| Florida                                                                         | 20-3217152                                         |
|---------------------------------------------------------------------------------|----------------------------------------------------|
| (State                  or other jurisdiction of incorporation or organization) | (IRS                  Employer Identification No.) |

----

| PART I.FINANCIAL                        INFORMATION                                                                                                                                                                                                                                                     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                              |   |
| ITEM 1.                        FINANCIAL                        STATEMENTS                                                                                                                                                                                                                              |   |
|                                                                                                                                                                                                                                                                                                              |   |
| Balance                        Sheets as of December 31,                        2007(unaudited) and June 30, 2007(audited)                                                                                                                                                                                   | 3      |
| Statements                        of Operations for the                        three month and six month periods ended December 31, 2007                        and 2006, and                        cumulative from July 22, 2005 (inception) through December 31, 2007                        (unaudited)  | 4      |
| Statement                        of Changes in                        Stockholders' Equity for the period from July 22, 2005(inception)                        through December 31, 2007 (unaudited)                                                                                                         | 5      |
| Statements                        of Cash Flows for the                        six month period ended December 31, 2007, and 2006 and cumulative                        from                        July 22, 2005 (inception) through December 31, 2007                        (unaudited)                   | 6      |

| Notes                    to                    Financial Statements (unaudited)                            | 7      |
|-----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |
| ITEM                    2.                    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION    |        |
|                                                                                                            |   |
| Overview                                                                                                   | 14     |
| Results                    of                    operations                                                | 15     |
| Liquidity                    and                    capital resources                                      | 15     |
|                                                                                                                 |        |
| ITEM                    3. CONTROLS AND PROCEDURES                                                         | 16     |
|                                                                                                                 |        |
| PART                    II - OTHER INFORMATION                                                             | 17     |
|                                                                                                            |   |
| Item                    1. Legal                    proceedings                                            | 17     |
| Item                    2.                    Unregistered sales of equity securities and use of proceeds  | 17     |
| Item                    3. Defaults                    upon senior securities                              | 17     |
| Item                    4.                    Submission of matters to a vote of security holders          | 17     |
| Item                    5. Other                    information.                                           | 17     |
| Item                    6.                    Exhibits                                                     | 17     |

----

|                                                                                                                                                     |   | December                    31, |       |   | June                    30, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                                                     |   | 2007                            |       |   | 2007                        |   |
|                                                                                                                                                     |   | (Unaudited)                     |       |   | (Audited)                   |   |
| ASSETS                                                                                                                                                   |   |                            |       |   |                        |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |
| Cash                                                                                                                                                     |   | $                               | 29,554     |   |                        | $      | 10,918 |   |
| Accounts                    receivable - net of                    allowance ( $6,041 at December 31, 2007 and $-0- at June 30,                    2007) |   |                            | -          |   |                        |   | 6,904 |   |
| Other                    receivables                                                                                                                     |   |                            | -          |   |                        |   | 7,000 |   |
| Inventories                                                                                                                                              |   |                            | 110,796    |   |                        |   | 63,642 |   |
| Other                                                                                                                                                    |   |                            | 7,065      |   |                        |   | 7,035 |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| Total                    current                    assets                                                                                               |   |                            | 147,415    |   |                        |   | 95,499 |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| Trademark                                                                                                                                                |   |                            | 325        |   |                        |   | 325 |   |
| Security                    deposit                                                                                                                      |   |                            | 200        |   |                        |   | 200 |   |
| Intangible                    asset -                    license                                                                                         |   |                            | 1,089,467  |   |                        |   | - |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| Total                    assets                                                                                                                          |   | $                               | 1,237,407  |   |                        | $      | 96,024 |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| LIABILITIES                    AND STOCKHOLDERS'                    EQUITY (DEFICIENCY)                                                                  |   |                            |       |   |                        |   |   |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| CURRENT                    LIABILITIES                                                                                                                   |   |                            |       |   |                        |   |   |   |
| Accounts                    payable and accrued                    expenses                                                                              |   | $                               | 300,034    |   |                        | $      | 36,623 |   |
| Notes                    payable                                                                                                                         |   |                            | 30,000     |   |                        |   | 50,000 |   |
| Due                    to                    officers                                                                                                    |   |                            | 79,271     |   |                        |   | 13,373 |   |
| Due                    to                    stockholders                                                                                                |   |                            | 183,383    |   |                        |   | 74,350 |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| Total                    current                    liabilities                                                                                          |   |                            | 592,688    |   |                        |   | 174,346 |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| Accrued                    royalties                    payable                                                                                          |   |                            | 464,864    |   |                        |   | - |   |
| Convertible                    debt                                                                                                                      |   |                            | 50,000     |   |                        |   | 50,000 |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| STOCKHOLDERS'                    EQUITY                    (DEFICIENCY)                                                                                  |   |                            |       |   |                        |   |   |   |
| Common                    stock, par value $.0001 per                    share; 100,000,000 authorized                                                   |   |                            | 2,328      |   |                        |   | 2,127 |   |
| Common                    stock to be                    issued                                                                                          |   |                            | 382,000    |   |                        |   | - |   |
| Additional                    paid in                    capital                                                                                         |   |                            | 1,361,442  |   |                        |   | 1,047,143 |   |
| Deficit                    accumulated during the                    development stage                                                                   |   |                            | (1,615,915 | )      |                        |   | (1,177,592 | ) |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| Total                    stockholders' equity                    (deficiency)                                                                            |   |                            | 129,855    |   |                        |   | (128,322 | ) |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |
| Total                    liabilities and                    stockholders' equity (deficiency)                                                            |   | $                               | 1,237,407  |   |                        | $      | 96,024 |   |
|                                                                                                                                                     |   |                            |       |   |                        |   |   |   |

----

|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   | July                  22, 2005  |       |
|------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|---------------------------------|--------|------------|---------------------------------|--------|--------|---------------------------------|--------|--------|---------------------------------|------------|
|                                                                         |   | Three                    months |       |   | Three                    months |   |       | Six                    months   |   |   | Six                    months   |   |   | (inception)                     |       |
|                                                                         |   | ended                           |       |   | ended                           |   |       | ended                           |   |   | ended                           |   |   | through                         |       |
|                                                                         |   | December                    31, |       |   | December                    31, |   |       | December                    31, |   |   | December                    31, |   |   | December                    31, |       |
|                                                                         |   | 2007                            |       |   | 2006                            |   |       | 2007                            |   |   | 2006                            |   |   | 2007                            |       |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |
| REVENUES                                                                     |   | $                               | 4,168      |   |                            | $      | -          |                            |   | $      | 21,347                          |   |   | $                               | -          |   |   | $ | 27,626 |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| COST                    OF GOODS                    SOLD                     |   |                            | 4,825      |   |                            |   | -          |                            |   |   | 19,481                          |   |   |                            | -          |   |   |   | 22,892 |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| Gross                    profit                                              |   | $                               | (657       | )      |                            | $      | -          |                            |   | $      | 1,866                           |   |   | $                               | -          |   |   | $ | 4,734 |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| EXPENSES                                                                     |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| General                    and administrative                    expenses    |   |                            | 200,661    |   |                            |   | 36,461     |                            |   |   | 428,347                         |   |   |                            | 57,987     |   |   |   | 1,588,742 |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| LOSS                    FROM                    OPERATIONS                   |   |                            | (201,318   | )      |                            |   | (36,461    | )                               |   |   | (426,481                        | )      |   |                            | (57,987    | ) |   |   | (1,584,008 | ) |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| Interest                    expense                                          |   |                            | 3,445      |   |                            |   | -          |                            |   |   | 6,445                           |   |   |                            | -          |   |   |   | 26,510 |   |
| Amortization                    expense                                      |   |                            | 5,397      |   |                            |   | -          |                            |   |   | 5,397                           |   |   |                            | -          |   |   |   | 5,397 |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| Loss                    before provision for income                    taxes |   |                            | (210,160   | )      |                            |   | (36,461    | )                               |   |   | (438,323                        | )      |   |                            | (57,987    | ) |   |   | (1,615,915 | ) |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| Provision                    for income                    taxes             |   |                            | -          |   |                            |   | -          |                            |   |   | -                               |   |   |                            | -          |   |   |   | - |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| Net                    loss                                                  |   | $                               | (210,160   | )      |                            | $      | (36,461    | )                               |   | $      | (438,323                        | )      |   | $                               | (57,987    | ) |   | $ | (1,615,915 | ) |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| Net                    loss per share basic and                    diluted   |   | $                               | (0.01      | )      |                            | $      | (0.00      | )                               |   | $      | (0.02                           | )      |   | $                               | (0.00      | ) |   | $ | (0.08 | ) |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |
| Weighted                    average per common                    share      |   |                            | 22,412,125 |   |                            |   | 20,611,750 |                            |   |   | 21,897,508                      |   |   |                            | 20,611,750 |   |   |   | 20,368,083 |   |
|                                                                         |   |                            |       |   |                            |   |       |                            |   |   |                            |   |   |                            |       |   |   |   |   |   |

----

|                                                                                                             |   | Common                    stock to be                    issued |        |   | Common                    stock issued and                    outstanding |   |     | Additonal                    paid in                    capital |   |   | Deficit                    Accumulated During the                    Development Stage |   |   | Total                    Stockholders'                    Equity |   |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|-------------|--------|---------------------------------------------------------------------------|--------|----------|-----------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                                                                                                             |   | Shares                                                          |        |   | Amount                                                                    |   |     | Shares                                                          |   |   | Amount                                                                                 |   |   |                                                             |   |   |   |   |   |   |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |
| Balance                    July 22, 2005                    (inception)                                          |   |                                                            | -           |   |                                                                      | $      | -        |                                                            |   |   | -                                                                                      |   |   | $                                                                | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock to be issued in                    connection with Incorporation (July 22, 2005) |   |                                                            | 4,000,000   |   |                                                                      |   | 10,000   |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | - |   |   |   | 10,000 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock to be issued as                    compensation - consulting services            |   |                                                            | 16,150,000  |   |                                                                      |   | 40,375   |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | - |   |   |   | 40,375 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued - private                    placement, net of issuance costs of $58,255  |   |                                                            | 461,750     |   |                                                                      |   | 126,445  |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | - |   |   |   | 126,445 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    loss                                                                                      |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | (64,361 | ) |   |   | (64,361 | ) |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                    June 30,                    2006                                                      |   |                                                            | 20,611,750  |   |                                                                      |   | 176,820  |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | (64,361 | ) |   |   | 112,459 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of shares                    (unaudited)                                             |   |                                                            | (20,611,750 | )      |                                                                      |   | (176,820 | )                                                               |   |   | 20,611,750                                                                             |   |   |                                                             | 2,061  |   |   |   | 174,759 |   |   |   | - |   |   |   | - |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beneficial                    conversion of loan                    discount                                     |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | 18,750 |   |   |   | - |   |   |   | 18,750 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued as                    compensation - consulting services                  |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | 660,000                                                                                |   |   |                                                             | 66     |   |   |   | 622,334 |   |   |   | - |   |   |   | 622,400 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of options for services                    rendered                                  |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   | 231,300 |   |   |   |   |   |   |   | 231,300 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    loss                                                                                      |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | (1,113,231 | ) |   |   | (1,113,231 | ) |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                    June 30,                    2007                                                      |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | 21,271,750                                                                             |   |   |                                                             | 2,127  |   |   |   | 1,047,143 |   |   |   | (1,177,592 | ) |   |   | (128,322 | ) |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock to be issued                    (unaudited)                                      |   |                                                            | 2,020,000   |   |                                                                      |   | 382,000  |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | - |   |   |   | 382,000 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of shares                    (unaudited)                                             |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | 1,125,000                                                                              |   |   |                                                             | 113    |   |   |   | 149,887 |   |   |   | - |   |   |   | 150,000 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued as                    compensation - consulting services (unaudited)      |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | 771,750                                                                                |   |   |                                                             | 76     |   |   |   | 164,111 |   |   |   | - |   |   |   | 164,187 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of options                    (unaudited)                                            |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   | 125,000                                                                                |   |   |                                                             | 12     |   |   |   | 301 |   |   |   |   |   |   |   | 313 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    loss                    (unaudited)                                                       |   |                                                            | -           |   |                                                                      |   | -        |                                                            |   |   | -                                                                                      |   |   |                                                             | -      |   |   |   | - |   |   |   | (438,323 | ) |   |   | (438,323 | ) |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                    December 31,                    2007                                                  |   |                                                            | 2,020,000   |   |                                                                      | $      | 382,000  |                                                            |   |   | 23,293,500                                                                             |   |   | $                                                                | 2,328  |   |   | $ | 1,361,442 |   |   | $ | (1,615,915 | ) |   | $ | 129,855 |   |
|                                                                                                             |   |                                                            |        |   |                                                                      |   |     |                                                            |   |   |                                                                                   |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                             |   |                              |     |   |                              |   |    |  July                      22,                      2005 |   |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|--------|-----------------------------------|--------|---------|---------------------------------------------------------------|--------|
|                                                                                                             |   | Six                      months   |     |   | Six                      months   |   |    | (inception)                                                   |   |
|                                                                                                             |   | ended                             |     |   | ended                             |   |    | through                                                       |   |
|                                                                                                             |   | December                      31, |     |   | December                      31, |   |    | December                      31,                             |   |
|                                                                                                             |   | 2007                              |     |   | 2006                              |   |    | 2007                                                          |   |
| CASH                      FLOWS FROM OPERATING                      ACTIVITIES:                                  |   |                              |     |   |                              |   |    |                                                          |   |   |
| Net                      loss                                                                                    |   | $                                 | (438,323 | )      |                              | $      | (57,987 | )                                                             |   | $ | (1,615,915 | ) |
| Adjustments                      to reconcile net loss                      to net cash used in operating        |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| activities:                                                                                                      |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
|   Amortization                      of  intangible asset - license                           |   |                              | 5,397    |   |                              |   |    |                                                          |   |   | 5,397 |   |
|   Common                      stock issued -                      for services                         |   |                              | 164,187  |   |                              |   | -       |                                                          |   |   | 826,962 |   |
|   Issuance                      of stock                      options - employee                       |   |                              | -        |   |                              |   | -       |                                                          |   |   | 231,300 |   |
|   Amortization                      of                      beneficial conversion discount             |   |                              | -        |   |                              |   | -       |                                                          |   |   | 18,750 |   |
|   Changes                      in operating                      assets and liabilities                |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
|     (Increase)/Decrease                      in:                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
|          Accounts                      receivable                   |   |                              | 6,904    |   |                              |   | -       |                                                          |   |   | - |   |
|          Other                      receivables                     |   |                              | 7,000    |   |                              |   | -       |                                                          |   |   | - |   |
|           Inventories                                          |   |                              | (47,154  | )      |                              |   | -       |                                                          |   |   | (110,796 | ) |
|          Other                                                      |   |                              | (30      | )      |                              |   | (2,320  | )                                                             |   |   | (7,065 | ) |
|          Security                      deposits                     |   |                              | -        |   |                              |   | -       |                                                          |   |   | (200 | ) |
|     Increase/(Decrease)                      in:                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
|          Accounts                      payable and accrued expenses |   |                              | 13,411   |   |                              |   | 10,872  |                                                          |   |   | 50,034 |   |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| Net                      cash used in operating                      activities                                  |   |                              | (288,608 | )      |                              |   | (49,435 | )                                                             |   |   | (601,533 | ) |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| CASH                      FLOWS FROM INVESTING                      ACTIVITIES:                                  |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| Purchase                      of                      license                                                    |   |                              | (50,000  | )      |                              |   | -       |                                                          |   |   | (50,000 | ) |
| Trademark                                                                                                        |   |                              | -        |   |                              |   | (325    | )                                                             |   |   | (325 | ) |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| Net                      cash used in investing                      activities                                  |   |                              | (50,000  | )      |                              |   | (325    | )                                                             |   |   | (50,325 | ) |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| CASH                      FLOWS FROM FINANCING                      ACTIVITIES:                                  |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| Net                      proceeds from sale of stock                      and exercise of stock options          |   |                              | 202,313  |   |                              |   | -       |                                                          |   |   | 338,758 |   |
| Proceeds                      from notes                      payable                                            |   |                              | -        |   |                              |   | -       |                                                          |   |   | 50,000 |   |
| Repayment                      of notes                      payable                                             |   |                              | (20,000  | )      |                              |   | -       |                                                          |   |   | (20,000 | ) |
| Advances                      from                      officers                                                 |   |                              | 65,898   |   |                              |   | -       |                                                          |   |   | 79,271 |   |
| Advances                      from                      stockholders                                             |   |                              | 109,033  |   |                              |   | -       |                                                          |   |   | 183,383 |   |
| Proceeds                      from convertible                      debt                                         |   |                              | -        |   |                              |   | -       |                                                          |   |   | 50,000 |   |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| Net                      cash provided by financing                      activities                              |   |                              | 357,244  |   |                              |   | -       |                                                          |   |   | 681,412 |   |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| NET                      INCREASE/(DECREASE) IN                      CASH                                        |   |                              | 18,636   |   |                              |   | (49,760 | )                                                             |   |   | 29,554 |   |
| CASH,                      beginning of                      period                                              |   |                              | 10,918   |   |                              |   | 53,515  |                                                          |   |   | - |   |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |
| CASH,                      end of                      period                                                    |   | $                                 | 29,554   |   |                              | $      | 3,755   |                                                          |   | $ | 29,554 |   |
|                                                                                                             |   |                              |     |   |                              |   |    |                                                          |   |   |   |   |

| Supplemental                  disclosures of cash                  flow information: |
|--------------------------------------------------------------------------------------|

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|                                                       |   | 2007   |      |   | 2006   |   |
|------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Original                  value of license described above |   | $      | 1,094,864 |   |   | $      | - |   |
| Less:                  accumulated amortization            |   |   | 5,397     |   |   |   | - |   |
| License,                  net                              |   | $      | 1,089,467 |   |   | $      | - |   |

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|                                                                                   |   | Options |    |   | Weighted                  Average Exercise                  Price |   |
|----------------------------------------------------------------------------------------|--------|---------|---------|--------|-------------------------------------------------------------------|--------|
| Outstanding                  as of July 22,                  2005(inception)           |   |    | -       |   |                                                              | $      | - |   |
| Granted                                                                                |   |    | 125,000 |   |                                                              |   | 0.0025 |   |
| Exercised                                                                              |   |    | -       |   |                                                              |   | - |   |
| Forfeited                                                                              |   |    | -       |   |                                                              |   | - |   |
| Expired                                                                                |   |    | -       |   |                                                              |   | - |   |
| Outstanding                  as of June 30,                  2006                      |   |    | 125,000 |   |                                                              | $      | 0.0025 |   |
| Granted                                                                                |   |    | 500,000 |   |                                                              |   | 0.55 |   |
| Exercised                                                                              |   |    | -       |   |                                                              |   | - |   |
| Forfeited                                                                              |   |    | -       |   |                                                              |   | - |   |
| Expired                                                                                |   |    | -       |   |                                                              |   | - |   |
| Outstanding                  as of June 30,                  2007                      |   |    | 625,000 |   |                                                              | $      | 0.44 |   |
| Granted                                                                                |   |    | -       |   |                                                              |   | - |   |
| Exercised                                                                              |   |    | 125,000 |   |                                                              |   | 0.0025 |   |
| Forfeited                                                                              |   |    | -       |   |                                                              |   | - |   |
| Expired                                                                                |   |    | -       |   |                                                              |   | - |   |
| Outstanding                  as of December                  31,                  2007 |   |    | 500,000 |   |                                                              | $      | 0.55 |   |

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| Exhibit                  No. | Description                  of                  Exhibit                                                         |
|------------------------------|------------------------------------------------------------------------------------------------------------------|
| 3.1                          | Articles                  of incorporation (1)                                                                   |
| 3.2                          | Bylaws                  (1)                                                                                      |
| 3.3                          | Articles                  of Amendment to Articles of Incorporation (1)                                          |
| 4.1                          | Copy                  of common stock certificate (1)                                                            |
| 31.1                    | Certification                  of CEO pursuant to                  Section 302 of the Sarbanes Oxley Act of 2002 |
| 31.2                         | Certification                  of CFO pursuant to                  Section 302 of the Sarbanes Oxley Act of 2002 |
| 32                      | Certification                  of CEO and CFO                  pursuant to Section 906                           |

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|                                       | WaterPure                  International,                  Inc. |                                                                 |
|--------------------------------------------|-----------------------------------------------------------------|----------------------------------------------------------------------|
|                                       |                                                            |                                                                 |   |
| Date:                    February 19, 2008 | By:                                                             | /s/ Paul                  S. Lipschutz                          |   |
|                                       |                                                            | Paul                  S. Lipschutz                                   |   |
|                                       |                                                            | Principal                  Executive Officer, President and Director |   |
|                                       |                                                            |                                                                 |   |

|                                       |   |                                    |
|--------------------------------------------|--------|-----------------------------------------|
|                                       |   |                                    |   |
| Date:                    February 19, 2008 | By:    | /s/ Robert                  F. Orr |   |
|                                       |   | Robert                  F. Orr          |   |
|                                       |   | Officer                  and Director   |   |
|                                       |   |                                    |   |

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