Document:

ex10_1.htm

    
      

    

    EXHIBIT
10.1

    

    

    
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              ACCOUNT
      PURCHASE AGREEMENT

            	 
      

    

    

    

    DATED
AND EFFECTIVE AS OF January 15, 2010

    

    BY AND
BETWEEN

    

    

    
      	
              SELLER:

            	
              Performance Capital Management,
      LLC

            

    

    

    SELLER
INFORMATION:

    
      	
               
      

            	
              ADDRESS:

            	
              7001
      Village Dr Suite 255

            

    

    
      	
               
      

            	
              Buena
      Park, CA 90621

            

    

    

    
      	
            	
              TELEPHONE
      NO.:

            	
              714-736-3790

            

    

    FAX
NO.:

    

    

    AND

    
 

    
      	
              BUYER:

            	
              Oliphant
      Financial Group, LLC

            

    

    
      	
               

              BUYER
      INFORMATION:

            

    

    
      	
               
      

            	
               

              ADDRESS:

            	
               

              9009
      Town Center Parkway

            

    

    
      	
               
      

            	
              Lakewood
      Ranch, FL 34202

            

    

    

    
      	
            	
              TELEPHONE
      NO.:

            	
              941-360-8990

            

    

    
      	
               
      

            	
              FAX
      NO.:

            	
              941-360-8993

            

    

    

    

    CLOSING
DATE: January 15, 2010

    PURCHASE
PRICE: $925,000.00

    
      
         

      

      
        Page
1

        
          

        

      

      
         

      

    

    ACCOUNT
PURCHASE AGREEMENT

    

    THIS
ACCOUNT PURCHASE AGREEMENT is entered into effective January 15, 2010, by
and between Performance Capital Management, LLC (“Seller") and Oliphant
Financial Group, LLC ("Buyer").   Seller
and Buyer are more specifically identified on the cover page to this Agreement,
which is incorporated herein

    

    RECITALS:

    

    WHEREAS,
Buyer reviewed and evaluated the Accounts and Account Information, and Buyer submitted the
winning bid to purchase the Accounts from Seller for the consideration and under
the express terms, provisions, conditions and limitations as set forth herein;
and

    

    WHEREAS,
Seller desires to sell and Buyer desires to buy the Accounts; and

    

    WHEREAS,
Seller is willing, subject to the express terms, provisions, conditions,
limitations, waivers and disclaimers as may be expressly set forth herein, and
in that certain Confidentiality Agreement heretofore executed by Buyer (or
Buyer’s agent/reviewer) with Seller, all of the terms and conditions of which
are expressly incorporated herein and made a part of Buyer’s representations to
Seller herein, to sell, transfer, assign and convey to Buyer all of Seller's
right, title and interest, in, to and under the Accounts.

    

    NOW,
THEREFORE, in
consideration of the premises, the mutual promises herein set forth and other
valuable considerations, the receipt and sufficiency of which is hereby
acknowledged, Seller and Buyer agree as follows:

    

    ARTICLE
I - DEFINITIONS

    

    For
purposes of this Agreement, the following terms shall have the meanings
indicated:

    

    "Account(s)" means: (a) the
obligations evidenced by any Evidence of Indebtedness or any deficiency
thereunder, consisting primarily of charged-off credit accounts and similar
non-commercial bad consumer debts that are in default, non-performing or
underperforming and that have been sold off by the original issuer; (b) any
rewrite contracts; (c) any judgments founded upon any such obligations, or other
Evidence of Indebtedness, to the extent attributable thereto, and any lien
arising therefrom; and (d) the proprietary interest of Seller in any Account, or
Evidence of Indebtedness forming the subject matter of any litigation or
bankruptcy to which Seller is a party or claimant.

    

    "Account
File" means, with respect to each Account included on the Account
Schedule, all available documents and instruments, whether originals or
photocopies, in the possession of Seller.

    

    "Account
Schedule" means the schedule, attached as Exhibit
"A” hereto,
setting forth the following information concerning each Account: the Account
numbers, if any, for Seller, the name of the Obligor, and the Approximate
Current Balance of each of the Accounts.  The Account Schedule shall
be attached as an Exhibit to the Bill of Sale.

    

    "Agreement"
means this Account Purchase Agreement, including the cover page and all Addenda,
Exhibits and Schedules hereto.

    

    “Approximate
Current Balance” means the approximate unpaid balance in U. S. Dollars
for each Account identified in the Account Schedule attached hereto as Exhibit
“A” and
specified as either the current balance or the current principal
balance.  This may include interest (accrued or unaccrued), costs, fees and
expenses.  It is possible that payments may be made by or on behalf of
any obligor prior to the Cut-Off Date or the date of this Agreement which are
not reflected in the Approximate Current Balance.  This figure may
also reflect payments made by or on behalf of any Obligor which have been
deposited and credited to the Approximate Current Balance of such Account, but
which may later be returned uncollected due to insufficient funds or other
reasons.

    

    "Bill of
Sale and Assignment" means the document to be delivered to Buyer on or
before the Transfer Date, in the form attached hereto as Exhibit
"B", together
with the attached Account Schedule.

    

    "Claim"
means any claim, demand or legal proceeding.

    

    “Cut-off
Date” means
December 1, 2009.

    

    "Evidence
of Indebtedness" means with respect to each Account, the original or any
copy (including any microfilm, microfiche, photocopy or machine readable format)
of: (a) a promissory note, rewrite contract, loan application, statements,
record of debt, account, agreement, document or instrument and any other
evidence of debt owed by an obligor, which a creditor could reasonably rely in
asserting that the same represents a balance due and owing, any Account payment
history data or computer printouts, creditor notations or any other Account
summary (b) the spreadsheet listing the Accounts and balances which is a
schedule to the Bill of Sale; (c) any such documents relating to any guarantor
or co-maker on an Account (if any); and (d) any obligation or other evidence
extending or renewing the Account.

    
      
         

      

      
        Page
2

        
          

        

      

      
         

      

    

    "Obligor"
means the current and unreleased obligor(s) on an obligation or on the Evidence
of Indebtedness, including, without limitation, any and all guarantors, sureties
or other persons or entities liable on an Account.

    

    "Purchase
Price" means the amount bid by Buyer to purchase the Accounts as set
forth on the Letter of Intent and reproduced on the cover page of this Agreement
and incorporated herein.

    

    "Seller"
means Performance Capital Management, LLC.

    

    "Transfer
Date" means the date upon which Seller transfers the Accounts to Buyer
and makes available for pick-up by, or delivery of the Transfer Documents to
Buyer, which Transfer Date shall be at Seller's discretion on any date after
full payment by Buyer of the Purchase Price but not later than January 15,
2010.

    

    "Transfer
Documents" means all documents that are required to be delivered on the
Transfer Date by Seller or the Buyer pursuant to Article
III.

     

    ARTICLE
II - PURCHASE AND SALE OF THE ACCOUNTS

    

    Section
2.1. Agreement
to Sell and Purchase Accounts.  Seller agrees to
sell, and Buyer agrees to purchase, the Accounts described in the Account
Schedule, subject to the terms, provisions, conditions, limitations, waivers and
disclaimers set forth in this Agreement.  The Accounts shall be
transferred and assigned pursuant to the Bill of Sale and
Assignment.

    

    Section
2.2.  Agreement
to Assign/Buyer's Right to Act.  On the Transfer Date, Seller
shall deliver to Buyer a Bill of Sale and Assignment, in the form of Exhibit
"B" hereto,
executed by an authorized representative of Seller, which Bill of Sale and
Assignment shall sell, transfer, assign, set-over, quitclaim and convey to Buyer
all right, title and interest of Seller in and to each of the Accounts, the
proceeds of the Accounts received by Seller from and after the Cut-off Date, if
any, and the Account Files.  The Account Schedule shall be attached as
an exhibit to the Bill of Sale and Assignment, identifying the Accounts conveyed
to the Buyer.  Buyer shall have no right to communicate with any
obligor or otherwise take any action with respect to any Account or any Obligor
until the Transfer Date.

    

    Section
2.3.  Account
Schedule.  Seller has provided as Exhibit
"A” hereto
the Account Schedule setting forth all of the Accounts, which Buyer has agreed
to purchase and Buyer acknowledges that it has reviewed the same to its full
satisfaction.

    

    Section
2.4. Purchase
Price/Payment.  Buyer shall pay to Seller for the Accounts to
be sold hereunder, the total sum of $925,000.00, as and for the Purchase Price,
payable as follows:

    

    (a) Deposit.  Buyer’s
deposit ($112,859.27) heretofore received.  The deposit consists of
collections received since the cut-off date.  The deposit shall be
non-interest bearing and shall be non-refundable.

    

    (b) Balance.  On
or before 5:00 p.m., (EST), January 15, 2010, Buyer shall pay to Seller the
balance of the Purchase Price ($812,140.73), in full.  All of such
funds must be paid in immediately available funds in U. S. Dollars by wire
transfer as instructed by Seller.

    

    Section
2.5.  Payments
Received Before/After Cut-Off Date; Adjustments;
Remittance.  If Seller (or original creditor) receives any
payments or other consideration distributed or paid by or on behalf of an
Obligor with respect to an Account (hereinafter "payment") prior to or on the
Cut-off Date, Seller shall be entitled to accept and retain such payment in
full, except to the extent that the Approximate Current Balance for any such
Account did not reflect a reduction for any such payment, in which event Seller
shall retain the payment and Buyer shall be given a credit on such Account equal
to the bid percentage (as a  percent of the Approximate Current
Balance) bid by Buyer times the amount of such payment.  Payments on
Accounts received by Seller after the Cut-off Date shall belong to Buyer, and
Seller shall pay over and/or deliver such payments to Buyer (without recourse
and without interest thereon from Seller) not later than thirty days after
receipt.

    

    ARTICLE
III - TRANSFER OF ACCOUNTS AND ACCOUNT FILES

    

    Section
3.1. Assignment
of Accounts and Account Files.  On the
Transfer Date, Seller shall execute and deliver to Buyer the Bill of Sale and
Assignment and such other documents necessary, proper or appropriate for the
legal transfer of its right, title and interest in and to the Accounts, and
shall deliver or make available the Account Files as set forth in Section 3.2
herein for all Accounts purchased pursuant to this Agreement (collectively, the
“Transfer Documents”).  The Bill of Sale and Assignment shall have the
same effect as an individual and separate bill of sale and assignment of each
and every Account referenced therein.  The responsibility and cost of
preparing and executing the Bill of Sale and Assignment and such assignments or
such other documents as Seller deems necessary, proper and appropriate, to be
executed and made available on the Transfer Date shall be borne by
Seller.  However, Buyer shall be responsible for the recording and/or
filing of the originals of any such assignments as the same may be necessary,
proper or appropriate and shall pay all costs, fees and expenses for such
recording and/or filing.  Seller reserves the right to retain copies
of all or any portion of the Account Files.  Buyer shall bear the
expenses of transportation of such Transfer Documents and of the other
documents, instruments and files to be delivered to Buyer pursuant to this
Article III.  The Seller through Dave Caldwell shall facilitate
executing and delivering to the Buyer an originally executed Assignment of
Judgment for any and all Judgment accounts within sixty (60) days of this
Agreement with the Buyer reimbursing reasonable expenses for
same.

    
      
         

      

      
        Page
3

        
          

        

      

      
         

      

    

    Section
3.2.  Account
Documents.  In the event Buyer requests Seller to execute and
deliver assignments or other documents in addition to the initial Transfer
Documents, Buyer shall furnish Seller with copies of the proposed additional
assignments or other documentation for review, analysis, approval, amendment and
execution.  The responsibility for all costs, fees and expenses of
preparing and filing or recording any such additional assignments or such other
documentation shall be the sole responsibility of Buyer.

    

    Seller
shall provide Buyer with information concerning availability and fees for
document requests from the original creditors.

    

    Seller
will provide Buyer with a power of attorney to execute any documents necessary
to effect a transfer or assignment to Buyer of any existing judgments or other
legal actions on any purchased Accounts.

    

    In
compliance with the Fair Credit Reporting Act, Seller will report to each of the
credit bureaus it uses that the Accounts have been sold to Buyer, to the extent
that each bureau provides such reporting.

    

    ARTICLE
IV - SERVICING

    

    Section
4.1. Servicing
After Transfer Date.   As of the Transfer Date, all
rights, obligations, liabilities and responsibilities with respect to the
servicing of the Accounts shall pass to Buyer, and Seller shall be discharged
from all liability or obligation therefor.

    

    Section
4.3. Servicer
Requirements.  Buyer shall be responsi­ble for complying
with all state and federal laws, if any, with respect to the ownership and/or
servicing of any of the Accounts from and after the Transfer Date including,
without limitation, the obligation to notify any obligor or guarantor of the
transfer of servicing rights from Seller to Buyer.  Further, Seller
shall have the right, but not the obligation, to mail a notice addressed to any
obligor or guarantor, at the address shown in its records, notifying such
obligor or guarantor of the transfer of any Account from Seller to
Buyer.

    

    ARTICLE
V – Intentionally left blank (RECALL OF ACCOUNTS AND REFUND OPTION OF
SELLER)

     

    ARTICLE VI – Intentionally left blank
(BUYER’S LIMITED RIGHT TO REQUIRE SELLER TO REPURCHASE CERTAIN ACCOUNTS
AFTER TRANSFER
DATE)

    

    ARTICLE
VII - REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER

    

    Buyer
hereby makes the following representations, warranties and covenants, as of the
date of this Agreement and as of the Transfer Date, all of which shall survive
the Transfer Date, and the execution and delivery of the Transfer
Documents:

    

    Section
7. 1.  Identity
of Buyer; Independent Evaluation.  Buyer warrants and
represents that it is a sophisticated, informed Buyer purchasing the Accounts
for its own account, and that it has knowledge, experience and expertise in the
buying, valuing, managing, collecting and pursuing of legal remedies to collect
and realize upon under-performing and/or non-performing consumer credit accounts
and other bad consumer loans such as the Accounts in the ordinary course of its
business.  Buyer further warrants, represents and covenants that it
has knowledge and experience in financial and business matters that enable it to
evaluate the merits and risks of the transactions contemplated by this
Agreement.  The Buyer has made such independent investigations as it
deems to be warranted into the nature, validity, enforceability, collectibility,
and value of the Accounts, and all other facts it deems material to its purchase
and is entering into this transaction solely on the basis of that investigation
and the Buyer's own judgment.

    

    Section
7.2. No
Collusion.  Neither the Buyer nor any of its officers,
partners, agents, representatives, employees or parties in interest has in any
way colluded, conspired, connived or agreed directly or indirectly with any
other bidder, firm or person to submit a collusive or sham bid, or any bid other
than a bona fide bid, or to fix prices.

    

    Section
7.3.  Authorization.  Buyer is duly and
legally authorized to enter into this Agreement and has complied with all laws,
rules, regulations, charter provisions and bylaws to which it may be subject and
that the undersigned representative is autho­rized to act on behalf of and
bind Buyer to the terms of this Agreement.

    

    Section
7.4. Binding
Obligations.  Assuming due authoriza­tion, execution and
delivery by each party hereto, this Agreement and all of the obligations of
Buyer hereunder are the legal, valid and binding obligations of Buyer,
enforceable in accordance with the terms of this Agreement, except as such
enforcement may be limited by bankruptcy, insolvency, reorganiza­tion or
other similar laws affecting the enforcement of creditors' rights generally and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).

    
      
         

      

      
        Page
4

        
          

        

      

      
         

      

    

    Section
7.5. No
Breach or Default.  The execution and delivery of this
Agreement and the performance of its obligations hereunder by Buyer will not
conflict with any provision of any law or regulation to which Buyer is subject
or conflict with or result in a breach of or constitute a default under any of
the terms, conditions or provisions of any agreement or instrument to which
Buyer is a party or by which it is bound or any order or decree applicable to
Buyer.

    

    Section
7.6. Due
Diligence.  Buyer has been urged, invited and directed to
conduct such due diligence review and analysis of the Account Information and
related information, together with such records as are generally available to
the public from local, county, state and federal authorities, record-keeping
offices and courts  (including, without limitation, any bankruptcy
courts in which any obligor(s) , guarantor or surety, if any, may be subject to
any pending bankruptcy proceedings), as the Buyer deemed
necessary,  proper or appropriate in order to make a considered
decision with respect to the purchase and acquisition of the
Accounts.

    

    Section
7.7. Accounts
Sold As Is.  BUYER ACKNOWLEDG­ES AND AGREES THAT SELLER HAS
NOT AND DOES NOT REPRESENT, WARRANT OR COVENANT THE NATURE, ACCURACY,
COMPLETENESS, ENFORCEABILITY OR VALIDITY OF ANY OF THE ACCOUNTS AND/OR ACCOUNT
FILES. ALL DOCUMENTA­TION, INFORMATION, ANALYSIS AND/OR CORRESPONDENCE, IF
ANY, WHICH IS OR MAY BE SOLD, TRANSFERRED, ASSIGNED AND CONVEYED TO BUYER WITH
RESPECT TO ANY AND ALL ACCOUNTS  IS DONE SO ON AN "AS IS, WHERE IS"
BASIS, WITH ALL FAULTS.

    

    Section
7.8.  Economic
Risk.  The Buyer represents, warrants and covenants that all
transactions contemplated by this Agreement do not involve, nor are they
intended in any way to constitute, the sale of a "security" or "securities"
within the meaning of any applicable securities laws, and none of the
representations, warranties or agreements of the Buyer shall create any
inference that the transactions involve any "security" or
"securities".  The Buyer acknowledges, understands and agrees that the
acquisition of these Accounts involves a high degree of risk and they are
suitable only for persons or entities of substantial financial means who have no
need for liquidity and who can hold the Accounts indefinitely or bear the
partial or entire loss of the value.

    

    Section
7.9. Confidentiality
Agreement.  Buyer is in full
compliance with its obligations under the terms of any Confidentiality Agreement
executed by Buyer (or its agent, Reviewer) to review the information made
available by Seller or its agents, and the terms thereof are hereby incorporated
herein subject to Buyer's ownership rights and interests acquired by Buyer
hereunder.

    

    Section
7.10. Identity.  Buyer
is a "United States person" within the meaning of Paragraph 7701 (a) (30) of the
Internal Revenue Code of 1986, as amended.

    

    Section
7.11. No
Affiliation With Seller.  Except as may have been previously
disclosed to Seller in writing, Buyer is not or has not been affiliated,
directly or indirectly, with Seller, or any of its Servicing
Agents.

    

    Section
7.12. Assistance
of Third Parties.  Buyer hereby agrees, acknowledges, confirms
and understands that Seller shall not have any responsibility or liability to
Buyer arising out of or related to any third parties’ failure to assist or
cooperate with Buyer.  In addition, Buyer is not relying upon the
continued actions or efforts of Seller or any third party in connection with its
decision to purchase the Accounts.  The risks attendant to the
potential failure or  refusal of third parties to assist or cooperate
with Buyer and/or Seller in the effective transfer, assignment, and conveyance
of the purchased Accounts, and/or assigned rights shall be borne by
Buyer.

    

    Section
7.13. Enforcement/Legal
Actions.  Buyer agrees and represents that Buyer shall not
institute any enforcement or legal action or proceeding in the name of Seller,
or make reference to any of the foregoing entities in any correspondence to or
discussion with any particular Obligor regarding enforcement or collection of
the Accounts other than to identify Seller as the previous
owner.  Buyer also warrants and covenants not to take any enforcement
action against any Obligor, which would be commercially
unreasonable.  Buyer shall not misrepresent, mislead, deceive, or
otherwise fail to adequately disclose to any particular Obligor or guarantor the
identity of Buyer as the owner of the Accounts.

    

    Section
7.14. Status
of Buyer.  The Buyer represents, warrants and certifies to the
Seller that it is (a) a financial institution; (b) an institutional purchaser
including a sophisticated, informed purchaser that is in the business of buying
or originating or collecting Accounts of the type being purchased or that
otherwise deals in such Accounts in the ordinary course of the Buyer's business;
or (c.) an entity or individual that is defined as an accredited investor under
the federal securities laws.

    

    Section 7.15. Non-Consumer
Transaction; Waiver.  The Buyer
represents and warrants to the Seller that this is not a consumer transaction,
within the meaning of any applicable federal, state or local statute or common
law, and that Buyer has knowledge and experience in financial and
business-matters that enables Buyer to evaluate the merits and risks of the
transactions contemplated hereby.  Further, the Buyer represents and warrants to the Seller
that it is not in a disparate bargaining position relative to the
Seller. The Buyer
hereby waives, to the
maximum extent permitted by law, any and all rights, benefits and remedies under any state
deceptive trade practices ­consumer protection act, with respect to any
matters pertaining to this Agreement and the transactions
contemplated hereby.

    
      
         

      

      
        Page
5

        
          

        

      

      
         

      

    

    Section
7.16 No
Brokers’ or Finders’ Fee.  Buyer has not employed any
investment banker, broker or finder in connection with the transaction
contemplated hereby who might be entitled to a fee or commission from the Seller
upon consummation of the transaction contemplated in this
Agreement.

    

    ARTICLE
VIII - LIMITED REPRESENTATION AND WARRANTY OF THE SELLER

    

    This sale of Accounts is
made without recourse, and without any representation or warranty, express or
implied, of Seller, except solely that Seller does hereby represent and warrant
that Seller is the owner and holder of the Evidence of Indebtedness for each of
the Accounts.  Any other provi­sions of this Agreement to the
contrary notwithstanding, BUYER’S PURCHASE OF THE ACCOUNTS  HEREUNDER IS
FINAL AND WITH THE SOLE EXCEPTION OF SELLER’S LIMITED WARRANTY OF TITLE TO
THE EVIDENCE OF INDEBTEDNESS FOR EACH OF THE ACCOUNTS, BUYER
ACCEPTS THE SAME "AS IS-WHERE IS" WITHOUT EXPRESS OR
IMPLIED REPRESENTATIONS OR WARRANTY BY SELLER OF: (A) THE AMOUNT OF THE
PRINCIPAL OR INTEREST
BALANCES OF ANY ACCOUNT OR LOT OF ACCOUNTS; (B) THE COLLECTIBILITY OF ANY
ACCOUNT; (C.) “FITNESS FOR A PARTICULAR PURPOSE;” (D) “MERCHANTABILITY;” OR (E)
ANY OTHER TYPE OR KIND BY SELLER WHETHER ANY SUCH WARRANTY WOULD ARISE BY
STATUTE OR AT COMMON LAW.

    

    Buyer
shall have no "put backs" or similar rights or options regarding the Accounts it
purchases hereunder except under the express provisions of Article VI of this
Agreement.  In any event, the Seller’s liability hereunder as to any
Account shall be limited to the repurchase of any such Account under the limited
terms and conditions specified in said Article VI.

    

    ARTICLE
IX - BUYER’S AND SELLER’S INDEMNIFICATION

    

    Section
9.1  Buyer’s
Indemnification of Seller. From and after the date
of this Agreement, Buyer shall indemnify and hold harmless Seller against and
from any and all liability for, and from and against any and all losses or
damages Seller may suffer as a result of, any claim, demand, cost, expense, or
judgment of any type, kind, character or nature (including reasonable attorneys,
fees), which Seller shall incur or suffer as a result of:  (a) any act
or omission of Buyer or Buyer's agents in connection with the Accounts and its
purchase of the Accounts pursuant to the Agreement; or  (b) the
material inaccuracy or breach of any of Buyer's representations, warranties
or  covenants herein; or (c.) any claim by any Obligor or anyone
claiming by, through or under any Obligor or other person liable on any Account
regarding the assignment, subsequent enforcement, servicing or administration of
the Accounts by Buyer from and after the date of this Agreement; or (d) the violation of any statute, regulation or common
law, whether state or federal, by Buyer or Buyer’s agents with respect to an
Account.  This indemnification shall survive the execution and
delivery of the Transfer Documents.

    

    Section
9.2  Seller’s
Indemnification of Buyer.  From and after the date of this
Agreement, Seller shall indemnify and hold harmless Buyer against and from any
and all liability for, and from and against any and all losses or damages Buyer
may suffer as a result of, any claim, demand, cost, expense, or judgment of any
type, kind, character or nature (including reasonable attorneys' fees), which
Buyer shall incur or suffer as a result of:  (a) any act or omission
of Seller or Seller's agents in connection with the Accounts and its purchase of
the Accounts pursuant to the Agreement; or  (b) the material
inaccuracy or breach of any of Seller's representations, warranties
or  covenants herein; or (c.) any claim by any Obligor or anyone
claiming by, through or under any Obligor or other person liable on any Account
regarding the assignment, subsequent enforcement, servicing or administration of
the Accounts by Seller; or (d) the violation of
any statute, regulation or common law, whether state or federal, by Seller or
Seller’s agents with respect to an Account. This indemnification
shall survive the execution and delivery of the Transfer Documents.

    

    ARTICLE
X – Intentionally left blank (SELLER OR ITS PREDECESSOR AS WITNESS)

    

    ARTICLE
XI - USE OF THE ORIGINAL CREDITOR’S NAME

    

    Section
11.1 Use
of the Original Creditor’s Name.  Buyer
and it’s Successors will not use or refer to the Original Creditor’s name for
any purpose relating to any Account including, without limitation, the
promotion, marketing, or advertising of any Account.  However, Buyer
may use the Original Creditor’s name for purposes of identifying an Account in
communications with the Account’s cardholder in order to collect amounts
outstanding on the Account and in accordance with Article XII
below.  Buyer may use the original creditor and Seller name as the
transferor in any lawsuit filed by buyer.

    
      
         

      

      
        Page
6

        
          

        

      

      
         

      

    

    ARTICLE
XII - EFFECT OF ASSIGNMENT TO THIRD PARTIES

    

    Neither
party hereto shall have the right to assign its rights or obligations under this
Agreement to any third party, including subsequent transferees of any
Account.   While Buyer shall be free to sell, transfer, or
dispose of any of the Accounts from and after the Transfer Date, the Buyer shall
have no right, at any time after the Transfer Date, to assign or transfer any
its rights under this Agreement to any subsequent transferee of such Account(s)
in whole or in part; any such transfer of the Buyer’s rights in or to the
Accounts shall automatically terminate any warranties, representations,
covenants, or continuing obligations of Seller hereunder; notwithstanding
any  such transfer or assignment of Accounts  by Buyer,
Buyer shall remain obligated with respect to any of its obligations to Seller
remaining hereunder.

    

    ARTICLE XIII – Intentionally left blank
(NOTICE OF OBLIGOR CLAIMS OR
LITIGATION)

    

    ARTICLE
XIV - CONFORMITY TO LAW; FILES AND RECORDS

    

    Section
14.1. Conformity
to Law.  Buyer agrees, at its sole cost and expense, to abide
by all applicable state and federal laws, rules and regulations regarding the
handling, maintenance and servicing of all Accounts and all documents and
records relating to the Accounts purchased hereunder including, but not limited
to, the length of time such documents and records are to be retained and making
any disclosures to Obligors as may be required by law.

    

    Section
14.2 Informational
Tax Reporting.  Buyer hereby agrees to perform all obligations
with respect to federal and/or state tax reporting relating to or arising out of
the Accounts sold and assigned pursuant to this Agreement including, without
limitation, the obligations with respect to Forms 1098 and 1099 and backup
withholding with respect to the same, if required, for the year 2009 and
thereafter.

    

    ARTICLE
XV - NOTICES

    

    Unless
otherwise provided for herein, notices and other communications required or
permitted hereunder shall be in writing (including a writing delivered by
facsimile transmission) and shall be deemed to have been duly given (a) when
delivered, if sent by registered or certified mail return receipt requested, (b)
when delivered, if delivered personally, (c.) when received but no later than
the second business day following mailing, if sent by overnight mail or
overnight courier, or (d) when received, if sent by facsimile, in each case to
the parties at the following addresses (or at such other addresses as shall be
specified by like notice):

    

    
      	
              If
      to the Buyer:

            	
              Oliphant
      Financial Group, LLC

            
	 
      	
              9009
      Town Center Parkway

            
	 
      	
              Lakewood
      Ranch, FL  34202

            
	 
      	
              Attention:  Melody
      A. Cuff

            
	 
      	
              Facsimile
      No.: 941-360-8993

            
	 
      	 
      
	
              If
      to the Seller:

            	
              Performance
      Capital Management, LLC

            
	 
      	
              7001
      Village Dr Suite 255

            
	 
      	
              Buena
      Park, CA 90621

            
	 
      	
              Attention:
      Dave Caldwell

            

    

    

    ARTICLE
XVI - DISCLAIMER

    

    Buyer,
all successors or assignees thereof and all subsequent transferees of the
Accounts hereby disclaim and waive any right or cause of action they may now or
in the future have against Seller and any and all of its respective officers,
directors, employees, attorneys, agents, predecessors in interest, and
independent contractors as a result of the purchase of the Accounts; provided,
however, that this waiver shall not extend to any liability of Seller arising
from Seller's failure to perform its obligations in accordance with the terms of
this Agreement, as limited to the remedies set forth in Article VI.

    

    ARTICLE
XVII- MISCELLANEOUS PROVISIONS

    

    Section
17.1. Severability.  If
any term, covenant, condition or provision hereof is unlawful, invalid, or
unenforceable for any reason whatsoever, and such illegality, invalidity, or
unenforceability does not affect the remaining parts of this Agreement, then all
such remaining parts hereof shall be valid and enforceable and have full force
and effect as if the invalid or unenforceable part had not been
included.

    

    Section
17.2. Rights
Cumulative: Waivers.  The rights of each of the parties under
this Agreement are cumulative and may be exercised as often as any party
considers appropriate under the terms and conditions specifically set
forth.  The rights of each of the parties hereunder shall not be
capable of being waived or varied otherwise than by an express waiver or
variation in writing.  Any failure to exercise or any delay in
exercising any of such rights shall not operate as a waiver or variation of that
or any other such right.  Any defective or partial exercise of any of
such rights shall not preclude any other or further exercise of that or any
other such right.  No act or course of conduct or negotiation on the
part of any party shall in any way preclude such party from exercising any such
right or constitute a suspension or any variation of any such
right.

    
      
         

      

      
        Page
7

        
          

        

      

      
         

      

    

    Section
17.3.  Headings.  The
headings of the Articles and Sections contained in this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.

    

    Section
17.4. Construction.  Unless
the context otherwise requires, singular nouns and pronouns, when used herein,
shall be deemed to include the plural of such noun or pronoun and pronouns of
one gender shall be deemed to include the equivalent pronoun of the other
gender.  This agreement shall be deemed to have been written by both
Buyer and Seller and, in the event of an ambiguity, its interpretation shall not
be construed against either party.

    

    Section
17.5. Assignment.  Subject
to Article XII, this Agreement and the terms, covenants, conditions, provisions,
obligations, undertakings, rights and benefits hereof, including the Addenda,
Exhibits and Schedules hereto, shall be binding upon, and shall inure to the
benefit of, the undersigned parties and their respective heirs, executors,
administrators, representatives, successors, and assigns.

    

    Section
17.6. Prior
Understandings.  This Agreement
super­sedes any and all prior discussions and agreements between Seller and
Buyer with respect to the purchase of the Accounts and other matters contained
herein, and this Agreement contains the sole and entire understanding between
the parties hereto with respect to the transactions contemplated
herein.

    

    Section
17.7. Integrated
Agreement.  This Agreement
and all Addenda, Exhibits and Schedules hereto constitute the final complete
expression of the intent and understanding of the Buyer and the
Seller.  This Agreement shall not be altered or modified except by a
subsequent writing, signed by Buyer and Seller.

    

    Section
17.8.  Counterparts;
Fax Signatures.  This Agreement
may be executed in any number of counterparts, each of which shall constitute
one and the same instrument, and either party hereto may execute this Agreement
by signing any such counterpart.  Fax signatures, bearing the
identification of the sender’s fax machine, shall be treated for all purposes as
original signatures on this Agreement and any notice or other document provided
for herein.

    

    Section
17.9. Non-Merger/Survival.  Each and every
covenant hereinabove made by Buyer or Seller shall survive the delivery of the
Transfer Documents and shall not merge into the Transfer Documents, but instead
shall be independently enforceable.

    

    Section
17.10. Governing
Law/Choice of Forum.  This Agreement shall be construed, and
the rights and obligations of Seller, and Buyer hereunder determined, in
accordance with the law of the State of Florida, without giving effect to any
choice of law principles.  The parties agree that any legal actions
between Buyer and Seller regarding the purchase of the Accounts hereunder shall
be originated in the United States District Court in and for the State of
Florida, Northern District, and Buyer hereby consents to the jurisdiction of
said court in connection with any action or proceeding initiated concerning this
Agreement and agrees that service by mail to the address specified on the cover
page of this Agreement shall be sufficient to confer jurisdiction over Buyer in
such United States District Court.  In the event of litigation under
this Agreement, the prevailing party shall be entitled to an award of attorneys,
fees and costs.

    

    Section
17.11. Third-Party
Beneficiaries.  This Agreement is for the sole and exclusive
benefit of the parties hereto, and none of the provisions of this Agreement
shall be deemed to be for the benefit of any other person or
entity.

    
      
         

      

      
        Page
8

        
          

        

      

      
         

      

    

    Section
17.12.  Waiver
of Jury Trial.  As a specifically bargained inducement for
Seller to enter into this agreement, and after having the opportunity to consult
counsel, buyer hereby expressly waives the right to trial by jury in any lawsuit
or proceeding relating to this agreement or arising in any way from the
transaction contemplated herein.

    

    IN
TESTIMONY WHEREOF, the parties hereto have executed this Agreement
effective as of the year and day above written.

    

    BUYER:  Oliphant
Financial Group, LLC

    

    By: /s/ Melody A.
Cuff                                                  

    Name
(print): Melody A.
Cuff                                     
  

    Title:
Senior Vice
President                                           

    

    SELLER:    Performance
Capital Management, LLC

    

    By:     /s/
David J.
Caldwell                                           

    Name
(print):            Dave
Caldwell                             

    Title:          C.O.O                                 
                          

    
      
         

      

      
        Page
9

        
          

        

      

      
         

      

    

    EXHIBIT
"A”

    ACCOUNT
SCHEDULE

    

    

    
      	 
      	
              Total Balance

            	
              Total Number of Accounts

            
	 
      	 
      	 
      
	 
      	
              $518,976,775.82

            	
              290,206

            

    

    
      
         

      

      
        Page
10

        
          

        

      

      
         

      

    

    EXHIBIT
"B"

    BILL OF SALE AND ASSIGNMENT OF
ACCOUNTS

    

    Performance
Capital Management, LLC, ("Assignor") hereby absolutely sells, transfers,
assigns, sets-over and conveys to Oliphant Financial Group, LLC ("Assignee")
without recourse and without representations or warranties, express or implied,
of any  type, kind or nature, except solely that Seller does hereby
represent and warrant that Seller is the owner and holder of the Evidence of
Indebtedness for each of the Accounts:

    

    (a) all
of Assignor's right, title and interest in and to each of the Accounts
identified in the Account Schedule attached hereto as Exhibit
"A” (the
"Accounts") , together with all promissory notes or other evidence of
indebtedness, if any, and together with all instruments and documents
constituting the Account Files pertaining to such Accounts, if any;
and

    

    (b) all
principal, interest or other proceeds of any kind with respect to the Accounts
(including but not limited to proceeds derived from the conversion, voluntary or
involuntary, of any of the Accounts into cash or other liquidated property, but
excluding any payments or other consideration received by or on behalf of
Assignor prior to December 1, 2009 with respect to the Accounts.

    

    This Bill
of Sale is being executed and delivered pursuant to and in accordance with the
terms and provisions of that certain Account Purchase Agreement made and entered
into by and between the Assignor as Seller, and the Assignee as Buyer dated
January 15, 2010 (the "Agreement").  The Accounts are defined and
described in the Agreement and are being conveyed hereby subject to the terms,
conditions and provisions set forth in the Agreement.  Assignor
represents that this Bill of Sale has been duly authorized and that the person
signing for same has full power and authority in the premises.

    

    THIS BILL OF SALE SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO THE CONFLICTS OF
LAWS RULES THEREOF.

    

    DATED:
         1
– 19 –
2010            

    

    
      	 
      	
              Seller: Performance
      Capital Management, LLC

            
	 
      	 
      
	 
      	
              By:      /s/ David
      J.
      Caldwell                             

            
	 
      	
              Name
      (print):               
      Dave
      Caldwell             

            
	 
      	
              Title:            C.O.O                                  
                 

            

    

    

    STATE OF
____________

    SS.

    COUNTY OF
__________

    

    The
foregoing instrument was acknowledged before me this _____ day of
____________2010, by ________________ as ____________ on behalf of Performance Capital
Management, LLC.

     

     

    
      	________________________________________	 
	Signature of Notary
      Public – State of ____________	 
	 	 
	Personally Known
      ____ Or Produced Identification ____	VR
    1/19/2010
	Type of
      Identification Produced ___________________	 

    

     

    Page 11ex4_1.htm

    
      

    

    Exhibit
4.1

    

    AMBICOM HOLDINGS, INC.

    (formerly known as Med Control, Inc.)

     

    SUBSCRIPTION AGREEMENT

     

    This
Subscription Agreement (this “Agreement”) is made as of the date set forth on
the signature page of this Agreement by and between AmbiCom Holdings, Inc.
(formerly known as Med Control, Inc.), a publicly-owned Nevada corporation (the
“Company”), and each party who is a signatory hereto (individually, a
“Subscriber” and collectively with other signatories of similar subscription
agreements entered into in connection with the Offering described below, the
“Subscribers”).

     

    1. DESCRIPTION OF THE
OFFERING.  The Company is offering (the “Offering”) shares of
its common stock, par value $0.001 per share (the “Common Stock”) at the
purchase price of $0.40 per share.  The Company is offering on a “best
efforts” basis a minimum of 1,250,000 shares of Common Stock for an aggregate
minimum offering amount of $500,000 (the “Minimum Offering”) and a maximum of
1,875,000 shares of Common Stock for a maximum offering amount of $750,000 (the
“Maximum Offering”).  The Offering will continue until subscriptions
for the Maximum Offering are received or until January 15, 2010 (the “Offering
Period”), unless extended an additional thirty (30) days by the Company, in its
sole discretion.  The Offering is being made only to accredited
investors who qualify as accredited investors pursuant to suitability standards
for investors described under Regulation D of the Securities Act of 1933, as
amended (the “Securities Act”) and who have no need for liquidity in their
investments.  Prior to this Offering there was no public market for
the Securities and no assurance can be given that a market will develop for the
Securities or if developed, that it will be maintained so that any subscribers
in this offering may avail any benefit form the same.  The Company
reserves the right, in its sole discretion, to accept fractional
subscriptions.  The Company has not engaged the services of a
placement agent, but reserves the right in its sole discretion to do so in the
future.  If a placement agent is retained, it is anticipated the
Company would be required to pay fees of funds it has actually raised for the
sale of the Shares of commissions equal to approximately ten percent
(10%).

     

    THE
SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND
SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT.  THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE, OR OTHER
JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES
MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR ASSIGNED EXCEPT AS
PERMITTED UNDER SUCH ACT OR SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.

     

    2. TERMS OF THE
OFFERING.  The closing of the Offering and the release of funds
from escrow is conditioned upon and subject to the consummation of an Agreement
and Plan of Share Exchange (the “Exchange Agreement”) between the Company and
AmbiCom Acquisition Corp. (“AAC”) whereby AAC will exchange all of its
outstanding capitalization in exchange for 20,000,000 newly-issued shares of
Common Stock, 9,400,000 shares of a newly-created class of the Company’s Series
A Preferred Stock and 2,600,000 shares of a newly-created class of the Company’s
Series B Preferred Stock (collectively, the “Exchange”).  As a result
of the Exchange, AAC will become a wholly-owned subsidiary of the
Company.  In addition, the Company will file an amendment to its
Articles of Incorporation to amend, among other things, the name of the Company
to “AmbiCom Holdings, Inc.” or such similar name as is available at the
time.  Subscriber understands that payments hereunder will be held in
a non-interest bearing escrow account established by the Company with Tarter
Krinsky & Drogin LLP, as escrow agent, and will only be released to the
Company upon receipt of proceeds equal to the Minimum Offering and the closing
of the Exchange (the “Closing”),

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    3. SUBSCRIPTION
PROCEDURES.  To subscribe, the Subscriber must send a completed and executed copy of each
this Subscription Agreement and
Subscriber Questionnaire to:

    

    
      	 
      	 
      	
              AmbiCom
      Holdings, Inc.

            
	 
      	 
      	
              c/o
      Tarter Krinsky & Drogin LLP

            
	 
      	 
      	
              Attn:
      Peter Campitiello, Esq.

            
	 
      	 
      	
              1350
      Broadway

            
	 
      	 
      	
              New
      York, New York 10018

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              along
      with, either

            

    

    

    
      	
               
      

            	
              ·

            	
              payment
      of the Subscriber’s subscribed amount by wire transfer as
      follows:

            

    

    

    
      	 
      	 
      	
              Citibank,
      N.A.

            
	 
      	 
      	
              1
      Park Avenue

            
	 
      	 
      	
              New
      York, New York 10016

            
	 
      	 
      	 
      
	 
      	 
      	
              Tarter
      Krinsky & Drogin, LLP

            
	 
      	 
      	
              Account
      # 085063873

            
	 
      	 
      	
              ABA
      # 021001486

            
	 
      	 
      	 
      
	 
      	 
      	
              Memo:
      AmbiCom Holdings, Inc.

            
	 
      	 
      	 
      
	 
      	
              or

            

    

    

    
      	
               
      

            	
              ·

            	
              payment
      of the Subscriber’s subscribed amount by check payable to “Tarter Krinsky
      & Drogin LLP, as Escrow Agent for AmbiCom Holdings,
    Inc.”

            

    

    

    4.
TERMS OF THE SUBSCRIPTION.

    

    4.1.  The
Company hereby agrees to issue and to sell to Subscriber, and Subscriber hereby
agrees to purchase from the Company, such number of Shares at the price and for
the aggregate subscription amount set forth on the signature page
hereto.  The Subscriber understands that this subscription is not
binding upon the Company until the Company accepts it.  The Subscriber
acknowledges and understands that acceptance of this Subscription will be made
only by a duly authorized representative of the Company executing and mailing or
otherwise delivering to the Subscriber at the Subscriber’s address set forth
herein, a counterpart copy of the signature page to this Subscription Agreement
indicating the Company’s acceptance of this Subscription.  The Company
reserves the right, in its sole discretion for any reason whatsoever, to accept
or reject this subscription in whole or in part.  Following the
acceptance of this Subscription Agreement, the Company shall instruct its
transfer agent to issue and deliver to Subscriber a certificate evidencing the
Shares purchased by the Subscriber pursuant to this Agreement against payment in
U.S. Dollars of the Purchase Price (as defined below).  If this
subscription is rejected, the Company and the Subscriber shall thereafter have
no further rights or obligations to each other under or in connection with this
Subscription Agreement.

    

    4.2.  Subscriber
has hereby delivered and paid concurrently herewith the aggregate purchase price
for the Shares set forth on the signature page hereof in an amount required to
purchase and pay for the Shares subscribed for hereunder (the “Purchase Price”),
which amount has been paid in U.S. Dollars by wire transfer or check, subject to
collection, to the order of “Tarter Krinsky & Drogin LLP –as Escrow
Agent.”

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    4.3.  Subscriber
understands and acknowledges that this subscription is part of a private
placement by the Company of the Shares, which offering is being made on a “best
efforts” basis, for a minimum of the Minimum Offering and a maximum of the
Maximum Offering (as defined above).  Subscriber understands that
payments hereunder as to the Minimum Offering will be held in a non-interest
bearing escrow account established by the Company with its counsel, Tarter
Krinsky & Drogin LLP, as escrow agent, and will be released to the Company
upon receipt of proceeds in an amount equal to the Minimum Offering and the
closing of the Exchange.  If subscriptions for the Minimum Offering
are not received and accepted by the Company within the Offering Period
(including any extended period) or the Exchange is not consummated, the funds
held in such escrow account will be promptly returned to the subscribers in full
without interest or deduction.  If the Company rejects all or a
portion of any subscription, a check will be promptly mailed to the subscriber
for all, or the appropriate portion of, the amount submitted with such
subscriber’s subscription, without interest or deduction.  All
subscriptions received after the subscriptions for the Minimum Offering have
been received will be deposited in such escrow account until accepted by the
Company, whereupon such subscription proceeds will be released by the escrow
agent to the Company up to the Maximum Offering.

    

    5. REPRESENTATIONS AND WARRANTIES OF
SUBSCRIBER. The Subscriber agrees, represents and warrants to the Company
with respect to itself and its purchase hereunder and not with respect to any of
the other Subscribers, that:

    

    5.1.
Organization and Qualification.  If an entity, the Subscriber is duly
incorporated, organized or otherwise formed, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated,
organized or otherwise formed.

    

    5.2.
Authorization.  If an entity: (a) the Subscriber has the requisite
corporate or other requisite power and authority to enter into and to perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof; and (b) the execution,
delivery and performance of this Agreement by the Subscriber and the
consummation by it of the transactions contemplated hereby have been duly
authorized by the Subscriber’s Board of Directors or other governing body and no
further consent or authorization of the Subscriber, its Board of Directors or
its shareholders, members or other interest holders is required.

    

    5.3.
Enforcement.  This Agreement has been duly executed by the Subscriber
and constitutes a legal, valid and binding obligation of the Subscriber
enforceable against the Subscriber in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization or moratorium or
similar laws affecting the rights of creditors generally and the application of
general principles of equity.

    

    5.4.
Consents.  The Subscriber is not required to give any notice to, make
any filing, application or registration with, obtain any authorization, consent,
order or approval of or obtain any waiver from any person or entity in order to
execute and deliver this Agreement or to consummate the transactions
contemplated hereby.

    

    5.5.
Non-contravention.  Neither the execution and the delivery by the
Subscriber of this Agreement, nor the consummation by the Subscriber of the
transactions contemplated hereby, will (a) violate any law, rule, injunction, or
judgment of any governmental agency or court to which the Subscriber is subject
or any provision of its charter, bylaws, trust agreement, or other governing
documents or (b) conflict with, result in a breach of, or constitute a default
under, any agreement, contract, lease, license, instrument, or other arrangement
to which the Subscriber is a party or by which the Subscriber is bound or to
which any of its assets is subject.

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    5.6.
Investment Purpose.  The Subscriber is purchasing the Shares for its
own account and not with a present view toward the public sale or distribution
thereof.

    

    5.7.
Accredited Subscriber Status.  The Subscriber is an “accredited
investor” as defined in Regulation D under the Securities Act of 1933, as
amended (the “Securities Act”), and has delivered to the Company a Confidential
Subscriber Questionnaire substantially in the form of Exhibit A attached
hereto.  The Subscriber hereby represents and warrants that, either by
reason of the Subscriber’s business or financial experience or the business or
financial experience of the Subscriber’s advisors (including, but not limited
to, a “purchaser representative” (as defined in Rule 501(h) promulgated under
Regulation D), attorney and/or an accountant each as engaged by the Subscriber
at its sole risk and expense) the Subscriber (a) has the capacity to protect its
own interests in connection with the transaction contemplated hereby and/or (b)
the Subscriber has prior investment experience, including investments in
securities of privately-held companies or companies whose securities are not
listed, registered, quoted and/or traded on a national securities exchange, to
the extent necessary, the Subscriber has retained, at its sole risk and expense,
and relied upon appropriate professional advice regarding the investment, tax
and legal merits and consequences of this Agreement and the purchase of the
Shares hereunder; if an entity, the Subscriber was not formed for the sole
purpose of purchasing the Shares.

    

    5.8.
Reliance on Exemptions.  The Subscriber agrees, acknowledges and
understands that the Shares are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of United States federal
and applicable state securities or “blue sky” laws and that the Company and its
counsel are relying upon the truth and accuracy of, and the Subscriber’s
compliance with, the representations, warranties, covenants, agreements,
acknowledgments and understandings of the Subscriber set forth herein in order
to determine the availability of such exemptions and the eligibility of the
Subscriber to acquire the Shares.

    

    5.9. No
General Solicitation.  No Shares were offered or sold to it by means
of any form of general solicitation or general advertising, and in connection
therewith, the Subscriber did not receive any general solicitation or general
advertising including, but not limited to, the Subscriber’s: (i) receipt or
review of any advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over television or radio,
whether closed circuit, or generally available; or (ii) attendance at any
seminar meeting or industry investor conference whose attendees were invited by
any general solicitation or general advertising.

    

    5.10.  Information.  The
Subscriber agrees, acknowledges and understands that the Subscriber and its
advisors, if any, have been furnished with all materials relating to the
business, finances and operations of the Company, and materials relating to the
offer and sale of the Shares that have been requested by the Subscriber or its
advisors, if any, the risk factors set forth therein.  The Subscriber
represents and warrants that the Subscriber and its advisors, if any, have been
afforded the opportunity to ask questions of the Company.  The
Subscriber agrees, acknowledges and understands that neither such inquiries nor
any other due diligence investigation conducted by the Subscriber or any of its
advisors or representatives modify, amend or affect the Subscriber’s right to
rely on the Company’s representations and warranties contained
herein.

    

    5.11.
Governmental Review.  The Subscriber agrees, acknowledges and
understands that no United States federal or state agency or any other
government or governmental agency has passed upon or made any recommendation or
endorsement of the Shares or an investment therein.

    

    5.12.
Transfer or Resale.  The Subscriber agrees, acknowledges and
understands that:

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    (a) the
Securities have not been and, except as set forth herein, are not being
registered under the Securities Act or any applicable state securities or “blue
sky” laws.  Consequently, the Subscriber may have to bear the risk of
holding the Securities for an indefinite period of time because the Securities
may not be transferred unless: (i) the resale of the Securities and is
registered pursuant to an effective registration statement under the Securities
Act; (ii) the Subscriber has delivered to the Company an opinion of counsel
reasonably acceptable to the Company and its counsel (in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; or (iii) the Securities are
sold or transferred pursuant to Rule 144 promulgated under the Securities Act
(“Rule 144”);

    

    (b) any
sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and, if Rule 144 is not applicable, any
resale of the Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the
Securities and Exchange Commission (the “Commission”) promulgated thereunder;
and

    

    (c)
except as set forth in herein, neither the Company nor any other person is under
any obligation to register the Securities under the Securities Act or any state
securities or “blue sky” laws or to comply with the terms and conditions of any
exemption thereunder.

    

    
             
5.13. Legends.

    

    

    (a) The
Subscriber agrees, acknowledges and understands that the certificates
representing the Securities (the “Restricted Securities”) will bear restrictive
legends in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Restricted
Securities):

    

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES OR “BLUE SKY” LAWS OF ANY STATE OF THE
UNITED STATES.  THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.

     

    (b) The
Subscriber agrees, acknowledges and understands that the Company will make a
notation in the appropriate records with respect to the foregoing restrictions
on the transferability of the Restricted Securities.  Certificates
evidencing the Restricted Securities shall not be required to contain such
legend or any other legend (a) following any sale of the Restricted Securities
pursuant to Rule 144, or (b) if the Restricted Securities are eligible for sale
under Rule 144 or have been sold pursuant to a registration statement and in
compliance with the Subscriber’s obligations set forth in this Agreement, or (c)
such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the Staff of
the Commission), in each such case (a) through (c) to the extent reasonably
determined by the Company’s legal counsel.

    

    5.14.
Residency.  The Subscriber is a resident of the jurisdiction set forth
immediately below the Subscriber’s name on the signature pages
hereto.

    

    5.15. Not
a Registered Representative.  The Subscriber agrees, acknowledges and
understands that if it is a Registered Representative of a FINRA member firm, he
or she must give such firm the notice required by FINRA’s Rules of Fair
Practice, receipt of which must be acknowledged by such firm in the Confidential
Subscriber Questionnaire attached hereto as Exhibit A.

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    5.16. No
Brokers.  The Subscriber has not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement.  The Subscriber hereby agrees to
indemnify and hold harmless the Company from and against all fees, commissions
or other payments owing to any such person or firm acting on behalf of the
Subscriber hereunder.

    

    5.17.
Integration.  This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, understandings, offers and negotiations, oral or written, with
respect thereto and no extrinsic evidence whatsoever may be introduced in any
judicial or arbitration proceeding, if any, involving this
Agreement.

    

    5.18.
Reliance on Representations.  The Subscriber agrees, acknowledges and
understands that the Company and its counsel, are entitled to rely on the
representations, warranties and covenants made by the Subscriber
herein.

    

    6. REPRESENTATIONS BY THE
COMPANY.  As used in this Section 6, the Company shall mean the
Company immediately following the closing of the Exchange and AmbiCom shall mean
AAC immediately preceding the closing of the Exchange.  The Company
hereby makes the following representations and warranties to each Subscriber as
follows:

    

    6.1.
Subsidiaries.  Upon consummation of the Exchange, AAC will be the only
direct or indirect subsidiary of the Company (the “Subsidiary”).  The
Company owns, directly or indirectly, all of the capital stock or other equity
interests of the Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

    

    6.2.
Organization and Qualification.  The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.  Neither the Company nor any Subsidiary is in
violation or default of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, does not
have and would not reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business,
or condition (financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, or (iii) a material adverse effect on the Company’s ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii), or (iii), a “Material Adverse Effect”)
and no Proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.

    

    6.3.
Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder.  The
execution and delivery of each of the Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s
stockholders in connection therewith.  This Agreement has been (or
upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    6.4. No
Conflicts; No Violation.  The execution, delivery and performance of
the Agreement by the Company and the consummation by the Company of the other
transactions contemplated hereby do not and will not: (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter documents,
or (ii) conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of clause (ii), such as does not have and would not reasonably be
expected to result in a Material Adverse Effect.

    

    6.5.
Filings, Consents and Approvals.  The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than the filing
of Form D with the Commission and such filings as are required to be made under
applicable state securities laws..

    

    6.6.
Issuance of the Shares.  The Shares are duly authorized and, when
issued and paid for in accordance with the Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for herein.

    

    6.7.
Capitalization.  The capitalization of the Company immediately prior
to and following the Exchange is set forth on Schedule 6.7.  No Person
has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by this
Agreement.  Except as set forth in Schedule 6.7, as a result of the
purchase and sale of the Shares, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, any Common Stock or Common Stock Equivalents, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional Common Stock or Common
Stock Equivalents.  The issuance and sale of the Shares will not
obligate the Company to issue Common Stock or Common Stock Equivalents or other
securities to any Person (other than the Subscribers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding
Common Stock or Common Stock Equivalents are validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase
securities.  No further approval or authorization of any stockholder,
the Board of Directors or other Person is required for the issuance and sale of
the Shares.  There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s Common Stock or Common
Stock Equivalents to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.

    

    6.8.
Financial Statements.  Schedule 6.8 attached hereto contains the
draft, unaudited consolidated balance sheet and related statements of operations
and cash flows of AmbiCom, Inc., AAC’s wholly-owned subsidiary, at and for the
year ending December 31, 2008 (the “AmbiCom Financial Statements”). The AmbiCom
Financial Statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods covered thereby, fairly present the financial condition,
results of operations and cash flows of AmbiCom and its subsidiaries as of the
date thereof and for the period referred to therein and are consistent with the
books and records of AmbiCom and its subsidiaries, except as may be otherwise
specified in such financial statements or the notes thereto and except that the
AmbiCom Financial Statements may not contain all footnotes required by
GAAP.

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    Since
September 30, 2009, (i) there has been no event, occurrence or development that
has had or that would reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any material liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice, (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP,
and (C) except as set forth in 6.9, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any Common Stock or Common
Stock Equivalents and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans.

    

    6.9.
Litigation.  There is no action, suit, inquiry, notice of violation,
or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”) or Proceeding which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Shares or (ii) would, if there were an unfavorable decision, reasonably be
expected to result in, a Material Adverse Effect.  Neither the Company
nor any Subsidiary, nor any manager, director or officer thereof, is or has been
the subject of any Action or Proceeding involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty.  There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation or Proceeding
by the Commission involving the Company or any current or former director or
officer of the Company.

    

    6.10.
Labor Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company which does have or would reasonably be expected to result in a
Material Adverse Effect.  None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship
with the Company or such Subsidiary, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with their employees are
good.  No executive officer, to the knowledge of the Company, is, or
is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters.  The Company
and its Subsidiaries are in compliance with all U.S. federal, state, local and
foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure
to be in compliance would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

    

    6.11.
Compliance.  Neither the Company nor any Subsidiary (i) is in
violation of any order of any court, arbitrator or governmental body, or (ii) is
or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws applicable to its business and all such laws that affect the environment,
except in each case as would not reasonably be expected to result in a Material
Adverse Effect.

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    6.12.
Regulatory Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such permits would
not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.

    

    6.13.
Title to Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries
are in compliance, except in each case as would not reasonably be expected to
result in a Material Adverse Effect.

    

    6.14.
Patents and Trademarks.  The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
material for use in connection with their respective businesses and which the
failure to so have could have a Material Adverse Effect (collectively, the
“Intellectual Property Rights”).  Neither the Company nor any
Subsidiary has received a notice (written or otherwise) that any of the
Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any Person. To the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property
Rights.  The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

    

    6.15.
Insurance.  The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged, including, but not limited to, directors and
officers insurance coverage at least equal to the Subscription
Amount.  Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.

    

    6.16.
Transactions with Affiliates and Employees.  None of the officers or
directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $60,000
other than for (i) payment of salary, consulting fees or bonuses in connection
with services rendered or to be rendered, (ii) reimbursement for expenses
incurred on behalf of the Company, and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    6.17.
Internal Accounting Controls.  The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

    

    6.18. No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.  The Subscriber shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by this
Agreement.

    

    6.19.
Private Placement.  Assuming the accuracy of the Subscribers’
representations and warranties set forth in Section 5.7, no registration under
the Securities Act is required for the offer and sale of the Shares by the
Company to the Subscribers as contemplated hereby.

    

    6.20.
Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares, will not be or be an
Affiliate required to file as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended within a period of one year from the
date hereof.

    

    6.21.
Registration Rights.  No Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the
Company.

    

    6.22.
Disclosure.  All disclosure furnished by or on behalf of the Company
to the Subscribers regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is
true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.  The Company acknowledges and agrees that no Subscriber
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 5 hereof.

    

    6.23. No
Integrated Offering. Assuming the accuracy of the Subscribers’ representations
and warranties set forth in Section 5.7, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Shares to be integrated with prior offerings by the Company for purposes of the
Securities Act which would require the registration of any such securities under
the Securities Act.

    

    6.24.
Solvency.  Based on the consolidated financial condition of the
Company as of the Closing Date after giving effect to the receipt by the Company
of the proceeds from the sale of the Shares hereunder (i) the fair saleable
value of the Company’s assets exceeds the amount that will be required to be
paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s
assets do not constitute unreasonably small capital to carry on its business as
now conducted and as proposed to be conducted including its capital needs taking
into account the particular capital requirements of the business conducted by
the Company, and projected capital requirements and capital availability
thereof, and (iii) the anticipated cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its liabilities when such amounts are
required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its
debt).  The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year
from the Closing Date.  As of the date hereof all outstanding secured
and unsecured Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments shall be set forth in the AmbiCom
Financial Statements.  For the purposes of this Agreement,
“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in
excess of $25,000 (other than trade accounts payable incurred in the ordinary
course of business), (b) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or
should be reflected in the Company’s balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (c)
the present value of any lease payments in excess of $25,000 due under leases
required to be capitalized in accordance with GAAP.  Neither the
Company nor any Subsidiary is in default with respect to any
Indebtedness.

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    6.25. Tax
Status.  Except for matters that do not have (and would not reasonably
be expected to result in), individually or in the aggregate, a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any
Subsidiary.

    

    6.26. No
General Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Shares by any form of
general solicitation or general advertising.  The Company has offered
the Shares for sale only to the Subscribers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.

    

    6.27.
Foreign Corrupt Practices.  Neither the Company, nor to the knowledge
of the Company, any agent or other person acting on behalf of the Company, has
(i) directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is  in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.

    

    6.28.
Acknowledgement Regarding Subscriber’s Trading Activity.  Anything in
this Agreement or elsewhere herein to the contrary notwithstanding, it is
understood and acknowledged by the Company (i) that none of the Subscribers have
been asked by the Company to agree, nor has any Subscriber agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
Shares for any specified term; (ii) that past or future open market or other
transactions by any Subscriber, specifically including, without limitation,
Short Sales or “derivative” transactions, before or after the closing of this or
future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities; (iii) that any Subscriber, and
counter-parties in “derivative” transactions to which any such Subscriber is a
party, directly or indirectly, presently may have a “short” position in the
Common Stock, and (iv) that each Subscriber shall not be deemed to have any
affiliation with or control over any arm’s length counter-party in any
“derivative” transaction.  The Company further understands and
acknowledges that (a) one or more Subscribers may engage in hedging activities
at various times during the period that the Shares are outstanding, and (b) such
hedging activities (if any) could reduce the value of the existing stockholders’
equity interests in the Company at and after the time that the hedging
activities are being conducted. The Company acknowledges that such
aforementioned hedging activities within the bounds of applicable law or
regulation do not constitute a breach of any of the Agreement.

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    6.29.
Regulation M Compliance. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Shares,
(ii) sold, bid for, purchased, or, paid any compensation for soliciting
purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii), compensation paid to
the Company’s placement agent in connection with the placement of the
Shares.

     

    7. RISK FACTORS.  THE SUBSCRIBER ACKNOWLEDGES THERE ARE
SIGNIFICANT RISKS ASSOCIATED WITH THE PURCHASE OF THE SHARES AND THAT SUCH
SECURITIES ARE HIGHLY SPECULATIVE AND SHOULD NOT BE PURCHASED BY ANYONE WHO
CANNOT AFFORD A TOTAL LOSS OF HIS OR HER ENTIRE
INVESTMENT.  The Subscriber represents and warrants that he or
she has carefully considered and reviewed all the information contained within
the reports the Company files with the Securities and Exchange Commission
(available at www.sec.gov), and the
following risks, in reaching a determination to purchase the
Shares:

    

    Risks
Specific to Us

    

    We
are currently indebted to a related party.

    

    The
Company currently owes the balance of $475,000 pursuant to a settlement
agreement from litigation in the Shih Lin District Court of Taiwan over accounts
receivable and payables with Ambeon Corporation, a related party by virtue of
common ownership.  The dispute was settled on August 20, 2008 whereby
the Company agreed to pay a sum of $560,000.  The balance of payments
under the settlement are due on December 31 on each successive year as follows:
2009, $160,000; 2010, $130,000; 2011, $90,000; 2012, $60,000; and 2013,
35,000.  If we do not meet these obligation to Ambeon, a further
action could be commenced where the Company could be found liable in amounts
greater than those owed under the settlement agreement, plus attorneys’ fees
costs and disbursements.

    

    If
our products do not gain expected market acceptance, prospects for our sales
revenue and profit may be affected.

    

    The
healthcare industry’s relative unfamiliarity with wireless medical products may
slow their market acceptance. Potential customers for our devices and systems
may be reluctant to adopt these as alternatives to traditional
technologies.  Obstacles to widespread adoption of our devices include
perceived quality, efficiency and the predicted life of the devices before they
are rendered obsolete.

    

    If
we are not able to compete effectively with other competitors, our prospects for
future growth will be jeopardized.

     

    There is
significant competition in the healthcare industry with more established
companies We are not only competing with other wireless device providers but
also with companies offering traditional medical products, which are usually
more established and have greater resources to devote to research and
development, manufacturing and marketing than we have.  In addition,
we compete with large companies such as General Electric which have advantages
of global marketing capabilities and substantially greater resources to devote
to research over than companies with our scope.

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

     

    Our
competitors may promote devices which are more readily accepted by customers and
we may be required to reduce the prices of our products in order to remain
competitive.

     

    Downturns in general economic and market conditions could
materially and adversely affect our business.

     

    Medical
device purchases are related to the budgets and purchasing of medical facilities
generally and hospitals in particular.  A reduction in spending and
budgets would likely cause a reduction in the demand for our
products.  If these facilities have less funds budgeted as a result of
general economic conditions, sales of our wireless medical products they have
budgeted for would inevitably be influenced by general economic
downturns.

     

    If
critical components become unavailable or contract manufacturers delay their
production, our business will be negatively impacted.

     

    Stability
of component supply is crucial to determine our manufacturing process. As some
critical devices and components are supplied by certain third-party
manufacturers, we may be unable to acquire necessary amounts of key components
at competitive prices.

     

    Outsourcing
the production of certain parts and components is one way to reduce
manufacturing costs. We have selected these particular manufacturers based on
their ability to consistently produce these products according to our
requirements and ensure the best quality product at the most cost effective
price. Contrarily, the loss of all or one of these suppliers or delays in
obtaining shipments could have a adverse effect on our operations until an
alternative supplier could be found, if one may be located at
all.  This may cause us to breach our contracts and lose
sales.

    

    If
our contract manufacturers fail to meet our requirements for quality, quantity
and timeliness, our business growth could be harmed.

     

    We design
and outsource our products to contract manufacturers.  These
manufacturers procure most of the raw materials for us and provide all necessary
facilities and labor to manufacture our products. If these companies are to
terminate their agreements with us without adequate notice, or fail to provide
the required capacity and quality on a timely basis, we would be unable to
process and deliver our products to our customers.

     

    Our products could contain defects or they may be installed or
operated incorrectly, which could reduce sales of those products or result in
claims against us.

     

    Although
we have experienced quality control and assurance personnel and established
thorough quality assurance practices to ensure good product quality, defects
still may be found in the future in our existing or future
products.

     

    End-users
could lose their confidence in our products and company when they unexpectedly
use defective products or use our products improperly.  This could
result in loss of revenue, loss of profit margin, or loss of market
share.  Moreover, because our products are employed in the healthcare
industry, if one of our products is a cause, or perceived to be the cause, of
injury or death to a patient, we would likely be subject to one or more lawsuits
if which we were found responsible could cause us to incur liability which could
interrupt or even cause us to terminate our operations.

     

    If
we are unable to recruit and retain qualified personnel, our business could be
harmed.

     

    Our
growth and success highly depend on qualified personnel. So we are inevitable to
make all efforts to recruit and retain skilled technical, sales, marketing,
managerial, manufacturing, and administrative personnel. Competitions among the
industry could cause us difficultly to recruit or retain a sufficient number of
qualified technical personnel, which could harm our ability to develop new
products. If we are unable to attract and retain necessary key talents, it
definitely will harm our ability to develop competitive product and keep good
customers and could adversely affect our business and operating
results.

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

    Risks Related to the Securities
Markets and Investments in Our Common Stock

    

    Because
our common stock is quoted on the "OTCBB," your ability to sell your shares in
the secondary trading market may be limited.

    

    Our
common stock is currently quoted on the over-the-counter market on the OTC
Electronic Bulletin Board. Consequently, the liquidity of our common stock is
impaired, not only in the number of shares that are bought and sold, but also
through delays in the timing of transactions, and coverage by security analysts
and the news media, if any, of our company. As a result, prices for shares of
our common stock may be lower than might otherwise prevail if our common stock
was quoted and traded on Nasdaq or a national securities exchange.

    

    Because
our shares are "penny stocks," you may have difficulty selling them in the
secondary trading market.

     

    Federal
regulations under the Securities Exchange Act of 1934 regulate the trading of
so-called "penny stocks," which are generally defined as any security not listed
on a national securities exchange or Nasdaq, priced at less than $5.00 per share
and offered by an issuer with limited net tangible assets and revenues. Since
our common stock currently is quoted on the "OTCBB" at less than $5.00 per
share, our shares are "penny stocks" and may not be traded unless a disclosure
schedule explaining the penny stock market and the risks associated therewith is
delivered to a potential purchaser prior to any trade.

     

    In
addition, because our common stock is not listed on Nasdaq or any national
securities exchange and currently is quoted at and trades at less than $5.00 per
share, trading in our common stock is subject to Rule 15g-9 under the Securities
Exchange Act. Under this rule, broker-dealers must take certain steps prior to
selling a "penny stock," which steps include: obtaining financial and investment
information from the investor; obtaining a written suitability questionnaire and
purchase agreement signed by the investor; and providing the investor a written
identification of the shares being offered and the quantity of the
shares.

    

    If these
penny stock rules are not followed by the broker-dealer, the investor has no
obligation to purchase the shares. The application of these comprehensive rules
will make it more difficult for broker-dealers to sell our common stock and our
shareholders, therefore, may have difficulty in selling their shares in the
secondary trading market.

    

    Because
the Company became public by means of a” reverse merger” with an existing
company, we may not be able to attract the attention of major brokerage firms
and, as a public company, will incur substantial expenses.

    

    Additional
risks may exist since the Company became public through a “reverse
merger.”  No assurance can be given that brokerage firms will want to
conduct any secondary offerings on behalf of the Company in the
future.

    

    As a
result of the Exchange, the Company is publicly-traded and, accordingly, subject
to the information and reporting requirements of the U.S. securities laws. The
U.S. securities laws require, among other things, review, audit, and public
reporting of the Company’s financial results, business activities, and other
matters.  Recent SEC regulation, including regulation enacted as a
result of the Sarbanes-Oxley Act of 2002, has also substantially increased the
accounting, legal, and other costs related to becoming and remaining an SEC
reporting company.  The public company costs of preparing and filing
annual and quarterly reports, and other information with the SEC and furnishing
audited reports to stockholders will cause the Company’s expenses to be higher
than they would be if we remained privately-held and did not enter into the
Exchange.  In addition, the Company will incur substantial expenses in
connection with the preparation of the Registration Statement and related
documents with respect to the registration of the shares issued in the Offering.
These increased costs may be material and may include the hiring of additional
employees and/or the retention of additional advisors and professionals. Failure
by the Company to comply with the federal securities laws could result in
private or governmental legal action against the Company and/or our officers and
directors, which could have a detrimental effect on the Company's business and
finances, the value of the Company’s stock, and the ability of stockholders to
resell their stock.

    

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    Our
management team does not have extensive experience in public company
matters.

    

    Our
management team has had limited public company management experience or
responsibilities, which could impair our ability to comply with legal and
regulatory requirements such as the Sarbanes-Oxley Act of 2002 and applicable
federal securities laws including filing required reports and other information
required on a timely basis.  There can be no assurance that our
management will be able to implement and affect programs and policies in an
effective and timely manner that adequately respond to increased legal,
regulatory compliance and reporting requirements imposed by such laws and
regulations. Our failure to comply with such laws and regulations could lead to
the imposition of fines and penalties and further result in the deterioration of
our business.

    

    Our
stock price may be volatile and your investment in our common stock could suffer
a decline in value.

    

    As of the
date of this Offering, there have been no trading activities in the Company’s
common stock.  There can be no assurance that a market will ever
develop in the Company’s common stock in the future.  If a market does
not develop then investors would be unable to sell any of the Company’s common
stock likely resulting in a complete loss of any funds therein
invested.

    

    Should a
market develop, the price may fluctuate significantly in response to a number of
factors, many of which are beyond our control. These factors
include:

     

    
      	
               
      

            	
              •

            	
              acceptance
      of our products in the industry;

            

    

    
      	
               
      

            	
              •

            	
              announcements
      of technological innovations or new products by us or our
      competitors;

            

    

    
      	
               
      

            	
              •

            	
              government
      regulatory action affecting our products or our competitors'
      products;

            

    

    
      	
               
      

            	
              •

            	
              developments
      or disputes concerning patent or proprietary
  rights;

            

    

    
      	
               
      

            	
              •

            	
              economic
      conditions in the United States or
abroad;

            

    

    
      	
               
      

            	
              •

            	
              actual
      or anticipated fluctuations in our operating
  results;

            

    

    
      	
               
      

            	
              •

            	
              broad
      market fluctuations; and

            

    

    
      	
               
      

            	
              •

            	
              changes
      in financial estimates by securities
analysts.

            

    

     

    A registration of
a significant amount of our outstanding restricted stock may have a negative
effect on the trading price of our stock.

     

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    Following
the Closing, shareholders of the Company held approximately 41,400,000 shares of
restricted Common Stock on a fully-diluted basis, or 62.3% of the outstanding
Common Stock.  If we were to file a registration statement including
all of these shares, and the registration is allowed by the SEC, these shares
would be freely tradable upon the effectiveness of the planned registration
statement. If investors holding a significant number of freely tradable shares
decide to sell them in a short period of time following the effectiveness of a
registration statement, such sales could contribute to significant downward
pressure on the price of our stock.

     

    We
do not intend to pay any cash dividends in the foreseeable future and,
therefore, any return on your investment in our capital stock must come from
increases in the fair market value and trading price of the capital
stock.

     

    We have
not paid any cash dividends on our common stock and do not intend to pay cash
dividends on our common stock in the foreseeable future.  We intend to
retain future earnings, if any, for reinvestment in the development and
expansion of our business.  Any credit agreements, which we may enter
into with institutional lenders, may restrict our ability to pay
dividends.  Whether we pay cash dividends in the future will be at the
discretion of our board of directors and will be dependent upon our financial
condition, results of operations, capital requirements and any other factors
that the board of directors decides is relevant.  Therefore, any
return on your investment in our capital stock must come from increases in the
fair market value and trading price of the capital stock.

    

    We
may issue additional equity shares to fund the Company's operational
requirements which would dilute your share ownership.

    

    The
Company's continued viability depends on its ability to raise
capital.  Changes in economic, regulatory or competitive conditions
may lead to cost increases.  Management may also determine that it is
in the best interest of the Company to develop new services or
products.  In any such case additional financing is required for the
Company to meet its operational requirements.  There can be no
assurances that the Company will be able to obtain such financing on terms
acceptable to the Company and at times required by the Company, if at
all.  In such event, the Company may be required to materially alter
its business plan or curtail all or a part of its operational
plans.  While the Company currently has no offers to sell it
securities to obtain financing, sale or the proposed sale of substantial amounts
of our common stock in the public markets may adversely affect the market price
of our common stock and our stock price may decline substantially.  In
the event that the Company is unable to raise or borrow additional funds, the
Company may be required to curtail significantly its operational
plans.

    

    The
Company’s Amended Articles of Incorporation authorize the issuance of up to
150,000,000 total shares of Common Stock without additional approval by
shareholders. Following the Closing, we will have 66,400,000 adjusted shares of
Common Stock outstanding on a fully-diluted basis.

    

    Because
our common stock is quoted only on the OTCBB, your ability to sell your shares
in the secondary trading market may be limited.

    

    Our
common stock is quoted only on the OTCBB.  Consequently, the liquidity
of our common stock is impaired, not only in the number of shares that are
bought and sold, but also through delays in the timing of transactions, and
coverage by security analysts and the news media, if any, of our company. As a
result, prices for shares of our common stock may be different than might
otherwise prevail if our common stock was quoted or traded on a national
securities exchange such as the New York Stock Exchange.

    

    Large
amounts of our common stock will be eligible for resale under Rule
144.

    

    
      
        
           

        

        
          16

          
            

          

        

        
           

        

      

    

    

    As of the
Closing, assuming proceeds equal to the Minimum Offering are raised,
approximately 41,400,000 of the 67,400,000 issued and outstanding shares of the
Company's common stock on a fully-diluted basis are restricted securities as
defined under Rule 144 of the Securities Act of 1933, as amended (the “Act”) and
under certain circumstances may be resold without registration pursuant to Rule
144.

    

    In
general, under Rule 144, a person (or persons whose shares are aggregated) who
has satisfied a six month holding period may, under certain circumstances, sell
within any three-month period a number of securities which does not exceed the
greater of 1% of the then outstanding shares of common stock or the average
weekly trading volume of the class during the four calendar weeks prior to such
sale. Rule 144 also permits, under certain circumstances, the sale of
securities, without any limitation, by a person who is not an Affiliate, as such
term is defined in Rule 144(a)(1), of the Company and who has satisfied a one
year holding period. Any substantial sale of the Company's common stock pursuant
to Rule 144 may have an adverse effect on the market price of the Company's
shares.  Following the Closing, the Company intends to file
information that will satisfy certain public information requirements necessary
for such shares to be sold under Rule 144.  However, since the Company
has previously indicated in its filings with the Commission that it is a shell
company, as that term is defined under the Securities Act, pursuant to Rule 144,
shareholders must wait at least one year from the date of the filing of this
Form 8-K to avail themselves of Rule 144 unless we file a registration statement
for the sale of such shares prior thereto.

    

    The
requirements of complying with the Sarbanes-Oxley act may strain our resources
and distract management

    

    We are
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002. the costs
associated with these requirements may place a strain on our systems and
resources. The Exchange Act requires that we file annual, quarterly and current
reports with respect to our business and financial condition. The Sarbanes-Oxley
Act requires that we maintain effective disclosure controls and procedures and
internal controls over financial reporting. Historically, as a private company
we have maintained a small accounting staff, but in order to maintain and
improve the effectiveness of our disclosure controls and procedures and internal
control over financial reporting, significant additional resources and
management oversight will be required. This includes, among other things,
retaining independent public accountants. This effort may divert management's
attention from other business concerns, which could have a material adverse
effect on our business, financial condition, results of operations and cash
flows. In addition, we may need to hire additional accounting and financial
persons with appropriate public company experience and technical accounting
knowledge, and we cannot assure you that we will be able to do so in a timely
fashion.

    

    Our
executive officers, directors and principal stockholders control our business
and may make decisions that are not in our stockholders' best
interests.

    

    At the
Closing, our officers, directors, and principal stockholders, and their
affiliates, in the aggregate, will beneficially owned a majority of the
outstanding shares of our common stock on a fully diluted basis.  As a
result, such persons, acting together, have the ability to substantially
influence all matters submitted to our stockholders for approval, including the
election and removal of directors and any merger, consolidation or sale of all
or substantially all of our assets, and to control our management and
affairs.  Accordingly, such concentration of ownership may have the
effect of delaying, deferring or preventing a change in discouraging a potential
acquirer from making a tender offer or otherwise attempting to obtain control of
our business, even if such a transaction would be beneficial to other
stockholders.

    

    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

    

    Sales
of additional equity securities may adversely affect the market price of our
common stock and your rights in the Company may be reduced.

    

    We expect
to continue to incur research and development and selling, general and
administrative costs, and in order to satisfy our funding requirements, we may
need to sell additional equity securities.  Our stockholders may
experience substantial dilution and a reduction in the price that they are able
to obtain upon sale of their shares.  Also, any new securities issued
may have greater rights, preferences or privileges than our existing common
stock which may adversely affect the market price of our common stock and our
stock price may decline substantially.

     

    8.
COVENANTS OF THE COMPANY AND SUBSCRIBER.

    

    8.1. Form
D.  The Company agrees to timely file a Form D with respect to the
Shares as required under Regulation D and to provide a copy thereof to
Subscriber promptly upon request of the Subscriber. The Company shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for, or to qualify the Shares for, sale to the Subscribers at the
Closing under applicable securities or “Blue Sky” laws of the states of the
United States, and shall provide evidence of such actions promptly upon request
of the Subscriber.

    

    8.2.
Expenses.  Each Party is liable for, and shall pay, their own expenses
incurred in connection with the negotiation, preparation, execution and delivery
of this Agreement, including, without limitation, attorneys’ and consultants’
fees and expenses.

    

    8.3.
Sales by Subscribers.  The Subscriber shall sell any and all
Securities purchased hereby in compliance with applicable prospectus delivery
requirements, if any, or otherwise in compliance with the requirements for an
exemption from registration under the Securities Act and the rules and
regulations promulgated thereunder.  The Subscriber will not make any
sale, transfer or other disposition of the Shares in violation of federal or
state securities or “blue sky” laws and regulations.

    

    9.
MISCELLANEOUS.

    

    9.1.
Governing Law; Jurisdiction.  This Agreement will be governed by and
interpreted in accordance with the laws of the State of Nevada without regard to
the principles of conflict of laws.  All questions concerning the
construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflict of laws thereof.  Each party agrees that all legal
proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated this Agreement shall be commenced in the state and
federal courts sitting in the City of New York, County of New York (the “New
York Courts”).  Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under the Transaction
Documents and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by applicable law. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to the Transaction Documents
or the transactions contemplated hereby or thereby. If either party shall
commence an action or proceeding to enforce any provisions of the Transaction
Documents, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other
reasonable costs and expenses incurred in the investigation, preparation and
prosecution of such action or proceeding.

    

    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

    

    9.2.
Counterparts; Electronic Signatures.  This Agreement may be executed
in two or more counterparts, all of which are considered one and the same
agreement and will become effective when counterparts have been signed by each
party and delivered to the other parties.  This Agreement, once
executed by a party, may be delivered to the other parties hereto by (e.g.
electronic submission, facsimile transmission or e-mail of a copy of this
Agreement bearing the signature of the party so delivering this
Agreement).

    

    9.3.
Headings.  The headings of this Agreement are for convenience of
reference only, are not part of this Agreement and do not affect its
interpretation.

    

    9.4.
Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

    

    9.5.
Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Subscriber and the Company will be entitled to specific performance under this
Agreement.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in this Agreement and hereby agree to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

    

    9.6.
Entire Agreement; Amendments.  This Agreement (including all schedules
and exhibits hereto) constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein.  This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.  Except as set forth in herein, no provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

    

    9.7.
Removal of Legends.  Upon the earlier of (i) registration for resale
as set forth herein, or (ii) an exemption under Rule 144 becoming available, the
Company shall (A) deliver to the transfer agent for the Securities (the
“Transfer Agent”) irrevocable instructions that the Transfer Agent shall reissue
a certificate representing shares of Common Stock without legends upon receipt
by such Transfer Agent of the leg ended certificates for such shares, together
with a customary representation by the Subscriber that Rule 144 applies to all
shares of Common Stock represented thereby and (B) cause its counsel to deliver
to the Transfer Agent one or more blanket opinions to the effect that the
removal of such legends in such circumstances may be effected under the
Securities Act subject to such investor and broker representations and
notifications or qualifications (in the case of subscribers who are or may be
deemed affiliates of the Company) that counsel may reasonably
request.  From and after the earlier of such dates, upon a
Subscriber’s written request, the Company shall promptly cause certificates
evidencing the Subscriber’s securities to be replaced with certificates which do
not bear such restrictive legends.

    

    
      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

    

    9.8.
Successors and Assigns.  This Agreement is binding upon and inures to
the benefit of the parties and their successors and assigns.  The
Subscriber acknowledges that the Company will be assigning this Agreement and
any rights or obligations hereunder without the prior written consent of the
Subscriber and the Subscriber may not assign this Agreement or any rights or
obligations hereunder upon the Closing without the prior written consent of the
Company.  This provision does not limit the Subscriber’s right to
transfer the Shares pursuant to the terms of this Agreement or to assign the
Subscriber’s rights hereunder to any such transferee pursuant to the terms of
this Agreement.

    

    9.9.
Third Party Beneficiaries.  This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.

    

    9.10.
Further Assurances.  Each party will do and perform, or cause to be
done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

    

    9.11. No
Strict Construction.  The language used in this Agreement is deemed to
be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

    

    9.12.
Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise this Agreement and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.  Any reference to any federal,
state, local, or foreign law will be deemed also to refer to law as amended and
all rules and regulations promulgated thereunder, unless the context requires
otherwise. The words “include,” “includes,” and “including” will be deemed to be
followed by “without limitation.” The words “this Agreement,” “herein,”
“hereof,” “hereby,” “hereunder,” and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited.

    

    9.13.
Acceptance.  Upon the execution and delivery of this Agreement by the
Subscriber, this Agreement shall become a binding obligation of the Subscriber
with respect to the purchase of the Shares as herein provided, subject to
acceptance by the Company; subject, however, to the right hereby reserved to the
Company to enter into the same agreements with other Subscribers and to add
and/or delete other persons as Subscribers.

    

    9.14.
Waiver.  It is agreed that a waiver by either party of a breach of any
provision of this Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.

    

    9.15.
Other Documents.  The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.

    

    9.16.
Public Statements.  The Subscriber agrees not to issue any public
statement with respect to the Subscriber’s investment or proposed investment in
the Company or the terms of any agreement or covenant between them and the
Company without the Company’s prior written consent, except such disclosures as
may be required under applicable law or under any applicable order, rule or
regulation.

    

    9.17.
Exculpation Among Subscribers.  The Subscriber agrees, acknowledges
and understands that it is not relying on any of the other Subscribers in making
its investment or decision to invest in the Company.  The Subscriber
agrees, acknowledges and understands that none of the other Subscribers nor
their respective controlling persons, officers, directors, partners, agents or
employees shall be liable to the Subscriber for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
purchase of the Shares or the execution of or performance under this Agreement,
nor shall the Subscriber be liable to the other Subscribers for any action
heretofore or hereafter taken or omitted to be taken by the Subscriber in
connection with the purchase of the Shares or the execution of or performance
under this Agreement.

    

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

    9.18.
Several Obligations.  The obligations of each Subscriber under any
Subscription Agreements are several and not joint with the obligations of any
other Subscriber, and no Subscriber shall be responsible in any way for the
performance of the obligations of any other Subscriber under any Subscription
Agreement.  Nothing contained herein or in any other Subscription
Agreement, and no action taken by any Subscriber pursuant hereto or thereto,
shall be deemed to constitute the Subscribers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the
Subscribers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Subscription
Agreements.  Each Subscriber confirms that it has independently
participated in the negotiation of the transaction contemplated hereby with the
advice of its own counsel and advisors.  Each Subscriber shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Subscription Agreements, and it shall not be necessary for any other Subscriber
to be joined as an additional party in any proceeding for such
purpose.  The Company acknowledges that each of the Subscribers has
been provided with the same Subscription Agreements for the purpose of closing a
transaction with multiple Subscribers and not because it was required or
requested to do so by any Subscriber.

    

    9.19.
WAIVER OF JURY
TRIAL.  IN ANY ACTION, SUIT OR PROCEEDING IN ANY JURISDICTION BROUGHT
BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER TRIAL BY
JURY.

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

    

    SIGNATURE
PAGE

    

    The
Subscriber hereby offers to purchase and subscribe to ____________ Shares and
encloses payment of $0.40 per share for an aggregate investment of
$_____________.

     

    
      	 
      	 
      	 
      
	 
      	
              Name
      of Subscriber

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Signature
      of Subscriber

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Name
      of  Joint Subscriber

            	 
      
	 
      	
              (If
      Applicable)

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Signature
      of  Joint Subscriber

            	 
      
	 
      	
              (If
      Applicable)

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Name
      and Title of Authorized Signatory

            	 
      
	 
      	
              (If
      Applicable)

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              (Print)
      Street Address - Residence

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              (Print)
      City, State and Zip Code

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Social
      Security/Taxpayer I.D. Number:

            	 
      

    

    

    

    AGREED
TO AND ACCEPTED:

    

    As of
_______, 2009

    

    

    AMBICOM
HOLDINGS, INC.

    

    

    
      	
              By:
      

            	 
      	 
      
	 
      	
              Name:John
      Hwang

            	 
      
	 
      	
              Title:
      President

            	 
      

    

    

    
      
        
           

        

        
          22

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A

     

    SUBSCRIBER
QUESTIONNAIRE

    

    PERSONAL
DATA.

    

    
      	 
      	 
      	 
      
	
              Name
      of Subscriber

            	 
      	
              Residence
      Telephone (Area Code Number)

            
	 
      	 
      	 
      
	 
      	 
      	
              Business
      Telephone (Area Code Number)

            
	 
      	 
      	 
      
	
              Residence
      or Principal Address (Street/City/State/Zip Code)

            	 
      	
              Birth
      Date

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              Mailing
      Address (if other than residence)

            	 
      	
              Citizenship
      (U.S./Other)

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              Marital
      Status

            	 
      	
              Social
      Security/Taxpayer I.D.  Number

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              Spouse’s
      Full Name

            	 
      	
              E-mail
      Address

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              Spouse’s
      Social Security Number

            	 
      	
              Facsimile
      Number (Area Code/Number)

            

    

    

    ACCREDITED
INVESTOR.  If Subscriber (or the entity on behalf of which
Subscriber is acting) is an “accredited investor” as that term is defined in
Rule 501(a) of Regulation D promulgated under the Act, and, as such, falls
within at least one of the following categories, then please INITIAL each applicable
category.

    

    
      	
              ______

            	
              (a)

            	
              A
      bank or savings and loan association or other institution (acting either
      in an individual or fiduciary capacity), registered broker-dealer,
      insurance company, registered investment company, or business development
      company, or licensed “small business investment company,” or an employee
      benefit plan which either is represented in a fiduciary capacity by a
      bank, savings and loan association, insurance company or registered
      investment advisor, has total assets in excess of $5,000,000 or is
      self-directed and the plan’s business investments are made solely by
      accredited investors.

            

    

    

    
      	
              ____

            	
              (b)

            	
              A
      trust (i) with total assets in excess of $5,000,000, (ii) which was not
      formed for the specific purpose of acquiring the subject securities, and
      (iii) whose purchase is directed by a person who has such knowledge and
      experience in financial and business matters as to be capable of
      evaluating the merits and risks of the prospective
    investment.

            

    

    

    
      	
              _____

            	
              (c)

            	
              An
      organization described in Section 501(c)(3) of the Internal Revenue Code,
      corporation or similar business trust, or partnership, not formed for the
      specific purpose of acquiring the subject securities, with total assets in
      excess of $5,000,000.

            

    

    

    
      	
              ______

            	
              (d)

            	
              An
      entity in which all of the equity owners are “accredited
      investors.”

            

    

    

    
      	
              ______

            	
              (e)

            	
              A
      director or an executive officer of the
Company.

            

    

    

    
      	
              ______

            	
              (f)

            	
              A
      natural person whose individual net worth, or joint net worth with spouse
      (if any), exceeds $1,000,000

            

    

    

    
      	
              ______

            	
              (g)

            	
              A
      natural person whose income in each of the two most recent calendar years
      exceeded $200,000 individually, or $300,000 jointly with spouse (if any),
      and who reasonably expects to reach that income level in the current
      year.

            

    

    

    
      	
              Signature
      of Authorized Signatory of Subscriber:

            	 
      	 
      
	 
      	 
      	 
      
	
              Name
      of Authorized Signatory:

            	 
      	 
      
	 
      	 
      	 
      
	
              Title
      of Authorized Signatory:

            	 
      	 
      

    

    

    
      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
6.7

    CAPITALIZATION

    

    

    
      	 
      	 	
              PRE-CLOSING

              CAPITALIZATION

            	 	 	
              POST-CLOSING

              CAPITALIZATION

            	 
	
              Common
      Stock

            	 	 	6,190,500	(1)	 	 	46,875,000	(2)
	
              Preferred
      Stock

            	 	 	 	 	 	 	 	 
	
              Series
      A

            	 	 	0	 	 	 	9,400,000	 
	
              Series
      B

            	 	 	0	 	 	 	2,600,000	 
	
              Common
      Stock Warrants

            	 	 	0	 	 	 	500,000	(3)
	
              Options

            	 	 	0	 	 	 	5,500,000	(4)

    

    

    
      	
            	
              (1)

            	
              Prior
      to forward-split on a 1 for 131.2335958
basis.

            

    

    
      
        	
              	
                (2)

              	
                Following
      forward-split on a 1 for 131.2335958 basis, the retirement of 6,000,000
      pre-split shares of Common Stock, the issuance of 20,000,000 post-split
      shares to consummate the Exchange and assuming receipt of subscriptions
      for the Maximum Offering of
1,875,000.

              

      

    

    
      	
            	
              (3)

            	
              Exercisable
      at $0.50 per share and expire in one
year.

            

    

    
      	
            	
              (4)

            	
              Exercisable
      immediately at the purchase price of
$0.01.

            

    

    

    
      
        
           

        

        
          24

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
6.8

    FINANCIAL
STATEMENTS

    

    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    ______________________________________________________

     

    INTERIM
FINANCIAL STATEMENTS

     

    SEPTEMBER
30, 2009

     

    (UNAUDITED)

    

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    INTERIM
BALANCE SHEETS

    (Unaudited)

    

    

    ASSETS

    

    
      	 
      	 	
              September 30,
      2009

            	 	 	
              December 31,
      2008

            	 
	
              Current
      assets:

            	 	 	 	 	 	 
	
              Cash
      and cash equivalents

            	 	$	35,550	 	 	$	114,148	 
	
              Accounts
      receivable, net

            	 	 	327,070	 	 	 	429,379	 
	
              Inventories

            	 	 	151,246	 	 	 	390,952	 
	
              Other
      receivable

            	 	 	673	 	 	 	47	 
	
              Prepaid
      and other current assets

            	 	 	37,429	 	 	 	63,515	 
	 
      	 	 	 	 	 	 	 	 
	
              Total
      current assets

            	 	 	551,968	 	 	 	998,041	 
	 
      	 	 	 	 	 	 	 	 
	
              Property,
      plant and equipment, net

            	 	 	280	 	 	 	11,345	 
	 
      	 	 	 	 	 	 	 	 
	
              Deposit

            	 	 	4,138	 	 	 	4,138	 
	 
      	 	 	 	 	 	 	 	 
	
              Total
      assets

            	 	$	556,386	 	 	$	1,013,524	 

    

     

     

    
      See
accompanying notes to financial statements.

    

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    INTERIM
BALANCE SHEETS

    (Unaudited)

    

    

    LIABILITIES
AND STOCKHOLDERS’ DEFICIT

    

    
      	 
      	 	
              September 30,
      2009

            	 	 	
              December 31,
      2008

            	 
	
              Current
      liabilities:

            	 	 	 	 	 	 
	
              Accounts
      payable

            	 	$	29,901	 	 	$	20,331	 
	
              Other
      payable

            	 	 	54,338	 	 	 	31,445	 
	
              Line
      of credit

            	 	 	50,000	 	 	 	139,000	 
	
              Due
      to shareholders

            	 	 	30,000	 	 	 	130,000	 
	
              Notes
      payable, current

            	 	 	245,000	 	 	 	265,000	 
	 
      	 	 	 	 	 	 	 	 
	
              Total
      current liabilities

            	 	 	409,239	 	 	 	585,776	 
	 
      	 	 	 	 	 	 	 	 
	
              Long-term
      liabilities: Notes payable, net of current

            	 	 	230,000	 	 	 	310,000	 
	 
      	 	 	 	 	 	 	 	 
	
              Total
      liabilities

            	 	 	639,239	 	 	 	895,776	 
	 
      	 	 	 	 	 	 	 	 
	
              Commitments
      and contingencies

            	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 
	
              Stockholders'
      equity:

            	 	 	 	 	 	 	 	 
	
              Convertible
      preferred stock, Series D, no par value – 3,658,536 shares authorized,
      609,756 shares issued and outstanding

            	 	 	500,000	 	 	 	500,000	 
	
              Convertible
      preferred stock, Series C, no par value - 4,200,000 shares authorized,
      4,133,333 shares issued and outstanding

            	 	 	6,199,955	 	 	 	6,199,955	 
	
              Convertible
      preferred stock, Series B, no par value – 1,964,668 shares authorized,
      1,924,668 shares issued and outstanding

            	 	 	1,443,500	 	 	 	1,443,500	 
	
              Convertible
      preferred stock, Series A, no par value – 5,334,643 shares authorized,
      5,334,643 shares issued and outstanding

            	 	 	2,400,592	 	 	 	2,400,592	 
	
              Common
      stock, no par value – 40,000,000 shares authorized, 3,373,833 shares
      issued and outstanding

            	 	 	35,850	 	 	 	35,850	 
	
              Additional
      paid-in capital

            	 	 	12,817	 	 	 	12,817	 
	
              Accumulated
      deficit

            	 	 	(10,675,567	)	 	 	(10,474,966	)
	 
      	 	 	 	 	 	 	 	 
	
              Total
      stockholders’ equity

            	 	 	(82,853	)	 	 	117,748	 
	 
      	 	 	 	 	 	 	 	 
	
              Total
      liabilities and stockholders' deficit

            	 	$	556,386	 	 	$	1,013,524	 

    

     

     

    
      See
accompanying notes to financial statements.

       

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    INTERIM
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

    (Unaudited)

    

    

    
      	 	 	Three
      Months Ended	 	 	Three
      Months Ended	 	 	Nine
      Months Ended	 	 	Nine
      Months Ended	 
	 
      	 	
              September 30,
      2009

            	 	 	
              September 30,
      2008

            	 	 	
              September 30,
      2009

            	 	 	
              September 30,
      2008

            	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
              Revenue

            	 	$	576,157	 	 	$	624,246	 	 	$	1,451,334	 	 	$	2,235,812	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Cost
      of revenue

            	 	 	314,395	 	 	 	348,400	 	 	 	791,364	 	 	 	1,788,166	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Gross
      profits

            	 	 	263,093	 	 	 	277,647	 	 	 	659,970	 	 	 	447,646	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Operating
      expenses:

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              General
      and administrative expenses

            	 	 	 	 	 	 	 	 	 	 	833,692	 	 	 	873,699	 
	
              Depreciation
      and amortization

            	 	 	 	 	 	 	 	 	 	 	12,875	 	 	 	105,105	 
	 
      	 	 	230,534	 	 	 	305,009	 	 	 	846,567	 	 	 	978,804	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Loss
      from operations

            	 	 	 	 	 	 	(27,362	)	 	 	(186,597	)	 	 	(531,158	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Other
      income (expenses):

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Gain
      on settlement

            	 	 	--	 	 	 	843,572	 	 	 	--	 	 	 	843,572	 
	
              Service
      income

            	 	 	1,331	 	 	 	1,801	 	 	 	5,039	 	 	 	5,930	 
	
              Net
      other income (expense)

            	 	 	5,009	 	 	 	26,997	 	 	 	(3,556	)	 	 	161,732	 
	
              Net
      interest expenses

            	 	 	 	 	 	 	 	 	 	 	(14,687	)	 	 	(21,471	)
	 
      	 	 	 	 	 	 	 	 	 	 	(13,204	)	 	 	989,763	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Loss
      before income taxes

            	 	 	 	 	 	 	 	 	 	 	(199,801	)	 	 	458,605	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Income
      tax expense

            	 	 	--	 	 	 	--	 	 	 	800	 	 	 	800	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Net
      income (loss)

            	 	 	37,569	 	 	 	843,207	 	 	 	(200,601	)	 	 	457,805	 

    

     

     

    
      See
accompanying notes to financial statements.

       

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    INTERIM
STATEMENTS OF CASH FLOWS

    (Unaudited)

    

    

    
      	 
      	 	
              Nine
      Months Ended

            	 
	 
      	 	
              September 30,

            	 
	 
      	 	 	 	 	 	 
	 
      	 	
              2009

            	 	 	
              2008

            	 
	 
      	 	 	 	 	 	 
	
              Cash
      flows from operating activities:

            	 	 	 	 	 	 
	
              Net
      income (loss)

            	 	$	(200,601	)	 	$	457,805	 
	
              Adjustments
      to reconcile net loss to net cash

            	 	 	 	 	 	 	 	 
	
              Provided
      by operating activities:

            	 	 	 	 	 	 	 	 
	
              Depreciation

            	 	 	12,875	 	 	 	105,105	 
	
              Stock
      compensation expense

            	 	 	--	 	 	 	5,783	 
	
              (Increase)
      decrease in assets:

            	 	 	 	 	 	 	 	 
	
              Accounts
      receivable

            	 	 	102,309	 	 	 	354,907	 
	
              Other
      receivable

            	 	 	(626	)	 	 	79,197	 
	
              Inventory

            	 	 	239,706	 	 	 	527,132	 
	
              Prepaid
      expenses and other assets

            	 	 	26,086	 	 	 	6,996	 
	
              Increase
      (decrease) in liabilities:

            	 	 	 	 	 	 	 	 
	
              Accounts
      payable

            	 	 	9,570	 	 	 	(1,303,089	)
	
              Other
      payable

            	 	 	22,893	 	 	 	(37,653	)
	
              Deferred
      revenue

            	 	 	--	 	 	 	(72,924	)
	 
      	 	 	 	 	 	 	 	 
	
              Cash
      provided by operating activities

            	 	 	212,212	 	 	 	123,259	 

    

    

    

    (Continued)

     

     

    
      See
accompanying notes to financial statements.

    

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    INTERIM
STATEMENTS OF CASH FLOWS

    (Unaudited)

    

    

    
      	 
      	 	
              Nine
      Months Ended

            	 
	 
      	 	
              September 30,

            	 
	 
      	 	 	 
	 
      	 	
              2009

            	 	 	
              2008

            	 
	 
      	 	 	 	 	 	 
	
              Cash
      flows from investing activities:

            	 	 	 	 	 	 
	
              Acquisition
      of property and equipment

            	 	 	(1,810	)	 	 	(656	)
	 
      	 	 	 	 	 	 	 	 
	
              Cash
      used in investing activities

            	 	 	(1,810	)	 	 	(656	)
	 
      	 	 	 	 	 	 	 	 
	
              Cash
      flows from financing activities:

            	 	 	 	 	 	 	 	 
	
              Payments
      on line of credit

            	 	 	(89,000	)	 	 	(218,200	)
	
              Proceeds
      from short and long-term notes

            	 	 	--	 	 	 	97,532	 
	
              Principal
      payments of notes payable

            	 	 	(200,000	)	 	 	(--	)
	 
      	 	 	 	 	 	 	 	 
	
              Cash
      used in financing activities

            	 	 	(289,000	)	 	 	(120,668	)
	 
      	 	 	 	 	 	 	 	 
	
              Net
      increase (decrease) in cash and cash equivalent

            	 	 	(78,598	)	 	 	1,935	 
	 
      	 	 	 	 	 	 	 	 
	
              Effect
      of foreign currency translation

            	 	 	--	 	 	 	(1	)
	 
      	 	 	 	 	 	 	 	 
	
              Cash
      and cash equivalent - beginning of period

            	 	 	114,148	 	 	 	45,034	 
	 
      	 	 	 	 	 	 	 	 
	
              Cash
      and cash equivalent - end of period

            	 	$	35,550	 	 	$	46,969	 
	 
      	 	 	 	 	 	 	 	 
	
              Supplemental
      Disclosure of Cash Flows Information:

            	 	 	 	 	 	 	 	 
	
              Cash
      paid for interest

            	 	$	9,177	 	 	$	21,922	 
	
              Cash
      paid for income taxes

            	 	$	800	 	 	$	800	 

    

     

     

    
      See
accompanying notes to financial statements.

       

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Note
1 – Organization and Nature of the Business

    

    Ambicom,
Inc., is a leading designer and developer of wireless technologies which
emphasize wireless medical and other wireless products.  Ambicom,
Inc., was formed in 1997, headquartered in San Jose CA, and has a branch
operation in Taiwan.

    

    On May
29, 2009, Ambicom Acquisition Corp. (the “AAC”) entered into a binding agreement
to acquire all the shares of the Company under the following terms:

    

    Preferred
shareholders of the Company to receive the $2,600,000 AAC Preferred Stock
Acquisition Consideration, which is convertible into common shares of AAC
beginning one year after the date of issuance of the public company shares and
for two years thereafter at the average of the market price for the thirty day
period preceding the conversion.  If not converted, the AAC Preferred
Stock Acquisition Consideration shall yield a 5% dividend and be paid in arrears
at the end of the sixth year.  The Preferred Stock or common share
issued by conversion thereof, may not be sold for a period of two years from the
date of the initial issuance of the Preferred Stock.

    

    Common
shareholders of the Company to receive the AAC Warrants Acquisition
Consideration to purchase 500,000 common shares of AAC at an exercise price of
$2.00 per share.  The AAC Warrants Acquisition Consideration can be
exchanged for the public company warrants, with the 12 month warrant exercise
period to begin upon issuance of the public company warrants.  Key
officers of the Company were issued the AAC Options subject to agreed
performance criteria over the first two years after the closing
date.

    

    On May
15, 2009, the Company amended and revised its articles of incorporation as
follows:

    

    In the
event of liquidation, common stock shareholders shall be entitled to receive
remaining assets of the Company after distribution is made according to
liquidation preference of holders of Series A, B, C and D.

    

    In the
event an acquisition consideration is received by the Company in form other than
cash, value will be determined as one of the following:

    

    
      	
               
      

            	
              -

            	
              If
      traded on a securities exchange, the value shall be deemed to be the
      average of the closing prices of the securities over the thirty –day
      period ending 3 days prior to the
closing.

            

    

    
      	
               
      

            	
              -

            	
              If
      actively traded over the counter, the value shall be deemed to be the
      average of the closing bid or sales price, whichever is applicable, over
      the thirty-day period ending 4 days prior to the
  closing.

            

    

    
      	
               
      

            	
              -

            	
              If
      there is no active public market, the value will be mutually determined by
      the Board of Directors of the
Company.

            

    

    

    Preferred
stock is entitled to the following liquidation preference over common
stock:

    

    
      	
               
      

            	
              -

            	
              $0.45
      per outstanding share of Series A

            

    

    
      	
               
      

            	
              -

            	
              $0.75
      per outstanding share of Series B

            

    

    
      	
               
      

            	
              -

            	
              $1.50
      per outstanding share of Series C

            

    

    
      	
               
      

            	
              -

            	
              $0.82
      per outstanding share of Series D

            

    

    

    If the
consideration received is insufficient to permit full allocation of preferential
amounts, then distribution shall be made ratably among the holders of Series A,
B, C and D.

    

    The
Company has sustained recurring losses and reported net loss of $201,601 for the
period ended September 30, 2009, and working capital deficiency of $82,853 as of
September 30, 2009.  The company’s accumulated deficits aggregated
$10,675,567 as of September 30, 2009.

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Note
2 – Summary of Significant Accounting Policies:

    

    The
following summary of significant accounting policies of the Company is presented
to assist in understanding the Company’s financial statements.  The
financial statements and notes are representations of the Company’s management,
who 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.

    

    In
management’s opinion, the accompanying unaudited financial statements contain
all adjustments necessary to state fairly the financial information included
herein.

    

    The
Company has evaluated subsequent events through December 2, 2009, the date the
financial statements were issued.

    

    Basis
of Presentation

    

    Where the
functional currency of the Company's Taiwan branch is the local currency, all
assets and liabilities are translated into U.S. dollars, using the exchange rate
on the consolidated balance sheet date, and revenues and expenses are translated
at average rates prevailing during the period.  Accounts and
transactions denominated in foreign currencies have been re-measured into
functional currencies before translated into U.S. dollars.  Foreign
currency transaction gains and losses are included as a component of other
income and expense.  Gains and losses from foreign currency
translation are included as a separate component of comprehensive
income.

    

    Use
of Estimates

    

    The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the period. These estimates are often based on complex judgments and
assumptions that management believes to be reasonable but are inherently
uncertain and unpredictable.  Actual results may differ materially
from these estimates.  In addition, any changes in these estimates or
their related assumptions could have a materially adverse effect on the
Company's operating results.

    

    Revenue
Recognition

    

    Revenues
from sales of products are recognized upon shipment or delivery and acceptance
of products by customers, when pervasive evidence of a sales arrangement exists,
the price is fixed or determinable, the title has transferred and collection of
resulting receivables is reasonably assured. 

    

    The
Company is able to make reasonable and reliable estimates of product returns for
sales based on the Company’s past history. Sales, provisions for estimated sales
returns and the cost of products sold are recorded at the time title transfers
to customers. Actual product returns are charged against estimated sales return
allowances.

    

    Sales
Taxes

    

    Taxes
collected from customers and remitted to governmental authorities are presented
on a net basis in the Company's statement of operations.

    

    Cash
and Cash Equivalents

    

    Cash
includes currency, checks issued by others and current deposits held by
financial institutions. For financial statement purposes, we consider all highly
liquid debt instruments with insignificant interest rate risk and maturity of
three months or less when purchased to be cash equivalent.

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Accounts
Receivable

    

    Trade
accounts receivable are presented at face value less allowance for doubtful
accounts.  The allowance for doubtful accounts is the Company’s best
estimate of probable credit losses in the existing accounts
receivable.  The Company determines the allowance based on Company’s
historical experience and review of specifically identified accounts and ageing
data.  The Company reviews its allowance for doubtful accounts
periodically.  Account balances are charged off against the allowance
after all means of collection have been exhausted and the potential for recovery
is considered remote.

    

    The
allowances for doubtful accounts were $11,831 as of September 30, 2009 and
December 31, 2008, respectively.

    

    Inventories

    

    Inventories
are stated at lower of cost or market.  Cost is computed using
weighted average method and net realizable value is determined by deducting
applicable selling expenses from selling price.  Market value of
inventory  is estimated  based on the impact of
market  trends,  an evaluation of
economic  conditions  and the value of current orders
relating to the future sales of this type of inventory

    

    The
Company determines that a certain level of inventory must be carried to maintain
an adequate supply of product for customers.  This inventory level may
vary based upon orders received from customers or internal forecasts of demand
for these products.  Other consideration in determining inventory
levels include the stage of products in the product life cycle, design win
activity, manufacturing lead times, customer demand, and competitive situations
in the marketplace.  Should any of these factors develop other than
anticipated, inventory level may be materially affected.

    

    Property
and Equipment

    

    Property
and equipment, including renewals and betterments, are stated at
cost.  Cost of renewals and betterment that extend the economic useful
lives of the related assets are capitalized.  Expenditures for
ordinary repairs and maintenance are charged to expense as
incurred.  Gain or loss on sale or disposition of assets is included
in the statement of operations.  Depreciation is calculated using the
straight-line method over the following estimated useful lives of the assets:
furniture and fixtures –seven years; machinery and equipment –five years;
software – five years.

    

    Research
and Development Costs

    

    Research
and development costs consist primarily of salaries and subcontracting expenses
and are expensed as incurred.

    

    Fair
Value of Financial Instruments

    

    GAAP
defines fair value as the exchange price that would be received for an asset or
paid to transfer a liability (i.e., an exit price) in the principal or most
advantageous market for the asset or liability an orderly transaction between
market participants on the measurement date. Fair value measurements are not
adjusted for transaction costs and establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the lowest
priority to unobservable inputs (level 3 measurements).

    

    The three
levels of the fair value hierarchy are described below:

    

    Level 1 -
Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets.

    

    Level 2 -
Significant other observable inputs other than Level 1 prices such as quoted
prices in markets that are not active, quoted prices for similar assets, or
other inputs that are observable, either directly or indirectly, for
substantially the full term of the asset.

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Level 3 -
Significant unobservable inputs that reflect a reporting entity's own
assumptions about the assumptions that market participants would use in pricing
an asset or liability.

    

    The fair
values of securities available for sale are generally determined by matrix
pricing, which is a mathematical technique widely used in the industry to value
debt securities without relying exclusively on quoted prices for the specific
securities but rather by relying on the securities' relationship to other
benchmark quoted securities (Level 2 inputs).

    

    The
Company determines the estimated fair value of financial instruments using
available market information and valuation methodologies considered to be
appropriate.  However, considerable judgment is required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates are not necessarily indicative of the amounts that the Company
could realize in a current market exchange.  The use of different
market assumptions and/or estimation methodologies could have a significant
effect on the estimated fair value amounts.  Carrying amounts of
accounts receivable and accounts payable approximate fair value due to the short
maturity of these financial instruments.

    

    Concentration
of Credit Risk

    

    Financial
instruments that potentially subject the Company to credit risk consist of
accounts receivable.

    

    The
Company provides credit to its customers in the normal course of
operations.  It carries out, on a continuing basis, credit checks of
its customers, and maintains allowance for credit losses contingent upon
management’s forecasts.  Concentration of credit risk arises when a
group of customers having similar characteristics such that their ability to
meet their obligations is expected to be affected similarly by changes in
economic conditions.

    

    As of
September 30, 2009, one major customer accounted for about 33.6% of the total
accounts receivable.  For the period ended September 30, 2009, the
Company had one major customer which accounted for about 28.3% of the total
revenue.

    

    Litigation
and Settlement Costs

    

    The
Company may be involved in legal actions arising in the ordinary course of
business.  The Company records an estimated loss for a loss
contingency when both of the following conditions are met: (1) information
available prior to issuance of the financial statements indicates that it is
probable that an asset had been impaired or a liability had been incurred at the
date of the financial statements, and (2) the amount of loss can be reasonably
estimated.

    

    Income
Taxes

    

    The
calculation of the Company's tax provision involves the application of complex
tax rules and regulations within multiple jurisdictions throughout the
world.  The Company's tax liabilities include estimates for all
income-related taxes that the Company believes are probable and that can be
reasonably estimated.  To the extent that the Company’s estimates are
understated, additional charges to the provision for income taxes would be
recorded in the period in which the Company determines such understatement. If
the Company's income tax estimates are overstated, income tax benefits will be
recognized when realized.

    

    Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards.  Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely
than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Comprehensive
Income

    

    Comprehensive
income or loss is defined as a change in equity of a company during a period
from transactions and other events and circumstances, excluding transactions
resulting from investments by owners and distributions to owners.  The
components of total comprehensive income or loss for the periods were consisted
of foreign currency translation adjustments.

    

    Reclassifications

    

    Certain
reclassifications have been made to the prior year financial statement
presentation to correspond to the current period’s format. Total equity and net
income are unchanged due to these reclassifications.

    

    Recent
Accounting pronouncements

    

    In June
2009, the FASB issued the FASC Accounting Standards Codification
(“Codification”) as the single source of authoritative U.S. generally accepted
accounting principles (“GAAP”) recognized by FASB to be applied by
non-governmental entities.  Rules and interpretive releases of the
Securities and Exchange Commission (“SEC”) under authority of the federal
securities laws are also sources of authoritative GAAP for SEC
registrants.  The Codification is effective for  financial
statements issued for interim and annual periods ending after September 15,
2009.  The Company adopted the Codification in the third quarter of
2009, and the adoption did not have any impact on its results of operations or
financial position.

    

    Note
3 – Stockholders’ Equity

    

    Preferred
Stock

    

    The
Company has 4 series of preferred stock issued and outstanding at September 30,
2009 and December 31, 2008, respectively.

    

    Holders
of the preferred stock are entitled to the following non-cumulative quarterly
dividend upon declaration by the Board of Directors:

    

    
      	
               
      

            	
              -

            	
              $0.036
      per share per annum on each outstanding share of Series
  A

            

    

    
      	
               
      

            	
              -

            	
              $0.060
      per share per annum on each outstanding share of Series
  B

            

    

    
      	
               
      

            	
              -

            	
              $0.120
      per share per annum on each outstanding share of Series
  C

            

    

    
      	
               
      

            	
              -

            	
              $0.066
      per share per annum on each outstanding share of Series
  D

            

    

    

    Preferred
stock is entitled to the following liquidation preference over common stock plus
any declared but unpaid dividend thereon:

    

    
      	
               
      

            	
              -

            	
              $0.45
      per outstanding share of Series A

            

    

    
      	
               
      

            	
              -

            	
              $0.75
      per outstanding share of Series B

            

    

    
      	
               
      

            	
              -

            	
              $1.50
      per outstanding share of Series C

            

    

    
      	
               
      

            	
              -

            	
              $0.82
      per outstanding share of Series D

            

    

    

    

    Preferred
stock is convertible into common shares under the following conversion rate,
subject to anti-dilution protection:

    

    
      	
               
      

            	
              -

            	
              $0.45
      over conversion price for each share of Series
A

            

    

    
      	
               
      

            	
              -

            	
              $0.75
      over conversion price for each share of Series
B

            

    

    
      	
               
      

            	
              -

            	
              $1.50
      over conversion price for each share of Series
C

            

    

    
      	
               
      

            	
              -

            	
              $0.82
      over conversion price for each share of Series
D

            

    

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Additionally
the preferred stock has the following provisions:

    

    
      	
               
      

            	
              1.

            	
              Each
      share of preferred stock has voting right equal to its equivalent common
      stock.

            

    

    

    
      	
               
      

            	
              2.

            	
              Preferred
      stock is subject to mandatory conversion provisions if the Company
      consummates a qualified public offering, defined as an offering resulting
      in at least $10,000,000 of gross proceeds to the Company and with a per
      share issuance sales price of at least $5.00, subject to appropriate
      adjustment.

            

    

    

    Common
Stock

    

    At
September 30, 2009 and December 31, 2008, 3,373,833 shares of common stock, no
par value, were issued and outstanding.

    

    Stock
Options

    

    The
Company’s 1997 Stock Option Plan (the “Plan”) permits the Company to grant
shares of common stock to employees and consultants of the Company under various
stock awards, including incentive stock options.  Under the plan, the
Company may grant up to 2,360,167 options.  The Plan is administered
by the Board of Directors, which determines the eligible persons to participate
in the Plan, number of shares for which options will be granted, the effective
dates of the grants, the option price, and the vesting schedules.

    

    In the
absence of an established market for the common stock of the Company, the Board
of Directors determines the fair market value of the Company’s common stock and
the option price is subject to limitations.  The term of each option
is limited to no more than ten years from the date of grant
thereof.  In the case of an incentive stock option granted to an
optionee who, at the time the option is granted, owns stock representing more
than 10% of the voting power of all classes of stock of the Company, the term of
the option is limited to no more than five years from the date of
grant.  Awards granted under the Plan may be immediately exercisable,
subject to a right of repurchase by the Company at the original exercise price
for all unvested shares at the termination of service.  At September
30, 2009, there were 2,012,666 shares granted and outstanding under the
Plan.  At December 31, 2008, there were 2,012,666 shares granted and
outstanding under the Plan.

    

    The
Company is required to measure the cost of employee services received in
exchange for stock options and similar awards based on the grant-date fair value
of the award and recognize this cost in the income statement over the period
during which an employee is required to provide services in exchange for the
reward.  Under this method, the Company recognizes compensation cost,
on a prospective basis, for the portion of outstanding awards for which the
requisite service has not yet been rendered as of January 1, 2007 and any new
grants, based upon the grant-date fair value of those
awards.  Accordingly, prior period amounts have not been
restated.  There were no stock options issued in 2009.

    

    The
following table summarizes the stock option activity during 2009:

    

    
      	 
      	 	
              Shares

            	 	 	
              Weighted
      Average Exercise Price

            	 
	
              Outstanding
      at December 31, 2008

            	 	 	2,012,666	 	 	$	0.08	 
	 
      	 	 	 	 	 	 	 	 
	
              Granted

            	 	 	--	 	 	 	--	 
	
              Forfeited

            	 	 	--	 	 	 	--	 
	
              Cancelled

            	 	 	--	 	 	 	--	 
	 
      	 	 	 	 	 	 	 	 
	
              Outstanding
      at September 30, 2009

            	 	 	2,012,666	 	 	$	0.08	 

    

    

    The stock
options have not been included in the calculation of the diluted earnings per
share as their inclusion would be anti-dilutive.

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Note
4 – Related Party Transactions and Gain on Settlement

    

    Shareholder

    The
Company borrows money from shareholders when operating capital is
needed.  Notes payable to shareholders were as follows as of September
30, 2009 and December 31, 2008:

    

    
      	 
      	 	
              September 30,
      2009

            	 	 	

              December 31,
      2008

            	 
	
              Note
      payable to a shareholder, bearing interest at 10% per
      annum.  The principal and interest is due in March
      2010.

            	 	$	--	 	 	$	100,000	 
	 
      	 	 	 	 	 	 	 	 
	
              Note
      payable to a shareholder, bearing interest at 10% per
      annum.  The principal and interest is due in January
      2010.

            	 	 	30,000	 	 	 	30,000	 
	 
      	 	 	30,000	 	 	 	130,000	 
	 
      	 	 	 	 	 	 	 	 
	
              Less:
      current portion

            	 	 	30,000	 	 	 	130,000	 
	 
      	 	 	 	 	 	 	 	 
	
              Notes
      receivable, net of current

            	 	$	--	 	 	$	--	 

    

    

    Litigation
settlement

    

    The
Company had an ongoing litigation over accounts receivable and payables with
Ambeon Corporation, a related party by virtue of common ownership, from
2004.  The dispute was settled in favor of the Company under the Shih
Lin District Court of Taiwan on August 20, 2008.  The Company agreed
to pay a sum of $560,000 and the minimum payments due under the settlement are
as follows:

    

    
      	
              Year
      ending December 31:

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              2009

            	 
      	$	
              160,000

            	 
      
	
              2010

            	 
      	 
      	
              130,000

            	 
      
	
              2011

            	 
      	 
      	
              90,000

            	 
      
	
              2012

            	 
      	 
      	
              60,000

            	 
      
	
              2013

            	 
      	 
      	
              35,000

            	 
      
	 
      	 
      	 
      	 
      	 
      
	
              Total

            	 
      	$	
              475,000

            	 
      

    

    

    As a
result of the settlement, the disputed payable balances were decreased in favor
of the Company and settlement income of $843,572 was realized in year
2008.

    

    Note
5 – Property, Plant and Equipment

    

    Property,
plant and equipment consist of the following at September 30, 2009 and December
31, 2008:

    

    
      	 
      	 	
              September 30,
      2009

            	 	 	
              December 31,
      2008

            	 
	 
      	 	 	 	 	 	 
	
              Machinery
      and equipment

            	 	 	20,373	 	 	$	20,373	 
	
              Furniture
      and fixtures

            	 	 	15,468	 	 	 	13,658	 
	
              Software

            	 	 	357,221	 	 	 	357,221	 
	 
      	 	 	393,062	 	 	 	391,252	 
	 
      	 	 	 	 	 	 	 	 
	
              Accumulated
      depreciation

            	 	 	(392,782	)	 	 	(379,907	)
	 
      	 	 	 	 	 	 	 	 
	
              Property
      and equipment, net

            	 	$	280	 	 	$	11,345	 

    

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Depreciation
expenses for the periods ended September 30, 2009 and December 31, 2008 were
$12,875 and $140,140, respectively.

    

    Note
6 – Line of Credit

    

    The
Company has an $800,000 line of credit with a bank that matures on January 1,
2010.  Borrowings outstanding from this credit line were $50,000 and
$139,000 as of September 30, 2009 and December 31, 2008 and bear interest at the
bank’s prime rate plus 0.75%.  This line of credit is collateralized
by substantially all of the Company’s assets and is guaranteed by the
shareholder.

    
       

    

    The
Company incurred interest expense of $890 and $12,964 during the period ended
September 30, 2009 and December 31, 2008 on this line of credit,
respectively. The
loan agreement includes requirements for certain level of financial
ratios.

    

    Note
7 - Notes Payable

    

    Notes
payable consist of the following at September 30, 2009 and December 31,
2008:

    

    
      	 
      	 	
              September 30,
      2009

            	 	 	

              December 31,
      2008

            	 
	
              Note
      payable to Ambeon Corporation, a related party by virtue of common
      ownership, bearing interest at 5% per annum.  The principal and
      interest was due in 2003 but was disputed until settlement in August
      2008.

            	 	$	375,000	 	 	$	470,000	 
	
              Note
      payable to an employee, bearing interest at 10% per annum.  The
      principal and interest is due in September 2010.

            	 	 	100,000	 	 	 	105,000	 
	
              Note
      payable to a shareholder, bearing interest at 10% per
      annum.  The principal and interest is due in March
      2010.

            	 	 	 --	 	 	 	  100,000	 
	
              Note
      payable to a shareholder, bearing interest at 10% per
      annum.  The principal and interest is due in January
      2010.

            	 	 	30,000	 	 	 	 30,000	 
	 
      	 	 	505,000	 	 	 	705,000	 
	 
      	 	 	 	 	 	 	 	 
	
              Less:
      current portion

            	 	 	275,000	 	 	 	395,000	 
	 
      	 	 	 	 	 	 	 	 
	
              Notes
      receivable, net of current

            	 	$	230,000	 	 	$	310,000	 

    

    

    Following
is a summary of principal maturities of notes payable over the next five
years:

    

    
      	 
      	 	
              Amount

            	 
	
              Years
      ending December 31,

            	 	 	 
	 
      	 	 	 
	
              2009

            	 	$	65,000	 
	
              2010

            	 	 	130,000	 
	
              2011

            	 	 	90,000	 
	
              2012

            	 	 	60,000	 
	
              2013

            	 	 	35,000	 
	 
      	 	 	 	 
	
              Total

            	 	$	380,000	 

    

    

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    Note
8 - Income Taxes

    

    Corporate
income tax rates applicable to the operations range from 10% to 34%. The Company
provided a valuation allowance equal to the deferred tax amounts resulting from
the tax losses in the United States, as it is not likely that they will be
realized.  The U.S. tax losses can be carried forward for 15 to 20
years to offset future taxable income.

     

    The
provision for income taxes for the periods ended September 30, 2009 and 2008 are
summarized as follows:

    

    
      	 
      	 	
              Nine
      Months Ended

            	 
	 
      	 	
              September 30,

            	 
	 
      	 	
              2009

            	 	 	
              2008

            	 
	 
      	 	 	 	 	 	 
	
              Current
      income tax provision

            	 	$	800	 	 	$	800	 
	
              Deferred
      income tax expense

            	 	 	--	 	 	 	--	 
	 
      	 	 	 	 	 	 	 	 
	
              Income
      tax expense

            	 	$	800	 	 	$	800	 

    

    

    

    The
Company has deferred tax assets at September 30, 2009 and December 31, 2008 as
follows:

    

    
      	 
      	 	
              September 30,
      2009

            	 	 	
              December 31,
      2008

            	 
	 	 	 	 	 	 	 	 	 
	
              Net
      operating loss carryforwards

            	 	$	3,909,253	 	 	$	3,855,949	 
	
              Valuation
      allowance

            	 	 	(3,909,253	)	 	 	(3,855,949	)
	 
      	 	 	 	 	 	 	 	 
	 
      	 	$	--	 	 	$	--	 

    

    

    At
September 30, 2009, the Company has recorded a valuation allowance against the
net deferred tax assets due to uncertainty of the amount and timing of future
taxable income.  The Company has net operating loss carryforwards of
approximately $9,808,961 and $9,638,997 for federal income tax purposes as of
September 30, 2009 and December 31, 2008, which will begin to expire in
2017.  Also, the Company has net operating loss carryforwards of
approximately $6,495,545 and $6,319,914 for California income tax purpose as of
September 30, 2009 and December 31, 2008 which will begin to expire in
2013.

    

    Note
9 – Commitments and Contingencies

    

    
      	
              (a)

            	
              Product
      Warranties:

            

    

    

    The
Company warrants goods against defects in material and workmanship under normal
use. A liability for estimated future costs under product warranties is recorded
when products are shipped. Warranty coverage of various lengths and terms is
provided to customers depending on standard offerings.  Estimated
warranty liabilities are based upon past experience with similar types of
products, the technological complexity of certain products, replacement costs
and other factors.

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    AMBICOM,
INC.

    NOTES
TO INTERIM FINANCIAL STATEMENTS

    (Unaudited)

     

    
      	
              (b)

            	
              Operating
      Lease Obligations:

            

    

    

    The
Company leases its office and warehouse.  The maturity date for the
lease is January 2011.  The minimum rental commitments under the lease
are as follows:

     

    
      	
              Years

            	 	
              Amount

            	 
	
              2009

            	 	$	57,750	 
	
              2010

            	 	 	59,550	 
	
              2011

            	 	 	5,100	 
	 
      	 	$	122,400	 

    

    

    The rent
expense for the period ending September 30, 2009 and December 31, 2008 were
$50,500 and $90,050, respectively.

     

     

    16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]