 200,000 shares of common
stock to founders for expense reimbursement of $50,100.

During August 2001 the Company issued 190,000 shares of common stock in exchange
for a license and rights valued at $47,500.

During the period from August 2000 to December 2000 the Company issued 42 shares
of common stock in exchange for services valued at $104. The value assigned to
the shares issued corresponds to the per share value of issuances during the
period.

During January 2001 the Company issued 103,200 shares of common stock in
conjunction with the recapitalization described in Note 3. The value of the
common stock of the shell of $5,350 was recorded as common stock in the combined
company and the $31,345 accumulated deficit of the shell was charged to
additional paid-in capital.


                                       35
<PAGE>

During October 2001 certain affiliates returned 130,000 common shares to the
Company's treasury for no consideration. These shares were cancelled by the
Company.

During October 2001 the Company issued 410,400 shares of common stock in
exchange for the cancellation of debt aggregating $270,000 including a charge to
operations of $64,800 for the difference between the amount of the debt of
$205,200 and the fair value of the shares issued.

During the year ended December 31, 2001 the Company issued an aggregate of
12,229 shares of common stock for services valued at $236,621. The value
assigned to the shares issued corresponds to the fair market value of the shares
issued on the date the Company agreed to issue the shares.

In January 2001, under a stock purchase agreement ("the Stock Purchase
Agreement"), three purchasers were to pay $425,000 to acquire 92,500 free
trading common shares of an inactive SEC reporting corporation. The Company
issued 90,000 shares to the purchasers and $250,000 of the $425,000 purchase
price was paid. Under two consulting agreements effective January 9, 2001, the
consultants were made a party to the Stock Purchase Agreement as the sole
compensation pursuant to those consulting agreements. The Consultants received
29,500 fully vested shares each, however, they did not pay for such shares, and
there is no obligation on the consultants to repay the principal stockholder.
Accordingly, the receipt of the shares by the consultants is, in substance, a
payment under the consulting agreements. During the quarter ended March 31,
2001, the Company recognized the entire consulting expense of $270,810 based on
the pro-rata portion of the purchase price of $4.59 per share. In addition 6,500
of the total purchased shares were granted to a third consultant for services
rendered and an expense of $29,835 was recognized in January 2001 based on the
pro-rata portion of the purchase price of $4.59 per share.

During January 2001 the Company issued 40,000 common stock purchase options to
an employee exercisable at $1.00 per share. In addition, during February 2001
the Company issued 300,000 common stock purchase options to certain directors
and 1,100,000 common stock purchase options to a consultant exercisable at $.10
per share. Compensation costs charged to operations aggregated $779,025 related
to these options during 2001. The Company cancelled all of these options during
2001.

During January 2002 the Company issued 9,000,000 shares of its common stock for
services valued at $9,000 to a significant shareholder. In addition, the Company
issued 2,404 shares of its common stock for services valued at $2 to a director.
At the time of issuance there was no market for the Company's common shares and
they were valued at management's estimate of the fair market value of the
shares, which approximated the fair market value of the services provided.

During March 2002 this significant shareholder sold the 9,000,000 common shares
representing a 91% interest in the Company to Kojon Biometrics, Inc. resulting
in a change of control of the Company.

During the year ended December 31, 2002 affiliates of the Company contributed
services valued at $6,000 and cash of $665 to the capital of the Company.

During June and July 2003 the Company issued 2,900,000 shares of common stock
for services valued at $159,500 or $.055 per share which represented the fair
market value of the shares on the dates it was agreed that they would be issued.


                                       36
<PAGE>

During August 2003 the Company issued 150,000 shares of common stock as
reimbursement for expenses aggregating $64,152 paid by an affiliate.

During August through November 2003 the Company issued 186,000 shares of common
stock for cash aggregating $93,000 or $.50 per share.

During October through December 2003 the Company issued 2,300,000 shares of
common stock for services valued at $1,150,000 and accepted subscriptions for
730,000 shares of common stock for services or $.50 per share which represented
the fair market value of the shares on the dates it was agreed that they would
be issued.

During the year ended December 31, 2003 affiliates of the Company contributed
$5,213 to the capital of the Company.

During the year ended December 31, 2004 a former affiliate of the Company
contributed services valued at $3,000 to the capital of the Company.

During the year ended December 31, 2004, the Company issued 590,000 shares of
common stock pursuant to a private placement at $.50 per share for cash
aggregating $295,000, 45,455 common shares pursuant to a private placement at
$1.10 per share for cash aggregating $50,000 and 1,762,892 shares were issued
pursuant to Regulation S for at various prices for cash aggregating $517,785
which represented a 60% discount from the trading price of the Company's common
stock on the date of the subscriptions. In addition, the Company accepted
subscriptions for shares of common stock for cash aggregating $138,708.

During October 2005, the Company signed a securities purchase agreement for the
issuance of 5,000,000 shares of common stock at $0.275 or $1,375,000. The shares
have been issued but to date, the cash proceeds have not been received, the
shares are held in escrow and the $1,375,000 is shown as a reduction of
stockholders' equity at December 31, 2005.

During the year ended December 31, 2004, the Company repurchased 1,871,666
shares of common stock held by a former officer for $200,000. The Company
canceled these shares in July 2005.

During the year ended December 31, 2005, the Company issued 2,058,904 shares of
common stock for services and agreed to issue 1,069,271 shares of common stock
for services. The shares were valued at their fair market value of $787,378 and
$481,172 respectively which has been charged to operations during the year. In
addition, the Company amortized $67,417 of deferred compensation from December
31, 2004, and charged the intrinsic value of options issued to employees of
$70,000 to operations during the year.

In March 2005, the Company issued 345,571 shares of restricted common stock to
two employees pursuant to employee contract performance milestones and services
rendered.

During the year ended December 31, 2005, the Company issued 4,798,512 shares of
common stock for cash aggregating $1,318,250 pursuant to private placements.


                                       37
<PAGE>

During the year ended December 31, 2005, the Company issued 250,000 shares of
common stock valued at its fair market value to settle a note payable of
$50,000.

During January 2005, May 2005, and December 2005, the Company filed Form S-8
registration statements registering a total of 1,814,271 shares of common stock
to be issued pursuant to employment and consulting contracts which are included
in the shares issued or subscribed for services described above.

Stock Options

During the year ended December 31, 2005 the Company issued options to purchase
350,000 shares of its common stock for a period of ten years at prices of $.64
and $.65 per share to four directors and a consultant for services rendered.
These options vest one year from the date of issuance. No expense was charged to
operations related to these options.

During the year ended December 31, 2005 the Company issued options to purchase
975,000 shares of its common stock for a period of ten years at prices of $.32
and $.61 per share to employees for services rendered. These options vest one
year from the date of issuance. At present $70,000 has been charged to
operations.

SFAS 123 requires the Company to provide pro forma information regarding net
income and earnings per share as if compensation cost for the Company's stock
option plans had been determined in accordance with the fair value based method
prescribed in SFAS 123. The fair value of the option grants is estimated on the
date of grant utilizing the Black-Scholes option pricing model with the
following weighted average assumptions for grants during the year ended December
31, 2003: expected life of options of 10 years, expected volatility of 208%,
risk-free interest rate of 3% and no dividend yield. The weighted average fair
value at the date of grant for options granted during the year ended December
31, 2004, approximated $1.00 per option. The weighted average fair value at the
date of grant for options granted during the year ended December 31, 2005,
approximated $1.00 per option. These results may not be representative of those
to be expected in future years.

Under the provisions of SFAS 123, the Company's net income (loss) and earnings
(loss) per share would have been reduced (increased) to the pro forma amounts
indicated below:

                                              2005                2004
Net (loss)
            As reported                 $   (2,942,851)     $   (4,231,179)
            Proforma                    $   (3,242,851)     $   (4,361,179)
Basic and diluted (loss) per share
            As reported                 $         (.11)     $         (.21)
            Pro forma                   $         (.12)     $         (.22)


                                       38
<PAGE>

A summary of stock option activity is as follows:

                                        Weighted     Weighted
                            Number       average      average
                                of      exercise         fair
                            shares         price        value
Balance at
  December 31, 2003             --
Granted                    350,000         $ .64        $1.00
Exercised/Forfeited             --
                         ---------
Balance at
  December 31, 2004        350,000         $ .64        $1.00
Granted                    650,000         $ .39        $1.00
Granted                    295,000         $ .32        $1.00
Granted                     30,000         $ .61        $1.00
                         ---------
Balance at
  December 31, 2005      1,325,000         $ .45        $1.00

The following table summarizes information about fixed-price stock options at
December 31, 2005:

<TABLE>
<CAPTION>
                               Outstanding                                     Exercisable
                       Weighted         Weighted     Weighted-
                       Average           Average      Average
Exercise                Number        Contractual     Exercise            Number         Exercise
Prices               Outstanding          Life          Price          Exercisable         Price
------               -----------          ----          -----          -----------         -----
<S>                    <C>              <C>              <C>             <C>               <C>
$.64                   350,000          10 years         $.64            350,000           $1.00
$.32 to $.39           945,000          10 years         $.35            945,000           $1.00
$.61                    30,000          10 years         $.61             30,000           $1.00
</TABLE>

Note 5. INCOME TAXES

The Company accounts for income taxes under SFAS 109, which requires use of the
liability method. SFAS 109 provides that deferred tax assets and liabilities are
recorded based on the differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes,
referred to as temporary differences. Deferred tax assets and liabilities at the
end of each period are determined using the currently enacted tax rates applied
to taxable income in the periods in which the deferred tax assets and
liabilities are expected to be settled, or realized.

The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The sources and tax effects of the differences are as follows:

Income tax provision at
 the federal statutory rate         34%
Effect of operating losses         (34)%
                                ------
                                    --
                                ======

As of December 31, 2005 the Company has a net operating loss carry forward of
approximately $ $3,900,000(subject to any restrictions because of prior changes
in ownership). This loss will be available to offset future taxable income. If
not used, this carry forward will expire through 2025. The deferred tax asset of
approximately $1,300,000 relating to the operating loss carry forward has been
fully reserved at December 31, 2005. The principal difference between the net
operating loss for income tax purposes and the net operating loss for financial
reporting purposes results from stock based compensation of approximately
$7,000,000. The change in the valuation reserve for the year ended December 31,
2005 was approximately $500,000.


                                       39
<PAGE>

Note 6. DUE TO INVESTORS

During December 2000, the Company raised $86,000 from three investors based on a
private placement offering at $1.00 per share. The investors subsequently agreed
to rescind the subscription agreements and subscribe to a new private placement
offering after the recapitalization described in Notes 1 and 3. Accordingly, the
$86,000 was reflected as a liability at December 31, 2000. During the three
months ended March 31, 2001, the Company raised an additional $154,200
consisting of $42,000 in cash and $112,200 of expenses paid directly to third
parties pursuant to subscription agreements, which because the shares were not
issued was also classified as a liability. During October 2001 the Company
issued 410,400 shares of common stock to retire $205,200 of this liability. The
Company charged the difference between the fair market value of the shares
issued and the agreed upon conversion price of $64,800 to operations during
2001.

During 2004 investors loaned the Company a net of $47,552 with no specified
interest rate. The loans are due on demand.

During 2005 investor loans of $18,552 were repaid, leaving the Company a net of
loans payable on demand of $64,000 at December 31, 2005 with no specified
interest rate.

Note 7. LEASE COMMITMENTS

On December 8, 2004, the Company entered into a lease agreement for office
premises in Dover, New Hampshire, requiring lease payments of $2,250 to $2,734
per month for the period January 1, 2005, through December 31, 2009.

On February 24, 2005, Liska Biometry (Canada) Inc. entered into an Agreement to
Lease office premises in Ottawa, Canada requiring minimum lease payments of
$8,819 per month beginning May 1, 2005, through March 31, 2010. In addition, the
lease allows for annual escalation of certain operating cost. In support of that
agreement, the Company agreed to sign an indemnification agreement guaranteeing
all rental payments.

Minimum lease payments under both leases for the years ended December 31, are
summarized below:

                 Company          Subsidiary
                 -------          ----------
2006           $   28,350         $  129,057
2007           $   29,768         $  129,057
2008           $   31,256         $  129,057
2009           $   32,819         $  129,057
2010           $       --         $   32,262

Note 8. COMMITMENTS AND CONTINGENCIES

During the periods covered by these financial statements the Company issued
shares of common stock without registration under the Securities Act of 1933.
Although the Company believes that the sales did not involve a public offering
of its securities and that the Company did comply with the "safe harbor"
exemptions from registration, provided required information and acquired
necessary subscription agreements, it could be liable for rescission of the
sales or other actions, including SEC enforcement actions, if such exemptions
were found not to apply or other violations occurred. This could have a material
negative impact on the Company's financial position and results of operations.


                                       40
<PAGE>

During the periods covered by these financial statements the Company entered
into several employment, consulting and other agreements with third parties.
Although the Company obtained settlement releases from a majority of the
parties, settlement releases were not entered into with some of these parties or
the settlement releases were verbal agreements. Future contingencies which
cannot be estimated by management, may exists for the above matters including
but not limited to issuance of capital stock and other financial obligations and
may have a material negative impact on the Company's financial position and
results of operations.

At April 1, 2005 the Company had entered into an executive employment contract
for one year, renewable each year, it was renewed April 1, 2006. through
December 2005 with two officers for annual compensation approximately $90,000.
In addition this officers will receive an aggregate of 550,000 shares of
restricted common stock if performance milestones are met and 100,000 common
shares registered pursuant to Form S-8. In addition

Note 9. SUBSEQUENT EVENTS

In February 2006 the company received a loan of $300,000 from Centrecourt Asset
Management. The term of the note expires on July 30, 2006, and carries an
interest rate of 8% per annum. The loan was secured by the assets in the company
and by a pledge of 3,300,000 shares of the Company's common stock held by an
officer.

In December 2005 the company signed a letter of Intent to merge operations with
Digital Card Systems of Acton, MA. As per the agreement, the company is to issue
25,000,000 shares of common stock for all of the stock in DCS. In addition the
company paid DCS $100,000 on December 5, 2005 in accordance with a standstill
agreement through June 30, 2006.

In February 2006 the company signed a definitive agreement to merge operations
with Digital Card Systems of Acton, MA. The agreement is subject to certain
terms and conditions including but not limited to audits, due diligence and
approval of shareholders.

In February 2006 the company reimbursed Digital Card Systems $75,000 for a loan
of 100,000 euros with a per annum rate of 4.5% to Sogedex of Paris, France in
exchange for an option to purchase 80% of Sogedex on or before July 31, 2006. As
per the agreement, Digital Card shall further be reimbursed $50,000 for the
remainder of 100,000 euros and related expenses made on behalf of the company.
As such the company (Liska) shall retain all the rights and benefits associated
with the Sogedex note and option agreements.

On March 17, 2006 the company, pursuant to Regulation s-8, registered 3,000,000
shares of common stock for employee and consultant compensation. Of the
3,000,000 shares registered 187,500 have been issued.

Through April 13, 2006, the Company issued 1,069,273 common shares which were
subscribed for at December 31, 2005. Additionally the Company issued 812,500
common shares of which 312,500 shares were issued for services and 500,000
shares were issued in accordance with the $300,000 loan described above. The
company is due to repay on or before April 30, 2006. If the loan is not paid the
company will issue an additional 500,000 shares in which case the loan is
payable on or before July 31, 2006.


                                       41
<PAGE>

Item 8A - Controls and Procedures

      We maintain and are currently undertaking actions to improve disclosure
controls and procedures designed to ensure that information required to be
disclosed in reports filed under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the specified
time periods. As of the end of the period covered by this report, the
Corporation's Chief Executive Officer ("CEO ") evaluated the effectiveness of
the Corporation's disclosure controls and procedures. Based on the evaluation,
our CEO has discovered a potential material weakness in our disclosure controls
as they relate to the documents supporting the issuance of equity securities.
Our CEO believes that the weaknesses did not affect the reporting or disclosure
in our annual or quarterly reports due to controls put in place during the
current quarter and compensating controls, such as the detailed review of these
areas subsequent to the time at which the agreements were entered into and
during the preparation of our quarterly and annual reports.

      These weaknesses are currently being addressed and actions are currently
being taken to improve our disclosure controls and procedures; and our CEO has
concluded that our disclosure controls and procedures, combined with
compensating controls are effective as of the end of the period covered by this
report in that information required to be disclosed in this 10KSB has been
recorded, processed, summarized and reported properly within the current fiscal
year. Although there was a change in our disclosure controls and procedures
during the quarter, there were no changes in our internal control over financial
reporting that occurred during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

      The following is a summary of the weakness and deficiency that has been
identified and addressed:

      o     Deficiency related to the documentation, review and approval of
            certain sales under a Regulation S sale of securities and S-8 by our
            authorized broker/dealer agents.

      At our most recent year-end, we identified a deficiency in controls
      related to documentation, review and approval of sales made under a series
      of Regulation S transactions. Such deficiencies resulted in our inability
      to obtain supporting documentation confirming the investor's intention to
      subscribe to the shares sold despite having received the funds from the
      broker/agent and despite having the certificates issued by our transfer
      agent. This deficiency did not exist for the private placements affected
      during the year.

      As a result of the findings above, we have implemented and will continue
to implement the following actions:

      o     The company intends to hire a CFO/Controller to address this issue.

      o     We are establishing procedures to improve our review and processing
            of non-accounting documentation and contracts, and specifically will
            require adequate documentation be provided concurrently with any
            future share subscriptions, regardless of type.

      o     We intend to periodically review our internal procedures and
            controls to ensure additional enhancements to our internal controls
            are installed as necessary to meet our operational needs. Outside
            consultants will be engaged to advise our management as areas of
            concern are identified.

      o     We intend to establish a Code of Ethics.

      Our management is committed to a sound internal control environment. We
believe we have committed adequate resources to the aforementioned reviews and
remedies. We believe that we have addressed the issue identified above, and we
believe that we are in the process of further improving our infrastructure,
personnel, processes and controls to help ensure that we are able to produce
accurate disclosures and financial statements with appropriate supporting
documentation on a timely basis.


                                       42
<PAGE>

PART III

Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH 16(a) OF THE EXCHANGE ACT

At December 31, 2005 the Executive Officers of the company were:

<TABLE>
<CAPTION>
Name                       Office                                     Term
<S>                        <C>                                        <C>
Christopher J LeClerc      President and CEO                          From 9/04 to present
Manoj Hippola              Chief Financial and Operating Officer      From 9/04 to 3/8/06
Jean E Boyle               Chairman                                   From 7/04 to 3/7/06
G. Bryan Thomas            Director                                   From 7/04 to present
Javaid Sheikh              Director                                   From 7/04 to present
Brian Hynes                Director                                   From 8/05 to present
John Hollander             Secretary                                  From 7/04 to 3/7/06
</TABLE>

Item 10. EXECUTIVE COMPENSATION

<TABLE>
<CAPTION>
Name                       Position                                   Year        Comp
<S>                        <C>                                        <C>        <C>
Christopher LeClerc        President and CEO                          2005       71,615

Manoj Hippola              Chief Financial and Operating Officer      2005      C$82999
</TABLE>

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Title           Name                                Amount     Percent

Common          Christopher LeClerc                3420841         9.5
                Manoj Hippola                      1815827           5
                G Bryan Thomas                      687375         1.9
                Javaid Sheikh                       380250           1
                Brian Hynes                          65000         0.1
                Lam Ko Chau                        4618000        12.7

As of 4/19/06

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Our former President, Lam Ko Chau, having previously made certain inventions and
discoveries, filed the following patents with the United States Patent and
Trademark Office for a method and system for fingerprint encoding and
authentication: (a) US Provisional Patent Application Serial No. 60/312,371
entitled "Method and System for Fingerprint Encoding and Authentication", filed
on August 16, 2001; and (b) US Patent Application Serial No. 09/965,809 entitled
"Method and System for Fingerprint Encoding and Authentication", filed on
October 1, 2001.

                                       43
<PAGE>

On August 15, 2002, our former President, Lam Ko Chau, filed a PCT International
Patent Application PCT/CA02/01274 entitled "Method and System for Fingerprint
Encoding and Authentication" with the World Intellectual Property Organization.
The World Intellectual Property Organization, headquartered in Geneva,
Switzerland, is an international organization dedicated to promoting the use and
protection of intellectual property works. On February 27, 2003, our former
President, Lam Ko Chau, assigned the right, title and interest to all of these
patent applications to us for consideration of $1.

On November 2, 2004, we incorporated Liska Biometry (Canada) Inc., a wholly
owned subsidiary registered in the province of Ontario, for the purpose of
conducting our Canadian operations. Our Chief Financial Officer, Manoj Hippola,
was elected as President and sole director of Liska Biometry Canada, Inc. Mr.
Hippola resigned March 8, 2006, subsequently resigning as director of Liska
Biomentry Canada.

On November 23, 2005 we incorporated Liska Biometry (Saudi Arabia), a wholly
owned subsidiary registered in the province , for the purpose of selling our
products in the Middle East. Our Chief Financial Officer, Manoj Hippola, was
elected as President and sole director of Liska Biometry Saudi Arabia, Inc. Mr.
Hippola resigned on March 8, 2006, subsequently resigning as director of Liska
Biometry Saudi Arabia.

Other than the above transactions, we have not entered into any material
transactions with any director, executive officer, and nominee for director,
beneficial owner of five percent (5%) or more of our common stock, or family
member of such persons in excess of $60,000. We are not a subsidiary of any
company.

Item 13. Exhibits and Reports on Form 8-K

Item 13. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit
Number                         Description

3.1   Articles of Incorporation of 3045 Corporation dated October 26, 1999(1)
3.2   Bylaws of 3045 Corporation dated October 25, 1999(1)
31.1  Certification of Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
32.1  Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.
----------

      (1) Denotes previously filed exhibits: filed on January 7, 2000 with 3045
Corporation's Form SB-2 registration statement, file # 333-94265.

      (2) Denotes previously filed exhibits: filed on May 30, 2003 with Liska
Biometry, Inc.'s Form 10-KSB for the period ended December 31, 2001.

      (3) Denotes previously filed exhibits: filed on August 15, 2003 with Liska
Biometry, Inc.'s Form 10-QSB for the period ended June 30, 2003.

(b) Reports on Form 8-K

Form 8-K Report filed on December 21, 2005

Item 14. Principal Accountant Fees and Services.

The Company's board of directors reviews and approves audit and permissible
non-audit services performed by its independent accountants, as well as the fees
charged for such services. In its review of non-audit service fees and its
appointment of Stark Winter Schenkein & Co., LLP as the Company's independent
accountants, the board of directors considered whether the provision of such
services is compatible with maintaining independence. All of the services
provided and fees charged by Stark Winter Schenkein & Co., LLP in 2005 and 2004
were approved by the board of directors.


                                       44
<PAGE>

Audit Fees

The aggregate fees billed for professional services for the audit of the annual
financial statements of the Company and the reviews of the financial statements
included in the Company's quarterly reports on Form 10-QSB for 2005 and 2004
were $28,000 and $23,000 respectively, net of expenses.

Audit-Related Fees

There were no other fees billed by during the last two fiscal years for
assurance and related services that were reasonably related to the performance
of the audit or review of the Company's financial statements and not reported
under "Audit Fees" above.

Tax Fees

There were approximately $5,000 per year spent on tax filings.

All Other Fees

There were no other fees billed during the last two fiscal years for products
and services provided.


                                       45
<PAGE>

SIGNATURES

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

Liska Biometry, Inc.
--------------------
Registrant

Dated: April 19, 2006


/s/ Chris LeClerc
By: Chris LeClerc, President and CEO

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

Dated: April 19, 2006


/s/ Chris LeClerc
By: Chris LeClerc, President and CEO


                                       46