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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              REPORT ON FORM 10-KSB

(Mark one)
[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

     for the year ended December 31, 2006.

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(D)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     for the transition period from______ to ______.

                          Commission File No. 000-50508

                                 NUVIM(R), INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

                Delaware                               13-4083851
        ------------------------         ---------------------------------------
        (State of Incorporation)         (I.R.S. Employer Identification Number)

        12 North State Route 17                          07652
----------------------------------------               ----------
(Address of Principal Executive Offices)               (Zip Code)

                                  201.556.1010
                           ---------------------------
                           (Issuer's Telephone Number)

Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.0001
                                                            par value per share.

         Check whether the issuer (1) has filed all reports required to be filed
by  Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days:

                                 Yes [X] No [ ]

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of Regulation SB is not contained herein and will not be contained,  to
the best of the  registrant's  knowledge,  in  definitive  proxy or  information
statements incorporated by reference in Part III of this Form 10SKB or any other
amendment to this Form 10SKB. [ ]

         The issuer's revenues for its most recent fiscal year were $1,292,155.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
issuer on April 11, 2007,  based upon the $0.51 per share  average bid and asked
prices of such stock on that date, was $6,005,345,  based upon 11,775,187 shares
held by non-affiliates of the issuer.

         Check whether the issuer has filled all documents and reports  required
to be filed by section 12, 13, or 15(d) of the Exchange  Act after  distribution
of securities under a plan confirmed by a court.

                                 Yes [ ] No [ ]

The  total  number  of  issuer's  shares of  common  stock  outstanding  held by
affiliates and non- affiliates as of April 11, 2007 was 14,406,782.

Documents Incorporated by Reference: Items 9, 10, 11, 12 and 14 are incorporated
from the Information  Statement  included in Schedule 14C to be filed within 120
days of the end of the fiscal year. See also Item 13, Exhibits.

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                           FORWARD-LOOKING STATEMENTS

Statements  that  are not  historical  facts,  including  statements  about  our
prospects and strategies  and our  expectations  about growth  contained in this
report are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934, as amended. These forward-looking  statements represent our present
expectations  or  beliefs   concerning  future  events.  We  caution  that  such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially  different from any future  results,  performance or  achievements
expressed or implied by such forward-looking  statements.  Such factors include,
among  other  things,  the  uncertainty  as to  our  future  profitability;  the
uncertainty   as  to  whether  our  new  business   model  can  be   implemented
successfully;  the accuracy of our performance  projections;  and our ability to
obtain   financing  on  acceptable   terms  to  finance  our  operations   until
profitability.

                                     PART I

ITEM 1.  DESCRIPTION OF THE BUSINESS

INTRODUCTION

         We produce,  market,  and distribute  NuVim(R)  dietary  supplements in
beverage and powder mix form.  In the first  quarter of 2007,  NuVim  introduced
NutraFlora(R),   manufactured  by  GTC  Nutrition  into  all  its   refrigerated
beverages.   NutraFlora(R)  short  chain   fructooligosaccharides  is  the  most
effective   prebiotic  fiber  available.   Derived  from  cane  or  beet  sugar,
NutraFlora(R)  is uniquely  capable of promoting health by supporting the growth
of beneficial (probiotic) bacteria which in turn provide health benefits such as
improved  calcium  and  mineral  absorption  for better bone health and a strong
immune system.  Studies also show that  NutraFlora(R)  helps improves  digestive
functions,  contributes  to a healthy  cholesterolmetabolism,  and bone  health.
NuVim(R) has an exclusive  agreement with GTC Nutrition for beverages and powder
products  that are mixed  with  liquids  for  reconstitution  that  benefit  the
consumer in immune enhancement and joint health.

         When  NutraFlora(R) was introduced,  the reformulation  included a much
higher  level  of whey  protein  concentrate.  Whey  concentrate  that  has been
credited with bringing  increased physical  performance,  building and repairing
muscle tissue, cardiovascular health, and immune defense. The reformulation also
eliminates  hi-fructose  corn syrup and reduces the calories per 8 ounce serving
from 70 to 45.

         NuVim(R)  dietary  supplement  beverages are formulated to meet many of
the  preferences  of health  conscious  consumers.  They are low in sugar,  with
approximately 6 grams per 8 ounce serving, compared to 40-50 grams for some soft
drinks.  There are 9 grams of carbohydrates per 8 ounces.  NuVim(R) is virtually
lactose-free,  fortified  with the  anti-oxidant  vitamins A, C, and E, contains
100% of the daily  recommended  requirement of zinc,  has all 9 essential  amino
acids, and calcium.

         Our first ready to drink product line was introduced in May 2000.  This
product  line  currently  consists  of three  flavors  of  refrigerated  dietary
supplement beverages:  Orange Tangerine,  Fruit Symphony and Strawberry Vanilla.
All  are  available  in  64-ounce  juice  type  cartons.  Orange  Tangerine  and
Strawberry  Vanilla are also available in 16-ounce  bottles.  We have introduced
NuVim(R)  ready to use powder in January 2006.  The powder is available in three
varieties; Chocolate, Vanilla, and Strawberry. NuVim(R) powder supplement can be
mixed with the  consumer's  favorite  beverage such as juice or milk or added to
yogurt or cereal.  The powder is sold in 30 individual  servings in a box and is
currently  available through the NuVim(R) web

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store at  www.NuVim.com.  In March,  2007,  we signed an agreement  with General
Nutrition Centers ("GNC") to sell NuVim(R) in their stores in the Tampa, Florida
market  as a test of its  customer  appeal.  At this  time  GNC will be the only
nutritional  supplement retailer that will be selling NuVim(R) in the powder mix
form.  NuVim(R)  will support the initial test stores with 60 second  television
advertising  tagging the  commercials  that NuVim(R) is now available at GNC. In
addition to the television advertising,  NuVim(R) will provide in-store programs
that  communicate to consumers the immune and bone health  benefits  provided by
our beverages. We are also planning a sampling program for all of the GNC stores
in the test.

         NuVim(R)  beverages  are  currently  available  in 13  states  and  the
District of Columbia.  Our  64-ounce  cartons are  currently  sold in over 2,100
supermarkets as of December 31, 2006.  Chains carrying NuVim(R) include ShopRite
Supermarkets,  Publix Super Markets, Pathmark Supermarkets,  Giant Supermarkets,
A&P  Supermarkets,  Food Emporium,  Waldbaums,  Mars Super  Markets,  SuperValue
Supermarkets,  Acme  Markets,  and  Wal-Mart  supercenters  in  Virginia,  North
Carolina,  South  Carolina,  Florida,  Georgia and Alabama.  In March of 2007 we
introduced  NuVim 64 ounce  size to 137  Kroger  stores as a test in the  Kroger
Detroit  Division.  Our 16-ounce bottles accounted for less than 5% of our sales
and are sold in selected  retail  locations,  including  small  grocery  stores,
delicatessens and a limited number of chain supermarkets  including Acme Markets
in Philadelphia and Giant Markets in Harrisburg who also sell the 64 ounce.

         In the future we plan to introduce  one new flavor of the 64-ounce size
beverage. Possible new flavors like chocolate,  vanilla, and peach or perhaps an
iced tea with the same NuVim(R) health benefits.  We expect to test market a new
item within the next 12 months.

INDUSTRY BACKGROUND

         NuVim(R),  as a dietary supplement in beverage form, is considered part
of the "functional foods" category of the nutrition  industry.  Functional foods
are defined as foods and beverages  that promise  health  benefits  beyond their
inherent nutritional value. The largest segment of the functional foods category
is  beverages  according  to  Business  Communications  Company,  Inc.  ("BCC").
Functional beverages include a variety of drinks, such as sports drinks,  energy
drinks,  enhanced fruit drinks,  soy beverages,  ready-to-drink  tea and bottled
water.

         The  functional  beverage  market in the United  States  has  developed
beyond being a niche category of drinks meant for better health and  well-being.
The wide variety of functional beverages makes available options that can appeal
to many types of consumers  who have become taste- and  ingredient-conscious  as
well as more  sophisticated  about their overall food  consumption.  In its 2004
report on the United States functional  beverages market, Frost & Sullivan cites
the following trends in the functional beverages market:

     o    physical fitness and mental  well-being are the core needs driving the
          functional beverage industry;
     o    the variety of functional  beverages has grown to appeal to almost all
          demographics of consumers;
     o    the growing ethnic population in the United States influences beverage
          consumption patterns with their use of novel ingredients;  and
     o    while still a small  segment of the  competitive  and already  crowded
          beverage  industry,  functional  beverages have  splintered  into many
          subcategories with their own consumer target markets.

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         BCC estimates that the functional beverage segment of the industry will
grow from approximately  $8.7 billion in 2002 to approximately  $11.5 billion in
2007,  despite a decline in overall beverage industry growth rate. BCC estimates
that the chilled juice market will increase from  approximately  $3.0 billion to
approximately  $4.2  billion  from  2002 to 2007 and  that  sports  drinks  will
increase from  approximately  $2.0 billion in 2002 to approximately $2.6 billion
in 2007.

         According to "New  Nutrition  Business," a journal for healthy  eating,
functional  foods,  and  nutraceuticals,  in recent years there has been a trend
toward  increased  consumption  of  dietary  supplements,  as well as foods  and
beverages  that  assist the human body in  preventing  and  controlling  certain
diseases.  We believe  that the  growing  demand and  awareness  for  functional
beverages will increase consumer  acceptance of dietary  supplements and enlarge
this category's share of the total beverage market.

         We believe growth in the functional foods market is driven by the
following trends:

     o    increasing  medical  acceptance  and  recommendation  of  supplements,
          vitamins  and health  foods;
     o    increasing  consumer  desire  to  avoid  prescription  drugs  and seek
          non-medical treatment options;
     o    growing  number  of  consumers  seeking  health  benefits  in food and
          beverages;
     o    growing  number  of  consumers  seeking  to  avoid  certain  unhealthy
          attributes in foods and beverages;
     o    growing  scientific  interest in the  problems of  inflammation  and a
          compromised immune system; and
     o    better nutritional educational practices being taught at all levels in
          the school system.

         Many of these trends are a result of the fact that the U.S.  population
over 35  years  of age is  growing  20%  faster  than  the  overall  population.
Therefore,  these  issues  are of  concern to an  increasing  proportion  of the
population.

OUR STRATEGY

         Our  objective  is  to  become  a  leading  provider  of  good-tasting,
nutritional beverages and beverage products designed to promote health using the
best technologies  that become available.  The elements of our business strategy
include the following:

     o    Increasing brand awareness, trial and repeat purchases of the NuVim(R)
          products  through  brand  building   activities   including  sampling,
          advertising, promotion and other marketing activities.
     o    Expanding sales for our existing product line in our current markets.
     o    Introducing  new  products  into our  current  markets  including  the
          NuVim(R) shelf stable single serve and the powder version.
     o    Expand  with  Wal-Mart,  Kroger and  military  commissaries  and troop
          feeding.
     o    Expanding our distribution  channels beyond the current  concentration
          in supermarkets,  to club  warehouses,  convenience  stores,  schools,
          business  cafeterias,   drug  stores,  fast  food  outlets  and  other
          locations   using  the  64  ounce  size,   16-ounce   plastic   bottle
          single-serving  size.

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     o    Expand the powder version through e-commerce,  retail outlets and fund
          raising organizations.
     o    Building the brand,  growing  revenues and achieving  profitability in
          order to  position  NuVim(R)  as a  possible  joint  venture or merger
          partner,  because NuVim(R)'s brand as well as its marketing  strengths
          could contribute to the combined venture.  NuVim(R) is also a possible
          acquisition  candidate  for  one  of the 13  multi-national  food  and
          beverage  companies that might seek to add healthy  product choices to
          their product offerings.

OUR PRODUCTS

         We  have  developed   NuVim(R)  beverages  to  provide  consumers  with
good-tasting  beverages that help  strengthen the immune system,  support muscle
flexibility and promote athletic  performance.  All of our refrigerated products
contain the proprietary,  patented and exclusive micronutrient NutraFlora(R) and
substantial amounts of Whey Protein.

         Current Products

           Ready to Drink Beverages

         This product  line  consists of natural,  fruit-flavored,  refrigerated
dietary supplement  beverages  available in three flavors:  Strawberry  Vanilla,
Orange Tangerine and Fruit Symphony.  The 64-ounce cartons are currently is sold
primarily in  refrigerated  juice  section of major  supermarkets.  We also sell
single-serving,  16-ounce bottles, which are available in Strawberry Vanilla and
Orange  Tangerine  flavors.  This smaller  size in plastic  bottles is currently
marketed  primarily  to small grocery stores, some major supermarket chains, and
delicatessens.

         NuVim has been  reformulated  to eliminate  its  dependence on the SBMI
whey protein and utilize  NutraFlora(R)  and an increased amount of whey protein
concentrate (first item on the ingredient  statement after water) to achieve its
benefits,  particularly  enhanced  immunity  and  joint  health.  Whey  protein,
NuVim(R)'s  largest  ingredient,  other  than  water,  has  been  credited  with
increased physical performance,  building and repairing muscle tissue,  enhanced
cardiovascular  health,   promoting  wound  healing,  and  strengthening  immune
defense. NutraFlora(R) is uniquely capable of promoting health by supporting the
growth of beneficial  (probiotic) bacteria which in turn provide health benefits
such as improved  calcium and  mineral  absorption  for better bone health and a
strong  immune  system.  Almost 200 studies also show that  NutraFlora(R)  helps
improve  digestive  functions  and bone and joint  health and  contributes  to a
healthy cholesterol  metabolism.  The reformulation will retain the vitamins and
minerals but will include a much higher level of whey protein  concentrate.  The
reformulation will also eliminate hi-fructose corn syrup and reduce the calories
per 8 ounce serving from 70 to 45.

         In addition to containing  the prebiotic  micronutrient  NutraFlora(R),
NuVim(R)  refrigerated  beverages are also fortified with vitamins and minerals.
An eight-ounce  serving offers 100% of the minimum daily requirement of Vitamins
E, C, B-12,  and zinc,  smaller  portions  of Vitamin A,  protein,  and all nine
essential  amino  acids.  The  beverage  is  readily  digestible,  is  virtually
lactose-free  and  contains no fat,  cholesterol,  or caffeine.  An  eight-ounce
serving contains 45 calories, 6 grams of sugar and 9 grams of carbohydrates.

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         An  additional  benefit  of  the  new  formulation  is  that  it can be
pasteurized  without  reducing  the  ability of the  ingredients  to enhance our
customers health.

         The 64-ounce size of NuVim(R) is typically  priced from $2.78 to $3.99,
depending  on the  supermarket.  This is  approximately  the  same  price as the
everyday price of a 64-ounce  carton of a nationally  branded orange juice.  The
16-ounce bottle is typically priced from approximately $1.29 to $1.59.

           NuVim(R) Powder

         In January 2006 we introduced NuVim(R) powdered supplements to be added
to  beverages, cereals, or yogurt.  It is available in three  flavors,  Vanilla,
Chocolate,  and  Strawberry.  NuVim(R) powder  currently  provides the same SMBI
micronutrients,  vitamins and minerals as our ready to drink beverages did prior
to the reformulation.  It is sold in 30 serving boxes and is currently available
on our online store for $49.95 per box, with  discounts  for larger  quantities.
The powder form allows us to market our product on a  nationwide  basis  without
the distribution  costs  associated with the  refrigerated  ready to drink line.
Sales to date have not been material.

         In March,  2007, NuVim entered into an agreement with General Nutrition
Company ("GNC") to sell NuVim(R) in their stores on a test in the Tampa, Florida
market. At this time GNC will be the only nutritional  supplement  retailer that
will be selling  NuVim(R)  in the powder mix form.  NuVim(R)  will  support  the
initial  test  stores  with  60  second  television   advertising   tagging  the
commercials that NuVim(R) is now available at GNC. In addition to the television
advertising,  NuVim(R)  will  provide  in-store  programs  that  communicate  to
consumers the immune and bone health benefits NuVim(R) provides.

         NuVim(R)  powder   continues  to  contain  its  other  two  proprietary
micronutrients,  MunePro(R) and AccuFlex(R) and will so do until existing stocks
are exhausted.

         New Product Development

         We  intend  to  develop  a  product  line  that  does  not  need  to be
refrigerated  throughout the distribution  system. This new line of shelf stable
beverages will be in a single serve size of 12 or 14 ounces and sold potentially
sold to the 1,500 non-Coke/Pepsi shelf stable distributors in the country. These
distributors  will in turn sell the  product to  schools,  colleges,  hospitals,
convenience  stores, and bodegas.  It is unlikely that the shelf stable products
will be sold in the major  supermarkets.  We expect to launch at least a test of
the shelf stable products in the first half of 2007.

SALES AND MARKETING

         We  target  consumers  seeking  specific  health  benefits  in foods or
beverages,  people taking vitamins or other supplements,  healthy, active people
and weight  conscious  consumers.  The health profile of our consumers  includes
people with health  concerns,  people trying to boost their immune  capacity and
people  with  restrictive   diets,  such  as  diabetics  or   lactose-intolerant
consumers.

         Approximately 95% of our current sales are to refrigerated  supermarket
warehouses  that then  deliver  our  product  and other  brands of  refrigerated
products to individual  supermarkets.  Some of these supermarket  warehouses are
owned by the supermarket  chains that stock our product,  while other warehouses
that we sell to have contracts with a supermarket chain to

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         warehouse and then deliver  refrigerated  products to their stores. For
the year ended  December  31, 2005,  Wal-Mart,  a retailer of our product in the
southeast  accounted  for 21% of our sales,  Publix,  a retailer  of our product
primarily in Florida and Georgia  accounted for 14% of our sales, C&S New Jersey
warehouse that supplies the Pathmark  supermarket  chain  accounted for 11%, and
Wakefern Foods, which supplies Shop Rite Supermarkets in the New York/New Jersey
area,  accounted  for  approximately  10% of our total gross  sales.  In 2006 we
shipped 17  different  warehouses  that in turn ship to  individual  supermarket
stores.  Seven of the 17  warehouses  are  Wal-Mart  distribution  centers.  The
combined seven Wal-Mart  distribution  centers accounted for 52% of our business
last year. One Wal-Mart distribution center accounted for 14.5 % of the business
and another one  accounted  for 10.7%.  In  addition,  the  warehouse  servicing
Pathmark  stores  accounted  for 8.4% of the  total  business  and the  Shoprite
warehouse 8.0%.

         Our  64-ounce  refrigerated  beverage  product  is  primarily  sold  to
consumers through supermarkets.  We also sell the 16-ounce refrigerated beverage
product to refrigerated  food  warehouses.  Some of these  warehouses sell their
refrigerated  products  to  independent  smaller  grocery  stores  or  to  large
supermarkets  that  have  only one or two  stores.  In  addition,  our  16-ounce
beverage product is sold to distributors  who only sell to foodservice  outlets,
such as cafeterias, schools, hospitals and convenience stores. We plan to expand
the number of  distributors  we sell and the  categories of customers to include
club stores, nutrition centers and health food outlets.

         During 2006 our limited marketing  programs included in-store sampling,
television  advertising,   print  advertising,  and  reduced  supermarket  price
features. We used these programs to build consumer brand awareness and trial and
repeat  purchases,  particularly to support our product  introduction in the new
Wal-Mart stores in North and South Carolina,  Virginia,  Alabama and Georgia. In
August of 2004 we began serving one Wal-Mart  distribution  center  servicing 44
stores in northern  Florida.  We  distributed  two  flavors of our  refrigerated
product this one  distribution  center  servicing  approximately  44 supercenter
stores. In August 2005 Wal-Mart  increased our distribution to three flavors and
a total of three  distribution  centers  servicing  approximately 120 stores. In
April 2006,  we  increased  our  distribution  to the entire  southeast  region,
encompassing  approximately  300  supercenters  and  six  Wal-Mart  distribution
centers that service  Wal-Mart  supercenters in 6 states.  In late 2006 we added
the seventh  distribution  center.  We believe Wal-Mart  operates  approximately
3,500 supercenters across the United States.

         We also made use of supermarket  advertising  and consumer  promotions,
and  internet  advertising.  During the year we also used direct  mail  programs
through the supermarket data base to identify and deliver advertising and coupon
incentives to our targeted audience.

         Dick Clark was our public  spokesperson  until 2005 and has appeared in
past NuVim(R)  television and radio commercials,  point of sale materials and on
our  website.  Because  Dick  Clark  suffered  a stroke  and has not  completely
recovered,  we used him in a limited way in 2006 and do not  anticipate  that we
will be using him in  advertising  or promotion in 2007. We have signed  actress
and model Ashleigh  Howard as our new  spokesperson.  We have produced and aired
three television spots with Ms. Howard.

         Beginning in December 2005 and  continuing  into 2007, we began a print
media campaign through News USA. The program creates and distributes a series of
news  articles  addressing  a wide range of consumer  health  concerns for which
NuVim(R) is  beneficial.  Topics include  staying heart healthy,  ways to combat
fatigue,  why the  immune  system  is key to good  health,  and the right way to
maintain sound nutrition when dieting.  This campaign is designed to build brand
awareness and educate the consumer about NuVim(R)'s benefits in an informational
and credible format.

         Since the third  quarter  of 2006 we have  used a  television  5 minute
infomercial  to  communicate  the benefits of NuVim(R) in powder  forms.  In the
fourth quarter of 2006 we introduced

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a 30 second television commercial, a 60 second commercial emphasizing the powder
version and a 5 minute  commercial  also focusing just on the powder  version to
build awareness, trial and repeat purchases of our products.

DISTRIBUTION

         We first introduced  NuVim(R)  refrigerated  beverages in the New York,
New Jersey and Connecticut  metropolitan area during the second quarter of 2000.
We then  expanded  the  distribution  of our  products  into  the  Philadelphia,
Baltimore, Washington, D.C., Harrisburg, Scranton, Wilkes-Barre and the State of
Delaware  marketing  areas during the first  quarter of 2001. In 2002 we further
expanded into Virginia, Pittsburgh, Cleveland and upstate New York. In September
2004, began selling to Publix Super Markets,  located in Florida. As of December
31, 2006,  our  refrigerated  beverages  are  available in  approximately  2,100
supermarkets  in all or part of 13 states (New York,  New  Jersey,  Connecticut,
Maryland, Pennsylvania, Delaware, Virginia, Ohio, Florida, Alabama, Georgia, and
North and South  Carolina)  and the  District of  Columbia.  These  accounts are
serviced by a network of eight food brokers. The brokers present the promotional
programs to the  supermarket  chain account  headquarter  buyers and the brokers
also have a retail force that call on each  individual  supermarket  to maintain
product rotation, correct pricing and maintain or improve shelf location and the
amount of space allocated to the NuVim(R)  products.  We handle the headquarters
for  Wal-Mart  and the test  launch  at  Kroger  in  house.  We do have a retail
organization  that  calls on the  Wal-Mart  stores  to assist  in  rotating  the
products and managing out of stocks and proper in store signage.

SUPPLY, MANUFACTURING AND ORDER PROCESSING

         Our  products  are now  manufactured  solely at  Mountainside  Farms in
Roxbury, New York, using whey protein concentrate, NutraFlora(R) supplied by GTC
Nutrition,  and a blend of  customized  flavors,  as well as  other  ingredients
purchased from major  domestic and  international  companies.  We provide annual
contract  purchase  orders and maintain  inventories of select  ingredients  and
supplies unique to our process;  these annual contracts result in more favorable
prices and better service. Mountainside Farms purchases selected ingredients and
stores them for us at their plant. We practice just in time inventory methods to
provide maximum beneficial cash flow. Our refrigerated  nutritional  beverage is
then  packaged in 64-ounce  juice  cartons and 16-ounce  plastic  single-serving
bottles.  NuVim(R)  beverages  have  an  83-day  shelf-life  from  the  date  of
production.  This compares  favorably  with fresh juice,  juice made or not made
from  concentrate and pasteurized  milk which have a shelf life of between 14 to
39 days. We expect that the processing,  ingredient,  storage,  and distribution
costs for the reformulated  product at Mountainside Farms will be improved as we
move to higher volumes.

         Mountainside  Farms will also store the finished product until shipment
to our customers.  Mountainside Farms' more flexible processing schedule enables
us to more closely schedule production to our customers needs, thereby enhancing
cash flow.

         NuVim(R)  beverages  are  produced  under a  strict  quality  assurance
program.  The  product  formulation  and  process  steps for the  production  of
NuVim(R)  products are documented in the NuVim(R),  Inc.  Quality  Manual.  This
manual contains production formula and process instructions,  as well as quality
assurance  testing  required  on  a  daily,  batch  basis,  including,   without
limitation,  daily microbiological  testing. The HACCP (Hazard Analysis Critical
Control Point), which is in place at Mountainside Farms and is a requirement for
all dairy  operations  in the  United  States,  will be  implemented  at any new
production site.

         If  Mountainside  cannot meet our needs,  we believe there are numerous
qualified dairies throughout the United States that have sufficient  capacity to
meet our needs.  This strategy allows

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<PAGE>

us to  operate  without  investing  in plant and  production  equipment  thereby
keeping our fixed  capital cost for  manufacturing  as well as  warehousing  and
freight at virtually zero.

         We use eight food broker  organizations  to obtain  product orders from
our major  supermarket  accounts  which they send to us for  fulfillment.  These
broker  organizations also provide retail coverage in the supermarkets to insure
that our products are stocked properly,  priced correctly and rotated as needed.
Each broker  organization is paid on a commission  basis for cases sold in their
territory.

         Upon  receiving an order,  our products are shipped  directly  from the
Mountainside facility to customer warehouses,  enabling "just in time" inventory
levels for our finished products. Customers typically receive the product with a
minimum of 60 days of shelf life. We control  inventory  management,  production
and invoicing.

PATENTS AND TRADEMARKS

         NuVim(R) was awarded a  manufacturing  process  patent for milk protein
concentrate beverages; the patent expires in March 2021.

         We own the NuVim(R),  MunePro(R),  AccuFlex(R),  MuneFlex(R), and Fruit
Symphony(R) trademarks.

         NuVim also owns the manufacturing process patent.

         We are responsible for maintenance of our trademarks and for protecting
those trademarks against infringement.

COMPETITION

         In a  broad  sense,  all  beverages  are  competitive  with  all  other
beverages  including  our  dietary  supplement  beverages.  When  consumers  buy
NuVim(R),  they most likely are not purchasing some alternative beverage choice,
which could be any beverage,  from bottled  water to carbonated  soda to milk or
juice.  Competition in the nutritional  beverages market,  in particular,  which
includes all of our existing and currently planned products, is intense,  always
growing and evolving. The industry trend has moved from small start-up companies
to  industry   participants   that  are  large   beverage   companies   or  food
conglomerates. These companies often have better cost control, product promotion
and distribution networks than we are able to generate.

         Competition is based  primarily on product  benefits,  price,  quality,
customer  satisfaction and marketing support. Our competition includes national,
regional and local  producers and  distributors.  Most of our  competitors  have
significantly greater financial,  managerial and technical resources than we do,
which  may put us at a  competitive  disadvantage.  For  instance,  channels  of
distribution  for our products often require the  expenditure of significant and
ongoing  capital,  which  may put us at a  disadvantage  to  better  capitalized
competition.

         We  believe  that  our  current  products  are  best  positioned  as  a
nutritional  beverage and placed in  supermarkets or other retail outlets in the
refrigerated juice section. Competition

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<PAGE>

is  particularly  intense among products in these  nutritional  beverage  market
segments.  We believe our direct  beverage  competition  in this market  segment
includes national, regional and local beverage manufacturers.  We compete within
the  refrigerated  fruit drink  category,  which includes  national and regional
brands such as  Tropicana  (owned by PepsiCo,  Inc.),  Minute Maid (owned by The
Coca-Cola Company) and Florida's Natural (a division of Citrus World,  Inc.). In
addition,  a number of major  supermarkets and other retail outlets market their
own  brand  of  fresh  juices  that  compete  with  our  products.   Significant
competitive  pressure from these or other companies could negatively  impact our
sales  and  results  of  operations.   In  many  supermarkets  and  in  Wal-Mart
supercenters  NuVim(R) is placed on the refrigerated  juice shelf between Minute
Maid and Tropicana products

         NuVim(R) dietary supplement beverages are the only beverages containing
NutraFlora(R)  sold in the  United  States  marketed  specifically  for the dual
benefits of "Enhanced Immunity and Joint Health".  Other companies sell milk and
whey  protein   concentrate  or  products   containing   milk  or  whey  protein
concentrate,  but they do not  support  the  growth  of  beneficial  (probiotic)
bacteria which in turn provide health NuVim(R)'s  health benefits.  Studies also
show that NutraFlora(R)  helps improve digestive functions and bone health an in
the  NuVim(R)  products.  Therefore,  we believe  our  products  provide  health
benefits to  consumers  that are not  available in other  products  that contain
milk-derived  antibodies.  We believe that NuVim(R) is the only beverage product
on  the  market  using   NutraFlora(R)  to  support  the  growth  of  beneficial
(probiotic) bacteria.

         Although we have an exclusive  licensing  agreement  with GTC Nutrition
for 2007 for ready to drink  beverages  and powder  products for  reconstitution
into  beverages  when marketed  specifically  for the dual benefits of "Enhanced
Immunity and Joint Health",  and are aware of no other beverage  brands that are
positioned  as dietary  supplements  with claims  promoting  healthy  joints and
immune  enhancement,  it is possible that another  larger,  established  company
might enter the dietary  supplement  market and offer a product  similar to ours
with  comparable  benefits.  Such a  potential  competitor  may  have  a  longer
operating history and  substantially  greater  financial,  technical support and
other  assets and  resources  and may be able to respond  more quickly to new or
changing business situations. If such a company were to enter the segment of the
beverage market we currently  occupy,  this could have a material adverse effect
on our business and prospects.

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<PAGE>

GOVERNMENT REGULATION

         The FDA has primary regulatory authority over dietary  supplements.  In
1976, the FDA's ability to regulate the  composition of dietary  supplements was
restricted in several material respects by the Proxmire Amendment to the Federal
Food,  Drug and Cosmetic Act.  Under this  Amendment,  the FDA is precluded from
establishing  maximum  limits on the  potency of  vitamins,  minerals  and other
dietary  supplements,  from limiting the  combination or number of any vitamins,
minerals or other food ingredients in dietary supplements and from classifying a
vitamin, mineral or combination of vitamins and minerals, or dietary supplements
as drugs solely because of their potency.  However,  the Proxmire  Amendment did
not affect the FDA's  authority  to determine  that a vitamin,  mineral or other
dietary  supplement  is a new drug on the basis of  disease  claims  made in the
product's  labeling.  This  determination  would require deletion of the disease
claims or submission and FDA approval of a new drug  application,  which entails
costly and time-consuming clinical studies over successive phases.

         In October  1994,  the  Dietary  Supplement  Health and  Education  Act
("DSHEA") was enacted,  which introduced a new statutory framework governing the
composition  and  labeling  of  dietary  supplements.  Under  this law,  dietary
supplements are permitted to make  "statements of nutritional  support"  without
FDA  pre-approval.   These  statements  may  describe  how  particular   dietary
ingredients affect the structure, function or general well-being of the body, or
the mechanism of action by which a dietary ingredient may affect body structure,
function  or  well-being,  but may not  state  that a  dietary  supplement  will
diagnose,  mitigate,  treat, cure, or prevent a disease. Nor can a claim be made
that would be  interpreted  as a health claim.  A company  making a statement of
nutritional support must possess adequate substantiating scientific evidence for
the statement, disclose on the label that the FDA has not reviewed the statement
and that the  product is not  intended  to  mitigate,  treat,  cure,  or prevent
disease,  and notify the FDA of the  statement  within 30 days after its initial
use. Although the FDA has been notified of the statements of nutritional support
made for our  products,  there  can be no  assurance  that,  at some time in the
future, the FDA will not determine that a given statement of nutritional support
which we make is a disease claim rather than an acceptable  nutritional  support
statement  relating to body  function or  structure.  This  determination  would
require  deletion  of the  disease  claim  or,  if it is to be used at all,  our
submission  and the approval by the FDA of a new drug  application  (which would
entail  costly and  time-consuming  clinical  studies)  or  revision to a health
claim,  which  would,  as noted  above,  require  demonstration  of  significant
scientific agreement and prior FDA approval. An expert panel determined that the
Stolle  milk  whey  concentrate  and  NutraFlora(R)  are  considered   Generally
Recognized As Safe and  therefore  the whey received a Certificate  of Generally
Recognized As Safe Approval.

         We  believe  that we  currently  meet the  requirements  of DSHEA.  Our
structure/function claims are that the product helps build a strong total immune
system, supports muscle flexibility, and promotes sturdy joints. We believe that
we are  currently  compliant  with all  material  laws and that we maintain  all
material  permits and licenses  relating to our  operation  based on the current
food labeling requirements under DSHEA.

EMPLOYEES

         As of March 17, 2007, we had five  employees:  our Chief  Executive and
Chief Financial  Officer,  credit manager,  consumer affairs  manager,  accounts
payable manager,  and operations

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<PAGE>

manager.  We out source auditing,  accounting,  investor  relations,  and public
relations.  Our sales organization consists of all commission sales brokers. Our
corporate secretary and general counsel is a part-time  consultant.  We also use
part time consultants to assist in operations, legal negotiations, Federal Trade
Commission advice, all of whom are members of our advisory committee.

RISK FACTORS RELATED TO OUR BUSINESS

         An investment  in our  securities  involves a high degree of risk.  You
should carefully  consider the following risks, as well as the other information
in this report,  before  purchasing our securities.  If any of the possibilities
described  as risks below  actually  occur,  our  business,  operating  results,
financial  condition,  and liquidity  would likely  suffer.  In that event,  the
trading price of our securities  could fall,  causing you to lose some or all of
your  investment  in our  company.  The  following is a  description  of what we
consider our key challenges and material risks.

We Will Need to Raise Additional Capital.

         We are  currently  operating  at a loss  and  expect  our  expenses  to
continue to increase  as we expand our  product  line as well as our  geographic
presence  throughout  the United  States.  To date, we have relied  primarily on
financing  transactions to fund operations.  We could face unforeseen costs such
as an increase in  transportation  costs  resulting from the recent  significant
increases  in the  cost  of  fuel;  or our  revenues  could  fall  short  of our
projections  because  retail  outlets  discontinue  ordering our products or for
reasons  unrelated to our products,  such as a revenue decline due to changes in
consumer  habits and preferences or we may achieve lower margins than planned on
our products due to cost increases or competitive pricing pressure. We will need
another  infusion of capital to continue to fund our operations in 2007.  During
2006 Paulsen  Investment  Company,  Inc.  privately placed 2,970,000  restricted
shares of our  common  stock at a price of twenty  cents per  share.  A total of
$594,000 was  received  less  offering  costs paid of 60,125 for a net amount of
$533,875.

         In addition,  during 2006 several  creditors  agreed to accept  331,453
shares of common  stock at a price of $0.35 per share to settle an  aggregate of
approximately  $110,534  of current or past due trade debt and seven  people and
organizations have agreed to accept approximately 695,412 shares of common stock
for services valued at  approximately  $216,065.  Four officers agreed to accept
661,500 shares of common stock in lieu of their 2005 executive cash bonuses.

         In April 2006 our former  CFO and a former  officer  agreed to accept a
total of 192,955  shares of common  stock for a portion of their 2006 salary and
accepted bonus due them.

         During  the second  quarter  of 2006 the  holders of $67,600 of secured
debentures agreed to accept 335,000 shares of common stock in exchange for their
notes and warrants.

         During  the third  quarter  on August  23,  2006,  the  holders  of all
$500,000 of NuVim(R)'s Senior Secured Notes, Richard Clark, the entertainer, and
Stanly Moger, one of NuVim(R)'s directors,  agreed to extend their maturity from
November 2006 to January  2009.  Interest will accrue at an annual rate of eight
(8%)  percent.  Neither  principal  nor interest will be due until that date. As
compensation,  each  received a warrant to  purchase  100,000  shares of NuVim's
common  stock for $0.35 per share.  The warrant may be exercised  from  February
2007 through August 15, 2015. As a result of this extension,  the maturity of an
additional $150,000 of debt which is subordinated to the Senior Secured Notes is
automatically  extended to January 2009. The loan agreement with Clark and Moger
provides that, if NuVim raises additional capital, they have the

                                       12
<PAGE>

right to demand prepayment of their Notes.

         On August 25, 2006  Kirkpatrick  & Lockhart  Nicholson  Graham LLP, the
holder of an $120,000 unsecured note agreed to extend its maturity from November
2006 to  January  2009.  Interest  will  accrue at an annual  rate of eight (8%)
percent.  Neither  principal  nor  interest  will be due  until  that  date.  In
connection with this transaction,  NuVim issued warrants entitling the holder to
purchase up to 50,000 shares of common stock at a price of $0.35 per share until
August of 2015.

         In June and November 2006, the holders of a $75,000  subordinated notes
agreed to accept  approximately  290,614 shares of common stock in settlement of
their note and all remaining accrued interest.

         At the end of 2006, Mr. Kundrat,  NuVim's CEO, agreed to accept 392,188
shares of common  stock in lieu of cash payment of part of his  executive  bonus
for 2006 of $125,500 and 218,750  shares of common stock in lieu of cash payment
of his $43,750 of unpaid 2005 salary.  Also, at that time, Mr.  Siegel,  NuVim's
corporate  Secretary,  agreed to accept 50,000 shares of common stock in lieu of
any cash fee in connection with a registration statement.

         We will  still  continue  to need  additional  funds  to  continue  our
operations. New sources of capital may not be available to us when we need it or
may be available  only on terms we would find  unacceptable.  If such capital is
not  available on  satisfactory  terms,  or is not  available at all, we will be
unable to continue to fully  develop our  business  and our  operations  and our
financial  condition will be materially and adversely  affected.  Such a lack of
additional  funding  could  force  us  to  cease  operations  altogether.   Debt
financing, if obtained,  could increase our expenses and would be required to be
repaid  regardless of operating  results.  In addition,  if we raise  additional
funds  through  the  issuance  of equity,  equity-related  or  convertible  debt
securities,  these securities may have rights,  preferences or privileges senior
to  those  of the  rights  of our  ordinary  shares  and  our  shareholders  may
experience additional dilution.  Any such developments can adversely affect your
investment in our company,  harm our financial and operating results,  and cause
our share price to decline.

Our  Auditors  Have  Substantial  Doubt About Our Ability To Continue As A Going
Concern.

         In their  report  in  connection  with  our  2006  and  2005  financial
statements, our auditors included an explanatory paragraph stating that, because
we have  incurred  net losses and have a net  capital  deficiency  for the years
ended December 31, 2005 and 2006,  there is substantial  doubt about our ability
to continue as a going  concern.  The extension of all debt to a payable date of
January 15, 2009 does  alleviate  the  immediate  debt  concerns.  Our continued
existence  will  depend in large part upon our  ability to  successfully  secure
additional financing to fund future operations.  Our initial public offering was
not sufficient to completely  alleviate these concerns;  recent stock sales have
brought us closer to that goal,  but it has not been reached.  The proceeds have
been adequate to fund  operations to date, but we will need to raise  additional
funding to continue operations. If we are not able to achieve positive cash flow
from operations or to secure additional financing as needed, we will continue to
experience the risk that we will not be able to continue as a going concern.

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<PAGE>

Our Limited Operating History Makes Evaluation Of Our Business Difficult.

         We have a limited operating history and have encountered, and expect to
continue to encounter, many of the difficulties and uncertainties often faced by
early stage  companies.  We commenced our business  operations in 1999 and began
marketing our initial products in 2000 on a limited basis. Accordingly,  we have
only a limited  operating  history  with which you can evaluate our business and
prospects.  An investor in our units must consider our business and prospects in
light of the risks,  uncertainties  and difficulties  frequently  encountered by
early stage companies, including limited capital, delays in product development,
possible  marketing and sales  obstacles and delays,  inability to gain customer
acceptance or to achieve  significant  distribution of our products to customers
and  significant  competition.  We cannot be certain  that we will  successfully
address these risks.  If we are unable to address these risks,  our business may
not  grow,  our  stock  price  may  suffer  and/or  we may be  unable to stay in
business.

We Have A History Of Losses And We Expect To Continue To Operate At A Loss For
The Foreseeable Future.

         Since our inception in 1999, we have incurred net losses in every year,
including  net losses of  $2,396,902  for the year ended  December  31, 2005 and
$1,778,959  for the year  ended  December  31,  2006.  We had a working  capital
deficit of  $506,292  at December  31, 2006 and have  negative  cash flows from
operations.  As a result of ongoing operating losses, we also had an accumulated
deficit of  $22,024,020  and a  stockholders'  deficit of $1,534,232 at the same
date. We expect to incur losses until at least through 2007 and may never become
profitable. We also expect that our expenses will increase substantially for the
foreseeable  future  as we seek  to  expand  our  product  line  and  sales  and
distribution  network,  implement internal systems and infrastructure and comply
with the legal,  accounting and corporate  governance  requirements imposed upon
public companies.

Our  Continued  Progress  Depends Of  Consumer  Acceptance  Of The  Reformulated
Beverage

         In the first quarter of 2007, NuVim introduced a reformulated  beverage
and began producing it at a new plant.  Although the new  formulation  maintains
the same taste,  reduces  calories  per serving from 70 to 45,  eliminates  High
Fructose Corn Syrup, as an ingredient,  and introduces  NutraFlora(R)  an active
ingredient with more, and more recent,  clinical  support for its improvement of
mineral  absorption,  particularly the calcium and magnesium  necessary for bone
strength,  reinforcing the immune system,  our consumers may not all continue to
enjoy the NuVim(R)  beverages and new  customers  attracted by the reduced sugar
and  calories  and the  improved  health  benefits  may not  replace all the old
customers lost because of the changes.

Our Business Depends On The Acceptance Of Our Products In Both Existing And New
Marketing Areas.

         We intend to expand into new  geographic  areas and broaden our product
offerings to generate  additional sales. Our refrigerated  beverage products are
currently  available  from  southern  Connecticut  to  Miami  and as far West as
Pittsburgh  including  such  supermarket  chains  as  ShopRite,  Pathmark,  A&P,
Gristedes, Food Emporium, Walbaums, Acme, Giant,

                                       14
<PAGE>

Giant Eagle,  Publix and Wal-Mart.  Although  marketing funds have been limited,
but we have been able to maintain  distribution  due to our loyal  consumer base
who have felt the NuVim difference and continue to buy NuVim on a regular basis.
The supermarket  chain accounts see NuVim as a one of a kind product that offers
the consumer a healthily  choice to high sugar and high caffeine  carbonated and
non- carbonated beverages. We do not know whether the level of market acceptance
we have  received in our current  markets  for our  products  will be matched or
exceeded in the  geographic  locations we are newly serving or in other areas of
the country as we expand our  distribution  in the future.  We also will need to
raise additional financing to support this expansion.

         We can give no assurance that we will expand into new geographic areas.
It is unlikely that we will achieve  profitability  in 2007,  but possibly could
achieve profitability on a monthly basis toward the end of next year.

Consumers Who Try Our Products May Not Experience The Health  Benefits We Claim,
Which May Cause Them To Discontinue Using Our Products.

         Although there is substantial clinical evidence showing that NuVim(R)`s
ingredients  produce  the  desired  results,  there  have been no studies of our
specific  formulation.  Therefore,  we currently  cannot confirm that the health
benefits of our products  will be evident to casual  consumers of our  products.
Consumers may  determine  that drinking 12 ounces of NuVim per day for a minimum
of 30 days requires more discipline and expense than they are willing to devote.
If  consumers  do not use our  product in the  quantity  or for the  duration we
recommend,  they may not achieve the health  benefits we claim,  which may cause
them  to  make  alternative   nutritional  beverage  and/or  dietary  supplement
purchasing decisions.

Our Business May Suffer From Lack Of Diversification.

         Our business is centered on nutritional beverages. The risks associated
with  focusing on a limited  product line are  substantial.  If consumers do not
accept our  products or if there is a general  decline in market  demand for, or
any significant  decrease in, the consumption of nutritional  beverages,  we are
not financially or  operationally  capable of introducing  alternative  products
within a short time frame. As a result, such lack of acceptance or market demand
decline could cause us to cease operations.

Expansion Of Our Business Is Dependent On Our Ability To Expand Production.

         We currently  manufacture our refrigerated product line at Mountainside
Farms in Roxbury,  New York. Our ability to expand beyond our current  marketing
areas  depends  on,  among other  things,  the ability to produce our product in
commercial quantities  sufficient to satisfy the increased demand.  Although our
present  production  capacity is sufficient  to meet our current and  short-term
future  production  needs,  production  capacity  may not be  adequate to supply
future needs.  If additional  production  capacity  becomes  needed,  it will be
necessary to engage additional  co-packers or to expand  production  capacity at
our present co-packer  facility.  If we expand production at Mountainside  Farms
Dairy,  we risk  having to pay  significantly  greater  transportation  costs to
transport our products to warehouses in other regions of the United States.  Any
new co-packing  arrangement  raises the additional risk of higher marginal costs
than we currently  enjoy since we would be required to negotiate  new terms with
any new co-packer. We

                                       15
<PAGE>

may not be able to pass along these  higher  costs to our  customers.  If we are
unable to pass along the higher  production  costs imposed by new  co-packers to
our   customers,   we  either  will  suffer   lower  gross   margins  and  lower
profitability,  once achieved,  or we may be unable to expand our business as we
have planned, which could disappoint our stockholders.

Our Business Contains Risks Due To The Perishable Nature Of Our Product.

         Our current  refrigerated  product is a perishable  beverage that has a
limited  shelf-life of  approximately  83 days. This restricted shelf life means
that we do not have any  significant  finished goods inventory and our operating
results are highly  dependent on our ability to  accurately  forecast  near term
sales in order to adjust our raw materials  sourcing and production  needs. When
we do not  accurately  forecast  product  demand,  we are either  unable to meet
higher than  anticipated  demand or we produce  excess  inventory that cannot be
profitably sold.  Additionally,  our customers have the right to return products
that are not sold by their expiration date. Therefore, inaccurate forecasts that
either  mean that we are unable  meet  higher  than  anticipated  demand or that
result in excess production, or significant amounts of product returns on any of
our  products  that are not sold by the  expiration  date could  cause  customer
dissatisfaction, unnecessary expense and a possible decline in profitability.

Government Regulation May Adversely Affect Our Business.

         Our  business  is subject to  government  regulation,  principally  the
United  States Food and Drug  Administration  (the "FDA"),  which  regulates the
processing,   formulation,   packaging,  labeling  and  advertising  of  dietary
products,  and to a lesser  extent,  state  governments,  where state  attorneys
general  have  authority  to  enforce  their  state  consumer  protection  acts.
Specifically,  we are subject to the Dietary Supplement and Health Education Act
("DSHEA"). Under DSHEA, dietary supplements are permitted to make "statements of
nutritional  support" with notice to the FDA, but without FDA pre-approval.  The
FDA does not allow claims that a dietary  product may mitigate,  treat,  cure or
prevent disease. There can be no assurance that at some future time the FDA will
not determine that the statement of nutritional support we make on our packaging
is a prohibited claim rather than an acceptable  nutritional  support statement.
Such a determination by the FDA would require deletion of the treatment, cure or
prevention of disease claim,  or, if it is to be used at all,  submission by our
company  and the  approval  by the FDA of a new drug  application,  which  would
entail  costly and  time-consuming  clinical  studies,  or  revision to a health
claim, which would require demonstration of substantiated scientific evidence to
support  such  claim and would also  consume  considerable  management  time and
financial resources.

         Our  advertising  of dietary  supplement  products  is also  subject to
regulation by the Federal Trade  Commission  (the "FTC") under the Federal Trade
Commission Act, which prohibits unfair or deceptive trade  practices,  including
false or misleading advertising. The FTC in recent years has brought a number of
actions  challenging  claims made by companies  that suggest that their products
are dietary  supplements.  No  assurance  can be given that  actions will not be
brought against us by the FTC or any other party challenging the validity of our
product advertising claims.

Our Business May Be Subject To Product Liability Claims Relating To Consumer Use
Of Our Products.

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<PAGE>

         As a marketer of beverages  that are ingested by consumers,  we face an
inherent risk of exposure to product liability claims if the use of our products
results  in injury  or our  labeling  contains  inadequate  warnings  concerning
potential  side  effects.  With  respect to product  liability  claims,  we have
obtained  a  $2.0  million   liability   insurance   policy  ($2.0  million  per
occurrence), which we believe is adequate for our kind of business activity. The
policy contains  certain  exclusions that would pertain to food products such as
the additional  products  exclusion for bodily injury or property damage arising
out of the  manufacture,  handling,  distribution,  sale,  application or use of
certain specified products (e.g.,  silicone,  latex, and dexfenfluramine,  among
others),  the intended injury and the willful and intentional  acts  exclusions.
There can be no assurance that such insurance will continue to be available at a
reasonable  cost, or, if available,  that it will be adequate to cover potential
liabilities. If we are found liable for product liability claims that exceed our
coverage or are subject to a policy  exclusion,  such liability could require us
to pay financial losses for which we have not budgeted and may not have adequate
resources to cover. If the uninsured losses were  significantly  large enough to
impact our ability to continue our then-existing  level of operations,  we might
experience a decline in net income and  earnings per share,  and our stock price
might  suffer.  In an  effort  to  limit  any  liability,  we  generally  obtain
contractual  indemnification  from parties  supplying raw materials or marketing
our products.  Such  indemnification is limited,  however,  by the terms of each
related  contract and, as a practical  matter,  by the  creditworthiness  of the
indemnifying party.

         Despite  the  insurance  coverage  that we plan on  maintaining,  it is
possible that we may be sued if one or more consumers  believe our products have
caused them harm.  While no such  claims have been made to date,  the results of
any such suit could result in  significant  financial  damages to us, as well as
serious damage to the reputation and public  perception of our company,  even if
we are ultimately found not to be at fault.

ITEM 2 - DESCRIPTION OF PROPERTY

         We currently lease  approximately  2,200 square feet of office space in
Paramus, New Jersey under a two-year lease that expired on December 31, 2006. As
of December  31,  2006,  the company  does not have a lease  agreement  with the
landlord and is operating on a month to month basis.  The lease space is used as
our executive  offices,  which we use for marketing  and  administrative  needs.
Since  we  use  off-site   co-packing  and  warehousing   arrangements  for  the
manufacture  and  distribution  of our  products,  we do not  require  extensive
facilities.  We believe that our current  leased  property is more space then we
currently need and will be negotiating a smaller space for the future. We expect
that we will be able to stay in the  same  building  at 12  route  17  north  in
Paramus, NJ.

ITEM 3. - LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

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

None in the fourth  quarter 2006

                                       17
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Common stock market price

Of the  11,622,867  shares of common stock  outstanding as of December 31, 2006,
all but  approximately  8,500,000 shares can be traded on the over-  the-counter
trading on the OTC Electronic  Bulletin Board,  which trading commenced July 24,
2005. Of this amount,  2,631,595  shares are held by  affiliates.  The following
quarterly  quotations  for common stock  transactions  on the OTC Bulletin Board
reflect inter-dealer prices, without retail mark-up, markdown or commissions and
may not represent actual  transactions.  The company completed an initial public
offering of its common stock on June 24, 2005. The shares  initially traded only
as part of a unit,  under the symbol  NUVMU,  with each unit  consisting  of one
share of common stock,  one "Class A" warrant to purchase common stock,  and one
"Class B" warrant to purchase common stock. Each unit was sold by the Company at
a price of $1.00 per share as described in a prospectus dated June 21, 2005. The
shares of common  stock,  Class A warrants,  and Class B Warrants  began trading
separately as NUVM, NUVMW, and NUVMZ, respectively, on July 24, 2006.

                                         High Bid     Low Bid
                                         ---------   ---------
  2007
      First Quarter
         (Through March 30, 2007)        $    0.55   $    0.13
  2006
      First Quarter                      $    0.73   $    0.50
      Second Quarter                     $    0.53   $    0.27
      Third Quarter                      $    0.40   $    0.16
      Fourth Quarter                     $    0.32   $    0.16
  2005
      First Quarter                            N/A         N/A
      Second Quarter                           N/A         N/A
      Third Quarter                      $    1.00   $    0.49
      Fourth Quarter                     $    0.70   $    0.33

         The last sale price of the  Company's  Common  Stock on March 29, 2007,
was $ 0.45 as reported on the over-the-counter  Electronic Bulletin Board. As of
March 30, 2007,  there were 188  shareholders of record of the Company's  Common
Stock. The Company has been informed that  approximately  200 shareholders  hold
their Common Stock in nominee name.

         Dividends

         The  Company has never paid cash  dividends  on its Common  Stock.  The
Company

                                       18
<PAGE>

presently  intends to retain  future  earnings to finance the  expansion  of its
business and does not  anticipate  that any cash  dividends  will be paid in the
foreseeable  future.  The future  dividend  policy will depend on the  Company's
earnings,  capital requirements,  expansion plans, financial condition and other
relevant factors.

RECENT SALES OF UNREGISTERED SECURITIES

         Stock Sales in the Fourth Quarter 2006 and in 2007 to date

         Sales for Cash

         On March 1 and 8,  2007,  NuVim  sold a total of  433,333  shares to an
unrelated  accredited investor for $130,000 or $.30 per share. No commissions or
fees  were  paid  in  connection  with  this  sale.  He  agreed  in  writing  to
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6).

         At the same  time as the  second  purchase,  three of  NuVim's  outside
directors,  Doug Scott,  Peter  DeCrescenzo,  and Cal Hodock  purchased  50,000,
33,333,  and 16,667 shares  respectively at the same price totaling  $$30,000 or
$0.30 per share.  Each  director  agreed in writing  to  restrictions  on resale
placed  with the  NuVim's  transfer  agent and the  printing  of a legend on its
certificate.  Because of these factors,  this sale was exempt from  registration
under the  Securities Act as not involving a public  distribution  under section
4(2) and 4(6).

         At the end of the first quarter,  NuVim  received  $300,000 to purchase
1,000,000  shares of common  stock from  Julius Baer  Multistock  SICAV US Stock
Fund, a European  Institutional  Investor,  at a price of $.30 per share.  NuVim
paid a commission of $30,000 to Continental  Advisors SA in connection with this
sale.  In  addition,  Continental  Advisors SA received  $9,000 for its expenses
without  accounting for it. The purchaser  represented in writing that it was an
accredited  investor and it agreed in writing to  restrictions  on resale placed
with the NuVim's transfer agent and the printing of a legend on its certificate.
Because of these  factors,  this sale was  exempt  from  registration  under the
Securities  Act as not  involving a public  distribution  under section 4(2) and
4(6).

         In April five investors represented by Paulsen Investment Company, Inc.
and an additional private investor purchased a total of 872,667 shares of common
stock for $261,800 or $0.30 per share.  Paulson  will  receive a  commission  of
$22,680 on the 772,667 shares sold to its clients. Each purchaser represented in
writing  that  it  was an  accredited  investor  and it  agreed  in  writing  to
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6).

         All cash raised in these sales has been applied to working capital.

         Debt and Unpaid Compensation Conversions

         On December 1, 2006,  NuVim issued a total of 182,983  shares of common
stock to the holder of a $50,000 note in complete settlement of his note and all
interest  accrued since June 1, 2005.  The shares have a value of  approximately
$59,000.  He agreed in writing to restrictions on resale placed with the NuVim's
transfer agent and the printing of a legend on its certificate. Because of these
factors,  this sale was exempt from registration under the Securities Act as not
involving a public distribution under section 4(2) and 4(6).

         On December 29, 2006,  Richard  Kundrat,  NuVim's CEO, agreed to accept
218,750 and 392,188  shares of common  stock in lieu of cash for his unpaid 2005
salary of  approximately  $43,750  and part of his 2006  bonus of  approximately
$125,750,  respectively. In March 2007, an additional 100,000 shares were issued
to settle the remaining  $32,000 of his 2006 bonus. He agreed in writing to hold
all the  shares  for at least  one year and to the  additional  restrictions  on
resale  placed with the NuVim's  transfer  agent and the printing of a legend on
its  certificate.   Because  of  these  factors,   this  sale  was  exempt  from
registration  under the  Securities  Act as not involving a public  distribution
under section 4(2) and 4(6).

         On January 30, 2007, NuVim issued 72,915 shares of common stock in lieu
of cash for unpaid 2006 salary of  approximately  $14,600 due to Michael  Vesey,
NuVim's former CFO. He agreed in writing to  restrictions  on resale placed with
the NuVim's  transfer  agent and the  printing

                                       19
<PAGE>

of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6).

         Common Stock Issued for Services

         On December 1, 2006,  NuVim  agreed with a  production  and  operations
expert to  provide  various  services  for a total of  100,000  shares of common
stock. The services have a value of approximately  $32,000. He agreed in writing
to  restrictions  on  resale  placed  with the  NuVim's  transfer  agent and the
printing of a legend on its certificate. Because of these factors, this sale was
exempt from  registration  under the  Securities  Act as not  involving a public
distribution under section 4(2) and 4(6).

         On the same date, NuVim agreed to issue a total of 79,000 shares to two
individuals  for  their  services  in  seeking  strategic  partners  and  merger
candidates.  The services have a value of approximately  $25,280. They agreed in
writing to restrictions on resale placed with the NuVim's transfer agent and the
printing of a legend on its certificate. Because of these factors, this sale was
exempt from  registration  under the  Securities  Act as not  involving a public
distribution under section 4(2) and 4(6).

         Also on that date,  NuVim issued 15,000 shares to its new  spokesperson
for services  valued at $4,800.  She agreed in writing to restrictions on resale
placed  with the  NuVim's  transfer  agent and the  printing  of a legend on its
certificate.  Because of these factors,  this sale was exempt from  registration
under the  Securities Act as not involving a public  distribution  under section
4(2) and 4(6).

         On December  29,  2006,  NuVim  agreed with its  Secretary  and General
Counsel to issue  50,000  shares of common stock in exchange for his services in
connection  with the filing of the Company's SB-2  Registration  Statement.  The
services have a value of approximately  $8,000. He agreed in writing to hold the
shares for at least one year and to the additional restrictions on resale placed
with the NuVim's transfer agent and the printing of a legend on its certificate.
Because of these  factors,  this sale was  exempt  from  registration  under the
Securities  Act as not  involving a public  distribution  under section 4(2) and
4(6).

         On January  29,  2007,  NuVim  agreed  with its  Secretary  and General
Counsel to issue 100,000 shares of common stock as additional  compensation  for
his services during 2007. The services have a value of approximately $16,000. He
agreed in writing to hold the shares for at least one year and to the additional
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6).

         Also on that date, NuVim agreed with its operations director to issue a
total of 50,000  shares  of  common  stock as  additional  compensation  for his
services.  The shares have a value of approximately $8,000. He agreed in writing
to  restrictions  on  resale  placed  with the  NuVim's  transfer  agent and the
printing of a legend on its certificate. Because of these factors, this sale was
exempt from  registration  under the  Securities  Act as not  involving a public
distribution under section 4(2) and 4(6)

                                       20
<PAGE>

         January 30, 2007 NuVim agreed with a  communications  expert to provide
various services for a total of 40,000 shares of common stock. The services have
a value of approximately $6,400. He agreed to restrictions on resale placed with
the NuVim's  transfer  agent and the  printing  of a legend on its  certificate.
Because of these  factors,  this sale was  exempt  from  registration  under the
Securities  Act as not  involving a public  distribution  under section 4(2) and
4(6).

         March 14, 2007 NuVim issued  15,000 shares of common stock for services
relating to its corporate presentation  materials.  The services have a value of
approximately  $5,700.  He agreed to  restrictions  on  resale  placed  with the
NuVim's transfer agent and the printing of a legend on its certificate.  Because
of these factors,  this sale was exempt from  registration  under the Securities
Act as not involving a public distribution under section 4(2) and 4(6).

         Warrants

         In connection with its debt extensions, NuVim issued warrants entitling
the holder to purchase up to 250,000  shares of common stock at a price of $0.35
per share  until  August of 2015.  The  Warrant  evidencing  this right  bears a
restrictive  Securities  Act legend and  provides  that any shares  issued  upon
exercise  shall be restricted,  be subject to stop orders with NuVim's  transfer
agent, and bear a legend to that effect. Because of these factors, this sale was
exempt from  registration  under the  Securities  Act as not  involving a public
distribution under section 4(2) and 4(6)

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

         We  produce,   market,   and  distribute   NuVim(R)   beverage  dietary
supplements  in   Ready-to-drink   and  powder  mix  forms  NuVim  utilizes  the
micronutrient  NutraFlora(R)  and  whey  protein  to  provide  important  health
benefits to its consumers.  Whey protein,  NuVim(R)'s largest ingredient,  other
than water, enhances physical performance,  enhances  cardiovascular health, and
promotes well being.  NutraFlora(R)  is uniquely  capable of promoting health by
supporting the growth of beneficial  (probiotic)  bacteria which in turn provide
health benefits such as improved calcium and mineral  absorption for better bone
health and a strong immune  system.  Studies also show that  NutrFlora(R)  helps
improves  digestive  functions,   contributes  to  a  healthy  cholesterol,  and
metabolism.

         We focus on developing  the NuVim(R) brand through a mix of advertising
and  promotional  programs  that  build  consumer  awareness,  trial and  repeat
purchases.   The  marketing   consists  of  television   advertising   newspaper
advertising/advertorials, product sampling, coupon distribution, and promotional
price  discounts.  These  marketing  expenditures  are  essential  to build  the
NuVim(R) brand. We continue to test various ways to find the most cost efficient
means to use these marketing  funds to increase  consumer  awareness,  trial and
repeat purchases.  We believe that these advertising and promotional  activities
are critical to the growth of our business and expect to continue these programs
in the future.

         We have distributed our refrigerated  beverages since the year 2000 and
are in approximately  2,100  Supermarkets in the Eastern United States.  In 2002
company revenues were

                                       21
<PAGE>

$3.5 million.  However, we eliminated most advertising and marketing support for
our  product  in  the  second  half  of  2002  due  to a  lack  of  funding.  We
recapitalized  our company in June 2005 through the conversion of  approximately
$7.7  million of debt into common  stock and an initial  public  offering of our
common  stock.  Since  that  time we have  concentrated  our  limited  financial
resources  on  developing  and  supporting  distribution  opportunities  that we
believe will provide the greatest profitable sales expansion potential.  We also
developed a powder version of our product to be sold through direct distribution
such as the  internet  as well as retail  outlets.  Sales of the product to date
have not been material.  We have begun to sell the powder mixes in retail stores
in 2007.

         We have launched an equity funded print news media  campaign to educate
consumers  about the benefits of NuVim(R) and create  market  awareness  for our
product.  The media  program  which began in January 2006 and will  continue for
approximately  eighteen  months or until the contracted  amount of the newspaper
features has been completed.

         We have produced a 30 second television commercial for the refrigerated
products,  a 60 second  television  commercial  for the powder  product  and a 5
minute  educational  video  for the  product  and  will  air  these  commercials
throughout 2007 through  Platinum  Television  Group  headquartered in Deerfield
Beach Florida.

         During 2006 we continued to have had limited funding to support product
sampling and advertising programs, which we believe are critical to maintain and
increase  sales of our  products.  Therefore,  we have  focused our  spending on
promotions  in accounts  that we believe will offer the greatest  potential  for
sales growth and expansion  opportunities until we are able to raise funding for
additional marketing programs.

         In  late  2003  we  began  a  test  program  with  a  single   Wal-Mart
supercenter. In late 2004 the test was expanded to 43 supercenters (one Wal-Mart
distribution  center)  and  then  further  expansion  to 120  supercenters  (two
additional  distribution centers) in late 2005 that covered most of the Wal-Mart
supercenters  in the State of Florida.  During the 2005  expansion the number of
NuVim(R)  varieties carried by the supercenters was increased from two to three.
First quarter 2005 Wal-Mart sales were 8% of the total 2005 first quarter sales.
In April 2006, we increased our  distribution  to the entire  southeast  region,
encompassing  approximately 300 supercenters (seven total distribution  centers)
servicing all or part of 7 states. Same store sales for Wal-Mart in 2006 were up
161% compared with 2005.

UNIT CASE VOLUME/CASE SALES

         The table set forth below  discloses  selected data regarding sales for
the  years  ended  December  31,  2006 and  2005.  The  data is not  necessarily
indicative of continuing trends.

         Sales of beverages  are  expressed  in unit case volume.  A "unit case"
means a unit of measurement  equal to 512 U.S. fluid ounces of finished beverage
(eight 64-ounce containers). Unit case volume means the number of unit cases (or
unit case  equivalents)  of beverages  directly or indirectly  sold by us. Gross
cases sold to the customer represent the number of cases shipped to the customer
prior to any  returned  cases  containing  product that has not been sold by its
expiration date.

                                       22
<PAGE>

                              Twelve Months Ended December 31
                              -------------------------------
                                  2006              2005
                              -------------     -------------
     Gross Cases Sold                70,542            65,982
     Gross Sales              $   1,292,155     $   1,208,279
     Net Sales                $     943,978     $     721,381

         Gross  sales are the  amount  invoiced  to  customers,  while net sales
deduct from gross sales any payment or discount terms,  promotional  allowances,
slotting  fees,  warehouse  damage and  returned  goods in  accordance  with the
Financial Accounting Standards Board Emerging Issues Task Force Issue No. 01-09,
Accounting for Consideration  Given by a Vendor to a Customer.  In some accounts
we pay slotting fees when our products are initially introduced to a new account
and run price feature  promotions to encourage  trials of our product.  As brand
loyalty grows in a market, we anticipate that we will be able to run fewer price
promotions and will not incur the one time additional  slotting fees to gain new
distribution.  70,542 cases sold  represents an increase of 4,560, or almost 7%,
for the twelve  months  ended  December  31,  2006.  This  increase for the year
represents  a strong last nine months.  In the first  quarter of 2006 sales were
29% or 6,032 cases  behind the first  quarter of 2005.  Sales for the last three
quarters of 2006  exceeded  the last three  quarters of 2005 by 10,592  cases or
nearly 23%. We believe that the strong  performance  in the last 9 months is due
to the  increase in the number of  Wal-Mart  supercenters  carrying  the product
because of the expansion to seven  distribution  centers  during 2006 from three
serviced in mid-May of 2005.

RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2006 COMPARED TO THE YEAR
ENDED DECEMBER 31, 2005

         Gross  Sales For the year ended  December  31,  2006,  gross sales were
$1,292,155 an increase of $83,876, or 7% above gross sales of $1,208,279 for the
twelve months ended  December 31, 2005. The increase in gross sales for the year
represents a rebound in the last nine months of the year from the first  quarter
2006 gross  sales  decrease of 29% below 2005.  The  overall  increase  occurred
because  sales  during the last three  quarters  exceeded  sales during the same
period last year by 23%.

         Discounts,  Allowances and Promotional  Payments Even though sales rose
7% for the twelve  months  ended  December  31,  2006,  promotional  allowances,
returns and  discounts  were  $348.177,  a decrease of $104,393 or 21%, from the
promotional allowances and discounts of $486,898 for the year ended December 31,
2005. This decrease is primarily attributable to not couponing,  discounting the
price as heavily as 2005 and better sales at regular price.  We record the price
reductions,  which are  reimbursed by us to the  retailers,  in accordance  with
Financial  Accounting  Standards  Board Emerging  Issues Task Force,  No. 01-09,
Accounting  for  Consideration  Given by a Vendor  to a  Customer.  We expect to
continue to use price promotions and coupon distribution  selectively as a means
to promote  consumer  sampling  and trial of our  product  into the  foreseeable
future.  As the product matures and a higher  percentage of users of our product
are repeat  purchasers,  we expect coupon  expense,  relative to gross sales, to
decline.

                                       23
<PAGE>

<TABLE>
<CAPTION>
                                                                          Year Ended December 31
                                                         ---------------------------------------------------------
                                                                                         Increase
                                                             2006           2005        (Decrease)     Percentage
                                                         ------------   ------------   ------------   ------------
<S>                                                      <C>            <C>            <C>                    <C>
Discounts for timely payment                             $     16,930   $     15,908   $      1,022              6%
Product returned after its expiration date                    139,927        142,852         (2,925)            (2)%
Promotional  price  allowances,  coupons and other
 incentives                                                   190,468        295,665       (105,197)           (36)%
Slotting fees                                                     852         32,473        (31,621)          (100)%
                                                         ------------   ------------   ------------   ------------
Total Discounts, Allowances and Promotional Payments     $    348,177   $    486,898   $   (138,721)           (28)%
                                                         ============   ============   ============   ============
</TABLE>

         Net Sales Net sales for the year ended  December 31, 2006 were $943,978
an increase of $222,597, or 31% higher than net sales of $721,381 for the twelve
months  ended  December  31,  2005,  despite a decline  of 16%  during the first
quarter. The increase in net sales is primarily  attributable to the increase in
case sales and lower  consumer price  discount  promotion  spending as discussed
above.  This also  means  that there were  higher  sales at  regular  price,  an
indication that consumer loyalty to the brand increased.

         Cost of Sales For the twelve  months ended  December 31, 2006,  cost of
sales was  $702,492,  an  increase  of  $15,325,  or 2.2% higher on a case sales
increase  for the  year of 7%.  Cost of  sales as a  percentage  of gross  sales
decreased to 54% for the year ended  December 31, 2006,  compared to 57% for the
twelve  month  ended  December  31,  2005.  The  decrease  in cost of sales as a
percentage  of gross sales was  primarily  the result of slightly  lower cost of
materials.

         Gross Profit Gross profit was $241,486 for the year ended  December 31,
2006, an increase of $207,272 from $34,214 for the year ended December 31, 2005.
Gross  profit as a  percentage  of gross  sales  was  18.7%  for the year  ended
December  31, 2006  compared to 2.8% for the twelve  months  ended  December 31,
2005.  The increase in gross profit as a percentage of gross sales was primarily
due to the lower price discounts and the lower cost of goods.

         Selling,  General  and  Administrative  Expenses  Selling,  general and
administrative  expenses were  $2,407,253  for the year ended December 31, 2006,
including  $546,881 of non-cash  expense  recorded under FAS 123R because of the
grant of options  under the  Company's  employee  stock option  plans.  Selling,
general, and administrative expenses during the twelve months ended December 31,
2005 were $2,392,996. The option expense in 2006 is included because of FAS 123R
governing valuation of option grants and the timing of their application. If the
option expense is excluded,  other selling,  general, and administration expense
decreased $546,881 or 22% from selling,  general and administrative expenses for
the twelve  months ended  December 31, 2005.  The last year includes five months
without a full time CFO,  four  months  without a full time Vice  President  for
operations  and 2 months  without  a full  time Vice  President  of  Sales.  Out
sourcing the financial and operations  management  functions have decreased cost
without  decreasing  effectiveness.  Changing  the  sales  organization  to 100%
commission  based also  helped  decrease  the total  administrative  costs.  The
decrease in selling, general and administrative expenses also reflects decreases
in product sampling  expenses.  These  improvements  were entirely offset by the
increased option expense.

                                       24
<PAGE>

         Loss from  Operations  Loss from operations was $2,165,767 for the year
ended  December 31, 2006 compared to $2,358,782  for the year ended December 31,
2005.  The  decrease  of the loss by  $193,015 in 2006 versus 2005 is due to the
improvements  in the gross profit and  decreased  operating  expenses  described
above. The $546,881 of the option expense calculated as required under FAS 123R,
mostly  occurring in the third and fourth quarters is included in the $2,165,767
loss. Excluding this non-cash items the loss would be $1,618,886.

         Interest  Expense  Interest  expense  was  $115,823  for the year ended
December  31,  2006;  a decrease of $314,393 or 73%,  from  interest  expense of
$430,216 for the year ended December 31, 2005. The decrease in interest  expense
is primarily  attributable to the retirement of indebtedness.  On June 24, 2005,
in connection with the closing of our initial public  offering,  we extinguished
approximately $7.7 million of indebtedness through the issuance of common stock.

         Net Loss Net loss was  $1,778,959  for the year ended December 31, 2006
compared to  $2,396,902  for the year ended  December  31,  2005.  The  $617,943
decrease  in net loss  was  primarily  attributable  to the  improved  operating
results and the lower  interest  expense  discussed  above  offset by the option
expense.

LIQUIDITY AND CAPITAL RESOURCES

         Our operations to date have generated significant operating losses that
have been funded  through the issuance of common stock and external  borrowings.
We  will  require   additional  sources  of  outside  capital  to  continue  our
operations.  During 2006, all of NuVim(R)'s short term debt, other than accounts
payable,  were either  converted into stock or extended by their holders so that
they do not mature until 2009.

         Debt Extensions and Conversions

         We began the year with secured convertible promissory notes with a face
amount of $67,600 due on June 23, 2006 and senior secured  promissory notes with
a principal  amount of $500,000 due in November 2006. All the notes due June 23,
2006 (and the warrants  issued with them) were  converted into 335,000 shares of
common  stock.  In August,  the  holders of all  $500,000 of  NuVim(R)'s  Senior
Secured  Notes,  Richard  Clark,  the  entertainer,  and  Stanly  Moger,  one of
NuVim(R)'s  directors,  agreed to extend their  maturity  from  November 2006 to
January  2009.  Interest  will accrue at an annual  rate of eight (8%)  percent.
Neither  principal nor interest  will be due until that date.  As  compensation,
each received a warrant to purchase  100,000  shares of NuVim's common stock for
$0.35 per share.  The warrant may be exercised from February 2007 through August
15, 2015. The loan agreement with Clark and Moger provides that, if NuVim raises
additional capital,  they have the right to demand prepayment of their Notes. As
a result of the extension of the $500,000 loan, additional stockholder loan debt
in the principal amount of $150,000 which is subject to subordination agreements
with the holders of the debt,  the  maturity  of this debt was also  extended to
January 2009.

         In  June  2006 a  note  holder  agreed  to  accept  107,631  shares  of
restricted common stock for approximately $38,000 in principal and interest.

         In August 2006 Kirkpatrick & Lockhart  Nicholson Graham LLP, the holder
of an $120,000  unsecured  note agreed to extend its maturity from November 2006
to January  2009.  Interest will accrue at an annual rate of eight (8%) percent.
Neither principal nor interest will be

                                       25
<PAGE>

due until that date. In connection with this transaction,  NuVim issued warrants
entitling  the holder to purchase up to 50,000 shares of common stock at a price
of $0.35 per share until August of 2015.

         In December 2006, the holder of a $50,000 subordinated stockholder note
agreed to accept  approximately  183,000 shares of common stock in settlement of
his note and all remaining accrued interest.

         Compensation, services and trade debt paid in shares of common stock

         In March 2006 the board and compensation  committee  authorized a total
of 661,500 shares of common stock in lieu of the executive cash bonuses for 2005
and agreed  with these  executives  to defer the  payment of their 2005  accrued
salaries until 2007 and  established  the parameters for settling these accruals
in common stock.  Also in March 2006,  50,000 shares of common stock were issued
to the new corporate  secretary  for a portion of his 2006 fees.  Also, in March
2006,  NuVim(R)  issued 7,850 shares of common stock to  SmallCapVoice.com,  for
investor relations services.

         In  April  2006  Paulsen  Investment  Company,  Inc.  privately  placed
2,970,000  restricted  shares of our common stock at a price of twenty cents per
share.  A total of $594,000 was received less offering costs paid of $60,125 for
a net amount of $533,875.

         Also in April  2006,  our  former  CFO and a former  officer  agreed to
accept a total of  192,955  shares of common  stock for a portion  of the salary
remaining  due to them on the date of his  resignation  and in lieu of this 2005
bonus.

         In May and June 2006, several creditors agreed to accept 331,453 shares
of restricted  common stock at a price of $0.35 per share to settle an aggregate
of approximately  $110,500 of current or past due accounts  payable  obligations
and several  organizations  agreed to accept  443,562 shares of common stock for
future services valued at approximately $162,000.

         During  the  fourth  quarter,  four  additional  individuals  agreed to
provide  services  aggregating  approximately  $62,000  in value  for a total of
194,000 shares of common stock.

         At the end of 2006, Mr. Kundrat,  NuVim's CEO, agreed to accept 492,188
shares of common stock in lieu of cash payment of his  executive  bonus for 2006
of which  392,188 were issued in December  2006 for $125,500 of the unpaid bonus
and  218,750  shares of common  stock in lieu of cash  payment of his $43,750 of
unpaid 2005 salary.  The remaining  100,000 shares for the remaining  $32,000 of
unpaid  bonus were  issued in 2007.  Also,  at that time,  Mr.  Siegel,  NuVim's
corporate  Secretary,  agreed to accept 50,000 shares of common stock in lieu of
any cash fee in connection with a registration statement.

         We will still need to raise  additional  financing  to pay our past due
obligations,  fund operating losses and to support sales and marketing  programs
to increase  sales of our  products.  If we are not able to identify  additional
sources of financing,  we may not be able to continue operations beyond December
2007. We have participated in the New Jersey Economic

                                       26
<PAGE>

development  Authority Tax Transfer  program for the past 4 years and will again
this year. The funds from this program were received in December and amounted to
approximately $442,000.

         Net cash used in operating  activities  for the year ended December 31,
2006 was $727,846,  compared to cash used in operating  activities of $1,932,719
during all of 2005. The decrease in cash used by operating activities during the
year ended December 31, 2007 of $1,204,837 was primarily  attributable  to lower
administrative  expenses,  less promotional  spending,  and higher contributions
from product sales.

         A net amount of $470,850 was provided by  financing  activities  during
2006,  compared  to  $1,925,980  provided  for the  year  2005.  The  excess  of
$1,455,130  in 2005 was mainly due to the impact of that year's  Initial  Public
Offering of NuVim Common Stock and Warrants.

APPLICATION OF RECENT AND CRITICAL ACCOUNTING POLICIES AND PRONOUNCEMENTS

Recent Accounting Pronouncements

         In  September   2006,   the  FASB  issued  SFAS  No.  157,  Fair  Value
Measurements,  and ("SFAS No.  157"),  which  defines fair value,  establishes a
framework for measuring  fair value,  and expands  disclosures  about fair value
measurements.  SFAS No. 157 will be effective for the Company  beginning January
1, 2008. Management is currently evaluating the effect SFAS No. 157 will have on
the Company's financial condition or results of operations.

         In September 2006, the FASB issued SFAS No. 158, Employers'  Accounting
for Defined  Benefit Pension and Other  Postretirement  Plans -- an amendment of
FASB  Statements  No. 87, 88, 106,  and 132(R)  ("SFAS No.  158").  SFAS No. 158
requires companies to recognize the over-funded or under-funded  status of their
defined benefit  postretirement  plans as an asset or liability and to recognize
changes in that  funded  status in the year in which the changes  occur  through
comprehensive  income. The Company will adopt SFAS No. 158 on December 31, 2006.
The  adoption of SFAS No. 158 is not  expected to have a material  effect on the
Company's financial condition or results of operations.

         In July 2006,  the Financial  Accounting  Standards  Board ("FASB") has
published FASB Interpretation No. 48 ("FIN No. 48"),  Accounting for Uncertainty
in Income Taxes,  to address the  non-comparability  in reporting tax assets and
liabilities  resulting  from a lack of specific  guidance in FASB  Statement  of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes, on
the  uncertainty  in  income  taxes  recognized  in  an  enterprise's  financial
statements.  FIN No. 48 will apply to fiscal years  beginning after December 15,
2006, with earlier adoption permitted. The adoption of FIN 48 is not expected to
have a  material  effect on the  Company's  financial  condition  or  results of
operations.

         In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and
Error  Correction  ("SFAS 154"),  which  replaces  Accounting  Principles  Board
Opinions  No.  20  "Accounting  Changes"  and SFAS No 3,  "Reporting  Accounting
Changes in Interim  Financial  Statements - An Amendment of APB Opinion No. 28."
SFAS 154 provides guidance on accounting for and reporting of accounting changes
and error corrections.  It establishes retrospective application,  or the latest
practicable  date,  as the required  method for reporting a change in accounting
principle and the  reporting of a correction of an error.  SFAS 154 is effective
for accounting  changes and corrections of errors made in fiscal years beginning
after

                                       27
<PAGE>

December  15,  2005 and is  required  to be adopted by the  Company in the first
quarter of fiscal  2006.  The adoption of SFAS 154 did not have an impact on the
Company's financial statements.

         The FASB issued FASB Interpretation No. 47 ("FIN 47"),  "Accounting for
Conditional  Asset Retirement  Obligations" in March 2005. FIN 47 clarifies that
an entity must record a liability for a conditional asset retirement  obligation
if  the  fair  value  of  the  obligation  can  be  reasonably  estimated.  This
Interpretation also clarifies the circumstances under which an entity would have
sufficient  information  to  reasonably  estimate  the  fair  value  of an asset
retirement obligation. This Interpretation is effective no later than the end of
fiscal  years  ending after  December  15,  2005.  This  guidance did not have a
material affect on the Company's financial statements.

CRITICAL ACCOUNTING ESTIMATES

         The discussion  and analysis of our financial  condition and results of
operations are based upon our financial statements,  which have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  The  preparation  of these  financial  statements  requires us to make
estimates  and  judgments  that  affect  the  reported   amount  of  assets  and
liabilities,  revenues and expenses, and related disclosure on contingent assets
and  liabilities  at the date of our financial  statements.  Actual  results may
differ from these estimates under different assumptions and conditions.

         Critical  accounting  policies are defined as those that are reflective
of significant judgments,  estimates and uncertainties and potentially result in
materially different results under different  assumptions and conditions.  For a
detailed  discussion on the application of these and other accounting  policies,
see Note 2 to our annual  financial  statements  for the year ended December 31,
2006.

         Placement and Promotional Allowances and Credits for Product Returns

         As an  inducement to our customers to promote our products in preferred
locations of their stores,  we provide  placement and promotional  allowances to
certain  customers.  We also provide  credits for customer  coupon  redemptions,
consumer price reductions, and product which has not been sold by its expiration
date.  These  allowances  and credits are reflected as a reduction of revenue in
accordance  with Emerging  Issues Task Force  ("EITF") No. 01-9,  which requires
certain  sales  promotions  and customer  allowances  previously  classified  as
selling,  general and administrative expenses to be classified as a reduction of
sales  or as cost of goods  sold.  Provisions  for  promotional  allowances  are
recorded  upon  shipment  and are  typically  based on shipments to the retailer
during an  agreed  upon  promotional  period.  We  expect  to offer  promotional
allowances  at  historical  levels  in the near  future as an  incentive  to our
customers.  Slotting or placement  fees are deducted  from revenue in the period
paid.  Provisions for coupon  redemptions and product  returned that has reached
its  expiration  date are based on historical  trends.  Information  such as the
historical  number of cases  returned  per unit  shipped,  product  shelf  life,
current  sales  volume,  and coupons  distributed  during the period are used to
derive  estimates  of  the  required  allowance.  As we  expand  production  and
introduce new products,  we may incur increased levels of returned goods.  Also,
our  estimates  assume  we  will  continue  as  a  going  concern  and  maintain
distribution with wholesalers and supermarkets that currently carry our product.
If a  supermarket  or wholesaler  discontinues  our product,  we may  experience
return rates in excess of our  historical  trend.  This could result in material
charges to future  earnings for

                                       28
<PAGE>

reimbursements to our customers for returned, unsold product.

         Accounts Receivable

         We evaluate the  collectibility of our trade accounts  receivable based
on a number of factors. Accounts receivable are unsecured,  non-interest bearing
obligations  that are typically due from customers within 30 days of the invoice
date.  However,  with  incentives to pay early we normally  receive  payment for
invoices on average of 17 days. We apply collections in accordance with customer
remittance advices or to the oldest outstanding  invoice if no remittance advice
is presented with payment.

         We estimate an allowance for doubtful accounts and revenue  adjustments
based on historical trends and other criteria.  Further,  as accounts receivable
outstanding are deemed uncollectible or subject to adjustment,  these allowances
are adjusted  accordingly.  In circumstances where we become aware of a specific
customer's inability to meet its financial obligations to us, a specific reserve
for bad debts is estimated and recorded which reduces the recognized  receivable
to the estimated amount we believe will ultimately be collected.  In addition to
specific  customer  identification  of potential bad debts, bad debt charges are
recorded based on our recent past history and an overall  assessment of past due
trade accounts  receivable  outstanding.  We also estimate the amount of credits
for product  placement,  promotion  and expired  product that are expected to be
issued for product sold based on an evaluation  of historical  trends and record
an allowance when the sale is recorded.

         INFLATION

         We do not believe that inflation had a significant impact on our
results of operations for the periods presented.

         OFF-BALANCE SHEET TRANSACTIONS

         At  December  31,  2006,  we  did  not  have  any  relationships   with
unconsolidated  entities  or  financial  partnerships,  such as  entities  often
referred to as structured finance or special purpose entities,  which would have
been established for the purpose of facilitating  off-balance sheet arrangements
or other contractually narrow or limited purposes.

                                       29
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS.

The  financial  statements  for the years ended  December  31, 2005 and 2006 are
contained on pages F-1 to 37, which follow the signature page.

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

The principal  accountants' reports on our financial statements for the past two
years contained an explanatory paragraph regarding going concern uncertainty.

No  disagreement  with the auditors  occurred  during the two most recent fiscal
years or the subsequent interim period on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements,  if not resolved to the  satisfaction of the  accountants,  would
have caused them to make reference to the subject matter of the disagreements in
connection with their reports.

Item 8A  CONTROLS AND PROCEDURES.

         The Company's Chief Executive Office,  Chief Financial Officer, and the
accounting firm of Hendel & Hendel evaluated the effectiveness of the design and
operation of its  disclosure  controls and procedures as defined in Exchange Act
Rule 13a-15(e).  The term  "disclosure  controls and  procedures," as defined in
Rules  13a-15(e) and  15d-15(e)  under the  Securities  Exchange Act of 1934, as
amended,  (the  Exchange Act) means  controls and other  procedures of a company
that are  designed  to ensure  that this  information  is  recorded,  processed,
summarized,  and reported  within the time periods  specified in the SEC's rules
and forms.  Disclosure  controls and procedures  include controls and procedures
designed to ensure that information required to be disclosed by a company in the
reports  that it files or submits  under the  Exchange  Act is  accumulated  and
communicated to the company's management,  including its principal executive and
principal financial officers, as appropriate to allow timely decisions regarding
required disclosure.  Based upon their evaluation of its disclosure controls and
procedures,  the Company's chief  executive,  chief financial  officer,  and the
Hendel firm had  concluded  that,  as of December 31, 2006 and as of the date of
filing,  the  controls  and  procedures  were  designed to be and  actually  are
effective  at a  reasonable  assurance  level and will  continue  to  operate as
designed.

         NuVim maintains certain internal controls over financial reporting that
are appropriate in their design and implementation, consistent with cost-benefit
considerations,  to provide  reasonable  assurance  regarding the reliability of
financial  reporting and the  preparation  of financial  statements for external
purposes in  accordance  with  generally  accepted  accounting  principles.  The
retention  of the  accounting  firm,  a  change  in our  internal  control  over
financial reporting,  occurred during the fiscal quarter ended June 30, 2006 has
materially  affected,  and is  reasonably  likely to  continue  to  affect,  the
Company's  internal control over financial  reporting in a positive  manner.  No
change effecting NuVim's internal controls occurred during the fourth quarter.

                                       30
<PAGE>

ITEM 8B  OTHER INFORMATION

         None

                                       31
<PAGE>

                                    PART III

Item 9, 10, 11, 12, and 14 are incorporated from the Proxy Statement included in
Schedule 14A to be filled within 120 days of the end of NuVim's fiscal year.

ITEM 13. - EXHIBITS

<TABLE>
<CAPTION>
   EXHIBIT                                                                                      INCORP.     FILED
   NUMBER        DESCRIPTION OF EXHIBIT                                                        BY REF.       NOW
--------------   ---------------------------------------------------------------------------  ----------  ---------
    <S>          <C>                                                                             <C>        <C>
      3.1        Registrant's Certificate of Incorporation, as amended                            (2)
      3.2        Registrant's Certificate of Amendment of Certificate of Incorporation            (2)
      3.3        Registrant's  Second Amended and Restated  Designation  and  Description of
                 Series A Preferred Stock                                                         (4)
      3.4        Registrant's Amended and Restated Designation and Description of Series C
                 Preferred Stock                                                                  (4)
      3.5        Registrant's By-laws                                                             (2)
      4.1        Revised Form of Common Stock Certificate                                         (4)
      4.2        Revised Form of Class A Public Warrant                                           (4)
      4.3        Revised Form of Class B Public Warrant                                           (4)
      4.4        Revised Form of Unit Certificate                                                 (4)
      4.5        Revised  Form of Warrant  Agreement  between the  Registrant  and  American
                 Stock Transfer & Trust Company                                                   (1)
      4.6        Revised Form of Representative's Purchase Warrant                                (1)
      5.1        Legal  Opinion                                                                  (11)
     10.1        Employment  Agreement between the Registrant and Richard P. Kundrat,  dated
                 as of September 9, 2004                                                          (2)
     10.2        Employment Agreement between the Registrant and John L. Sullivan,  dated as
                 of September 9, 2004                                                             (2)
     10.3        Employment  Agreement between the Registrant and Paul J. Young, dated as of
                 September 9, 2004                                                                (2)
     10.4        Employment  Agreement between the Registrant and Michael Vesey, dated as of
                 December 1, 2004                                                                 (3)
     10.5        Form of Indemnification Agreement between the Registrant and its directors       (2)
     10.6        Revised 2005 Incentive Stock Option Plan                                         (4)
     10.7        Revised 2005 Directors' Stock Option Plan                                        (4)
     10.8        2000 Employee Stock Option Plan                                                  (2)
     10.9        2001 Employee Stock Option Plan                                                  (2)
     10.10       2002 Employee Stock Option Plan                                                  (3)
     10.11       2000 Employee Equity Incentive Plan                                              (2)
     10.12       Amended and Restated  License  Agreement  between the Registrant and Stolle
                 Milk Biologics, Inc., dated as of May 1, 2004                                    (2)
     10.13       Amended and Restated  Supply  Agreement  between the  Registrant and Stolle
                 Milk Biologics, Inc., dated as of May 1, 2004                                    (2)
     10.14       Loan  Agreement  between the Registrant and Dick Clark dated as of July 26,
                 2004                                                                             (2)
    10.14.1      Letter  Agreement  dated  November 3, 2004  amending  certain  terms of the
                 Amendment to Services Agreement and Convertible  Promissory note each dated
                 July 26, 2004 and Second Amendment to Services Agreement and Warrant,  each
                 dated September 14, 2004                                                         (3)
    10.14.2      Letter  Agreement  dated  March  28,  2005  amending  certain  terms of the
                 Amendment to Services Agreement and Convertible  Promissory note each dated
                 July 26, 2004 and Second Amendment to Services Agreement and Warrant,  each
                 dated September 14, 2004                                                         (4)
    10.14.3      Letter  Agreement  dated  April  30,  2005  amending  certain  terms of the
                 Amendment to Services Agreement and Convertible  Promissory note each dated
                 July 26, 2004 and Second Amendment to Services Agreement and Warrant,  each
                 dated September 14, 2004                                                         (5)
</TABLE>

                                       32
<PAGE>

<TABLE>
    <S>          <C>                                                                             <C>
    10.14.4      Letter Agreement dated May 31, 2005 amending certain terms of
                 the  Amendment to Services Agreement and Convertible
                 Promissory note each dated July 26, 2004 and Second Amendment
                 to Services Agreement and Warrant, each dated September 14,
                 2004                                                                             (1)
     10.15       Security  Agreement  between the Registrant and Dick Clark dated as of July
                 26, 2004                                                                         (2)
     10.16       Form of Secured Promissory Notes Up to $1 Million (Bridge Financing)             (2)
     10.17       Convertible Note dated as of July 26, 2004 payable to Dick Clark                 (2)
     10.18       Warrant to Purchase  $650,000 of Common  Stock  dated as of  September  14,
                 2004                                                                             (2)
     10.19       Warrant to Purchase up to 9.9% of the Outstanding  Capital Stock,  dated as
                 of July 26, 2004                                                                 (2)
     10.20       Services Agreement between the Registrant and Olive Enterprises, Inc.,
                 dated February 20, 2000                                                          (2)
     10.21       Amendment  to  Services   Agreement   between  the   Registrant  and  Olive
                 Enterprises, Inc., dated as of July 26, 2004                                     (2)
     10.22       Second  Amendment to Services  Agreement  between the  Registrant and Olive
                 Enterprises, Inc., dated as of September 14, 2004                                (2)
     10.23       Form of Subordination Agreement (Bridge Financing)                               (2)
     10.24       Consent to Grant Security  Interest,  Waiver,  Subordination  and Amendment
                 Agreement between Registrant and Stolle Milk Biologics,  Inc., dated August
                 5, 2004                                                                          (2)
     10.25       Processing  and Packing  Agreement  between the Registrant and Clover Farms
                 Dairy Company, dated June 27, 2000                                               (2)
     10.26       Amendment to Processing  and Packing  Agreement  between the Registrant and
                 Clover Farms Dairy Company, effective April 1, 2003                              (2)
     10.27       Second Amended and Restated  Stockholders  Agreement  dated as of August 2,
                 2004                                                                             (2)
     10.28       Amended and Restated  Registration Rights Agreement,  dated as of August 2,
                 2004                                                                             (2)
     10.29       Wachovia line of credit documents                                                (4)
     10.30       Lease  between  the  Registrant  and  Paramus  Plaza IV  Associates,  dated
                 December 8, 1999 and Addendum II to Lease, dated December 8, 1999                (2)
     10.31       First  Amendment  to Lease  between the  Registrant  and  Paramus  Plaza IV
                 Associates, dated November 5, 2002                                               (2)
     10.32       Second  Amendment  to Lease  between the  Registrant  and Paramus  Plaza IV
                 Associates, dated November 23, 2004                                              (2)
    10.33.1      Letter  Agreements  dated  December 31, 2004 between  Spencer Trask Private
                 Equity Fund I LP,  Spencer Trask Private  Equity Fund II LP,  Spencer Trask
                 Specialty Group LLC and Kevin  Kimberlin  Partners LP, on the one hand, and
                 the  registrant  on the  other,  with  respect  to the debt  extinguishment
                 transactions  between the parties,  as amended by  agreements  of March 28,
                 2005                                                                             (4)
    10.33.2      Agreement  dated May 2, 2005 further  amending the agreements  with Spencer
                 Trask                                                                            (5)
    10.33.3      Agreement  dated May 18, 2005 further  amending the agreements with Spencer
                 Trask                                                                            (1)
     10.34       Security  Agreement  between the  Registrant  and Spencer  Trask  Specialty
                 Group LLC, dated January 31, 2002                                                (4)
    10.35.1      Modification and Extension  Agreement  between Stolle Milk Biologics,  Inc.
                 and the Registrant dated March 28, 2005                                          (4)
    10.35.2      Amendment of March 28, 2005 Modification and Extension Agreement                 (1)
    10.36.1      Conversion  Agreement  dated April 30, 2005 between the Registrant and Dick
                 Clark                                                                            (5)
</TABLE>

                                       33
<PAGE>

<TABLE>
    <S>          <C>                                                                             <C>           <C>
    10.36.2      Amended and Restated  Conversion  Agreement between the Registrant and Dick
                 Clark, dated May 31, 2005                                                        (1)
     10.36       Proposal/Memorandum  of  Understanding  between the  Registrant  and Global
                 Media Fund, LLC                                                                  (6)
     10.37       Form of Secured  Convertible  Promissory  note between the  Registrant  and
                 Lenders                                                                          (6)
     10.38       Form of Warrant Agreement between the Registrant and Lenders                     (6)
     10.39       Form of Warrant  Agreement between the Registrant and Midtown Partners           (6)
     10.40       Placement Agent Agreement between the Registrant and Midtown Partners            (6)
    10.40.1      Letter  Terminating  Placement Agent  Agreement  between the Registrant and
                 Midtown Partners                                                                 (6)
     10.41       Dick Clark/Stanley Moger Consent to Secured Convertible Note financing           (6)
     10.42       Warrant  issued in  connection  with  acquisition  of 24% interest in NuVim
                 Powder LLC                                                                       (7)
     10.43       Placement Agent Agreement                                                        (7)
     10.44       2006 Employee Stock Option Plan                                                  (8)
     10.45       Note Extension Letter with Richard Clark and Stanley Moger                       (9)
     10.46       Note Extension Letter with Kirkpatrick &Lockhart Nicholson Graham LLP            (9)
      21         Subsidiaries of the Registrant                                                                X
     23.2        Consent  of   WithumSmith+Brown,   P.C.,   Independent   Registered  Public
                 Accounting Firm                                                                 (11)
     23.3        Consent of Attorney (included in Exhibit 5.1)                                   (11)
      24         Power of Attorney                                                               (10)
     31.1        Certification  of Chief  Executive  Officer  Pursuant to 18 U.S.C.  Section
                 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                    X
     31.2        Certification  of Chief  Financial  Officer  Pursuant to 18 U.S.C.  Section
                 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                    X
     32.1        Certification  of the Chief Executive  pursuant to 18 U.S.C.  Section 1350,
                 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                         X
     32.2        Certification of the Chief Financial Officer pursuant to 18 U.S.C.  Section
                 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                   X
</TABLE>

----------
(1)  Previously  filed  as  part  of  Pre-effective   Amendment  No.  6  to  the
     Registration Statement filed on June 6, 2005.
(2)  Previously filed as part of the Registration Statement filed on December 2,
     2004.
(3)  Previously   filed  as  part  of   Pre-effective   Amendment  No.1  to  the
     Registration Statement filed on February 3, 2005.
(4)  Previously   filed  as  part  of   Pre-effective   Amendment  No.3  to  the
     Registration Statement filed on March 31, 2005.
(5)  Previously   filed  as  part  of   Pre-effective   Amendment  No.5  to  the
     Registration Statement filed on May 4, 2005.
(6)  Previously filed as part of the 2005 Annual Report on Form 10-KSB
(7)  Previously  filed as part of the Current Report on Form 8-K filed April 21,
     2006
(8)  Previously  filed as part of the  Current  Report on Form 8-K filed May 30,
     2006
(9)  Previously filed as part of the Current Report on Form 8-K filed August 28,
     2006
(10) Previously filed as part of the Registration Statement filed on October 10,
     2006.
(11) Previously  filed  as  part  of  Pre-effective  Amendment  Number  1 to the
     Registration Statement filed on December 18, 2006.

                                       34
<PAGE>

                                   SIGNATURES

         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                    NUVIM, INC.


Date: April 11, 2007
                                                    By: /s/ Richard Kundrat
                                                        ------------------------
                                                        Richard Kundrat,
                                                        Chief Executive Officer

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

SIGNATURE                                    TITLE                    DATE
--------------------------         --------------------------    ---------------

/s/ Richard Kundrat                Chief Executive Officer       April 11, 2007
--------------------------
Richard Kundrat

/s/ Richard Kundrat                Chief Financial               April 11, 2007
--------------------------         and Accounting Officer
Richard Kundrat

                                       35
<PAGE>

                                   NUVIM INC.

                                   ----------

                              FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 and 2006

                                   ----------

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              -----
<S>                                                                                           <C>
Report of Independent Registered Public Accounting Firm                                       F - 2
Balance Sheets - December 31, 2005 and 2006                                                   F - 3
Statements of Operations - Years ended December 31, 2005 and December 31, 2006                F - 4
Statements of Cash Flows - Years ended December 31, 2005 and December 31, 2006                F - 5
Statements of Stockholders' Deficit - Years ended December 31, 2005 and December 31, 2006     F - 6
Notes to Financial Statements                                                                 F - 7
</TABLE>

                                       F-1

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Audit Committee of
NuVim, Inc.:

We have audited the accompanying  balance sheets of NuVim,  Inc. (the "Company")
as of December  31, 2005 and 2006,  and the related  statements  of  operations,
stockholders'  deficit, and cash flows for the years then ended. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of the Company as of December 31,
2005 and 2006,  and the  results  of its  operations  and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.

As  discussed in Note 2J to the  accompanying  financial  statements,  effective
January 1, 2006, the Company adopted Statement of Financial Accounting Standards
No. 123(R), "Share-Based Payments".

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 1B to the
financial statements,  the Company has suffered recurring losses from operations
and has a net working capital  deficiency that raise substantial doubt about its
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also  described in Note 1B. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ WithumSmith+Brown, P.C.

Somerville, New Jersey

April 11, 2007

                                       F-2

<PAGE>

                                   NUVIM, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                           DECEMBER, 31
                                                                                  --------------------------------
                                                                                       2005              2006
                                                                                  --------------    --------------
<S>                                                                               <C>               <C>
                                     ASSETS
Current Assets:
   Cash and cash equivalents                                                      $      270,468    $       55,472
   Accounts receivable, net                                                               35,399            55,827
   Inventory                                                                             172,714           166,929
   Prepaid expenses and other current assets                                             328,915           191,053
                                                                                  --------------    --------------
      Total Current Assets                                                               807,496           469,281
                                                                                  --------------    --------------
Equipment and furniture, net                                                               1,502               598
Deferred offering costs                                                                       --            57,025
Deposits and other assets                                                                  8,547             8,147
Distribution rights                                                                           --            90,400
                                                                                  --------------    --------------
      TOTAL ASSETS                                                                $      817,545    $      625,451
                                                                                  ==============    ==============
                     LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
   Current portion of accounts payable                                            $      881,345    $      443,426
   Accounts payable and accrued expenses to related parties                              231,328            57,606
   Accrued expenses                                                                      269,968           119,597
   Accrued compensation                                                                  420,100           336,024
   Rescinded series B offering payable                                                    18,920            18,920
   Secured convertable promissory notes, net of unamortized discount of $14,629
    at December 31, 2005                                                                  52,971                --
                                                                                  --------------    --------------
      TOTAL CURRENT LIABILITIES                                                        1,874,632           975,573
Other Liabilities:
   Accounts payable, net of current portion                                                   --           242,430
   Senior notes payable - related parties, net of unamortized discount of
    $36,667 at December 31, 2006                                                         500,000           463,333
   Accrued interest - senior notes payable - related parties                             119,160           169,160
   Stockholder loans - subordinated covertable promissory notes                          225,000           150,000
   Accrued interest stockholder loans                                                     28,691            21,770
   Other notes payable, net of unamortized discount of $8,500 at
    December 31, 2006                                                                    133,000           111,500
   Accrued Interest - other notes payable                                                 14,467            25,917
                                                                                  --------------    --------------
      TOTAL OTHER LIABILITIES                                                          1,020,318         1,184,110
                                                                                  --------------    --------------
TOTAL LIABILITIES                                                                      2,894,950         2,159,683
Commitments and Contingencies
Stockholders' Deficit:
   Common Stock, 120,000,000 shares authorized, $.00001 par value, 5,034,995
    and 11,622,867 shares issued and outstanding at December 31, 2005 and 2006
    respectively                                                                              51               116
   Additional paid-in capital                                                         18,167,605        20,489,672
   Accumulated deficit                                                               (20,245,061)      (22,024,020)
                                                                                  --------------    --------------
Total Stockholders' Deficit                                                           (2,077,405)       (1,534,232)
                                                                                  --------------    --------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                       $      817,545    $      625,451
                                                                                  ==============    ==============
</TABLE>

        The  notes  to  financial  statements  are an  integral  part  of  these
statements.

                                       F-3
<PAGE>

                                   NUVIM, INC.
                            STATEMENTS OF OPERATIONS
                         FOR THE YEARS ENDED DECEMBER 31

                                                 2005            2006
                                             ------------    ------------
Gross Sales                                  $  1,208,279    $  1,292,155
Less: Discounts, Allowances and
 Promotional Payments                             486,898         348,177
                                             ------------    ------------
Net Sales                                         721,381         943,978
Cost of Sales                                     687,167         702,492
                                             ------------    ------------
Gross Profit                                       34,214         241,486
Selling, General and Administrative
 Expenses                                       2,392,996       2,407,253
                                             ------------    ------------
Loss from Operations                           (2,358,782)     (2,165,767)
Other Income (Expense):
   Interest Expense                              (430,216)       (115,823)
   Interest Income                                  7,000              46
   Gain on Sale of Assets                                          42,000
   Gain on forgiveness of accounts payable        151,995          18,498
                                             ------------    ------------
        Total Other Income (Expense) - Net       (271,221)        (55,279)
                                             ------------    ------------
Net Loss Before Income Tax Benefit             (2,630,003)     (2,221,046)
Income Tax Benefit                                233,101         442,087
                                             ------------    ------------
Net Loss                                     $ (2,396,902)   $ (1,778,959)
                                             ============    ============
Basic and Diluted Loss Per Share             $      (0.82)   $       (.20)
                                             ============    ============
Weighted Average Number of Common Shares
 Outstanding - Basic and Diluted                2,940,987       8,953,184

        The  notes  to  financial  statements  are an  integral  part  of  these
statements.

                                       F-4
<PAGE>

                                NUVIM, INC.
                         STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2006

<TABLE>
<CAPTION>
                                                                             2005            2006
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
Cash Flow From Operating Activities:
  Net Loss                                                               $ (2,396,902)   $ (1,778,959)
  Adjustment to reconcile net loss to net cash used in operating
   activities:
  Depreciation                                                                 19,960             904
  Amortization of debt discount on notes payable                               70,000          14,029
  Accrued incentive stock grant                                               332,600              --
  Gain on forgiveness of accounts payable                                    (151,995)        (18,498)
  Gain on sale of equipment                                                        --         (42,000)
  Stock issued for services                                                    24,500         266,065
  Employee stock based compensation                                                --         546,881
  Stock issued for compensation                                                    --         125,750
  Interest expense accrued in connection with warrants for debt
   discount                                                                        --           7,333
  Provision for sales returns                                                 486,898         348,177
  Bad debt expense                                                              4,109              --
Changes in Operating Assets and Liabilities:
  Accounts receivable                                                        (492,682)       (368,605)
  Inventory                                                                   (88,230)          5,785
  Prepaid expenses and other current assets                                   (10,789)        171,862
  Accounts payable                                                            151,487         (73,407)
  Accounts payable and accrued expenses to related parties                   (427,672)       (173,722)
  Accrued expenses                                                            (15,763)       (150,371)
  Accrued compensation                                                        210,997         315,215
  Accrued interest - senior notes payable - related parties                        --          50,000
  Accrued interest - stockholder loans                                        350,763          14,265
  Accrued interest - other note payable                                            --          11,450
                                                                         ------------    ------------
       Net Cash Used in Operating Activities                               (1,932,719)       (727,846)
                                                                         ------------    ------------
Cash Flow From Investing Activities:
  Purchase of equipment and furniture                                            (442)             --
  Proceeds from sale of equipment and furniture                                    --          42,000
                                                                         ------------    ------------
     Net Cash Provided by (Used in) Investing Activities                         (442)         42,000
                                                                         ------------    ------------
Cash Flow From Financing Activities:
  Net proceeds from issuance of common stock                                1,604,237         533,875
  Reimbursement of, (payments for) deferred offering costs                    346,243         (57,025)
  Proceeds from secured convertable notes                                      63,580              --
  Repayment of stockholder loan                                               (35,000)             --
  Payment of note payable                                                     (17,000)         (6,000)
  Payment of Series B Advances                                                (23,080)             --
  Proceeds of related party advances - net                                    (13,000)             --
  Proceeds from underwriter advance-related party                             200,000              --
  Repayment of underwriter advance-related party                             (200,000)             --
  Proceeds from related party advances                                             --         160,000
  Repayment of related party advances                                              --        (160,000)
                                                                         ------------    ------------
     Net Cash Provided by Financing Activities                              1,925,980         470,850
Decrease in Cash and Cash Equivalents                                          (7,181)       (214,996)
Cash and Cash Equivalents at Beginning of Year                                277,649         270,468
                                                                         ------------    ------------
Cash and Cash Equivalents at End of Year                                 $    270,468    $     55,472
                                                                         ============    ============
</TABLE>

        The  notes  to  financial  statements  are an  integral  part  of  these
statements.

                                       F-5
<PAGE>

                                   NUVIM, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 2005 and 2006

<TABLE>
<CAPTION>
                                                            Preferred Stock                   Preferred Stock
                                                                Series A                          Series C
                                                     ------------------------------    ------------------------------
                                                         Shares          Amount           Shares           Amount
                                                     -------------    -------------    -------------    -------------
<S>                                                     <C>           <C>                 <C>           <C>
Balance at December 31, 2004                             4,875,850    $          49        3,623,000    $          36
Common stock issued in payment of convertible
 promissory notes-related parties
Common stock issued in payment of
 accrued salaries
Common stock issued in payment of senior notes
 payable related parties
Common stock issued in payment of stockholder
 loans, subordinated convertible promissory notes
 payable and accrued interest
Common stock issued in payment of
 advances-realted party
Common stock issued in payment of accounts
 payable
Common stock issued upon conversion of
 convertible promissory notes-related party
Common stock issued, conversion of Series A
 preferred stock                                        (4,875,850)             (49)
Common stock issued, conversion of Series C
 preferred stock                                                                          (3,623,000)             (36)
Commmon stock and Warrants issued in payment
 for media campaign
Warrants issued in connection with secured
 convertible notes
Issuance of common stock, initial public
 offering
Net loss for the year ended December 31, 2005
                                                     -------------    -------------    -------------    -------------
Balance at December 31, 2005                                    --               --               --               --
Stock sold to accredited investors, net
Stock issued for services
Stock cancellation for services not rendered
Stock issued for accounts payable
Stock issued for accrued compensation
Stock issued for accrued compensation
Stock issued for secured convertible
 promissory notes
Stock issued for stockholder loans
 and accrued interest
Stock issued for purchase of Nuvim Powder, LLC
Employee stock based compensation
Stock issued for employee compensation
Warrants issued for note
 extension - senior notes payable
Warrants issued for note
 extension - other notes payable
Warrants issued for services
Net Loss
                                                     -------------    -------------    -------------    -------------
Balance at December 31, 2006                                    --    $          --               --    $          --
                                                     =============    =============    =============    =============

<CAPTION>
                                                               Common Stock           Additional                        Total
                                                     -----------------------------      Paid-In       Accumulated    Shareholders'
                                                        Shares          Amount          Capital         Deficit         Deficit
                                                     -------------   -------------   -------------   -------------   -------------
<S>                                                     <C>          <C>             <C>             <C>             <C>
Balance at December 31, 2004                               414,073   $           4   $   8,377,140   $ (17,848,159)  $  (9,470,930)
Common stock issued in payment of convertible
 promissory notes-related parties                          461,700               5       6,141,522                   $   6,141,527
Common stock issued in payment of
 accrued salaries                                          250,696               3         593,747                         593,750
Common stock issued in payment of senior notes
 payable related parties                                   250,000               2         499,998                         500,000
Common stock issued in payment of stockholder
 loans, subordinated convertible promissory notes
 payable and accrued interest                               88,882               1         118,113                         118,114
Common stock issued in payment of
 advances-realted party                                     23,000                          69,000                         69,000
Common stock issued in payment of accounts
 payable                                                   197,031               2         251,404                         251,406
Common stock issued upon conversion of
 convertible promissory notes-related party                245,000               2         244,998                         245,000
Common stock issued, conversion of Series A
 preferred stock                                            88,732               1              48                              --
Common stock issued, conversion of Series C
 preferred stock                                            65,881               1              35                              --
Commmon stock and Warrants issued in payment
 for media campaign                                        250,000               3         249,997                         250,000
Warrants issued in connection with secured
 convertible notes                                                                          17,366                          17,366
Issuance of common stock, initial public
 offering                                                2,700,000              27       1,604,237                       1,604,264
Net loss for the year ended December 31, 2005                                                           (2,396,902)     (2,396,902)
                                                     -------------   -------------   -------------   -------------   -------------
Balance at December 31, 2005                             5,034,995              51      18,167,605     (20,245,061)     (2,077,405)
Stock sold to accredited investors, net                  2,970,000              30         533,845                         533,875
Stock issued for services                                  762,554               9         272,056                         272,065
Stock cancellation for services not rendered               (17,142)                         (6,000)                         (6,000)
Stock issued for accounts payable                          331,453               3         110,581                         110,584
Stock issued for accrued compensation                      854,455               9         355,532                         355,541
Stock issued for accrued compensation                      392,188               4         125,746                         125,750
Stock issued for secured convertible
 promissory notes                                          335,000               3          66,997                          67,000
Stock issued for settlement of stockholder
 loans and accrued interest                                290,614               3          96,183                          96,186
Stock issued for purchase of Nuvim Powder, LLC             450,000               3          89,997                          90,000
Employee stock based compensation                                                          546,881                         546,881
Stock issued for employee compensation                     218,750               1          43,749                          43,750
Warrants issued for note
 extension - senior notes payable                                                           44,000                          44,000
Warrants issued for note
 extension - other notes payable                                                             8,500                           8,500
Warrants issued for services                                                                34,000                          34,000
Net Loss                                                                                                (1,778,959)     (1,778,959)
                                                     -------------   -------------   -------------   -------------   -------------
Balance at December 31, 2006                            11,622,867   $         116   $  20,489,672   $ (22,024,020)  $  (1,534,232)
                                                     =============   =============   =============   =============   =============
</TABLE>

        The  notes  to  financial  statements  are  an  integral  part  of  this
statement.

                                      F-6
<PAGE>

                                   NUVIM, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - BUSINESS AND BASIS OF PRESENTATION

A. Business

NuVim,  Inc.  (the  "Company")   markets  and  distributes   dietary  supplement
beverages,  which enhance the immune  system,  promote  sturdy joints and muscle
flexibility.  The Company  distributes  its  products  through  supermarkets  in
approximately  13 states,  predominately  on the East Coast, and the District of
Columbia.

B. Going Concern

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  shown  in the  accompanying  financial
statements, the Company incurred net losses of $2,396,902 and $1,778,959 for the
years ended December 31, 2005 and 2006,  respectively.  Management  also expects
operating  losses to continue in 2007.  The  Company's  continued  existence  is
dependent  upon  its  ability  to  secure  adequate  financing  to  fund  future
operations  and  commence  profitable  operations.  To  date,  the  Company  has
supported its activities through equity  investments,  the sale of common stock,
and a line of credit  through a bank of $50,000 of which there is currently none
used.  During 2006, the Company addressed these concerns by selling common stock
to raise approximately  $534,000,  settling  approximately $274,000 of principal
and  interest on note and supplier  debt with common  stock,  and issuing  stock
worth approximately  $266,000 to secure services.  In addition,  during 2006 the
Company  has  negotiated  extended  terms  on  approximately  $987,000  of notes
payable, stockholder loans, and accrued interest until January 2009. To date the
Company has already raised an additional  gross amount of 721,800  through stock
sales.

It is the Company's  intention to raise  additional  capital through  additional
sales of its  common  stock.  No  assurance  can be  given  that  these  funding
strategies will be successful in providing the necessary  funding to finance the
operations  of the Company.  Additionally,  there can be no  assurance,  even if
successful  in  obtaining  financing,  the  Company  will be  able  to  generate
sufficient  cash  flows  to  fund  future  operations.  These  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The accompanying financial statements do not include any adjustments relating to
the  recoverability  and  classification  of  recorded  assets  or  amounts  and
classification   of  liabilities  that  might  be  necessary   related  to  this
uncertainty.

                                       F-7
<PAGE>

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

A. Cash Equivalents

Cash equivalents consist of highly-liquid  investments with an original maturity
of three months or less when purchased.

B. Accounts Receivable

Accounts  receivable are unsecured,  non-interest  bearing  obligations that are
typically  due from  customers  within 30 days of the invoice  date.  Management
applies  collections in accordance  with customer  remittance  advices or to the
oldest outstanding invoice if no remittance advice is presented with payment.

Accounts  receivable  are recorded at their net  realizable  value.  The Company
estimates an allowance for doubtful accounts, sales returns and allowances based
on historical  trends and other criteria.  At December 31, 2005 and 2006,  these
allowances approximated $27,700 and $26,100,  respectively.  No bad debt expense
was incurred in 2006 as all allowances  represented sales returns or promotional
allowances  compared to  approximately  $4,100 for the year ended  December  31,
2005.

C. Inventories

Inventories,  which are predominantly raw materials,  are stated at the lower of
cost (first-in,  first-out method) or market. A provision for excess or obsolete
inventory is recorded at the time the determination is made. For finished goods,
inventory  that is within 30 days of its  expiration  date is charged to cost of
sales.

D. Deferred Offering Costs

During 2006, the Company incurred  $57,025 in deferred  offering costs in regard
to their SB-2 filing  during the year to register  securities as of December 31,
2006. The registration statement is not effective as it is still under review by
the  Securities  and Exchange  Commission,  (SEC).  Upon the SEC  declaring  the
registration  statement  effective,  these  costs  will  be  reclassified  as  a
reduction  to  additional  paid in  capital.  In the  event  it is not  declared
effective, such costs will be charged to operations.

The Company  incurred  deferred  costs  incurred in  connection  with an initial
public  offering of its common stock.  Amounts  deferred were offset against the
gross proceeds (recorded as additional paid in capital) upon consummation of the
offering on June 24, 2005.

                                       F-8
<PAGE>

E. Debt Extinguishments

The Company  accounts for debt  extinguishments  in  accordance  with  Financial
Accounting Standards Board Statement 15 "Accounting by Debtors and Creditors for
Troubled Debt  Restructurings".  Related party debt extinguishments are recorded
as  increases  to  additional  paid in capital  in  accordance  with  Accounting
Principles Board Opinion 26.

F. Revenue Recognition

The Company records revenue at the time the related products are received by the
customer from the public warehouse used by the Company and the risk of ownership
has  passed  to  the  customer.  A  provision  for  estimated  product  returns,
promotional  allowances  and cash  discounts  based on the Company's  historical
experience is recorded during the period of sale.

G. Promotional Allowances

As an inducement to its customers to display the Company's products in preferred
locations  of their  stores,  the Company  provides  placement  and  promotional
allowances  to certain  customers.  The Company also  reimburses  retailers  for
coupon redemptions,  and provides credits for product which has not been sold by
its expiration  date.  These allowances and credits are reflected as a reduction
of gross sales in accordance  with Emerging Issues Task Force ("EITF") No. 01-09
"Accounting for Consideration Given by a Vendor to a Customer".

H. Freight Costs

In accordance  with EITF No. 00-10,  "Accounting  for Shipping and Handling Fees
and Costs,"  reimbursement  of freight charges are recorded in net sales and the
Company is disclosing  that  unreimbursed  freight costs are recorded as selling
general and administrative  expenses.  For the years ended December 31, 2005 and
2006,  freight-out costs approximated $251,000 and $270,000,  respectively,  and
have been recorded in selling, general and administrative expenses.

I. Equipment and Furniture

Equipment   and  furniture  is  stated  at  cost  and   depreciated   using  the
straight-line method over the estimated useful lives of the assets (3-5 years).

J. Stock-Based Compensation

In December  2004, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of  Financial   Accounting   Standards  No.  123R   (revised   2004),
"Share-Based  Payment" which revised  Statement of Financial  Standards No. 123,
"Accounting for

                                       F-9
<PAGE>

Stock-Based  Compensation" This statement supersedes Opinion No. 25, "Accounting
for Stock Issued to  Employees."  The  statement  addresses the  accounting  for
share-based  payment  transactions  with  employees,  eliminates  the ability to
account for  share-based  compensation  transactions  using the intrinsic  value
method pursuant to APB 25 and requires that the  compensation  costs relating to
such  transactions  be recognized at fair value in the statement of  operations.
The revised  statement has been implemented by the Company  effective January 1,
2006. The Company  continued to account for stock awards issued to non-employees
under the fair value method as described  in EITF 96-18  "Accounting  for Equity
Investments  that are  issued  to  Other  than  Employees  for  Acquiring  or in
Conjunction with Selling Goods or Services."

The  initial  adoption  of SFAS  123R  on  January  1st,  2006  did  not  have a
significant effect on the Company's  operations.  The implementation of SFAS No.
123R has the following  effect on the statement of operations for the year ended
December 31, 2006:

                                                                      Per Share
                                                                      ---------
        Increase in selling, general and administrative
         expense                                          $  547,000  $     .19
        Stock based compensation before income taxes         547,000        .19
        Income tax benefit                                        --         --
                                                          ----------  ---------
        Stock based compensation after income taxes       $  547,000  $     .19
                                                          ==========  =========

For the 2005 year, the Company accounted for its employee incentive stock option
plans using the intrinsic  value method in accordance  with the  recognition and
measurement   principles  of  Accounting   Principles   Board  Opinion  No.  25,
"Accounting  for  Stock  Issued  to  Employees."  (See  Note  18E for pro  forma
disclosures for 2005)

Effective  January 1, 2006,  the  Company  adopted FAS No.  123R  utilizing  the
modified  prospective  method.  FAS No. 123R requires the  recognition  of stock
based compensation expense in the financial statements.

Under the modified  prospective  method, the provisions of FAS No. 123R apply to
all awards  granted or modified  after the date of adoption.  In  addition,  the
unrecognized  expense  of  awards  not  yet  vested  at the  date  of  adoption,
determined under the original provisions of FAS 123, "Accounting for Stock Based
Compensation",  shall be  recognized in operations in the periods after the date
of adoption. Stock based compensation consists primarily of stock options. Stock
Options are granted to  employees  at exercise  prices  equal to the fair market
value on the dates of grant.  Stock options  generally vest over three years and
have a term of seven years. Compensation expense for stock options is recognized
over the period for each separate vesting portion of the stock option award.

The fair value for options  issued  prior to January  2006 was  estimated at the
date of grant using a Black-Scholes option-pricing model. The risk free rate was
derived from the U.S.  Treasury  yield curve in effect at the time of the grant.
The  volatility  factor was  determined  based on a comparison to companies with
similar  characteristics.  The Black-Scholes  option-pricing model was developed
for use in  estimating  the fair  value of traded  options  that have no vesting
restrictions  and are fully  transferable.  In addition,

                                      F-10
<PAGE>

option-pricing  models  require  the  input  of  highly  subjective  assumptions
including the expected stock price  volatility.  Because the Company's  employee
stock options have characteristics  significantly different from those of traded
options and because changes in the subjective  input  assumptions can materially
affect the fair value estimate,  in management's  opinion the existing models do
not necessarily  provide a reliable single measure of the fair value of employee
stock options.

K. Advertising and Promotion Costs

Advertising and promotion costs are expensed as incurred.  Advertising expenses,
including media advertising,  in store sampling programs,  and advertisements in
customer printed circulars were included in selling,  general and administrative
expenses,  with the  exception  of coupon  expenses  which  were  included  as a
reduction  of net sales.  During the years  ended  December  31,  2005 and 2006,
advertising  and  promotion  expense was  approximately  $477,000 and  $268,000,
respectively.

L. Income Taxes

Deferred tax assets and liabilities are determined based on differences  between
financial  reporting  and  income tax basis of assets  and  liabilities  and are
measured  using the  enacted  tax rates and laws that will be in effect when the
differences are expected to reverse.  Differences  that give rise to significant
portions  of the  Company's  deferred  tax assets are net  operating  losses and
deferred stock compensation.  A valuation allowance is recorded against deferred
tax assets in instances  where the  realization of the deferred tax asset is not
considered to be "more likely than not."

M. Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying   notes   including  the   disclosure  of  contingent   assets  and
liabilities.  These  estimates  include,  but are not  necessarily  limited  to,
accounts  receivable  allowances,  stock based compensation and depreciation and
coupon liability estimates. Actual results could differ from those estimates.

N. Net Loss Per Share

Basic loss per share has been  calculated  using the weighted  average number of
common shares  outstanding in accordance with FASB 128 "Earnings Per Share." All
potentially   dilutive   securities,   including  options,   convertible  notes,
convertible  preferred  stock and  warrants  have been  excluded as common stock
equivalents and diluted loss per share has not been presented as such securities
are  antidilutive  due to the Company's net loss for all periods  presented.  At
December 31, 2006, the Company had warrants  outstanding  to purchase  7,522,514
shares of common stock (see note 18D) and employee

                                      F-11
<PAGE>

stock options to purchase 2,628,647 shares of common stock outstanding (see note
18E) which are not included in the calculation.

O. Impairment of Long Lived Assets

The Company reviews long-lived assets for impairment whenever  circumstances and
situations change such that there is an indication that the carrying amounts may
not be recovered. At December 31, 2005 and December 31, 2006 the Company has not
recognized any impairment charges for long lived assets.

P. Concentration of Risks

The Company maintains its cash balances in financial institutions located in New
Jersey,  and  periodically  has cash  balances  in  excess  of  Federal  Deposit
Insurance  Corporation  limits. The Company  distributes its products and grants
credit  to its  customers  who  are  food  distributors  and  retailers  located
primarily in the eastern  portion of the United  States.  The Company  generally
does not require  collateral or other  security with regard to balances due from
customers.  The Company  extends credit to its customers in the normal course of
business and performs periodic credit evaluations of its customers,  maintaining
allowances for potential credit losses.

Sales to four  customers  during the year ended  December 31, 2005  approximated
21%,  14%, 11% and 10% of sales.  Sales to two  customers  during the year ended
December  31,  2006  approximated  51% and 12% of sales.  A loss of one of these
customers  could have a significant  adverse effect on the Company's  results of
operations and cash flows.

Accounts  receivable from four customers at December 31, 2005  approximated 35%,
13%,  12%  and  10%,  respectively  and  two  customers  at  December  31,  2006
approximated 53% and 11% of accounts receivable.

One outside vendor  manufactured all of the Company's finished goods. During the
years ended  December 31, 2005 and 2006,  manufacturing  costs of  approximately
$217,500 and $208,000 were  incurred at this vendor.  There was no amount due to
this vendor at December 31, 2005 and 2006.

See note 21a for other purchase concentrations.

Q. Value of Financial Instruments

The Company's financial instruments consist mainly of cash and cash equivalents,
accounts  receivable,  accounts  payable and debt. The carrying amounts of these
financial instruments approximate fair value due to their short-term nature. The
carrying amount due to related party,  notes payable and  stockholder  loans are
estimated  to  approximate  their fair  values as their  stated  interest  rates
approximate current interest rates.

                                      F-12
<PAGE>

R. Recent Accounting Pronouncements

In September  2006, the FASB issued SFAS No. 157, Fair Value  Measurements,  and
("SFAS No.  157"),  which  defines  fair  value,  establishes  a  framework  for
measuring  fair  value  using  a  market  participant   approach,   and  expands
disclosures  about fair value  measurements.  SFAS No. 157 will be effective for
the Company  beginning January 1, 2008.  Management is currently  evaluating the
effect SFAS No. 157 will have on the Company's financial condition or results of
operations.

In  September  2006,  the FASB issued SFAS No. 158,  Employers'  Accounting  for
Defined  Benefit Pension and Other  Postretirement  Plans-- an amendment of FASB
Statements  No. 87, 88, 106, and 132(R) ("SFAS No. 158").  SFAS No. 158 requires
companies to recognize the over-funded or  under-funded  status of their defined
benefit  postretirement  plans as an asset or liability and to recognize changes
in  that  funded  status  in  the  year  in  which  the  changes  occur  through
comprehensive income. The Company adopted SFAS No. 158 on December 31, 2006. The
adoption  of SFAS No.  158 did not have any  effect on the  Company's  financial
condition or results of operations.

In July 2006, the Financial  Accounting  Standards  Board ("FASB") has published
FASB Interpretation No. 48 ("FIN No. 48"),  Accounting for Uncertainty in Income
Taxes, to address the  noncomparability  in reporting tax assets and liabilities
resulting  from a lack of  specific  guidance  in FASB  Statement  of  Financial
Accounting  Standards  ("SFAS") No. 109,  Accounting  for Income  Taxes,  on the
uncertainty in income taxes recognized in an enterprise's  financial statements.
FIN No. 48 will apply to fiscal years  beginning  after December 15, 2006,  with
earlier  adoption  permitted.  The  adoption of FIN 48 is not expected to have a
material effect on the Company's financial condition or results of operations or
cash flows.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Correction ("SFAS 154"), which replaces Accounting Principles Board Opinions No.
20 "Accounting Changes" and SFAS No 3, "Reporting  Accounting Changes in Interim
Financial  Statements  - An  Amendment of APB Opinion No. 28." SFAS 154 provides
guidance  on  accounting  for and  reporting  of  accounting  changes  and error
corrections. It establishes retrospective application, or the latest practicable
date, as the required method for reporting a change in accounting  principle and
the reporting of a correction of an error.  SFAS 154 is effective for accounting
changes and  corrections of errors made in fiscal years beginning after December
15, 2005 and was adopted by the Company in the first quarter of fiscal 2006. The
adoption  of  SFAS  154  did  not  have an  impact  on the  Company's  financial
statements.

The  FASB  issued  FASB  Interpretation  No.  47  ("FIN  47"),  "Accounting  for
Conditional  Asset Retirement  Obligations" in March 2005. FIN 47 clarifies that
an entity must record a liability for a conditional asset retirement  obligation
if the fair value of the obligation

                                      F-13
<PAGE>

can  be  reasonably   estimated.   This   Interpretation   also   clarifies  the
circumstances  under  which an  entity  would  have  sufficient  information  to
reasonably  estimate  the fair  value of an asset  retirement  obligation.  This
Interpretation  is  effective no later than the end of fiscal years ending after
December 15, 2005. This guidance did not have a material affect on the Company's
financial statements.

S. Distribution Rights

Intangible  assets consist of  distributions  rights acquired in connection with
the acquisition of remaining shares of NuVim Powder,  LLC. This intangible asset
does not have a finite useful life and in accordance with Statement of Financial
Accounting  Standards  ("SFAS") No. 142,  "Goodwill and Other Intangible Assets"
("SFAS No. 142"), such assets with are not amortized,  but are subject to annual
impairment  testing by applying a fair value based test.  Management  intends to
complete its first annual impairment  testing of the distribution  rights by the
anniversary date of the closing of this transaction.  It has not been determined
whether an impairment adjustment will be required related to this test.

T. Accounts Payable

Accounts  payable   represent  amounts  due  for  obligations  to  creditors  in
connection  with  the  Company's  operations  and  are  recorded  at the  amount
transacted,  which are generally  not  significantly  different  from their fair
value.  In  connection  with an  outstanding  obligation to one of the Company's
advertising  vendors,  the Company  negotiated  an extension of this  obligation
until the year 2013 and has  reflected  amounts due beyond one year as long-term
accounts  payable.  The Company has  followed  the  principles  of  Statement of
Financial  Accounting  Standards No. 15, Accounting by Debtors and Creditors for
Troubled Debt Restructurings in recording the extension of this obligation.

U. Reclassifications

Certain  reclassifications  were made to the  presentation of the 2005 financial
statements  in  order  to  conform  to  the  2006  financial  statements.   Such
reclassifications had no effect on the prior year's results of operations.

NOTE 3 - INITIAL PUBLIC OFFERING

In June 2005, the Company  completed an initial public offering  ("IPO") selling
2,700,000 units at a price of $1.00 per unit to the public.  Each unit consisted
of one share of common stock, one Class A redeemable  public warrant to purchase
one share of common  stock,  and one Class B  non-redeemable  public  warrant to
purchase  one  share of  common  stock.  The net  proceeds  from the sale of the
2,700,000 units were  approximately  $1,604,000 after deducting the underwriting
discount and offering expenses.

The common stock and Class A and Class B public  warrants  traded only as a unit
until July 21, 2005 when the unit separated,  after which the common stock,  the
Class  A  public  warrants  and  the  Class  B  public  warrants  began  trading
separately.

Class A public  warrants  . The Class A public  warrants  included  in the units
became  exercisable  on July 21, 2005.  The  exercise  price of a Class A public
warrant is $1.50. The Class A public warrants expire on June 20, 2010, the fifth
anniversary of the effective date of the IPO.

The Company has the right to redeem the Class A public  warrants at a redemption
price of $0.25 per warrant,  subject to adjustment in the event of stock splits,
reverse  stock  splits  and  other  similar  events  of  recapitalization.   The
redemption  right arises if the last reported sale price of the Company's common
stock equals or exceeds $2.00 for five consecutive  trading days ending prior to
the date of the notice of redemption. The Company is required to provide 30 days
prior  written  notice to the Class A public  warrant  holders of the  Company's
intention to redeem the warrants.

Class B public  warrants  . The Class B public  warrants  included  in the units
became  exercisable  on July 21, 2005.  The  exercise  price of a Class B public
warrant is $2.00. The Class B public warrants expire on June 20, 2010, the fifth
anniversary  of the closing of the IPO.  The Company  does not have the right to
redeem the Class B public warrants.

                                      F-14
<PAGE>

Underwriters  warrants . The Company issued a warrant to purchase 270,000 shares
of common stock in  connection  with the  offering.  The  exercise  price of the
underwriter's warrants is $1.20. The warrant expires on June 20, 2010, the fifth
anniversary of the closing of the IPO.

NOTE 4 - DEBT EXTINGUISHMENTS CONCURRENT WITH INITIAL PUBLIC OFFERING

On June 24, 2005, the Company issued 1,116,611 shares of common stock in payment
of notes payable,  accrued interest,  accounts payable, and accrued salaries due
to executive  officers at a debt conversion  value per share of $1.00 to $13.00.
The debt conversion  transactions  were  contingent on the Company  completing a
public  offering of its common stock.  The shares issued were subject to lock-up
agreements  with the Company's  underwriter  of six months to one year. The fair
market value of the shares  issued is assumed to be equal to the initial  public
offering  price of one "Unit" in the initial public  offering  completed on June
24, 2005. The amount of indebtedness extinguished in excess of the fair value of
shares issued was recorded as gain on  extinguishment of debt in accordance with
the provisions of SFAS No. 15,  Accounting by Debtors and creditors for Troubled
Debt  Restructurings.  The amount of related party indebtedness  extinguished in
excess of the fair value of shares  issued was  recorded as  additional  paid in
capital in accordance with APB 26, paragraph 20. The table below summarizes debt
extinguishments consummated concurrently with the initial public offering of the
Company's common stock.

<TABLE>
<CAPTION>
                                                                                              Excess of
                                                                                          Extinguished Debt
                                                                                          Over Fair Value
                                                                                    ---------------------------
                                                                        Debt         Additional
                                          Shares          Fair          Extin-        Paid  In
                                          Issued         Value        guishment       Capital          Gain
                                       ------------   ------------   ------------   ------------   ------------
<S>                                       <C>         <C>            <C>            <C>            <C>
Senior secured notes-related parties        461,700   $    461,700   $  6,141,527   $  5,679,827   $         --
Accrued salaries                            250,696        250,696        593,750        343,054             --
Senior secured notes payable-related
 parties                                    250,000        250,000        500,000        250,000             --
Subordinated notes payable
 and accrued interest                        88,882         88,882        266,639         95,899         81,858
Related party advances                       23,000         23,000         69,000         46,000
Accounts payable                             42,333         42,333        109,000             --         66,667
                                       ------------   ------------   ------------   ------------   ------------
Total                                     1,116,611   $  1,116,611   $  7,679,916   $  6,414,780   $    148,525
                                       ============   ============   ============   ============   ============
</TABLE>

                                      F-15
<PAGE>

NOTE 5 - INVENTORY

Inventory consists of the following:

                            December 31,
                       -----------------------
                          2005         2006
                       ----------   ----------
Raw materials          $   93,665   $   60,911
Work In Progress           22,087           --
Finished goods             56,962      106,018
                       ----------   ----------
Total                  $  172,714   $  166,929
                       ==========   ==========

NOTE 6 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid Expenses and Other Current Assets consists of the following:

                            December 31,
                       -----------------------
                          2005         2006
                       ----------   ----------
Prepaid Advertising    $  250,000   $  141,250
Prepaid Insurance          51,730       41,303
Debt Financing Costs       13,259           --
Other Prepaids and
    Advance Payments       13,926        8,500
                       ----------   ----------
Total                  $  328,915   $  191,053
                       ==========   ==========

The  Advertising  program  began in  January  2006,  the amount is being
expensed as the advertising occurs or is broadcast thoughout 2007.

                                      F-16
<PAGE>

NOTE 7 - EQUIPMENT AND FURNITURE

Equipment and furniture consists of the following:

                                       December 31,
                                 ------------------------
                                    2005          2006
                                 ----------    ----------
Equipment                        $  155,431    $       --
Furniture and fixtures               54,964        54,964
                                 ----------    ----------
                                    210,395        54,964
Less: accumulated depreciation     (208,893)      (54,366)
                                 ----------    ----------
Equipment and furniture, net     $    1,502    $      598
                                 ==========    ==========

Depreciation  expense for years ended December 31, 2005 and 2006 was $19,960 and
$904, respectively.

During 2006 the Company sold its equipment that was fully  depreciated  that led
to a gain of $42,000.

NOTE 8 - SENIOR NOTES PAYABLE - RELATED PARTIES

On July 26, 2004,  the Company  entered into a loan agreement with a stockholder
of the  Company  who is also a Company  spokesperson,  and one of the  Company's
directors.  The loan  agreement  provided for borrowings up to $1,000,000 in the
form of  Senior  Notes  Payable  issued  in four  tranches,  each of  which  was
conditioned upon completion of specified  actions or events.  As of December 31,
2004,  the  Company  had  received  the full  amount  of  $1,000,000  under  the
agreement.  The loan accrues interest at 12% per annum, unless it is in default,
in which case the  interest  increases to 18%. The loan is secured by all of the
assets of the Company,  and certain  Company  creditors were required to execute
subordination  agreements  in favor of the lenders.  The  principal  and accrued
interest were  originally due and payable on the earlier of the  consummation of
an initial  public  offering  or January 1, 2005.  The notes were not paid as of
January 1, 2005 which constituted an event of default under the agreement. Under
an event of default,  the  lenders had the right to, but did not make,  a demand
for  payment  of the  notes.  In May 2005,  the note  holders  agreed to convert
outstanding  principal of $500,000,  into 250,000  shares of common stock,  upon
completion of the initial public offering of the Company's  common stock on June
24, 2005.  The holders of the notes agreed not to sell shares of stock  received
in the transaction for a period of six months after the initial public offering.
The note  holders  also  agreed to extend the  maturity of the  remaining  notes
aggregating  $500,000 and all accrued interest thereon to November 2006, bearing
interest at 12%.

Also in 2006,  both holders  agreed to extend the maturity of the $500,000  Note
and all the unpaid interest  thereon until January 15, 2009 in  consideration of
each receiving

                                      F-17
<PAGE>

warrants to purchase  100,000  shares of common  stock for $0.35 per share until
2015. These warrants were valued under the black sholes method and were recorded
as debt discount in the amount of $44,000 and are being  amortized over the note
extension period of 26 months.

The Company has recorded $97,514 and $50,000 as interest expense on the notes in
2005 and 2006, respectively.  Accrued interest was $119,160 at December 31, 2005
and $169,160 at December 31, 2006.

As an additional  condition of the loan  agreement,  the Company  entered into a
second amended services agreement with the spokesperson.  In connection with the
second amended  services  agreement,  the Company issued 30,000 shares of common
stock, a warrant to purchase  $650,000 of common stock, and a warrant to acquire
up to 9.9% of the Company's  common stock under certain  conditions.  The common
stock  issued,  and stock  underlying  the warrants  were to be forfeited by the
spokesperson if obligations under the service agreement were not met. Therefore,
no performance commitment had been met, as of December 31, 2005 and 2006, and no
value had been recorded for the shares and warrants in accordance  with EITF No.
96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees
for Acquiring, or In Conjunction with Selling Goods or Services.

The  warrant  issued  to the  spokesperson  to  acquire  up to 9.9% of the total
fully-diluted  issued and outstanding  common stock of the Company under certain
circumstances  see note 18 E.) was deemed to have no value.  The warrant allowed
the holder,  to acquire an additional number of shares of Common Stock, to bring
his total holdings to 9.9%, after the consummation of an initial public offering
of its common stock, at the initial public  offering price,  after deducting any
existing  equity  holdings at that date.  After the  completion of the Company's
initial public  offering of its common stock on June 24, 2005, it was determined
that no shares  were  issueable  under the  warrant  as the  spokesperson  owned
greater than 9.9%.

As  an  additional  condition  to  the  loan  agreement  the  Company  issued  a
convertible  note in lieu of  payment  of past due fees (see note 12).  The loan
agreement  also required the formation of NuVim Powder LLC, of which the Company
spokesperson was given a 12.5% ownership interest.  During 2005 NuVim Powder LLC
was an inactive  company.  In 2006,  the  Company  acquired  the  spokesperson's
interest in NuVim Powder LLC for 225,000 shares of common stock. (See Note 18L)

The  spokesperson and one of the Company's  directors  participated in the loans
under the agreement  equally.  In 2004, the  spokesperson  and Company  Director
entered  into an  agreement  providing  for an equal share in the  warrants  and
ancillary  agreements  issued in connection with the loan agreement.  Therefore,
the Company  Director was given a 12.5% interest in the NuVim Powder Company and
a 50%  interest  in both of the  warrants  issued  in  connection  with the loan
agreement and second amended services

                                      F-18
<PAGE>

agreement.  In 2006, the Company  acquired this interest in NuVim Powder LLC for
225,000 shares of common stock as well. (see note 18L)

NOTE 9 - DEMAND NOTE PAYABLE - BANK

In 2001 the Company issued a note payable to a bank which was due on demand with
interest due monthly at the LIBOR Index plus 1.25% (3.53% at December 31, 2004).
The note was  secured by all of the assets of the Company  and  guaranteed  by a
stockholder.  The Company had not paid  monthly  interest  due on the note since
March 31, 2003 and was in default of the loan terms as of December 31, 2004.  In
May of 2005,  the loan and all  unpaid  interest  thereon  was  assigned  to the
guarantor  by the  lender.  The  guarantors  agreed to exchange  the  $2,500,000
principal  balance,   accrued  interest  thereon,   aggregating  $179,498,   and
$3,462,029  of  outstanding   principal  and  interest  on  Senior   Convertible
Promissory Notes due to them in exchange for 461,700 shares of common stock, see
notes  4  and  11.  The  $5,679,827  excess  of  the  amount  of  related  party
indebtedness  extinguished  in excess of the fair  value of  shares  issued  was
recorded as additional paid in capital in accordance with APB 26.

Interest  expense on the demand note was $49,558 for the year ended December 31,
2005.

NOTE 10 - SECURED CONVERTIBLE PROMISSORY NOTES PAYABLE

On December 23, 2005 the Company issued Secured  Convertible  Promissory  Notes,
due June 24, 2006. The notes have a face amount  aggregating  $67,600,  and were
discounted  for the first six months of  interest,  resulting in net proceeds of
$63,580.  The notes bear  interest at a rate of 12%  annually,  and 18% annually
upon an event of  default.  Upon an event of  default  each note  holder has the
option to convert the principal  and accrued  interest due, in whole or in part,
into a number of shares of common  stock  calculated  by dividing  the amount of
debt and accrued  interest by $.40 per share.  The notes are redeemable prior to
maturity at 110% of their face value and are collateralized by all the assets of
the Company.  The Company calculated the value of the beneficial  conversion and
determined it was insignificant to these financial statements.

The Company also issued  warrants to purchase  67,600  shares of common stock to
the note holders and 24,950 shares of common stock to the placement  agent.  The
warrants have a three and five year term,  respectively  and are  exercisable at
$.40.  Upon an event  of  default,  the  Company  has  agreed  to  issue  33,800
additional  warrants to the  investors at an exercise  price of $.375 and adjust
the exercise price on the existing 67,600  warrants to $.375.  The $11,200 value
of the  warrants  for  67,600  shares  was  recorded  as debt  discount  and was
amortized  over the six  month  term of the  notes.  Additionally,  the  Company
recorded the $6,165 fair value of the warrant issued to the placement  agent and
$7,630 in fees paid to the  placement  agent as debt  issuance  costs which were
amortized over the life of the note. The Company recognized $15,221

                                      F-19
<PAGE>

and $1,128 in interest  expense,  including  amortization  of discounts and fees
related to the notes, in 2005 and 2006, respectively.

In the second  quarter of 2006,  all of the notes were converted into a total of
335,000 shares of common stock and the warrants,  other than the placement agent
warrants, were cancelled.

NOTE 11 - SENIOR CONVERTIBLE PROMISSORY NOTES PAYABLE - RELATED PARTY

Senior notes payable  related party  consisted of a series of notes  aggregating
$2,480,000  issued to a group of related  investors in the Company's  common and
preferred stock, and guarantor of the Demand Note Payable - Bank. The notes bore
interest at a rate of 8% annually,  and 14%  annually  upon an event of default.
Each note holder had the option to convert the  principal  and accrued  interest
due, in whole or in part,  into a number of shares of Series C  preferred  stock
calculated  by  dividing  the amount of debt and  accrued  interest  by $.20 per
share. The notes were collateralized by all the assets of the Company. The notes
had maturity  dates from  December  31, 2004 to  September 3, 2005,  and were in
default at December 31, 2004. In May of 2005, the  noteholders  agreed to accept
461,700 shares of common stock in full settlement of $2,480,000 in principal and
$982,029 in accrued interest due on the Senior Convertible Promissory Notes, and
$2,679,498 of Unpaid principal and accrued interest on the Demand Note Payable -
Bank (see note  4&9).  The  $5,679,827  excess of the  amount of  related  party
indebtedness  extinguished  in excess of the fair  value of  shares  issued  was
recorded as additional paid in capital in accordance with APB 26.

Interest  expense  related to the notes was $168,778 for the year ended December
31, 2005. No expense was incurred in 2006.

NOTE 12 - CONVERTIBLE PROMISSORY NOTE - RELATED PARTY

On July 26, 2004, The Company issued a convertible promissory note in the amount
of $175,000 in payment of accounts payable owed to the Company  spokesperson and
in consideration  for his forbearance until a "maturity date," as defined in the
note. The note accrued  interest at the rate of 10% per annum until its original
maturity date of January 1, 2005, and 15% thereafter. The note was automatically
convertible into $245,000 of common stock or unregistered units identical to the
units sold at the initial  public  offering  price,  provided  the  offering was
consummated  on or before June 30, 2005  (original date of December 31, 2004 was
previously extended by agreement to March 31, 2005 and subsequently to April 30,
2005 and June 30,  2005).  If the offering  did not occur by June 30, 2005,  the
convertible note became convertible into $245,000 of common stock, at the option
of the holder,  at the conversion  price of $1.00 per share,  subject to certain
contingencies  defined in the Services Agreement.  In accordance with EITF 98-5,
"Accounting for Convertible  Securities with Beneficial  Conversion  Features on
Contingently  Adjustable  Conversion  Ratios,"  the Company had not recorded the

                                      F-20
<PAGE>

beneficial  conversion  feature of the note as of December 31, 2004, because its
terms change based on the occurrence of future events outside the control of the
holder of the convertible  note. The note  automatically  converted into 245,000
shares of common stock upon the closing of the Company's initial public offering
of common stock on June 24, 2005. Accordingly, $49,753 related to the beneficial
conversion was recorded as interest expense at that date.

NOTE 13 - STOCKHOLDER LOANS - SUBORDINATED CONVERTIBLE PROMISSORY NOTES

Stockholder  Loans -  Subordinated  Convertible  Promissory  Notes consists of a
series of  identical  notes  issued on  September  13,  2002 in  replacement  of
outstanding demand notes, issued in June 2001, of the same principal amount. The
notes had a maturity  date of December  31, 2002,  based on certain  factors and
bear  interest  at a rate of 8% and  default  interest  at 14%.  The  notes  are
subordinated  in right of payment to the senior notes  payable-related  parties.
The holder of these notes may convert  the notes (or a portion  thereof)  into a
number of shares of Company's Series C preferred  stock,  calculated by dividing
the amount of the debt being  converted by $.20 per share rounded to the nearest
whole share.

At the holder's  election,  unless converted,  the accrued interest on the notes
shall be paid to the holder in cash on the  conversion  date.  The notes were in
default as of December 31, 2002.  However,  in May of 2005, the holders of notes
aggregating  $225,000 that remain outstanding as of December 31, 2005, agreed to
not demand  payment  until a public  offering  of the  Company's  common  stock,
subsequent to the initial public offering,  or the Company achieving  $1,000,000
in profits.

In April 2005, two holders of the Company's subordinated  convertible promissory
notes agreed to convert outstanding  principal and accrued interest at April 30,
2005,  aggregating $179,813,  into 59,939 shares of common stock, if the Company
completed an initial  public  offering of its common  stock.  The holders of the
notes  agreed not to sell  shares of stock  received  in the  transaction  for a
period of six months after the initial public offering.

In May 2005, three holders of the Company's subordinated  convertible promissory
notes  agreed  to  convert  outstanding  accrued  interest  at April  30,  2005,
aggregating  $86,826,  into  28,943  shares of common  stock,  and to extend the
maturity  date of notes with an aggregate  principal  balance of $200,000 to the
earlier of a public  offering of the  Company's  common stock  subsequent to the
initial  public  offering  or  the  Company   generating  an  annual  profit  of
$1,000,000.  The  holders  of the notes  agreed  not to sell the shares of stock
received in the  transaction for a period of six months after the initial public
offering.

In April 2005, one holder of the Company's  subordinated  convertible promissory
notes agreed to forgive $10,671 of interest  accrued on his note, if the Company
pays the

                                      F-21
<PAGE>

$25,000  outstanding  principal  balance  of the note out of the  proceeds  of a
public offering of its common stock  subsequent to this initial public offering.
The holder has agreed not to sell the shares  received in the  transaction for a
period of six months after the initial public offering.

In July 2005,  the  Company  paid  $35,000 in  principal  and $11,340 in accrued
interest due on one of the notes.

In June 2006,  one holder  agreed to convert his $25,000 note and  approximately
$12,600 of unpaid interest into approximately 108,000 shares of common stock.

In  December   2006,   one  holder  agreed  to  convert  his  $50,000  note  and
approximately  $8,500 of unpaid  interest into  approximately  183,000 shares of
common stock.

Interest  expense on  stockholder  loans was  $33,877  and $17,000 for the years
ended December 31, 2005 and 2006,  respectively.  Accrued  interest  payable was
$28,691 and $21,770 as of December 31, 2005 and 2006, respectively.

NOTE 14 - ACCRUED COMPENSATION

Accrued compensation  consists of unpaid salary and incentive stock grants to be
issued to certain  officers  of the  Company.  Compensation  expense  related to
accrued and unpaid salary and bonus  approximated  $420,100 and $336,024 for the
years ended December 31, 2005 and 2006,  respectively.  In 2005, three executive
officers  converted  accrued  salaries  owed  to  them  through  May  31,  2005,
aggregating $593,750, into 250,696 shares of common stock, concurrently with the
public offering the Company's common stock. The executive officers agreed not to
sell the shares of stock received in the  transaction for a period of six months
after the initial public offering.

The Company has  recorded the $343,054  excess of the accrued  salaries  settled
over the fair  value of the  stock  issued  as  additional  paid in  capital  in
accordance with APB 26, paragraph 20.

During 2005, three executives  agreed to allow the Company to defer payment of a
portion of their  salaries,  aggregating  $87,500  until  December 31, 2005.  At
December 31, 2005 the executives  agreed to extend payment of the salaries until
January,  2007,  and the  Board  agreed  that if the  executives  and the  board
mutually  agree to convert  their  salary into  restricted  common  stock in the
future,  it will not be at a value higher than the fair value of similar  equity
instruments  at December 31, 2005,  which is estimated to be $0.20.  In December
2006, one of the  executives  agreed to accept  approximately  218,750 shares of
stock in lieu of a total of about $43,750 of unpaid  compensation and agreed not
to sell the shares before January 2008.

The Company did not adopt a cash bonus plan in 2005. In March of 2006, the Board
of  Directors  authorized  the  compensation  committee to grant an aggregate of
746,500

                                      F-22
<PAGE>

shares of unregistered stock to four executives as an incentive and in lieu of a
2005  bonus  plan.   The  Company  has  recorded  the  stock  grant  as  accrued
compensation  in 2005 at a value of $332,600 based on the quoted market price of
a share of common stock at December 31, 2005 in accordance  with APB Opinion 25.
When these shares are issued,  the  liability and  stockholders  deficit will be
reduced. These shares were issued and recorded during 2006.

The Company did adopt a bonus plan for 2006.  Under the plan,  one executive was
awarded a bonus of  $157,750.  In  December  2006,  he agreed to accept  492,188
shares of common stock in lieu of cash  payment of his bonus.  He also agreed to
not sell the shares before January 2008.  During  December 2006,  392,188 shares
were issued to him as partial payment of his 2006 bonus.  The remaining  accrued
bonus at December  31, 2006 is $32,000.  The  remaining  accrued  bonus was also
settled for stock in 2007.

NOTE 15 - RESCINDED SERIES B OFFERING PAYABLE

Pursuant to a private placement  memorandum,  dated October 5, 2001, the Company
offered to sell shares of Series B  convertible  preferred  stock.  The Company,
however, did not have a sufficient amount of preferred stock authorized to issue
and sell the  Series B  convertible  preferred  stock and had not taken  certain
legal steps to designate the terms of the Series B convertible  preferred stock.
Accordingly,  the Series B convertible  preferred stock was invalidly issued and
holders  thereof  did not own an equity  interest  in the Company as a result of
their  purported  investment  therein.  As a result,  the  Company  was  legally
obligated to offer to rescind,  or return,  the payment made by such holders for
such shares,  plus any interest  required by applicable  state law.  Proceeds of
$647,100  were  collected in the Series B offering and accounted for as offering
payable from the Company.

In  November  2002,  the Company  consummated  its offer to rescind the Series B
offering and refund the original purchase price, or issue replacement  shares of
the Company's  Series C  convertible  preferred  stock at the proposed  offering
price  of $.20 per  share,  at the  investors'  option.  Investors  representing
$568,600 elected to receive,  and were issued,  2,843,000  replacement shares of
the Series C convertible  preferred  stock, and investors  representing  $78,500
elected a cash refund.  The Company paid an  additional  $23,080 of the refunded
proceeds due during 2005 and $0 during 2006, The liability remaining at December
31, 2006 and 2005 is $18,920.

NOTE 16 - RELATED PARTY ADVANCES

Related party advances consist of short term advances that are due to the lender
on demand.  At December  31, 2004,  the balance  consisted of $20,000 due to the
Company's  underwriter  and $62,000 due to an executive  officer of the Company.
The amount due to the underwriter  accrued interest at 10% per annum. The amount
due to the executive officer did not accrue interest. During 2005, an additional
$31,000 was advanced to the Company by the officers of the Company. Also in 2005
one officer

                                      F-23
<PAGE>

agreed to accept  23,000  shares of common  stock in  settlement  of  $69,000 of
advances,  and remaining  advances of $24,000 were repaid. The $46,000 excess of
the debt  retired  over the fair  market  value of the common  stock  issued was
recorded as additional paid in capital in accordance  with APB 26,  paragraph 20
(see note 4).

Additionally,  In May 2005,  the Company  borrowed  $200,000 from the investment
bank that managed the initial public offering of its common stock.  The note was
payable upon the closing of the stock  offering if closed by May 31, 2005, or on
demand  thereafter.  The  note did not bear any  interest  and was  repaid  upon
closing of the initial public offering on June 24, 2005.

During  2006,  an  officer   advanced  the  Company  working  capital  funds  in
anticipation  of the  receipt  of funds from the sale of the State of New Jersey
Tax losses.  A total of $160,000 was advanced in increments  beginning in August
and ending in December when the advances were fully repaid. The officer was also
paid approximately $1,600 in interest that was accrued at 8%.

NOTE 17 - OTHER NOTES PAYABLE

Other notes payable consists of notes payable issued to a law firm in payment of
past due legal  fees and  accrued  interest  thereon.  On August 20,  2004,  the
Company  agreed to pay $30,000 and issue two  promissory  notes for $120,000 and
$30,000,  respectively,  payable the earlier of the consummation of the proposed
public offering or February 5, 2005, in payment of past due accounts  payable of
$240,000.  The notes bore interest at 5% and default interest at 7%. The Company
recognized  a gain  on  the  extinguishment  of  this  debt  in  the  amount  of
approximately $60,000 during the year ended December 31, 2004. The notes had not
been paid as of their respective maturity dates.  Therefore, on February 3, 2005
the Company agreed to issue a replacement $150,000 demand note, payable upon the
earlier of a demand by the lender or an initial public offering of the Company's
common  stock.  In June 2005,  the holder of the note agreed to defer payment to
the next financing  completed by the Company after the initial public  offering,
provided the Company make a $5,000  payment upon an initial  public  offering of
common stock and pays $2,000 each month thereafter. The Company paid $17,000 and
$6,000 under the agreed  payment  schedule  during 2005 and 2006,  respectively.
During  2006,  this note and  accrued  interest  was again  refinanced  with the
Company  recognizing a gain on debt extinguishment of $7,000. The new note has a
principal  balance of $120,000 as of December 31, 2006 with an interest  rate of
8% per annum.  Interest  expense related to the note was $11,925 and $11,450 for
2005 and 2006,  respectively.  Accrued  interest  was  $14,467  and  $25,917  at
December 31, 2005 and 2006.

The holder agreed to extend payment of the remaining balance of $120,000 and all
interest  due  there on until  January  2009.  In  consideration  for this  note
extension, the Company issued warrants to purchase 50,000 shares of common stock
for $.35 per share and was valued at $8,500 and recorded as debt discount and is
being  amortized  over the note  extension  period of 30  months.  This  warrant
expires in 2015.

                                      F-24
<PAGE>

NOTE 18 - STOCKHOLDERS' DEFICIT

A. Capital Stock

The Company is authorized to issue 185,000,000  shares of all classes of capital
stock,  including  120,000,000 as common. The Company has authorized  65,000,000
shares  of all  classes  of  preferred  stock,  of which  4,875,850  shares  are
designated as Series A and 50,000,000 as Series C.

B. Preferred Stock Series A

In November  2000,  the Company  completed  a private  offering  for the sale of
4,875,850  shares of Series A convertible  preferred stock for  $4,875,850.  The
gross  proceeds of this  offering  were reduced by $527,975 of  placement  agent
fees, legal fees and expenses  incurred in connection with the private offering,
paid to a preferred  stockholder.  In  connection  with the private  offering of
Series A convertible preferred stock, the Company issued to the placement agent,
who is a preferred  stockholder  and its  representatives,  warrants to purchase
17,730 shares of common stock.

Each 55 shares of Series A convertible  preferred stock is convertible  into one
share of common stock, at any time by the holder or  automatically  in the event
of a merger or  firmly  underwritten  public  offering  of  common  stock and is
subject to  anti-dilution  provisions  as defined  in the  instrument.  Series A
convertible  preferred  stock votes on an as converted  basis with common stock,
except as required by law.  Holders of the Series A convertible  preferred stock
are entitled to preferential  non-cumulative dividends payable at the discretion
of the Board of Directors and have preference in liquidation of $1.00 per share.
No dividends  were  declared  during any periods  presented  in these  Financial
Statements.

The Series A preferred  stock  holders  voted to convert  their shares to common
stock upon  effectiveness of the Company's initial public offering of its common
stock on June 21,  2005.  There  are no  shares  of  Series  A  preferred  stock
outstanding as of December 31, 2005 or 2006.

C. Preferred Stock Series C

In November 2002 and January 2003, the Company  completed a private offering for
the sale of 3,523,000 and 100,000 shares, respectively,  of Series C convertible
preferred stock for a total of $724,600, including $568,600 of advances from the
rescinded  offering of Series B convertible  preferred stock. The gross proceeds
of this offering were reduced by approximately $240,000 of placement agent fees,
legal fees and expenses incurred in connection with the private  offering,  paid
to a preferred stockholder.

Each 55 shares of Series C convertible  preferred stock is convertible  into one
share of common stock, at any time by the holder,  or automatically in the event
of a merger or

                                      F-25
<PAGE>

public  offering of common stock and is subject to  anti-dilution  provisions as
defined in the instrument.  Series C convertible  preferred stock votes on an as
converted basis with common stock. Holders of the Series C convertible preferred
stock are  entitled  to  preferential  non-cumulative  dividends  payable at the
discretion of the Board of Directors and have  preference in liquidation of $.20
per share.  No dividends  were  declared  during any periods  presented in these
financial statements.

The Series C  preferred  stock,  with  respect  to  dividend  rights,  rights on
liquidation,  winding up and  dissolution,  ranked pari pasu with the  Company's
Series A preferred  stock to the extent set forth in the  amended  and  restated
Certificate of Incorporation.

The Series C preferred  stock  holders  voted to convert  their shares to common
stock upon  effectiveness of the Company's initial public offering of its common
stock on June 21,  2005.  There  are no  shares  of  Series  C  preferred  stock
outstanding as of December 31, 2005 or 2006.

D. Warrants

The following is a summary of warrants outstanding at December 31, 2006:

<TABLE>
<CAPTION>
                                     Number of Shares
     Issue Date    Expiration Date   of Common Stock      Price           Basis for Warrant Issuance
     -----------   ---------------   ----------------   ---------    -------------------------------------
     <S>              <C>               <C>              <C>         <C>
     11/01/00         11/01/07              8,714        $ 55.00     Placement Agent Class A Prefd (a)
     11/01/02         06/20/08              1,273        $ 11.00     Placement Agent Class C Prefd (a)
     03/01/03         02/28/10              2,577        $ 11.00     Accrued Compensation
     09/15/04         09/14/14            325,000        $  1.00     Second Amend Service Agreement (a)
     06/25/05         06/24/10            245,000        $  1.50     Conversion of Note Payable
     06/25/05         06/24/10            245,000        $  2.00     Conversion of Note Payable
     06/25/05         06/24/10          2,700,000        $  1.50     Class A IPO Warrants (b)
     06/25/05         06/24/10          2,700,000        $  2.00     Class B IPO Warrants
     06/25/04         06/24/10            270,000        $  1.20     Underwriter's warrants
     11/01/05         06/24/10            250,000        $  1.50     Media Campaign
     11/01/05         06/24/10            250,000        $  2.00     Media Campaign
     12/22/05         12/22/10             24,950        $  0.40     Bridge Loan Agent
     02/14/06         02/13/13             50,000        $  1.00     25% of NuVim Powder LLC
     04/06/06         04/06/10            200,000        $  0.60     Investor Relation
     08/23/06         08/15/15            100,000        $  0.35     Secured Note Extension
     08/23/06         08/15/15            100,000        $  0.35     Secured Note Extension
     11/07/06         08/15/15             50,000        $  0.35     Note Extension
                                     ----------------
                                        7,522,514
                                     ================
</TABLE>

                                      F-26
<PAGE>

(a)   Includes anti-dilution agreement and cashless exercise right.
(b)   Callable at $.25 if common stock trades at $2.00 for five days.

E. Stock Options

The Company  adopted six Stock Option Plans (the "Plans") in 2000,  2001,  2002,
two stock option plans in 2005, and one plan in 2006 under which incentive stock
options ("ISOs") and non-qualified  stock options ("NQSOs") to acquire shares of
common  stock  that  may  be  granted  to  employees,  officers,  directors  and
consultants of the Company. When the 2006 plan was adopted, the prior plans were
terminated:  all  previously  issued options will remain in effect in accordance
with their original terms but no new options will be issued under those plans.

Each Plan  expires  ten years  from the date of  adoption.  Under the  currently
operative  plan,  the Company is authorized to grant options for up to 2,000,000
common shares.  Under each Plan, the option price of an ISO may not be less than
the fair market  value of a share of common  stock on the date of grant.  An ISO
may not be granted to a "ten  percent  stockholder"  (as such term is defined in
Section 422A of the Internal Revenue Code) unless the exercise price is at least
110% of the fair market value of the common stock and the term of the option may
not exceed  five years from the date of grant.  The  maximum  term of each stock
option granted to persons other than ten percent  stockholders is ten years from
the date of the grant.

A summary of the activity in the Plans is as follows:

                                                             Weighted-
                                                             Average
                                             Number of       Exercise
                                              Shares          Price
                                           ------------    ------------
        Outstanding December 31, 2004            15,316    $      19.38
        Cancelled                               (17,500)   $      24.25
        Issued                                1,645,500             .92
                                           ------------
        Outstanding December 31, 2005         1,643,316    $       1.01
        Cancelled                              (954,669)
        Issued                                1,940,000             .32
                                           ------------
        Outstanding at December 31, 2006      2,628,647    $        .58
                                           ============
        Exercisable at December 31, 2004         13,116    $      14.04
                                           ============
        Exercisable at December 31, 2005      1,150,816    $       1.01
                                           ============
        Exercisable at December 31, 2006      2,465,318    $        .58
                                           ============

Grant date fair value per option of options issued in:

        2005 -              $    .76
                            ========
        2006 -              $    .26
                            ========

                                      F-27
<PAGE>

The options  generally expire 10 years from the date of grant.  However,  in the
event a  participant's  employment is  terminated  for any reason other than the
result of death,  disability or  retirement,  as defined,  the options expire 90
days after termination.

If a  participant's  employment is  terminated  as a result of death,  permanent
disability  or  retirement,  the  options  expire  one  year  from  the  date of
termination.

The weighted-average remaining contractual life of options outstanding was 8 and
8.9 years as of December  31, 2005 and  December  31,  2006,  respectively.

A summary of the status of the  Company's  nonvested  shares as of December  31.
2006, and changes during the year ended December 31, 2006 is presented below:

<TABLE>
<CAPTION>
                                                                                 Weighted-
                                                                  Weighted-      Average
                                                                   Averag        Remaining
                                                                    Fair        Contractual
                                                 Number of        Value at        Term
                                                   Shares        Grant Date     (in years)
                                                ------------    ------------   ------------
<S>                                               <C>           <C>                     <C>
Non-vested shares at December 31, 2005 ......        492,456    $       1.00            9.5
Options granted .............................      1,940,000             ---            ---
Options vested ..............................     (2,107,506)            ---            ---
Options forfeited or expired ................       (161,621)            ---            ---
                                                ------------    ------------   ------------
Non-vested shares at December 31, 2006 ......        163,329    $       1.00            8.5
                                                ============    ============   ============
</TABLE>

As of December 31, 2006, no  outstanding  options had an exercise price that was
less than the fair value of the Company's common stock.

As of December  31,  2005,  there was  approximately  $438,000  of  unrecognized
compensation  cost related to non-vested stock option awards,  which is expected
to be recognized in future years.

At December 31, 2006, Pro-forma  information regarding net loss required by SFAS
No. 123 and has been  estimated at the date of grant using the fair value method
with the following assumptions:

                                      F-28

<PAGE>

   Assumptions:
   Risk-free rate                              3.5%-4.85%
   Dividend yield                              0
   Volatility factor of the expected market    .10% to 90%
   Price of the Company's common stock         $.20 to 11.00
   Average life                                7 years

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options,  which have no vesting  restrictions and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective assumptions,  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
option, the existing models do not necessarily provide a reliable single measure
of the fair value of its employee stock options.

<TABLE>
<CAPTION>
                                                                        For the Year Ended
                                                                        December 31, 2005
                                                                        ------------------
<S>                                                                     <C>
Net loss - as reported                                                  $       (2,396,902)
Less:  stock compensation reported in the financial
 statements under an intrinsic value method                                             --
Add: total stock based employee compensation expense
 determined under fair value based methods                                        (794,276)
Net loss - pro forma                                                    $       (3,191,178)
Net loss attributable to common stockholders per share:
Basic and diluted net loss per share as reported                        $            (0.82)
Pro forma and diluted basic loss per share                              $            (1.09)
</TABLE>

F.  Sales for Cash

On April 10, 2006, Paulsen Investment  Company,  Inc. the company that served as
underwriter of NuVim's recently completed initial public offering of securities,
and NuVim  entered into a Placement  Agent  Agreement  pursuant to which Paulsen
would attempt to place up to 2,500,000 shares (subject to additional allocations
with the consent of Paulsen and NuVim) of NuVim's  common stock with  accredited
investors.  Under the agreement,  a commission of seven percent would be paid to
the selling broker and Paulsen would receive an unaccountable  expense allowance
of three percent of the total amount placed under the  agreement.  The agreement
also provided that NuVim would use its best efforts to register the shares to be
sold under the  Securities  Act of 1933, as amended  within 120 business days of
the sale of 2,500,000 shares.

On April 18, 2006, Paulson Investment Company,  Inc., the company that served as
underwriter of NuVim's recently completed initial public offering of securities,
purchased

                                      F-29
<PAGE>

500,000 shares of NuVim's common stock for $100,000.

On May 18, 2006, NuVim accepted twenty-two  additional  subscriptions  resulting
from  private  placements  arranged  by Paulson  Investment  Company,  Inc.  The
investors purchased 2,470,000 shares of common stock for a total of $494,000. In
addition,  Paulson  purchased an  additional  37,500  shares in exchange for the
cancellation  of $7,500 of past due fees.  The brokers  placed  each  investment
received  a 7%  commission  and  Paulson  received  a 3%  unaccountable  expense
allowance.  The net cash  proceeds  from the  issuance the  2,970,000  shares of
common stock was $533,875.

All of the cash was used for working capital.

G. Common Stock Issued for Services

On November  3, 2005 the Company  issued  250,000  shares of common  stock and a
warrant to purchase  250,000  shares of common stock at $1.50 and 250,000 shares
of common  stock at $2.00 with terms  substantially  the same as its Class A and
Class B warrants,  in payment for a one year media advertising program. The fair
value  of  the  advertising  program  was  readily   determinable  as  $250,000.
Therefore,  the company  recorded  prepaid  advertising  and additional  paid in
capital of  $250,000  at December  31,  2005 in  accordance  with EITF Issue No.
96-18,  "Accounting  for  Equity  Instruments  That Are  Issued  to  Other  Than
Employees for Acquiring, or in Conjunction with Selling, Goods and Services".

During  2006,  NuVim  issued a total of 175,000  shares of its  Common  Stock to
NuVim's  Secretary as payment for his  services for the year ended  December 31,
2006.  Mark  Siegel's  relationship  to  NuVim  qualifies  him as an  accredited
investor. The services for which the shares were issued are valued,  pursuant to
agreement between NuVim and Mr. Siegel at approximately $66,000.

                                      F-30
<PAGE>

During May and June of 2006, NuVim agreed with several  organizations to provide
various  services for 393,554 shares of common stock.  The services have a value
of approximately $144,000.  During September 2006, 17,142 shares of common stock
were  returned  and   cancelled   due  to  services  not  performed   valued  at
approximately $6,000.

On December 1, 2006,  NuVim agreed with a production  and  operations  expert to
provide  various  services for a total of 100,000  shares of common  stock.  The
services have a value of approximately $32,000.

On  December  1,  2006,  NuVim  agreed to issue a total of 79,000  shares to two
individuals  for  their  services  in  seeking  strategic  partners  and  merger
candidates. The services have a value of approximately $25,280.

On December 29, 2006, NuVim agreed with its new spokesperson to issue a total of
15,000 shares of common stock as additional compensation for their services. The
shares have a value of approximately $4,800.

H. Stock Issued for Trade Debt

On November 3, 2005 the Company  issued 50,000 shares of common stock in payment
of outstanding  legal fees of $105,794 incurred in connection with the Company's
initial public offering of common stock. The fees were originally  recorded as a
reduction of the net proceeds of the Company's initial public offering of common
stock.  Therefore,  the excess of the amount of accounts  payable  over the fair
market  value of common  stock  issued of $83,294 was recorded as an increase in
paid in capital. The Company also issued 20,000 shares as payment for legal fees
for the third and fourth quarter of 2005 at a fair value of $6,000.

On November 3, 2005 the Company  issued  34,697  shares of common  stock at fair
value in payment of outstanding legal fees aggregating $15,614.

On November 3, 2005 the Company  issued  50,000  shares of common  stock at fair
value as compensation  for the Company's  corporate  secretary for the six month
period ended December 31, 2005.

During 2005, the Company issued 42,334 shares of common stock for past due trade
debt valued at $109,000.

In June 2006,  several creditors agreed to accept 331,453 shares of common stock
at a price of $0.35 per share to settle an aggregate of  approximately  $111,000
of current or past due trade  debt.

I. Common Stock issued for Executive Compensation

On April 20,  2006 NuVim and two  current  and one  retired  executives  reached
agreement on the number of shares to be granted in lieu of a cash bonus for 2005
and the  additional  restrictions  to be  imposed  on their  ability to sell the
shares. A total of 661,500 shares were granted, 341,500 to Mr. Kundrat, the CEO,
200,000 to John L. Sullivan,

                                      F-31
<PAGE>

the  Vice-President of Sales, and 120,000 to Paul J. Young,  until April 1, 2006
the Vice President of Operations and now a member of the Advisory Board. All are
accredited  investors  who have agreed in writing  that they are  accepting  the
shares for  investment  purposes and will not sell the shares until after May 1,
2007.

Also, during April 2006 a former officer,  (Young), of the Company also accepted
9,000 shares of common stock for approximately $3,000 of accrued compensation.

On April 21, 2006 Michael Vesey agreed,  in connection with his resignation,  to
accept  98,955  shares of NuVim  common  stock in payment  of accrued  salary of
$19,791.  In addition,  he accepted 85,000 shares of common stock in lieu of his
executive  cash bonus for 2005. Mr. Vesey also agreed that he would not sell his
shares before May 1, 2007.

During December 2006, Mr. Kundrat,  NuVim's CEO, agreed to accept 392,188 shares
of common stock in lieu of cash  payments of $125,500 for part of his  executive
bonus for 2006 and 218,750 shares of common stock in lieu of cash payment of his
$43,750 of unpaid 2005 salary.

J. Common Stock issued on Conversion of Secured Convertible Promissory Notes

In June 2006, the holders of the Secured  Convertible  Promissory  Notes, in the
amount of $67,000,  agreed to the conversion of their Notes into an aggregate of
335,000  shares of common  stock.  In  addition,  the  holders  surrendered  the
warrants  that had been issued in  connection  with the Notes for  cancellation.

In June 2006, a stockholder loan note holder exchanged  $37,631 of principal and
accrued interest for 107,631 shares of common stock.

                                      F-32
<PAGE>

In December 2006, another stockholder loan note holder agreed to convert his
$50,000 note and approximately $8,500 of unpaid interest into 182,983 shares of
common stock.

K. Stock Reserved

At December 31, 2006, the Company had reserved shares of its common stock as
follows:

                                             Common
                                           ----------
Conversion of Accrued Compensation            100,000
Exercise of common stock warrants           7,522,514
Exercise of stock options                   2,628,647
                                           ----------
Total                                      10,251,161
                                           ==========

L. Acquisition of the Remainder of NuVim Powder LLC

On  August  23,  2004  NuVim  Powder  LLC was  formed as a  condition  to a loan
agreement  with a director and  investor,  who was also a  spokesperson  for the
Company.  NuVim  Powder  LLC  was  owned  51%  by  the  Company,  12.5%  by  the
spokesperson,  12.5%  by the  director  and 24% by a  related  vendor  providing
production services to the Company,  and was to be the exclusive  distributor of
food powder  products  developed by the Company.  The LLC was not active in 2004
and 2005.

NuVim originally planned to distribute the powder version of its product through
a subsidiary of which fifty-one percent was to be owned by NuVim and the balance
owned by Santa Fe  Productions  Inc.,  the  venture's  production  company,  the
entertainer Dick Clark, and NuVim director Stanley Moger.

During the first quarter of 2006,  NuVim  acquired all of Santa Fe  Productions'
24%  interest  in the powder  subsidiary  for a seven year  warrant to  purchase
50,000  shares of  common  stock  for a dollar a share.  The fair  value of this
warrant was not significant to these financial statements.

On April 7, 2006 NuVim  agreed  with  Messrs.  Clark and Moger to acquire  their
respective 12.5% interests in the powder  subsidiary for 225,000 shares of NuVim
common stock each.  NuVim  executed the  agreement on April 18. 2006.  The NuVim
shares were  exchanged for the  interests in the powder  subsidiary on April 20,
2006.

                                      F-33
<PAGE>

The value of these shares is approximately  $90,000 and has been allocated to an
intangible  asset,  distribution  rights,  and in accordance  with SFAS 142, the
Company will perform an impairment test within the one year of the closing date.
In the event that the value of this intangible  asset can not be sustained,  the
carrying  value may be written down to its then defined fair value.  Such charge
could be significant in future periods.

NOTE 19 - INCOME TAXES

Based on the Company's  operating losses, no provision for income taxes has been
provided  for the years ended  December  31, 2005 and 2006.  As of December  31,
2006, the Company had net operating  losses of approximately  $21,600,000  which
expire though the year 2021. Due to the Company's  initial public offering there
was a change in ownership in accordance with relevant provisions of the Internal
Revenue  Code,  which are  expected  to limit the  realization  of  certain  net
operating losses.

At  December  31,  2005 and  2006,  the  Company  had  deferred  tax  assets  of
approximately $5,440,000 and $7,000,000, respectively. A valuation allowance for
the full  amount of the  deferred  tax assets was  established  since it is more
likely  than not that  all of the  deferred  tax  assets  will not be  realized.
Deferred  tax assets  principally  consist of net  operating  losses and accrued
compensation expense.

In December 2005 and 2006,  the Company  received  proceeds from the sale of the
rights to approximately $3,075,264 and $6,275,000 of New Jersey state income tax
losses,  respectively.  Based on an agreement with the State of New Jersey,  the
Company was allowed to allocate and sell their net operating  loss  representing
$276,774 and $502,599 in 2005 and 2006, respectively,  in potential tax benefits
under the Technology  Business Tax Certificate  Program  administered by the New
Jersey  Economic  Development  Authority.  The Company  received net proceeds of
$238,026  and $442,287 in 2005 and 2006,  respectively,  related to the sale and
accordingly recorded them as a tax benefit in the year received.

The state of New Jersey  renews the program  annually and  currently  limits the
aggregate  proceeds  to  $60,000,000.  We cannot be cerain if we will be able to
sell any of our remaining or future New Jersey loss carryforwards or tax credits
under this program.

NOTE 20 - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

<TABLE>
<CAPTION>
                                                                     December 31,
                                                              ---------------------------
                                                                  2005           2006
                                                              ------------   ------------
<S>                                                           <C>            <C>
Interest paid                                                 $      1,625   $         --
Non-cash investing and financing activities:
  Assignment of senior secured notes payable
    and accrued interest to related part                      $  2,679,498   $         --
  Automatic conversion of notes payable                       $    245,000   $         --
  Debt extinguished through issuance of common
    stock - see Note 6                                        $  7,679,916   $         --
  Warrants issued for convertible note debt
    discount                                                  $    117,366   $         --
  Settlement of deferred offering cost                        $     95,000   $         --
  Issuance of common stock for services                       $    250,000   $         --
  Stock issued for accounts payable                           $    147,582   $    110,584
  Stock issued for accrued compensation                                 --   $    399,291
  Stock issued for senior notes payable                                 --   $     67,000
  Stock issued for management loan and accrued interest                 --   $     96,186
  Stock issued for interest in NuVim Powder, LLC,
   distribution rights                                                  --   $     90,000
  Warrants issued for extension of senior note payable                  --   $     52,500
   Warrants issued for pre-paid expenses                                --   $     34,000
</TABLE>

                                      F-34
<PAGE>

NOTE 21 - COMMITMENTS

A. Royalty, License and Supply Agreement - Related Party

In March 2000 and amended in May 2004, the Company entered into an agreement for
the exclusive licensing rights, in specific  territories,  to produce and market
certain  beverage  products,  patented and trademarked by SMBI. The agreement is
for a term of 10 years  commencing on the date of the  amendment,  May 2004, and
provides for royalties of between 1% and 2% of net sales for the duration of the
agreement.  The  exclusive  licensing  agreement can be cancelled by SMBI if the
Company  does  not  meet its  annual  purchasing  commitment  under  the  supply
agreement (see below), in which case, SMBI agrees to negotiate in good faith for
a non-exclusive  supply agreement.  Royalty expense of approximately  $9,000 and
$19,000  was   recorded  in  the  years  ended   December  31,  2005  and  2006,
respectively,  of which  $10,000 and $29,000 are payable to SMBI at December 31,
2005 and 2006, respectively.

In January  2000 and  amended in May 2004,  the  Company  entered  into a supply
agreement with SMBI for the purchase of SMBI's  proprietary  immune whey protein
concentrate.  The agreement is for a term of 10 years, commencing on the date of
amendment,  May 2004.  During the years ended  December  31, 2005 and 2006,  the
Company purchased approximately $98,000, and $41,000,  respectively, of the milk
and whey protein concentrates from SMBI.

SMBI is the  Company's  sole  source of this whey  protein  concentrate.  If the
Company is unable to obtain this product from SMBI, the Company's  manufacturing
and distribution  processes could be severely  disrupted and operations could be
adversely affected.

The license and supply agreements are subject to the Company maintaining minimum
purchases of SMBI's proprietary immune whey protein  concentrate.  The agreement
requires the Company to  purchased  minimum  amounts of whey  protein  which are
determined  annually  by  mutual  agreement.  The  Company  has met its  minimum
purchase  agreement in 2005 of three metric tons  (approximately  $98,000).  The
2006  commitment is  approximately  four metric tons ($172,000) in 2006. In each
subsequent

                                      F-35
<PAGE>

year the minimum  purchase  commitment is the greater of the prior year's actual
purchases  or 115% of the prior year's  minimum  purchase  commitment.  For each
calendar  year in which the  Company  fails to  purchase  its  minimum  purchase
requirements,  the Company  shall pay to SMBI a sum equal to the contract  price
for the shortfall of product not purchased.

NuVim and SBMI  have  agreed  that both the  supply  agreement  and the  license
agreement had  terminated as of the end of 2006 and that NuVim's only  remaining
obligation  to SBMI was for $29,000 for unpaid  royalties.  This amount had been
paid during April 2007.

B. Lease

The Company  leases  office space under an agreement  which  expired in December
2006,  with  annual  payments  approximating  $58,000.  During  the years  ended
December  31, 2005 and 2006,  rent  expense  was  approximately  $58,000.  As of
December 31, 2006, the Company does not have a lease agreement with the landlord
and is operating on a month to month basis.

C. Employment Agreements

In September 2004, the Company entered into employment  agreements with three of
its  executive  officers  that will  become  effective  upon the  closing of the
proposed public  offering of its common stock,  which occurred on June 24, 2005.
The employment  agreements  have a term of three years with an aggregate  annual
salary of $575,000.  All except one of these  agreements were cancelled as these
employees left the Company.  The remaining salary agreement at December 31, 2006
has a salary obligation of $225,000.

NOTE 22 - RELATED PARTY TRANSACTIONS

Included in selling,  general and administrative expenses are consulting fees to
a  stockholder  and  convertible  note  holder  to act as  general  counsel  and
secretary  of the  Company of  approximately  $15,000  and $66,000 for the years
ended December 31, 2005 and 2006, respectively.

Included  in  selling,  general  and  administrative  expenses  are  salaries to
immediate family members of an executive officer of the Company of approximately
$27,000  and  $48,000  for  the  years  ended   December   31,  2005  and  2006,
respectively.

Included in selling,  general and administrative  expenses are royalties paid to
SMBI, a stockholder of the Company,  in the amount of $9,000 and $19,000 for the
years ended December 31, 2005 and 2006,  respectively.  Royalties  payable which
are included in accounts  payable-related party, amounted to $10,000 and $29,000
at December 31, 2005 and 2006, respectively

Included in cost of sales are purchases  from SMBI, a stockholder of the Company
in the amount of $98,000 and $41,000 for the years ended  December  31, 2005 and
2006.

                                      F-36
<PAGE>

NOTE 23 - SUBSEQUENT EVENTS

A. Stock Option Plan

In March 2007, the Board of Directors  approved the 2007 Incentive  Stock Option
Plan for the  benefit  of its  officers,  employees  and  consultants.  The plan
authorizes the grant of 2,000,000 shares of common stock. The plan is subject to
the approval of shareholders at the Company's annual meeting in May of 2007.

B. Sales for Cash

On March 1 and 8, 2007,  NuVim issued a total of 433,333  shares to an unrelated
accredited  investor for $130,000 or $.30 per share. No commissions or fees were
paid in  connection  with this sale.

On March 8,  2007,  at the same time as the  second  purchase,  three of NuVim's
outside  directors,  Doug Scott,  Peter  DeCrescenzo,  and Cal Hodock  purchased
50,000,  33,333,  and 16,667  shares  respectively  at the same  price  totaling
$30,000 or $0.30 per share.

At the end of the first  quarter of 2007,  NuVim  received  $300,000 to purchase
1,000,000  shares of common  stock from  Julius Baer  Multistock  SICAV US Stock
Fund, a European  Institutional Investor a price of $.30 per share. NuVim paid a
commission of $30,000 to Continental  Advisors SA in connection  with this sale.
In addition,  Continental  Advisors SA received $9,000 for its expenses  without
accounting for it.

In April 2007 five investors represented by Paulsen Investment Company, Inc. and
an additional  private  investor  purchased a total of 872,667  shares of common
stock for $261,800 or $0.30 per share.  Paulson  will  receive a  commission  of
$22,680 on the 772,667 shares sold to its clients.

All cash raised in these sales has been applied to working capital.

C. Debt and Accrued Compensation Conversion

On January 30, 2007,  NuVim issued 72,915 shares of common stock in lieu of cash
for unpaid 2006 salary of  approximately  $14,600 due to Michael Vesey,  NuVim's
former  CFO.

D. Stock Issued for Services

On January 29, 2007,  NuVim  agreed with its  Secretary  and General  Counsel to
issue 100,000 shares of common stock as additional compensation for his services
during 2007. The services have a value of  approximately  $16,000.

                                      F-37
<PAGE>

On January 29, 2007, NuVim agreed with its operations  director to issue a total
of 50,000  shares of common stock as additional  compensation  for his services.
The  shares  have a value of  approximately  $8,000.  He  agreed in  writing  to
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6)

On January 30, 2007 NuVim agreed with a communications expert to provide various
services for a total of 40,000 shares of common stock. The services have a value
of  approximately  $6,400.  He agreed to  restrictions on resale placed with the
NuVim's transfer agent and the printing of a legend on its certificate.  Because
of these factors,  this sale was exempt from  registration  under the Securities
Act as not involving a public distribution under section 4(2) and 4(6).

In March 2007,  NuVim  issued  100,000  shares of common  stock to Mr.  Kundrat,
NuVim's CEO for the remaining balance of his 2006 executive bonus due him in the
amount of $32,000.

                                      F-38