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, 2005.

[ ]   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 or Other Jurisdiction of                             (I.R.S. Employer
  Incorporation or Organization)                         Identification Number)

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

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. [X]

      The issuer's revenues for its most recent fiscal year were $1,208,279

The aggregate market value of the voting stock held by non-affiliates of the
issuer on March 17, 2006, based upon the $0.58 per last sales price of such
stock as of that date, was $1,855,202, based upon 3,198,624 shares held by
non-affiliates of the issuer.

The total number of issuer's shares of common stock outstanding held by
affiliates and non- affiliates as of March 17, 2006 was 5,092,845.

Transitional Small Business Disclosure Format (check one): Yes[ ] No[X]

      Documents Incorporated By Reference: Items 9, 10, 11, 12 and 14 are
incorporated from the Information Statement included in Schedule 14C to be
filled within 30 days of the filing hereof. 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. In evaluating these forward-looking statements, you should
consider various factors, including those listed below under the heading
"Factors Affecting Operating Results"". The Company's actual results may differ
significantly from the results projected in the forward-looking statements. The
Company assumes no obligation to update forward-looking statements.



                                     PART I

ITEM 1.  DESCRIPTION OF THE BUSINESS


                                    BUSINESS

INTRODUCTION

      We produce, market, and distribute NuVim(R) dietary supplements in
beverage form. NuVim(R) contains two proprietary micronutrients known as
MunePro(R) and AccuFlex(R). These two patented micronutrients have been shown in
independent clinical studies to help strengthen the immune system, support
muscle flexibility and enhance athletic performance when twelve ounces are
consumed for six weeks. Our exclusive worldwide license (except for Asia,
Australia and New Zealand) and supply agreement with Stolle Milk Biologics Inc,
("SMBI") allows us to use these proprietary micronutrients in carbonated and
non-carbonated beverages (and powders for reconstitution), excluding only
certain milk, yogurt and nutritional meal replacement products. This allows us
to be a sole source provider in the markets in which we operate.

NuVim(R) dietary supplement beverages are formulated to meet many of the
preferences of health conscious consumers. They are low in sugar, with
approximately 10 grams per serving, compared to 40-50 grams for some soft
drinks. NuVim(R) is non-dairy, virtually lactose-free, fortified with the
anti-oxidant vitamins A, C, and E, contains 100% of the daily recommended
requirement of zinc, and has all 9 essential amino acids as well as 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 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 serving boxes and is currently
available through the NuVim(R) web store at www.NuVim.com.

      NuVim(R) beverages are currently available in 13 states and the District
of Columbia. Our 64-ounce cartons were sold, as of December 31, 2005, in over
2,500 supermarkets. Chains carrying NuVim(R) include ShopRite, Publix, Pathmark,
Giant, A&P, Stop & Shop, Food Emporium, Waldbaums, Mars, and SuperValue
supermarkets, Acme Markets, and Wal-Mart in its supercenters in Florida, South
Georgia and South Carolina. 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 in the New York
metropolitan area.

      In the future we plan to introduce one new flavor of the 64-ounce size
beverage. Possible new flavors include chocolate, vanilla, and peach. We expect
to test market the new item within the next 12 months.


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<PAGE>


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.

      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.

      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.

      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.

MICRONUTRIENTS: HISTORY AND DEVELOPMENT OF MUNEPRO(R) AND ACCUFLEX(R)

      Micronutrients, which include vitamins, minerals and certain other
chemical agents, are nutrients that play important roles in the production of
enzymes, hormones and other substances that help to regulate growth, activity,
development and functioning of the immune and other body systems. Cow's milk
naturally contains many vital micronutrients, but generally in minute
quantities. The body receives these nutrients only in minute quantities, which
is why they are referred to as "micronutrients."

      The health benefits of our beverages are based on more than 35 years of
clinical research conducted by Stolle Milk Biologics, Inc. ("SMBI"). SMBI's work
was based on earlier research that demonstrated that a cow's natural process of
creating antibodies to the antigens present in an immune stimulant injected into
the cow was passed to the milk of that cow and could benefit humans who consumed
that milk. In addition, that milk could be concentrated,


                                       3
<PAGE>

and the biological factors present in liquid milk could be maintained in
concentrated form and could benefit humans who consumed the milk or the
concentrated milk.

      Dairy cows are routinely immunized for the purpose of protecting the
cow from diseases known to affect cows, some of which may also affect humans.
SMBI developed and patented proprietary cow immune stimulants that target a
broad spectrum of bacterial antigens that are specific to humans. The immune
stimulants are the Stolle Milk Biologics Inc. Series 100 Immune Stimulant. The
stimulant consists of 26 different strains of killed bacteria. The stimulant is
manufactured by independent licensed serum manufacturing companies. The
immunization induces the treated cows to produce antibodies, Immunogloublin G
("IGG") and Anti-Inflammatory Factor ("AIF"). The presence and level of the
micronutrients is measured through the full production process, beginning with
the levels present at the first milking after inoculation, through collection of
the fluid milk and the concentration process. NuVim(R) trademarked these
micronutrients under the name MunePro(R) for the immune stimulant and
AccuFlex(R) for the anti-inflammatory stimulant.

      The unique immune stimulant in NuVim(R) beverages, as well as the
micronutrients resulting from the immunizations, is the subject of patent
protection. The immunized cow's milk is then dehydrated into nonfat skim milk
powder, milk protein concentrate and whey protein concentrate under strictly
controlled conditions to minimize inactivation and prevent destruction of the
micronutrients. This gentle, low heat process reduces the lactose and salts in
the milk. The resulting products also are free of hormones, antibiotics and
genetic alteration.

      The milk and whey micronutrient concentrates produced from the cows
injected with SMBI's proprietary immunizations have been used in more than 20
independent but small-scale human and animal clinical studies, which generally
conclude that milk and whey protein concentrates from these cows are effective
in promoting the health benefits of MunePro(R) and AccuFlex(R). In 2002, C.M.
Colker, M. Swain, L. Lynch and D.A. Gingerich published in "Nutrition" Magazine
a study of our NuVim(R) beverage entitled, "The Effects of a Milk-Based
Bioactive Micronutrient Beverage on Pain Symptoms and Activity of Adults with
Osteoarthritis: A Double Blind, Placebo-Controlled Clinical Evaluation." This
clinical study involved 31 human subjects and yielded similar results to the
other micronutrient studies, when subjects consumed 12 ounces of NuVim(R) daily
for six weeks. There has been no follow up study, and therefore, we do not have
clinical evidence that a shorter period of daily consumption might provide
similar beneficial results.

OUR STRATEGY

      Our objective is to become a leading provider of good-tasting, nutritional
beverages and beverage products based on the technology we license from SMBI or
other technologies that become available. The elements of our business strategy
include the following:

      o     Increasing brand awareness of the NuVim(R) brand through television
            advertising, sampling and other marketing activities.

      o     Expanding sales for our existing product line into additional
            geographic markets and increasing sales in our current markets. o
            Introducing new products that we have developed, including the
            NuVim(R) powder mix and the shelf-stable sports drink;

      o     Expanding our distribution channels beyond the current concentration
            in supermarkets, to club warehouses, convenience stores, schools,
            business cafeterias, the military, drug stores, fast food outlets
            and other locations using the 16-ounce plastic bottle single-serving
            size; and using e-commerce and infomercials for selling of NuVim(R)
            powder mix.

      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 products contain the
proprietary, patented, and exclusive micronutrients, MunePro(R) and AccuFlex(R).


                                       4
<PAGE>

      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 and delicatessens, plus a limited
number of chain supermarkets.

      In addition to containing the proprietary micronutrients MunePro(R) and
AccuFlex(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,
calcium, 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 70 calories, 10 grams of sugar and 12 grams of
carbohydrates.

      The 64-ounce size of NuVim(R) is typically priced from $2.78 to over
$3.99, depending on the supermarket. This is approximately a $0.10 to $0.20
premium over the everyday price of a 64-ounce carton of a nationally branded
orange juice. The 16-ounce bottle is typically priced at 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, Strawberry. NuVim(R) provides the same micronutrients, vitamins and
minerals as our ready to drink beverages. 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. We intend to
distribute the product through Nuvim Powder LLC, of which we are a 76.5% owner
as of February 2006 (see Distribution below). The product will be marketed
through internet affiliates, retailers, and, possibly, infomercials in the
future.

      New Product Development

      We intend to develop the following additional products that deliver the
same clinically-demonstrated health benefits as our current products:

      o     New Formulation. We are planning to introduce a new formula in the
            third quarter of 2006 that, among other things, eliminates the high
            fructose corn syrup from our product, resulting in lower calories
            per serving.

      o     New Flavors. We plan to introduce one new flavor of our 64-ounce
            size beverage - chocolate, vanilla or peach - at least one of which
            should be available for test marketing within the next 12 months.


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 80% 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, independent
warehouses that we sell to have contracts with a supermarket chain to warehouse
and deliver refrigerated products to their stores. For the year ended December
31, 2005, Wal-Mart, a retailer of our product in Florida and Georgia accounted
for 21% of our


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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.

      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 to and the categories of customers to include
club stores, nutrition centers and health food outlets.

      During 2005 our primary marketing program was in-store sampling. We
used sampling to build consumer brand awareness and trial and repeat purchases,
particularly to support our product introduction in Wal-Mart supercenters in the
state of Florida. In August of 2004 we began a test program with Wal-Mart
supercenters in northern Florida. We distributed two flavors of our refrigerated
product to 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 127 supercenters.
We believe Wal-Mart operates approximately 2000 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 in 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 2005 and do not anticipate that we will be using
him in advertising, or promotion in 2006.

      In December 2005 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. In the first
quarter of 2006 we will be using a television 5 minute infomercial to
communicate the benefits of NuVim(R) in all three forms; the 64 ounce size for
at home family consumption, the 16 ounce size for drinking away from home with
breakfast or lunch or between meals as a healthy beverage, and the powder
product.

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, 2005, our refrigerated beverages are available in approximately 2,500
supermarkets in all or part of 13 states (New York, New Jersey, Connecticut,
Maryland, Pennsylvania, Delaware, Virginia, Ohio, Florida, Alabama, Georgia, and
South Carolina) and the District of Columbia. These accounts are serviced by a
network of eight food brokers.

      In August 2004 we began selling NuVim(R) in the 64 ounce size to one
Wal-Mart distribution center that services approximately 43 Wal-Mart
supercenters. Wal-Mart supercenters include the full compliment of grocery
products along with Wal-Mart's typical soft and hard goods. In August 2005 and
again in September 2005 we expanded to a second and third Wal-Mart distribution
centers serving, in all, approximately 127 supercenters. The expansion also
included adding NuVim(R)'s third flavor to all 127 supercenters.

      In August 2004, as a condition to a $1,000,000 loan agreement, we
established NuVim(R) Powder LLC, to act as distributor of our powder product
line. We owned 51% of NuVim(R) Powder LLC; 24% was owned by the owner of our
advertising production company, and Dick Clark, our spokesperson, and Stanley H.
Moger, one of our


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directors each owned 12.5%. Messrs. Moger and Clark had each loaned $500,000 to
the Company. Each member of the LLC had planned to contribute services, with
varying values, to the LLC to market the NuVim(R) powder product, primarily
through infomercials. However, an operating agreement for the venture was never
finished and executed. In February 2006 we agreed to purchase the ownership
share of the production company's 24% interest in exchange for a warrant to
purchase 50,000 shares of common stock at $1.00 for ten years.

      We initially plan to sell NuVim(R) powder in our online store at
www.NuVim.com and through affiliate web-sites. We plan to test a
powder infomercial to build consumer awareness, trials, and purchases from a
toll free number.

SUPPLY, MANUFACTURING AND ORDER PROCESSING

      SMBI whey protein concentrate ("WPC") containing MunePro(R) and
AccuFlex(R), which is the unique ingredient in our products, is extracted from
the milk of approximately 30,000 pasture-fed cows in New Zealand, which is well
known for maintaining high standards for dairy production and quality. We obtain
our requirements of WPC under a supply agreement with SMBI (the "Supply
Agreement"). Our license agreement with SMBI (the "License Agreement"), gives us
the worldwide (except for Asia, Australia and New Zealand) exclusive right to
incorporate SMBI's WPC into our dietary supplement beverages. See "Related Party
Transactions" for information concerning these agreements.

      Our products are currently manufactured solely at Clover Farms Dairy in
Reading, Pennsylvania, using WPC supplied by SMBI, plus milk protein concentrate
and a blend of customized flavors, as well as other ingredients purchased from
major domestic and international companies. Clover Farms purchases and maintains
inventories of select ingredients, which bulk purchases result in more favorable
prices and service. We purchase all the other ingredients. 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 not made
from concentrate and pasteurized milk. We are planning to introduce a new
formula in the third quarter of 2006 that, among other things, eliminates the
high fructose corn syrup from our product, resulting in lower calories per
serving. We expect to be able to produce the new product at a slightly lower
cost than the current product.

      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 Clover Farms Dairy and is a requirement for
all dairy operations in the United States, will be implemented at any new
production site.

      We expect to contract with other co-packer dairies in the future as the
geographic scope of our distribution expands. We believe there are numerous
qualified dairies throughout the United States that have sufficient capacity to
meet our needs. This strategy allows 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.

      Our beverages are currently warehoused exclusively at Orefield Cold
Storage in Orefield, Pennsylvania and transported to our customers by common
carrier.

      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
Orfield warehouse to customer warehouses, enabling "just in time" inventory
levels for our finished products. Customers typically receive the product with a
minimum of 50 days of shelf life. We control inventory management, production
and invoicing.

PATENTS AND TRADEMARKS

      SMBI has over 100 U.S. and foreign patents and patent applications that
apply directly to NuVim(R) products,


                                       7
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which expire at various times between February 2005 and April 2017. In addition,
in November 2003, NuVim(R) was awarded a manufacturing process patent for milk
protein concentrate beverages, which expires in March 2021.

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

      SMBI retains responsibility for patent maintenance and filing
applications for new technology and for infringement actions for the
intellectual property licensed from SMBI. 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 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.

      We have not yet begun producing, marketing and distributing our
shelf-stable sports drink. When we enter that market, we will be principally
competing with two widely known brands, Gatorade (owned by PepsiCo, Inc.) and
Powerade (owned by The Coca-Cola Company). We believe we will be able to compete
effectively through independent distributions with these products on the basis
of our major points of differentiation: NuVim(R) helps build the immune system
(our first line of disease defense), muscle flexibility, and athletic
performance. However, our competition has significantly greater name
recognition, financial, managerial, and technical resources than we do, which
may put us at a competitive disadvantage. Our intent is to try to capture a
small share of this very large and growing segment of the beverage industry.

      NuVim(R) dietary supplement beverages are the only beverages sold in
the United States containing the proprietary micronutrients MunePro(R) and
AccuFlex(R). Other companies sell milk and whey protein concentrate or products
containing milk or whey protein concentrate, but they do not include the
antibodies 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 derived from milk that has the anti-inflammatory as well
as the enhanced immunity factor.

      Although we have an exclusive licensing agreement with SMBI 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.


                                       8
<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 is consider 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 December 31, 2005, we had eight employees. Three are full-time
employees and are our executive officers, and five are part-time employees, one
is in credit collection management, one is in consumer affairs and one is in
administration and quality assurance, one in accounts payable, and one is our
Vice President of Operations. Our corporate secretary and general council is a
part-time consultant. We also employ a part time consultant to assist in
operations.
                       FACTORS AFFECTING OPERATING RESULTS

      Investing in our shares involves a high degree of risk. You should
carefully consider the following risks, as well as the other information in this
report, before deciding whether to invest in our shares. If any of the following
risks actually occur, our business, financial condition, results of operations
and liquidity could suffer. In that event, the trading price of our shares could
decline and you might lose all or part of your investment.

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 raised net proceeds of approximately
$1,602,000 from our initial public offering, which, together with revenues from
product sales, and proceeds from the sale of State of New Jersey Tax benefits,


                                       9
<PAGE>

were sufficient to fund our operations through March 2006. We will need another
infusion of capital to continue to fund our operations in 2006. However, we do
not have any currently identified sources of additional capital. 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 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. 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.

OUR AUDITORS HAVE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN.

      In their report in connection with our 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, 2004 and 2005, and, as of May 31, 2005, we have approximately
1,020,000, in notes payable due upon our next financing, there is substantial
doubt about our ability to continue as a going concern. 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. 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.


WE HAVE APPROXIMATELY $1.4 MILLION OF INDEBTEDNESS THAT IS PAYABLE OUT OF
PROCEEDS OF ADDITIONAL FINANCING THAT WE SECURE.

      We have not had sufficient capital to operate our business for
approximately three years, and as a result, we have negotiated extended payment
terms on approximately $1,020,000 of notes payable, and $400,000 of accounts
payable which are due and payable upon receipt of additional financing. These
outstanding obligations may make it difficult to raise additional financing.

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 $2,131,581 and $2,396,902 for the year ended December
31, 2004 and December 31, 2005. We had a working capital deficit of $2,090,924
at December 31, 2005 and have negative cash flows from operations. As a result
of ongoing operating losses, we also had an accumulated deficit of $20,245,061
and a stockholders' deficit of $2,077,405 at the same date. We expect to incur
losses until at least 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. These ongoing
financial losses may adversely affect our


                                       10
<PAGE>

stock price.

OUR SUCCESS SUBSTANTIALLY DEPENDS ON MAINTAINING OUR RELATIONSHIPS WITH SMBI.

      SMBI is the holder of certain patents and trademarks that cover the
micronutrients that we use in our products and is our only supplier of those
micronutrients. We have a license agreement and a supply agreement with SMBI,
both of which are critical to our business and expire in 2014. Under the SMBI
license agreement, we have the right to use SMBI's intellectual property for the
production and distribution of carbonated and noncarbonated beverages
incorporating the micronutrients that provide the health benefits of our
products. SMBI also supplies the key ingredient in our products under the terms
of the supply agreement. These agreements contain cross-termination provisions,
and therefore, we risk losing both our rights to the licensed use of the
micronutrients and other SMBI intellectual property needed for our business, as
well as our sole source of supply, if either agreement is terminated in
accordance with its terms. Furthermore, any exclusive rights we enjoy under the
license and supply agreements may be jeopardized if we fail to satisfy certain
minimum purchase requirements. In addition, SMBI and its affiliate, Spencer
Trask Specialty Group, LLC ("Spencer Trask"), are founders and significant
stockholders of our company and, as such, SMBI has provided us with favorable
terms under the supply contract. However, due to our relationship with Spencer
Trask, there is a potential for conflicts of interest between SMBI and us. If we
are unable to obtain the whey protein concentrate from SMBI for any reason, our
manufacturing and distribution processes could be severely disrupted, and our
operations could be adversely affected. We are aware of only one other source
that might be able to provide an immune enhancement whey protein but it does not
contain LactoActin and LactoMune, which are proprietary to SMBI, and we are not
certain of its effectiveness. Moreover, it is our understanding that this
ingredient would not provide the muscle flexibility health benefit that we
achieve by using the SMBI whey protein concentrate. In addition, even if we are
able to find acceptable alternative sources of supply, the new terms would
likely be less favorable than those that we receive from SMBI. Accordingly, it
is critical that we continue to meet all of our material obligations under both
the license agreement and the supply agreement. In the past, we have not always
been able to do so because of a lack of financial resources.

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 in the northeastern United States and, recently, portions of
the south, but our beverage products have not yet been widely distributed. We do
not know whether the level of market acceptance we have received in the
northeastern United States for our initial 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.

As we expand our product line to include additional flavors of the refrigerated
beverage, as well as the shelf-stable sports drink and the powder mix, we will
face the additional uncertainty of whether these new products will gain market
acceptance in any market. We can give no assurance that we will expand into new
geographic areas or successfully expand our product line. It is unlikely that we
will achieve profitability and otherwise have a successful business unless we
are able to gain market acceptance of our existing and future products over a
wide geographic area.

CONSUMERS WHO TRY OUR PRODUCTS MAY NOT EXPERIENCE THE HEALTH BENEFITS WE CLAIM,
WHICH MAY CAUSE THEM TO DISCONTINUE USING OUR PRODUCTS.

      There have been approximately 20 independent clinical studies that have
demonstrated the health benefits of the micronutrient components of our
products. However, there has been only one, small-scale study of the effects of
NuVim beverages directly. That study required the subjects to consume 12 ounces
of NuVim daily for six weeks. While the study did validate the positive health
claims we believe our products provide, it did not consider whether a smaller
quantity of the beverage or a shorter period of continued usage might provide
similar benefits. 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 six weeks 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


                                       11
<PAGE>

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 entire product line at Clover Farms Dairy
in Reading, Pennsylvania. 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 Clover 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 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


                                       12
<PAGE>

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.

      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 expires on December 31, 2006.
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
adequate for our needs, but that additional or alternative space will be
available at commercially reasonable rates if our requirements change.

ITEM 3. - LEGAL PROCEEDINGS


There currently are no material claims or lawsuits against us.


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


None in the fourth quarter 2005


                                       13
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Common stock market price

Of the 5,034,995 shares of common stock outstanding as of December 31, 2005, all
but approximately 1,700,000 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, 1,894,221 shares are held by affiliates. Additionally,
Class A warrants to purchase 2,700,000 shares of common stock and Class B
Warrants to purchase 2,700,000 shares of common stock can be traded on the over-
the-counter trading on the OTC Electronic Bulletin Board, which trading
commenced July 24, 2005.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 21, 2006.


COMMON STOCK:

       ------------------     ----------------     ---------------------
                                  High Bid               Low Bid
       ------------------     ----------------     ---------------------
       2005
           First Quarter      N/A                  N/A
           Second Quarter     N/A                  N/A
           Third Quarter      $ 1.00               $ 0.48
           Fourth Quarter     $ 0.68               $ 0.33
       ------------------     ----------------     ---------------------

CLASS A WARRANTS:

       ------------------     ----------------     ---------------------
                                  High Bid               Low Bid
       ------------------     ----------------     ---------------------
       2005
           First Quarter      N/A                  N/A
           Second Quarter     N/A                  N/A
           Third Quarter      $ 0.21               $ 0.06
           Fourth Quarter     $ 0.15               $ 0.08
       ------------------     ----------------     ---------------------

CLASS B WARRANTS:

       ------------------     ----------------     ---------------------
                                  High Bid              Low Bid
       ------------------     ----------------     ---------------------
       2005
           First Quarter      N/A                  N/A
           Second Quarter     N/A                  N/A
           Third Quarter      $ 0.25               $ 0.05
           Fourth Quarter     $ 0.15               $ 0.06
       ------------------     ----------------     ---------------------


                                       14
<PAGE>


At December 31, 2005, the Company had 139 shareholders of record, and an unknown
number of additional holders whose stock is held in "street name".


      Dividends

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

      Securities Authorized for Issuance

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2005 with respect to
our shares of Common Stock that may be issued under our equity compensation
plans:


<TABLE>
<CAPTION>
Plan Category                                               Number of
                                                           shares to be           Weighted
                                                            issued upon       average exercise        Number of
                                                            exercise of           price of           securities
                                                            outstanding         outstanding           remaining
                                                         options, warrants    options warrants      available for
                                                            and rights           and rights        future issuance
-------------------------------------------------------- -----------------    -----------------   -----------------
<S>                                                              <C>                      <C>             <C>
Equity Compensation plans approved by security holders           1,643,316                $1.01              91,957
-------------------------------------------------------- -----------------    -----------------   -----------------
Equity compensation plans not approved by security
holders                                                          1,500,000                  N/A           1,500,000
-------------------------------------------------------- -----------------    -----------------   -----------------
Total                                                            3,143,316                  N/A           1,591,957
-------------------------------------------------------- -----------------    -----------------   -----------------
</TABLE>


RECENT SALES OF UNREGISTERED SECURITIES

      Fourth Quarter 2005 Stock Sales

On November 3, 2005, NuVim(R), Inc. (the "Company") issued the following
unregistered securities:

1.    The Company issued 250,000 shares of its Common Stock, 250,000 five-year
      redeemable warrants exercisable at $1.50 and 250,000 five-year warrants
      exercisable at $2.00 to 3 accredited investors for payment of $250,000
      news media program. The program will provide $3,000,000 worth of
      nationally syndicated newspaper and radio features at standard rates, at a
      discounted amount of $250,000 over a twelve month period. The redeemable
      warrants may be called by the Company at any time after its Common Stock
      closes at a price of $2.00 or more for five consecutive trading days. Upon
      30 days' notice, the warrants will be redeemed, if not exercised, by the
      payment of $0.25 per warrant. The Company has agreed to automatically
      include 25% (62,500) of the shares, and all the shares underlying the
      warrants issued in the next registration of securities it files, subject
      to underwriters cut back provisions. The investors were purchasing those
      shares and any shares issued upon exercise of the warrants for their own
      investment and agreed to restrictions on resale placed with the Company's
      transfer agent and the printing of a legend on their instruments. Because
      of these factors, this issuance is exempt from registration under the
      Securities Act as not involving a public distribution under sections 4(2)
      and 4(6) of the Act. The Investors and securities issued are listed Below:

             Global Media Fund       150,000 shares
             Global Media Fund       warrant to purchase 250,000 shares at $1.50


                                       15
<PAGE>

             Global Media Fund       warrant to purchase 250,000 shares at $2.00
             Richard D. Smith        50,000 shares
             Don L. Rose             50,000 shares


2.    The Company issued 50,000 shares of its Common Stock to the law firm
      Wickersham and Murphy, P.C. in payment of past due accounts payable of
      $105,793.50. The Company also issued 10,000 shares of common stock for
      payment for legal services provided in the third quarter of 2005 and an
      additional 10,000 shares as a prepayment for legal services to be provided
      in the fourth quarter of 2005. The investors were purchasing those shares
      for their own investment and agreed to restrictions on resale placed with
      the Company's transfer agent and the printing of a legend on their
      certificates. Because of these factors, this issuance is exempt from
      registration under the Securities Act as not involving a public
      distribution under sections 4(2) and 4(6) of the Act.

3.    The Company issued of 34,697 shares of its Common Stock to a law firm in
      payment of past due accounts payable of $15,613.57 to the law firm Morse
      Zelnick Rose and Lander LLP The investors were purchasing those shares for
      their own investment and agreed to restrictions on resale placed with the
      Company's transfer agent and the printing of a legend on their
      certificates. Because of these factors, this issuance is exempt from
      registration under the Securities Act as not involving a public
      distribution under sections 4(2) and 4(6) of the Act.

4.    The Company issued of 50,000 shares of its Common Stock to the law firm
      Maizes and Maizes LLP for Michael Maizes duties as the Corporation's
      Secretary for the period beginning July 1, 2005 and ending December 31,
      2005. The investor was purchasing those shares for their own investment
      and agreed to restrictions on resale placed with the Company's transfer
      agent and the printing of a legend on its certificate. Because of these
      factors, this issuance is exempt from registration under the Securities
      Act as not involving a public distribution under sections 4(2) and 4(6) of
      the Act.


On December 23, 2005, NuVim(R), Inc. (the "Company") issued the following
unregistered securities:

1.    The Company issued Secured Convertible Promissory notes in the aggregate
      principal amount of $67,600. The notes bear interest at the rate of 12%
      per annum and are due and payable six months from the issue date. The
      first six months of interest was deducted from the proceeds to the Company
      as prepaid interest. The notes are redeemable by the Company prior to the
      maturity date at 110% of the principal amount, plus accrued interest. If
      the notes are not repaid on their maturity date they become convertible
      into shares of common stock at a price per share equal to 90% of the
      average closing bid price of the Company's common stock for the five
      trading days preceding the issue date, and the interest increases to 18%
      per annum. The Company has granted piggy-back registration rights for the
      shares of common stock underlying the notes. The investors represented
      themselves in writing to be accredited investors who were purchasing the
      securities and any shares of common stock issued thereunder, for their own
      investment and agreed to restrictions on resale placed with the Company's
      transfer agent and the printing of a legend on his certificate. Because of
      these factors, this issuance is exempt from registration under the
      Securities Act as not involving a public distribution under sections 4(2)
      and 4(6) of the Act. The securities were issued to the following
      Investors:


                     Marshall Sterman         $10,000

                     Robert Wessel            $25,000

                     William Flynn            $12,000

                     Joseph Flannery          $10,000

                     Doug Arnold              $10,600

2.    In connection with the note sale, the Company issued warrants to purchase
      67,600 shares of common stock at a purchase price of $.40 per share in
      connection with the notes. The warrants are exercisable for three years
      from the issue date. If the notes are not paid by their maturity date the
      Company has agreed to issue an


                                       16
<PAGE>

additional 33,800 warrants to purchase common stock for three years at an
exercise price of $.375 and to adjust the exercise price of the 67,600 warrants
issued upon closing to $37.5. The Company has granted piggy-back registration
rights for the shares of common stock underlying the warrants. The investors
represented themselves in writing to be accredited investors who were purchasing
the securities and any shares of common stock issued thereunder for their own
investment and agreed to restrictions on resale placed with the Company's
transfer agent and the printing of a legend on his certificate. Because of these
factors, this issuance is exempt from registration under the Securities Act as
not involving a public distribution under sections 4(2) and 4(6) of the Act. The
securities were issued to the following Investors:


                 Marshall Sterman       10,000

                 Robert Wessel          25,000

                 William Flynn          12,000

                 Joseph Flannery        10,000

                 Doug Arnold            10,600


                                       17
<PAGE>


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

OVERVIEW

      We produce, market and distribute NuVim(R) dietary supplement beverages.
These micronutrients have been clinically proven to enhance the immune system,
muscle flexibility and athletic performance. We focus on developing brand
awareness and trial and repeat purchases through advertising, product sampling,
coupon distribution, and promotional price discounts. These marketing
expenditures help to enhance distribution and availability of our products as
well as increase consumer awareness and preference for our brands. We believe
that these marketing 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 in
approximately 2,500 Supermarkets in the Eastern United States. 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 sales
expansion potential. We increased our distribution through Wal-Mart Supercenters
from two flavors in approximately 44 stores to three flavors in approximately
127 stores. We also developed a powder version of our product to be sold through
direct distribution such as the internet and infomercials, as well as retail
outlets. Sales of the product to date have not been material. We expect Nuvim
Powder LLC, of which we own 75.5% of, to begin marketing the NuVim(R) powder
through an internet affiliate marketing program in the second quarter of 2006.

      We launched an equity funded print and radio news media campaign to
educate consumers about the benefits of NuVim(R) and create market awareness for
our product. In November, 2005 we issued common stock and warrants as payment
for a contract to provide $3,000,000 worth of nationally syndicated print and
radio features at standard rates, at a discounted amount. The media program will
began in January 2006 and continue for approximately twelve months.

      Case shipments of our refrigerated product declined by 11,413 or 15% in
2005 when compared to the prior year. Increased case shipments to Wal-Mart
Supercenters of approximately 10,808 cases were offset by decreased shipments in
the New York/New Jersey markets. During 2005 we 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 product sampling 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 August of 2004 we began a test program with Wal-Mart supercenters in
northern Florida. We distributed two flavors of our refrigerated product to one
distribution center servicing approximately 44 supercenters. In August 2005
Wal-Mart increased our distribution to three flavors and a total of three
distribution centers servicing approximately 127 supercenters. This resulted in
sales of approximately 6,100 cases in the fourth quarter of 2005. We believe
Wal-Mart operates approximately 2000 supercenters across the United States.

      The table set forth below discloses selected data regarding sales for the
years ended December 31, 2005 and 2004. 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 represents the number of cases shipped to the customer
prior to any returned cases containing product that has not been sold by its
expiration date.


                                       18
<PAGE>



                           Unit Case Volume/Case Sales

                        Year Ended December31,        Increase
                         2004            2005        (Decrease)    Percentage
                      ----------------------------------------------------------
Gross Cases Sold          77,395         65,982        (11,413)       (15%)
Gross Sales           $1,411,355     $1,208,279     $  203,076        (15%)
Net Sales             $  958,785     $  721,381     $  237,404        (25%)

      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 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 for
our refrigerated product. We believe these initiatives will provide better
opportunity for long term growth and increase sales in our existing markets by
creating market awareness for our product.

Results of operations for the year ended December 31, 2005 compared to the year
ended December 31, 2004

      Gross Sales. For the year ended December 31, 2005, gross sales were
$1,208,279, a decrease of $203,076, or 17% lower than gross sales of $1,411,355
for the year ended December 31, 2004. The decrease in gross sales is primarily
attributable to a decrease in case volume in stores New York, New Jersey,
Pennsylvania, Virginia and the Publix Supermarket chain, partially offset by
increased sales at Wal-Mart Supercenters. We have not had funds to maintain
advertising and sampling of our products on a consistent basis in our existing
stores since mid 2002 resulting in declining sales. In June 2005, we
restructured our balance sheet through the issuance of common stock, but were
only able to raise a limited amount of funds for advertising and sampling
programs. We have focused these limited resources on selected growth
opportunities for our refrigerated product and introduction of a powder product,
until such time as we are able to fund programs across all of our markets.

      Discounts, Allowances and Promotional Payments. For the year ended
December 31, 2005, promotional allowances and discounts were $486,898, an
increase of $34,328 or 8% higher than the promotional allowances and discounts
of $452,570 for the year ended December 31, 2004. This increase is primarily
attributable to increased promotional price allowances, coupons and other
incentives of $38,133, and slotting fees of $24,343. Promotional price
allowances, coupons and other incentives increased due to sampling programs at
Publix stores in the first quarter of 2005 where $1.00 coupons were distributed
in store locations, and promotional price discounts in the New York and New
Jersey markets. We record the estimated redemptions based on our historical
experience at the time the coupon is distributed. We also record reimbursements
given to retailer for consumer price promotions. We expect to continue to use
coupon distribution and price promotions as a means to promote consumer sampling
and trial of our product into the foreseeable uture. Slotting fees increased due
to fees paid to gain distribution in approximately 400 stores supplied by a
distributor serving the Mid-Atlantic region of the United States. Discounts,
allowances and promotional payments as a percentage of gross sales increased
from 32% for the year ended December 31, 2004 to 40% for the year ended December
31, 2005, primarily due to the increased coupons and price discounts discussed
above. Discounts, allowances and promotional payments are comprised of the
following:


<TABLE>
<CAPTION>
                                            Year Ended December 31,     Increase
                                                2004       2005        (Decrease)  Percentage
                                              --------   --------       --------   ----------
<S>                                           <C>        <C>            <C>             <C>
Discounts for timely payment                  $ 25,595   $ 15,908       $ (9,687)        (38)%
Product returned after its expiration date     161,313    142,852        (18,461)         11%
Promotional price allowances, coupons and      257,532    295,665         38,133          15%
other incentives
Slotting fees                                    8,130     32,473         24,343         300%
                                              --------   --------       --------    --------
Total Discounts, Allowances and Promotional   $452,570   $486,898       $ 34,328           8%
Payments
                                              ========   ========       ========    ========
</TABLE>




                                       19
<PAGE>


      Net Sales. Net sales for the year ended December 31, 2005 were $721,381, a
decrease of $237,404, or 25% lower than net sales of $958,785 for the year ended
December 31, 2004. The decrease in net sales is primarily attributable to the
decrease in cases sold and the increased discounts, allowances and promotional
payments discussed above.

      Cost of Sales. For the year ended December 31, 2005, cost of sales were
$687,167, a decrease of $50,475 or 7% lower than cost of sales of $737,642 for
the year ended December 31, 2004. The decrease in cost of sales was primarily
attributable to a 14% decrease in cases sold discussed above, offset by higher
ingredient costs due to increased pricing for certain ingredients. Cost of sales
as a percentage of gross sales was approximately 57% for the year ended December
31, 2005 and 52% for the year ended December 31, 2004.

      Gross Profit (loss). Gross profit (loss) was $34,214 for the year ended
December 31, 2005, a decrease of $186,929, from the $221,143 gross profit for
the year ended December 31, 2004. Gross profit (loss) as a percentage of gross
sales was 3% for the year ended December 31, 2005, compared to a gross profit as
a percentage of gross sales of 16% for the year ended December 31, 2004. The
decrease in gross profit as a percentage of gross sales was primarily due to the
increased coupons and price incentives and cost of sales as a percent of gross
revenue discussed above.

      Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $2,392,996 for the year ended December 31, 2005, an
increase of $300,098 or 14%, from selling, general and administrative expenses
of $2,092,898 for the year ended December 31, 2004. Selling, general and
administrative expenses exceeded net sales in both periods as we are in an early
stage of our development and have not achieved sales volumes sufficient to
generate net sales in excess of our selling, general and administrative
expenses. The increase in selling, general and administrative expenses was
primarily attributable to a non cash charge for stock grants to executive
officers. In March 2006, the board authorized the compensation committee to
grant an aggregate of 831,500 shares of unregistered stock to four executive
officers, in lieu of 2005 bonuses. The Company recorded the stock grant at a
value of $332,600 based on the quoted a value per share equal to the closing bid
price on December 31, 2005 of $.40 per share.

      Loss from Operations. Loss from operations was $2,358,782 for the year
ended December 31, 2005 compared to $1,871,755 for the year ended December 31,
2004. The $487,027 increase in loss from operations was primarily attributable
to the increased operating expenses and lower gross profit described above.

      Interest Expense. Interest expense was $430,216 for the year ended
December 31, 2005, a decrease of $148,344, or 26%, from interest expense of
$578,560 for the year ended December 31, 2004. The decrease in interest expense
is primarily attributable to a reduction in indebtedness resulting from the
conversion of debt to common stock. 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. Therefore we
expect interest expense to decline in future periods due to lower outstanding
borrowings.

      Gain on Forgiveness of Accounts Payable. In 2004, Gain on forgiveness of
accounts payable represents the difference between the invoiced amount and the
amount in the form of a note payable for fees to a law firm incurred and
expensed in 2002. In 2005, Gain on forgiveness of accounts payable represents
the difference between the principal and accrued interest due on notes payable
and accounts payable, and the fair market value of common stock issued to retire
those obligations.

      Net Loss. Net loss was $2,396,902 for the year ended December 31, 2005
compared to $2,131,581 for the year ended December 31, 2004. The $265,321
increase in net loss was primarily attributable to the increased operating
expenses and lower gross profits, offset by lower interest expense and the gain
on retirement of accounts payable discussed above.

LIQUIDITY AND CAPITAL RESOURCES

      Our operations to date have generated significant operating losses that
have been funded through the issuance of common stock, preferred stock and
external borrowings. We will require additional sources of outside capital


                                       20
<PAGE>

to continue our operations and currently have no identifiable source.

      We have approximately $67,600 of secured convertible notes payable due on
June 24, 2006, and approximately $650,000 of senior notes payable and accrued
interest thereon due upon the earlier of a subsequent financing or November of
2006. Additionally, holders of approximately $375,000 of notes payable and
$400,000 of accounts payable that are past due have agreed to defer payment
until we secure additional financing. This may make it more difficult to secure
such financing, unless we can secure extended terms from these creditors. Also,
we have not been able to pay salaries to our employees, including our executive
officers since January 15, 2006.

      On June 24, 2005, we completed an initial public offering of 2,700,000
units, with each unit consisting of one share of common stock, one redeemable
Class A warrant, and one Class B warrant to purchase common stock. The offering
resulted in net proceeds to the Company of $1,604,000 after deducting
underwriting discounts and offering expenses. The net proceeds, along with
product revenues and proceeds from the sale of State of New Jersey Tax benefits
of approximately $230,000 have been adequate to fund our operations to date.
However, we will need additional funding to continue operations beyond that
date, or to fund advertising and promotional programs to maintain and increase
sales.

      In May 2005, we borrowed $200,000 from the investment bank that managed
the initial public offering. The note was repaid upon the closing of the stock
offering on June 24, 2005. The note did not bear any interest. We also paid
$21,874 of principal and accrued interest on an advance from the underwriter
made in July of 2004.

      On June 24, 2005, we issued 1,116,611 shares of common stock in settlement
of approximately $7,684,000 of notes payable, accrued interest, accounts
payable, and accrued salaries due to executive officers at a debt conversion
value per share ranging from $1.00 to $13.00 per share of common stock. The
table below summarizes the debt extinguishments transactions:

                                                    Shares         Debt
                                                    Issued    Extinguishment
                                                  ----------  --------------
Senior secured notes-related parties                 461,700    $6,141,527
Accrued salaries                                     250,696       593,750
Senior secured notes payable - related parties       250,000       500,000
Subordinated notes payable and accrued interest       88,882       266,639
Related party advances                                23,000        69,000
Accounts payable                                      42,333       109,000

                                                  ----------    ----------
Total                                              1,116,611    $7,679,916
                                                  ==========    ==========

      On June 24, 2005, a convertible note payable with a face value of $175,000
automatically converted into 245,000 unregistered units substantially identical
to the units sold at the initial public offering. The Company had not recorded
the beneficial conversion feature prior to the closing of the initial public
offering because its terms change based on the occurrence of future events
outside the control of the holder of the convertible note. Upon completion of
the public offering on June 24, 2005, we recorded interest expense of $49,755 to
reflect the beneficial conversion feature of the note.

      On November 3, 2005 we issued 50,000 shares of unregistered common stock
in payment of outstanding legal fees of $105,794. 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 of unregistered common stock as payment for legal fees in the third and
fourth quarters of 2005 at an estimated fair value of $7,000.

      On November 3, 2005 we issued 250,000 shares of unregistered 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, with
a value of $250,000, discussed above. The Company granted piggyback registration
rights on 62,500 of the shares issued and all the shares underlying the warrants
issued in the transaction.


                                       21
<PAGE>


      On November 3, 2005 we issued 34,697 shares of unregistered common stock
in payment of outstanding legal fees aggregating $15,614. We recognized a gain
on forgiveness of accounts payable of $3,470 on the transaction.

      On November 3, 2005 we issued 50,000 unregistered shares of common stock
with an estimated fair value of $17,500 as compensation for the Corporations
secretary for the six month period ending December 31, 2005.

      Additionally, holders of our Senior Secured Notes Payable - Related Party
have extended the due date on $500,000 of outstanding senior secured notes
payable to the earlier of the completion of an a subsequent stock sale, sale of
assets, change of control or financing by the Company, or November 30, 2006.

      On December 24, 2005 we issued Secured Convertible Promissory notes, due
June 24, 2006. The notes had a face amount aggregating $67,600, and were
discounted for the first six months of interest, resulting in net proceeds of
$63,580.

      As of December 31, 2005, we had cash on hand of $270,468 and a working
capital deficit of $2,087,454. We have negotiated with certain noteholders and
vendors to defer payment or accept progress payments on approximately $400,000
of accounts payable and $400,000 of notes payable and accrued interest thereon
until we are able to raise additional financing. In January, 2006 we paid
$200,000 to SMBI, an affiliate of one of our investors and the provider of the
exclusive whey protein concentrate used in our product, which was due on January
15, 2006. As of March 15, 2006, we had remaining cash on hand of approximately
$6,000. We will 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.

      In March of 2006, a noteholder requested payment of a note with a $50,000
principal balance, and accrued interest thereon, for which he had previously
agreed to defer payment. The noteholder also signed a subordination agreement in
favor of our senior lenders. We have informed the noteholder that payment of the
note would be in violation of these agreements.

      Net cash used in operating activities for the year ended December 31, 2005
was $1,932,729 compared to cash used in operating activities of $388,450 during
2004. The increase in cash used by operating activities of $1,544,279 was
primarily attributable to an increased net loss of $265,321 and payments of
related party accounts payable of approximately $428,000, including $250,000 to
SMBI, our exclusive provider of whey protein concentrate.

         Net cash provided by financing activities was $1,925,980 for the year
ended December 31, 2005, compared to $613,757 for the year ended December 31,
2004. The increase of $1,312,223 is due to net proceeds from the initial public
offering of our common stock.

Application of Recent and Critical Accounting Policies and Pronouncements

Recent Accounting Pronouncements

      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 is required to be adopted by Nuvim Inc. in the first quarter of
fiscal 2006. The Company is currently evaluating the effect that the adoption of
SFAS 154 will have on its consolidated results of operations and financial
condition, but does not expect it to have a material impact.

The FASB issued FASB Interpretation No. 47 ("FIN 47"), "Accounting for
Conditional Asst 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. The Company does not expect this
guidance to have a material affect on its financial statements.


                                       22
<PAGE>


      In December 2004, the FASB revised FASB Statement No. 123 and issued FASB
Statement No. 151, Accounting for Stock-Based Compensation. This Statement
supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its
related implementation guidance. This Statement establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments
for goods or services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity's equity instruments or that may be settled by the issuance of
those equity instruments. This Statement focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions. This Statement does not change the accounting guidance for
share-based payment transactions with parties other than employees provided in
Statement 123 as originally issued and EITF Issue No. 96-18, "Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services." It applies in the Company's first
reporting period in 2006.


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,
2005.

      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 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. 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


                                       23
<PAGE>


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.

      Stock-based Payments

Common stock issued to employees and equity instruments issued to non-employees
are accounted for in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation", and 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" using a fair value approach. For equity
instruments, including stock options, issued to non-employees, the fair value of
the equity instruments or the fair value of the consideration received,
whichever is more readily determinable, is used to determine the value of
services or goods received and the corresponding charge to operations. In
determining the fair value of common stock and equity instruments issued for
goods and services we consider trading prices of our common stock as it is
quoted on OTC Electronic Bulletin Board and other factors that affect fair value
such as restrictions on trading of the stock. We also consider what an
independent investor would pay for shares of stock with similar restrictions in
determining fair value.
We have elected to account for stock grants to employees under the principals of
APB opinion No. 25, as is permitted by SFAS 123. Stock grants are recorded in
the period earned at the quoted market price of common stock at the measurement
date.

      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, 2005, 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.


                                       24
<PAGE>


ITEM 7. FINANCIAL STATEMENTS.

The financial statements for the years ended December 31, 2004 and 2005 are
contained on pages F-1 to F-23, which follow the Exhibits.







                                   NUVIM INC.

                                   ----------

                              FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2005

                                   ----------


                                       25
<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.

a) Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer
and our principal financial officer, after evaluating the effectiveness of our
disclosure controls and procedures (as defined in the Securities Exchange Act of
1934 Rules 13a-14(c) and 15d-14(c) as of the filing date of this report on Form
10-KSB (December 31, 2005), have concluded that as of the Evaluation Date, our
disclosure controls and procedures were adequate and effective to ensure that
material information relating to the Company and our consolidated subsidiary
would be made known to them by others within those entities, particularly during
the period in which this report on Form 10-KSB was being prepared.

b) Changes in Internal Controls. There were no changes in our internal controls
or in other factors that could significantly affect our disclosure controls and
procedures subsequent to the Evaluation Date, nor any significant deficiencies
or material weaknesses in such disclosure controls and procedures requiring
corrective actions. As a result, we took no corrective actions.

ITEM 8B     OTHER INFORMATION

            None

                                    PART III

Item 9, 10, 11, 12, and 14 are incorporated from the Information Statement
included in Schedule 14C to be filled within 30 days of the filing hereof.

ITEM 13. - EXHIBITS

<TABLE>
<CAPTION>
Exhibit                                                                                                 Incorporated        Filed
No.          Document Description                                                                       by Reference      Herewith
------------------------------------------------------------------------------------------------------------------------------------
<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       (4)
             Stock
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     (1)
             Company

                                       26
<PAGE>

4.6          Revised Form of Representative's Purchase Warrant                                                (1)
10.1         Employment Agreement between the Registrant and Richard P. Kundrat, dated as of September 9,     (2)
             2004
10.2         Employment Agreement between the Registrant and John L. Sullivan, dated as of September 9,       (2)
             2004
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,         (2)
             Inc., dated as of May 1, 2004
10.13        Amended and Restated Supply Agreement between the Registrant and Stolle Milk Biologics, Inc.,    (2)
             dated as of May 1, 2004
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      (3)
             Agreement and Convertible Promissory
             note each dated July 26, 2004 and
             Second Amendment to Services Agreement
             and Warrant, each dated September 14,
             2004
10.14.2      Letter Agreement dated March 28, 2005 amending certain terms of the Amendment to Services        (4)
             Agreement and Convertible Promissory note each dated July 26, 2004 and Second Amendment to
             Services Agreement and Warrant, each dated September 14, 2004
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
10.14.4      Letter Agreement dated May 31, 2005 amending certain terms of the Amendment to Services          (1)
             Agreement and Convertible Promissory note each dated July 26, 2004 and Second Amendment to
             Services Agreement and Warrant, each dated September 14, 2004
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,        (2)
             2000
10.21        Amendment to Services Agreement between the Registrant and Olive Enterprises, Inc., dated as     (2)
             of July 26, 2004
10.22        Second Amendment to Services Agreement between the Registrant and Olive Enterprises, Inc.,       (2)
             dated as of September 14, 2004
10.23        Form of Subordination Agreement (Bridge Financing)                                               (2)
10.24        Consent to Grant Security Interest, Waiver, Subordination and Amendment Agreement between        (2)
             Registrant and Stolle Milk Biologics, Inc., dated August 5, 2004
10.25        Processing and Packing Agreement between the Registrant and Clover Farms Dairy Company, dated    (2)
             June 27, 2000
10.26        Amendment to Processing and Packing Agreement between the Registrant and Clover Farms Dairy      (2)
             Company, effective April 1, 2003
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)


                                       27
<PAGE>

10.29        Wachovia line of credit documents                                                                (4)
10.30        Lease between the Registrant and Paramus Plaza IV Associates, dated December 8, 1999 and         (2)
             Addendum II to Lease, dated December 8, 1999
10.31        First Amendment to Lease between the Registrant and Paramus Plaza IV Associates, dated           (2)
             November 5, 2002
10.32        Second Amendment to Lease between the Registrant and Paramus Plaza IV Associates, dated          (2)
             November 23, 2004
10.33.1      Letter Agreements dated December 31, 2004 between Spencer Trask Private Equity Fund I LP,        (4)
             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
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 Speciality Group LLC, dated          (4)
             January 31, 2002
10.35.1      Modification and Extension Agreement between Stolle Milk Biologics, Inc. and the Registrant      (4)
             dated March 28, 2005
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)
10.36.2      Amended and Restated Conversion Agreement between the Registrant and Dick Clark, dated May       (1)
             31, 2005
10.37        Proposal/Memorandum of Understanding between the Registrant and Global Media Fund, LLC                          X
10.38        Form of Secured Convertible Promissory note between the Registrant and Secured Lenders                          X
10.39        Form of Warrant Agreement between the Registrant and Secured Lenders and Placement Agent                        X
10.40        Form of Dick Clark/Stanley Moger Consent to Secured Convertible Note financing                                  X
21           Subsidiaries of the Registrant                                                                   (2)
31.1         Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002                 X
31.2         Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002                 X
32.1         Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002                 X
32.2         Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002                 X
99.1         Form of lock-up agreement between Paulson Investment Company, Inc. and the Registrant's          (3)
             officers, directors and stockholders
99.2         Form of Investment Representation Statement                                                      (1)
99.3         Form of Lockup Agreement for Selling Stockholders                                                (1)

------------------------------------------------------------------------------------------------------------------------------
(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.
</TABLE>


                                       28
<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: March 31, 2006

                     By: /s/Richard P. 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 P.Kundrat         Chief Executive Officer          March 31, 2006
    -----------------
    Richard Kundrat

/s/ Michael Vesey                Chief Financial               March 31 , 2006
    -----------------        and Accounting Officer
    Michael Vesey



                                       29
<PAGE>



                                  NUVIM, INC.

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                   Page
<S>                                                                                 <C>
Report of Independent Registered Public Accounting Firm                             F-2
Balance Sheets - December 31, 2004 and 2005                                         F-3
Statements of Operations - Years ended December 31, 2004 and December 31, 2005      F-4
Statements of Cash Flows - Years ended December 31, 2004 and December 31, 2005      F-5
Statements of Stockholders' Deficit - Years ended December 31, 2004 and
        December 31, 2005                                                           F-6
Notes to Financial Statements                                                       F-8
</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, 2004 and 2005, 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,
2004 and 2005, 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.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 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 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ WithumSmith+Brown, P.C.
March 17, 2006


Somerville, New Jersey


                                       F-2


<PAGE>





                                   NUVIM, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                           December 31
                                                                                                   ----------------------------
                                                                                                        2004            2005
                                                          ASSETS
<S>                                                                                                <C>            <C>
Current Assets:
Cash and cash equivalents                                                                          $    277,649    $    270,468
Accounts receivable, net                                                                                 33,715          35,399
Inventory                                                                                                84,484         172,714
Prepaid expenses and other current assets                                                                61,766         328,915
                                                                                                   ------------    ------------
        Total Current Assets                                                                            457,614         807,496
Equipment and furniture, net                                                                             21,020           1,502
Deferred offering costs                                                                                 441,243              --
Deposits and other assets                                                                                 8,547           8,547
                                                                                                   ------------    ------------
        TOTAL ASSETS                                                                               $    928,424    $    817,545
                                                                                                   ============    ============

    LIABILITIES AND STOCKHOLDERS'DEFICIT
Current Liabilities:
    Senior secured notes payable - related parties                                                 $  1,000,000    $    500,000
    Accrued interest - senior notes payable - related party                                              21,646         119,160
    Secured convertible promissory notes, net of unamortized discount of
        $14,629 at December 31, 2005                                                                         --          52,971
    Demand note payable - bank                                                                        2,500,000              --
    Accrued interest - demand note payable - bank                                                       129,940              --
    Senior convertible promissory notes payable - related party                                       2,480,000              --
    Accrued interest - senior convertible promissory notes - related party                              813,251              --
    Convertible promissory note - related party                                                         175,000              --
    Stockholder loans - subordinated convertible promissory notes                                       385,000         225,000
    Accrued interest stockholder loans                                                                  147,793          28,691
    Accounts payable                                                                                  1,055,622         881,345
    Accounts payable and accrued expenses to related parties                                            659,000         231,328
    Accrued expenses                                                                                    285,277         269,968
    Accrued compensation                                                                                470,283         420,100
    Rescinded series B offering payable                                                                  42,000          18,920
    Related party advances                                                                               82,000            --
    Other note payable, includes accrued interest of $2,542 and $14,467 at
        December 31, 2004 and 2005                                                                      152,542         147,467
                                                                                                   ------------    ------------
        Total Current Liabilities                                                                    10,399,354       2,894,950
                                                                                                   ------------    ------------
Commitments and Contingencies

Stockholders' Deficit:
    Preferred Stock - 65,000,000 shares authorized:
    Preferred Stock Series A, convertible, non cumulative, participating, par
        value $.00001 per share; 4,875,850 and 0 shares designated, issued and outstanding
        (liquidation preference of $4,875,850) as of 2004 and 2005                                           49              --
    Preferred Stock Series C, convertible, non cumulative, participating, par
        value $.00001 per share; designated 50,000,000 shares, 3,623,000 and 0
        issued and outstanding (liquidation preference of $724,600) as of 2004 and 2005                      36              --
    Common Stock, 120,000,000 shares authorized, $.00001 par value, issued and outstanding,
        414,073 at December 31, 2004 and 5,034,995 at December 31, 2005                                       4              51
    Additional paid-in capital                                                                        8,377,140      18,167,605
    Accumulated deficit                                                                             (17,848,159)    (20,245,061)
                                                                                                   ------------    ------------
        Total Stockholders' Deficit                                                                  (9,470,930)     (2,077,405)
                                                                                                   ------------    ------------
    TOTAL LIABILITIES AND STOCKHOLDERS'DEFICIT                                                     $    928,424    $    817,545
                                                                                                   ============    ============
</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

<TABLE>
<CAPTION>
                                                                              2004            2005
                                                                           -----------    -----------
<S>                                                                        <C>            <C>
Gross Sales                                                                $ 1,411,355    $ 1,208,279
Less: Discounts, Allowances and Promotional Payments                           452,570        486,898
                                                                           -----------    -----------
Net Sales                                                                      958,785        721,381
Cost of Sales                                                                  737,642        687,167
                                                                           -----------    -----------
Gross Profit                                                                   221,143         34,214
Selling, General and Administrative Expenses                                 2,092,898      2,392,996
                                                                           -----------    -----------
Loss from Operations                                                        (1,871,755)    (2,358,782)
Other Income (Expense):
    Interest Expense                                                          (578,560)      (430,216)
    Interest Income                                                                 --          7,000
    Gain on Forgiveness of Accounts Payable                                     60,258        151,995
                                                                           -----------    -----------
        Total Other Income (Expense) - Net                                    (518,302)      (271,221)
                                                                           -----------    -----------
Net Loss Before Income Tax Benefit                                          (2,390,057)    (2,630,003)
Income Tax Benefit                                                             258,476        233,101
                                                                           -----------    -----------
Net Loss                                                                   $(2,131,581)   $(2,396,902)
                                                                           ===========    ===========
Basic and Diluted Loss Per Share                                           $    (10.26)   $      (.82)
                                                                           ===========    ===========
Weighted Average Number of Common Shares Outstanding - Basic and Diluted       207,740      2,940,987
                                                                           ===========    ===========
</TABLE>


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 2004 and 2005

<TABLE>
<CAPTION>
                                                                                      2004          2005
                                                                                 -----------    -----------
<S>                                                                              <C>            <C>
Cash Flow From Operating Activities:
    Net Loss                                                                     $(2,131,581)   $(2,396,902)
    Adjustment to reconcile net loss to net cash used in operating activities:
    Depreciation                                                                      42,120         19,960
    Amortization of debt discount on notes payable                                        --         70,000
    Accrued incentive stock grant                                                         --        332,600
    Gain on forgiveness of accounts payable                                          (60,258)      (151,995)
    Stock issued for services                                                             --         24,500
    Provision for sales returns and allowances                                       452,570        486,898
    Bad debt expense                                                                      --          4,109

    Changes in Operating Assets and Liabilities:
    Accounts receivable                                                             (405,833)      (492,682)
    Inventory                                                                         76,180        (88,230)
    Prepaid expenses and other current assets                                        (21,574)       (10,789)
    Deposits and other assets                                                           (400)            --
    Accounts payable                                                                 504,186        151,487
    Accrued compensation                                                             484,362        210,997
    Accrued expenses                                                                 104,317        (15,763)
    Accrued interest                                                                 496,461        350,763
    Accounts payable to related parties                                               71,000       (427,672)
                                                                                 -----------    -----------
        Net Cash Used in Operating Activities                                       (388,450)    (1,932,719)

Cash Flow From Investing Activities:
    Purchase of equipment and furniture                                               (2,267)          (442)
                                                                                 -----------    -----------
        Net Cash Used in Investing Activities                                         (2,267)          (442)

Cash Flow From Financing Activities:
    Net proceeds from issuance of common stock                                                    1,604,237
    Reimbursement of (payment) of deferred offering costs                           (441,243)       346,243
    Proceeds from secured convertible notes                                                          63,580
    Proceeds from senior note payable - related party                              1,000,000
    Repayment of shareholder loan                                                                   (35,000)
    Repayment of notes payable                                                                      (17,000)
    Repayment of Series B advances                                                                  (23,080)
    Proceeds from underwriter advance - related party                                               200,000
    Repayment of underwriter advance - related party                                               (200,000)
    Proceeds from (repayment of) related party advances                               55,000        (13,000)
                                                                                 -----------    -----------
        Net Cash Provided By Financing Activities                                    613,757      1,925,980
                                                                                 -----------    -----------

Increase (Decrease) in Cash and Cash Equivalents                                     223,040         (7,181)
Cash and Cash Equivalents at Beginning of Year                                        54,609        277,649
                                                                                 -----------    -----------
Cash and Cash Equivalents at End of Year                                         $   277,649    $   270,468
                                                                                 ===========    ===========
Interest paid                                                                    $        --    $     1,625
                                                                                 ===========    ===========
</TABLE>


The Notes to Financial Statements are an integral part of these statements.


                                       F-5

<PAGE>



                                   NUVIM, INC.
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                      FOR THE YEAR ENDED DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                    Preferred Stock              Preferred Stock
                                        Series A                     Series C                   Common Stock
                               ---------------------------------------------------------------------------------------
                                  Shares          Amount        Shares         Amount         Shares          Amount
                               ------------   ------------   ------------   ------------   ------------   ------------
<S>                               <C>         <C>               <C>         <C>                 <C>       <C>
Balance at December 31, 2003      4,875,850   $         49      3,623,000   $         36        155,073   $          2
Shares issued in connection              --             --             --             --             --             --
with related party debt
extinguishment
Common stock issued in                   --             --             --             --         30,000             --
connection with service
agreement
Common stock issued in                   --             --             --             --          6,000             --
connection with payment of
accounts payable
Common stock issued in                   --             --             --             --        147,866              1
connection with accrued
compensation
Common stock issued in                   --             --             --             --         75,134              1
connection with stockholder
loans
Net loss for the year ended              --             --             --             --             --             --
December 31, 2004
                               ------------   ------------   ------------   ------------   ------------   ------------
Balance at December 31, 2004      4,875,850   $         49      3,623,000   $         36        414,073   $          4
                               ============   ============   ============   ============   ============   ============
</TABLE>




<TABLE>
<CAPTION>
                                Additional                        Total
                                 Paid-In     Accumulated      Stockholders'
                                 Capital       Deficit           Deficit
                               ---------------------------------------------


<S>                             <C>           <C>             <C>
Balance at December 31, 2003      7,300,687   $(15,716,578)   $ (8,415,804)
Shares issued in connection          71,912             --          71,912
with related party debt
extinguishment
Common stock issued in                   --             --              --
connection with service
agreement
Common stock issued in               36,000             --          36,000
connection with payment of
accounts payable
Common stock issued in              623,499             --         623,500
connection with accrued
compensation
Common stock issued in              345,042             --         345,043
connection with stockholder
loans
Net loss for the year ended              --     (2,131,581)     (2,131,581)
December 31, 2004
                               ------------   ------------    ------------
Balance at December 31, 2004   $  8,377,140   $(17,848,159)   $ (9,470,930)
                               ============   ============    ============
</TABLE>


The Notes to Financial Statements are an integral part of these statements.


                                       F6

<PAGE>


                                   NUVIM, INC.
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                      FOR THE YEAR ENDED DECEMBER 31, 2005

<TABLE>
<CAPTION>

                                   Preferred Stock               Preferred Stock
                                       Series A                     Series C                  Common Stock
                        ------------------------------------------------------------------------------------------
                            Shares          Amount          Shares         Amount         Shares        Amount
                        ------------    ------------    ------------   ------------   ------------   ------------
<S>                        <C>          <C>                <C>         <C>                 <C>        <C>
Balance at December
31, 2004                   4,875,850    $         49       3,623,000   $         36        414,073    $         4

Common stock issued
in payment of
convertible
promissory notes -
related parties                                                                            461,700              5

Common stock issued
in payment of accrued
salaries                                                                                   250,696              3

Common stock issued
in payment of senior
notes payable -
related parties                                                                            250,000              2

Common Stock issued
in payment of
stockholder loans,
subordinated
convertible
promissory notes
payable and accrued
interest                                                                                    88,882              1

Common stock issued
in payment of
advances - related
party                                                                                       23,000

Common stock issued
in payment of
accounts payable                                                                           197,031              2

Common stock issued
upon conversion of
convertible
promissory note -
related party                                                                              245,000              2

Common stock issued,
conversion of Series
A preferred stock         (4,875,850)            (49)                                       88,732              1

Common stock issued,
conversion of Series
C preferred stock                                         (3,623,000)           (36)        65,881              1

Common stock and
Warrants issued in
payment for media
campaign                                                                                   250,000              3

Warrants issued in
connection with
secured convertible
notes

Issuance of common
stock, initial public
offering                                                                                 2,700,000             27

Net loss for the year
  ended
  December 31,  2005            --              --              --             --             --             --
                        ------------    ------------    ------------   ------------   ------------   ------------
Balance at
   December 31 , 2005           --      $       --              --     $       --        5,034,995   $         51
                        ============                    ------------   ============   ============   ============

<CAPTION>
                          Additional                        Total
                            Paid-In       Accumulated    Stockholders'
                            Capital        Deficit         Deficit
                        --------------------------------------------

                         ------------   ------------    ------------
<S>                      <C>            <C>             <C>
Balance at December
31, 2004                 $  8,377,140   $(17,848,159)   $ (9,470,930)

Common stock issued
in payment of
convertible
promissory notes -
related parties             6,141,522                      6,141,527

Common stock issued
in payment of accrued
salaries                      593,747                        593,750

Common stock issued
in payment of senior
notes payable -
related parties               499,998                        500,000

Common Stock issued
in payment of
stockholder loans,
subordinated
convertible
promissory notes
payable and accrued
interest                      118,113                        118,114

Common stock issued
in payment of
advances - related
party                         69,000                          69,000

Common stock issued
in payment of
accounts payable              251,404                        251,406

Common stock issued
upon conversion of
convertible
promissory note -
related party                 244,998                        245,000

Common stock issued,
conversion of Series
A preferred stock                  48                           --

Common stock issued,
conversion of Series
C preferred stock                  35                           --

Common stock and
Warrants issued in
payment for media
campaign                      249,997                        250,000

Warrants issued in
connection with
secured convertible
notes                          17,366                         17,366

Issuance of common
stock, initial public
offering                    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    $ 18,167,605   $(20,245,061)   $ (2,077,405)
                         ============   ============    ============
</TABLE>


The Notes to Financial Statements are an integral part of these statements.


                                       F7
<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, predominantly on the East Coast, and the District of
Columbia. The Company's beverage products contain certain micronutrients which
Stolle Milk Biologics, Inc.'s ("SMBI") has patented. Spencer Trask Specialty
Group, LLC ("ST") is the controlling stockholder of SMBI. SMBI and ST
collectivelty are significant stockholders of the Company. The Company has
entered into supply and licensing agreements with SMBI for these patented
micronutrients, which can be terminated by SMBI under certain conditions (See
Note 21 A).

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 $2,131,581 and $2,396,902 for the
years ended December 31, 2004 and 2005, respectively. The Company has negotiated
extended terms until a subsequent financing on approximately $1,020,000 of notes
payable, stockholder loans, and accrued interest. Management also expects
operating losses to continue in 2006 and 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 preferred
stock, a demand note payable to a bank and cash advances from related parties
and stockholders. It is the Company's intention to raise additional capital
through additional borrowings and 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.


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, 2004 and 2005, these
allowances approximated $26,700 and $27,700, respectively. No amounts were
recorded as bad debt expense for the year ended December 31, 2004 as all
allowances represented sales returns or promotional allowances. Bad debt expense
was 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

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.

The Company also incurred deferred financing costs during 2005 and are being
amortized over the life of the debt, in this case six months. The unaudited
portion is recorded in other current assets.

E. Debt Extinguishments

The Company accounts for debt extinguishments in accordance with Financial
Accounting Standards Board Statement 15 "Accounting by


<PAGE>

Debtors and Creditors for Troubled Debt Restructurings". Related party debt
extinguishments are recorded as increases to 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
unreimbursed freight costs are recorded as selling general and administrative
expenses. For the years ended December 31, 2004 and 2005, freight-out costs
approximated $172,000 and $251,000, 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 (Also See Note 2 R - Recent Accounting
Pronouncements)

The Company accounts for employee stock-based compensation in accordance with
Financial Accounting Standards No. 123, "Accounting for Stock-based
Compensation" (SFAS No. 123) which allows stock options and similar instruments
issued to employees to be valued under the principles of ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees", and the pro forma effect on net loss
and loss per share as if the fair value based method had been applied to be
disclosed supplementally. Under APB Opinion No. 25 employee stock options are
accounted for using the intrinsic method, where compensation expense is recorded
on the grant date only if the current market price of the underlying stock
exceeds the exercise price of the option. Incentive stock grants are recorded at
the quoted market price on the measurement date.

Equity instruments issued to non-employees are accounted for in accordance with
SFAS No. 123, "Accounting for Stock-Based Compensation", and 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"
using a fair value approach. For equity instruments, including stock options,
issued to non-employees, the fair value of the equity instruments or the fair
value of the consideration received, whichever is more readily determinable, is
used to determine the value of services or goods received and the corresponding
charge to operations. (See notes 18 F for a discussion of time and valuation
assumptions used to value options and warrants.)

SFAS No. 123 established accounting and disclosure requirements using a fair
value-basis method of accounting for stock-based employee compensation plans.
Had the Company elected to recognize compensation cost based on fair value of
the stock options at the date of grant under SFAS No.123, such costs would have
been recognized ratably over the vesting period of the underlying instruments
and the Company's net loss and net loss per common share would have increased to
the pro forma amounts indicated in the table below.


                                              Year Ended
                                             December 31,
                                          2004           2005
Net loss, as reported                  $2,131,581     $2,396,902
Net loss, pro forma                    $2,143,042     $3,191,178
Net loss per share, as reported        $   (10.26)    $     (.82)
Net loss per share, pro forma          $   (10.32)    $    (1.09)

The pro forma results above are not intended to be indicative of, or a
projection of, future results.

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, 2004 and 2005,
advertising and promotion


<PAGE>

expense was approximately $687,000 and $477,000, 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, 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, 2005, the Company had warrants to purchase 7,423,937 shares of
common stock (see note 18 E) and employee stock options (see note 18 F) to
purchase 1,643,316 shares of common stock outstanding 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, 2004 and December 31, 2005 the Company has not
recognized any impairment charges for long lived assets.

P. Concentration of Risk

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 two customers during the year ended December 31, 2004 approximated 14%
and 13% of sales. Sales to four customers during the year ended December 31,
2005 approximated 21%, 14%, 11% and 10% of sales.

Accounts receivable from two customers at December 31, 2004 approximated 21% and
16% of accounts receivable, and four customers at December 31, 2005 approximated
35%, 13%, 12% and 10%, respectively

One outside vendor manufactures all of the Company's finished goods. During the
years ended December 31, 2004 and 2005, manufacturing costs of approximately
$146,000 and $217,500 were incurred at this vendor. There was no amount due to
this vendor at December 31, 2004 and 2005.

See note 21a for 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.

R. Recent Accounting Pronouncements

      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 is required to be adopted by Nuvim Inc. in the first quarter of
fiscal 2006. The Company is currently evaluating the effect



<PAGE>

that the adoption of SFAS 154 will have on its consolidated results of
operations and financial condition, but does not expect it to have a material
impact.

The FASB issued FASB Interpretation No. 47 ("FIN 47"), "Accounting for
Conditional Asst 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. The Company does not expect this
guidance to have a material affect on its financial statements.

In December 2004, the FASB revised FASB Statement No. 123, Accounting for
Stock-Based Compensation. This Statement supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and its related implementation
guidance. This Statement establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services. It also addresses transactions in which an entity incurs liabilities
in exchange for goods or services that are based on the fair value of the
entity's equity instruments or that may be settled by the issuance of those
equity instruments. This Statement focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions and requires such statement be recorded at fair value. This
Statement does not change the accounting guidance for share-based payment
transactions with parties other than employees provided in Statement 123 as
originally issued and EITF Issue No. 96-18, "Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services." It applies to the Company's first reporting period
in 2006. The impact of the adoption of Statement No. 123 (revised 2004) is
expected to have a material impact on results of operations (see note 2 J).

In January 2003, the FASB issued interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities". The primary objectives of this
interpretation are to provide guidance on the identification of entities for
which control is achieved through means other than through voting rights
("variable interest entities") and how to determine when and which business
enterprise (the "primary beneficiary") should consolidate the variable interest
entity. This new model for consolidation applies to an entity in which either
(i) the equity investors (if any) do not have a controlling financial interest;
or (ii) the equity investment at risk is insufficient to finance that entity's
activities without receiving additional subordinated financial support from
other parties. In addition, FIN 46 requires that the primary beneficiary, as
well as all other enterprises with a significant variable interest entity, make
additional disclosures. Certain disclosure requirements of FIN 46 were effective
for financial statements issued after January 31, 2003. In December 2003, the
FASB issued FIN 46 (revised December 2003), "Consolidation of Variable Interest
Entities" ("FIN 46-R") to address certain FIN 46 implementation issues. The
effective dates and impact of FIN 46 and FIN 46-R are as follows: (i)
Special-purpose entities ("SPEs") created prior to February 1, 2003: The Company
must apply either the provisions of FIN 46 or early adopt the provisions of FIN
46-R at the end of the first interim or annual reporting period ended after
December 15, 2003. (ii) Non-SPEs created prior to February 1, 2003: The Company
was required to adopt FIN 46-R at the end of the first interim or annual
reporting period ending after March 15, 2004. (iii) All entities, regardless of
whether SPE, that were created subsequent to December 31, 2003: The
interpretation applies immediately. The Company does not have any arrangements
with variable interest entities that will require consolidation of their
financial information in the Company's financial statements.

S. Reclassifications

Certain reclassifications were made to the 2004 financial statements in order to
conform to the 2005 financial statements. Such reclassifications had no effect
on 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.

Underwriters warrants . The Company issued a warrant to purchase 270,000 shares
of common stock in connection with the offering. The


<PAGE>


exercise price of the underwriters 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, 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
                                                                                          -----------------------
                                                                                          Additonal
                                                     Shares       Fair         Debt        Paid In      Gain
                                                     Issued      Value    Extinguishment   Capital
-----------------------------------------------------------------------------------------------------------------
<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>



NOTE 5 - INVENTORY

Inventory consists of the following:


                                           December 31,
                                      ---------------------
                                        2004        2005
                                      -------     --------
Raw materials                         $62,358     $ 93,665
Work In Progress                           --       22,087
Finished goods                         22,126       56,962
                                      -------     --------
Total                                 $84,484     $172,714
                                      =======     ========


NOTE 6 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid Expenses and Other Current Assets consists of the following:


                                          December 31,
                                     --------------------
                                       2004        2005
                                     --------    --------
Prepaid Advertising                  $    --     $250,000
Prepaid Insurance                     53,000       51,730
Debt Financing Costs                      --       13,259
Other Prepaids and Advance Payments    8,766       13,926
                                     --------    --------
Total                                $61,766     $328,915
                                     ========    ========

The Advertising program began in January 2006, the amount will be expensed as it
is used over the next twelve months.
<PAGE>


NOTE 7 - EQUIPMENT AND FURNITURE

Equipment and furniture consists of the following:

                                         December 31,
                                    ---------------------
                                      2004         2005
                                    ---------    --------
Equipment                           $155,431     $155,431
Furniture and fixtures                54,522       54,964
                                    ---------    --------
                                     209,953      210,395
Less: accumulated depreciation      (188,933)    (208,893)
                                    ---------    --------
Equipment and furniture, net        $ 21,020     $  1,502
                                    ========     ========


Depreciation expense for years ended December 31, 2004 and 2005 was $42,120 and
$19,960, respectively.

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 noteholders 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 noteholders 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%.

The Company has recorded $21,646 and $97,514 as interest expense on the notes in
2004 and 2005, respectively. Accrued interest was $ 21,646 at December 31, 2004
and $119,160 at December 31, 2005.

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, 2004 and 2005, 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
performance commitment under the contract had been met as of January 31, 2006,
and accordingly the Company expects to record a non cash charge of approximately
$250,000 for services performed under the agreement during the first quarter of
2006.

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 an additional condition to the loan agreement the Company issued a
convertible note in 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 25% ownership interest. During 2004 and 2005
Nuvim Powder LLC was an inactive company.

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 has been 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 agreement.

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


<PAGE>


Notes due to them in exchange for 461,700 shares of common stock, see
note 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 $70,421 and $49,558 for the years ended
December 31, 2004 and 2005, respectively, and accrued interest payable on the
note was $129,940 at December 31, 2004.

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. Since the notes are only convertible upon an event of default the
Company calculated the value of the beneficial conversion feature of the notes
of $11,200 on the issuance date, but will not record it as debt discount until
the event of default occurs in accordance with EITF 00-27 and 98-5.

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 is being
amorrtized 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 are
being amortized over the life of the note. The Company recognized $1,128 in
interest expense, including amortization of discounts and fees, in 2005 related
to the notes.

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 $340,057 and $168,778 for the years
ended December 31, 2004 and 2005, respectively. Accrued interest on these notes
was $813,251 at December 31, 2004.

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
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.

The Company recorded $7,486 as interest expense on the convertible note in 2004
and $62,514, including the beneficial conversion feature in 2005. The $7,486 of
accrued interest was included in accrued expenses at December 31, 2004

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


<PAGE>

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 $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.

Interest expense on stockholder loans was $85,983 and $33,877 for the years
ended December 31, 2004 and 2005, respectively. Accrued interest payable was
$147,793 and $28,691 as of December 31, 2004 and 2005, 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 $470,000 and $420,100 for the
years ended December 31, 2004 and 2005, 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, $.20.

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
831,500 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.

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


<PAGE>


investors representing $78,500 elected a cash refund. The Company paid an
additional $23,080 of the refunded proceeds due during 2005 and has remaining
liability of $18,920 at December 31, 2005.

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 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.

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 theron. 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
under the agreed payment schedule in 2005. The note bears interest at 10% per
annum. Interest expense related to the note was $2,542 and $11,925 for 2004 and
2005, respectively. Accrued interest was $2,542 and $14,467 at December 31, 2004
and 2005.

NOTE 18 - STOCKHOLDERS' DEFICIT

A. Reverse Stock Split

A one-for-fifty five reverse stock split was effected November 30, 2004. The
Company retained the current par value of $.00001 per share for all shares of
common stock. All references in the financial statements to the number of shares
outstanding, per share amounts, and stock option and warrant data pertaining to
the Company's common stock have been restated to reflect the effect of the
reverse stock split for all years presented. Stockholders' deficit reflects the
reverse stock split by reclassifying from "common stock" to "additional paid in
capital" an amount equal to the par value of the reduced shares arising from the
reverse split.

B. 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.

C. 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.

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.

D. Preferred Stock Series C


<PAGE>


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 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.

E. Warrants

The following is a summary of warrants outstanding at December 31, 2005:

<TABLE>
<CAPTION>
                                                                                                   Number of
                                                                                                   Shares of
                                                                                                    Common
                                                                                                     Stock         Exercise
                                                                                                  Pertaining to     Price
            Date Issued                        Basis for Warrant Issuance                           Warrant        per Share
-----------------------------  ---------------------------------------------------------          -------------    -------
<S>                            <C>                                                                  <C>             <C>
November 2000                  Placement agent fees for series A preferred stock (a)(b)                 8,714       $55.00
June 2001                      Stockholder demand notes payable (e)                                     8,823       $55.00
November 2002                  Placement agent fees for series C preferred stock (b)(f)                 1,273       $11.00
March 2003                     Accrued compensation                                                     2,577       $11.00
September 2004                 Second amended services agreement (g) (b)                              650,000       $ 1.00
July 2004                      Amended services agreement (h)                                              --           --
June 2005                      Conversion of note payable(d)                                          245,000       $ 1.50
June 2005                      Conversion of note payable(d)                                          245,000       $ 2.00
June 2005                      Class A warrants IPO (c) (d)                                         2,700,000       $ 1.50
June 2005                      Class B warrants IPO(d)                                              2,700,000       $ 2.00
June 2005                      Underwriters warrant(d)                                                270,000       $ 1.20
November 2005                  Media Campaign (k)                                                     250,000        $1.50
November 2005                  Media Campaign (k)                                                     250,000        $2.00

December 2005                  Secured Convertible Notes (i)                                           67,600         $.40


December 2005                  Secured Convertible Notes (J)                                           24,950         $.40
</TABLE>


(a)   Expires November 2007
(b)   Includes anti-dilution agreement and cashless exercise right.
(c)   Callable at $.25 if common stock trades at $2.00 for five days.
(d)   Expires June 24, 2010.
(e)   Expires September 2006.
(f)   Expires the June 20, 2008.
(g)   Expires September 14, 2014.


<PAGE>

(h)   Warrant to purchase an amount of common stock to bring spokesperson's
      total holdings to 9.9% of outstanding fully-diluted common shares of the
      Company immediately after its initial public offering. The spokesperson's
      holdings exceeded 9.9% immediately after the offering. Therefore, no
      additional shares were issueable under the warrant.
(i)   Expire December 22, 2008
(j)   Expire December 22, 2010
(k)   Expires June 24, 2010

F. Stock Options

The Company adopted three Stock Option Plans (the "Plans") in 2000, 2001 and
2002 and two stock option plans in 2005 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.

Each Plan expires ten years from the date of adoption. The Company is authorized
to grant options for up to 1,735,273 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-
                                             Number of      Average
                                             Shares      Exercise Price
                                           ----------------------------
       Outstanding December 31, 2003          33,428          $   19.38
       Cancelled                             (18,112)         $   24.25
       Issued                                     --                 --
                                           ---------
       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
                                           =========
       Exercisable at December 31, 2004       13,116          $   14.04
                                           =========
       Exercisable at December 31, 2005    1,150,816          $    1.01
                                           =========


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 6 and
10 years as of December 31, 2004 and December 31, 2005, respectively. The
weighted average grant date fair value of options issued in 2005 was $.70.

Pro-forma information regarding net loss is required by SFAS No. 123 and has
been determined as if the Company had accounted for its employee stock options
under the fair value method of SFAS No. 123. Since there is no trading history
for the Company's stock, the fair value of the Company's issued options and
warrants were estimated at the date of grant using the fair value method with
the following assumptions:

        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           $.77 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.


<PAGE>


G. Stock Issued in Payment of Accounts Payable and for Payment of Goods and
Services

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 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".

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 ending December 31, 2005.

In November 2004, several vendors also agreed accept 6,000 shares of common
stock at its estimated fair value of $6.00 per share in payment of $36,000 of
accounts payable. The amount has been recorded as additional paid in capital as
of December 31, 2004. See Note 19B for revised terms.

H. Stock Reserved

At December 31, 2005, the Company had reserved shares of its common and
preferred stock as follows:



                                                Common        Preferred
                                              ----------      ---------
Conversion Secured Convertible Notes             169,000
Conversion of Accrued Compensation                81,819
Exercise of common stock warrants              7,423,937
Exercise of stock options                      1,735,273
Conversion of subordinated convertible
      promissory notes                            20,455       1,125,000
                                              ----------      ----------
Total                                          9,430,484       1,125,000
                                              ==========      ==========


I. 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. In February 2006, the Company acquired a 24% interest in the LLC not
previously owned by it in exchange for a warrant to acquire 50,000 shares of
Nuvim Inc. common stock at a price of $1.00. The warrant has a term of ten
years.

NOTE 19 - INCOME TAXES

Based on the Company's operating losses, no provision for income taxes have been
provided for the years ended December 31, 2004 and 2005. As of December 31, 2004
the Company had net operating losses of approximately $16,000,000, which expire
though the year 2024. Due to the Company's initial public offering there is 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, 2003 and 2004, the Company had deferred tax assets of
approximately $4,800,000 and $5,440,000, respectively. A valuation allowance for
the full amount of the deferred tax assets was established since it is more
likely than not 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 2004 and 2005, the Company received proceeds from the sale of the
rights to approximately $3,340,000 and $3,075,264 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
$300,564 and $276,774 in 2004 and 2005, 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


<PAGE>


$258,476 and $238,026 in 2004 and 2005, respectively, related to the sale and
accordingly recorded them as a tax benefit in the year received.

NOTE 20 - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
<TABLE>
<CAPTION>
                                                                                                      December 31,
                                                                                               -------------------------
                                                                                                  2004            2005
                                                                                               --------       ----------
<S>                                                                                            <C>            <C>
Adjustment for related party debt extinguishments through equity                               $ 71,912       $       --
Issuance of common stock in payment of accounts payable                                        $ 36,000       $   29,644
Issuance of common stock in payment of accrued compensation                                    $623,500       $       --
Issuance of common stock in payment of stockholder loans and accrued interest                  $345,043       $       --
Issuance of note payable for accounts payable-related party                                    $175,000       $       --
Issuance of note payable for accounts payable                                                  $150,000       $       --
Assignment of senior secured notes payable and accrued interest to related party               $     --       $2,679,498
Automatic conversion of notes payable                                                          $     --       $  245,000
Debt extinguished through issuance of common stock - see note 6                                $     --       $7,679,916
Issuance of common stock for paid advertising                                                  $     --       $  250,000
Issuance of common stock for accounts payable                                                  $     --       $  117,938
Warrants issued for convertible note debt discount                                             $     --       $   17,366
Settle deferred offering costs                                                                 $     --       $   95,000
</TABLE>


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 $21,000 and
$10,000 was recorded in the years ended December 31, 2004 and 2005,
respectively, of which $21,000 and $10,000 are payable to SMBI at December 31,
2004 and 2005, 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, 2004 and 2005, the
Company purchased approximately $47,000, and $98,000, 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 purchase 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 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.

B. Lease

The Company leases office space under an agreement expiring in December 2006,
with annual payments approximating $58,000. During the years ended December 31,
2004 and 2005, rent expense was approximately $58,000.

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.

The Company has entered into an employment agreement with another executive
officer that has no specific termination date, with an initial $150,000 annual
base salary.

D. NuVim Powder Co-Packer

In August of 2005 the Company issued a purchase order for approximately $50,000
for the production of the Nuvim Powder product. As of


<PAGE>


December 31, 2005 approximately $25,000 of the order was filled and paid for and
the remaining $25,000 was completed in 2006. There were no sales of the powder
product in 2005.

NOTE 22 - RELATED PARTY TRANSACTIONS

A. Consulting Fees

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 $18,000 and $15,000 for the year ended
December 31, 2004 and 2005, respectively.

Included in selling, general and administrative expenses are consulting fees to
an immediate family member of an executive officer of the Company of
approximately $27,000 and December 31, 2004.

B. Advertising and Legal Fees

The Company incurred approximately $92,000 of marketing and legal expenses for
the year ended December 31, 2004 to an advertising agency and law firm,
controlled by a board member, a member of his immediate family and an investor
in NuVim Powder LLC.

C. Accounts Payable and Accrued Expenses - Related Parties

Accounts payable and accrued expenses - related parties consists of the
following:



                                                       December 31,
                                                   --------------------
                                                     2004        2005
                                                   --------    --------
Royalty license and supply agreement - (a)         $487,000    $212,278
Consulting fees - (b)                                98,600      19,050
Legal fees - (b)                                      1,400
Advertising and Legal fees - (c)                     72,000
                                                   --------    --------
Total                                              $659,000    $231,328
                                                   ========    ========

(a)   Payable to SMBI, an approximate .09% stockholder of the Company.
(b)   See description of caption A. above.
(c)   See description of caption B. above

F. Amended Service Agreement - Spokesperson

On July 26, 2004, the Company entered into an amended services agreement with
its spokesperson. Under the agreement, the Company agreed to issue a convertible
promissory note (see Note 8) in payment of unpaid past services and enter into
an amended agreement for services for the three year period ending in January,
2006.

On September 14, 2004, the Company entered into a second amendment to the
Services Agreement, providing for the issuance of 30,000 shares of common stock
and a warrant to purchase $650,000 of common stock at a fair market price to be
determined based on a "maturity event," as defined in the agreement, in
consideration for services to be provided under the amended services agreement
during the years 2004, 2005 and 2006. The warrant expires 10 years after
issuance. The number of shares and exercise price of the warrant are set
according to the sooner of a "maturity event," as defined in the amended service
agreement and the warrant agreement, or March 31, 2005, subsequently extended to
May 31, 2005. In the event of a public stock offering of the Company's common
stock on or prior to May 31, 2005, the warrant will be exercisable at the IPO
price into the number of shares of common stock calculated by dividing $650,000
by the initial public offering price. If the maturity event is a sale of assets
or a merger or acquisition, the share calculation price is determined depending
on the nature of the maturity event. If a "maturity event" does not occur on or
prior to May 31, 2005, the share calculation price will be the lesser of $1 or
80% of the purchase price per share in any subsequent financing, including this
offering, depending on the outcome of certain future events defined in the
agreement.

The stock issued and underlying the warrants are subject to 100% forfeiture if
the spokesperson does not complete all services during the entire period under
the Services Agreement. Therefore, no value will be ascribed to the stock and
warrants until performance is complete in accordance with EITF 96-18.

NOTE 23 - SUBSEQUENT EVENTS

A. Stock Option Plan

In March 2006, the Board of Directors approved the 2006 Incentive Stock Option
Plan for the benefit of its officers, employees and consultants. The plan
Authorizes the grant of 1,500,000 shares of common stock. The plan will become
effective upon approval of shareholders at the Company's annual meeting in May
of 2006.


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B. NuVim Powder LLC

In February, 2006 the Company issued a warrant to purchase 50,000 shares of
common stock at $1.00 per share in exchange for a 24.5% interest in NuVim Powder
LLC. The Warrants have a term of ten years.

C. Stock Issuances

In February 2006, the Company issued 50,000 shares of common stock to the
company's Corporate Secretary and general counsel for services to be provided in
2006.

In February 2006, the Company issued 7,850 shares of common stock for public
relations services to be provided in 2006.