UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-KSB




T
            Annual
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934 for the fiscal year ended December 31,
2007




£
            Transition
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934 for the transition period from
___to___




Commission
File Number  0-29711




Subjex
Corporation


(Exact
name of issuer as specified in its charter)




Minnesota
            
            41-1596056(State
      or other jurisdiction of incorporation or organization)
            
            (IRS
      Employer Identification No.)3245
      Hennepin Ave S Suite 1, Minneapolis MN
            
            55408(Address
      of Principal Executive Offices)
            
            (Zip
      Code)





612-827-2203


(Issuer’s
telephone number)




(Former
Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)





Securities registered pursuant to
Section 12(b) of the Exchange Act:None




Securities
registered pursuant to Section 12(g) of the Exchange Act:





Common
Stock, no par value





Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act.  £




Check
whether the issuer: (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for
such shorter period that the issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days. Yes TNo £




Check if
there is no disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained herein, and no disclosure will be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. £




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes £No T




The
issuer’s revenues for the fiscal year ended December 31, 2007 were$84,378.




The
aggregate market value of the common stock of the issuer held by non-affiliates
of the issuer on April 15, 2008 based on the closing price of the common stock
as reported on the OTC Bulletin Board on such date was $1,244,003.




As of
April 15, 2008 there were 88,857,389 outstanding shares of common stock, no par
value.




Traditional
Small Business Disclosure Format: Yes £No T













SUBJEX
CORPORATION


FORM
10-KSB


YEAR
ENDED DECEMBER 31, 2007





INDEX


ITEM
            
            
            
            PAGEPART
      I1.
            
            Description of Business
            
            32.
            
            Description of Property
            
            43.
            
            Legal Proceedings
            
            54.
            
            Submission of Matters to a Vote of Security
      Holders
            
            5PART
      II5.
            
            Market for Registrant’s Common Equity and Related Stockholder
      Matters
            
            66.
            
            Management's Discussion & Analysis of Financial Condition
      and Results of Operations
            
            67.
            
            Financial Statements
            
            68.
            
            Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure
            
            6PART
      III9.
            
            Directors, Executive Officers, Promoters and Control Persons,
      Compliance with Section 16(a) of the Exchange Act.
            
            710.
            
            Executive Compensation
            
            811.
            
            Security Ownership of Certain Beneficial Owners and Management
      and Related to Shareholder Matters.
            
            1012.
            
            Certain Relationships and Related
    Transactions
            
            1113.
            
            Exhibits
            
            1114.
            
            Principal Accountant Fees and Services.
            
            11Signatures
            
            12Financial Statements
            
            14







References
to the “Company,” the “Registrant,” “we”, “us” or “our” in this Annual Report on
Form 10-KSB refer to Subjex Corporation., unless the context indicates
otherwise.





CAUTIONARY
STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995





2
 Index





Statements
in this discussion which are not historical facts may be considered "forward
looking statements" within the meaning of Section 21E of the Securities Act of
1934, as amended. The words "believe", "expect", "anticipate", "estimate", and
similar expressions identify forward looking statements. Any forward looking
statement involves risks and uncertainties that could cause actual events or
results to differ, perhaps materially, from the events described in the forward
looking statements. Readers are cautioned not to place undue reliance on these
forward looking statements. The Company undertakes no obligation to publicly
update or revise any forward looking statement, whether as a result of new
information, future events or otherwise. The risks associated with the Company's
forward looking statements include, but are not limited to, risks associated
with the Company's history of losses and uncertain profitability, sales and
marketing strategies, competition, general economic conditions, reliance on key
management and production people, current and future capital needs, dilution,
effects of outstanding notes and convertible debentures, limited public market
for the Company’s capital stock, low stock price, and lack of
liquidity.





The
following discussion and analysis should be read in conjunction with the
Financial Statements, related notes and other information included in this
annual report on Form 10-KSB.





ITEM1. Description
of Business





Overview





Subjex
Corporation, a Minnesota corporation formed in 1999, is an innovative developer
and marketer of artificial intelligence software products. The flagship product,
SubjexFMS (“Forecast Market Software”)  is a licensed software product
that forecasts the major US financial market indices so that subscribers, when
"plugged into" the software, can find capital appreciation with a third party
investment account. The forecasting engines' objective is to provide accurate
next day forecasts, long or short, allowing clients to take market neutral
profits via short term trades. SubjexFMS is not a mutual fund or a brokerage
service; it is software that clients subscribe to and use for their trading. The
technology offers a monetary value to our client base while providing revenue
and profit growth for our investor base.





Trademarks
and Patents





The
Company has held trademarks and patent pending protection for most of its
business that management feels is necessary to protect the company interests.





Environmental
Compliance





The
Company believes it is in compliance with all current federal and state
environmental laws.





Employees





The
Company currently has 1 full-time employee and a team of outside consultants to
fit the Company’s operational needs. The Company's employees are not represented
by any labor unions.   The Company considers its relations with
its employees to be outstanding.





Competition





The
Company is aware of other companies selling solutions that appear to be similar
to Subjex; however management is not aware of any companies that are selling the
same solutions as we offer.  In addition, management continues to
market it products to businesses, qualified investors and institutions. The
Company believes that its solutions are more effective than its competition.
Management believes that while some companies may have greater resources than
us, we have more advanced products which continue to grow in power and client
usage.





3
 Index





Recent
Developments





In late
2005 and early 2006 Subjex Corporation entered into an agreement involving Wayne
Warrington, Howard Walsh and FarSuperior Management LLC.,
(“FarSup”)  In mid 2006, Subjex Corporation recognized what it
considered to be breach of contract by “FarSup” and its management. Subjex
Corporation did not receive domain names, usable code, or trademarks as promised
by “FarSup”. Therefore the Company could not execute its plan as made public in
2005 and 2006. As a result the Company, in late 2006 recognized a breach of
contract with the “FarSup” party.  In the 1st quarter
of 2006 the Company made sales of its pre-existing CSR product to clients
introduced by “FarSup”. However because these clients were told they would
receive enhancements  contingent on the “FarSup” additions being
realized, the sales made to clients in early 2006 were refunded as a result of
the Subjex Corporation’s inability to deliver what was promised by “FarSup”.
Currently the Company and “FarSup” are in litigation.





In
October 2006 because of the failure of the “FarSup” transaction, Subjex
Corporation began to look at older technology developed by its CEO in the 1980’s
and 1990’s. The company found a Market Forecasting algorithm that it licensed
and released under the name Forecast Market Software (FMS). The Company’s
management believed this was necessary for the Company’s survival efforts due to
a lack of revenue and damage in reputation it sustained from failed business
with “FarSup”. FMS (Forecast Market Software) is based upon a proprietary
artificial intelligence trade timing engine invented by Andrew D. Hyder. Subjex
Corporation licenses the algorithm processes for its FMS product from its Chief
Executive Officer, Andrew D. Hyder, on an exclusive 10 year self-renewing
contract basis.





FMS has
proven to be successful in terms of its long term objective of generating
positive returns. The performance of FMS has been exceptional in terms of
percentage returns in 2006 in which it generated an audited 70% return. However
the software did undergo problems in the 4th quarter
of 2007 in which all the gains for 2007 were lost in this
quarter.  Therefore the net result of 2007 was a loss of 23%.
Management proceeded to reengineer the software based on the original algorithm
more closely. As a result of the reengineering, management now believes that FMS
will perform more in line with 2006 results.  This is evident to
management since the final enhancements were made on Feb 15th 2008.
Since this time FMS has not taken any trade losses, and has earned over 8% for
its clients. The Company does not plan on making future changes to FMS now that
it is performing as desired. However as with any system in the markets, there
are risks associated with any investment.




The
Company continues to seek legitimate strategic partners for its other software
products such as SubjexCSR. In the 1st quarter
of 2008 the Company entered into an agreement to acquire a majority stake in
Minneapolis-Based Startup Certivera.com, an online Six Sigma Certification
Venture, under which Subjex will provide its CSR technology for use in an online
testing, certification and verification site that addresses a unique need in the
growing online education and training market. The venture, Certivera.com, as of
its May 2008 launch, will provide real time testing services for a variety of
companies and institutions involved in granting degrees, certificates or other
credentials. As such, it insinuates itself into the revenue streams of a
significant number of established training organizations. In exchange for
providing the technology that will power the venture and for Andrew Hyder,
President and Chief Executive Officer of Subjex, serving as a Chief Technology
Officer of Certivera.com, Subjex has received 60% of the equity in the new
company. Hyder is also a member of Certivera's board of directors.




ITEM2: Description
of Property





The
Company's principal office is located at 3245 Hennepin Ave S Suite 1
Minneapolis, MN 55408, occupying approximately 1,000 square feet and utilized
entirely for office space. The lease is month to month. The space is not rented
under a written lease.  Management believes that comparable office
space is readily available. With the aid of one of its investors, the company is
considering buying a property to help lower monthly costs.





ITEM3: Legal
Proceedings





4
 Index





Currently
the Company and “FarSup” are in litigation.  The Company believes its
exposure in the litigation is minor and intends to vigorously defend itself from
the claims made by FarSup, while also vigorously pursuing its damage claims
versus FarSup.





There
were no other legal proceedings pending or, to the Company's knowledge, that
would be material to the financial position of the Company.





ITEM4: Submission
of Matters to a Vote of Security Holders





None.








PART
II





ITEM5: Market
for Common Equity and Related Stockholder Matters





(a)
            Market
      Information





The
Company’s Common Stock is traded on the Over the Counter Bulletin Board since
January 2000 under the symbol “PGBN”.   The Company changed it
ticker symbol in 2003 to “SBJX”. Its high and low sales prices of common stock
in 2007 were $0.48 and $0.02, respectively. These prices are inter-dealer
prices,without retail mark-up,
mark-down or commission and may not represent actual transactions.





The
following table lists the high and low price for our common stock as quoted, in
U.S. dollars, on the internet tracking services during each quarter within the
last two fiscal years:




Price per
Share - Calendar Year 2007








Quarter
            
            High
            
            
            LowFirst
            
            $
            .48
            
            
            
            .06Second
            
            $
            .35
            
            
            
            .12Third
            
            $
            .14
            
            
            
            .06Fourth
            
            $
            .06
            
            
            
            .02








Price per
Share - Calendar Year 2006








Quarter
            
            High
            
            
            LowFirst
            
            $
            0.11
            
            
            
            0.03Second
            
            $
            0.07
            
            
            
            0.02Third
            
            $
            0.04
            
            
            
            0.02Fourth
            
            $
            0.08
            
            
            
            0.03








(a)
            Record
      Holders





On
December 31, 2007 there were 248 holders of the Company’s 85,435,166 outstanding
shares of common stock.





(b)
            Dividends





We have
not paid or declared any dividends on our common stock; however, we do
anticipate paying dividends on our common stock in the
future.





5
 Index





(c)
            Recent
      Sales of Unregistered Securities





During
2007, we issued pursuant to private placement offerings to certain of our
security holders and aggregate of 6,996,142 shares of our common stock, at an
average price per share of $0.045, resulting in net proceeds to the Company of
$313,250.




The sales
of the securities identified above were made pursuant to privately negotiated
transactions that did not involve a public offering of securities and,
accordingly, we believe that these transactions were exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) thereof
and rules promulgated thereunder. Based on representations from the
above-referenced investors, we have determined that such investors were
“accredited investors” (as defined by Rule 501 under the Securities Act) and
were acquiring the shares for investment and not distribution, that they could
bear the risks of the investment and could hold the securities for an indefinite
period of time. The investors received written disclosures that the securities
had not been registered under the Securities Act and that any resale must be
made pursuant to a registration or an available exemption from such
registration. All of the foregoing securities are deemed restricted securities
for purposes of the Securities Act.




ITEM6: Management's
Discussion & Analysis of Financial Condition and Results of Operations





In 2007
the Company’s operating expenses included a license agreement with Beard Creek
Inc in the amount of $100,000 and payment of stock for the FMS algorithms and
payments to other consultants and vendors. The total value
of  non-cash stock compensation issued to these entities was $733,503.
Some  of the expenses consisted of Legal and Accounting $181,457,
Salary $104,466 and others in the amount of $209,229.  In 2006 the
operating expenses were $456,267.





The
Company generated revenues of $84,378 and $32,753 in 2007 and 2006,
respectively.  Most of the revenue in 2007 was generated from
SubjexFMS.  Revenue levels by themselves were not sufficient to
sustain the Company’s operations in 2007; therefore funds were raised from the
sale of common stock to the Company’s investor base to meet its financial
needs.  The Company used a “just-in-time” funding method, in an effort
to hold off dilution of its stock, by not raising more funds than necessary
while its stock price was low.




Liquidity
and Capital Resources





The
accumulated deficit from inception to December 31, 2007 was $6,691,429. To date,
most of the operations of the Company have been funded by monies raised through
the issuance of common stock. Management believes it has the relationships in
place to continue this type of funding until its revenues can sustain operations
on a going forward basis.





The
Company plans to use its future profits to further grow its market share, start
its dividend program, and buy back its stock.  This stock buy back
program is intended to support the public stock price and build a stock reserve
for future use in possible acquisitions or as security in debt
financings.  Proceeds from debt financings will be used in a Company’s
owned FMS implementation to further build its revenues.





ITEM7: Financial
Statements





The
financial statements of the Company are included herein following the
signatures.





ITEM8: Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure




None.




ITEM8A. Controls
and Procedures




6
 Index





Evaluation
of Disclosure Controls and Procedures




Based on
their most recent review, as of the end of the period covered by this report,
the Company's principal executive officer has concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Securities Exchange Act of 1934, as amended, is accumulated and
communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure and are effective to ensure that such
information is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. There were no significant
changes in the Company's internal controls or in other factors that could
significantly affect those controls subsequent to the date of their
evaluation.


Limitations
on the Effectiveness of Controls





Our
management does not expect that our disclosure controls and internal controls
will prevent all error and all fraud.  A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met.  Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs.  Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been
detected.  These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake.  Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management or board override of the control.  The design
of any system of controls also is based in part upon certain assumptions about
the likelihood of future events, and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future
conditions; over time, control may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate.  Because of the inherent limitations in a cost-effective
control system, misstatements due to error or fraud may occur and not be
detected.








PART
III





ITEM9. Directors,
Executive Officers, Promoters and Control Persons, Compliance with Section 16(a)
of the Exchange Act





The
following table sets forth the name and position of each of our directors and
executive officers:




Name
            
            Age
            
            PositionsAndrew
      D. Hyder
            
            41
            
            Director,
      Chairman of the Board, Chief Executive Officer and
    PresidentSharon
      R. Hyder
            
            64
            
            Director







Andrew D. Hyder has been the
President and Chief Executive Officer and a Director since October 1999. As
Founder and CEO of Subjex Corp. Hyder has over 20 years of software and A.I.
engineering experience. He developed in 1996 one of the first of its kind
"cloaking engines" for search engine optimization that later sold for over half
a million dollars and kicked off a revolution in search engine marketing. As a
lifelong entrepreneur he has designed flight simulators, market timing engines
and payroll software. He has a passion for viral marketing & sales
psychology, with expertise in the areas of finance, corporate governance, direct
mail and product branding. Hyder knows most computer-programming
languages.





Sharon R. Hyder has been a
director of Subjex Corporation since October 2006.   She is
serving a three year term on the board of directors which began on October 18,
2006.She is the
mother of the Company’s Chief Executive Officer, President, and Chairman of the
Board, Andrew D. Hyder.  Sharon holds a Bachelor of Arts in business
and accounting, and an MBA in Business and Finance. Her extensive industry
certifications and IRS/tax/audit training make her well suited for board
membership with an impressive background in public private and academic
work.  Sharon was CFO for Optidynamic Communications Inc.  a
VA Corporation from January 2002 to December of 2005. In addition she owns her
own accounting firm, “Hyder Accounting, Tax and Consulting
Services”.  Her firm currently handles the accounting for Subjex
Corporation along with others.





7
 Index





Section
(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Securities Exchange Act of 1934 requires executive officers and
directors and persons who beneficially own more than 10% of the Company’s Common
Stock to file initial reports of ownership and reports of changes in ownership
with the Securities and Exchange Commission (“SEC”).  Executive
officers, directors, and greater than 10% beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.





Based
solely on a review of the copies of such forms furnished to the Company and
written representations from the executive officers, directors and holders of
10% or more of the Company’s Common Stock, the Company believes that its
executive officers, directors and 10% shareholders complied with all Section
16(a) filing requirements applicable to them.





Code
of Ethics





We have a
Code of Business Conduct and Ethics that applies to all officers, directors and
employees of our company.  A copy of our Code of Business Conduct and
Ethics is available on our company’s website.  If we make any
substantive amendments to the Code of Business Conduct and Ethics or grant any
waiver from a provision of the code to an executive officer or director, we will
promptly disclose the nature of the amendment or waiver by filing with the SEC a
current report on Form 8-K.




Audit
Committee and Audit Committee Financial Expert





We do not
have an audit committee and as a result our entire board of directors performs
the duties of an audit committee. Our board of directors evaluates the scope and
cost of the engagement of an auditor before the auditor renders audit and
non-audit services. As a result, we do not rely on established pre-approval
policies and procedures.





ITEM10: Executive
Compensation





Executive
Compensation





Summary
Compensation Table




The
following table sets forth all of the compensation awarded to, earned by or paid
to (i) each individual serving as our principal executive officer during our
last completed fiscal year; and (ii) each other individual that served as our
executive officer at the conclusion of the fiscal year ended December 31, 2007
and who received in excess of $100,000 in the form of salary and bonus during
such fiscal year (collectively, the “named executives”).







Name
      and
              Principal
      Position
            Year
            
            Salary
            
            
            Bonus
      (1)
            
            
            Option
      Awards (2)
            
            
            Non-Equity
      Incentive Plan Compensation
            
            
            All
      Other Compensation
            
            
            TotalAndrew
      D. Hyder
              Chief
      Executive Officer and President
            2007
            
            $
            44,066
            
            
            $
            0
            
            
            $
            0
            
            
            $
            0
            
            
            $
            0
            
            
            $
            44,066





8
 Index





Executive
Bonus Compensation




Our named
executive officers are eligible for discretionary annual bonuses, the maximum
amount of which is determined as a percentage of such executive’s annual
salary.  The determination of whether to declare such bonuses, and if
declared, the amount of such bonuses, are made in the sole discretion of our
board of directors, and may be based upon the recommendation of our chief
executive officer.  The chief executive officer does not provide
recommendations or other input with respect to his own bonus.  A
number of performance factors are considered in bonus decisions, including (i)
professional ability (job knowledge and professionalism), (ii) human relation
skills (interpersonal skills, communication and coordination), (iii) strengths
and (iv) areas of developments.  We currently do not anticipate
changing our informal bonus policy as it pertains to executives.




Outstanding
Equity Awards at Fiscal Year-End





The
following table sets forth information regarding each unexercised option held by
each of our named executive officers as of December 31, 2007.  None of
our named executive officers received any stock awards during 2007.





Option
      Awards (1)Name
            NumberofSecurities
      Underlying Unexercised OptionsExercisable
            Number
      of Securities Underlying Unexercised OptionsUnexercisable
            Option
      Exercise Price
            Option
      Expiration DateAndrew
      D. Hyder
            2,500
            0
            n/a
            n/a





(1)
            All
      options granted pursuant to our 1999 Stock Option and Stock Award Plan, as
      amended.





Executive
Compensation under the 1999 Stock Option and Stock Award Plan





As of
December 31, 2007, we have outstanding options to purchase 12,500 shares of our
common stock and warrants to purchase 159,118 shares of our common stock all
issued under our 1999 Stock Option and Stock Award Plan, of which 2,500 have
been issued to the named executives through December 31,
2007.




Director
Compensation





None.





9
 Index





ITEM11. SECURITY
OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS




The
following table sets forth certain information regarding beneficial ownership of
the our common stock as of April 5 2008, by (i) each person known by us to be
the beneficial owner of more than 5 percent of the outstanding common stock,
(ii) each director and director nominee, (iii) each named executive officer (as
defined under Item 402(a) (2) of Regulation S-B), and (iv) all named executive
officers and directors as a group. The number of shares beneficially owned is
determined under rules promulgated by the SEC, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
those rules, beneficial ownership includes any shares as to which the individual
has sole or shared voting power or investment power and also any shares which
the individual has the right to acquire within 60 days of the date hereof,
through the exercise or conversion of any stock option, convertible security,
warrant or other right. Inclusion of shares in the table does not, however,
constitute an admission that the named stockholder is a direct or indirect
beneficial owner of those shares. Unless otherwise indicated, each person or
entity named in the table has sole voting power and investment power (or shares
that power with that person’s spouse) with respect to all shares of capital
stock listed as owned by that person or entity. Unless otherwise indicated, the
address of each of the following persons is 3245 Hennepin Ave S Suite 1,
Minneapolis Minnesota, 55408.





Name
      of Beneficial Owner
            
            Shares
      of Common Stock Beneficially Owned (#)
            
            
            Percentage
      of Common Stock BeneficiallyOwned (%) (1)Andrew
      D. Hyder
            
            
            3,011,256
            (2)
            
            
            3.53
            %Sharon
      R. Hyder
            
            
            598,738
            (3)
            
            
            .6
            %  *Jacquelin
      L Powell
            
            
            8,901,508
            (4)
            
            
            10.4
            %Beard
      Creek Inc
            
            
            10,000,000
            (4)
            
            
            11.7
            %All
      officers and directors as a group (2 persons)
            
            
            3,609,994
            (5)
            
            
            4.13
            %


* Less
than 1%.





(1)
            Beneficial
      ownership is determined in accordance with SEC rules, and includes any
      shares as to which the security or stockholder has sole or shared voting
      power or investment power, and also any shares which the security or
      stockholder has the right to acquire within 60 days of the date hereof,
      whether through the exercise or conversion of any stock option,
      convertible security, warrant or other right.  The indication
      herein that shares are beneficially owned is not an admission on the part
      of the security or stockholder that he, she or it is a direct or indirect
      beneficial owner of those shares.





(2)
            Includes
      shares of common stock issuable upon exercise of options to purchase an
      aggregate of 2,500 shares of common stock that are currently exercisable
      or will become exercisable within the next 60 days.  Also
      includes 25,000 shares of common stock held by Mr. Hyder’s daughter, whom
      Mr. Hyder disclaims any beneficial ownership interest to, except to the
      extent of his pecuniary interest
therein.





(3)
            Directors





(4)
            Other
      shareholders





(5)
            All
      officers and directors as a group


10
 Index


Equity Compensation Plan
Information


The
following table sets forth, as of December 31, 2007, the (i) number of
securities to be issued upon the exercise of outstanding options, warrants and
rights issued under the equity compensation plans, (ii) the weighted average
exercise price of such options, warrants and rights, (each as converted pursuant
to the merger).  All outstanding options identified herein are
governed by the terms of the Company’s 1999 Stock Option and Stock Award Plan,
as amended.





Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
              (a)
            
            
            Weighted
      -average price of outstanding options, warrants and rights
              (b)
            
            
            Number
      of securities remaining available for future issuance under equity
      compensation plan (excluding (a))
              (c)Equity
      compensation plans not approved by security holders
            
            
            13,500
            
            
            $
            0.44
            
            
            
            -Total
            
            
            13,500
            
            
            $
            0.44
            
            
            
            -








ITEM12. Certain
Relationships and Related Transactions





None.





ITEM13. Exhibits





None.





ITEM14. Principal
Accountant Fees and Services





The Board
of Directors of the Company selectedMaddox Ungar Silberstein,
PLLC (formally  knownas Ronald N. Silberstein, CPA, PLLC), with offices in Bingham Farms,
Michigan and Ann Arbor, Michigan, to audit the Company’s financial statements
for the year ended December 31, 2007.  Ronald N. Silberstein CPA, PLLC
(now known as Maddox Ungar Silberstein, PLLC) audited the Company’s financial
statements for the years ended December 31, 2006. The following table details
the fees billed by the independent auditors in the years ended December 31, 2007
and 2006.





2007
            2006Audit
      fees
            17,500
            17,600





No
services in connection with appraisal or valuation services, fairness opinions
or contribution-in-kind reports were rendered by Maddox Ungar Silberstein, PLLC.
Furthermore, no work Maddox Ungar Silberstein, PLLC with respect to its services
rendered to the Company was performed by anyone other than Maddox Ungar
Silberstein, PLLC.





11
 Index





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of
1934, the Issuer has duly caused this report to be signed on its behalf by the
undersigned officers and/or Directors, there unto duly authorized.





Subjex
Corporation


Date:  April
15, 2008





NAME
            
            TITLE/s/
      Andrew D. Hyder
            
            President
      and Chief Executive Officer,





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




Signature
            Title
            Date/s/
      Andrew D. Hyder
            President
      and CEO
            April
      15, 2008Andrew
      D. Hyder





12
 Index





Exhibit
      IndexExhibit 31.1
            
            Certification
      of Chief Executive OfficerExhibit 32.1
            
            Certificate
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002





13
 Index





SUBJEXCORPORATION


FINANCIAL
STATEMENTS


YEARS
ENDED DECEMBER 31, 2007 AND 2006





TABLE OF
CONTENTS





Report
      of Independent Registered Public Accounting Firm Financial
      Statements:
            
            15Balance
      Sheets
            
            16Statements
      of Operations
            
            17Statement
      of Stockholders' Deficit
            
            18Statements
      of Cash Flows
            
            19Notes
      to Financial Statements
            
            20





14
 Index




Maddox Ungar Silberstein, PLLCCPAs and Business
      AdvisorsPhone
      (248) 203-0080Fax
      (248) 281-094030600
      Telegraph Road, Suite 2175Bingham
      Farms, MI 48025-4586www.maddoxungar.com




REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM





Board of
Directors


Subjex
Corporation


Minneapolis,
Minnesota





We have
audited the accompanying balance sheets of Subjex Corporation as of December 31,
2007 and 2006 and the related statements of operations, stockholders' deficit
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company has
determined that it is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit includes examining on a test basis, evidence supporting the
amounts and disclosures in 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 Subjex Corporation as of December
31, 2007 and 2006, and the results of its operations and cash flows for the
years then ended in conformity with U.S. generally accepted accounting
principles.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has limited revenue, has incurred substantial
losses from operations and has a working capital deficit. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans with regard to these matters are described in Note 2. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.





/s/
Maddox Ungar Silberstein, PLLC





Maddox
Ungar Silberstein, PLLC


Bingham
Farms, Michigan


April 7,
2008





15
 Index




SUBJEX
CORPORATION


BALANCESHEETS





December
      31,
            
            
            December
      31,2007
            
            
            2006ASSETSCurrent
      Assets:Cash
            
            $
            15,217
            
            
            $
            96,835Accounts
      receivable
            
            
            1,517
            
            
            
            -Prepaid
      expenses
            
            
            37,500
            
            
            
            8,395Total
      current assets
            
            
            54,234
            
            
            
            105,230Property
      and Equipment, net
            
            
            5,017
            
            
            
            13,676Other
      Assets
            
            
            3,611
            
            
            
            8,101Total
      assets
            
            $
            62,862
            
            
            $
            127,007LIABILITIES AND
      STOCKHOLDERS' DEFICITCurrent
      Liabilities:Short-term
      notes payableSubordinated
      convertible notes payable
            
            $
            27,177
            
            
            $
            58,634Accounts
      payable
            
            
            23,000
            
            
            
            23,000Accrued
      expenses:
            
            
            160,632
            
            
            
            77,985Accrued
      expenses-Related partyPayroll
      and payroll taxes
            
            
            31,006
            
            
            
            -Refunds
      payable
            
            
            13,383
            
            
            
            11,226Accrued
      interest
            
            
            -
            
            
            
            82,000Accrued
      expenses
            
            
            23,052
            
            
            
            20,7833,633Total
      current liabilities281,883
            
            
            
            273,628Long-term
      Debt:Long-term
      debt, less current portion
            
            
            -
            
            
            
            -Total
      liabilities
            
            
            281,883
            
            
            
            273,628Stockholders'
      Deficit:Common
      stock, no par or stated value;100,000,000 shares authorized: 85,434,166
      and 64,051,737 shares issued and outstanding at December 31, 2007 and
      December 31, 2006, respectively
            
            
            6,462,408
            
            
            
            5,216,155Subscription
      received
            
            
            10,000
            
            
            
            -Accumulated
      deficit
            
            
            (6,691,429
            )
            
            
            (5,362,776
            )Total
      stockholders' Deficit
            
            
            (219,021
            )
            
            
            (146,621
            )Total
      liabilities and stockholders’ deficit
            
            $
            62,862
            
            
            $
            127,007





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





16
 Index




SUBJEXCORPORATION


STATEMENTS
OF OPERATIONS




Years
      Ended December 31,2007
            
            
            2006Revenues:Gross
      revenue
            
            $
            84,378
            
            
            $
            32,753Expenses:Selling,
      general and administrative
            
            
            1,406,777
            
            
            
            456,267Total
      operating expense
            
            
            1,406,777
            
            
            
            456,267Operating
      loss
            
            
            (1,322,399
            )
            
            
            (423,514
            )Other
      income (expense):Interest
      expense
            
            
            (6,254
            )
            
            
            (7,115
            )Net
      loss
            
            $
            (1,328,653
            )
            
            $
            (430,629
            )Net
      loss per basic and diluted common share
            
            $
            (0.02
            )
            
            $
            (0.01
            )Weighted
      average common shares outstanding - basic and diluted
            
            
            85,435,166
            
            
            
            64,051,737




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





17
 Index




STATEMENTOF STOCKHOLDERS' DEFICIT
 YEARS
ENDED DECEMBER 31, 2007 AND 2006
 
 Common
      StockAccumulated
              
              
              Stockholders'Shares
              
              
              Amount
              
              
              Deficit
              
              
              DeficitBALANCE,
      December 31, 2005
              
              
              49,105,648
              
              
              
              4,653,730
              
              
              
              (4,932,147
              )
              
              
              (278,417
              )Common
      stock issuance
              
              
              13,076,089
              
              
              
              474,425
              
              
              
              
              
              
              
              474,425Common
      stock issuance for consulting services
              
              
              1,000,000
              
              
              
              55,000
              
              
              
              
              
              
              
              55,000Restricted
      stock compensation
              
              
              500,000
              
              
              
              27,500
              
              
              
              
              
              
              
              27,500Stock
      added to outstanding due to found certificates
              
              
              370,000
              
              
              
              -
              
              
              
              
              
              
              
              -Payments
      received for stock issued in previous years
              
              
              -
              
              
              
              5,500
              
              
              
              
              
              
              
              5,500Net
      Loss
              
              
              
              
              
              
              
              
              
              
              (430,629
              )
              
              
              (430,629
              )BALANCE,
      December 31, 2006
              
              
              64,051,737
              
              
              $
              5,216,155
              
              
              $
              (5,362,776
              )
              
              $
              (146,621
              )Common
      stock issuance
              
              
              6,996,142
              
              
              
              313,250
              
              
              
              
              
              
              
              313,250Common
      stock issuance for consulting services
              
              
              2,613,858
              
              
              
              321,003
              
              
              
              
              
              
              
              321,003Common
      stock issuance for License Agreement
              
              
              10,000,000
              
              
              
              500,000
              
              
              
              
              
              
              
              500,000Common
      stock issued for refund of 2006 revenue
              
              
              1,171,429
              
              
              
              82,000
              
              
              
              
              
              
              
              82,000Common
      stock issued to settle debt
              
              
              450,000
              
              
              
              30,000
              
              
              
              
              
              
              
              30,000Stock
      added to outstanding due to found certificates
              
              
              152,000
              
              
              
              -
              
              
              
              
              
              
              
              -Subscription
      received
              
              
              
              
              
              
              10,000
              
              
              
              
              
              
              
              10,000Net
      Loss
              
              
              
              
              
              
              
              
              
              
              (1,328,653
              )
              
              
              (1,328,653
              )BALANCE,
      December 31, 200785,435,166
              
              
              $
              6,472,408
              
              
              $
              (6,691,429
              )
              
              $
              (219,021
              )
 
 The
accompanying notes are an integral part of these financial
statements.




18
 Index




SUBJEXCORPORATION


STATEMENTS
OF CASH FLOWS




Years
      Ended December 31,2007
            
            
            2006Cash
      flows from operating activities:Net
      loss
            
            $
            (1,328,653
            )
            
            $
            (430,629
            )Adjustments
      to reconcile net loss tonet cash flows from
      operating activities:Depreciation
      and amortization
            
            
            10,746
            
            
            
            7,999Write
      off of out of use equipment
            
            
            9,449
            
            
            
            -Impairment
      of assets
            
            
            503,192
            
            
            
            -Restricted
      stock compensation expense
            
            
            -
            
            
            
            27,500Debt
      settled with issuance of common stock
            
            
            30,000
            
            
            
            -Non
      cash common stock issued for consulting services
            
            
            403,003
            
            
            
            55,000Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            (1,517
            )
            
            
            150Prepaid
      expenses
            
            
            (29,105
            )
            
            
            (10,272
            )Accounts
      payable
            
            
            82,647
            
            
            
            (14,296
            )Accrued
      expenses
            
            
            3,633
            
            
            
            -Accrued
      expenses-Related party
            
            
            31,006
            
            
            
            -Payroll
      and payroll taxes payable
            
            
            2,157
            
            
            
            (118,147
            )Accrued
      interest
            
            
            2,269
            
            
            
            2,874Refunds
      payable
            
            
            (82,000
            )
            
            
            82,000Net
      cash flows used in operating activities
            
            
            (363,173
            )
            
            
            (397,821
            )Cash
      flows from investing activities:Purchase
      of property and equipment
            
            
            (14,611
            )
            
            
            (12,028
            )Net
      cash flows used in investing activities
            
            
            (14,611
            )
            
            
            (12,028
            )Cash
      flows from financing activities:Proceeds
      from issuance of common stock
            
            
            313,250
            
            
            
            474,425Subscriptions
      received
            
            
            10,000
            
            
            
            -Increase
      in short term notes payable
            
            
            1,543
            
            
            
            -Payment
      received from notes receivable
            
            
            5,615
            
            
            
            -Issuance
      of notes receivable
            
            
            (1,242
            )
            
            
            -Proceeds
      from issuance of notes payable
            
            
            3,000
            
            
            
            15,044Payment
      on notes payable
            
            
            (36,000
            )
            
            
            4,000Principal
      payments on long-term debt
            
            
            -
            
            
            
            11,000Net
      cash flows provided by financing activities
            
            
            296,166
            
            
            
            504,469Net
      increase (decrease) in cash and equivalents
            
            
            (81,618
            )
            
            
            94,620Cash
      and cash equivalents at beginning of year
            
            
            96,835
            
            
            
            2,215Cash
      and cash equivalents at end of year
            
            $
            15,217
            
            
            $
            96,835




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





19
 Index





NOTESTO THE FINANCIAL STATEMENTS


YEARS
ENDED DECEMBER 31, 2007 AND 2006





NOTE 1 –
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES








Nature of past
Business





Subjex
Corporation provided a software service, Subject CSR, through an ASP
(application service provider) model. Customers can use the software online or
by downloading it, and do not need to install it on their server. This software
service is wrapped in a subscription model, and is billed monthly until customer
cancellation.





Revenue
Recognition





Revenue
from the sale of software and other products is recognized when an agreement is
made, delivery is complete, no significant obligations remain unfulfilled, and
collection of the resulting receivable is probable. In instances where a
significant obligation exists, revenue recognition is delayed until the
obligation has been satisfied. Revenue from services, including training and
consulting are recognized as the services are performed.





Use of
Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.





Cash Deposits in Excess of
Federally Insured Limits





The
Company maintains its cash in bank deposit accounts which, at times, may exceed
federally insured limits. The balances are insured by the Federal Deposit
Insurance Company up to $100,000.  At December 31, 2007 the Company
had no uninsured cash balances.





Cash and Cash
Equivalents





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




Segment
Reporting




The
Company operates as one reporting segment.





20
 Index





Fair Value of Financial
Instruments





The
company considers that the carrying amount of financial instruments, including
accounts receivable, accounts payable, accrued liabilities and notes payable,
approximates fair value.  Interest on the notes payable is payable at
rates which approximate fair value.





Property and
Equipment





Property
and equipment are stated at cost.  Depreciation and amortization is
provided using the straight-line method over the estimated useful lives of the
related assets.  When assets are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from the accounts and the
resulting gain or loss is included in operating income for the
period.  The cost of maintenance and repairs is expensed as incurred;
significant renewals and betterments are capitalized.  Deduction is
made for retirements resulting from renewals and betterments.








The
estimated useful lives are as follows:


Computers
      & Equipment
            3
      to 5 yrsFurniture
            5
      to 7 yrsOperations
      Equipment
            5
      yrs





Impairment of Long-Lived
Assets





Long-lived
assets, such as equipment are reviewed for impairment whenever changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.  Recoverability of assets to be held and used is measured
by comparison of the carrying amount of an asset to estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount
of an asset exceeds its estimated future cash flows, an impairment charge is
recognized in the amount by which the carrying amount of the asset exceeds the
fair value of the asset.





Research and
Development


Research
and development costs, whether performed by the Company or by outside parties
under contract, are charged to operations as incurred. The company incurred no
R&D expenses during 2007 and 2006.





Software Development
Costs


The
Company capitalizes certain software development and production costs once
technological feasibility has been achieved.  Software development
costs incurred prior to achieving technological feasibility are expensed as
incurred.





The
Company fully expensed the software maintenance incurred and there were no
software development costs in 2007 and 2006.





Basic and Diluted Net Loss
Per Share





Basic
per-share amounts are computed, generally, by dividing net income or loss by the
weighted-average number of common shares outstanding.  Diluted
per-share amounts assume the conversion, exercise, or issuance of all potential
common stock instruments, unless their effect is antidilutive, thereby reducing
the loss or increasing the income per common share. The Company has granted
options and warrants to purchase shares of common stock at various amounts per
share.  Those options and warrants were not included in the
computation of diluted earnings per share because the Company incurred losses in
both years.  The inclusion of potential common shares in the
calculation of diluted loss per share would have an antdilutive
effect.  Therefore, basic and diluted loss per share amounts are the
same in each year presented.





Stock-Based
Consideration





21
 Index





As
permitted by Statement of Financial Accounting Standards (“SFAS”) No. 123,
“Accounting for Stock-Based Compensation,” the Company accounts for share-based
payments to employees and directors using the intrinsic value method under
Accounting Principles Board (“APB”) Opinion No. 25. As such, we do not recognize
compensation cost related to these stock option grants if the exercise price of
the options equals or exceeds the fair value of the underlying stock at issuance
date. Our general policy is to grant stock options and warrants at fair value at
the date of grant. We recorded expense related to stock based compensation
issued to non-employees in accordance with SFAS No. 123.




For the
years ended December 31, 2007 and 2006, we recorded no compensation expense
pursuant to APB Opinion No. 25 and no options were granted.





No employee stock options were granted
during 2007 and 2006.





Trade Accounts
Receivable





Trade
accounts receivable are recorded at the invoiced amount. The Company grants
uncollateralized credit to customers, but requires deposits on unique
orders.  The Company reviews customers’ credit history before
extending unsecured credit. The allowance for doubtful accounts is the Company’s
best estimate of the amount of probable credit losses in the Company’s existing
accounts receivable.  The Company determines the allowance based on
historical write-off experience.  The Company reviews its allowance
for doubtful accounts monthly or quarterly depending on the service offered the
account.  Past due balances over 90 days and over a specified dollar
amount are reviewed individually for collectibility. Account balances are
charged off against the allowance after all means of collection have been
exhausted and the potential for recovery is considered remote.





Comprehensive Income
(Loss)





SFAS No.
130 establishes standards for the reporting and disclosure of comprehensive
income (loss) and its components which will be presented in association with the
Company’s financial statements.  Comprehensive income (loss) is
defined as the change in a business enterprise’s equity during a period arising
from transactions, events or circumstances relating to non-owner sources, such
as foreign currency translation adjustments and unrealized gains or losses on
available-for-sale securities.  It includes all changes in equity
during a period except those resulting from investments by or distributions to
owners.  For the years ended December 31, 2007 and 2006, net loss and
comprehensive loss were equivalent.





Income
Taxes





The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes which require the use
of the liability method of accounting for income taxes.  See Note
6.





NOTE 2 –
GOING CONCERN AND LIQUIDITY





The
Company had a working capital deficit and recurring net losses from operations
in 2007, and at December 31, 2007 had insufficient cash on hand to support its
ongoing operations. These factors create doubt about the Company's ability to
continue as a going concern.





NOTE 3 –
FIXED ASSETS





Property
and equipment consisted of the following at December 31,


2007
            
            
            2006Company
      Vehicle
            
            $
            11,186
            
            
            $
            -Office
      and Computer Equipment
            
            
            49,583
            
            
            
            59,737Furniture
      and Fixtures
            
            
            14,231
            
            
            
            13,176Accumulated
      Depreciation
            
            
            (55,175
            )
            
            
            (44,429
            )Impairment
      of Fixed Assets
            
            
            (14,808
            )
            
            
            (14,808
            )Property
      and Equipment, net
            
            $
            5,017
            
            
            $
            13,676





22
 Index





Depreciation
and amortization expense on property and equipment was $10,746 and $7,999 for
the years ended December 31, 2007 and 2006, respectively.





NOTE 4 –
FINANCING ARRANGEMENTS





Short-Term Notes
Payable





There
were several short term notes that were obtained from shareholders and unrelated
parties and are due at various dates through 2007. The interest rate on these
notes is 10%.





Short-term
notes payable consisted of the following:





2007
            
            
            2006Shareholders
            
            $
            3,000
            
            
            $
            15,000Unrelated
      third parties
            
            
            1,500
            
            
            
            1,500$
            4,500
            
            
            $
            16,500








Subordinated Notes
Payable





The
subordinated convertible notes payable are unsecured, bear interest at 10% and
were due at various dates, with all currently being due.  To date the
Company has not repaid these amounts.  The outstanding balance at
December 31, 2007 and 2006 is $23,000 and $23,000 respectively.





Long-Term
Debt





None.





NOTE 5 -
SHAREHOLDERS’ EQUITY





Stock
Options





In 2007
the Board of Directors adopted to bring to an end the 1999 Pagelab Network, Inc.
Stock Option and Stock Award Plan.  The Plan permitted the granting of
incentive stock options meeting the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended and nonqualified options, which do not meet the
requirements of Section 422.  A total of 2,500,000 shares were
reserved under the Plan.  All options were granted at an exercise
price not less than the fair market value of the common stock on the grant date
according to the Plan provisions.  The options granted to participants
owning more than 10 percent of the Company’s outstanding voting stock were to be
granted at an exercise price not less than 110 percent of fair market value of
the common stock on that date.  The options expired on the date
determined by the Board of Directors, but not greater than 10 years from the
grant date. No options were granted under the old Plan during the years ended
December 31, 2007 and 2006.





23
 Index





A summary
of outstanding options under the Plan as of December 31 is as
follows:





2007
            
            
            2006Shares
            
            
            WeightedAverage
              Exercise
      Price
            
            
            Shares
            
            
            Weighted
      Average Exercise PriceOutstanding
      at beginning of yr
            
            
            132,500
            
            
            $
            .83
            
            
            
            172,500
            
            
            $
            .91Canceled/Expired
            
            
            (120,000
            )
            
            $
            .75
            
            
            
            (40,000
            )
            
            $
            .75Outstanding
      at end of year
            
            
            12,500
            
            
            $
            .80
            
            
            
            132,500
            
            
            $
            .83


All
options were fully vested and have a have weighted average remaining contractual
life of 1.02 years at December 31, 2007.





Stock
Warrants


The
Company issued detachable warrants with the sale of common stock to purchase
654,800 shares of common stock in 2002. Warrants for 300,000 shares expired in
June 2004 and had an exercise price of $0.10 per share. Warrants for 354,800
shares of common stock expire from June 2005 to June 2017, become exercisable
when the Company’s share price reaches $1.00 per share and have an exercise
price of $0.25 per share.





The
Company issued detachable warrants with the sale of common stock to purchase
60,000 shares of common stock in December 2003. The warrants have a three year
life and an exercise price of $0.25 per share. The Company issued warrants
related to the sale of common stock during 2004. The warrants for 1,775,000
shares expired in 2006 and had an average exercise price of $0.13 per share. The
warrants for 442,382 shares expired in 2007 and had an average exercise price of
$0.08 per share.





A summary
of outstanding warrants as of December 31 is as follows:





2007
            
            2006Shares
            
            Weighted-Average
              ExercisePrice
            
            Shares
            
            Weighted-Average
              ExercisePriceOutstanding
      at beginning of year
            
            
            601,500
            
            
            $
            .16
            
            
            
            2,376,500
            
            
            $
            .18Granted
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -Exercised
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -Canceled/Expired
            
            
            (500,500
            )
            
            
            .08
            
            
            
            (1,775,000
            )
            
            
            .13Outstanding
      at end of year
            
            
            101,000
            
            
            $
            .40
            
            
            
            601,500
            
            
            $
            .16


All
warrants were fully vested and have a have weighted average remaining
contractual life of 1.5 years at December 31, 2007.








NOTE 6 -
INCOME TAXES





24
 Index








2007
            
            
            2006Amount
            
            
            %
            
            
            Amount
            
            
            %Expected
      Federal
            
            $
            (451,742
            )
            
            
            (34
            %)
            
            $
            (118,300
            )
            
            
            (34
            %)Expected
      State
            
            
            (53,146
            )
            
            
            (4
            %)
            
            
            (13,900
            )
            
            
            (
      4
            %)Valuation
      allowance
            
            
            504,888
            
            
            
            38
            %
            
            
            132,200
            
            
            
            38
            %Total
            
            $
            -
            
            
            
            -
            %
            
            $
            -
            
            
            
            -
            %








The
Company has a net operating loss carry forward totaling approximately $5,608,000
at December 31, 2007 that can be used to offset future taxable
income.  Due to the uncertainty of the Company’s future taxable
income, a valuation allowance has been established. The following is a listing
of the Company's net deferred tax assets as of December 31:


2007
            
            
            2006Deferred
      tax asset relating to net operating loss carry-forwards
            
            $
            1,854,200
            
            
            $
            1,349,200Valuation
      allowance
            
            
            (1,854,200
            )
            
            
            (1,349,200
            )Net
      deferred tax asset
            
            
            0
            
            
            
            0





At
December 31, 2007, the Company has federal net operating loss carry forwards as
follows:





Federal2019
            
            
            49,0002020
            
            
            1,010,0002021
            
            
            1,051,0002022
            
            
            778,0002023
            
            
            300,0002024
            
            
            280,0002025
            
            
            464,0002026
            
            
            348,0002027
            
            
            1,328,000$
            5,608,000





NOTE 7 -
STOCK BASED COMPENSATION





Effective
January 1, 2006, the Company adopted the provisions of Statement ofFinancial
Standards No. 123 (revised 2004), Share-Based Payment ("SFAS No. 123(R)"), which is a revision of
SFAS No. 123. SFAS No. 123 (R) supersedes APBOpinion No. 25, Accounting for
Stock Issued to Employees, and amends FASBStatement No. 95, Statement of Cash
Flows. Generally, the approach to accountingfor share-based payments in SFAS No.
123(R) is similar to the approach describedin SFAS No. 123. However, SFAS No.
123(R) requires all new share-based paymentsto employees, including grants of
employee stock options, to be recognized inthe financial statements based on
their fair values. Pro forma disclosure of thefair value of new share-based
payments is no longer an alternative to financialstatement
recognition.





Prior to
2006, the Company accounted for its employee stock option plans underthe
intrinsic value method, in accordance with the provisions of
AccountingPrinciples Board ("APB") Opinion No. 25, "Accounting for Stock Issued
toEmployees” and
related interpretations. Compensation expense related to thegranting of employee
stock options is recorded over the vesting period only, if,on the date of grant,
the fair value of the underlying stock exceeds theoption's exercise price. The
Company had adopted the disclosure-onlyrequirements of SFAS No. 123, "Accounting for Stock-Based
Compensation", whichallowed entities to continue to apply the provisions
of APB No. 25 fortransactions with employees and provide pro forma net income
and pro formaincome per share disclosures for employee stock grants made as if
the fair valuebased method of accounting in SFAS No. 123 had been applied to
thesetransactions.





25
 Index





NOTE 8 -
SUPPLEMENTAL CASH FLOWS INFORMATION





Supplemental
disclosure of cash flow information:





2007
            
            
            2006Cash
      paid during year for interest
            
            $
            -
            
            
            $
            -Cash
      paid during year for income tax
            
            $
            -
            
            
            $
            -








NOTE 9 –
LEASE





The
Company rents its offices under a month to month lease.  Rent expense
was $20,964 in 2007 and $19,748 in 2006.




NOTE 10 –
RECENT ACCOUNTING PRONOUNCEMENTS




In
February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140, to
simplify and make more consistent the accounting for certain financial
instruments. SFAS No. 155 amends SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, to permit fair value remeasurement
for any hybrid financial instrument with an embedded derivative that otherwise
would require bifurcation, provided that the whole instrument is accounted for
on a fair value basis. SFAS No. 155 amends SFAS No. 140, Accounting for the Impairment or
Disposal of Long-Lived Assets, to allow a qualifying special-purpose
entity to hold a derivative financial instrument that pertains to a beneficial
interest other than another derivative financial instrument. SFAS No. 155
applies to all financial instruments acquired or issued after the beginning of
an entity's first fiscal year that begins after September 15, 2006, with earlier
application allowed. This standard is not expected to have a significant effect
on the Company’s future reported financial position or results of
operations.




In March
2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". This
statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization and impairment requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and servicing liabilities at fair value eliminates the necessity for
entities that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year
beginning after September 15, 2006. The adoption of this statement is not
expected to have a significant effect on the Company’s future reported financial
position or results of operations.




In June
2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48,“Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in the Company's
financial statements in accordance with FASB Statement No. 109“Accounting for Income
Taxes.”  FIN 48 also prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a return, as well as guidance on
derecognition, classification, interest and penalties and financial statement
reporting disclosures. FIN 48 is effective for the Company on January 1, 2007.
Based on the Company's evaluation and analysis, FIN 48 is not expected to have a
material impact on the Company’s financial statements.





26
 Index





In June
2006, the Emerging Issues Task Force ("EITF") ratified EITF Issue
06-3,How Taxes Collected From
Customers and Remitted to Governmental Authorities Should Be Presented in the
Income Statement (That Is, Gross versus Net Presentation). A consensus
was reached that entities may adopt a policy of presenting taxes in the income
statement on either a gross or net basis. An entity should disclose its policy
of presenting taxes and the amount of any taxes presented on a gross basis
should be disclosed, if significant. The guidance is effective for periods
beginning after December 15, 2006. We present revenues net of taxes. EITF 06-3
will not impact the method for recording these sales taxes in our financial
statements.





In
September 2006, the FASB issued FASB Statement No. 157,“Fair Value Measurements”
(“FAS 157”), which
addresses how companies should measure fair value when they are required to use
a fair value measure for recognition or disclosure purposes under generally
accepted accounting principles. The FASB believes that the new standard will
make the measurement of fair value more consistent and comparable and improve
disclosures about those measures. FAS 157 is effective for fiscal years
beginning after November 15, 2007.   The Company is currently
evaluating the requirements and impact of FAS 157 on the Company's consolidated
financial statements, and will adopt the provisions on January 1, 2008. FAS 157
is not expected to have a material impact on the Company's financial
statements.





In
September 2006, the SEC issued Staff Accounting Bulletin 108 (“SAB 108”), which expresses
the Staff's views regarding the process of quantifying financial statement
misstatements. The bulletin was effective at fiscal year end 2006. The
implementation of this bulletin had no impact on the Company's results of
operations, cash flows or financial position.





In
October 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Staff
Position (“FSP”)
Financial Accounting Standard (“FAS”) 123(R)-5, Amendment of
FSP FAS 123(R)-1, (“FSP FAS
123(R)-5”) to address whether a change to an equity instrument in
connection with an equity restructuring should be considered a modification for
the purpose of applying FSP No. FAS 123(R)-1, Classification and
Measurement of Freestanding Financial Instruments Originally Issued in Exchange
for Employee Services under FAS Statement No 123(R) (“FSP FAS 123(R)-1”). FSP FAS
123(R)-1 states that financial instruments issued to employees in exchange for
past or future services are subject to the provisions of SFAS 123(R) unless the
terms of the award are modified when the holder is no longer an employee. In FSP
FAS 123(R)-5, the FASB staff concluded that changes to the terms of an award
that are made solely due to an equity restructuring are not considered
modifications as described in FSP FAS 123(R)-1 unless the fair value of the
award increases, anti-dilution provisions are added, or holders of the same
class of equity instruments are treated unequally. FSP FAS 123(R)-5 is effective
for the first reporting period beginning after October 10, 2006. The
adoption of FSP FAS 123(R)-5 did not have a material impact on the Company’s
financial statements.





On
February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Liabilities” (SFAS No. 159). Under this Standard, the
Company may elect to report financial instruments and certain other items at
fair value on a contract-by-contract basis with changes in value reported in
earnings. This election is irrevocable. SFAS No. 159 provides an
opportunity to mitigate volatility in reported earnings that is caused by
measuring hedged assets and liabilities that were previously required to use a
different accounting method than the related hedging contracts when the complex
provisions of SFAS No. 133 are not met. SFAS No. 159 is effective for
years beginning after November 15, 2007. The Company does not believe it
will have an impact on its consolidated financial statements.





27
 Index




In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”
(“SFAS 141R”). SFAS
141R amends SFAS 141 and provides guidance for recognizing and measuring
identifiable assets and goodwill acquired, liabilities assumed, and any
non-controlling interest in the acquiree. It also provides disclosure
requirements to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. SFAS 141R will be effective
for fiscal years beginning on or after December 15, 2008 and will be
applied prospectively.




In
December 2007, the FASB issued SFAS No. 160, “Non-Controlling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS 160”). SFAS 160
requires that ownership interests in subsidiaries held by parties other than the
parent, and the amount of consolidated net income, be clearly identified,
labeled and presented in the consolidated financial statements. It also requires
once a subsidiary is deconsolidated, any retained non-controlling equity
investment in the former subsidiary be initially measured at fair value.
Sufficient disclosures are required to clearly identify and distinguish between
the interests of the parent and the interests of the non-controlling owners.
SFAS 160 is effective for fiscal years beginning on or after December 15,
2008 and requires retroactive adoption of the presentation and disclosure
requirements for existing minority interests. All other requirements shall be
applied prospectively.  The adoption of this statement is not expected
to have a significant effect on the Company’s future reported financial position
or results of operations.




NOTE 11 –
RELATED PARTY TRANSACTION




During
2007, the Company licensed the use of Forecast Market Software from an entity
controlled by its CEO, in exchange for $100,000 for set-up and maintenance fees
(of which $31,006 was still owed at December 31, 2007), and 10,000,000 shares of
common stock for the license.  The stock was valued at $500,000, and
the purchase price of the license was initially capitalized to be expensed over
the term of the licensing agreement.  At December 31, 2007, due to the
lack of revenues produced by the Company’s operations related to this license
and our difficult cash-flow situation which could limit our ability to
effectively market our operations related to this software, management
determined that the value of the licensing agreement was fully impaired,
resulting in a non-cash expense item which is included in selling, general, and
administrative expenses.  The contract, which is for ten years and
includes automatic renewal provisions, also provides for ongoing cash payments
calculated under a formula provided for in the licensing agreement, based on
revenues from services provided to the Company’s customers.






28