**ANNUAL
      REPORT ON FORM 10-KSB FOR THE YEAR ENDED**


**DECEMBER
      31, 2007**




**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C.  20549**




**FORM
      10-KSB**




x
            
            Annual
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.
              For
                the fiscal year ended December 31, 2007.o
            
            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: 333-146052




**MIPSolutions,
      Inc.**


(EXACT
      NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)




Nevada
            
            20-4047619(State
                or other Jurisdiction of
              Incorporation
                or Organization)
            
            (I.R.S.
                Employer
              Identification
                No.




**128
      E. Fairview Avenue, Spokane, WA 99207**


(Address
      of Principal Executive Offices) (Zip Code)




Registrant’s
      Telephone Number, including Area Code:  (509) 484-6385




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, $.001 par value




Indicate
      by check mark if the Registrant is not required to file reports pursuant to
      Section 13 or Section 15 (d) of the Exchange Act.
   Yes oNo x




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










Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, 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.    Yes x     No o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes oNo x




The
      Company had no revenues in 2007.




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates was $565,150.00 based upon the purchase price of securities
      from
      the Company’s only private placement which was completed on March 16,
      2007.




As
      of
      December 31, 2007, the Registrant had outstanding 5,587,800 shares of its common
      stock.




**DOCUMENTS
      INCORPORATED BY REFERENCE**




FORM
      SB-2
      filed with the Securities and Exchange Commission, effective October 3, 2007
      is
      incorporated by reference in Items 1, 3, 5 and 7.




2




**TABLE
      OF CONTENTS**




**Page
                    No.**PART
                    I
                
                
                
                
                
                4ITEM
                    1
                
                
                DESCRIPTION
                    OF BUSINESS
                
                
                6ITEM
                    2
                
                
                DESCRIPTION
                    OF PROPERTY
                
                
                18ITEM
                    3
                
                
                LEGAL
                    PROCEEDINGS
                
                
                18ITEM
                    4
                
                
                SUBMISSION
                    OF MATTERS TO A VOTE OF SECURITY HOLDERS
                
                
                18**PART
                    II**
                
                
                
                
                
                19ITEM
                    5
                
                
                MARKET
                    FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                    ISSUER PURCHASES OF EQUITY SECURITIES.
                
                
                19ITEM
                    6
                
                
                MANAGEMENT’S
                    DISCUSSION AND ANALYSIS
                
                
                19ITEM
                    7
                
                
                FINANCIAL
                    STATEMENTS
                
                
                26ITEM
                    8
                
                
                CHANGES
                          IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                          FINANCIAL DISCLOSURE
                
                
                26ITEM
                    8A
                
                
                CONTROLS
                    AND PROCEDURES
                
                
                26ITEM
                    8A(T)
                
                
                CONTROLS
                    AND PROCEEDURES
                
                
                27ITEM
                    8B
                
                
                OTHER
                    INFORMATION
                
                
                29**PART
                    III**
                
                
                
                
                
                30ITEM
                    9
                
                
                DIRECTORS,
                    EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
                    GOVERNANCE;
                    COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
                
                
                30ITEM
                    10
                
                
                EXECUTIVE
                    COMPENSATION
                
                
                35ITEM
                    11
                
                
                SECURITY
                    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                    STOCKHOLDER MATTERS
                
                
                37ITEM
                    12
                
                
                CERTAIN
                    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
                
                
                37ITEM
                    13
                
                
                EXHIBITS
                
                
                37ITEM
                    14
                
                
                PRINCIPAL
                    ACCOUNTANT FEES AND SERVICES
                
                
                37**SIGNATURES**
                
                
                
                
                
                38





3




**PART
      I**




**Cautionary
      Note Regarding Forward-Looking Statements**




This
      report contains “forward-looking statements” within the meaning of Section 27A
      of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder,
      and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule
      3b-6 promulgated thereunder, that involve inherent risk and uncertainties.
       Any statements about our expectations, beliefs, plans, objectives,
      strategies or future events or performance constitute forward-looking
      statements.  These statements are often, but not always, made through the
      use of words or phrases such as “anticipate,” “estimate,” “plan,” “project,”
“continuing,” “ongoing,” “expect,” “believe,” “intend” and similar words or
      phrases.  Accordingly, these statements involve estimates, assumptions and
      uncertainties that could cause actual results to differ materially from those
      expressed or implied in them.  All forward-looking statements are qualified
      in their entirety by reference to the risk factors discussed in this report,
      including, among others, the following risk factors discussed more fully in
      Item
      1A hereof:





dependence
      on commercialization of our Molecularly Imprinted Polymer (MIP)
      technology;





our
      ability to continue as a “going concern”;





our
      need
      and ability to raise sufficient additional capital;





ineffective
      internal operational and financial control systems;





our
      ability to hire and retain specialized and key personnel;





dependence
      on our ability to purchase Float Concentrate at a discount of its gold value
      in
      the marketplace;





our
      limited operating history and continued losses;





restrictions
      contained in our outstanding convertible notes;





rapid
      technological change;





uncertainty
      of intellectual property protection;





potential
      infringement on the intellectual property rights of others;





factors
      affecting our common stock as a “penny stock;”





extreme
      price fluctuations in our common stock;





price
      decreases due to future sales of our common stock;





general
      economic and market conditions;




4




future
      shareholder dilution; and





absence
      of dividends.





Because
      the risk factors referred to above could cause actual results or outcomes to
      differ materially from those expressed or implied in any forward-looking
      statements made by us or on our behalf, you should not place undue reliance
      on
      any forward-looking statement. Further, any forward-looking statement speaks
      only as of the date on which it is made, and we undertake no obligation to
      update any forward-looking statement to reflect events or circumstances after
      the date on which the statement is made or to reflect the occurrence of future
      events or developments. New factors emerge from time to time, and it is not
      possible for us to predict which factors will arise. In addition, we cannot
      assess the impact of each factor on our business or the extent to which any
      factor, or combination of factors, may cause actual results to differ materially
      from those contained in any forward-looking statements.




5




**ITEM
      1.**  **DESCRIPTION
      OF BUSINESS**




MIP
      Solutions, Inc. (“The Company”) is a Development Stage Nevada corporation that
      is currently developing molecular imprinting technology that it licensed from
      the Johns Hopkins Applied Physics Laboratory ("JHU/APL") in January 2006 which
      can be defined as Molecularly Imprinted Polymers ("MIP") Ion Exchange ("IX")
      resin beads for various commercial applications relating to the removal of
      targeted molecules from water and solutions.




Through
      a
      licensing agreement with JHU/APL the Company has the exclusive right to all
      intellectual property owned by JHU/APL related to the MIP technology as applied
      to drinking water safety, waste water treatment and water-based mining
      operations using filtration, treatment, reclamation and extraction processes.
      In
      addition the Company has acquired additional rights to technology developed
      in
      conjunction with the license agreement with JHU/APL including the approach
      to
      the formation of the aforementioned MIP IX resin beads  by
      combining a large number of these MIPs for use in the extraction and filtration
      of target molecules.




Currently
      the Company lacks the necessary funds to proceed with its business operations
      over the next twelve months. As of December 31, 2007 the Company had $14,816
      of
      cash available. These funds have been utilized to maintain administrative
      expenses related to corporate fees and expenses since year end. In addition
      the
      Company secured an additional $30,000 in the form of Promissory Notes in January
      2008. On October 3, 2007, the Company’s Registration Statement as filed on Form
      SB-2 was deemed effective by the Securities and Exchange Commission (SEC)
      (Please note these Registration Statements can be viewed on EDGAR at the SEC’s
      website - www.sec.gov). Through the Registration Statement the Company intended
      to offer to the public up to 1,000,000 common shares through a Continuous
      Offering at a price of $1.50 per share with total anticipated proceeds of
      $1,500,000. On January 7, 2008 the Company withdrew the Continuous Offering
      at
      the recommendation of FINRA in order to obtain a listing on the Over the Counter
      Bulletin Board (OTCBB) for its common stock, .001 par value. This Continuous
      Offering may be refiled with the SEC in the future. Below describe
      management’s anticipated course of action over the next twelve months.




The
      Company plans to offer $1,500,000 to $2,500,000 worth of Convertible debentures
      through a Private Placement Offering in the future to secure additional
      financing. There can be no guarantee or assurance the Company will be able
      to
      sell any of the debentures through the anticipated offering in the future.
      The
      Company’s business development will likely fail if it is unable to raise
      proceeds through the sale of its debentures. If the Company is unsuccessful
      in
      raising adequate funds through the sale of its debentures it would be forced
      to
      rely on obtaining loans from financial institutions or shareholders, of which
      both are highly unlikely to occur. The inability of the Company to secure such
      loans or obtain adequate financing would result in business failure and any
      investment made into the Company would be lost in its entirety. As such the
      following explanations should be considered forward-looking
      statements.




6




**MIP
      Technology**




This
      MIP
      IX Resin bead technology process employs a target molecule as the template,
      which can be a metal ion or an organic molecule. The template is surrounded
      by
      ligands (organic compounds that have a high chemical affinity for the template
      molecule) that possess polymerizable groups (allowing the components to be
      chemically bound into a polymer) to form a template complex, which is the
      assembly of the ligands with the template. The complex is typically polymerized
      with a matrix monomer, such as styrene, and a cross-linking monomer in the
      presence of a suitable solvent. The cross-linking monomers add rigidity and
      mechanical strength to the finished polymer and the solvent provides site
      accessibility by increasing the porosity of the polymer. Removal of the template
      molecule leave behind a cavity that exhibits enhanced affinity for rebinding
      the
      target molecule. The MIP IX Resin bead may be then exposed to a solution
      containing the target molecule and many other chemical compounds, such as found
      in drinking water, with only the target molecule removed.




The
      following excerpt from a technology disclosure by one of the Johns
      Hopkins Laboratory scientists, Dr. George Murray, describes this technological process
      using heavy metal lead as an example (additional applications are also
      mentioned):




“The
      process involves suspension polymerization so as to form macroporous (beads
      with
      relatively large pores) ion
      exchange resin beads in a
      narrow and useful range of bead diameter. The beads will exhibit high
      selectivity with capacity comparable to non-selective ion
      exchange resin beads .
      The
      beads will be useful for a variety of applications. The first would be a means
      of removing toxic metals from drinking water. Lead plumbing exists in many
      places and by passing the water from the tap through a column of the beads
      the
      water would be rendered safe for drinking. By using the correct coordinator
      the
      beads can be induced to luminescence different colors when loaded and unloaded
      so as to allow replacement of the resin before any lead ions could pass through.
      The lead loaded resin could then be acid cleaned to remove the lead and due
      to
      the selectivity of the resin a pure lead solution would be obtained allowing
      easy recovery of the lead for re-use. In systems where more than one toxic
      metal
      ion could be present sequential cartridges would be utilized. The beads can
      be
      employed in the selective sequestration of economically important metals from
      waste streams or industrial effluents. For example, the effluents from a
      desalination plant consist of a hot brine solution. This solution has metals
      pre-concentrated for facile removal. A series of resin beads can selectively
      remove purified fractions for later use and both clean the effluent as well
      as
      "mine" specific minerals.”




In
      relation to drinking water safety, the MIP beads will be of sufficient size
      so
      that the untreated water will flow through the resin bed without the need for
      large pumps. Accordingly, the amount of infrastructure needed at the water
      utility will be minimized. The beads will also be fitted into a number of form
      factors that can be placed into the existing system of water utilities. The
      beads will exhibit high selectivity for the desired metal with a capacity
      comparable to non-selective ion
      exchange resin beads because
      of its large surface area resulting from its macroporous structure. The MIP
      beads can be regenerated a large number of times with little loss in
      performance. The MIP beads will perform well over the range of natural water
      pH’s, and since the MIP beads are chemically designed for a specific metal, they
      will suffer little loss in performance from potential interferents. Overall,
      MIP
      beads are desirable because of their high selectivity for specific metals and
      their potential for removing valuable or toxic metals from potable, mining,
      or
      reclaimed waters.




7




The
      Company believes that a “cartridge” containing our resin beads will be able to
      be placed in-line within the current infrastructure of a treatment plant and
      therefore have significantly lower installation expense. Furthermore, since
      the
“cartridge” will be place in-line there will be no additional electrical expense
      to run pumps. We also expect the beads to perform well without the introduction
      of additional chemicals to change the pH or other make up of the pre-filtered
      water which should reduce operational expenses further. The captured arsenic
      can
      be removed from the beads and resold into the chemical market.




Other
      companies may be developing technology similar or more competitive to the MIP
      technology that the Company is developing.




**DESCRIPTION
      OF PATENTS**




**Currently
      published Intellectual Property patents include:**




**US
      Patent No. 6,780,323** ,
      issued
      August 24th, 2004 for "Polymer Based Permeable Membrane for Removal of Ions"
      -
      This patent describes the preparation of an imprinted polymer membrane for
      facilitated transport of a specific chemical species. The examples were
      phosphate, nitrate and iron. The other membrane disclosures were collected
      into
      the application and the extension below.




**US
      Patent application No. 10/924,666,** filed
      January 27th, 2005, publication no. 2005-0019302 published January 27th, 2005,
      for "Polymer Based Permeable Membrane for Removal of Ions" - This application
      is
      an extension to the above patent. These above listed issued patents and
      published patent applications contain the following Johns Hopkins Laboratory
      Files: No. 1734-SPL: "Polymer Based Permeable Membrane for Removal of Ions"
      -
      The disclosure involving the removal of iron. No. 1744-SPL: "Environmental
      Phosphate Pollution Removal Using a Selectively Permeable Molecular Imprinted
      Polymer Membrane"- The disclosure involving the removal of phosphate. No.
      1745-SPL: "Environmental Nitrate Pollution Removal Using a Selectively Permeable
      Molecularly Imprinted Polymer Membrane" - The disclosure involving the removal
      of nitrate.




8




**US
      Patent application No. 11/127897,** filed
      May
      12th, 2005, (The Johns Hopkins Laboratory file no. 2122-1331) "Process for
      preparing Vinyl Substituted Beta-Diketones" - This provisional patent describes
      the synthesis of polymerizable ligands for removing metals from water, but
      not
      actually providing in what polymeric form the MIP would be contained, except
      for
      the first description a molecularly imprinted polymer (MIP) porous bead for
      the
      removal of copper from water.




**US
      provisional application No. 60/736376** ,
      filed
      November 14th, 2005 (The Johns Hopkins Laboratory file no. 2292-SPL) "The
      Preparation of Molecularly Imprinted Polymer Ion-exchange Resin Beads and Their
      Use as Sequestering Agents for Toxic or Economically Useful Ions" - This
      provisional patent covers the formation of molecularly imprinted polymer (MIP)
      porous beads that are capable of removing inorganic ions from liquids. The
      provisional patent fleshes out the original claim from the previous patent
      covering the synthesis of useful b-diketone ligands. The beads are large to
      encourage high flow rates but also have large surface areas to quickly capture
      large amounts of ions, which range from main group anions and oxyanions to
      rare
      earth cations, and transion metal cations, anions **,** and
      oxyanions.




**US
      Patent Application No. 11/520,448** filed
      September 12th, 2006, “Molecularly Imprinted Polymers for the Selective Removal
      of Target Compounds From Liquids” This patent expands upon the conditions needed
      to form effective MIP beads, favorable ligands for MIP bead formation, and
      target compound/ligand interaction under suspension polymerization conditions.




**License
      Agreement with JHU/APL**




The
      Company and JHU/APL entered into a license agreement effective January 23,
      2006
      (filed as an exhibit to the Company's SB-2 Registration Statement) granting
      the
      Company the exclusive license to make, use, sell, offer to sell, import, copy,
      modify, distribute, publicly display and otherwise utilize the technologies
      (the
“Core Technology”) described in the five patents described in the agreement (and
      discussed herein below under “Patents”) as such Core Technologies relate to the
      licensed fields of drinking water safety, wastewater treatment, and water-based
      mining operations using filtration, treatment, reclamation and extraction
      processes. All other fields are specifically excluded.




Included
      as part of the Core Technology licensed by the Company is all the non-patented
      intellectual property pertaining to the technology of the patents including
      copyrighted matter, technical information, know-how, show-how or trade secrets.
      The non-patented information includes such items as schematics, drawings, test
      and operating software, engineering analysis, reliability analyses, special
      manufacturing processes, quality assurance plans and procedures. In addition,
      any future improvements on the Core Technology or non-patented property is
      deemed to become part of the Core Technology and is included as such in the
      License Agreement




9




As
      part
      of the license agreement, the Company shall negotiate separate task agreements
      (research and development agreements) in the form of the Johns Hopkins
      Laboratory standard task order contract for specific research and development
      projects with funding to be paid to the Johns Hopkins Laboratory in certain
      minimum amounts. The first task order has been executed between the Company
      and
      the Johns Hopkins Laboratory for the removal of arsenic molecules from drinking
      water (Task Order # DCQ01).




Under
      the
      license agreement, the Company may sublicense others and amend any sublicense
      agreement so long as the terms of any sublicense agreement are no broader in
      scope and no less restrictive on the sub-licensee than the license agreement
      is
      on the Company and the terms of the sublicense agreement provide for payment
      of
      the royalties due to the Johns Hopkins Laboratory under the license agreement,
      and provide for its indemnification and flow down of the warranties contained
      in
      the license agreement. The Johns Hopkins Laboratory shall file, prosecute and
      maintain all patents and patent applications contained or to be contained in
      the
      Core Technology.




The
      license agreement provides that the Company shall exercise its best efforts
      to
      develop and commercialize products and services arising from the application
      of
      the Core Technology and the sale of such products and services in the market.
      The license agreement will expire in each country on the date of expiration
      of
      the last patent in that country that is included in the Core Technologies or
      in
      the event that no patents are issued, then 20 years from the effective date
      of
      the agreement. The license agreement may be terminated upon a material breach
      or
      default by either party upon written notice with a 60 day period to cure such
      default. If the Company fails to make a commercial sale within thirty
      months of the effective date of the license agreement, then the Johns Hopkins
      Laboratory, in its sole discretion and without written notice or a cure period,
      may terminate the license agreement. The Company may terminate the license
      agreement for any reason upon 60 days notice.




The
      license agreement provides that the Company reimburse the Johns Hopkins
      Laboratory for costs of maintaining the patents contained in the Core
      Technologies, issue it stock in the Company with an anti-dilution privilege
      such
      that the equity ownership of the Johns Hopkins Laboratory shall not be less
      than
      1% until January 23, 2009, and make payments upon reaching minimum sales levels
      and royalty payments of not more than 7% beginning 12 months after the first
      commercial sale of a product or service arising from the Core
      Technology.




If
      the
      Company is unable to compensate Johns Hopkins pursuant to the license agreement
      it would diversely impact Company’s ability to develop its proposed business and
      would likely cause the business to fail.




**Medical
      Option**




On
      February 20, 2007 the Company entered into a (revised) Agreement with JHU/APL
      for use of MIP technology as it relates to drug testing and
      diagnostics.




10




**Laboratory
      Facilities at Research Park on the University of Utah
      Campus**




On
      April
      1, 2007, Dr. Glen Southard, one of the Company’s founders and former JHU/APL
      scientist began work in the Company’s newly leased facility at Research Park on
      the University of Utah Campus. His primary focus will be to develop MIP IX
      resin
      beads for use in precious metals extraction and processing markets.




**Commercialization
      of the Technology**




MINING
      EXTRACTION AND PROCESSING




Over
      the
      next twelve months the Company intends to focus primarily on the development
      of
      MIP IX resin beads for use in the precious metals extraction and processing
      markets. Our commercialization plan is summarized in the following
      steps:




1.
            Develop
                a Ag (silver) MIP IX Resin Bead and perform additional research to
                increase the capacity of both our gold and silver beads at the
                bench.




2.
            Up-scale
                the production of the beads once we have reached maximum capacity
                and
                performance at the bench.




3.
            Contract
                out the production of sufficient quantities of both the silver and
                gold
                beads for pilot testing with an identified third
                party.




4.
            Secure
                a site for our pilot plant (ideally at the same time we are completing
                steps 1-3).




5.
            Construct
                a pilot plant (ideally at the same time we are completing steps 1-3)
                by
                4thQuarter 2008.




6.
            Purchase
                Float Concentrate ("FC") from identified
                sources.




7.
            Fine
                tune the pilot plant and process the concentrate capturing the discount
                on
                the gold values and all of the silver values to generate
                revenue.




8.
            Build
                a full scale processing FC Processing Plant by 4thQuarter 2009




The
      company believes its technology and related products will improve upon existing
      extraction technology by the selective nature of it products. This improved
      selectivity should lower costs associated with the processing of FC, reduce
      the
      environmental impact and energy consumption of methods in use
      today.




**Continued
      Research - Task Project with JHU/APL**




DRINKING
      WATER SAFETY




The
      Company plans to enter specific task orders with the Johns Hopkins Laboratory for the research and development of specific tasks. To date, the
      Company has entered into Basic Ordering Agreement No. 123-001 with the Johns
      Hopkins Laboratory and each additional task order with specific identified
      target molecules will be issued pursuant to the terms of this Basic Ordering
      Agreement. The Ordering Agreement, provides that the work performed under each
      task order will become part of the core technology as described in the license
      agreement, that the all work will be performed pursuant to individual task
      orders, that tasking under the basic ordering agreement may take place for
      a
      period of four years, and provides for other standard contractual matters such
      as governing law, severability, and disputes.




11




On
      February 3, 2006, the Company entered into its first task order with the JHU/APL
      (Proposal No. AD-2925L, Task DCQ01), for research and development of the
      Molecularly Imprinted Polymers for the Selective Removal of Trace Inorganic
      Arsenic from Culinary Water and to use the MIP technology for the removal of
      arsenic from drinking water. The Task Order sets out the scientific parameters
      of this project plus provides for in-progress reviews, both on-site and
      technical, as required by the Company. As of December 31, 2007 the Company
      has
      paid JHU/APL $130,260 on this Task Order, has a budget of $25,699 remaining,
      and
      is making payments on the remaining balance already invoiced (approximately
      $21,000). The task was scheduled for completion by February 14, 2007 and has
      been extended until May 31, 2008 due to lack of funding.




WASTE
      WATER TREATMENT




The
      Company plans to pursue the waste water treatment market after first pursuing
      commercial products in the drinking water safety and mining
      verticals.




**Management**




The
      Company has three executive officers: Jeffery Lamberson, President, Edward
      Hunton, Secretary and Treasurer and Glen Southard, Chief Scientific Officer.
      Currently, the Company does not anticipate the addition of additional management
      positions.




**Recent
      Developments**




On
      January 7, 2008 the Company filed a Post-Effective Amendment with the SEC for
      its registration statement for a Continuous offering of 1,000,000 its common
      shares.




On
      January 11, 2008 the Company received a Notice of Effectiveness from the SEC
      for
      its Post-Effective Amendment filed on January 7, 2008.




On
      January 22, 2008 the Company was assigned the symbol of MSOL by
      FINRA.




On
      January 31, 2008 the Company held its annual meeting of shareholders where
      one
      director, Mark Quinn, declined re-election and a new director, Gary MacDonald
      was elected to the board.




12




On
      February 4, 2008 the Company filed an 8-K with the SEC to report the departure
      of Mark Quinn and the election of Gary MacDonald.




**Intellectual
      Property Protection**




Because
      much of the Company’s value in the future depends on the MIP Technology, The
      Company’s patent and intellectual property strategy is of vital importance. The
      following sets forth the efforts taken by the Company to protect patent and
      intellectual property. MIP’s has engaged Thorpe North & Western of Sandy
      Utah as its patent counsel and currently has three applications in process
      with
      many additional applications under consideration. In addition, Thorpe North
      & Western is working in conjunction with The Johns Hopkins University
      Applied Physics Laboratory’s internal patent counsel, Intellectual Property
      Department and Office of Technology Transfer.




**Major
      Customers**




The
      Company has no customers to date.




**Competition**




MINING
      EXTRACTION AND PROCESSING




**** Our
      Au
      (gold) extractive MIP IX Resin Beads, developed at the bench by Dr. Southard,
      have been proven to have a high degree of selectivity and outperform other
      resins currently available on the market.  The table below shows that our
      initial beads perform over 10 times better than Amberlite-400, a Rohm and Haas
      product currently in use today.




Element
            
            MIP
                Au beads,  rel. ratio (mass)
            
            Amberlite-400,
                 rel. ratio (mass)
            
            Feed
                rel. ratio (mass)Al
            
            
            0.000
            
            
            0.000
            
            
            0.035Ca
            
            
            0.000
            
            
            0.034
            
            
            16.080Fe
            
            
            0.070
            
            
            1.123
            
            
            6.631Co
            
            
            0.000
            
            
            0.004
            
            
            0.001Ni
            
            
            0.000
            
            
            0.083
            
            
            0.282Cu
            
            
            0.117
            
            
            10.520
            
            
            43.427Zn
            
            
            0.000
            
            
            0.047
            
            
            1.385As
            
            
            0.000
            
            
            0.000
            
            
            0.007Se
            
            
            0.000
            
            
            0.004
            
            
            0.011Mo
            
            
            0.000
            
            
            0.008
            
            
            0.053Ag
            
            
            0.044
            
            
            0.083
            
            
            0.022Ba
            
            
            -0.019
            
            
            0.000
            
            
            0.007Au
            
            
            1.000
            
            
            1.000
            
            
            1.000Pb
            
            
            0.000
            
            
            0.000
            
            
            0.028%
                Au
            
            
            82.553
            
            
            7.748
            
            
            1.450




13




The
      table
      shows the other metals (the first column) commonly found along with gold
      extractions by cyanide solution and the ratios by mass found in solution upon
      cyanide extraction, as seen in the far right column or “feed”. The “feed”
solution was allowed to flow separately through cartridges of the MIPSoutions
      MIP beads and the Rohm and Haas Amberlite-400 beads, the two sets of beads
      were
      then stripped of all metals and the strip solution analyzed for the metals
      found
      in the “feed” solution. As can be seen, the MIPSolutions MIP beads selectively
      removed gold from the “feed” solution at a much higher mass ratio than the
      Amberlite-400 beads, increasing the concentration of gold found by over
      10-fold.




In
      addition, the mining industry widely accepts activated carbon for extraction
      purposes in the gold/cyanide extraction process and the Company will need to
      overcome preconceived biases regarding IX beads to “educate” industry
      professionals in order to gain acceptance of their products if it ever wishes
      to
      expand its revenue model from the processing of FC to the sale of its
      beads.




DRINKING
      WATER SAFETY AND WASTE WATER TREATMENT




The
      highly competitive filtration markets will be addressed as the Company’s
      technology evolves in these verticals.




**Employees**




The
      Company currently has no employees other than management; however, assuming
      adequate financing is obtained, it plans to hire a full time metallurgist and
      a
      lab technician by the 4 th Quarter
      of 2008.




**Government
      Regulation**




MINING
      EXTRACTION AND PROCESSING




State
      and
      Federal Agencies that regulate the use and permitting processes for hazardous
      chemicals will need to be contacted in order for the Company to obtain the
      necessary permits to operate its planned pilot and processing plants in the
      mining vertical, however, if the Company can negotiate a site on the already
      permitted land of a yet to be identified strategic partner, the permitting
      process could be avoided.




14




DRINKING
      WATER SAFETY AND WASTE WATER TREATMENT




The
      Company anticipates that any and all filters designed for the drinking water
      and
      waste water markets would
      need to be certified by either Underwriters Laboratory or the National
      Sanitation Foundation in conjunction with the American Water Works Association
      under EPA guidelines.




**Risk
      Factors**




Investors
      should carefully consider the following risk factors and all other information
      contained in this report.  Our business and our securities involve a high
      degree of risk.




**The
      financial statements enclosed herein contain a going concern footnote which
      indicates that the auditors for the Company are concerned that the Company
      may
      not have the resources to continue.**




If
      the
      Company is unable to raise additional capital or take other corporate measures,
      such as the successful sale or licensing of its technology, the Company’s
      ability to continue as a going concern is in jeopardy.




**Dispute
      with former president of the Company over ownership of 1,122,500 shares of
      the
      Company’s shares.**




The
      Company has not heard from Michael Pieniazek, the former president of the
      Company, regarding the legal action he and his brother were contemplating
      against the Company regarding the cancellation of 1,122,500 shares of the
      Company’s common stock issued collectively to them since they responded to the
      allegations in a letter prepared by counsel and dated July 3, 2007. Additional
      information regarding their allegations can be found in the Company’s SB-2
      registration statement filed with the U.S. Securities and Exchange Commission
      at www.sec.gov .




**Because
      MIPSolutions, Inc. is a start-up company with no operating history, an investor
      cannot assess the Company’s profitability or performance.**




The
      Company was formed in December 2005 and concentrated its efforts on developing
      its intellectual property and developing a public market for its common stock,
      has no operating results and therefore it is impossible for an investor to
      assess the performance of the Company or to determine whether the Company will
      meet its projected business plan. An investor must rely solely on the Company’s
      management’s history and its projected operations.




**There
      may be competition developing similar technology or even more effective
      technology which would undermine the Company’s ability to market its technology.**




There
      may
      be other companies that are developing technologies to extract elements
      from solution similar or even more efficient and cost effective to that
      being developed by the Company. It is possible that when the Company tries
      to
      market its technology, it will find such other competitive technologies already
      in the market or close to marketability. If such competing technologies are
      being developed or marketed, the Company will have a more difficult time selling
      its technology.




15




**The
      management and its affiliates own enough shares of the Company to influence
      a
      shareholder vote.**




The
      Company’s executive officers and directors and founders beneficially own
      approximately 58.1% of the Company’s outstanding common stock. As a result,
      these executive officers and directors will be able to exercise substantial
      interest over matters requiring shareholder approval, including the election
      of
      directors and the approval of material corporate matters such as change of
      control transactions.




**The
      Company will need additional financing which could delay the development of
      the
      MIP technology, cause increased debt to the Company, and dilute the existing
      shareholders.**




Future
      events, including problems, delays, expenses and difficulties frequently
      encountered by newly formed companies with developing technology may require
      that the Company seek additional sources of capital, including an additional
      offering of its equity securities, an offering of debt securities or obtaining
      financing through a bank or other entity. If the Company needs to obtain
      additional financing, there is no assurance that financing will be available,
      from any source, or that it will be available on terms acceptable to it, or
      that
      any future offering of securities will be successful.




**The
      Company’s intellectual property and other proprietary rights are valuable and
      any inability to protect them could adversely affect the Company’s projected
      business and future operations.**




The
      Company’s ability to compete effectively is dependent upon its ability to
      protect and preserve the intellectual property and other proprietary rights
      and
      materials owned, licensed or otherwise used by the Company. The license
      agreement with the Johns Hopkins Laboratory includes two issued patents and
      two
      pending patents. The Company cannot assure an investor that the patent
      applications will result in an issued patent, and failure to secure rights
      under
      the patent application may limit the Company’s ability to protect the
      intellectual property rights that the application was intended to cover. The
      Company cannot assure an investor that its intellectual property may not be
      infringed upon or its trade secrets misappropriated. The Company may not have
      adequate remedies available for any such infringement or other unauthorized
      use.
      In addition, the Company may itself become subject to claims against it which
      require payment of damages or limitation of the Company’s ability to use certain
      intellectual property or other proprietary rights found to be in violation
      of a
      third party’s rights. Regardless of outcome, any litigation, whether commenced
      by the Company or third parties, could be protracted and costly and would result
      in increased expenses.




16




**The
      Company does** **not
      intend to pay dividends to its stockholders, so investors will not receive
      any
      return on investment in the Company prior to selling their interest in it.**




The
      Company does not project paying dividends but anticipates that it will retain
      any future earnings for funding of growth and development of technology.
      Therefore, investors should not expect the Company to pay dividends in the
      foreseeable future. As a result, investors will not receive any return on their
      investment prior to selling their shares in the Company, if and when a market
      for such shares develops.




**The
      Company’s common stock is currently considered a “penny stock” which places it
      under additional regulations with respect to its purchase and sale through
      registered broker-dealers.**




Penny
      stocks generally are equity securities with a price of less than $5.00 per
      share
      other than securities registered on national securities exchanges or listed
      on
      the NASDAQ Stock Market, provided that current price and volume information
      with
      respect to transactions in such securities are provided by the exchange or
      system. The penny stock rules impose additional sales practice requirements
      on
      broker-dealers who sell such securities to persons other than established
      customers and accredited investors (generally those with assets in excess of
      $1,000,000 or annual income exceeding $200,000, or $300,000 together with their
      spouse). For transactions covered by these rules, the broker-dealer must make
      a
      special suitability determination for the purchase of such securities and have
      received the purchaser's written consent to the transaction prior to the
      purchase. Additionally, for any transaction involving a penny stock, unless
      exempt, the rules require the delivery, prior to the transaction, of a
      disclosure schedule prescribed by the SEC relating to the penny stock market.
      The broker-dealer also must disclose the commissions payable to both the
      broker-dealer and the registered representative and current quotations for
      the
      securities. Finally, monthly statements must be sent disclosing recent price
      information on the limited market in penny stocks. Because of these penny stock
      rules, broker-dealers may be restricted in their ability to sell the Company’s
      common stock. The foregoing required penny stock restrictions will not apply
      to
      the Company’s common stock if such stock reaches and maintains a market price of
      $5.00 or greater. At present, however, the Company’s common stock is subject to
      these penny stock regulations.




**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**




Statements
      herein regarding the time period during which the proceeds from the Offering
      will fund the Company’s operations constitute forward-looking statements under
      the federal securities laws. Such statements are subject to certain risks and
      uncertainties that could cause the rate at which the Company incurs expenses
      and
      acquires or develops centers to differ materially from those projected. The
      Company’s ability to proceed with its continued development is subject to
      certain risks, as discussed under the caption “RISK FACTORS” contained herein,
      and the Company’s ability to estimate the time period for which the proceeds of
      the Offering will fund the Company’s operations is subject to substantial
      uncertainty due to the factors outline under the caption “USE OF PROCEEDS”
contained herein. Undue reliance should not be placed on the dates and time
      periods referenced herein. These estimates are based on the current expectations
      of the Company’s management team, which may change in the future due to a large
      number of unanticipated future developments.




17




**ITEM
      2.**  **DESCRIPTION
      OF PROPERTY**




Our
      primary office is located in the residence of our Director, Edward Hunton,
      located at 128 E. Fairview Ave.,  Spokane, WA 99207.




In
      December 2007 our President, Jeffrey Lamberson, secured a month to month Lease
      at the Spokane Entrepreneurial Center located at 308 W. 1 st Avenue,
      Suite 304, Spokane, WA 99201 which serves as the office of the president and
      which the Company pays a total of $295 per month for the suite and parking
      space.




On
      April
      1 st ,
      2007
      the Company began a five (5) year lease with Research Park Associates for a
      1786
      square feet laboratory space located at 421 Wakara Way, Suite 203, Salt Lake
      City, UT 84108. The lease has a term of 60 months from the rent commencement
      date of April 1 st ,
      2007
      with a rental fee of $15.00 per square foot (“PSF”)
      ($26,790 per
      annum) which is adjustable every twelve months according changes in the CPI.
      In
      addition the Company pays $6.65 PSF ($11,876.90 per annum) for use of common
      areas and maintenance which is also subject to annual adjustment. The Company
      is
      also allotted four parking spaces with the lease.




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




There
      are
      no legal proceedings pending against us, and, to the knowledge of management,
      there was one material legal proceeding threatened by the Company’s former
      President, CEO and CFO, Michael T. Pieniazek. Details of the threatened
      litigation are contained herein under Item 1A and in the Company’s SB-2 Filing
      dated September 28, 2008 which can be found at www.sec.gov.




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




There
      were no meetings of the shareholders held in 2007. In accordance with our
      Bylaws, the annual meeting of shareholders was held on January 31, 2008, within
      one month of Company’s fiscal year end. At the meeting, the majority of our
      shareholders re-elected four directors, including Dale Carlton, Edward Hunton,
      Duane Simon and Glen Southard. One new director, Gary MacDonald was elected
      to
      replace Mark Quinn who did not seek another term. All five directors to serve
      until the next annual meeting of shareholders or until their respective
      successors are duly elected and qualified.




18




**PART
      II**




**ITEM
      5.** **MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
      PURCHASES OF EQUITY SECURITIES.**




**Common
      Stock Price Range**




On
      April
      5, 2007 the Company filed an SB-2 Registration Statement with the SEC. On
      September 13, 2007 the Company filed a 15c2-11 with the NASD (now FINRA) through
      Spartan Securities. On October 3, 2007 the Company received a Notice of
      Effectiveness on its SB-2 Filing from the SEC. On January 22, 2008 the Company
      was assigned the symbol of MSOL by FINRA which later cleared the stock to trade
      on the OTCBB.




Our
      common stock did not trade on a public exchange or over the counter in
      2007.




**Stockholders**




As
      of
      December 31, 2007, there were 70 stockholders of record of the Company’s common
      stock, $.001 par value.




**Dividends**




We
      have
      never paid or declared any cash dividends.  Future payment of dividends, if
      any, will be at the discretion of our board of directors and will depend, among
      other criteria, upon our earnings, capital requirements, and financial condition
      as well as other relative factors. Management intends to retain any and all
      earnings to finance the development of our business, at least in the foreseeable
      future.  Such a policy is likely to be maintained as long as necessary to
      provide working capital for our operations.




**Sales
      of Unregistered Securities**




All
      sales
      of our securities pursuant to any unregistered private offering during 2007
      have
      been previously reported on our SB-2 filed with the SEC on September 28, 2007
      and are included herein under Management’s Discussion and Analysis of
      Financial Condition and results of operations.




**Purchases
      of Equity Securities by the Issuer and Affiliated
      Purchasers**




We
      had no
      purchases of equity securities during 2007.




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




The
      following discussion of our financial condition and results of operations should
      be read together with our audited financial
      statements and accompanying notes that are included elsewhere in
      this report.  This discussion may contain forward-looking statements based
      upon current expectations that involve risks and uncertainties.  Our actual
      results may differ materially from those anticipated in these forward-looking
      statements as a result of various factors, including those set forth under
      the
      caption “Risk Factors” or in other parts of this report.  See “Cautionary
      Note Regarding Forward-Looking Statements.”




19




**Critical
      Accounting Policies**


Use
        of
        Estimates
  We
        prepare our financial statements in conformity with accounting principles
        generally accepted in the United States.  As such, we are required to make
        certain estimates, judgments and assumptions that we believe are reasonable
        based upon the information available.  These estimates and assumptions
        affect the reported amounts of assets and liabilities at the date of the
        financial statements and the reported amounts of revenues and expenses during
        the periods presented.
 
 Going
        Concern
  As
        shown
        in the accompanying financial statements, the Company had negative working
        capital and an accumulated deficit of $955,213 at December 31, 2007. These
        factors raise substantial doubt about the Company’s ability to continue as a
        going concern. However, the Company is currently developing technology that,
        if
        successful, will mitigate these factors. The financial statements do not
        include
        any adjustments relating to the recoverability and classification of recorded
        assets, or the amounts and classification of liabilities that might be necessary
        in the event the company cannot continue in existence.
 
 Accounting
        for Stock Options and Warrants Granted to Employees and
        Non-employees
  In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 123, “Accounting for Stock Based
        Compensations.” (SFAS 123R) This statement supersedes APB Opinion No. 25,
“Accounting for Stock Issued to Employees,” and its related implementation
        guidance. This statement establishes standards for the accounting for
        transactions in which an entity exchanges its equity instruments for goods
        or
        services. It also addresses transactions in which an entity incurs liabilities
        in exchange for goods or services that are based on the fair value of the
        entity’s equity instruments or that may be settled by the issuance of those
        equity instruments. This statement focuses primarily on accounting for
        transactions in which an entity obtains employee services in share-based
        payment
        transactions. This statement does not change the accounting guidance for
        share
        based payment transactions with parties other than employees provided in
        Statement of Financial Accounting Standards No. 123(R). This statement does
        not
        address the accounting for employee share ownership plans, which are subject
        to
        AICPA Statement of Position 93-6, “Employers’ Accounting for Employee Stock
        Ownership Plans.” The Company has adopted SFAS No. 123(R) which measures
        compensation costs based on the estimated fair value of the award and recognizes
        cost over the service period.




**Executive
      Overview**




We
      continue to need additional capital to fund our operating activities, including
      the development of our MIP technology.  Since its inception, the Company
      has issued a series of unregistered securities, all of which were deemed to
      be
      exempt from securities registration as not involving a public offering.
      Summaries of the Company’s private placements since inception are as follows:




In
      its
      initial capitalization in December 2005, the Company issued 4,590,000 shares
      of
      common stock for a total of $1,122 in patents and $3,468 in subscription
      receivables. These subscriptions were paid during the year ended December 31,
      2006.




During
      the year ended December 31, 2006 the Company issued 360,000 additional common
      stock shares to the founders at par.




On
      January 23, 2006, the Company issued 550,000 shares of its common stock to
      The
      Johns Hopkins University as partial payment for a license fee at par.




During
      the year ended December 31, 2006, the Company issued 200,000 shares of common
      stock for legal services valued at $100,000.




During
      the year ended December 31, 2006, the Company cancelled 1,122,500 of the initial
      founders shares issued in 2005. These shares were not related to the common
      shares issued for patents.




20




Also
      during the year ended December 31, 2006, the Company issued 880,000 “units” to
      investors at a price of $0.50 per unit in a private placement. Each unit
      consists of one share of common stock and one common share purchase warrant.
      The
      warrants entitle the holder to purchase, at a price of $0.50, one common share
      for a period of three years from the purchase date of the unit.




During
      the year ended December 31, 2007, the Company issued 250,300 “units”
to investors for cash and payables at a price of $0.50 per unit in a private
      placement. Each unit consists of one share of common stock and one common share
      purchase warrant. The warrants entitle the holder to purchase, at a price of
      $0.50, one common share for a period of three years from the purchase date
      of
      the unit.




Since
      its
      inception the Company sold a total of 1,130,300 Units consisting of one (1)
      share of Common Stock and one (1) Warrant to purchase an additional share at
      $.50 per share for a period of three years from the initial date of purchase
      of
      the Units. These Units and the securities comprising the Units were the subject
      of the Company’s SB-2 registration statement declared effective by the U.S.
      Securities and Exchange Commission as of October 3, 2007, which registered
      the
      resale of the Shares that comprised the Units sold in that
      offering.




Also
      during the year ended December 31,
      2007, the Company issued 150,000 shares for services and payables valued at
      $75,000.




On
      January 22, 2008 the Company applied for and was granted a listing on the Over
      the Counter Bulletin Board by FINRA to trade its common stock under the symbol
      MSOL. This should allow the Company better access to capital markets which
      it
      hopes will enable it to secure the necessary funding to continue its operations
      and commercialize its technology.




**Results
      of Operations for the Years Ended December 31, 2007 and December 31,
      2006**




*Net
      Sales*




The
      Company is a Development Stage company, has no operations, and no
      revenue.




*Net
      Loss*




We
      had a
      net loss of $387,985 for the year ended December 31, 2007 compared to a net
      loss
      of $567,699 for the year ended December 31, 2006. The decrease was primarily
      due
      to a decrease in consulting expenses, a decrease in research and development
      expenses, and a decrease in professional fees as described below.




*Operating
      Expenses*




We
      incurred total operating expenses of $376,178 for the year ended December 31,
      2007 compared to total operating expenses of $560,470 for the year ended
      December 31, 2006.




21




Research
      and development expenses decreased primarily due to lack of funding for
      additional research being performed under the open Task# DCQ01 with JHU/APL
      while the company was in its quiet period after it filed its SB-2 with the
      SEC.




Consulting
      expenses decreased due to the lack of capital to retain and hire new consultants
      and the appointment of Jeff Lamberson as president which eliminated his
      consulting expense. In addition, payments to certain officers were classified
      under consulting while the Company was still a privately held corporation.




Professional
      fees decreased as a result of the lack of capital to retain professionals and
      hire new ones.




Our
      general and administrative expenses increased $48,073 from $9,847 for the year
      ended December 31, 2006 to $57,920 for the year ended December 31, 2007.
 The increase resulted principally from the increase of $30,731 related to
      the lease of laboratory space described above, $8,313 in filing fees associated
      with our SB-2 Filing and 3 rd Quarter
      10-Q, $4,629 for D&O insurance, and an increase of $3,520 in telephone
      expenses.




*Interest
      Expense*




We
      recorded an increase in interest expense of $11,466 from interest of $341 in
      2006 to $11,807 in 2007.  This interest was primarily due to accrued
      interest on Promissory Notes which the Company issued to fund
      operations.




**Contractual
      Obligations**




The
      following table summarizes our approximate contractual obligations as of
      December 31, 2007:




Payments
                DueOne
                Year
            
            
            Years
              Two
                and Three
            
            
            Years
                Four and Five Years
            
            
            After
                Five Years
            
            
            TotalLong-term
                debt obligations
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0Capital
                lease obligationsOperating
                lease obligations
            
            
            36,384
            
            
            83,600
            
            
            10,270
            
            
            
            
            
            133,562Purchase
                obligationsOther
                obligations*
            
            
            421,883
            
            
            100,000
            
            
            50,000
            
            
            
            
            
            571,883Total
                contractual obligations
            
            $
            449,267
            
            $
            183,600
            
            $
            60,270
            
            $
            0
            
            $
            705,445




22




*
      These
      figures do not include $1,050,000 in milestone payments or royalty payments
      of
      7% of Net Sales which are part of the License Agreement with JHU/APL as there
      is
      no way of knowing the exact trigger dates of these events. Details of these
      commitments are located in our Notes to Financial Statements incorporated in
      this filing.





**Off-Balance
      Sheet Arrangements**




We
      have
      no off-balance sheet arrangements.




**Liquidity
      and Capital Resources**




At
      December 31, 2007, we had cash of $14,816, total current assets of $17,611,
      total current liabilities of $285,306 and total stockholders' deficit of
      $196,156.




Our
      accumulated deficit has been offset by sales of units, comprised of on
      share of our common stock and a warrant to purchase an additional share of
      our
      common stock at $.50 per share, to investors pursuant to a private placement
      offering, by the exercise of warrants related to the unit offering, and by
      issuance of promissory notes.  We expect to continue to experience negative
      operating cash flow as long as we continue our technology development program.




Our
      audited financial statements for the year ended December 31, 2007 contain a
      “going concern” qualification.  As discussed in Note 2 of the Notes to
      Financial Statements, we have incurred losses and have not demonstrated the
      ability to generate cash flows from operations to satisfy our liabilities and
      sustain operations.  Because of these conditions, our independent auditors
      have raised substantial doubt about our ability to continue as a going
      concern.




The
      Company plans to raise additional working capital through private placement
      offerings of equity and/or debt instruments to the public. Depending on its
      ability to raise additional working capital through private placements, the
      Company may re-submit the Continuous Offering that it withdrew with the
      Post-Effective Amendment filed on January 7, 2008 with the SEC.




Our
      long-term liquidity is dependent upon execution of our business model which
      includes the commercialization of our technology and the realization of revenue
      associated with it, working capital, as described above, and upon capital needed
      for continued development of the MIP technology.  Commercialization and
      future applications of the MIP technology are expected to require additional
      capital estimated to be approximately $2.0 million annually for the foreseeable
      future. This estimate will increase or decrease depending on funds available
      to
      us.  The availability of funding will also determine, in large measure, the
      timing and introduction of services, products, or new product applications
      in
      the marketplace.  Capital required for additional applications of the MIP
      technology is expected to come from internally generated cash flow from
      operations once the Company is able to enter the business associated with the
      processing of Float Concentrate or from external financing.




23




To
      date,
      we have met our working capital needs through funds received from sales of
      our
      common stock and borrowings in the form of promissory notes described above.
       Until our operations become profitable, we must continue to sell equity or
      find another source of operating capital. There can be no assurance that we
      will
      be able to obtain adequate working capital or additional financing at all or
      on
      terms favorable to us.




**Recent
      Accounting Pronouncements**




In
        December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business
        Combinations, or SFAS No. 141R. SFAS No. 141R will change the accounting
        for
        business combinations. Under SFAS No. 141R, an acquiring entity will be required
        to recognize all the assets acquired and liabilities assumed in a transaction
        at
        the acquisition-date fair value with limited exceptions. SFAS No. 141R will
        change the accounting treatment and disclosure for certain specific items
        in a
        business combination. SFAS No. 141R applies prospectively to business
        combinations for which the acquisition date is on or after the beginning
        of the
        first annual reporting period beginning on or after December 15, 2008.
        Accordingly, any business combinations we engage in will be recorded and
        disclosed following existing GAAP until January 1, 2009. We expect SFAS No.
        141R
        will have an impact on accounting for business combinations once adopted
        but the
        effect is dependent upon acquisitions at that time.
 
 In
        December 2007, the FASB issued Statement of Financial Accounting Standards
        No.
        160 ("SFAS 160"), Noncontrolling interests in Consolidated Financial Statements,
        which establishes accounting and reporting standards for the noncontrolling
        interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS
        160
        is effective for financial statements issued for fiscal years beginning on
        or
        after December 15, 2008, and interim periods within those fiscal years. We
        expect SFAS 160 will have an impact on accounting for noncontrolling interests
        once adopted but the effect is dependent upon any future investments,
        acquisitions and/or the creation of a subsidiary with a third party which
        would
        result in a noncontrolling interest of a subsidiary.
 
 In
        February 2007, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 159, “The Fair Value Option for Financial
        Assets and Financial Liabilities - Including an amendment of FASB Statement
        No.
        115” (hereinafter “SFAS No. 159”). This statement permits entities to choose to
        measure many financial instruments and certain other items at fair value.
        The
        objective is to improve financial reporting by providing entities with the
        opportunity to mitigate volatility in reported earnings cause by measuring
        related assets and liabilities differently without having to apply complex
        hedge
        accounting provisions. This Statement is expected to expand the use of fair
        value measurement, which is consistent with the Board’s long-term measurement
        objectives for accounting for financial instruments. This statement is effective
        as of the beginning of an entity’s first fiscal year that begins after November
        15, 2007, although earlier adoption is permitted. Management has not determined
        the effect that adopting this statement would have on the Company’s financial
        condition for results of operations.
 
 November
        15, 2006. We do not believe that the adoption of SAB 108 will have a material
        impact on our financial position, results of operations or cash flow.




24




In
        September 2006, the FASB issued Statement of Financial Accounting Standard
        No.
        158, “Employers' Accounting for Defined Benefit Pension and Other Postretirement
        Plans”, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS
        158”). SFAS 158 requires, among other items, (1) that a company recognize the
        funding status of its defined benefit pension plan as an asset or liability
        on
        its balance sheet, (2) recognize in other comprehensive income gains and
        losses,
        net of tax, and prior service costs or credits that are not recognized in
        the
        current period, and (3) measure benefit plan assets and liabilities as of
        the
        company's balance sheet date. The guidance of SFAS 158 must be applied to
        the
        first reporting period ending after December 31, 2006. We are currently
        evaluating the provisions of SFAS 158.
 
 In
        September 2006, the SEC released Staff Accounting Bulletin, No.108 (“SAB 108”),
        which provides guidance on the consideration of the effects of prior year
        misstatements in quantifying current year misstatements for the purpose of
        a
        materiality assessment. Early application of the guidance is encouraged in
        any
        report for an interim period of the first fiscal year after November 15,
        2006,
        filed after the publication of SAB 108. SAB 108 is required for fiscal years
        ending after
 In
        September 2006, the FASB issued Statement of Financial Accounting Standard
        No.
        157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 addresses how companies
        should measure the fair value of assets and liabilities when fair value
        recognition or disclosure is required. Additionally, SFAS 157 formally defines
        fair value as the amount that the company would receive if it sold an asset
        or
        transferred a liability to another company operating in the same market.
        The
        guidance of SFAS 157 must be applied to the first reporting period beginning
        after November 15, 2007. The adoption of SFAS 157 is not expected to have
        a
        material impact on our financial position, results of operations or cash
        flows.
 
 In
        June
        2006, the Financial Accounting Standards Board issued FASB Interpretation
        No. 48
“Accounting for Uncertainty in Income Taxes (an interpretation of FASB Statement
        No. 109)” which is effective for fiscal years beginning after December 15, 2006
        with earlier adoption encouraged. This interpretation was issued to clarify
        the
        accounting for uncertainty in income taxes recognized in the financial
        statements by prescribing 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 tax return. We are currently evaluating the potential
        impact of this interpretation.
 
 In
        February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments—an amendment of FASB Statements No. 133 and 140.”
 SFAS 155 amends SFAS 133, “Accounting for Derivative Instruments and
        Hedging Activities,” and SFAS 140, “Accounting for Transfers and Servicing of
        Financial Assets and Extinguishments of Liabilities.”  SFAS 155 permits
        fair value remeasurement for any hybrid financial instrument that contains
        an
        embedded derivative that otherwise would require bifurcation; clarifies which
        interest-only strips and principal-only strips are not subject to the
        requirements of SFAS 133; establishes a requirement to evaluate interests
        in
        securitized financial assets to identify interests that are freestanding
        derivatives or that are hybrid financial instruments that contain an embedded
        derivative requiring bifurcation; clarifies that concentrations of credit
        risk
        in the form of subordination are not embedded derivatives; and, amends SFAS
        140
        to eliminate the prohibition on a qualifying special-purpose entity from
        holding
        a derivative financial instrument that pertains to a beneficial interest
        other
        than another derivative financial instrument.  SFAS 155 is effective for
        all financial instruments acquired or issued after December 31, 2006.  We
        are currently evaluating the impact of SFAS 155.





25




**ITEM
      7.**  **FINANCIAL
      STATEMENTS**




The
      following financial statements required by this Item 7 begin on Page F-1 and
      are
      located following the signature page.  All information which has been
      omitted is either inapplicable or not required.




Report
                of Independent Registered Public Accounting Firm for the years endedDecember
                31, 2007 and December 31, 2006
            
            
            F-1Balance
                Sheets as of December 31, 2007 and December 31, 2006
            
            
            F-2Statements
                of Operations for the years ended December 31, 2007 andDecember
                31, 2006.
            
            
            F-3Statements
                of Stockholders’ Equity (Deficit) for the years ended December 31, 2007
                and December 31, 2006.
            
            
            F-4Statements
                of Cash Flows for the years ended December 31, 2007 andDecember
                31, 2006.
            
            
            F-5Notes
                to Financial Statements
            
            
            F-6




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




There
      have been no changes in or disagreements with our Accountants.


**ITEM
        8A.**  **CONTROLS
        AND PROCEDURES**
 
 Evaluation
        of Disclosure Controls and Procedures
 
 We
        maintain disclosure controls and procedures as defined in Rule 13a-15(e)
        of the
        Securities Exchange Act of 1934, as amended.  Our disclosure controls and
        procedures include controls and procedures designed to ensure that information
        required to be disclosed in our reports filed or submitted under the Exchange
        Act is accumulated and communicated within management, including our President
        ( Principal
        Executive Officer) and
        Treasurer ( Principal
        Financial and Accounting Officer ),
        as
        appropriate to allow timely decisions regarding required disclosures.
 
 As
        required by Rule 13a-15(b) of the Exchange Act, during 2007 we conducted
        an
        evaluation, under the supervision of our President and Treasurer, of the
        effectiveness of the design and operation of our disclosure controls and
        procedures as of December 31, 2007.  Based on this evaluation, our
        President and Treasurer concluded that our disclosure controls and procedures
        were not effective as of December 31, 2007 in alerting them in a timely manner
        to material information required to be included in our reports filed under
        the
        Exchange Act.




26


**ITEM
        8A(T).**  **CONTROLS
        AND PROCEEDURES**
 
 **Management’s
        Report on Internal Control over Financial Reporting**
 
 Management
        is responsible for establishing and maintaining an adequate system of internal
        control over financial reporting, pursuant to Rule 13a-15(c) of the
        Securities Exchange Act. This system is intended to provide reasonable assurance
        regarding the reliability of financial reporting and the preparation of
        financial statements for external purposes in accordance with accounting
        principles generally accepted in the United States (“GAAP”).
 
 A
        company’s internal control over financial reporting includes policies and
        procedures that: (i) pertain to the maintenance of records that, in
        reasonable detail, accurately and fairly reflect the transactions and
        dispositions of the assets of the company, (ii) provide reasonable
        assurance that transactions are recorded as necessary to permit preparation
        of
        financial statements in accordance with accounting principles generally accepted
        in the United States, and that receipts and expenditures of the company are
        being made only in accordance with authorizations of management and directors
        of
        the company, and (iii) provide reasonable assurance regarding prevention or
        timely detection of unauthorized acquisition, use or disposition of the
        company’s assets that could have a material effect on the financial statements.
 
 Because
        of its inherent limitations, internal control over financial reporting may
        not
        prevent or detect misstatements. Also, projections of any evaluation of
        effectiveness to future periods are subject to the risk that controls may
        become
        inadequate because of changes in conditions or that the degree of compliance
        with the policies or procedures may deteriorate.


27




In
        accordance with the internal control reporting requirements of the Securities
        and Exchange Commission our management completed an assessment of the
        effectiveness of our internal control over financial reporting as of
        December 31, 2007. In making this assessment, management used the criteria
        set forth in the Internal Control—Integrated Framework by the Committee of
        Sponsoring Organizations of the Treadway Commission (“COSO”). The COSO framework
        summarizes each of the components of a company’s internal control system,
        including the: (i) control environment, (ii) risk assessment,
        (iii) information and communication, and (iv) monitoring
        (collectively, the “entity-level controls”), as well as a company’s control
        activities (“process-level controls”). Management’s evaluation of the design and
        operating effectiveness of our internal controls over financial reporting
        identified material weaknesses resulting from design and operating deficiencies
        in the internal control system. A “material weakness” is defined as a
        deficiency, or a combination of deficiencies, in internal control over financial
        reporting such that there is a reasonable possibility that a material
        misstatement of the registrant’s annual or interim financial statements will not
        be prevented or detected on a timely basis.
 
 Management
        identified the following material weaknesses in our internal control over
        financial reporting as of December 31, 2007:
 
 Entity-Level
        Controls
 
 As
        of
        December 31, 2007, management had sufficiently documented the Company’s
        control environment using the COSO internal control framework but concluded
        that
        such control activities were not appropriately designed and operating
        effectively as of December 31, 2005. Management concluded that it did not
        maintain a control environment that fully emphasized the establishment of,
        adherence to, or adequate communication regarding appropriate internal control
        for all aspects of its operations. Specifically, management concluded that
        the
        Company did not have adequate controls with respect to: (i) oversight of
        the management and financial reporting by an Audit Committee, (ii) effective
        and
        continuous communication of the Company’s commitment to ethical business
        practices and standards, (iii) identification, monitoring and disclosure of
        related party relationships, and (iv) adequate segregation of duties and/or
        supervisory controls in certain departments. Based on the deficiencies noted
        in
        the design and operating effectiveness of the Company’s control environment,
        management determined that the Company had an ineffective control environment.
        Additionally, due to the deficiencies noted above management determined that
        the
        monitoring function and dissemination of information and communication did
        not
        operate effectively. These deficiencies constitute a material weakness in
        the
        control environment, monitoring, and information and communication components
        of
        COSO. Each of these deficiencies individually constitutes a material weakness.
        These material weaknesses increase the likelihood of potential material errors
        in our financial reporting.




28


Financial
        Closing and Reporting Process
 
 Management
        concluded that it did not have adequate controls designed and implemented
        in the
        financial close and reporting process to provide reasonable assurance that
        material misstatements would be prevented or detected. Specifically, management
        concluded that the Company did not have adequate controls in the following
        areas
        for the purposes of identifying, recording and disclosing the Company’s
        financial results of operations: (i) formalized accounting policies and
        procedures that govern the summarization and resolution of significant
        non-routine, unusual or complex accounting matters, (ii) formalized
        accounting policies and procedures that govern the identification and disclosure
        of related party transactions, (iii) adequate oversight and review of the
        Company’s implementation of accounting principles in accordance with generally
        accepted accounting principles, and (iv) adequate evaluation and review of
        significant estimates and judgments made by management.
 
 During
        the 2007 year-end management review and financial statement closing process,
        we
        identified a number of adjustments not previously identified. Given the
        adjustments identified, the significance of the financial closing and reporting
        process to the preparation of reliable financial statements, and the potential
        for errors to significant account balances to occur as of December 31,
        2007; our management has concluded that there are a combination of deficiencies
        in our internal controls over financial reporting such that there is a
        reasonable possibility that a material misstatement of our annual or interim
        financial statements will not be prevented or detected on a timely
        basis.
 
 Segregation
        of Duties
 
 Management
        identified that based on the concentration of duties on one individual and
        that
        this officer was responsible for the initiating and/or the recording of
        transactions with no other officer being delegated oversight, there existed
        a
        segregation of duties weaknesses. The lack of appropriate segregation of
        duties
        increases the risk that material misstatements to the Company’s financial
        statements may not be prevented or detected.
 __________________________
 
 As
        a
        result of the material weaknesses in internal control over financial reporting
        described above, the Company’s management has concluded that, as of December 31,
        2007, the Company’s internal control over financial reporting was not effective
        based on the criteria in *Internal
        Control - Integrated Framework* issued
        by the COSO.
 
 This
        annual report does not include an attestation report of our independent
        registered public accounting firm regarding internal control over financial
        reporting. We were not required to have, nor have we, engaged our independent
        registered public accounting firm to perform an audit of internal control
        over
        financial reporting pursuant to the rules of the Securities and Exchange
        Commission that permit us to provide only management’s report in this annual
        report.
 
 Remediation
        of Material Weaknesses in Internal Control over Financial
        Reporting
 
 The
        Company has adopted an Internal Control Manual effective January 1, 2008,
        elected an Audit Committee on February 8, 2008, and plans to implement other
        controls and procedures during 2008 to overcome the deficiencies noted
        above.
 
 Changes
        in Internal Control over Financial Reporting
 
 As
        of the
        end of the period covered by this report, there have been no changes in internal
        control over financial reporting (as defined in Rule 13a-15(f) of the Exchange
        Act) during the quarter ended December 31, 2007, that materially affected,
        or
        are reasonably likely to materially affect, the Company’s internal control over
        financial reporting.




**ITEM
      8B.**  **OTHER
      INFORMATION**





None.




29




**PART
      III**




**ITEM
      9.** **DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT**




The
      following table sets forth the names, ages and positions of our executive
      officers and directors: 2007.




Name
            
            Age
            
            Position
            
            Date
                Directorship
              CommencedJeffery
                Lamberson
            
            37
            
            President
            
            January,
                2007Edward
                Hunton
            
            43
            
            Director,
                Secretary, Treasurer
            
            December,
                2005Glen
                Southard, Ph.D.
            
            39
            
            Director,
                Chief Scientific Officer
            
            December,
                2005Duane
                Simon
            
            54
            
            Director
            
            January,
                2007Dale
                Carlton
            
            54
            
            Director
            
            January,
                2007Mark
                Quinn
            
            54
            
            Director
            
            December,
                2005




*Jeffery
      Lamberson* has
      served as the President of the Company since January 2007. Prior to 1998, Mr.
      Lamberson worked in the investment banking business and in 1998 he co-founded
      American Financial Communications providing investor relation services to public
      and private companies. In January, 2001, he founded JML Consulting, Spokane,
      Washington, to continue his consulting career as a sole proprietor. Mr.
      Lamberson continues to do occasional consulting work through JML Consulting.




*Glen
      Southard, Ph.D.* ,
      has
      served as a director of the Company since its inception in December 2005. From
      1999 to 2001, Dr. Southard was employed by the Schafer Corporation as a Senior
      Scientist. From 2001 to 2004, he was employed by the Johns Hopkins University
      Applied Physics Laboratory as Senior Professional Staff. Dr. Southard received
      his Bachelor of Science in Chemistry from Iowa State University in 1991 and
      his
      Ph.D. in Inorganic Chemistry from the University of Michigan in 1998. From
      1998
      to 1999, Dr. Southard did post-doctoral work at Eastern Michigan University.




*Edward
      Hunton* has
      served as a director and Secretary of the Company since its inception in
      December 2005. Mr. Hunton has operated his own investor relations consulting
      firm since 2002. Prior to 2002, Mr. Hunton worked as an investment advisor
      and
      served as Vice President of Investments for UBS PaineWebber. Mr. Hunton filed
      a
      personal Chapter 7 Bankruptcy, case # 04-15011-SJS, on April 14, 2004 in the
      United States Bankruptcy Court in the Western District of Washington. The case
      was discharged on July, 21 2004.




*Duane
      Simon* has
      served as a director of the Company since January 2007. Mr. Simon graduated
      from
      California State University, Sacramento, with a Bachelor of Science degree
      in
      Business Administration (Marketing) and a Masters of Business Administration
      in
      1983. Mr. Simon has been in the telecommunications for 22 years and the
      information technology industry since 1980. Since 1990, Mr. Simon has worked
      for
      Vision Service Plan (VSP), a leader in the eye care provider industry. During
      his tenure at Vision Service Plan, he worked developing the technology
      leadership and vision of the voice and data networks for VSP. He has been part
      of the team responsible for the growth of VSP to a billion-dollar company and
      has managed its technology network’s growth and expansion.




30




*Dale
      Carlton* has
      served as a director of the Company since January 2007. From 1984 to 1992,
      Mr.
      Carlton co-founded Cascade Microtech Inc., a semiconductor capital equipment
      company growing revenues to about $15 million in 1992. Mr. Carlton served as
      that company’s first president, and later as corporate secretary and president
      of Cascade Microtech, KK, in Japan. Mr. Carlton received his Bachelor of Science
      degree in Electrical Engineering, cum laude, from Washington State University,
      in 1975 and his Masters of Business Administration degree from University of
      Portland in 1994.




*Mark
      Quinn* has
      served as a director of the Company since January 2007. In 1980, Mr. Quinn
      received his Business Administration degree from Mercy College. In 1974, Mr.
      Quinn was employed by Xerox Corporation as a technical specialist and corporate
      technical trainer. In 1984, Mr. Quinn began his financial services career with
      American Express Financial Advisors and then served for 18 years as a First
      Vice
      President/Senior Investment Management Consultant with the brokerage firm of
      Smith Barney. In 2003, Mr. Quinn founded and serves as president of Greenfield
      Financial Services LLC, a full service financial planning firm, and Greenfield
      Financial Solutions LLC, a full service life settlement broker and consulting
      firm. Mr. Quinn did not seek re-election to the board of directors in January
      2008 and therefore is no longer a director.




**Board
      and Committee Matters**




During
      2007, the board of directors held seven meetings and took three separate actions
      by unanimous written consent resolution.  Four of the five serving
      directors attended 100% of the board meetings and one Director attended four
      of
      the seven meetings.  The board of directors is accountable to our
      shareholders to build long-term financial performance and value.  The board
      of directors’ responsibilities include overseeing the business and affairs of
      our Company, hiring and evaluating our president who acts as our chief executive
      officer; providing guidance, counsel and direction to management in formulating
      and evaluating operational strategies; monitoring our Company’s performance and
      capital requirements; and ensuring adherence to ethical practices and compliance
      with federal and state laws, including providing full and fair disclosure to
      shareholders pursuant to SEC regulations.  We encourage, but do not
      require, directors and director nominees to attend shareholder meetings.
 All of our board members attended our annual meeting of shareholders held
      in January, 2008.




The
      Company understands the need for an audit committee of the board which is why
      we
      established one at our February 8, 2008 meeting of the board of directors.
      The
      committee has provided a brief report below.  We have not established a
      compensation committee as of yet but plan to do so in 2008 along with a
      nominating committee of the board prior to sending out notices to shareholders
      with regard to our next annual meeting that will be held in January of 2009.
      Currently our entire board of directors participates in the selection and
      nomination of candidates to serve as directors.  Three of our current
      directors are “independent” under the definition of independence in Rule
      4200(a)(15) of the NASD’s (now FINRA) listing standards.




31




When
      formulating its recommendations for director nominees, the board of directors
      will consider advice and recommendations offered by our executive officers,
      shareholders and outside advisors.  All candidates for membership on the
      board are evaluated on the basis of business experience, financial acumen,
      professional accomplishments and contacts, educational background, ability
      to
      make independent analytical inquiries, understanding of our business environment
      and willingness to devote adequate time to board duties.




We
      do not
      have a formal policy concerning shareholder recommendations of candidates for
      board of director membership.  Our board views that such a formal policy is
      not necessary at the present time given the board’s willingness to consider
      candidates recommended by shareholders.  Shareholders may recommend
      candidates by writing to our Secretary at our principal offices: 128 E. Fairview
      Ave, Spokane, WA 99207, giving the candidate’s name, contact information,
      biographical data and qualifications.  A written statement from the
      candidate consenting to be named as a candidate and, if nominated and elected,
      to serve as a director should accompany any such recommendation. Shareholders
      who wish to nominate a director for election are generally advised to submit
      a
      shareholder proposal no later than September 30 for the next annual meeting
      of
      shareholders which will take place in January of each year based upon the
      current bylaws of the corporation.




**Audit
      Committee**




Our
      audit
      committee was established in February 2008 and currently includes Messrs.
      Hunton, Simon, and MacDonald.  The functions of the audit committee include
      recommending an independent registered public accounting firm to audit our
      annual financial statements, reviewing the independence of our auditors, the
      financial statements and the auditors’ report, and reviewing management’s
      administration of our system of internal control over financial reporting and
      disclosure controls and procedures.  The board of directors has not yet
      adopted a written audit committee charter or similar document. The results
      of
      their first meeting and review of the financial statements contained in this
      document are described in the report below.




**Limitation
      on Incorporation by Reference**




*Notwithstanding
      anything to the contrary set forth in any of our previous filings under the
      Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
      as
      amended, that incorporates by reference, in whole or in part, subsequent filings
      including, without limitation, this report shall not be deemed to be
      incorporated by reference into any such filings.*




32




**Report
      of the Audit Committee of the Board of Directors**




March
      27,
      2008




To
      the
      board of directors of MIPSolutions, Inc.:




We
      have
      reviewed and discussed with management the audited consolidated financial
      statements of MIPSolutions, Inc. (the “Company”) as of and for the year ended
      December 31, 2007.




We
      have
      discussed with the independent auditors the matters required to be discussed
      by
      Statement on Auditing Standards No. 61, *Communication
      with Audit Committee* s,
      as
      amended, by the Auditing Standards Board of the American Institute of Certified
      Public Accountants and Public Company Accounting Oversight Board.




We
      have
      received and reviewed the written disclosures and the letter from the
      independent accountants required by Independence Standards Board Standard No.
      1, *Independence
      Discussions with Audit Committee* s,
      as
      amended, and has discussed with the independent accountants their
      independence.




Based
      on
      the reviews and discussions referred to above, we recommend to the board of
      directors that the audited financial statements referred to above be included
      in
      the Company’s Annual Report on Form 10-K for the year ended December 31, 2007
      for filing with the Securities and Exchange Commission.




SUBMITTED
      BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS:









33




**Communication
      with the Board**




We
      have
      not, to date, developed a formal process for shareholder communications with
      the
      board of directors.  We believe our current informal process, in which any
      communication sent to the board of directors, either generally or in care of
      the
      president, secretary or other corporate officer or director, is forwarded to
      all
      members of the board of directors, has served the board’s and the shareholders’
needs.




**Conflict
      of Interest Policy**




Our
      ICM
      was put in place to guard against any potential conflicts of interest. As the
      Company grows it will be the job of the audit committee to decide if additional
      controls need to be put in place.





**Code
      of Ethics**




Our
      ICM
      was put in place to ensure a high degree of ethical standards. As the Company
      grows it will be the job of the audit committee to decide if a separate “Code of
      Conduct” need to be put in established.




**COMPLIANCE
      WITH SECTION 16(a) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**




Section
      16(a) of the Exchange Act requires our directors and executive officers, and
      persons who own more than 10% of our common stock, to file with the SEC initial
      reports of ownership and reports of changes in ownership of our common stock
      and
      other equity securities.  Executive officers, directors and greater than
      10% shareholders are required by SEC regulations to furnish us with copies
      of
      all Section 16(a) forms they file.




34




To
      our
      knowledge, during the year ended December 31, 2007, our directors, executive
      officers and greater than 10% shareholders complied with all Section 16(a)
      filing requirements.




**ITEM
      10.**  **EXECUTIVE
      COMPENSATION**




**Compensation**





**Officers
                and Directors Compensation for 2007****Officers****Name**
            **Position**
            **Outside
                Director's Fee**
            **Inside
                Director's Fee**
            **Salary/Fee**Dale
                Carlton
            Outside
                Director
            50,000
                Common Shares (2)Edward
                Hunton
            Corp.
                Sec., Treas. & Director
            
            $0.00
            $60,000.00
                (1) (3)Jeffrey
                Lamberson
            President
            
            
            $60,000.00
                (1) (4)Duane
                Simon
            Outside
                Director
            50,000
                Common Shares (2)Glen
                Southard
            Vice
                President & Director
            
            $0.00
            $60,000.00
                (1) (5)Mark
                Quinn
            Outside
                Director
            50,000
                Common Shares (2)***NOTES
                TO COMPENSATION:***(1) 
                As the Company is still a Development Stage company it has been paying
                its
                officers a salary in the form of a fee of $5,000 per month. Management
                determines how and when these amounts are paid based on resources
                available, otherwise they accrue.(2) 
                Although the Company has no formal policy it has consistently authorized
                50,000 shares of common stock, $.001 par value, to each Outside Director
                when they are elected to the board.(3) 
                As of December 31, 2007 Mr. Hunton had an accrual of
                $37,000.00(4) As
                of December 31, 2007 Mr. Lamberson had an accrual of
                $26,000.00(5) 
                As of December 31, 2007 Dr. Southard had an accrual of
                $42,000.000




**Discussion,
      Analysis and Overview of Compensation Program**




The
      Company currently has no established compensation program as it is still a
      development stage company in need of financing. The three officers of the
      Company each receive a monthly payment of $5,000 when cash is available in
      the
      form of a fee payable to them for their services. When cash is not available,
      the amount accrues on the books of the Company. Should the Company be able
      secure sufficient capital to fund its business plan and strategy, then it plans
      to formalize a compensation strategy that will adopt the following
      philosophies:




35




*Compensation
      Philosophy:* Our
      general compensation philosophy is designed to link an employee’s total cash
      compensation with our performance, the employee’s department goals and
      individual performance.  Given our stage of operations and limited capital
      resources, we are subject to various financial restraints in our compensation
      practices.  As an employee’s level of responsibility increases, there is a
      more significant level of variability and compensation at risk. By linking
      incentive compensation to the performance of the Company, we believe that it
      will create an environment in which our employees are stakeholders in our
      success and, thus, benefits all shareholders.




*Executive
      Compensation Philosophy* :
       Our executive compensation philosophy will be designed to establish an
      appropriate relationship between executive pay and our annual performance,
      our
      long-term growth objectives, individual performance of the executive officer
      and
      our ability to attract and retain qualified executive officers.  We will
      attempt to achieve these goals by integrating competitive annual base salaries
      with (a) bonuses based on corporate performance and on the achievement of
      specified performance objectives, and stock awards through some form of long
      term incentive plan. We believe that cash compensation in the form of salary
      and
      bonus provides our executives with short-term rewards for success in operations
      and stock awards will provide long term incentives.




In
      making
      compensation decisions, the compensation committee, when formed, will compare
      each element of total compensation against companies referred to as a
“compensation peer group.”  The compensation peer group will be a group of
      companies that the compensation committee will select from readily available
      information about small companies engaged in similar businesses and with similar
      resources.




**Employment
      Contracts**




The
      Company currently has no employment Contracts




**Stock
      Option Plan**




The
      Company currently has no Stock Option Plan but intends to establish one in
      2008.




**DIRECTOR
      COMPENSATION**




We
      currently grant each new Director 50,000 restricted shares of our common stock,
      $.001 par value. No other compensation has been considered to date but the
      board
      plans to address the subject in 2008.




36




**ITEM
        11.    **SECURITY
        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
        MATTERS****


The
      following table sets forth the beneficial ownership of our common stock at
      December 31, 2007 by each director, executive officer, and each person known
      by
      us to own beneficially more than 5% of our common stock.




Beneficial
                Owner
            
            Beneficial
                Ownership
            
            Percentof
                ClassJeffrey
                Lamberson
            
            
            1,172,500
            
            
            20.0
            %Edward
                A. Hunton
            
            
            1,112,500
            
            
            18.9
            %Glen
                Southard
            
            
            1,112,500
            
            
            18.9
            %The
                Johns Hopkins Applied Physics Lab
            
            
            550,000
            
            
            9.3
            %Dale
                Carlton*
            
            
            50,000
            
            
            0.8
            %Duane
                Simon*
            
            
            50,000
            
            
            0.8
            %Mark
                Quinn (1)
            
            
            250,000
            
            
            4.2
            %





*
      Represents less than 1% of our common stock outstanding.




(1)  Includes
      200,000 shares held by Mr Quinn’s wife, Bonnie Quinn.




**ITEM
      12.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS,** **AND
      DIRECTOR INDEPENDENCE**




None




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


**Exhibit
Number**
              **Description
                of
                Document**  Exhibit
                  31.1
              SECTION
                  302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER (PRESIDENT) AND CHIEF
                  FINANCIAL OFFICER (TREASURER)
 Exhibit
                  32.1
              CERTIFICATION
                  PURSUANT TO 18 U.S.C. SEC. 1350 (SECTION 906 OF SARBANES-OXLEY
                  ACT OF
                  2002)


**ITEM
      14.**  **PRINCIPAL
      ACCOUNTANT FEES AND SERVICES**




Fees
      for
      professional services provided by our current independent auditors for each
      of
      the last two fiscal years, in each of the following categories, are as
      follows:




2007
            
            2006Audit
                fees
            
            $
            15,224.00
            
            $
            11,958.75
            *Audit-related
                fees
            
            
            —
            
            
            —Tax
                fees
            
            
            —
            
            
            2,021.25
            *All
                other fees
            
            
            2,932.00
            
            
            —Total
            
            $
            18,156.00
            
            $
            13,980.00




*Includes
      2005 Audit and 2005 Tax fees for the period from December 19, 2005 to year
      end
      2005.




37




Audit
      fees included fees associated with the annual audit and reviews of our annual
      and quarterly reports, and registration statements under the Securities Act
      of
      1933, filed with the SEC.




Tax
      fees
      included fees associated with tax compliance and tax consultations.




**SIGNATURES**




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




**MIPSolutions,
                Inc.**Date:
                March 31, 2008
            
            /s/
                Jeffrey LambersonBy:
                 Jeffrey LambersonIts:
                 President




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.




Date:
                  March 31, 2008
              
              /s/
                  Jeffrey LambersonBy:
                   Jeffrey LambersonIts:
                   President
                (Principal
                    Executive Officer)
 Date:
                    March 31, 2008
                
                /s/
                    Edward A. HuntonBy:
                     Edward A. HuntonIts:
                     Treasurer
                  (Principal
                      Financial and Accounting
                      Officer)
 Date:
                      March 31, 2008
                  
                  /s/
                      Dale CarltonBy:
                       Dale CarltonIts:
                       Director
 Date:
                        March 31, 2008
                    
                    /s/
                        Duane SimonBy:
                         Duane SimonIts:
                         Director




Date:
                  March 31, 2008
              
              /s/
                  Glen SouthardBy:
                   Glen SouthardIts:
                     Director
  Date:
                      March 31, 2008
                  
                  /s/
                      Gary MacDonaldBy:
                       Gary MacDonaldIts:
                         Director
  38




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**






We
      have
      audited the accompanying balance sheet of MIPSolutions, Inc. (a development
      stage company) as of December 31, 2007 and 2006, and the related statements
      of operations, stockholders’ equity (deficit) and cash flows for the years then
      ended and for the period from December 19, 2005 (Inception) to December 31,
      2007. 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 audit.




We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company 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 audit provides
      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 MIPSolutions, Inc. as of December
      31, 2007 and 2006 and the results of its operations, stockholders equity
      (deficit) and its cash flows for the years then ended and for the period from
      December 19, 2005 (Inception) to December 31, 2007, in conformity with
      accounting principles generally accepted in the United States of
      America.




The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 2, the Company has
      sustained substantial operating losses since inception and has limited cash
      resources. These factors raise substantial doubt about the Company's ability
      to
      continue as a going concern. Management's plans regarding those matters also
      are
      described in Note 2. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty






/s/
      Williams & Webster, P.S.


Certified
      Public Accountants


Spokane,
      Washington


March
      28,
      2008





F-1


**MIP
      SOLUTIONS, INC.**


(A
        DEVELOPMENT STAGE
        COMPANY)
  **BALANCE
          SHEETS**


December
                31,
            
            December
                31,2007
            
            2006**ASSETS****CURRENT
                ASSETS**Cash
            
            $
            14,816
            
            $
            12,160Refund
                receivable
            
            
            -
            
            
            1,139Prepaid
                expenses
            
            
            2,795
            
            
            5,000Total
                Current Assets
            
            
            17,611
            
            
            18,299**PROPERTY
                AND EQUIPMENT, NET OF DEPRECIATION**
            
            
            11,321
            
            
            984**OTHER
                ASSETS**License
            
            
            45,550
            
            
            45,550Patent
            
            
            16,905
            
            
            7,566Accumulated
                amortization
            
            
            (2,237
            )
            
            (365
            )Total
                Other Assets
            
            
            60,218
            
            
            52,751**TOTAL
                ASSETS**
            
            $
            89,150
            
            $
            72,034**LIABILITIES
                AND STOCKHOLDERS' DEFICIT****CURRENT
                LIABILITIES**Accounts
                payable
            
            $
            86,650
            
            $
            74,914Accrued
                interest
            
            
            10,162
            
            
            341Accrued
                officers and directors fees
            
            
            105,000
            
            
            -Note
                payable
            
            
            66,589
            
            
            20,000Note
                payable - related party
            
            
            16,905
            
            
            100Total
                Current Liabilities
            
            
            285,306
            
            
            95,355**COMMITMENTS
                AND CONTINGENCIES**
            
            
            -
            
            
            -**STOCKHOLDERS'
                DEFICIT**Common
                stock, $0.001 par value; 50,000,000 sharesauthorized,
                5,887,800 and 5,457,500 shares issuedand
                outstanding, respectively
            
            
            5,888
            
            
            5,458Additional
                paid-in capital
            
            
            753,640
            
            
            538,920Deficit
                accumulated during developmen stage
            
            
            (955,684
            )
            
            (567,699
            )Total
                Stockholders' Deficit
            
            
            (196,156
            )
            
            (23,321
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS' DEFICIT**
            
            $
            89,150
            
            $
            72,034


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


F-2


**MIP
      SOLUTIONS, INC.**


(A
        DEVELOPMENT STAGE
        COMPANY)


**STATEMENTS
        OF OPERATIONS**




Year
                Ended
            
            
            Year
                Ended
            
            
            From
                December 19, 2005 (Inception) toDecember
                31,
            
            
            December
                31,
            
            
            December
                31,2007
            
            
            2006
            
            
            2007**REVENUES**
            
            $
            -
            
            $
            -
            
            $
            -**OPERATING
                EXPENSES**Consulting
            
            
            11,676
            
            
            188,669
            
            
            200,345Depreciation
                and amortization
            
            
            4,215
            
            
            569
            
            
            4,784General
                and administrative
            
            
            57,920
            
            
            9,847
            
            
            67,767Professional
                fees
            
            
            37,188
            
            
            187,377
            
            
            224,565Research
                and development
            
            
            5,623
            
            
            149,288
            
            
            154,911Officers
                and directors fees
            
            
            255,000
            
            
            -
            
            
            255,000Option
                fee
            
            
            -
            
            
            2,500
            
            
            2,500Travel
                and meals
            
            
            4,556
            
            
            22,220
            
            
            26,776**TOTAL
                OPERATING EXPENSES**
            
            
            376,178
            
            
            560,470
            
            
            936,648**LOSS
                FROM OPERATIONS**
            
            
            (376,178
            )
            
            (560,470
            )
            
            (936,648
            )**OTHER
                INCOME (EXPENSE)**Interest
                expense
            
            
            (11,807
            )
            
            (341
            )
            
            (12,148
            )Loss
                on disposition of assets
            
            
            -
            
            
            (6,888
            )
            
            (6,888
            )**TOTAL
                OTHER INCOME**
            
            
            (11,807
            )
            
            (7,229
            )
            
            (19,036
            )**LOSS
                BEFORE TAXES**
            
            
            (387,985
            )
            
            (567,699
            )
            
            (955,684
            )**INCOME
                TAX EXPENSE**
            
            
            -
            
            
            -
            
            
            -**NET
                LOSS**
            
            $
            (387,985
            )
            $
            (567,699
            )
            $
            (955,684
            )**NET
                LOSS PER COMMON SHARE,****BASIC
                AND DILUTED**
            
            $
            (0.07
            )
            $
            (0.10
            )**WEIGHTED
                AVERAGE NUMBER OF****COMMON
                STOCK SHARES****OUTSTANDING,
                BASIC AND DILUTED**
            
            
            5,837,467
            
            
            5,457,500




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


F-3


**MIP
      SOLUTIONS, INC.**


(A
      DEVELOPMENT STAGE
      COMPANY)




**STATEMENT
        OF STOCKHOLDERS' EQUITY (DEFICIT )**




Additional
            
            
            
            
            
            TotalCommon
                Stock
            
            Paid-in
            
            Subscription
            
            Accumulated
            
            Stockholders'Shares
            
            Amount
            
            Capital
            
            Receivable
            
            Deficit
            
            (Deficit)Balance
                at December 19, 2005 (Inception)
            
            
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Common
                stock issued as founder's shares at par for patents,
            
            
            1,122,000
            
            
            1,122
            
            
            -
            
            
            -
            
            
            -
            
            
            1,122Common
                stock issued as founder's shares for subscription receivable at
                par
            
            
            3,468,000
            
            
            3,468
            
            
            -
            
            
            (3,468
            )
            
            -
            
            
            -Balance,
                December 31, 2005
            
            
            4,590,000
            
            
            4,590
            
            
            -
            
            
            (3,468
            )
            
            -
            
            
            1,122Common
                stock issued for license agreement fee at par.
            
            
            550,000
            
            
            550
            
            
            -
            
            
            -
            
            
            -
            
            
            550Common
                stock issued for additional founders at par.
            
            
            360,000
            
            
            360
            
            
            -
            
            
            -
            
            
            -
            
            
            360Common
                stock issued for services at $0.50 per share
            
            
            200,000
            
            
            200
            
            
            99,800
            
            
            -
            
            
            -
            
            
            100,000Common
                stock and warrants issued for cash at $0.50 per share
            
            
            880,000
            
            
            880
            
            
            439,120
            
            
            -
            
            
            -
            
            
            440,000Cancelled
                founder's shares
            
            
            (1,122,500
            )
            
            (1,122
            )
            
            -
            
            
            1,122
            
            
            -
            
            
            -Subscriptions
                received
            
            
            -
            
            
            -
            
            
            -
            
            
            2,346
            
            
            -
            
            
            2,346Net
                loss for the year endedDecember
                31, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (567,699
            )
            
            (567,699
            )Balance,
                December 31, 2006
            
            
            5,457,500
            
            
            5,458
            
            
            538,920
            
            
            -
            
            
            (567,699
            )
            
            (23,321
            )Common
                stock and warrants issued for payables at $0.50 per share
            
            
            5,000
            
            
            5
            
            
            2,495
            
            
            -
            
            
            -
            
            
            2,500Common
                stock issued for services at $0.50 per share at $0.50 per
                share
            
            
            150,000
            
            
            150
            
            
            74,850
            
            
            -
            
            
            -
            
            
            75,000Common
                stock and warrants issued for cash at $0.50 per share
            
            
            245,300
            
            
            245
            
            
            122,405
            
            
            -
            
            
            -
            
            
            122,650-Exercise
                of warrants
            
            
            30,000
            
            
            30
            
            
            14,970
            
            
            
            
            
            
            
            
            15,000Net
                loss for the year endedDecember
                31, 2007
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (387,985
            )
            
            (387,985
            )Balance,
                December 31, 2007
            
            
            5,887,800
            
            $
            5,888
            
            $
            753,640
            
            $
            -
            
            $
            (955,684
            )
            $
            (196,156
            )


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


F-4


**MIP
        SOLUTIONS, INC.**
 (A
        DEVELOPMENT STAGE
        COMPANY)




**STATEMENTS
        OF CASH FLOWS**




Year
                  Ended
              
              Year
                  Ended
              
              From
                  December 19, 2005 (Inception) toDecember
                  31,
              
              December
                  31,
              
              December
                  31,2007
              
              2006
              
              2007**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (387,985
              )
              $
              (567,699
              )
              $
              (955,684
              )Adjustments
                  to reconcile net loss to net cashprovided
                  (used) by operating activities:Depreciation
                  and amortization
              
              
              4,215
              
              
              569
              
              
              4,784Loss
                  on disposition of assets
              
              
              -
              
              
              6,888
              
              
              6,888Stock
                  issued for services
              
              
              75,000
              
              
              100,000
              
              
              175,000Stock
                  issued for payables
              
              
              2,500
              
              
              -
              
              
              2,500Decrease
                  (increase) in:Refund
                  receivable
              
              
              1,139
              
              
              (1,139
              )
              
              -Prepaid
                  expenses
              
              
              2,205
              
              
              (5,000
              )
              
              (2,795
              )Increase
                  (decrease) in:Accounts
                  payable
              
              
              11,735
              
              
              74,914
              
              
              86,649Accrued
                  interest
              
              
              9,821
              
              
              341
              
              
              10,162Related
                  party payable
              
              
              16,805
              
              
              100
              
              
              16,905Accrued
                  officer and director fees
              
              
              105,000
              
              
              -
              
              
              105,000Net
                  cash provided (used) by operating activities
              
              
              (159,565
              )
              
              (391,026
              )
              
              (550,591
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES:**Purchase
                  of equipment
              
              
              (12,679
              )
              
              (8,076
              )
              
              (20,755
              )Purchase
                  of license
              
              
              -
              
              
              (45,000
              )
              
              (45,000
              )Purchase
                  of patents
              
              
              (9,339
              )
              
              (6,444
              )
              
              (15,783
              )Net
                  cash used by financing activities
              
              
              (22,018
              )
              
              (59,520
              )
              
              (81,538
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Common
                  stock and warrants for cash
              
              
              137,650
              
              
              440,360
              
              
              578,010Collection
                  of subscriptions receivable
              
              
              -
              
              
              2,346
              
              
              2,346Proceeds
                  from note payable
              
              
              46,589
              
              
              29,500
              
              
              76,089Repayment
                  of note payable
              
              
              -
              
              
              (9,500
              )
              
              (9,500
              )Net
                  cash provided by financing activities
              
              
              184,239
              
              
              462,706
              
              
              646,945Net
                  increase in cash and cash equivalents
              
              
              2,656
              
              
              12,160
              
              
              14,816**Cash,
                  beginning of period**
              
              
              12,160
              
              
              -
              
              
              -**Cash,
                  end of period**
              
              $
              14,816
              
              $
              12,160
              
              $
              14,816**SUPPLEMENTAL
                  CASH FLOW INFORMATION:**Interest
                  paid
              
              $
              -
              
              $
              -
              
              $
              -Income
                  taxes paid
              
              $
              -
              
              $
              -
              
              $
              -**NON-CASH
                  TRANSACTIONS:**Common
                  stock issued for license
              
              $
              550
              
              $
              -
              
              $
              550Common
                  stock issued for patent
              
              $
              -
              
              $
              1,122
              
              $
              1,122




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


F-5




**MIP
      SOLUTIONS, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007**






**NOTE
      1 - BASIS OF PRESENTATION**




MIP
      Solutions, Inc. was incorporated on December 19, 2005 in the State of
      Nevada.





The
      principal business of the Company is the development of Molecularly Imprinted
      Polymers (“MIPs”) for various commercial applications relating to the removal of
      targeted molecules from water. The Company has various patents and a license
      agreement with The Johns Hopkins University Applied Physics Laboratory (JHU/APL)
      and is currently developing applications for the removal of arsenic from
      drinking water and for the extraction of precious metals from various mining
      operations. The Company’s year-end is December 31.




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES**





This
      summary of significant accounting policies of MIP Solutions, Inc. is presented
      to assist in understanding the Company’s financial statements. The financial
      statements and notes are representations of the Company’s management, which is
      responsible for their integrity and objectivity. These accounting policies
      conform to accounting principles generally accepted in the United States of
      America, and have been consistently applied in the preparation of the financial
      statements.





Accounting
      Method


The
      Company’s financial statements are prepared using the accrual basis of
      accounting in accordance with accounting principles generally accepted in the
      United States of America.





Cash
      and Cash Equivalents


For
      purposes of the statement of cash flows, the Company considers all highly liquid
      investments and short-term debt instruments with original maturities of three
      months or less to be cash equivalents.





Loss
      Per Share


The
      Company has adopted Statement of Financial Accounting Standards No. 128, which
      provides for calculation of "basic" and "diluted" earnings per share. Basic
      earnings per share includes no dilution and is computed by dividing net income
      (loss) available to common shareholders by the weighted average common shares
      outstanding for the period. Diluted earnings per share reflect the potential
      dilution of securities that could share in the earnings of an entity similar
      to
      fully diluted earnings per share. There were 1,100,300 warrants outstanding
      at
      December 31, 2007; they were not included in the calculation of earnings per
      share because they would have been considered anti-dilutive.




F-6




Fair
      Value of Financial Instruments


The
      Company's financial instruments as defined by Statement of Financial Accounting
      Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
      include cash, receivables, accounts payable and accrued expenses. All
      instruments are accounted for on a historical cost basis, which, due to the
      short maturity of these financial instruments, approximates fair value at
      December 31, 2007.




Income
      Taxes


Income
      taxes are provided based upon the liability method of accounting pursuant to
      Statement of Financial Accounting Standards No. 109, “Accounting for Income
      Taxes.” Under this approach, deferred income taxes are recorded to reflect the
      tax consequences in future years of differences between the tax basis of assets
      and liabilities and their financial reporting amounts at each year-end. A
      valuation allowance is recorded against deferred tax assets if management does
      not believe the Company has met the “more likely than not” standard imposed by
      SFAS No. 109 to allow recognition of such an asset.





At
      December 31, 2007, the Company had deferred tax assets calculated at an expected
      rate of 34% of approximately $324,800 principally arising from net operating
      loss carryforwards for income tax purposes. As management of the Company cannot
      determine that it is more likely than not that the Company will realize the
      benefit of the deferred tax asset, a valuation allowance equal to the deferred
      tax asset has been established at December 31, 2007. The significant components
      of the deferred tax asset at December 31, 2007 and December 31, 2006 were as
      follows:




December
                31,
            
            
            December
                31,2007
            
            
            2006Net
                operating loss carry forward****
            
            $
            955,213
            
            $
            567,699Deferred
                tax asset
            
            $
            324,800
            
            $
            193,000Deferred
                tax asset valuation allowance
            
            
            (324,800
            )
            
            (193,000
            )Net
                deferred tax asset
            
            $
            -
            
            $
            -





At
      December 31, 2007, the Company has net operating loss carryforwards of
      approximately $955,200, which expire in the years 2026-2027. The change in
      the
      allowance account from December 31, 2006 to December 31, 2007 was
      $131,800.




F-7




Use
      of
      Estimates


The
      process of preparing financial statements in conformity with accounting
      principles generally accepted in the United States of America requires the
      use
      of estimates and assumptions regarding certain types of assets, liabilities,
      revenues, and expenses. Such estimates primarily relate to unsettled
      transactions and events as of the date of the financial statements. Accordingly,
      upon settlement, actual results may differ from estimated amounts.





Going
      Concern


As
      shown
      in the accompanying financial statements, the Company has no revenues, had
      negative working capital and an accumulated deficit of $955,684 at December
      31,
      2007. These factors raise substantial doubt about the Company’s ability to
      continue as a going concern. However, the Company is currently developing
      technology that, if successful, will mitigate these factors. The financial
      statements do not include any adjustments relating to the recoverability and
      classification of recorded assets, or the amounts and classification of
      liabilities that might be necessary in the event the company cannot continue
      in
      existence.




An
      estimated $2 million is believed necessary to continue operations and increase
      development through the next fiscal year. Management intends to seek additional
      capital from new equity securities offerings that will provide funds needed
      to
      increase liquidity, fund internal growth and fully implement its business plan.





Accounting
      for Stock Options and Warrants Granted to Employees and
      Non-employees


In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 123, “Accounting for Stock Based
      Compensations.” (SFAS 123R) This statement supersedes APB Opinion No. 25,
“Accounting for Stock Issued to Employees,” and its related implementation
      guidance. This statement establishes standards for the accounting for
      transactions in which an entity exchanges its equity instruments for goods
      or
      services. It also addresses transactions in which an entity incurs liabilities
      in exchange for goods or services that are based on the fair value of the
      entity’s equity instruments or that may be settled by the issuance of those
      equity instruments. This statement focuses primarily on accounting for
      transactions in which an entity obtains employee services in share-based payment
      transactions. This statement does not change the accounting guidance for share
      based payment transactions with parties other than employees provided in
      Statement of Financial Accounting Standards No. 123(R). This statement does
      not
      address the accounting for employee share ownership plans, which are subject
      to
      AICPA Statement of Position 93-6, “Employers’ Accounting for Employee Stock
      Ownership Plans.” The Company has adopted SFAS No. 123(R) which measures
      compensation costs based on the estimated fair value of the award and recognizes
      cost over the service period.




F-8




Accounting
      Pronouncements


In
      December 2007, the FASB issued Statement of Financial Accounting Standards
      No.
      160 ("SFAS 160"), “Noncontrolling Interests in Consolidated Financial
      Statements”, this statement requires that the ownership interests in
      subsidiaries held by parties other than the parent be clearly identified,
      labeled, and presented in the consolidated statement of financial position
      within equity, but separate from the parent’s equity. The amount of consolidated
      net income attributable to the parent and to the noncontrolling interest be
      clearly identified and presented on the face of the consolidated statement
      of
      income. Changes in a parent’s ownership interest while the parent retains its
      controlling financial interest in its subsidiary be accounted for consistently.
      A parent’s ownership interest in a subsidiary changes if the parent purchases
      additional ownership interests in its subsidiary or if the parent sells some
      of
      its ownership interests in its subsidiary. It also changes if the subsidiary
      reacquires some of its ownership interests or the subsidiary issues additional
      ownership interests. All of those transactions are economically similar, and
      this Statement requires that they be accounted for similarly, as equity
      transactions. When a subsidiary is deconsolidated, any retained noncontrolling
      equity investment in the former subsidiary be initially measured at fair value.
      The gain or loss on the deconsolidation of the subsidiary is measured using
      the
      fair value of any noncontrolling equity investment rather than the carrying
      amount of that retained investment. Entities provide sufficient disclosures
      that
      clearly identify and distinguish between the interests of the parent and the
      interests of the noncontrolling owners. This Statement is effective for fiscal
      years, and interim periods within those fiscal years, beginning on or after
      December 15, 2008 (that is, January 1, 2009, for entities with calendar
      year-ends). Earlier adoption is prohibited. The effective date of this Statement
      is the same as that of the related Statement 141(R)





In
      December 2007, the FASB issued Statement of Financial Accounting Standards
      No.
      141R, “Business Combinations”, (SFAS No. 141R”). This statement changes the
      accounting for business combinations. Under this statement, an acquiring entity
      is required to recognize all the assets acquired and liabilities assumed in
      a
      transaction at the acquisition-date fair value with limited exceptions. This
      statement changes the accounting treatment and disclosure for certain specific
      items in a business combination. This statement applies prospectively to
      business combinations for which the acquisition date is on or after the
      beginning of the first annual reporting period beginning on or after December
      15, 2008. Accordingly, any business combinations we engage in will be recorded
      and disclosed following existing GAAP until January 1, 2009. We expect SFAS
      No.
      141R will have an impact on accounting for business combinations once adopted
      but the effect is dependent upon acquisitions at that time.





In
      February 2007, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 159, “The Fair Value Option for Financial
      Assets and Financial Liabilities - Including an amendment of FASB Statement
      No.
      115” (SFAS No. 159). This statement permits entities to choose to measure many
      financial instruments and certain other items at fair value. The objective
      is to
      improve financial reporting by providing entities with the opportunity to
      mitigate volatility in reported earnings caused by measuring related assets
      and
      liabilities differently without having to apply complex hedge accounting
      provisions. This statement is expected to expand the use of fair value
      measurement, which is consistent with the Board’s long-term measurement
      objectives for accounting for financial instruments. This statement is effective
      as of the beginning of an entity’s first fiscal year that begins after November
      15, 2007, although earlier adoption is permitted. Management has not determined
      the effect that adopting this statement would have on the Company’s financial
      condition or results of operations.





F-9




In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
      No. 87,88,106, and 132(R)” (SFAS No. 158). This statement requires an employer
      to recognize the overfunded or underfunded statues of a defined benefit
      postretirement plan (other than a multiemployer plan) as an asset or liability
      in its statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a
      business entity or changes in unrestricted net assets of a not for profit
      organization. This statement also requires an employer to measure the funded
      status of a plan as of the date of its year end statement of financial position,
      with limited exceptions. The adoption of this statement had no immediate
      material effect on the Company’s financial condition or results of operations.




In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 157, “Fair Value Measurements,” (SFAS No.
      157) which defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles (GAAP), and expands disclosures
      about fair value measurements. Where applicable, SFAS No. 157 simplifies and
      codifies related guidance within GAAP and does not require any new fair value
      measurements. SFAS No. 157 is effective for financial statements issued for
      fiscal years beginning after November 15, 2007, and interim periods within
      those
      fiscal years. Earlier adoption is encouraged. The Company does not expect the
      adoption of SFAS No. 157 to have a significant immediate effect on its financial
      position or results of operation.





In
      March
      2006, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—an
      amendment of FASB Statement No. 140.” This statement requires an entity to
      recognize a servicing asset or servicing liability each time it undertakes
      an
      obligation to service a financial asset by entering into a servicing contract
      in
      any of the following situations: a transfer of the servicer’s financial assets
      that meets the requirements for sale accounting; a transfer of the servicer’s
      financial assets to a qualifying special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale securities or trading
      securities; or an acquisition or assumption of an obligation to service a
      financial asset that does not relate to financial assets of the servicer or
      its
      consolidated affiliates. The statement also requires all separately recognized
      servicing assets and servicing liabilities to be initially measured at fair
      value, if practicable and permits an entity to choose either the amortization
      or
      fair value method for subsequent measurement of each class of servicing assets
      and liabilities. The statement further permits, at its initial adoption, a
      one-time reclassification of available for sale securities to trading securities
      by entities with recognized servicing rights, without calling into question
      the
      treatment of other available for sale securities under Statement 115, provided
      that the available for sale securities are identified in some manner as
      offsetting the entity’s exposure to changes in fair value of servicing assets or
      servicing liabilities that a servicer elects to subsequently measure at fair
      value and requires separate presentation of servicing assets and servicing
      liabilities subsequently measured at fair value in the statement of financial
      position and additional disclosures for all separately recognized servicing
      assets and servicing liabilities. This statement is effective for fiscal years
      beginning after September 15, 2006, with early adoption permitted as of the
      beginning of an entity’s fiscal year. Management believes the adoption of this
      statement will have no impact on the Company’s financial condition or results of
      operations.




F-10




In
      February 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
      Instruments, an Amendment of FASB Standards No. 133 and 140” (SFAS No. 155).
      This statement established the accounting for certain derivatives embedded
      in
      other instruments. It simplifies accounting for certain hybrid financial
      instruments by permitting fair value remeasurement for any hybrid instrument
      that contains an embedded derivative that otherwise would require bifurcation
      under SFAS No. 133 as well as eliminating a restriction on the passive
      derivative instruments that a qualifying special-purpose entity (“SPE”) may hold
      under SFAS No. 140. This statement allows a public entity to irrevocably elect
      to initially and subsequently measure a hybrid instrument that would be required
      to be separated into a host contract and derivative in its entirety at fair
      value (with changes in fair value recognized in earnings) so long as that
      instrument is not designated as a hedging instrument pursuant to the statement.
      SFAS No. 140 previously prohibited a qualifying special-purpose entity from
      holding a derivative financial instrument that pertains to a beneficial interest
      other than another derivative financial instrument. This statement is effective
      for fiscal years beginning after September 15, 2006, with early adoption
      permitted as of the beginning of an entity’s fiscal year. Management believes
      the adoption of this statement will have no impact on the Company’s financial
      condition or results of operations.





Derivative
      Instruments


The
      Financial Accounting Standards Board issued Statement of Financial Accounting
      Standards No. 133, “Accounting for Derivative Instruments and Hedging
      Activities” (hereinafter “SFAS No. 133”), as amended by SFAS No. 137,
“Accounting for Derivative Instruments and Hedging Activities - Deferral of
      the
      Effective Date of FASB No. 133”, and SFAS No. 138, “Accounting for Certain
      Derivative Instruments and Certain Hedging Activities”, and SFAS No. 149,
“Amendment of Statement 133 on Derivative Instruments and Hedging Activities”.
      These statements establish accounting and reporting standards for derivative
      instruments, including certain derivative instruments embedded in other
      contracts, and for hedging activities. They require that an entity recognize
      all
      derivatives as either assets or liabilities in the balance sheet and measure
      those instruments at fair value.




F-11




If
      certain conditions ar e
      met, a
      derivative may be specifically designated as a hedge, the objective of which
      is
      to match the timing of gain or loss recognition on the hedging derivative with
      the recognition of (i) the changes in the fair value of the hedged asset or
      liability that are attributable to the hedged risk or (ii) the earnings effect
      of the hedged forecasted transaction. For a derivative not designated as a
      hedging instrument, the gain or loss is recognized in income in the period
      of
      change.





At
      December 31, 2007 and 2006, the Company has not engaged in any transactions
      that
      would be considered derivative instruments or hedging activities.





Long-lived
      Assets


In
      accordance with Statement of Financial Accounting Standards No. 144, “Accounting
      for the Impairment or Disposal of Long-Lived Assets”. This standard establishes
      a single accounting model for long-lived assets to be disposed of by sale,
      including discontinued operations, and requires that these long-lived assets
      be
      measured at the lower of carrying amount or fair value less cost to sell,
      whether reported in continuing operations or discontinued operations.
      Accordingly, the Company reviews the carrying amount of long-lived assets for
      impairment where events or changes in circumstances indicate that the carrying
      amount may not be recoverable. The determination of any impairment would include
      a comparison of estimated future cash flows anticipated to be generated during
      the remaining life of the assets to the net carrying value of the assets. For
      the years ended December 31, 2007 and 2006, no impairments have been
      identified.





Property
      and Equipment


Property
      and equipment are stated at cost. Depreciation of property and equipment is
      calculated using the straight-line method over the estimated useful lives of
      the
      assets, which range from five to seven years. See Note 3.





Research
      and Development


Research
      and development expenses are charged to operations as incurred. The cost of
      intellectual property purchased from others that is immediately marketable
      or
      that has an alternative future use is capitalized and amortized as intangible
      assets. Capitalized costs are amortized using the straight-line method over
      the
      estimated economic life, typically 10 years, of the related asset. The Company
      periodically reviews its capitalized patent costs to assess recoverability
      based
      on the projected undiscounted cash flows from operations. Impairments are
      recognized in operating results when a permanent diminution in value
      occurs.





F-12





**NOTE
      3 - PROPERTY AND EQUIPMENT**





Property
      and equipment are stated at cost. Depreciation is provided using the
      straight-line method over the estimated useful lives of the assets. The useful
      lives of property, plant and equipment for purposes of computing depreciation
      are three to seven years. The following is a summary of property, equipment,
      and
      accumulated depreciation:





December
                31, 2007
            
            December
                31, 2006Office
                equipment
            
            
            2,269
            
            
            1,884Lab
                equipment
            
            
            11,599
            
            
            -Total
                assets
            
            
            13,868
            
            
            1,884Less
                accumulated depreciation
            
            
            (2,547
            )
            
            (204
            )Net,
                Property & Equipment
            
            $
            11,321
            
            $
            984





Depreciation
      expense for the periods ended December 31, 2007 and December 31, 2006
      was $2,343
      and $204, respectively. The
      Company evaluates the recoverability of property and equipment when events
      and
      circumstances indicate that such assets might be impaired. The Company
      determines impairment by comparing the undiscounted future cash flows estimated
      to be generated by these assets to their respective carrying amounts.
      Maintenance and repairs are expensed as incurred. Replacements and betterments
      are capitalized. The cost and related reserves of assets sold or retired are
      removed from the accounts, and any resulting gain or loss is reflected in
      results of operations.




**NOTE
      4 - PATENTS**




Costs
      relating to the development and approval of patents, other than research and
      development costs which are expensed, are capitalized and amortized using the
      straight-line method over ten years.  The Company’s patents
      are:





US
      Patent
      No. 6,780,232, issued August 24, 2004 for "Polymer Based Permeable Membrane
      for
      Removal of Ions"




This
      patent describes the preparation of an imprinted polymer membrane for
      facilitated transport of a specific chemical species. The examples were
      phosphate, nitrate and iron. The other membrane disclosures were collected
      into
      the application and the extension below.





US
      Patent
      application No. 10/924,666 filed January 27, 2005, publication no. 2005-0019302
      published January 27, 2005, for "Polymer Based Permeable Membrane for Removal
      of
      Ions".




F-13




This
      application is an extension to the above patent. These above listed issued
      patents and published patent applications contain the following Johns Hopkins
      Laboratory Files:





No.
      1734-SPL: "Polymer Based Permeable Membrane for Removal of Ions".


The
      disclosure involving the removal of iron.





No.
      1744-SPL: "Environmental Phosphate Pollution Removal Using a Selectively
      Permeable Molecular Imprinted Polymer Membrane"


The
      disclosure involving the removal of phosphate.





No.
      1745-SPL: "Environmental Nitrate Pollution Removal Using a Selectively Permeable
      Molecularly Imprinted Polymer Membrane"


The
      disclosure involving the removal of nitrate.





US
      Patent
      application No. 11/127897 filed May 12, 2005, (the Johns Hopkins Laboratory
      file
      no. 2122-1331) "Process for preparing Vinyl Substituted
      Beta-Diketones"





This
      provisional patent describes the synthesis of polymerizable ligands for removing
      metals from water, but not actually providing in what polymeric form the MIP
      would be contained, except for the first description a molecularly imprinted
      polymer (MIP) porous bead for the removal of copper from water.





US
      provisional application No. 60/736376, filed November 14, 2005 (the Johns
      Hopkins Laboratory file no. 2292-SPL) "The Preparation of Molecularly Imprinted
      Polymer Ion-exchange Resin Beads and Their Use as Sequestering Agents for Toxic
      or Economically Useful Ions"





This
      provisional patent covers the formation of molecularly imprinted polymer (MIP)
      porous beads that are capable of removing inorganic ions from liquids. The
      provisional patent fleshes out the original claim from the previous patent
      covering the synthesis of useful beta-diketone ligands. The beads are large
      to
      encourage high flow rates but also have large surface areas to quickly capture
      large amounts of ions, which range from main group anions and oxyanions to
      rare
      earth cations, and transion metal cations, anions, and oxyanions.





The
      following is a summary of the costs of patents and patents pending:





Cost
            
            Accumulated
                Amortization
            
            Net
                AmountBalance,
                December 31, 2004
            
            $
            0
            
            $
            0
            
            $
            02005
                Activity
            
            
            1,123
            
            
            0
            
            
            1,123Balance,
                December 31, 2005
            
            
            1,123
            
            
            0
            
            
            1,1232006
                Activity
            
            
            6,444
            
            
            365
            
            
            6,079Balance,
                December 31, 2006
            
            
            7,567
            
            
            365
            
            
            7,2022007
                Activity
            
            
            9,338
            
            
            1,872
            
            
            7,466Balance,
                December 31, 2007
            
            $
            16,905
            
            
            2,237
            
            $
            14,668




F-14




**NOTE
      5 - COMMON STOCK**


Common
        Stock
 The
        Company is authorized to issue 50,000,000 shares of common stock. All shares
        have equal voting rights, are non-assessable and have one vote per share.
        Voting
        rights are not cumulative and, therefore, the holders of more than 50% of
        the
        common stock could, if they choose to do so, elect all of the directors of
        the
        Company.
 
 In
        its
        initial capitalization in December 2005, the Company issued 4,590,000 shares
        of
        common stock for a total of $1,122 in patents and $3,468 in subscription
        receivables. These subscriptions were paid during the year ended December
        31,
        2006.
 
 During
        the year ended December 31, 2006 the Company issued 360,000 additional common
        stock shares to the founders at par, issued 550,000 shares of its common
        stock
        to The Johns Hopkins University as partial payment for a license fee at par,
        issued 200,000 shares of common stock for legal services valued at $100,000,
        cancelled 1,122,500 of the initial founders shares issued in 2005 (not related
        to the common shares issued for patents), and issued 880,000 “units” to
        investors at a price of $0.50 per unit in a private placement. Each unit
        consists of one share of common stock and one common share purchase warrant.
        The
        warrants entitle the holder to purchase, at a price of $0.50, one common
        share
        for a period of three years.
 
 During
        the year ended December 31, 2007, the Company issued 150,000 shares for services
        valued at $75,000 and issued 250,300 “units” to investors at a price of $0.50
        per unit in a private placement. Each unit consists of one share of common
        stock
        and one common share purchase warrant. The warrants entitle the holder to
        purchase, at a price of $0.50, one common share for a period of three years.
        Also during the year ended December 31, 2007,


F-15





**NOTE
      6 - COMMON STOCK WARRANTS AND OPTIONS**





Warrants


During
      the period ended December 31, 2006 as part of a private placement, the Company
      issued warrants to purchase 880,000 shares of common stock at a value of
      $122,860. The fair value of the warrants was estimated using the Black Scholes
      Option Price Calculation. The following assumptions were made to value the
      warrants: share price at $.50; risk free interest rate of 5%; expected life
      of 3
      years; expected volatility of 50%; no dividends expected to be
      paid.





During
      the year ended December 31, 2007 as part of a private placement, the Company
      issued warrants to purchase 250,300 shares of common stock at a value of
      $49,940. The fair value of the warrants was estimated using the Black Scholes
      Option Price Calculation. The following assumptions were made to value the
      warrants: share price at $.50; risk free interest rate of 5%; expected life
      of 3
      years; expected volatility of 105%; no dividends expected to be
      paid.





Also
      during the year ended December 31, 2007 the company received $15,000 upon the
      exercise of 30,000 warrants.




**NOTE
      7 - COMMITMENTS AND CONTINGENCIES**





During
      the year ended December 31, 2006 the Company signed an exclusive license
      agreement with Johns Hopkins University/Applied Physics Laboratory to
      commercially develop, manufacture, use and distribute products and process
      embodying JHU/APL Intellectual Property with in the filed of drinking water
      safety, wastewater treatment, and water based mining operations using
      filtration, treatment, reclamation, and extraction processes throughout the
      world. As of December 31, 2007 all terms of the License Agreement had been
      met
      or amended and the Company has the following commitments going
      forward:




**License
                Agreement Commitments by sections noted (overview)**Under
                6.2 (c) Amended
            $50,000
                and 100,000 shares of common stock ($.001 par value)and
                100,000 warrants to purchase an additional share of commonstock
                ($.001 par value) at $.50 per warrantUnder
                6.2 (d)
            
            $1,050,000
                in cash for sales milestones due no later than 30 daysafter
                the COMPANY receives payment in full for the sale whichtriggers
                the milestone payment to JHU/APL. The triggers andpayments
                are:
            TRIGGER
            
            PAYMENT$2,000,000
            
            $50,000$5,000,000
            
            $100,000$10,000,000
            
            $150,000$20,000,000
            
            $250,000$50,000,000
            
            $500,000Under
                6.2 (e)
            
            $272,240
                in addition research commitments at JHU/APLUnder
                6.4 (a)
            
            7%
                of NET SALES as a royalty on any products incorporatingthe
                intellectual property covered by the license agreement
                beginning12
                months after the first commercial sale of such product.Under
                6.4 (e)
            
            50%
                of all sublicense revenuesUnder
                6.5
            
            
            The
                following Minimum annual royalty payments beginning 12 monthsafter
                the first commercial sale of such product:Year
                1
            $100,000
            
            Year
                2
            $100,000Year
                3
            $200,000
            
            Year
                4
            $200,000Year
                5
            $300,000
            
            Year
                5
            $0




F-16




During
      the year ended December 31, 2007, a lease agreement for a larger office space
      was approved by the board of directors. The new lease commenced April 1, 2007,
      extends for a period of 60 months, and requires monthly payments of $2,233
      for
      the first 12 months. The monthly rental fee is open for adjustment based on
      the
      consumer price index every 12 months thereafter.




The
        Company has not heard from Michael Pieniazek, the former president of the
        Company, regarding the legal action he and his brother were contemplating
        against the Company regarding the cancellation of 1,122,500 shares of the
        Company’s common stock issued collectively to them since they responded to the
        allegations in a letter prepared by counsel and dated July 3, 2007. Additional
        information regarding their allegations can be found in the Company’s SB-2
        registration statement filed with the U.S. Securities and Exchange Commission
        at www.sec.gov .




**NOTE
      8 - NOTE PAYABLE**





The
      Company issued a promissory note, for a total of $20,000 on October 25, 2006.
      The note bears interest at the rate of 1% per month for six months, 11⁄2% for the
      next six months and then increases by 1⁄2 % ever six months thereafter. The note
      was payable on demand six months from issuance. As of December 31, 2007, related
      interest of $2,959 has been accrued and expensed, respectively.





The
      Company issued a promissory note, for a total of $8,076 on March 9, 2007. The
      note bears interest at the rate of 8% per year, is amortized over 30 years,
      with
      a balloon payment in 5 years from the date of issuance. As of December 31,
      2007,
      related interest of $262 has been expensed.





The
      Company issued a promissory note, for a total of $40,000 on December 14, 2007.
      The note is due 90 days from the date of the note, with interest of
      $6,000.




**NOTE
      9 - RELATED PARTY TRANSACTIONS**





During
      the year ended December 31, 2006, an officer and director of the Company used
      $100 to open up a bank account on behalf of the Company. As of December 31,
      2006, the Company has not yet reimbursed the officer for this cash advance.
      The
      funds advanced are unsecured, non-interest bearing, and due on
      demand.





During
      the year ended December 31, 2007, the Company advanced to one of its officers
      a
      total of $27,000. Because the transactions occurred while the Company was still
      private, it was not subject to the Sarbanes-Oxley Act of 2002, and therefore,
      was not prohibited. The officer repaid $12,000 of the loaned amount and the
      receivable has been fully settled.




F-17




The
      Company issued a promissory note to one of its officers, for a total of $5,000
      on July 11, 2007. The note bears interest at a rate of 1% per month for twelve
      months, 11⁄2% for the next six months and then increases by 1⁄2 % ever six months
      thereafter. The note is payable on demand six months from issuance. As of
      December 31, 2007, related interest of $295 has been accrued and expensed,
      respectively.





The
      Company issued a promissory note to one of its directors, for a total of $10,000
      on August 24, 2007. An additional $1,000 was added to this note on October
      18,
      2007. The note bears interest at a rate of 1% per month for twelve months,
      11⁄2%
      for the next six months and then increases by 1⁄2 % ever six months thereafter.
      The note is payable on demand six months from issuance. As of December 31,
      2007,
      related interest of $437 has been accrued and expensed,
      respectively.


As
        of
        December 31, 2007, the Company has accrued $105,000 for amounts due officers
        and
        directors for services provided during 2007.




**NOTE
      10 - SUBSEQUENT EVENTS**





The
      Company issued a promissory note, for a total of $20,000 on January 11, 2008.
      The note is due 90 days from the date of the note, with interest of
      $3,000.





The
      Company issued a promissory note, for a total of $10,000 on January 24, 2008.
      The note is due 120 days from the date of the note, with interest of
      $1,000.





On
      February 28, 2008 one of our shareholders exercised 30,000 warrants at $.50
      per
      warrant by completing the warrant exercise form and wiring $15,000 to our
      corporate bank account.





The
      Company issued a promissory note, for a total of $46,000 on March 7, 2008 for
      payment on the Note issued on December 14, 2007. The note is due 60 days from
      the date of the note, with interest of $4,000.





F-18