**UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-KSB**

 

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

 

**For theFiscal Year Ended December 31, 2007**

 

**o****                     TRANSITIONREPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934**

 

**For thetransition period from                        to**

 

**Commission File No. 333-133634**

 

**INTEGRATEDMANAGEMENT INFORMATION, INC.**

(Name of SmallBusiness Issuer in its charter)

 

| **Colorado**                                                     | ** ** | **43-1802805**                        |
|------------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |       | (I.R.S. Employer  Identification No.) |

 

**221Wilcox, Suite A**

**CastleRock, CO 80104**

(Address ofprincipal executive offices, including zip code)

 

Issuer’s telephonenumber, including area code:

**(303)895-3002**

 

Securitiesregistered pursuant to Section 12(b) of the Act:

**None**

 

Securitiesregistered pursuant to Section 12(g) of the Act:

**CommonStock, $0.001 par value**

(Title of Class)

 

Check whether the issuer:(1) filed all reports required to be filed by Section 13 or 15(d) ofthe Exchange Act during the past 12 months (or for such shorter period that theregistrant was required to file such reports); and (2) has been subject tosuch filing requirements for the past 90days.       Yes x       Noo

 

Check if disclosure ofdelinquent filers in response to Item 405 of Regulation S-B is not contained inthis form, and will not be contained, to the best of registrant’s knowledge, indefinitive proxy or information statements incorporated by reference in Part IIIof this Form 10-KSB or any amendment to this Form 10-KSB.

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).

Yes   o  No   x

 

The Issuer’s revenues forthe fiscal year ended December 31, 2007 were $2,307,808.

 

The number of shares ofthe registrant’s common stock, $.001 par value per share, outstanding as of March 24,2008 was 19,995,506. The aggregate market value of the voting and non-votingcommon equity held by non-affiliates of the registrant on March 24, 2008,based on the last sales price on the OTC Bulletin Board as of such date, wasapproximately $1,545,487.

 

DOCUMENTS INCORPORATED BYREFERENCE

 

Transition Small BusinessDisclosure Format:                Yes         o                            No           x

 

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TABLE OF CONTENTS

 
| ** ** | PART I                                                                                                                 | **PAGE**   |
|------------|-----------------------------------------------------------------------------------------------------------------------------|------------|
| ** ** |                                                                                                                        | ** ** |
| ITEM 1.    | DESCRIPTION OF BUSINESS                                                                                                     | 3          |
| ITEM 1A.   | RISK FACTORS                                                                                                                | 9          |
| ITEM 1B.   | UNRESOLVED STAFF  COMMENTS                                                                                                  | 12         |
| ITEM 2.    | DESCRIPTION OF PROPERTY                                                                                                     | 12         |
| ITEM 3.    | LEGAL PROCEEDINGS                                                                                                           | 12         |
| ITEM 4.    | SUBMISSION OF  MATTERS TO A VOTE OF SECURITY HOLDERS                                                                        | 12         |
|       |                                                                                                                        |       |
|       | PART II                                                                                                                |       |
|       |                                                                                                                        |       |
| ITEM 5.    | MARKET FOR  COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUERS  PURCHASES OF EQUITY SECURITIES           | 13         |
| ITEM 6.    | MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF  OPERATION                                                             | 14         |
| ITEM 7.    | FINANCIAL  STATEMENTS                                                                                                       | 20         |
| ITEM 8.    | CHANGES AND  DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                          | 41         |
| ITEM 8A.   | CONTROLS AND  PROCEDURES                                                                                                    | 41         |
| ITEM 8B.   | OTHER INFORMATION                                                                                                           | 41         |
|       | PART III                                                                                                               |       |
|       |                                                                                                                        |       |
| ITEM 9.    | DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH  SECTION 16(a) OF THE EXCHANGE ACT | 42         |
| ITEM 10.   | EXECUTIVE  COMPENSATION                                                                                                     | 44         |
| ITEM 11.   | SECURITY OF  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER  MATTERS                         | 46         |
| ITEM 12.   | CERTAIN  RELATIONSHIPS AND RELATED TRANSACTIONS                                                                             | 47         |
| ITEM 13.   | EXHIBITS                                                                                                                    | 48         |
| ITEM 14.   | PRINCIPAL  ACCOUNTANT FEES AND SERVICES                                                                                     | 49         |
|       | SIGNATURES                                                                                                                  | 50         |

 

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****PART I****

 

****ITEM1.  BUSINESS****

 

IntegratedManagement Information, Inc. (“IMI Global,” “IMI,” the “Company,” “our,” “we,”or “us,”) is a recognized leader providing third-party verification andcommunication solutions for the agriculture and food industry. Our solutionshelp our customers establish their own systems, meet government regulations,create their own premium brand identity, gain cost efficiencies and command ahigher price for their product.

 

Wewere incorporated in 1998 as a Missouri corporation. In March, 2005, wereincorporated in Delaware and in April 2006 we redomiciled to Colorado.

 

OnFebruary 14, 2006, our shareholders approved a three for two stock split.All common shares here-in reflect this split.

 

****DESCRIPTION OF BUSINESS****

 

Weapply information technology, verification systems and electronic documentationmanagement to the livestock and food industry by addressing the growingimportance to the industry (producers, processors, and customers) of detailedinformation regarding identification, traceability, and verification ofmarketing claims such as: source of origin information, genetic background,animal treatment, animal health history, animal age, animal movements,nutrition, and other credence attributes. Our solutions provide assuranceregarding those claims made that can not be confirmed by visual inspection oncethe product reaches the meat case and is marketed to the consumer. We havedeveloped a range of proprietary web based applications, consultingmethodologies, auditing processes, and other services to allow the livestockand food industry to record, manage, report, and audit this information.

 

Wealso own several internet-based online services providing news and informationabout the North American livestock and food industry. These websites contributerevenues from their e-commerce activities and advertising.

 

**INDUSTRYBACKGROUND**

 

Asthe livestock and food industry has matured and expanded internationally, therehas been an increasing need to record, manage, report and audit informationregarding the source, age, genetic background, animal treatment, nutrition, and other credence attributes of livestockfor the benefit of producers, processors, distributors, retailers, consumers,and regulators.

 

Demandfor livestock identification, traceability and verification solutions furtheraccelerated in recent years due to industry and consumer concerns regardingbovine spongiform encephalopathy (mad cow disease), governmental and industryregulations regarding recordkeeping for livestock, and technology, andtechnology advances, including radio frequency ID tags for livestock andweb-based systems facilitating real-time data entry, reporting, and auditing.

 

Manyof the world’s largest beef and other livestock exporting countries, includingBrazil, Argentina, and Australia, have established mandatory traceability andverification standards. Other countries have issued voluntary animalidentification and traceability standards. The United States lags with regardsto meeting this market demand, as the United States government has not to dateestablished mandatory traceability standards.

 

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Tosupport industry driven marketing programs and to comply with trade agreementsestablished with international export partners, the United States Department ofAgriculture (“USDA”), Agriculture Marketing Service, Audit, Review andCompliance Branch has established the voluntary Quality System Assessment, NonHormone Treated Cattle (NHTC), and Process Verified programs based on ISO 9001Instructions. These programs provide guidelines and structure to enablesuppliers of agricultural products and services to assure customers of theirability to provide consistent quality products or services by having theirprocesses audited by independent, third-party auditors using USDA approvedmethodologies and programs.

 

TheUSDA’s Quality System Assessment (QSA) program is a documented qualitymanagement system and verification trail that can support specific productclaims or customer requirements, as well as confirm compliance with exportstandards. The approved QSA must show that characteristics of the product arebeing monitored and measured accurately. Approved QSA programs are audited bythe USDA at least twice per year.

 

TheUSDA’s Process Verified Program (“PVP”) is similar to the QSA program, butbroader in scope. Like the QSA, PVP ensures that companies deliver productsthat meet stated product claims. In addition, it provides the livestock andfood industry with a verifiable marketing tool. Once marketing claims areverified by the USDA, the company may use the “USDA Process Verified” shield onits marketing materials.

 

BothQuality Systems Assessment and Process Verification Programs are applicable toa company’s entire program or certain portions of its programs where specifiedproducer or product requirements are supported by a document quality managementsystem and the documented delivery processes are verified through anindependent, third party audit. To operate an approved program, suppliers mustsubmit a documented quality management system to the Audit Review andCompliance Branch of the USDA Livestock and Seed Program and successfully passa document review and an on-site audit.

 

Withinthe United States, these USDA programs are voluntary and are primarily usefulin providing the industry with a process for demonstrating source, age, andquality attributes as the product moves through the supply chain. In addition,compliance with the programs allows producers to verify claims such as “ageverified,” “non-hormone treated,” or “guaranteed tender.”

 

Tomarket beef and other livestock products outside of the United States,suppliers must comply with the QSA and PVP policies and procedures and addressthe specified product requirements addressed in the USDA Export Verification (“EV”)Instructions specific to each country. Regardless of final export destinationor specific Export Verification program requirements, US suppliers seeking tosell beef and other livestock products must participate in a pre-approvedQuality System Assessment or Process Verified Program so as to have anapproved means of verifying source, age, and other specific product requirements.Therefore, though the program is voluntary, it is mandatory to gain access tomany export markets.

 

Japan,Mexico, South Korea, and Europe are the world’s largest export markets. Tomarket beef and other livestock products in these markets, beef for example, isrequired to be sourced from cattle that are of a certain maximum age at thetime of slaughter. The USDA QSA program is the standard mechanism for verifyingsource and age for these export markets and, therefore, is a mandatoryrequirement for producers, packers, and distributors to export to these keymarkets.

 

Theseexport markets represent a significant opportunity for the US livestock andfood industry. Prior to the discovery of the first case of mad cow disease inthe US in December 2003, the USDA estimated that 

 

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theindustry exported approximately $2.8B to Japan, Mexico, South Korea, andCanada. The governments of these and other countries responded to the discoveryby forbidding import of beef and other livestock products from the US, andexports fell to approximately $0.4B during 2004. In large part because ofimplementation of the USDA QSA initiatives, export partners’ confidence in USbeef and other livestock supply increased, and many export markets reopened,including Mexico, Canada, Hong Kong, Singapore, and Taiwan. In December 2005,Japan lifted its ban on imported US beef and other livestock products, butreinstated it in January 2006 after an inspection revealed a case ofnon-compliance with the Japanese import regulations. In mid-2006, the Japanesemarket reopened. The Korean market also reopened, but imposed restrictionswhich make compliance extremely difficult. The Chinese market remains closed.Current beef and other livestock consumption within the US has not changed overthe past 20 years, while the productivity of the US livestock and food industrycontinues to improve. Therefore, international market access and growth iscritical for the US livestock and food industry. Future growth opportunitiesfor US protein lie in consumption growth internationally, as only 2% of theworld’s population resides in the US.

 

Theopportunity to participate in export markets presents a strong indicator ofpotential demand for approved verification processes, which have becomeessential. However, during the time in which the export markets are closed,demand for solutions to comply with these regulatory requirements isconstrained. Furthermore, the recent Hallmark/Westland beef recall, due toanimal handling practices, shows the domestic markets interest in standardizedpractices and a need for third-party verification.

 

**PRODUCTAND SERVICE OFFERINGS**

 

Toaddress the livestock industry’s requirements to deploy and maintainidentification, traceability, and verification systems and to facilitateparticipation in and compliance with the USDA’s Quality System Assessment,Process Verification, and Export Verification Programs, we have developed andoffer a balanced portfolio of products and services. These solutions addressspecific requirements at each level of the livestock supply chain. In addition,we offer customized solutions to address unique customer requirements. Wecomplement these products and services with our Cattlenetwork.com andCattlestore.com industry information services and internet portals.

 

Weoffer a range of products and services to track, record, manage, report, andaudit key data regarding livestock. Our distinct product line isUSVerifiedTM.com, a USDA Process Verified Product Line which offers thefollowing verification solutions: USDA Process Verified, QSA, NHTC and EVProgram Development for companies. Our offerings address the needs of eachindustry segment, and our customers span the supply chain from birth throughthe various stages of feeding and raising the livestock, to packing anddistribution. We have no principal suppliers because most of our revenue isservice related. What products we do purchase (principally livestockidentification ear tags) we purchase primarily from Allflex and DigitalAngel. However, there are numerous other companies which manufacture and marketsuch ear tags. Our USVerified products and services offerings are tailored tothe needs of each level of the beef and other livestock supply chain in supportof USDA programs:

 

***Suppliers (Cow/Calf Producers)***

 

SupplyVerified is a verification and auditing service offered to livestock and foodindustry suppliers that enables them to demonstrate their ability toefficiently and accurately track key data related to the source and age oflivestock. The USDA has informed us that our Supply Verified program was theindustry’s first USDA approved offsite evaluation process for cattle and otherlivestock suppliers to meet requirements under the USDA’s QSA and PVP programs.

 

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Underthe Supply Verified program, suppliers provide documentation to us about theirprocesses and records. This documentation is evaluated and audited by us and,if warranted, we provide a certificate that the producer meets the requirementsof source and age verification. We charge each supplier a fixed annual fee forperforming the audit and providing the certification. In order to maintaincertification, a supplier must participate in the annual audits.

 

***Feed Yards***

 

Weoffer solutions to enable feed yards to comply with USDA’s verificationrequirements. Initially, we work with the feed yard to implement the requiredsystems and procedures to track key data regarding the cattle and otherlivestock that move through the operation, including source and age as well asadditional health and nutritional information. This service is provided andpriced to feed yards on a packaged basis, which includes access to ourproprietary web based applications and processes, completion of a USDA programcompliant manual, implementation services, and initial training. In addition,we offer a monthly service to maintain the USDA compliant manual and web hostthe data.

 

***Packers***

 

Weoffer solutions to meat packers, processors and distributors to demonstratethat their products comply with USDA’s QSA requirements, Export Verification (“EV”)requirements as well as the USDA’s Process Verified Program (“PVP”), which isbroader in scope than the QSA program. Suppliers with approved USDA ProcessVerified Programs are able to make marketing claims associated with theirprocess verified points — such as age, source, feeding practices, or otherraising and production claims. This service is provided and priced to meatpackers on a packaged basis, which includes access to our Proprietary web basedapplications and processes, completion of a USDA program compliant manual,obtaining USDA approval, implementation services, and initial training. Inaddition, we offer a monthly service to maintain the USDA compliant manual andweb host the data.

 

**SALES**

 

Wehave three primary channels for selling our product and service offerings:Third-Party Verification, The Networks and E-Learning Solutions. We sell ourproducts and services directly to customers at various levels in the livestocksupply chain. Our customers include some of the largest U.S. beef and porkpackers, however no single customer generates more than 10% of our revenue.

 

***Third Party Verification***

 

OurUSVerifiedTM.com product line offers the following verification solutions: USDAProcess Verified, QSA, NHTC and EV Program Development for companies.Additionally we provide various products and services to promote ourverification programs including:

 

·                  Source and Age Verification (USDA ProcessVerified Product Line)

·                  Non-Hormone Treated Cattle, NHTC (USDAProcess Verified Product Line)

·                  Premise Registration (NAIS Program)

·                  Individual Animal Identification and TagAllocation (USDA Process Verified Product Line)

·                  Simply Natural BeefTM (USDA Process VerifiedProduct Line)

·                  PetSupplyVerified, building verificationprograms to verify marketing claims for the Pet Food Industry.

 

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Wealso offer consulting and web-based development on a customized basis to meetspecial customer requirements. For the years-ended December 31, 2007 and2006, our third party verification programs provided approximately 54% and 48%,respectively, of our revenue.

 

***Our Networks***

 

Ournetworks are leading internet industry specific news and information websites.The websites include:

 

·                  CattleNetwork.com, the most widely viewedwebsite serving the worldwide cattle industry

·                  AgNetwork.com, dedicated to covering broaderagriculture industry news and market information

·                  MyEquineNetwork.com, the website for thehorse industry and enthusiasts

 

Inaddition, we also own AgTraderIndex, a unique commodity market analyst tool,and Cattlestore.com, an e-commerce site for customers to purchase a wide rangeof products and supplies related to agriculture.

 

Wederive revenue from our networks through a combination of advertising sales tocompanies seeking to reach a unique base of readers and sales of productsthrough Cattlestore.com. Internet sales and advertising generated approximately46% and 52% of our revenue for the years-ended December 31, 2007 and 2006,respectively.

 

***E-Learning Solutions***

 

Wehave constructed highly customizable e-learning solutions for our customers.These solutions offer our customers the ability to standardize trainingmaterials, provide access to remote locations, easily automate the trainingmodules, quickly update and modify and assess employee competency.

 

**MARKETING**

 

Ourmarketing strategy includes direct marketing, advertising, event sponsorship,and trade show participation. From a public relations perspective, our staff isfrequently quoted in industry trade journals and requested as speakers atvarious industry events as subject matter experts on the topics of animalidentification, traceability, branding, and the USDA QSA, EV and PVP programs.We maintain strong affiliations with Breed Associations, US Meat ExportFederation, The National Meat Association, The National Cattlemen’s BeefAssociation, and Livestock Marketing Association.

 

Inorder to reach additional customers, we continually develop strategic marketingpartnerships with leading companies in the industry with complementaryabilities and products. We do not currently rely on any third party contractswith distributors, licenses or manufacturers in conducting our business.

 

**COMPETITION**

 

Ofthe 775,000 independent suppliers of cattle in the United States, we estimatethat only approximately 40,000 use some form of verification program. Wecurrently provide tracking information for approximately 4,000 of the mostsignificant independent suppliers which we believe supply greater than 50% ofthe beef and other livestock products available for exports markets.

 

Webelieve we differentiate ourselves from our competitors by providing better,more flexible solutions to all segments of the supply chain. We are also themarket leader in the area of diversifying to the Non-Hormone Treated CattleVerification Program and the USDA’s Never Ever 3 Verification Program.

 

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Ourkey competitors for our SupplyVerified Program are: AgInfolink, MicroBeefTechnologies, and Sterling Solutions.

 

**INTELLECTUALPROPERTY**

 

Wecreate, own and maintain a variety of intellectual property assets that webelieve are among our most valuable assets. Our intellectual property assetsinclude patents and patent applications related to our innovations, productsand services, trademarks related to our brands, products and services, andother property rights. We also have licensing arrangements when features fromour programs are desirable to incorporate into either a new or an existingtechnology we offer. We seek to protect our intellectual property right assetsthrough patent, copyright, trade secret, trademark and other laws of the UnitedStates and other countries, and through contractual provisions. Additionalinformation regarding certain risks related to our intellectual property isincluded in Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-KSB.

 

**EMPLOYEES**

 

Asof December 31, 2007 we had 21 employees all of which are full-time. Ourfuture success is substantially dependent upon the performance of our keysenior management personnel, as well as our ability to attract and retainhighly qualified technical personnel. Additional information regarding certainrisks related to our employees is included in Part I, Item 1A “RiskFactors” of this Annual Report on Form 10-KSB.

 

****AVAILABLEINFORMATION****

 

****Ourwebsite is located at www.imiglobal.com. We make available free of charge onour investor relations website under “SEC Filings” our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and anyamendments to those reports as soon as reasonably practicable after weelectronically file or furnish such materials to the U.S. Securities andExchange Commission (“SEC”). Further, a copy of this annual report on Form 10-Kis located at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580,Washington, D.C. 20549. Information on the operation of the Public Reference Room canbe obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internetsite that contains reports, proxy and information statements and otherinformation regarding our filings at http://www.sec.gov.****

 

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****ITEM 1A.               RISKFACTORS****

 

Inaddition to the other information included in this report and our other publicfilings and releases, the following factors should be considered whenevaluating our business, financial condition, results of operations andprospects:

 

*****We havehad a history of operating losses and negative cash flows from operations.There is no assurance that we will achieve profitability in the future, or thatwe will be able to raise additional capital or continue as a going concern.*****

 

Wehave a history of operating losses. It is uncertain if our future prospectswill result in profitable operations. If we continue to experience losses, thevalue of an investment in our common stock could decline significantly.

 

Ifwe are unable to significantly grow the sales of our products and services inthe next twelve months and if our business operations continue at their currentlevels, we will be unable to generate sufficient cash for our plannedoperations. We will need to raise additional capital and/or further reduceoperating costs. We can give no assurances that additional capital will beavailable to us on favorable terms, or at all. Our inability to obtainadditional capital, if and when needed, would have a material adverse effectupon our financial condition and our ability to continue as a going concern.

 

*****Weoperate in a highly competitive industry with a limited market characterized bychanging technology, frequent introductions of new products, productenhancements, and evolving industry standards.*****

 

Wecompete with many other vendors of products and services designed for trackingcattle and other livestock and for herd management. Our competitors range fromsmall start-up companies to multi-national firms. Our competitors may havesignificantly greater financial, technical and marketing resources. Competitionis likely to intensify as current competitors expand their product offeringsand as new companies enter the market. Increasing competition may result inreduced margins and the loss of market share. Our competitors may offer broaderproduct lines or technologies that are more commercially attractive and gaingreater market acceptance than our current or future products. Additionally,new technology may render our products obsolete.

 

***The success of our business model depends on the broad acceptance ofour technologies into markets that are continuing to develop as a result of theincreasing focus on food safety and assurance.***

 

Weare currently benefiting from a slow but growing movement among U.S. andinternational beef and other livestock producers to source and age verifyproducts. This emerging trend is fueled in part by consumers focus on foodsafety and assurance. However, we can offer no assurances that there will bemarket acceptance of our technologies. Furthermore, some of our primary targetsegments within the livestock and food industry are experiencing unpredictableeconomic conditions and are expected to continue to struggle with supply, tradeand profitability issues in the near term. Although we believe that our products,if adopted on a wide-scale basis, would have a significant impact on improvingthe safety, quality and confidence in our nation’s food supply, our customersfor these products historically have been very slow to change and reluctant toadopt new technologies and business practices.

 

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***Decreases or delays in advertising spending by our advertisers due togeneral economic conditions could harm our ability to generate advertisingrevenue.***

 

Expendituresby advertisers tend to be cyclical in nature, reflecting overall economicconditions and budgeting and buying patterns. Since we derive a portion of ourrevenues from advertising, any decreases in or delays in advertising spendingdue to economic conditions could reduce our revenues or negatively impact ourability to grow our revenues.

 

*****Ourbusiness may be negatively impacted by international export market activities,including trade barriers to US beef and other livestock exports and customeracceptance of US beef and other livestock products.*****

 

Inprior years, the Japanese and Korean beef and other livestock markets wereclosed to the U.S. as a result of mad cow disease in at least one animal in theUnited States. Currently, the Japanese and Korean markets are the largest beefand other livestock export markets for U.S. producers. Both markets requireverification, which is important to the sale of our products. Because the U.S.market does not mandate verification, there is limited incentive for beef andother livestock producers to purchase our products. Therefore, internationaltrade barriers and limited consumer acceptance of U.S. beef and other livestockproducts can significantly impair our sales and profitability.

 

*****In theevent that market demand for beef and other livestock products declines, ourcustomers may not be able to generate sufficient revenues to justify purchaseof our verification solutions and consulting services.*****

 

Publicattitudes towards beef and other livestock products may be influenced by claimsthat these products are unsafe for consumption or pose unknown health risks.Decreased demand for beef and other livestock products could have a materialadverse affect on the operating results and financial condition of our existingor prospective customers. If operating results of our customers are impaired,the resources that our customers can devote to building information systems fortracking cattle and other livestock and herd management would be reduced whichin turn would limit purchases of our verification solutions and consultingservices. Therefore, our ability to generate revenue is subject to the risksand uncertainties relating to the financial condition of its customers.

 

***We look for opportunities to expand our presence in internationalmarkets in which we may have limited experience and inherently internationaloperations are subject to increased risks which could harm our business,operating results and financial condition.***

 

Wecontinually seek to expand our product and service offerings in internationalmarkets. As we expand into new international markets, we will have only limitedexperience in marketing and operating our products and services in suchmarkets. In other instances, we may rely on the efforts and abilities offoreign business partners in such markets. Certain international markets may beslower than domestic markets and our operations in international markets maynot develop at a rate that supports our level of investment.

 

Inaddition to uncertainty about our ability to expand into international markets,there are certain risks inherent in doing business internationally, including:

 

·                  trade barriers and changes in traderegulations;

·                  difficulties in developing, staffing andsimultaneously managing a large number of varying foreign operations as aresult of distance, language and cultural differences;

·                  stringent local labor laws and regulations;

 

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·                  longer payment cycles;

·                  currency exchange rate fluctuations;

·                  political or social unrest or economicinstability;

·                  import or export restrictions;

·                  seasonal volatility in business activity;

·                  risks related to government regulation orrequired compliance with local laws in certain jurisdictions, including thosemore fully described above; and

·                  potentially adverse tax consequences.

 

Oneor more of these factors could harm our future international operations andconsequently, could harm our brand, business, operating results and financialcondition.

 

*****Ourfuture success depends upon our ability to obtain and enforce patents; preventothers from infringing on our patents, trademarks and other intellectualproperty rights; and operate without infringing upon the patents andproprietary rights of others.*****

 

Wewill be able to protect our intellectual property from unauthorized use ofthird parties only to the extent that it is covered by valid and enforceablepatents and trademarks. Patent protection generally involves complex legal andfactual issues and, therefore, the enforceability of patent rights cannot bepredicted with certainty. Moreover, the laws of some foreign countries do notprotect proprietary rights to the same extent as the laws of the United States.In the event that patents owned by us do not provide adequate protection, wemay not be able to prevent competitors from offering substantially similarproducts and services. Failure to protect our proprietary rights couldseriously impair our competitive position.

 

*****Failureto protect our proprietary rights could seriously impair our competitiveposition.*****

 

Inthe event that third parties claim that our current or future products or servicesinfringe upon their intellectual property, we may face litigation and beprevented from selling the products and services at issue. Infringement orother claims could be asserted or prosecuted against us in the future, and itis possible that past or future assertion or prosecutions could harm ourbusiness. Litigation either in defense of our intellectual property rights orin response to infringement claims made by others may be, both expensive andtime consuming, which in turn would adversely affect our business.

 

*****Ourfuture success depends to a significant degree upon the continued service ofkey senior management personnel, in particular, John and Leann Saunders.*****

 

BothJohn and Leann Saunders’ reputation and prominence in the field provide us witha strong competitive advantage. While they are currently bound by employmentagreements, we can offer no assurance that John and or Leann Saunders will beable to continue to work for us in the event of an unforeseen accident, severeinjury or major disease, or on a long-term basis. The loss of key personnelcould have a material adverse effect on our business and operating results.

 

*****Corporategovernance requirements are likely to increase our costs and make it moredifficult to attract qualified directors.*****

 

Weface corporate governance requirements under the Sarbanes-Oxley Act of 2002, aswell as rules adopted by the Securities and Exchange Commission. We expectthat changes in these laws, rules and regulations will continue toincrease our legal and financial compliance costs and make some activities moredifficult, time-consuming and costly particularly the outside review of ourinternal controls. We also

 

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expectthat these requirements will make it more difficult and more expensive for usto obtain director and officer liability insurance. We may be required toaccept reduced coverage or incur significantly higher costs to obtain coverage.These new requirements are also likely to make it more difficult for us toattract and retain qualified individuals to serve as members of our board ofdirectors or committees of the board.

 

*****Becausewe are not presently subject to the same corporate governance standards ascompanies listed on registered stock exchanges or NASDAQ, our officers andDirectors may have interests adverse to those of the Shareholders.*****

 

Registeredstock exchanges and NASDAQ have enhanced corporate governance requirements thatapply to issuers that list their securities on those exchanges. For example, weare not required to have any independent directors or to adopt a code ofethics. In certain circumstances, management may not have the same interests asthe shareholders and conflicts of interest may arise. We do not presently havea policy to resolve conflicts of interest. Notwithstanding the exercise oftheir fiduciary duties as directors and executive officers and any other dutiesthat they may have to us or our shareholders in general, these persons may haveinterests different than yours which could adversely affect your investment.

 

**ITEM 1B.          UNRESOLVED STAFF COMMENTS**

 

None

 

****ITEM 2.             PROPERTIES****

 

Welease approximately 3,100 square feet of office space in a one story officefacility in Castle Rock, Colorado which is used as our corporate headquarters.Our lease expires on June 18, 2011. Our rent for the facility in CastleRock, Colorado is $4,973 per month.

 

Welease approximately 2,415 square feet of office space in a two story buildingin Platte City, Missouri. Our lease expired on January 31, 2008 and wecurrently rent this facility on a month-to-month basis. Our rent for thefacility in Platte City, Missouri is $1,550 per month.

 

****ITEM 3.****             ****LEGAL PROCEEDINGS****

 

Weare and may be involved in various unresolved legal actions, administrativeproceedings and claims in the ordinary course of business. Although it is notpossible to predict with certainty the outcome of these unresolved actions, wedo not believe, based on current knowledge, that any legal proceeding or claimis likely to have a material adverse effect on our financial position, resultsof operations or cash flows.

 

****ITEM 4.             SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS****

 

Duringthe quarter ended December 31, 2007, no matters were submitted to a voteof security holders.

 

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****PART II****

 

****ITEM 5.             MARKETFOR COMMON EQUITY’ RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUERPURCHASES OF EQUITY SECURITIES****

 

***Market Information for Common Stock***

 

Sincethe inception of the public trading of our securities on November 15,2006, our common stock has been listed on the over-the-counter electronicbulletin board (“OTC:BB”) under the symbol “INMG”. The following table setsforth the range of high and low bid prices since the debut of public trading inour shares. The quotations reflect inter-dealer prices without retail mark-up,mark-down or commission and may not represent actual transactions.

 
| ** **     | ** ** | **2007** | ** ** | **2006** | ** ** |
|----------------|------------|----------|------------|----------|------------|
| ** **     | ** ** | **High** | ** ** | **Low**  | ** ** | **High** | ** ** | **Low** | ** ** |
| First quarter  |       | $        | 0.40       |     | $          | 0.20 |   | N/A |   | N/A |   |
| Second quarter |       | $        | 0.27       |     | $          | 0.15 |   | N/A |   | N/A |   |
| Third quarter  |       | $        | 0.25       |     | $          | 0.14 |   | N/A |   | N/A |   |
| Fourth quarter |       | $        | 0.25       |     | $          | 0.07 |   | $ | 1.40 |   | $ | 0.33 |   |
|                |            |          |            |          |            |  |  |  |  |  |  |  |  |

 

***Stockholders***

 

Asof March 24, 2008, we estimate that there were approximately 135beneficial and actual owners of our Common Stock.

 

***Dividends***

 

Wehave not declared or paid any cash dividends on our common stock. We presentlydo not have plans to pay any cash dividends in the future.

 

***Recent Sales of Unregistered Securities***

 

InFebruary 2007, we completed a private placement for our common stock andissued 555,556 shares at $0.45 per share resulting in proceeds of $250,000. In August 2007,we completed the sale of 666,667 shares of our common stock at $0.15 per shareresulting in proceeds of $100,000.  Therewas no commission paid on the sale of these shares.

 

Theissuance of these shares of our common stock described above was pursuant tothe exemption from registration provided by Section 4(2) of theSecurities Act of 1933, as amended and related state private offeringexemptions. All of the investors were Accredited Investors as defined in theSecurities Act who took their shares for investments purposes without a view todistribution and had access to information concerning the company and itsbusiness prospects, as required by the Securities Act.

 

Inaddition, there was no general solicitation or advertising for the purchase ofthese shares. All certificates for these shares issued pursuant to Section 4(2) containa restrictive legend. Finally, our stock transfer agent has been instructed notto transfer any of such shares, unless such shares are registered for resale orthere is an exemption with respect to their transfer.

 

***Issuer Purchases of Equity Securities***

 

None

 

13

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****ITEM 7.****             ****MANAGEMENT’S DISCUSSION AND ANALYSIS****

 

****Forward-LookingStatements****

 

Thisannual report on Form 10-KSB contains forward-looking statements withinthe meaning of the federal securities laws. These forwarding-looking statementsinclude without limitation statements regarding our expectations and beliefsabout the market and industry, our goals, plans, and expectations regarding ouroperations and properties and results, our intentions and strategies regardingfuture operations, acquisitions and sales of properties, our intentions andstrategies regarding the formation of strategic relationships, our beliefsregarding the future success of our operations, our expectations and beliefsregarding competition, competitors, the basis of competition and our ability tocompete, our beliefs and expectations regarding our ability to hire and retainpersonnel, our beliefs regarding period to period results of operations, ourexpectations regarding revenues, our expectations regarding future growth andfinancial performance, our beliefs and expectations regarding the adequacy ofour facilities, and our beliefs and expectations regarding our financialposition, ability to finance operations and growth and the amount of financingnecessary to support operations. These statements are subject to risks anduncertainties that could cause actual results and events to differ materially.We undertake no obligation to update forward-looking statements to reflectevents or circumstances occurring after the date of this annual report on Form 10-KSB.

 

Asused in this annual report on Form 10-KSB, unless the context otherwiserequires, the terms “we,” “us,” “the Company,” “IMI” and “IMI Global” refer toIntegrated Management Information, Inc., a Colorado corporation.

 

****BusinessOverview****

 

Weare a recognized leader providing third-party verification and communicationsolutions for the agriculture industry. We also maintain internet websitesdedicated to publishing news and trends in the agricultural and food industriesand marketing products. To our customers, we provide our owned and operatedonline properties and services which specialize in identification andtraceability, process, production practice and supply verification, documentcontrol for USDA verification programs and third party auditing services. Oursolutions help our customers establish their own systems, meet governmentregulations, create their own premium brand identity, gain cost efficienciesand command a higher price for their product. To our advertisers, we provide arange of tools and marketing solutions designed to enable businesses to reachour customers.

 

Demandfor livestock identification, traceability and verification solutions hasaccelerated in recent years due to industry and consumer concerns regardingbovine spongiform encephalopathy (mad cow disease) governmental and industryregulations regarding recordkeeping for livestock, and technology, andtechnology advances, including radio frequency ID tags for livestock andweb-based systems facilitating real-time data entry, reporting, and auditing.Many of the world’s largest beef and other livestock exporting countries,including Brazil, Argentina, and Australia, have established mandatorytraceability and verification standards. Other countries have issued voluntaryanimal identification and traceability standards. The United States lags withregards to meeting this market demand, as the United States government has notto date established mandatory traceability standards.

 

Theopportunity to participate in export markets presents a strong indicator ofpotential demand for approved verification processes, which have becomeessential. However, during the time in which the export markets are closed,demand for solutions to comply with these regulatory requirements isconstrained. Furthermore, the recent Hallmark/Westland beef recall, due toanimal handling practices, shows the domestic markets interest in standardizedpractices and a need for third-party verification.

 

14

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**PerformanceHighlights**

 
| Revenues            |   | Our  revenues for the year ended December 31, 2007 increased approximately  50% year over year to $2.3 million. Customer demand for our USVerified  solutions continues to increase with the reopening of key export markets and  increasing demand for verification of non-hormone treated cattle and other  livestock and humane handling marketing claims. |
|---------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| Gross  Profit       |   | Our  gross operating profit for the year ended December 31, 2007 improved  approximately 9 basis points to 58% of revenues primarily due to the  absorption of fixed costs for our USVerified solutions over an increased  revenue base.                                                                                                                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| Net  Loss           |   | Our  net loss for the year ended December 31, 2007 improved approximately 51%  year over year.                                                                                                                                                                                                                                                                |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| Stock  Buyback Plan |   | On  January 7, 2008, we announced our intention to buy back up  to one million shares of our common stock from the open market over the first  six months of 2008.                                                                                                                                                                                            |

 

 

****Liquidityand Capital Resources****

 

AtDecember 31, 2007, we had cash and cash equivalents of $170,882 and aworking capital deficit of $298,387 compared to $230,539 of cash and cashequivalents and working capital of $74,123 at December 31, 2006. Thedecrease in our working capital is primarily due to the short-termclassification of certain notes payable due June 2008. We currently have aplan in place to secure funding necessary to pay this liability within itscontract terms.

 

AtDecember 31, 2006, we had restricted cash of $50,000 consisting of acertificate of deposit held as collateral against our line of credit. In September 2007,our line of credit was restructured and the $50,000 certificate of deposit wasreleased.

 

Netcash used by operating activities during the year ended December 31, 2007was $638,646 compared to $1,152,365 used by operating activities during theyear ended December 31, 2006. Cash used by operating activities is drivenby our net loss and adjusted by non-cash items. Non-cash adjustments primarilyinclude depreciation, amortization of intangible assets and stock basedcompensation expense. The improvement was primarily driven by better operatingperformance yields over a greater volume of sales at consistent overheadlevels. Additionally, the timing of cash receipts and cash disbursementsaffects our operating assets and cash balances.

 

Netcash used in investing activities is primarily attributable to capitalexpenditures. Our capital expenditures were $34,389 and $15,895 for the yearsended December 31, 2007 and 2006, respectively. Our capital expendituresfor 2007 were primarily related to purchases and internal development ofinformation technology assets to support our product and service offerings.As we anticipate continued growth, we expect to invest additional capitalin our information technology assets.

 

Netcash provided by financing activities during the year ended December 31,2007 was $613,378, compared to $713,966 provided by financing activities duringthe year ended December 31, 2006. Cash provided by financing activitieswas related primarily to the completion of private placements offerings of ourcommon stock.

 

15

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Wehave continued to incur losses from operations and negative cash flows fromoperations. Historically, our growth has been funded through a combination ofconvertible debt from private investors and private placement offerings.Considering our cash on hand at December 31, 2007, our ability to secureadditional debt financing, and our 2008 internal estimates and projections, webelieve we have sufficient cash to execute our 2008 Business Plan. We expectthat we may need to raise additional capital to accomplish our businessobjectives. We continually evaluate all funding options including additional offeringsof our securities to private, public and institutional investors and othercredit facilities as they become available. Our founders have also offered tolend funds to the Company. At the present time, we do not have formalcommitments for any such additional capital, and there can be no assurance asto the availability or terms upon which financing alternatives might beavailable.

 

Ourplan to move from loss to profit is primarily based upon intensifying our focuson international markets. We believe that there are significant growthopportunities available to us because often the only way to access variousrestrictions as imposed on international market imports/exports is via aquality verification program, like our USVerifiedTM.com product line.  Although we intend to aggressively pursue ourplan, there can be no assurance that we will be successful in our attempt tomake the Company profitable.

 

**OffBalance Sheet Arrangements**

 

Asof December 31, 2007, we had no off-balance sheet arrangements of anytype.

 

****RESULTSOF OPERATIONS****

 

****YearEnded December 31, 2007 Compared to Year Ended December 31, 2006****

 

****Revenues****

 

Revenuesare derived from sales of our USVerified identification and verificationsolutions, consulting services, web-based development, advertising and productsales related to our internet-based online information/news and e-commercesites. Revenues for the year ended December 31, 2007 were $2,307,808, animprovement of 50% over 2006 revenues of $1,539,933. The improvement in saleswas primarily due to increased consumer awareness and demand for our USVerified identification and verification solutions. Additionally impacting theimprovement in sales was an increase in advertising on our Cattlenetwork.comwebsite due to greater traffic and website expansion.

 

Inmid-2005, the verification and identification US Verified programs werelaunched and received strong demand in anticipation of the Japanese borderre-opening. The border re-opened in early December 2005 but wassubsequently closed in January 2006 due to a non-conforming meat shipmentunrelated to our programs. The Japan border was re-opened again in late July sothat 2006 reflects approximately 6 months of the Japan border being open. WhileJapanese customers have been slow to respond to U.S. beef and other livestockproducts, the re-opening has driven increased demand for our US Verifiedsolutions. Marketing claims, including NHTC (non-hormone treated cattle) andhumane handling, have also increased demand for our US Verified solutions.

 

In2007, our third party verification revenue, which includes sales of ourUSVerified identification and verification solutions, increased 71% to$1,254,561 in 2007 from $734,897 in 2006. Sales of our third party verificationsolutions are expected to represent a substantial proportion (in excess of 50%)of revenues in the future. We believe that customer demand for our USVerifiedsolutions will continue to 

 

16

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increasewith the reopening of key export markets and increasing demand for verificationof NHTC and humane handling marketing claims. Revenues derived from ournetworks through a combination of advertising sales and sales of productsthrough our websites (Cattlenetwork.com and Cattlestore.com) increased 31% to$1,053,247 in 2007 from $805,036 in 2006.

 

****Costof Sales and Gross Margin****

 

Costof sales for the year ended December 31, 2007 were $968,475, an increaseof 24% over the 2006 amount of $781,494. Gross margin improved approximately 9basis points to 58% of revenues for 2007 compared to 49% for 2006. Theimprovement is primarily due to the absorption of fixed costs for ourUSVerified solutions over an increased revenue base coupled with an increase inadvertising revenue, offset by shifts in the sales mix of our lower margine-commerce sales.

 

**Selling,General and Administrative Expenses**

 

Selling,general and administrative expenses for the year ended December 31, 2007were $2,069,770, a decrease of $232,478, or 10% over the 2006 amount of$2,302,248. The decrease was primarily due to a $312,080 reduction in stockbased compensation expense, $287,430 reduction in spending for contractedservices and other professional service fees which included certain non-capitalizablecosts of going public in 2006, and an overall decrease in expenses due tomanagement’s efforts to aggressively control costs. Offsetting the decrease wasan increase in salaries of $358,072 due to increased headcount. The addition inheadcount enabled us to reduce our reliance upon outside contracted services.It also enabled us to better accommodate the increasing demand for ourUSVerified offerings and support further development of company-owned andoperated websites.

 

****OtherIncome (Expense)****

 

Netother expense for the year ended December 31, 2007 increased to $29,123compared to $15,233 for the year ended December 31, 2006. The increaseduring 2007 was primarily attributable to more interest expense incurred on agreater borrowing base at higher interest rates during part of 2007 as comparedto 2006.

 

****NetLoss and Loss per Share****

 

Asa result of the foregoing, the net loss for the year ended December 31,2007 was $759,560, or $0.04 per basic and diluted common share, compared to$1,559,042, or $0.08 per basic and diluted common share for the year ended December 31,2006.

 

17

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****CRITICALACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES****

 

Ourdiscussion and analysis of our financial condition and results of operations isbased upon our financial statements, which have been prepared in accordancewith GAAP. The preparation of these consolidated financial statements requiresus to make estimates, judgments and assumptions that affect the reportedamounts of assets, liabilities, revenues and expenses, and the relateddisclosure of contingent assets and liabilities. We base our estimates onhistorical experience and on various other assumptions that we believe arereasonable under the circumstances, the results of which form the basis formaking judgments about the carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results may differ from theseestimates.

 

Anaccounting policy is considered to be critical if it requires an accountingestimate to be made based on assumptions about matters that are highlyuncertain at the time the estimate is made, and if different estimates thatreasonably could have been used, or changes in the accounting estimate that arereasonably likely to occur, could materially impact the consolidated financialstatements. We believe that the following critical accounting policies reflectthe more significant estimates and assumptions used in the preparation of theconsolidated financial statements.

 

*****Goodwilland Other Intangible Assets*****

 

****Goodwillis tested for impairment at the reporting unit level (operating segment or onelevel below an operating segment) on an annual basis and between annual testsin certain circumstances. Application of the goodwill impairment test requiresjudgment, including the identification of reporting units, assigning assets andliabilities to reporting units, assigning goodwill to reporting units, anddetermining the fair value of each reporting unit. Significant judgmentsrequired to estimate the fair value of reporting units include estimatingfuture cash flows, and determining appropriate discount rates, growth rates andother assumptions. Changes in these estimates and assumptions could materiallyaffect the determination of fair value for each reporting unit which couldtrigger impairment. Based on our 2007 and 2006 impairment test, there wouldhave to be a significant unfavorable change to our assumptions used in suchcalculations for an impairment to exist.****

 

****Weamortize other intangible assets over their estimated useful lives. We recordan impairment charge on these assets when we determine that their carryingvalue may not be recoverable. The carrying value is not recoverable if itexceeds the undiscounted future cash flows resulting from the use of the assetand its eventual disposition. When there is existence of one or more indicatorsof impairment, we measure any impairment of intangible assets based on aprojected discounted cash flow method using a discount rate determined by ourmanagement to be commensurate with the risk inherent in our business model. Ourestimates of future cash flows attributable to our other intangible assetsrequire significant judgment based on our historical and anticipated results andare subject to many factors. Different assumptions and judgments couldmaterially affect the calculation of the fair value of our other intangibleassets which could trigger impairment.****

 

***Stock-Based Compensation Expense***

 

Calculatingstock-based compensation expense requires the input of highly subjectiveassumptions, including the expected term of the stock-based awards, stock pricevolatility, and the pre-vesting option forfeiture rate. We estimate theexpected life of options granted based on historical exercise patterns, whichwe believe are representative of future behavior. We estimate the volatility ofour common stock on the date of grant based on the implied volatility ofpublicly traded options on our common stock, with a term of one year or greater.We believe that implied volatility calculated based on actively traded optionson our common stock is a better indicator of expected volatility and futurestock price trends than 

 

18

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historicalvolatility. Therefore, expected volatility for the year ended December 31,2007 was based on a market-based implied volatility. The assumptions used incalculating the fair value of stock-based awards represent our best estimates,but these estimates involve inherent uncertainties and the application ofmanagement judgment. As a result, if factors change and we use differentassumptions, our stock-based compensation expense could be materially differentin the future. In addition, we are required to estimate the expected forfeiturerate and only recognize expense for those shares expected to vest. We estimatethe forfeiture rate based on historical experience of our stock-based awardsthat are granted, exercised and cancelled. If our actual forfeiture rate is materiallydifferent from our estimate, the stock-based compensation expense could besignificantly different from what we have recorded in the current period.

 

***Recent Accounting Pronouncements***

 

InJuly 2006, the FASB issued FASB Interpretation No. 48, “Accountingfor Uncertainty in Income Taxes” (“FIN 48”). FIN 48 is an interpretation ofFASB Statement No. 109, “Accounting for Income Taxes,” and it seeks toreduce the diversity in practice associated with certain aspects of measurementand recognition in accounting for income taxes. FIN 48 prescribes a recognitionthreshold and measurement criterion for the financial statement recognition andmeasurement of tax positions taken or expected to be taken in a tax return,among other items. In addition, FIN 48 provides guidance on de-recognition,classification, interest and penalties, accounting in interim periods,disclosure, and transition with respect to uncertainty in income taxes. Weadopted FIN 48 at the beginning of fiscal year 2007. The impact of adoption didnot have a material impact on our financial position, cash flows, or results ofoperations.

 

InFebruary 2007, the FASB issued SFAS No. 159, “The Fair Value Optionfor Financial Assets and Financial Liabilities” (“SFAS 159”), which permitsentities to choose to measure many financial instruments and certain otheritems at fair value that are not currently required to be measured at fairvalue. SFAS 159 will be effective for the Company on January 1, 2008. Weare currently evaluating the impact of adopting SFAS 159 but we do not believethat the adoption of SFAS 159 will have a material impact on our financialposition, cash flows, or results of operations.

 

Wehave considered all other recently issued accounting pronouncements and do notbelieve the adoption of such pronouncements will have a material impact on ourconsolidated financial statements.

 

19

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**ITEM 7.             FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

 

***Index to Financial Statements***

*** ***
| ** **                                                                                                     | **Page** |
|----------------------------------------------------------------------------------------------------------------|----------|
| Financial  Statements:                                                                                         |     |
| Report  of Independent Registered Public Accounting Firm                                                       | 21       |
| Balance  Sheets as of December 31, 2007 and 2006                                                          | 22       |
| Statements of Operations  for the years ended December 31, 2007 and December 31, 2006                | 23       |
| Statements of Cash Flows  for the years ended December 31, 2007 and December 31, 2006                | 24       |
| Statements of  Stockholders’ Equity for the years ended December 31, 2007 and December 31, 2006 | 25       |
| Notes to Financial  Statements                                                                                 | 26       |

 

20

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****Report of IndependentRegistered Public Accounting Firm****

 

****To theBoard of Directors and Stockholders of Integrated Management Information, Inc.:****

 

Wehave audited the accompanying balance sheets of Integrated ManagementInformation, Inc. as of December 31, 2007 and 2006 and the relatedstatements of operations, shareholders’ equity, and cash flows for the yearsended December 31, 2007 and 2006. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan andperform the audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting.Our audit included consideration of internal control over financial reportingas a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

Inour opinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Integrated Management Information, Inc.as of December 31, 2007 and 2006 and the results of its operations andcash flows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

Theaccompanying financial statements have been prepared assuming that the Companywill continue as a going concern. As described in Note 1 to the financialstatements, conditions exist which raise substantial doubt about the Company’sability to continue as a going concern unless it is able to generate sufficientcash flows to meet its obligations and sustain its operations. Management’splans regarding those matters are also described in Note 1. The financialstatements do not include any adjustments that might result from the outcome ofthis uncertainty.

 

 

Gruber &Company, LLC

LakeSaint Louis, Missouri

March 26,2008

 

21

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**Integrated Management Information, Inc.**

**Balance Sheets**

 
| ** **                                                                                                                                                                            | ** ** | **December 31,** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                                                                                                                            | ** ** | **2007**              | ** ** | **2006** | ** ** |
| **Assets**                                                                                                                                                                            | ** ** | ** **            | ** ** | ** ** | ** ** |
| Current assets:                                                                                                                                                                       |       |                  |       |   |   |
| Cash and cash equivalents                                                                                                                                                             |       | $                     | 170,882    |   | $ | 230,539 |   |
| Accounts receivable, net of allowance of  $3,200 and $14,000                                                                                                                          |       | 193,737               |       | 178,159 |   |
| Inventories                                                                                                                                                                           |       | 18,759                |       | 14,185 |   |
| Prepaid expenses and other current assets                                                                                                                                             |       | 43,495                |       | 33,435 |   |
| Total current assets                                                                                                                                                                  |       | 426,873               |       | 456,318 |   |
| Cash restricted for payment on line of  credit                                                                                                                                        |       | —                |       | 50,000 |   |
| Property and equipment, net                                                                                                                                                           |       | 54,134                |       | 31,617 |   |
| Goodwill                                                                                                                                                                              |       | 418,208               |       | 418,208 |   |
| Intangible assets, net                                                                                                                                                                |       | 28,395                |       | 46,633 |   |
| Total assets                                                                                                                                                                          |       | $                     | 927,610    |   | $ | 1,002,776 |   |
|                                                                                                                                                                                  |       |                  |       |   |   |
| **Liabilities  and Stockholders’ Equity**                                                                                                                                        | ** ** | ** **            | ** ** | ** ** | ** ** |
| Current liabilities:                                                                                                                                                                  |       |                  |       |   |   |
| Accounts payable                                                                                                                                                                      |       | $                     | 259,104    |   | $ | 206,466 |   |
| Accrued expenses and other current  liabilities                                                                                                                                       |       | 40,406                |       | 8,287 |   |
| Deferred revenues                                                                                                                                                                     |       | 5,750                 |       | 10,820 |   |
| Short-term debt and current portion of  notes payable (Note 4)                                                                                                                        |       | 420,000               |       | 156,622 |   |
| Total current liabilities                                                                                                                                                             |       | 725,260               |       | 382,195 |   |
| Notes payable and other long-term debt (Note  4)                                                                                                                                      |       | 300,000               |       | 350,000 |   |
| Commitments and contingencies (Note 12)                                                                                                                                               |       |                  |       |   |   |
| Stockholders equity:                                                                                                                                                                  |       |                  |       |   |   |
| Preferred stock, $0.001 par value;  5,000,000 shares authorized; none issued or outstanding                                                                                           |       | —                |       | — |   |
| Common stock, $0.001 par value; 95,000,000 shares  authorized; 28,245,506 and 27,023,283 shares issued, respectively; and 19,995,506  and 18,773,283 shares outstanding, respectively |       | 28,245                |       | 27,024 |   |
| Additional paid-in-capital                                                                                                                                                            |       | 4,705,679             |       | 4,315,571 |   |
| Treasury stock of 8,250,000 shares                                                                                                                                                    |       | (1,485,000            | )          | (1,485,000 | ) |
| Accumulated deficit                                                                                                                                                                   |       | (3,346,574            | )          | (2,587,014 | ) |
| Total stockholders’ equity                                                                                                                                                       |       | (97,650               | )          | 270,581 |   |
| Total liabilities and stockholders’ deficit                                                                                                                                      |       | $                     | 927,610    |   | $ | 1,002,776 |   |

 

Theaccompanying notes are an integral part of these financial statements.

 

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**Integrated Management Information, Inc.**

**Statements of Operations**

 
| ** **                                               | ** ** | **Years ended December 31,** | ** ** |
|----------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                               | ** ** | **2007**                                    | ** ** | **2006** | ** ** |
|                                                     |       |                                        |       |   |   |
| Revenues                                                 |       | $                                           | 2,307,808  |   | $ | 1,539,933 |   |
| Costs of revenues                                        |       | 968,475                                     |       | 781,494 |   |
| Gross profit                                             |       | 1,339,333                                   |       | 758,439 |   |
| Selling, general and administrative  expenses (1)        |       | 2,069,770                                   |       | 2,302,248 |   |
| Loss from operations                                     |       | (730,437                                    | )          | (1,543,809 | ) |
| Other expense (income):                                  |       |                                        |       |   |   |
| Interest expense                                         |       | 36,444                                      |       | 24,301 |   |
| Other income, net                                        |       | (7,321                                      | )          | (9,068 | ) |
| Loss before income taxes                                 |       | (759,560                                    | )          | (1,559,042 | ) |
| Income taxes                                             |       | —                                      |       | — |   |
|                                                     |       |                                        |       |   |   |
| Net loss                                                 |       | $                                           | (759,560   | ) | $ | (1,559,042 | ) |
|                                                     |       |                                        |       |   |   |
| Net loss per share - basic and diluted                   |       | $                                           | (0.04      | ) | $ | (0.08 | ) |
|                                                     |       |                                        |       |   |   |
| Weighted average shares outstanding - basic  and diluted |       | 19,512,401                                  |       | 18,885,183 |   |

 

----

(1) Selling, generaland administrative expenses for the years ended December 31, 2007 and 2006includes stock based compensation. 

 

Theaccompanying notes are an integral part of these financial statements.

 

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**Integrated Management Information, Inc.**

**Statements of Cash Flows**

 
| ** **                                                                       | ** ** | **Year ended December 31,** | ** ** |
|----------------------------------------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                                                       | ** ** | **2007**                                   | ** ** | **2006** | ** ** |
| Operating activities:                                                            |       |                                       |       |   |   |
| Net loss                                                                         |       | $                                          | (759,560   | ) | $ | (1,559,042 | ) |
| Adjustments to reconcile net loss to net  cash provided by operating activities: |       |                                       |       |   |   |
| Depreciation and amorization                                                     |       | 30,110                                     |       | 38,984 |   |
| Stock based compensation expense                                                 |       | 41,330                                     |       | 353,410 |   |
| Provision for doubtful accounts                                                  |       | 14,227                                     |       | 27,864 |   |
| Changes in assets and liabilities:                                               |       |                                       |       |   |   |
| Accounts receivable                                                              |       | (29,805                                    | )          | 35,281 |   |
| Inventories                                                                      |       | (4,574                                     | )          | (4,414 | ) |
| Prepaid expenses and other current assets                                        |       | (10,061                                    | )          | (33,435 | ) |
| Accounts payable                                                                 |       | 52,638                                     |       | 27,619 |   |
| Accrued expenses and other current  liabilities                                  |       | 32,119                                     |       | (2,896 | ) |
| Deferred revenue                                                                 |       | (5,070                                     | )          | (35,736 | ) |
| Net cash used in operating activites                                             |       | (638,646                                   | )          | (1,152,365 | ) |
|                                                                             |       |                                       |       |   |   |
| Investing activities:                                                            |       |                                       |       |   |   |
| Purchases of property and equipment                                              |       | (34,389                                    | )          | (15,895 | ) |
| Net cash used in investing activities                                            |       | (34,389                                    | )          | (15,895 | ) |
|                                                                             |       |                                       |       |   |   |
| Financing activities:                                                            |       |                                       |       |   |   |
| Proceeds from line of credit, net                                                |       | 300,000                                    |       | 56,622 |   |
| Repayments of notes payable                                                      |       | (86,622                                    | )          | — |   |
| Proceeds from issuance of common stock                                           |       | 350,000                                    |       | 1,120,680 |   |
| Purchase of treasury shares from Company  founders                               |       | —                                     |       | (885,000 | ) |
| Change in restricted cash balances                                               |       | 50,000                                     |       | 421,664 |   |
| Net cash provided by financing activities                                        |       | 613,378                                    |       | 713,966 |   |
| Net change in cash and cash equivalents                                          |       | (59,657                                    | )          | (454,294 | ) |
| Cash and cash equivalents at beginning of  year                                  |       | 230,539                                    |       | 684,833 |   |
| Cash and cash equivalents at end of year                                         |       | $                                          | 170,882    |   | $ | 230,539 |   |

 

Theaccompanying notes are an integral part of these financial statements.

 

24

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**Integrated Management Information, Inc.**

**Statements of Stockholders’ Equity**

 
| ** **                                                                                                            | ** ** | ** **            | ** ** | ** **  | ** ** | **Additional** | ** ** | ** **   | ** ** | ** ** | ** ** | ** ** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------|------------|----------------|------------|--------------|------------|------------|------------|------------|------------|
| ** **                                                                                                            | ** ** | **Common Stock** | ** ** | **Paid-in** | ** ** | **Retained**   | ** ** | **Treasury** | ** ** | ** ** | ** ** |
| ** **                                                                                                            | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **Capital**    | ** ** | **Deficit**  | ** ** | **Stock**  | ** ** | **Total**  | ** ** |
|                                                                                                                  |       |                  |       |        |       |           |       |         |       |       |       |       |       |   |   |   |   |   |
| Balance at January 1, 2006                                                                                       |       | 25,405,015            |       | $           | 25,405     |           | $          | 2,243,100    |       | $          | (1,027,972 | )          | $          | — |   | $ | 1,240,533 |   |
| Issuance of common stock in connection with  a private placement in February 2006,   net of fees of $44,530 |       | 712,500               |       | 713         |       | 548,507        |       | —       |       | —     |       | 549,220    |       |
| Treasury stock purchase of 8,250,000 shares  from founders in February 2006                                      |       | —                |       | —      |       | —         |       | —       |       | (885,000   | )          | (885,000   | )          |
| Fair value of stock options granted to  founders in consideration of the sale of the treasury  shares (Note 6)   |       | —                |       | —      |       | 600,000        |       | —       |       | (600,000   | )          | —     |       |
| Stock-based compensation expense upon adoption  of SFAS 123R                                                          |       | —                |       | —      |       | 353,410        |       | —       |       | —     |       | 353,410    |       |
| Issuance of common stock in connection with  a private placement in December 2006                                |       | 905,768               |       | 906         |       | 570,554        |       | —       |       | —     |       | 571,460    |       |
| Net loss                                                                                                              |       | —                |       | —      |       | —         |       | (1,559,042   | )          | —     |       | (1,559,042 | )          |
| Balance at December 31, 2006                                                                                     |       | 27,023,283            |       | 27,024      |       | 4,315,571      |       | (2,587,014   | )          | (1,485,000 | )          | 270,581    |       |
|                                                                                                                  |       |                  |       |        |       |           |       |         |       |       |       |       |       |
| Issuance of common stock in connection with  a private placement in February 2007                                |       | 555,556               |       | 555         |       | 249,445        |       |         |       |       |       | 250,000    |       |
| Issuance of common stock in connection with  a private placement in August 2007                                  |       | 666,667               |       | 667         |       | 99,333         |       |         |       |       |       | 100,000    |       |
| Stock-based compensation expense                                                                                      |       |                  |       |        |       | 41,330         |       |         |       |       |       | 41,330     |       |
| Net loss                                                                                                              |       | —                |       | —      |       | —         |       | (759,560     | )          | —     |       | (759,560   | )          |
| Balance at December 31, 2007                                                                                     |       | 28,245,506            |       | $           | 28,246     |           | $          | 4,705,679    |       | $          | (3,346,574 | )          | $          | (1,485,000 | ) | $ | (97,649 | ) |

 

Theaccompanying notes are an integral part of these financial statements.

 

25

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****Note1 - The Company and Basis of Presentation****

 

****BusinessDescription****

 

IntegratedManagement Information, Inc. (“IMI Global,” “IMI,” or the “Company”)provides livestock tracking and herd management software database applications,consulting services, verification solutions for the livestock and meat industryand maintains an internet portal dedicated to news, trends, and products in theagricultural industry.

 

Wewere incorporated in 1998 as a Missouri corporation. In March 2005, wereincorporated in Delaware and, in March 2006, we moved our state ofincorporation from Delaware to Colorado. Our headquarters are located in CastleRock, Colorado and we also maintain an office in Platte City, Missouri.

 

IMIGlobal stands at the forefront of a rapidly evolving movement to tracklivestock and verify sources of beef and other livestock products. In theaftermath of the discovery of the first case of mad cow disease in the UnitedStates in December, 2003, many of the largest U.S. beef and other livestockexport markets were closed resulting in significant losses to the industry. Inresponse to the crisis, several initiatives were enacted to facilitate thereopening of key export markets. Most notably, U.S. suppliers seeking to sellbeef and other livestock products to other countries must participate in apre-approved Quality System Assessment Program so as to have an approved meansof verifying specific product requirements. With the introduction of theUSVerified Source and Age Verification system in 2005, we were the first todevelop a USDA Quality System Assessment document management system forauditing the tracking systems used by beef and other livestock producers toverify source and age.

 

****GoingConcern****

 

Asshown in the accompanying financial statements, we have continued to incurlosses from operations and negative cash flows from operations. Historically,our growth has been funded through a combination of convertible debt fromprivate investors and private placement offerings. Considering our cash on handat December 31, 2007, our ability to secure additional debt financing, andour 2008 internal estimates and projections, we believe we have sufficient cashto execute our 2008 Business Plan. We expect that we may need to raiseadditional capital to accomplish our business objectives. We continuallyevaluate all funding options including additional offerings of our securitiesto private, public and institutional investors and other credit facilities asthey become available. Our founders have also offered to lend funds to theCompany. At the present time, we do not have formal commitments for any suchadditional capital, and there can be no assurance as to the availability orterms upon which financing alternatives might be available.

 

****Basisof Presentation****

 

Ourfinancial statements have been prepared in conformity with accountingprinciples generally accepted in the United States of America. The preparationof financial statements in conformity with accounting principles generallyaccepted in the United States of America requires us to make estimates andassumptions that affect reported amounts of assets and liabilities, disclosureof contingent assets and liabilities at the date of the financial statements,and the reported amounts of revenues, costs and expenses during the reportingperiod. Actual results could differ from the estimates.

 

Ourcommon shares have been presented to reflect a three for two stock splitapproved by our shareholders on February 14, 2006. In connection with theincorporation in the state of Colorado, common stock authorized was increasedto 95,000,000 common shares, $.001 par value, from 50,000,000 

 

26

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

sharesof common stock, $.01 par value. Additionally 5,000,000 preferred shares, $.001par value were authorized, but none have been issued. All share and per shareamounts in these financial statements and the related notes have beenretroactively adjusted to reflect the stock split for all periods presented.

 

****Note2 - Summary of Significant Accounting Policies****

 

****RevenueRecognition****

 

Revenuesare recognized only when realized / realizable and earned in accordance withgenerally acceptable accounting principles.

 

·                  Revenue from product sales is recognized whenthe goods are shipped and title passes to the customer.

 

·                  Revenue from contracts for consulting andwebsite development is recognized on the percentage of completion method.

 

·                  Advertising revenues earned by CattleNetwork.comare recognized when the underlying advertisements are published.

 

·                  Revenue derived from our US Verified programis recognized using the Proportional Performance Model. Contracts arecancelable only for non- performance.

 

****Costof Goods Sold****

 

Costof goods sold includes the purchase price of products sold through theCattlestore website and livestock ear tags sold through the US Verified Sourceand Age Verification programs. Salaries and related fringe benefits directlyassociated with development of the US Verified programs are allocated to costof goods sold.

 

****Cashand Cash Equivalents****

 

Allcash and short-term investments with original maturities of three months orless are considered cash and cash equivalents, since they are readily convertibleto cash. Amounts in-transit from credit card processors are also consideredcash equivalents because they are both short-term and highly liquid in natureand are typically converted to cash within three days of the sales transaction.

 

****RestrictedCash****

 

InSeptember 2007, our line of credit with Platte Valley Bank wasrestructured and the $50,000 collateral held in the form of a certificate ofdeposit was released.

 

****Inventory****

 

Ourinventory, which primarily consists of livestock identification ear tags maintainedfor overnight shipment, is valued using the lower of cost or market on a firstin, first out basis. The inventory is used in connection with the US Verifyprogram. Due to the nature of our inventory, a provision for obsolete or slowmoving inventory was not deemed necessary as of December 31, 2007 and2006.

 

27

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****LongLived Assets****

 

Long-livedassets include:

 

·                  Property and equipment - These assets arerecorded at cost and are depreciated generally using the straight-line methodover the estimated useful lives of the respective assets, which range from oneto seven years.

 

·                  Intangible assets- Our intangibles assetsresulted from the allocation of the estimated fair values of identifiableassets acquired in connection with the acquisition of Cattlefeeding.com, Inc.We amortize these assets on a straight line basis over their estimated usefullives.

 

·                  Goodwill - Goodwill represents excess of costover fair value of net assets acquired in the acquisition ofCattelefeeding.com. Goodwill has an indefinite life and accordingly is notamortized.

 

Wereview all of our long-lived assets, including goodwill and other intangibleassets, for impairment at least annually or whenever impairment indicators aredetermined to be present. If an impairment exists, the amount of impairment ismeasured as the excess of the carrying amount of the asset over its fair valueas determined utilizing the estimated discounted future cash flows, or someother fair value measure, or the expected proceeds, net of costs to sell, uponsale of the asset.

 

****Researchand Development, Software Development Costs, and Internal Use SoftwareDevelopment Costs****

 

Researchand development costs are charged to operations as incurred.

 

Softwaredevelopment costs are accounted for in accordance with SFAS No. 86, “Accountingfor the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed.” ****Software development costsare capitalized once technological feasibility of a product is established andsuch costs are determined to be recoverable. For products where proventechnology exists, this may occur very early in the development cycle. Factorswe consider in determining when technological feasibility has been establishedinclude (i) whether a proven technology exists; (ii) the quality andexperience levels of the individuals developing the software; (iii) whetherthe software is similar to previously developed software which has used thesame or similar technology; and (iv) whether the software is beingdeveloped with a proven underlying engine. Technological feasibility isevaluated on a product-by-product basis. Capitalized costs for those productsthat are cancelled or abandoned are charged immediately to cost of sales. Therecoverability of capitalized software development costs is evaluated on theexpected performance of the specific products for which the costs relate.****

 

****Internaluse software development costs are accounted for in accordance with AICPAStatement of Position No. 98-1, “Accounting for the Costs of ComputerSoftware Developed or Obtained for Internal Use,” which requires thecapitalization of certain external and internal computer software costsincurred during the application development stage. The application developmentstage is characterized by software design and configuration activities, coding,testing and installation. Training costs and maintenance are expensed asincurred, while upgrades and enhancements are capitalized if it is probablethat such expenditures will result in additional functionality.****

 

28

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****Inaccounting for website software development costs, we have adopted theprovisions of EITF No. 00-2. EITF No. 00-2 provides that certainplanning and training costs incurred in the development of website software beexpensed as incurred, while application development stage costs are to becapitalized pursuant to SOP 98-1.****

 

****Duringthe year ended December 31, 2007, we have capitalized certain external andinternal use software and website development costs totaling $24,401. Theestimated useful life of costs capitalized is evaluated for each specificproject and ranges from one to three years. During 2007, the amortization ofcapitalized costs totaled $2,602. Capitalized costs are included in propertyand equipment, net.****

 

****AdvertisingExpenses****

 

Advertisingcosts are expensed as incurred. The total advertising expenses included in theStatement of Operations for the years ended December 31, 2007 and December 31,2006 were $4,384 and $5,900, respectively.

 

****FairValue of Financial Instruments****

 

Forcertain of our financial instruments, including cash, accounts payable andaccrued interest, the carrying amounts approximate fair value due to theirshort maturities. The amounts shown for notes payable also approximate fairvalue because current interest rates and terms offered to us for similar debtare substantially the same.

 

****Concentrationof Credit Risk****

 

Financialinstruments, which potentially subject us to concentrations of credit risk,consist of cash and cash equivalents and accounts receivable. We place our cashwith high quality financial institutions and at times may exceed the FDIC$100,000 insurance limit. We extend credit based on an evaluation of a customer’sfinancial condition, generally without collateral. Exposure to losses onreceivables is principally dependent on each customer’s financial condition. Wemonitor our exposure for credit losses and maintain allowances for anticipatedlosses, as required. Accounts receivable are “written-off” when deemeduncollectible.

 

29

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****Note3 - Property and Equipment****

 

Themajor categories of property and equipment are as follows at December 31,2007 and December 31, 2006:

 
| ** **                                 | ** ** | **December 31,** | ** ** |
|--------------------------------------------|------------|-----------------------|------------|
| ** **                                 | ** ** | **2007**              | ** ** | **2006** | ** ** |
| ** **                                 | ** ** | ** **            | ** ** | ** ** | ** ** |
| Automobiles                                |       | $                     | 37,660     |   | $ | 37,660 |   |
| Furniture and office equipment             |       | 75,635                |       | 65,667 |   |
| Software and tools                         |       | 12,082                |       | 12,082 |   |
| Website development and other enhancements |       | 24,401                |       | — |   |
|                                       |       | $                     | 149,778    |   | $ | 115,409 |   |
| Less accumulated depreciation              |       | 95,644                |       | 83,792 |   |
| Notes payable and other long-term debt     |       | $                     | 54,134     |   | $ | 31,617 |   |

 

Depreciationexpense for the years ended December 31, 2007 and 2006 were $11,872 and$18,053, respectively.

 

****Note4 - Notes Payable****

 

Notespayable consist of the following:

 
| ** **                                                      | ** ** | **December 31,** | ** ** |
|-----------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                      | ** ** | **2007**              | ** ** | **2006** | ** ** |
| ** **                                                      | ** ** | ** **            | ** ** | ** ** | ** ** |
| Platte Valley Line of Credit                                    |       | $                     | 70,000     |   | $ | 156,622 |   |
| Cattlefeeding.com Note                                          |       | 350,000               |       | 350,000 |   |
| Lapaesotes Note Payable                                         |       | 300,000               |       | — |   |
|                                                            |       | $                     | 720,000    |   | $ | 506,622 |   |
| Less current portion of notes payable and  other long-term debt |       | 420,000               |       | 156,622 |   |
| Notes payable and other long-term debt                          |       | $                     | 300,000    |   | $ | 350,000 |   |

 

***Platte Valley Line of Credit***

 

Wehave a $75,000 line of credit with Platte Valley Bank. The line of credit issecured by the personal guarantees of our two founding shareholders and theaccounts receivable of the company. Interest is payable monthly based on theprime rate with a floor and ceiling cap of 6.75% and 13.75%, respectively. Asof December 31, 2007 our interest rate was at 7.25%. Our line of creditexpires September 25, 2008 and as of December 31, 2007, we hadremaining availability of $5,000. In September 2007, the line of creditwas restructured to reduced the borrowing base from $225,000 to $75,000 and torelease certain forms of collateral, including a certificate of deposit in theamount of $50,000 and a security interest in the founders’ Missouri home.

 

30

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

***Cattlefeeding.com Note***

 

Inconnection with the acquisition of the assets of Cattlefeeding.com, we issued anote payable to Cattlefeeding.com, Inc. in the amount of $350,000. Underthe Note, interest in the amount of 5% of outstanding principal is payable on amonthly basis, with all outstanding principal and interest payable on June 12,2008. Management currently has a plan in place to secure funding necessary topay this note within its contract terms.

 

***Lapaseotes Note Payable***

 

InSeptember 2007, we obtained $300,000 in unsecured debt financing. The$300,000 note held by a major shareholder, bears an interest rate of 9% perannum, payable quarterly. The principal balance is due on September 12,2011. Proceeds from the Note were used to pay down certain amounts outstandingunder the Platte Valley Bank line of credit.

 

****Note5 - Income Taxes****

 

Deferredtax assets and liabilities have been determined based upon the differencesbetween the financial statement amounts and the tax bases of assets andliabilities as measured by enacted tax rates expected to be in effect whenthese differences are expected to reverse. In assessing the reliability ofdeferred tax assets, management considers whether it is more likely than notthat some portion or all of the deferred tax assets will not be realized. Ournet operating loss carry forwards are the most significant component of ourdeferred income tax assets; however, the ultimate realization of our deferredincome tax assets is dependent upon generation of future taxable income. Weconsider past history, the scheduled reversal of taxable temporary differences,projected future taxable income, and tax planning strategies in making thisassessment. As of December 31, 2007 and 2006, we believe it is more likelythan not that our net deferred tax asset will not be realized and accordinglywe have recorded a valuation allowance against the deferred tax assets.

 

OnJanuary 1, 2007, we adopted the provisions of FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes (“FIN 48”). Previously, we accountedfor tax contingencies in accordance with Statement of Financial AccountingStandards 5, Accounting for Contingencies. As Required by FIN 48, whichclarifies SFAS No. 109, we recognize the financial statement benefit of atax position only after determining that the relevant tax authority would morelikely than not sustain the position following an audit. For tax positionsmeeting the more-likely-than-not threshold, the amount recognized in thefinancial statements is the largest benefit that has a greater than 50%likelihood of being realized upon ultimate settlement with the relevant taxauthority. At the adoption date, we applied FIN 48 to all tax positions forwhich the statute of limitations remained open. As a result of theimplementation of FIN 48, we believe that the adoption of FIN 48 does not havea significant impact on the unrecognized tax benefits within 12 months from December 31,2007. There was no net effect to the financial statements and none of theunrecognized tax benefits will impact our effective tax rate.

 

31

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

Theincome tax effects of temporary differences that give rise to significantportions of deferred tax assets as of December 31, 2007 and 2006 are asfollows:

 
| ** **                       | ** ** | **December 31,** | ** ** |
|----------------------------------|------------|-----------------------|------------|
| ** **                       | ** ** | **2007**              | ** ** | **2006** | ** ** |
| Deferred tax assets:             |       |                  |       |   |   |
| Net operating loss carryforwards |       | $                     | 1,290,105  |   | $ | 1,034,805 |   |
| Other                            |       | 2,800                 |       | — |   |
| Deferred tax assets              |       | $                     | 1,292,905  |   | $ | 1,034,805 |   |
| Less valuation allowance         |       | (1,292,905            | )          | (1,034,805 | ) |
| Net deferred tax assets          |       | $                     | —     |   | $ | — |   |

 

Asof December 31, 2007, our net operating loss carry forwards for U.S.federal income tax purposes were $3.2 million, and were subject to thefollowing expiration schedule:

 
| **Net operating loss incurred:** | ** ** | **Amount** | ** ** | **Expiration dates:** | ** ** |
|-------------------------------------------------|------------|------------|------------|----------------------------|------------|
| December 31, 2005                          |       | 981,966    |       | December 31,  2025    |       |
| December 31, 2006                          |       | 1,544,906  |       | December 31,  2026    |       |
| December 31, 2007                          |       | 698,391    |       | December 31,  2027    |       |
| Total tax carryforwards                         |       | $          | 3,225,263  |                       |       |   |
|                                                 |            |            |            |                            |            |  |

 

Ourunused net operating loss carry forwards may be applied against future taxableincome. Utilization of net operating losses may be limited in the event of anownership change under Section 382 of the Internal Revenue Code.

 

32

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** **

**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****Note6 – Stockholders’ Equity****

 

***Common Stock***

 

Weare authorized to issue up to 95 million shares of common stock, par value$0.001 per share. As of December 31, 2007 and 2006, there were 19,995,506and 18,773,283 shares outstanding, respectively, net of 8,250,000 shares heldin treasury.

 

InFebruary 2006, we completed a private placement offering that began in2005 in which we issued 712,500 shares of our common stock at $0.83 per share,which resulted in proceeds of $549,220, net of issuance costs of $44,531.

 

InDecember 2006, we completed an additional private placement and issued905,768 shares at an average price per share of $0.63 resulting in proceeds of$571,460.

 

InFebruary 2007, we completed another private placement for our common stockand issued 555,556 shares at $0.45 per share resulting in proceeds of $250,000.

 

Finally,in August 2007, we completed the sale of 666,667 shares of our commonstock at $0.15 per share resulting in proceeds of $100,000.

 

***Preferred Stock***

 

Weare authorized to issue up to 5 million shares of our preferred stock, parvalue $0.001 per share. There are currently no issued shares.

 

***Stock Buyback Plan***

 

OnJanuary 7, 2008, we announced our intention to buy back up to one millionshares of our common stock from the open market over the first six months of2008. As of March 15, 2008, we have repurchased 11,000 shares, which willbe recorded as part of treasury stock for the fiscal year ended 2008. Treasurystock is accounted for under the cost method.

 

****Note7 - Stock Plans****

 

***2005 Stock Plan***

 

The2005 Stock Plan provides for the issuance of stock-based awards to employees,including executive officers, and consultants. The 2005 Stock Plan permits thegranting of non-qualified stock options. Options granted under this plangenerally become exercisable over a five-year period or less based on continuedemployment, vest pro-ratably over an annual basis and expire five years afterthe date of grant. On March 12, 2005 our Board of Directors granted1,687,500 options at $0.61 to acquire common stock to certain employees andadvisors. As of December 31, 2007, there were no more shares available forissuance under the 2005 Stock Plan.

 

33

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** **

**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

***2006 Equity Incentive Plan***

 

The2006 Equity Incentive Plan provides for the issuance of stock-based awards toemployees, officers, directors and consultants. The 2005 Stock Plan permits thegranting of stock awards and stock options. The vesting of stock-based awards is generally subject to meetingcertain performance based objectives, the passage of time or a combination ofboth, and continued employment through the vesting period. The 2006 EquityIncentive Plan provides for the issuance of a maximum of 3,000,000 shares ofour common stock of which 2,455,000 shares were still available for issuance asof December 31, 2007.

 

***Options Granted to the Former Chief Financial Officer***

 

InFebruary 2006, pursuant to an employment agreement with our former ChiefFinancial Officer, we granted an aggregate of 1,650,000 options to purchase ourcommon stock at exercise prices of $0.83 - $1.17. These options have a term ofthree years from their vesting date and vest over a period beginning at thetime of grant and ending in July 2007. As of December 31, 2007, therewere no more shares available for issuance under this plan.

 

***Stock Option Activity***

 

Stockoption activity under our Stock Plans is summarized as follows:

 
| ** **                     | ** ** | ** **          | ** ** | ** **              | ** ** | ** **             | ** ** | **Weighted Avg.**    | ** ** |
|--------------------------------|------------|---------------------|------------|-------------------------|------------|------------------------|------------|---------------------------|------------|
| ** **                     | ** ** | ** **          | ** ** | **Weighted Avg.**  | ** ** | **Weighted Avg.** | ** ** | **Remaining**             | ** ** |
| ** **                     | ** ** | **Number**          | ** ** | **Exercise Price** | ** ** | **Fair Value**    | ** ** | **Contractual Life** | ** ** |
| ** **                     | ** ** | **of Options** | ** ** | **per Share**      | ** ** | **per Share**     | ** ** | **(in years)**       | ** ** |
|                           |       |                |       |                    |       |                   |       |                      |       |
| Outstanding, December 31, 2005 |       | 1,462,500           |       | $                       | 0.61       |                   |       |                      |       |   |
| Granted                        |       | 1,650,000           |       | $                       | 0.99       |                   |       |                      |       |   |
| Exercised                      |       | —              |       | $                       | —     |                   |       |                      |       |   |
| Forfeited                      |       | —              |       | $                       | —     |                   |       |                      |       |   |
| Outstanding, December 31, 2006 |       | 3,112,500           |       | $                       | 0.81       |                   |       |                      |       |   |
| Granted                        |       | 545,000             |       | $                       | 0.63       |                   |       |                      |       |   |
| Exercised                      |       | —              |       | $                       | —     |                   |       |                      |       |   |
| Forfeited                      |       | —              |       | $                       | —     |                   |       |                      |       |   |
| Outstanding, December 31, 2007 |       | 3,657,500           |       | $                       | 0.78       |                   | $          | —                    |       | 0.64 |   |
| Exercisable, December 31, 2007 |       | 3,112,500           |       | $                       | 0.81       |                   | $          | —                    |       | 0.28 |   |

 

Theaggregate intrinsic value of stock options represents the total pre-taxintrinsic value (the aggregate difference between the closing stock price ofour common stock on December 31, 2007 and the exercise price forin-the-money options) that would have been received by the option holders ifall in-the-money options had been exercised on December 31, 2007. At December 31,2007, no stock options were in-the-money.

 

34

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** **

**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

Thefollowing table summarizes information concerning outstanding and exercisableoptions as of December 31, 2007:

 
| ** **                          | ** ** | **Options Outstanding** | ** ** | **Options Exercisable** | ** ** |
|-------------------------------------|------------|------------------------------|------------|------------------------------|------------|
| ** **                          | ** ** | ** **                   | ** ** | **Average**                  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                          | ** ** | ** **                   | ** ** | **Remaining**                | ** ** | **Weighted Avg.** | ** ** | ** ** | ** ** | **Weighted Avg.** | ** ** |
| ** **                          | ** ** | **Number**                   | ** ** | **Contractual Life**    | ** ** | **Exercise Price** | ** ** | **Number** | ** ** | **Exercise Price** | ** ** |
| ** **                          | ** ** | **Outstanding**              | ** ** | **(in years)**          | ** ** | **per Share** | ** ** | **Outstanding** | ** ** | **per Share** | ** ** |
|                                |       |                         |       |                         |       |   |   |   |   |   |   |
| Range of exercise prices per share: |       |                         |       |                         |       |   |   |   |   |   |   |
| $0.00 - $0.70                       |       | 1,632,500                    |       | 0.60                         |       | $ | 0.56 |   | 1,462,500 |   | $ | 0.61 |   |
| $0.71 - $0.94                       |       | 1,275,000                    |       | 0.86                         |       | $ | 0.83 |   | 900,000 |   | $ | 0.83 |   |
| $0.95 - $1.17                       |       | 750,000                      |       | 0.38                         |       | $ | 1.17 |   | 750,000 |   | $ | 1.17 |   |
| Total                               |       | 3,657,500                    |       | 0.64                         |       | $ | 0.78 |   | 3,112,500 |   | $ | 0.81 |   |

 

***Options Granted to the Company’s Founders***

 

InFebruary 2006, the founders of the Company were granted options topurchase 6,000,000 shares of common stock. The options vest at 1,500,000 peryear over a period beginning January 1, 2007 to January 1, 2010 atexercise prices of $1.67 for the first three million and $2.67 for theremaining three million. The options expire January 1, 2011.

 

****Note8 - Warrants****

 

Thefollowing table summarizes information concerning outstanding warrants as of December 31,2007:

 
| ** **                       | ** ** | **Number**           | ** ** | **Price**          | ** ** | **Expiration** | ** **         |
|----------------------------------|------------|----------------------|------------|--------------------|------------|----------------|--------------------|
| ** **                       | ** ** | **of Warrants** | ** ** | **per Share** | ** ** | **Date**       | ** **         |
|                             |       |                 |       |               |       |           |               |
| Cattlefeeding.com                |       | 225,000              |       | $                  | 0.61       |           | May 2008      |   |
| Placement Agent                  |       | 60,000               |       | $                  | 0.61       |           | May 2009      |   |
| Placement Agent                  |       | 237,810              |       | $                  | 0.83       |           | December 2009 |   |
| Pfeiffer High Investor Relations |       | 400,000              |       | $                  | 0.83       |           | October 2010  |   |
| Total warrants outstanding       |       | 922,810              |       |               |       |           |               |

 

****In May 2005in connection with the acquisition of the assets of Cattlefeeding.com and as apart of the purchase price, we issued warrants to purchase 225,000 shares ofour common stock.****

 

****Inconnection with various private placement offerings that occurred during 2005,we issued warrants to purchase 60,000 and 237,810 shares of Common Stock at$0.61 and $0.83, respectively.****

 

****In October 2006,we entered into a consulting arrangement with an investor relations firm inwhich warrants to purchase 400,000 shares of our common stock was granted as apart of the fee negotiation. Under FAS 125R, we recorded $116,000 in stockbased compensation expense during the forth quarter of 2006.****

 

35

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****Note9 - Stock-Based Compensation****

 

InDecember 2004, the FASB issued SFAS No. 123R, Share-Based Payment (“SFASNo. 123R”). SFAS 123R is a revision of SFAS No. 123, Accounting forStock-Based Compensation (“SFAS No. 123”), and supersedes AccountingPrinciples Board Opinion (“APB”) No. 25,Accounting for Stock Issued toEmployees (“APB No. 25”) and its related implementation guidance. SFAS No. 123Rfocuses primarily on accounting for transactions in which an entity obtainsemployee services in share-based payment transactions. The Statement requiresentities to recognize compensation expense for awards of equity instruments toemployees based on the grant-date fair value of those awards (with limitedexceptions).

 

EffectiveJanuary 1, 2006, we prospectively adopted FAS 123R, Stock-Based Payments,and related Securities and Exchange Commission rules included in StaffAccounting Bulletin No. 107. Under this method, compensation costrecognized beginning January 1, 2006 has included costs related to allshare-based payments granted subsequent to December 31, 2005 based on thegrant-date fair value estimated in accordance with the provisions of FAS 123R.Compensation cost for stock options granted to employees is recognized ratablyover the vesting period.

 

Becausewe previously adopted only the pro forma disclosure provisions of SFAS No. 123,we are recognizing compensation cost, over the requisite service period,relating to the unvested portion of awards granted prior to the date ofadoption using the same estimate of the grant-date fair value and the sameattribution method used to determine the pro forma disclosures under SFAS No. 123,except that forfeiture rates are estimated for all options, as required by SFASNo. 123R.

 

Ourstock-based compensation cost for the years ended December 31, 2007 and2006 was $41,330 and $353,410 respectively and has been included in general andadministrative expenses. No tax benefits were recognized for these costs due toour cumulative losses as well as a full valuation reserve on our deferred taxassets.

 

Thefair value of stock options is estimated using the Black-Scholes option-pricingmodel with the following weighted average assumptions:

 
| ** **                                  | ** ** | **December 31,** | ** ** |
|---------------------------------------------|------------|-----------------------|------------|
| ** **                                  | ** ** | **2007**              | ** ** | **2006** | ** ** |
|                                        |       |                  |       |   |   |
| Expected life of options from date of grant |       | 1.5  - 3.3 years      |       | 1.5  - 2.3 years |   |
| Risk free interest rate                     |       | 4.7  - 4.9            | %          | 4.7 | % |
| Expected volatility                         |       | 35.9                  | %          | 35.9 | % |
| Assumed dividend yield                      |       | 0.0                   | %          | 0.0 | % |

 

Dividendyield is based on our historical and anticipated policy of not paying cashdividends. Expected volatility is based on the “calculated value” method setforth in FAS 123R (based on historical volatilities of appropriate industrysector indices) because our stock did not have sufficient historic share pricedata available, as it was not publicly traded prior to November 15, 2006.The risk-free interest rate is based on the U.S. Treasury yield curve in effectat the time of grant for periods corresponding with the expected term of theoptions. The expected term of options represents the period of time that optionsgranted are expected to be outstanding giving consideration to vestingschedules.

 

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****Note10 - Basic and Diluted Net Loss per Share****

 

Netloss per share is calculated in accordance with the Statement of FinancialAccounting Standards No. 128 (SFAS No. 128), “Earnings per Share”.Basic net loss per share is based upon the weighted average number of commonshares outstanding. Diluted net loss per share is based on the assumption thatall dilutive convertible shares and stock options were converted or exercised.Dilution is computed by applying the treasury stock method. Under this method,options and warrants are assumed to be exercised at the beginning of the period(or at the time of issuance, if later), and as if funds obtained thereby wereused to purchase common stock at the average market price during the period.Weighted average number of shares used to compute basic and diluted loss pershare is the same in these financial statements since the effect of dilutivesecurities is anti-dilutive.

 

****Note11 - Related Party Transactions****

 

In2007 and 2006, we recorded revenue of $1,589 and $3,604, respectively, from arelated party (father of Leann Saunders, a founding shareholder).

 

Priorto 2006 an advance of $1,900 was made to our Chief Executive Officer. Theamount was repaid in February 2006.

 

In2006, we paid two former members of its Board of Directors (Messrs. Rothand Belk) fees of $61,000 pursuant to agreements for business development andadvisory services. By mutual agreement, these agreements were terminated in September 2006.Total fees of $61,000 were expensed in 2006 under these agreements.

 

InSeptember 2007, we obtained $300,000 in unsecured debt financing. The$300,000 note is held by a major shareholder who is related to Pete Lapaseotes,a director. The note bears an interest rate of 9% per annum, payable quarterly.The principal balance is due on September 12, 2011.

 

****Note12 - Commitments and Contingencies****

 

***Operating Leases***

 

InJune 2006, we entered into a building lease for its new headquarters inCastle Rock, Colorado. The lease is for a period of five years and can beextended for an additional five years. We also lease a facility in Platte City,Missouri on a month-to-month basis at a monthly rate of $1,550 until January,2008. In addition to the primary rent, both leases require additional paymentsfor operating costs and other common area maintenance costs.

 

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

Theannual primary lease payments are as follows:

 
| **Years Ending December 31,** | ** ** | **Amount** | ** ** |
|----------------------------------------------|------------|------------|------------|
| 2008                                         |       | $          | 46,595     |   |
| 2009                                         |       | 46,171     |       |
| 2010                                         |       | 47,326     |       |
| 2011                                         |       | 48,509     |       |
| 2012                                         |       | 24,554     |       |
| Thereafter                                   |       | —     |       |
| Total lease commitments                      |       | $          | 213,155    |   |
|                                         |       |       |       |

Welease a copier machine which requires a base rent of $189.00 per month or$2,268 annually. The lease expires in September 2009.

 

***Contracts***

 

EffectiveOctober 1, 2006, we entered into a six month contract with Pfeiffer HighInvestor Relations which requires a fee of $4,000 per month. In addition,400,000 warrants were granted at an exercise price of $0.83 per common share.Pursuant to FAS123(R), Stock Based Compensation, a non-cash charge of $116,000was recorded in the fourth quarter of 2006. See Note 9 for valuationmethodology.

 

***Employment Agreements***

 

InJanuary 2006, we entered into an employment contract with John Saunders asour President and Chief Executive Officer for an annual salary of $90,000subject to annual performance review adjustments. The agreement automaticallyrenews annually unless a 60-day notice of non-renewal is provided by either theCompany or the employee.

 

InJanuary 2006, we entered into an employment contract with Leann Saundersas our Vice President of Quality Control for an annual salary of $90,000subject to annual performance review adjustments. The agreement automaticallyrenews annually unless a 60-day notice of non-renewal is provided byeither  the Company or the employee.

 

InFebruary 2007, we entered into an employment contract with Rob Streight asour Chief Operating Officer for an annual salary of $150,000 and 300,000 stockoptions at an exercise price of $0.83. The agreement automatically renewsannually unless a 60-day notice of non-renewal is provided by either theCompany or the employee. Previously, this position was on a full-time contractbasis.

 

***Legal proceedings***

 

TheCompany is and may be involved in various unresolved legal actions,administrative proceedings and claims in the ordinary course of business.Although it is not possible to predict with certainty the outcome of theseunresolved actions, we do not believe, based on current knowledge, that anylegal proceeding or claim is likely to have a material effect on its financialposition, results of operation or cash flows.

 

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

****Note13 – Employee Benefit Plan****

 

OnFebruary 13, 2006, we established a 401(K) plan for the benefit ofour employees. The Plan covers substantially all of our employees who haveattained age 21. We may make a discretionary matching contribution in an amountthat will be determined by our Board of Directors. If a matching contributionis made, the amount cannot exceed the elective deferral contributions. For theyears ended December 31, 2007 or 2006, we did not make a matchingcontribution.

 

****Note14 - Recent Accounting Pronouncements****

 

InJuly 2006, the FASB issued FASB Interpretation No. 48, “Accountingfor Uncertainty in Income Taxes” (“FIN 48”). FIN 48 is an interpretation ofFASB Statement No. 109, “Accounting for Income Taxes,” and it seeks toreduce the diversity in practice associated with certain aspects of measurementand recognition in accounting for income taxes. FIN 48 prescribes a recognitionthreshold and measurement criterion for the financial statement recognition andmeasurement of tax positions taken or expected to be taken in a tax return,among other items. In addition, FIN 48 provides guidance on de-recognition,classification, interest and penalties, accounting in interim periods,disclosure, and transition with respect to uncertainty in income taxes. Weadopted FIN 48 at the beginning of fiscal year 2007. The impact of adoption didnot have a material impact on our financial position, cash flows, or results ofoperations.

 

InSeptember 2006, the FASB issued SFAS No. 157, Fair Value Measurements(“SFAS No. 157”), which defines fair value, establishes a framework formeasuring fair value in accordance with GAAP and expands disclosures about fairvalue measurements. SFAS No. 157 is effective for fiscal years beginningafter November 15, 2007. We do not believe such adoption will have amaterial impact on our financial statements.

 

InFebruary 2007, the FASB issued SFAS No. 159, “The Fair Value Optionfor Financial Assets and Financial Liabilities” (“SFAS 159”), which permitsentities to choose to measure many financial instruments and certain otheritems at fair value that are not currently required to be measured at fairvalue. SFAS 159 will be effective for the Company on January 1, 2008. Weare currently evaluating the impact of adopting SFAS 159 but we do not believethat the adoption of SFAS 159 will have a material impact on our financialposition, cash flows, or results of operations.

 

InDecember 2007, the FASB issued SFAS 141 (revised 2007), BusinessCombinations, (“SFAS 141R”). SFAS 141R establishes principles and requirementsfor how an acquirer recognizes and measures in its financial statements theidentifiable assets acquired, including goodwill, the liabilities assumed andany non-controlling interest in the acquiree. The Statement also establishesdisclosure requirements to enable users of the financial statements to evaluatethe nature and financial effects of the business combination. SFAS 141R iseffective for business combinations for which the acquisition date is on orafter the beginning of the first annual reporting period beginning on or after December 15,2008. The impact of adopting SFAS 141R will be dependent on the future businesscombinations that we may pursue after its effective date.

 

InDecember 2007, the SEC issued SAB 110 Share-Based Payment. SAB 110 amendsand replaces Question 6 of Section D.2 of Topic 14, “Share-Based Payment,”of the Staff Accounting Bulletin series. Question 6 of Section D.2 ofTopic 14 expresses the views of the staff regarding the use of the “simplified”method in developing an estimate of the expected term of “plain vanilla” shareoptions and allows usage of the “simplified” method for share option grantsprior to December 31, 2007. SAB 110 allows public companies which do nothave historically sufficient experience to provide a reasonable estimate tocontinue use of the “simplified” method for estimating the expected term of “plainvanilla”

 

39

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**Integrated Management Information, Inc.**

**Notes to the Financial Statements**

 

shareoption grants after December 31, 2007. SAB 110 is effective January 1,2008. We currently use the “simplified” method to estimate the expected termfor share option grants as we do not have enough historical experience toprovide a reasonable estimate. We will continue to use the “simplified” methoduntil we have enough historical experience to provide a reasonable estimate ofexpected term in accordance with SAB 110. We do not expect SAB 110 will have amaterial impact on our balance sheets, statements of operations and cash flows.

 

Wehave considered all other recently issued accounting pronouncements and do notbelieve the adoption of such pronouncements will have a material impact on ourconsolidated financial statements.

 

40

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****ITEM 8.****             ****CHANGES IN AND DISAGREEMENTS WITHACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE****

 

None

 

****ITEM 8A.               CONTROLSAND PROCEDURES****

 

**Evaluationof Disclosure Controls and Procedures**

 

Ourmanagement, with the participation of our principal executive officer andprincipal financial officer, has evaluated the effectiveness of the Company’sdisclosure controls and procedures (as such term is defined in Rules 13a-15(e) and15d-15(e) under the Exchange Act) as of the end of the period covered bythis report. Based on such evaluation, our principal executive officer andprincipal financial officer have concluded that, as of the end of such period,the Company’s disclosure controls and procedures were effective.

 

**Management’sReport on Internal Control over Financial Reporting**

 

Ourmanagement is responsible for establishing and maintaining adequate internalcontrol over financial reporting as defined in Rules 13a-15(f) and15d-15(f) under the Exchange Act. Under the supervision and with theparticipation of our management, including our principal executive officer andprincipal financial officer, we conducted an evaluation of the effectiveness ofour internal control over financial reporting based on criteria established inthe framework in Internal Control — Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission. Based on thisevaluation, our management has concluded that our internal control overfinancial reporting was effective as of December 31, 2007.

 

Becauseof its inherent limitations, internal control over financial reporting may notprevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risks that controls maybecome inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.

 

Thisannual report does not include an attestation report of our registered publicaccounting firm regarding internal control over financial reporting. Management’sreport was not subject to attestation by our registered public accounting firmpursuant to the rules of the Securities and Exchange Commission thatpermit us to provide only management’s report in this annual report.

 

**Changesin Internal Control over Financial Reporting**

 

Therehave not been any changes in the Company’s internal control over financialreporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) underthe Exchange Act) during the most recent fiscal quarter that have materiallyaffected, or are reasonably likely to materially affect, the Company’s internalcontrol over financial reporting.

 

****ITEM 8b.                OTHERINFORMATION****

 

None

 

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****PART III****

 

****ITEM 9.****             ****DIRECTORS, EXECUTIVE OFFICERS, CONTROLPERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OFTHE EXCHANGE ACT****

 

****Directorsand Officers****

 

Ourdirectors are elected by the stockholders to a term of one (1) year andserve until his successor is elected and qualified. Our key executive officersare appointed by the Board of Directors to a term of one (1) year andserve until his successor is duly elected and qualified, or until he is removedfrom office.

 

****Thenames and ages of our directors and executive officers and their positions areas follows:****

 
| **Name**            | ** ** | **Age** | ** ** | **Position Held**                             | ** ** | **Position  held since** |
|---------------------|------------|---------|------------|-----------------------------------------------|------------|--------------------------|
| John Saunders       |       | 36      |       | President, CEO and  Chairman of the Board     |       | 1998                     |
| Pete Lapasotes      |       | 49      |       | Director                                      |       | 2007                     |
| Adam Larson         |       | 39      |       | Director                                      |       | 2006                     |
| Dr. Gary Smith |       | 69      |       | Director                                      |       | 2006                     |
| Robert VanSchoick   |       | 57      |       | Director                                      |       | 2007                     |
| Rob Streight        |       | 46      |       | Chief Operating Officer                       |       | 2007                     |
| Dannette Boyd       |       | 38      |       | Chief Financial Officer                       |       | 2008                     |
| Leann Saunders      |       | 37      |       | Executive Vice President  of Quality Services |       | 2003                     |

 

**JohnSaunders** founded our company in 1998 and has been itspresident and chief executive officer since founding. Previously, Mr. Saunderswas a partner and consultant for Pathfinder Consulting Services, Inc. inParker, Colorado. An expert in both technology and the livestock industry, Mr. Saundersis a graduate of Yale University.

 

**PeteLapaseotes** co-manages the Lapaseotes family farm and feedingoperations in Bridgeport, Nebraska. The business includes a cow calf operation,a grass cattle operation and a finish feed yard. Mr. Lapaseotes is also apartner in five John Deere dealerships and 11 The Mercantile Farm, Ranch &Home retail stores. He is a member of the board of directors of Valley Bank andTrust.

 

**AdamLarson** has been involved in the cattle feeding and ranching business since1991. During that period, he has been a member and manager of eight familyorganizations involved in cattle ranching and cattle feeding and is primarilyinvolved in cattle financing. Mr. Larson is a graduate of the Universityof Colorado.

 

**Dr. GarySmith** is a professor in the Department of Animal Science at Colorado StateUniversity, a position he has held since 1990. Dr. Smith received his PhDin Meat Science and Muscle Biology from Texas A&M University. Dr. Smithhas also taught at Washington State University, Texas A&M University andFSIS-USDA National Meat Inspection Training Center. Dr. Smith is a memberof multiple professional associations and societies and has received numerousacademic awards.

 

**RobertVan Schoick II**is president of Med-Pharmex Animal Health. Hisprevious experience includes 28 years in sales and marketing withpharmaceutical giant Merck & Co., where he served for nine years withMerial, Merck’s world leading animal health joint venture. He holds BA and MAdegrees from Austin College and a BS in Animal Science from Texas A&M.

 

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**RobStreight** joined our company in January 2007 as ourChief Operating Officer. Previously, Mr. Streight was the Executive VicePresident of Operations with Chuck Latham Associates, a provider ofmerchandising and marketing services to major pet specialty chains. He is afounder of Future Beef Operations, LLC, and has also held management positionsat Keystone Foods, Manville Sales and Campbell Soup. He holds a B.S. degree inBiology from the University of Toledo.

 

**DannetteBoyd** was engaged as a consultant beginning in November 2007 andaccepted responsibilities as the Chief Financial Officer in early 2008. From2004 to 2007, Ms. Boyd was the Controller for Einstein Noah RestaurantGroup. From 2001 to 2003, she served as the Assistant Controller for Vari-L Company.Ms. Boyd’s previous experience includes financial management positionswith KPMG Peat Marwick, DF&R Restaurant Company, and CSI/CDC Company. Ms. Boydis a CPA with more than 15 years of professional experience. She received a BBAdegree in Accounting from the University of Texas at Arlington.

 

**LeannSaunders** joined IMI in 2003 and is responsible for managingthe product development, implementation and delivery of the USVerified productline. Prior to 2003, Mrs. Saunders worked for PM Beef Holdings, anintegrated beef company, and developed a supply system for PM’s Ranch to Retailproduct line and managed PM’s USDA Process Verified program. She then served asthe company’s Vice President of Marketing and Communications. Prior to joiningPM in 1996, Mrs. Saunders worked for McDonald’s Corporation as aPurchasing Specialist, and Hudson Foods Corporation. Mrs. Saundersgraduated with a BS in Agriculture Business and an MS in Beef IndustryLeadership from Colorado State University.

 

**FamilyRelationships**

 

JohnSaunders and Leann Saunders are husband and wife.

 

**BoardStructure**

 

Theboard of directors held three meetings during calendar year 2007. We currentlyhave no nominating, executive, compensation committee or other board committeeperforming equivalent functions. Currently, all members of our board ofdirectors participate in discussions concerning executive officer compensation.Our independent outside directors’ function as the Audit Committee and AdamLarson acts as a financial expert.

 

**DirectorCompensation**

 

Wepresently compensate all directors by paying them $500 per meeting attending inperson and $200 per telephonic meeting in excess of fifteen minutes. The samecompensation applies for any committee meetings attended. In addition,directors are reimbursed for all company travel related expenses.

 

****Section 16(a) BeneficialOwnership Reporting Compliance****

 

****Section 16(a) ofthe Securities Exchange Act of 1934 requires the Company’s executive officersand directors, and persons who beneficially own more than ten percent of theCompany’s Common Stock, to file initial reports of ownership and reports ofchanges in ownership with the Securities and Exchange Commission (the “SEC”).Executive officers, directors and greater than ten percent beneficial ownersare required by the SEC to furnish the Company with copies of all Section 16(a) formsthey file.****

 

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****Basedupon a review of the copies of such forms furnished to the Company, we believethat all Section 16(a) filing requirements applicable to itsexecutive officers and directors were met during the year ended December 31,2007.****

 

****Codeof Conduct****

 

****Ourboard of directors has adopted a code of conduct, which is posted on ourwebsite at http://imiglobal.com.  OurCode of Conduct applies to all employees, including our Chief ExecutiveOfficer, Chief Financial Officer and Controller. The Code of Conduct sets forthspecific policies to guide the designated officers in their duties. We intendto satisfy the disclosure requirement under Item 5.05 of Form 8-Kregarding any amendment to, or waiver from, a provision of this Code of Ethicsby posting such information on our website, at the address and locationspecified above.****

 

****ITEM 10.               EXECUTIVECOMPENSATION****

 

**SummaryCompensation Table**

 

Thefollowing table sets forth, for the last two completed fiscal years ended December 31,2007 and 2006, the cash compensation paid by the Company, as well as certainother compensation paid with respect to those years and months, to the ChiefExecutive Officer and to each of the three other executive officers of theCompany in all capacities in which they served:

 
| ** **                      | ** ** | ** ** | ** ** | **Annual Compensation** | ** ** | **Securities  underlying  Stock** | ** ** |
|---------------------------------|------------|------------|------------|------------------------------|------------|-----------------------------------|------------|
| **Name and Position** | ** ** | **Year**   | ** ** | **Salary ($)**          | ** ** | **Bonus ($)**                | ** ** | **Other ($)** | ** ** | **Options (#)** | ** ** |
| John Saunders                   |       | 2007       |       | 90,000                       |       | —                            |       | — |   |   |   |
| President and CEO               |       | 2006       |       | 90,000                       |       | 12,000                            | (3)        | 4,692 | (4) | — |   |
|                            |       |       |       |                         |       |                              |       |   |   |   |   |
| Leann Saunders                  |       | 2007       |       | 91,250                       |       | —                            |       | — |   | — |   |
| Exec. VP of Quality Services    |       | 2006       |       | 90,000                       |       | —                            |       | 3,160 | (4) | — |   |
|                            |       |       |       |                         |       |                              |       |   |   |   |   |
| Rob Streight                    |       | 2007       | (1)        | 150,000                      |       | —                            |       | — |   | 300,000 |   |
| Chief Operating Officer         |       |       |       |                         |       |                              |       |   |   |   |   |
|                            |       |       |       |                         |       |                              |       |   |   |   |   |
| Dannette Boyd                   |       | 2007       | (2)        | —                       |       | —                            |       | — |   | — |   |
| Chief Financial Officer         |       |       |       |                         |       |                              |       |   |   |   |   |

 

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(1) Mr. Streight’semployment began on January 1, 2007. In connection with his employment wegranted 300,000 stock options at an exercise price of $0.83.

(2) Ms. Boydbegan consulting for the Company in December 2007 and accepted theresponsibilities as the Chief Financial Officer in early 2008.

(3) Automobileallowance

(4) Health insurance

 

44

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InFebruary 2007, we entered into an employment contract with Rob Streight asour Chief Operating Officer for an annual salary of $150,000. We have no otheremployment agreements with any other executive officer.

 

**OptionGrants in the Last Fiscal Year**

 

Duringthe year ended December 31, 2007 we granted options to purchase 300,000shares of our common stock at an exercise price of $0.83 per share to RobStreight, Chief Operating Officer. This grant represented 55% of the totaloptions granted to all employees during the year ended December 31, 2007.The options expire on December 31, 2010. There were no other optionsgranted to any other named executive officer.

 

**AggregatedOption Exercises in the Last Fiscal Year and Year End Option Values**

 

Thefollowing table sets forth the total number of securities underlyingunexercised options held by our named executive officers as of December 31,2007:

** **
| ** **                      | ** ** | **Number of Outstanding Options** | ** ** | **Value of Outstanding in-the-  Money Options** | ** ** |
|---------------------------------|------------|--------------------------------------------------|------------|---------------------------------------------------------------------|------------|
| **Name and Position** | ** ** | **Exercisable (#)**                         | ** ** | **Unexercisable  (#)**                                              | ** ** | **Exercisable ($)** | ** ** | **Unexercisable  ($)** | ** ** |
| John Saunders                   |       | 750,000                                          |       | 2,250,000                                                           | (1)        | — |   | — |   |
| Leann Saunders                  |       | 750,000                                          |       | 2,250,000                                                           | (1)        | — |   | — |   |
| Rob Streight                    |       | 75,000                                           |       | 300,000                                                             | (2)        | — |   | — |   |
| Dannette Boyd                   |       | —                                           |       | —                                                              |       | — |   | — |   |

 

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(1) Of the 2,250,000unexercisable options, 750,000 will become exercisable on January 1, 2008.

(2) Of the 300,000unexercisable options, 750,000 will become exercisable on January 1, 2008.

 

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****ITEM 11.****               ****SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERSMATTERS****

 

Thefollowing table sets forth as of March 15, 2008 the record and beneficialownership of Common Stock held by (i) each person who is known to theCompany to be the beneficial owner of more than 5% of the Common Stock of theCompany; (ii) each current director; (iii) each “named executiveofficer” (as defined in Regulation S-B, Item 402 under the Securities Act of1933); and (iv) all executive officers and directors of the Company as agroup. Securities reported as “beneficially owned” include those for which thenamed persons may exercise voting power or investment power, alone or withothers. Voting power and investment power are not shared with others unless sostated. The number and percent of shares of Common Stock of the Companybeneficially owned by each such person as of March 15, 2008 includes thenumber of shares, which such person has the right to acquire within sixty (60)days after such date.

 
| **Name and Address**                    | ** ** | **Number of  Shares** | ** **    | **Percentage  Ownership** | ** ** |
|---------------------------------------------------|------------|----------------------------|---------------|---------------------------|------------|
| Michael D. Smith                        |       |                       |          |                      |       |
| 7103 4th St. NW, Albuquerque, NM 87107            |       | 1,268,890                  | (1)      | 5.2                       | %          |
|                                              |       |                       |          |                      |       |
| John and Leann Saunders                           |       | 10,977,143                 | (2), (3), (4) | 44.7                      | %          |
| Pete Lapasotes                                    |       | —                     | (2)           | *                         |       |
| Adam Larson                                       |       | 60,000                     | (2)           | *                         |       |
| Dr. Gary Smith                               |       | 50,000                     | (2)           | *                         |       |
| Robert VanSchoick                                 |       | —                     | (2)           | *                         |       |
| Rob Streight                                      |       | 320,000                    | (2), (5)      | 1.3                       | %          |
| Dannette Boyd                                     |       | —                     | (2)      | *                         |       |
| All officers and directors as a group (7 persons) |       | 11,407,143                 |          | 46.4                      | %          |

 

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(1) This table isbased upon information obtained from our stock records. Unless otherwiseindicated in the footnotes to the above table and subject to community propertylaws where applicable, we believe that each stockholder named in the abovetable has sole or shared voting and investment power with respect to the sharesindicated as beneficially owned.

(2) The address forall persons is 221 Wilcox, Suite A, Castle Rock, CO 80104

(3) John and LeannSaunders are husband and wife and own the shares as joint tenants.

(4) Includes optionsto purchase 3,000,000 shares of common stock which are currently exercisable orwill become exercisable within 60 days.

(5) Includes optionsto purchase 300,000 shares of common stock which are currently exercisable orwill become exercisable within 60 days.

* Less than 1% beneficialownership

 

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**Changeof Control**

 

Thereare currently no arrangements that would result in a change of control of thecompany.

 

**EquityCompensation Plan Information**

 

Thefollowing table sets forth securities authorized for issuance under our equitycompensation plans as of December 31, 2007:

 
| **Plan Category**                                      | ** ** | **No. of securities  to be issued upon  exercise of  outstanding  options and  warrants** | ** ** | **Weighted  average  exercise  price of  outstanding  options and  warrants** | ** ** | **No. of securities  remaining  available for  future issuance  under equity  compensation  plans** | ** ** |
|-------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                        |       |                                                                                                                         |       |                                                                                    |       |                                                                                                                         |       |
| Equity compensation plans approved by security holders:     |       |                                                                                                                         |       |                                                                                    |       |                                                                                                                         |       |
| 2005 Stock Plan                                             |       | 1,462,500                                                                                                                    |       | $                                                                                       | 0.61       |                                                                                                                         | —     |   |
| 2006 Equity Incentive Plan                                  |       | 3,000,000                                                                                                                    |       | $                                                                                       | 0.63       |                                                                                                                         | 2,455,000  |   |
| Former CFO Stock Option Grant                               |       | 1,650,000                                                                                                                    |       | $                                                                                       | 0.99       |                                                                                                                         | —     |   |
| Equity compensation plans not approved by security holders: |       |                                                                                                                         |       |                                                                                    |       |                                                                                                                         |       |
| Options held by John and Leann Saunders                     |       | 6,000,000                                                                                                                    |       | $                                                                                       | 2.17       |                                                                                                                         | —     |   |
| Warrants issued to consultants                              |       | 922,810                                                                                                                      |       | $                                                                                       | 0.76       |                                                                                                                         | —     |   |
| Total                                                       |       | 13,035,310                                                                                                                   |       |                                                                                    |       | 2,455,000                                                                                                                    |       |

 

Asadditional consideration issued in connection with a capital transactioncommencing in 2005, we issued stock options to purchase 6 million shares of ourcommon stock to John and Leann Saunders.

 

****ITEM 12.****               ****CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE****

 

JohnSaunders, our President, CEO and Chairman of the Board, is married to LeannSaunders, our Executive Vice-President of Quality Control.

 

In2007 and 2006, the Company recorded revenue of $1,589 and $3,604, respectively,from a related party (father of Leann Saunders, a founding shareholder).

 

Priorto 2006 an advance of $1,900 was made to the Company’s Chief Executive Officer.The amount was repaid in February 2006.

 

In2006, the Company paid two former members of its Board of Directors (Messrs. Rothand Belk) fees of $61,000 pursuant to agreements for business development andadvisory services. By mutual agreement, these agreements were terminated in September 2006.Total fees of $61,000 were expensed in 2006 under these agreements.

 

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InSeptember 2007, we obtained $300,000 in unsecured debt financing. The$300,000 note is held by a major shareholder who is related to Pete Lapaseotes,a director. The note bears an interest rate of 9% per annum, payable quarterly.The principal balance is due on September 12, 2011.

 

Messrs. Lapasoetes,Larson, Smith and Van Schoick are considered independent directors. The soledirector who is not independent is Mr. John Saunders, who is also thePresident, CEO and Chairman of the Board of the Company. Since we have notdesignated an audit committee, the independent directors constitute the auditcommittee.

 

****ITEM 13.               EXHIBITS****

 

****(a) ****Exhibits

 
| **Number** | ** ** | **Description** |
|------------|------------|-----------------|
|       | 2.1        |            | Cattlefeeding.com, Inc. Asset Purchase  Agreement (1) |
|       | 3.1        |            | Articles of Incorporation (1) |
|       | 3.2        |            | By-laws of the Registrant (1) |
|       | 4.1        |            | Form of the Registrant’s Common Stock  Certificate (1) |
|       | 4.2        |            | 2005 Stock Option Plan (1) |
|       | 4.3        |            | 2006 Equity Incentive Plan (1) |
|       | 10.1       |            | Lease dated July 15, 2005 for offices in  Platte City, Missouri (1) |
|       | 10.2       |            | Employment Agreement dated January 1, 2006  between the Registrant and John K. Saunders (1) |
|       | 10.3       |            | Employment Agreement dated January 1, 2006  between the Registrant and Leann Saunders (1) |
|       | 10.4       |            | Employment Agreement between the Registrant and  Rob Streight (2) |
|       | 31.1       |            | Section 302 Certification of CEO* |
|       | 31.2       |            | Section 302 Certification of CFO* |
|       | 32.1       |            | Section 906 Certification of CEO* |
|       | 32.2       |            | Section 906 Certification of CFO* |

 

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****(1) Incorporatedby reference from Registrant’s Registration Statement on Form SB-2.****

****(2) Incorporated byreference from Registrant’s Annual Report on Form 10-KSB for the yearended December 31, 2006.****

*****Filed herewith****

 

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****ITEM 14.               PRINCIPALACCOUNTANTS FEES AND SERVICES****

 

****FeesPaid to Independent Public Accountants****

 

Thefollowing table presents fees for professional audit services rendered by E.Randall Gruber, CPA PC for the audit of the Company’s annual financialstatements for the years ended December 31, 2007 and December 31,2006 and fees billed for other services rendered by E. Randall Gruber, CPA PCduring those periods.

 
| ** **             | ** ** | **2007** | ** ** | **2006** | ** ** |
|------------------------|------------|----------|------------|----------|------------|
| Audit fees (1)         |       | $        | 26,500     |     | $          | 24,500 |   |
| Audit related fees (2) |       | —   |       | 7,000    |       |
| Tax fees               |       | —   |       | —   |       |
|                   |       | $        | 26,500     |     | $          | 31,500 |   |

 

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(1)           Audit Fees consist of fees billed forprofessional services rendered for the audit of the Company’s consolidatedannual financial statements and review of the interim consolidated financialstatements included in quarterly reports and services that are normallyprovided by E. Randall Gruber, CPA PC in connection with statutory andregulatory filings or engagements.

 

(2)           Audit-Related Fees consist of feesbilled for assurance and other services not explicitly related to theperformance of the audit or review of the Company’s consolidated financialstatements and are not reported under “Audit Fees.” This category includes feesrelated to the Company’s registration statements, review of proxy statementsand accounting research.

 

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****SIGNATURES****

 

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

 
| Date:  March 27, 2008 | Integrated  Management Information, Inc. |
|----------------------------|-----------------------------------------------|
|                       |                                          |
|                       | By:                                           | /s/  John K. Saunders |
|                       |                                          |   |
|                       |                                          | Chief  Executive Officer |
|                            |                                               |  |  |

 

Inaccordance with the Exchange Act, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.

 
| **Signatures**           | ** ** | **Title**                    | ** ** | **Date**             |
|--------------------------|------------|------------------------------|------------|----------------------|
|                     |       |                         |       |                 |
| /s/  John K. Saunders    |       | Chairman,  President and CEO |       | March 27,  2008 |
| John  K. Saunders        |       |                         |       |                 |
|                     |       |                         |       |                 |
| /s/  Pete Lapasotes      |       | Director                     |       | March 27,  2008 |
| Pete  Lapasotes          |       |                         |       |                 |
|                     |       |                         |       |                 |
| /s/  Adam Larson         |       | Director                     |       | March 27,  2008 |
| Adam  Larson             |       |                         |       |                 |
|                     |       |                         |       |                 |
| /s/  Dr. Gary Smith |       | Director                     |       | March 27,  2008 |
| Dr. Gary  Smith     |       |                         |       |                 |
|                     |       |                         |       |                 |
| /s/  Robert VanSchoick   |       | Director                     |       | March 27,  2008 |
| Robert  VanSchoick       |       |                         |       |                 |

 

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