Satellite Security - As disclosed elsewhere in this report, on...

Satellite Security - Recent Material Event

Item 5.06 of this report, as a result of the Share Exchange, we ceased being a shell company as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

FORM 10-SB DISCLOSURE

As disclosed elsewhere in this report, on December 31, 2007, we acquired AIMMS in a reverse acquisition transaction. Item 2.01(f) of Form 8-K states that if the registrant was a shell company, like we were immediately before the Share Exchange disclosed under Item 2.01, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10-SB.

Accordingly, we are providing below the information that would be included in a Form 10-SB if we were to file a Form 10-SB. Please note that the information provided below relates to the combined enterprises after the acquisition of AIMMS, except that information relating to periods prior to the date of the Share Exchange only relates to AIMMS unless the context suggests otherwise.

In this report, we rely on and refer to information and statistics regarding the mobile marketing solutions industry and other related industries that we have obtained from a variety of sources. This information is publicly available for free and has not been specifically prepared for us for use in this report or otherwise. Although we believe that this information is generally reliable, we cannot guarantee, nor have we independently verified, the accuracy and completeness of this information.

Description of Business

Our History

Before we acquired AIMMS, and since March 7, 2007, we did not have any ongoing business operations or any revenue sources. Until operations ceased in March 2007, we had been engaged in the business of providing satellite-based asset tracking solutions and services, through the operations of our formerly wholly owned subsidiary Satellite Security Systems, Inc. ("S3"). On March 7, 2007, S3 lacked sufficient working capital to continue to fund its operations in the ordinary course of business, and all of its employees were released. S3, which was our sole source of operations and revenue, effectively ceased operations at that time.

After S3 ceased operations, we evaluated options for the sale or other disposition of our assets, and also evaluated options for obtaining additional financing or acquiring or merging with another operating company. The holders (the "Noteholders") of our secured convertible promissory notes in the amount of, in the aggregate, $3.3 million (the "Notes"), informed us that they intended to exercise their remedies under, among other sources of authority, the California Uniform Commercial Code, pursuant to which they may accept collateral in satisfaction of the obligations secured by such collateral. Given our unsuccessful attempts to obtain additional financing or to find a strategic transaction that would permit us to begin operations, we and S3 agreed to consent to the Noteholders exercise of their remedies under the California Uniform Commercial Code and the foreclosure upon substantially all of our assets, including the shares of stock we hold in our subsidiaries. Accordingly, on June 29, 2007, we entered into an agreement (the "Noteholders Agreement") with the Noteholders pursuant to which we agreed to consent to the Noteholders foreclosure on, and to transfer to the Noteholders, substantially all of our assets including the stock of our subsidiary entities. In exchange, the Noteholders agreed to, among other things, convert all outstanding amounts due and all obligations under the Notes into an aggregate of 2,000,000 shares of our common stock, waive all breaches, defaults, penalties, accrued and unpaid interest, charges, fees and costs, and cancel all outstanding warrants issued to the Noteholders in connection with the Notes. The transactions contemplated under the Noteholders Agreement were consummated on September 14, 2007.

AIMMS

This section discusses the business of AIMMS which we have acquired, though the business will continue to be operated through AIMMS as our wholly-owned subsidiary.

History and Overview

AIMMS was founded in 1998 as Korea Data Base & Consulting Co., Ltd. but conducted minimal operations until February 2007. At that time, the Articles of Incorporation were amended and the name of the Company was changed to AIMMS Co., Ltd. The Company then began its current business of providing mobile marketing solutions in Korea. Since the Company has had minimal operations since its’ founding in 1998, accordingly the financial statements accompanying this report have been prepared with the Company reporting as a development stage enterprise.

AIMMS develops proprietary, interactive applications and services for the mobile telephone industry that generate transaction based revenue and aggregate end user data. Specifically, AIMMS provides mobile membership marketing services, customized data base services, data indexed services and online marketing and promotional services to its customers which include Asian and multinational brands such as LGT, Citibank, HSBC Banking Group, AMEX, Shinhan Life, Kukmin Card, LG Card, Pizza Hut, 2ASP, Life Cord, HanilWorld and Hyundai Qsis. Typically our clients make use of our services and solutions to conceptualize and execute opt-in marketing campaigns and activities which in turn enhance customer loyalty and drive revenue.

AIMMS currently operates in Korea. Mobile marketing solutions have become effective, time-saving, and competitive methods for promoting specific services and products of companies operating in Korea. Korea has one of the highest penetration rates of mobile phone and Internet usage in the world with approximately 85% of the population owning a mobile phone. There are currently 43 million mobile phone subscribers in Korea and approximately 38 million Internet connections. Korea is considered one of the most technologically advanced countries in the world and a pioneer in new generation technologies.

We believe that the market for interactive mobile marketing solutions, like the ones AIMMS offers, will undergo rapid growth in the foreseeable future. Market research firm, eMarketer, forecasts that mobile advertising will grow to become a $13.8 billion market by 2011, up from $1.5 billion in 2007. Markets for user generated content are also expected to undergo significant growth because of the impact of opt in social networking sites such as MySpace and Facebook. We believe that these social networking applications will, in time, migrate to mobile phones, which may lead to a significant increase in advertising opportunities.

Our business relies on two key customer relationships. We contract with retailers that desire to promote their products and services to end users. Part of the competitive landscape where AIMMS has core competence is in the area of mobile phone based customer relationship management, or CRM, and loyalty programs. Brand owners worldwide are continually searching for innovative and cost effective ways to leverage their brand and to generate data about their customers. Traditionally, loyalty programs have been launched on the back of discount based value propositions, but this is generally not sustainable for a variety of reasons, primarily because discounting erodes brand equity. Mobile phones offer brand owners the means to build and maintain an interactive relationship with their customers in a measurable and effective manner. In this regard, AIMMS has developed and owns the U-Membership Program which is designed to provide a platform for customers to interact with brands. We anticipate that the U-Membership Program will in time be a significant interactive mobile database in Korea.

In addition, we contract with mobile telephone network operators who provide the infrastructure for our advertising campaigns. Our interactive marketing solutions allow mobile phone network operators to increase services and generate additional revenue over their network infrastructure. We believe, based on our negotiations with network operators that, investment by the mobile phone network operators in so called third generation licenses has generally not resulted in commercial success because of the slow uptake in content rich data products and services. Consequently we expect there to be a proliferation of new services offered by the mobile phone networks in the future. We believe that all of these factors will contribute to AIMMS' growth in the foreseeable future.

AIMMS has 30 full time employees and consultants and is based on the 4th Floor, Kumkang B/D, 681, Yeoksamdong, Kangam Gu, Seoul, Korea.

Marketing Strategy

AIMMS is currently focusing on marketing its integrated mobile U-Membership Program by providing short message services, or SMS, to franchise companies on a national basis. AIMMS is currently working with a national franchise association in Korea to market AIMMS’ mobile marketing services and solutions to its 12,000 members, which represent approximately 2,500,000 retail outlets in Korea.

We are introducing our services in a three phase roll out strategy. The first phase of the roll out is begin promotional activities in order to secure opt in membership profiles from end users that we hope will generate and manage a significant amount of customer profile date.

In the second phase of the roll out looking to use the collected profile data to offer tailored promotional opportunities to advertisers. During this phase, we expect that demographic and purchase behavioral information will be provided to clients on a targeted basis. We anticipate that revenue will be generated through fees in respect of data which is made available to customers from the AIMMS consumer databases and from service fees in respect of marketing campaigns carried out for and on behalf of clients.

The third phase of the AIMMS roll out will be to provide consumer index services to potential clients needing customer purchase behavioral patterns and trends. As customer database information increases in volume, their purchase information becomes a valuable asset to AIMMS and we expect to be able to offer an omnibus consumer index to clients needing consumer information. Retail index services are currently provided by major research companies such as AC Nielsen and TNS. We intend to differentiate from these competitive services through easier access to consumer indexes. We believe that the database index business will maximize the profit level to AIMMS as the data can be offered to multiple clients in diverse industries.

We expect to fine tune and continuously upgrade the database information generated through the relationship and marketing alliances with mobile phone network operators to increase the quality of customer data and to provide value-added service to AIMMS retailing customers. We believe that acquiring such high quality data will give AIMMS significant advantages to offer customized database services and consequently offer customer data index services.

Principal Products and Services

AIMMS primary products and services consist of Integrated Mobile Membership Services, Customized-Need Database Service and Data Index Service.

Integrated Mobile Membership Services (IMMS). This service is divided into the following categories:

General Target SMS/MMS (GTS). Under this service AIMMS sends SMS or multimedia messaging service, or MMS, to the primary target via network operators, after screening gender/age/residential area. For instance if a franchisee sends a discount or gift coupon to message recipients as part of a launch initiative in a given area, based on selected qualifications, this could be defined as part of the GTS offering. This type of marketing activity will continue to grow as brand owners migrate certain of their advertising budgets to mobile and digital media. The GTS service is volume dependant and price sensitive. High volumes enable AIMMS to obtain better prices from the networks and management is therefore focused on driving volume in this market segment.

Specified Target SMS/MMS (STS). Once the recipient of the discount or gift coupon visits a store, then he or she is required to subscribe to the AIMMS U-Membership Program through their mobile phone. At that point the customer can receive the discount or gift that was offered to them. The transaction information retrieved from the customer's mobile phone through the store's point-of-sale, or POS, system is transmitted to the AIMMS server, which AIMMS can then analyze for future target segmentation.

Automatic Target SMS/MMS (ATS). ATS is a targeted messaging service provided to consumers based on predetermined rules. For instance, a client subscribing to the AIMMS U-Membership Program or a company with a million customer database can set up rules to send out SMS messages to specific clients on predefined occasions providing benefits when visiting the client's stores. Such services are managed through strategic sessions involving AIMMS CRM experts and the client's marketing personnel.

Co-op Target SMS/MMS(CTS). In many instances, clients have built up data about their customers over a period of time, but they have been unable to leverage this data because of either a lack of strategic intent or a lack of infrastructure. AIMMS is able to offer an outsourced service to clients on a joint venture basis. By utilizing databases owned by third parties, SMS services can be implemented for a client. The profit-sharing of commissions is agreed to by AIMMS and the clients.

Customized-Need Database Service. Customer database information accumulated in the AIMMS server through U-membership subscription generates customer profiles, contact and transaction information. We believe that these customer databases are a powerful marketing tool when compared to other customer profile information that is currently available in the market place. With the AIMMS generated and managed customer database information, we believe clients will be able to maximize the communication level with desired target customer segments and implement marketing promotions.

Data Index Service. We intend to develop high quality customer databases and use those to establish customer Data Index Service for companies wanting to track customer purchase behavior on a continuous basis. Retailers that run their own loyalty programs gather information only for their locations or a retail index of consumer purchasing. We believe our Data Index Service will be unique because the profiling will be based on consumer transaction data generated from a variety of retailers through actual consumer purchase data which is recorded through POS systems is then transmitted to the AIMMS server. Because the data is based on actual consumer transactions, it is not easily susceptible to manipulation. We anticipate that this service will provide more valuable information to retailers and differentiate AIMMS from its competitors.

Markets for AIMMS' Products and Services

The various products and services offered by AIMMS are targeted to different industry segments and different end users. For example AIMMS requires relationships with brand owners in order to leverage their advertising spending, as well as the mobile phone networks in order to access their infrastructure and to obtain the most competitive pricing. AIMMS also establishes and maintains relationships with end user consumers in the form of the U-Membership Program. On an individual product category basis, the target market for the AIMMS service is franchise companies with more than 50 franchisees. The target market for the customized data base service are companies needing high quality standard customer data base, such as insurance companies, banks, and companies in the travel and leisure sectors. Finally, the target market for the data index service is all industries who offer products to individual consumers.

Intellectual Property

We regard the protection of our trade secrets, patents, patent applications, copyrights and trademarks as critical to our success. We rely on a combination of statute, common law and contractual restrictions to establish and protect our proprietary rights and developed intellectual property in our product and service offerings. AIMMS has filed several patent applications covering features of the AIMMS' product offering. We have entered into proprietary information and invention assignment agreements with our employees, contractors and consultants, and nondisclosure agreements with customers, partners and third parties to whom we disclose confidential and proprietary information. Despite our efforts in this regard, former employees or third parties may infringe or misappropriate our proprietary rights that could harm our business. The validity, enforceability and scope of protection of our intellectual property can be tested and in some areas is still evolving.

AIMMS currently has the following patent rights, utility models, and patent applications:

Type	Title	Registration No.	Date
Patent Application	CRM Database structuring by use of E-money service	10-2001-0055538	2001.09.10
Patent Rights	Lottery Issuance by use of Credit card reader and sales slip	Patent. 10-0386332	2003.05.21
Patent Application	Lottery number selector for credit card sales slip lottery event	10-2002-0007441	2002.02.08
Patent Rights	Compensation system for e-lottery among purchase qualifying specific conditions	Patent. 10-0447625	2004.08.30
Patent Application	Information transmission method/system through network	10-2002-0008386	2002.02.18
Patent Application	Providing gift certificate to purchaser of credit card transaction	10-2002-0013486	2002.03.13
PCT Application	Input device and revitalization of e-lottery based on credit card purchases	PCT/KR02/00722	2002.04.19
Utility Model	Hidden image window Card	20-0293412	2002.07.19
Utility Model	Envelop with decoder in transparent window	20-0299925	2002.10.16
Utility Model	Ad leaflet with multiple imbedded decoder	20-0372922	2003.11.11
Int'l Patent	System for lottery issuing on the sales slip through credit card terminal	10/500.547
Int'l Patent	System for lottery issuing on the sales slip through credit card terminal
Patent Application	CRM system/structuring through integrated membership	10-2007-70548	2007.07.13

Customers

AIMMS provides its services to the mobile phone networks, brand owners and end user consumers. The mobile phone networks make use of the AIMMS solutions to drive data usage and to enhance the overall service offering from the network to their end users. Part of the benefit to AIMMS from this relationship is the creation of consumer databases that AIMMS stores and manages. We believe that the endorsement of the mobile phone networks is a major competitive advantage for AIMMS. AIMMS currently has contracts with SK Telecom and KTF, the two largest mobile phone network operators in Korea.

Brand owners also make extensive use of AIMMS' products and services because of the integrated nature of the AIMMS offering. A brand owner can use AIMMS for an end to end solution in the mobile marketing space. AIMMS provides consulting services where a brand owner can develop a strategic framework and also owns and operates the platform on which the mobile marketing solutions are delivered. Typically a brand owner would approach AIMMS to conceptualize and execute a marketing campaign which would generate data which is then stored and managed by AIMMS. Our branded retail customers include Asian and multinational brands such as LGT, Citibank, HSBC Banking Group, AMEX, Shinhan Life, Kukmin Card, LG Card, Pizza Hut, 2ASP, Life Cord, HanilWorld and Hyundai Qsis.

Consumers make use of the AIMMS platform when they register in the U-Membership Program. U-Membership is a lifestyle oriented mobile phone social network where registered users can select on an opt-in basis which products and services they wish to subscribe for. The membership subscription allows AIMMS to market to that U-Member on an ongoing basis. Over time we intend to use the U-Membership Program to make targeted offers to U-Members of transaction based products and services developed by AIMMS.

Competition

The mobile marketing solutions industry is highly competitive and consists of both opportunities for growth as well as factors which are totally beyond the control of management such as the pace and effectiveness of developments in mobile phone technology. The competitive landscape is varied and is influenced by the activities and actions of third parties such as mobile phone network operators, handset manufacturers, media companies, advertising agencies and brand owners.

The markets in which we operate are considered and are characterized by rapid technological change and shifting customer requirements. Technological developments such as the need for increasing bandwidth on which mobile phone networks and media companies can offer their services will have an impact on our business. We do however believe that the markets in which we operate will continue to receive significant capital expenditure from the various industry influencers and role players and that we will be able to leverage our activities off their need for growth.

Our ability to compete successfully will depend on internal and external variables, both within and outside of our control. To compete effectively, AIMMS will continue to seek to develop alliances with telecom operators, franchise associations, CRM associations, and index service companies in order to expand its client base, obtain and maintain market share and establish coalitions to create value-added service to customers. We will also need to develop and launch new products in the timeframes within which the industry influencers adopt our products and services.

Currently, we do not believe that there is one single competitor in the Korean market that offers the same end-to-end solution as AIMMS provides. However, in certain market niches, there are competitors who are able to selectively offer products and services to the mobile phone networks and brand owners. We will continue to face significant competition in each of our market segments. We believe we compete on the basis of the integrated nature of the AIMMS product offering. We believe that AIMMS is well positioned in that it offers an end-to-end solution to our customers who are able to obtain a total mobile marketing solution under one roof. We believe that this is a competitive advantage in that brand owners do not want to risk their mission critical marketing activities with a myriad of suppliers.

Research and Development

AIMMS purchased computer equipment from a related party, and AIMMS’ major shareholder during September, 2007. The purchase price of $799,340 was based on a third-party valuation obtained by AIMMS. AIMMS issued 1,462,000 shares of its common stock (78.5% of total issued and outstanding stock) as payment for the computer equipment.

AIMMS purchased software from a related party, and AIMMS’ major shareholder during March, 2007. The software is proprietary and is used in the mobile membership marketing services, customized data base services, data indexed services and online marketing and promotional services to its customers. The purchase price of $1,253,140 was based on a third-party valuation obtained by AIMMS. AIMMS issued a note payable in the amount of $1,253,140 payable in five equal annual installments beginning in December, 2008. The note bears interest at the rate of 5%.

AIMMS incurred research and development costs of $5,389 for the period from February 17, 2007 through September 30, 2007.

Employees

As of January 1, 2008, Satellite had no employees other than its chief executive officer. As of January 1, 2008, AIMMS had 30 full time employees and no part-time employees. We consider our employee relationships and those of AIMMS to be satisfactory.

Description of Property

AIMMS currently leases space for its headquarters, a marketing center and an internet data center. The headquarters is located at 5th Fl., Hanshin IT Tower, 235, Kuro 3 Dong, Kurogu, Seoul, Korea. The marketing center is located at 4th Fl., Kumkang Bldg., 681, Yeoksam Dong, Kangnamgu, Seoul, Korea, and the internet data center is located at 4th Fl., IDC Bldg., 58-5, Euljiro 6Ka, Choongku, Seoul, Korea.

Each of our facilities is covered by insurance and we believe them to be suitable for their respective uses and adequate for our present needs. We believe that suitable additional or substitute space will be available to accommodate the foreseeable expansion of our operations.

Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information contained in this report before deciding to invest in our common stock.

Business Related Risks

Our limited operating history may not serve as an adequate basis to judge future prospects and results of operations.

AIMMS began its operations in the mobile marketing solutions industry in February 2007. Its limited operating history in this industry may not provide a meaningful basis on which to evaluate its business. Although AIMMS' revenues have grown rapidly since its inception, we cannot assure you that AIMMS will maintain such growth or that it will not incur net losses in the future. We expect that operating expenses will increase as AIMMS expands. Any significant failure to realize anticipated revenue growth could result in significant operating losses. We will continue to encounter risks and difficulties frequently experienced by companies at a similar stage of development, including our potential failure to:

maintain cutting edge proprietary technology;

expand product offerings and maintain the quality of products;

manage expanding operations;

obtain sufficient working capital to support expansion;

maintain adequate control of expenses;

implement product development, marketing, sales, and acquisition strategies and adapt and modify them as needed;

anticipate and adapt to changing conditions in the industry in which we operate as well as the impact of any changes in government regulation, technological developments and other significant competitive and market dynamics.

If we are not successful in addressing any or all of these risks, our business may be materially and adversely affected.

We may require additional capital in order to execute our business plan, and we have no current arrangements in place for any such financing.

If we are not successful in generating sufficient cash flow from operations to fund our operating expenses, we contemplate that we will secure capital from outside sources. However, we have no arrangements for additional capital in place at this time, and there can be no assurances regarding our ability to secure capital or the terms upon which any capital may be offered to us. Our ability to obtain financing will depend upon a number of factors, including our financial condition and results of operations, the condition of the economy, and conditions in relevant financial markets. If we are unable to obtain financing, as needed, on a timely basis and on acceptable terms, our financial position, competitive position, growth and profitability may be adversely affected.

We face labor, political and currency risks because AIMMS operates in Korea, and we may face other risks if we continue to expand our business internationally.

AIMMS operates in Korea, and as such, we face risks that U.S. companies may not face, including those arising from the current political tension between North and South Korea. While we have not faced any problems to date, in the future, as we continue to expand our business internationally, we may face:

regulatory limitations imposed by foreign governments,

price increases due to fluctuations in currency exchange rates,

political, military and terrorist risks,

disruptions caused by government agencies,

unexpected changes in regulatory requirements, tariffs, customs, duties and other trade barriers, and

potentially adverse tax consequences resulting from changes in tax laws.

We cannot assure you that one or more of the factors described above will not have a material adverse effect on our business, financial condition and results of operation.

If we are unable to successfully compete in our core market, our ability to retain our customers and attract new customers could decline as would our revenues.

Competition for the products AIMMS provides and services AIMMS offers is intense. Although we are not aware of any one company that directly competes with every one of the products and services that AIMMS offers, there are competitors for each of the products in various niches. AIMMS is also competing in an emerging market and faces new competitors as the market develops. If existing customers and other consumers prefer the products and services offered by competitors over those offered by AIMMS we will not be able to generate or sustain sufficient revenues to develop our business.

We believe competition will increase as current competitors increase the sophistication of their offerings, as new participants enter the market and as the market continues to grow, becoming increasingly attractive. Many current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we do and may enter into strategic or commercial relationships with larger, more established and better-financed companies. Any delay in the development or introduction of products or services or updates, would also allow additional time for our competitors to improve their service or product offerings, and for new competitors to develop messaging products and services for our target markets. Increased competition could result in pricing pressures, reduced operating margins and loss of market share, any of which could cause our business to suffer.

We may not be able to respond to the rapid technological change of the industry.

The mobile marketing solutions industry is characterized by rapid technological change, changes in user and customer requirements and preferences, and the emergence of new industry standards and practices that could render AIMMS' existing services, proprietary technology and systems obsolete. We must continually develop or introduce and improve the performance, features and reliability of AIMMS' services, particularly in response to competitive offerings. Our success depends, in part, on AIMMS' ability to develop new functionality, technology and services that address the increasingly sophisticated and varied needs of prospective customers. If AIMMS does not properly identify the feature preferences of prospective customers, or if it fails to deliver marketing solutions features that meet the standards of these customers, its ability to market its service successfully and to increase revenues could be impaired. The development of proprietary technology and necessary service enhancements entails significant technical and business risks and requires substantial expenditures and lead-time. AIMMS may not be able to keep pace with the latest technological developments. AIMMS may also be unable to use new technologies effectively or adapt services to customer requirements or emerging industry standards.

We may experience difficulty in attracting and retaining key personnel, which may negatively affect our ability to develop new products or services or retain and attract customers.

The loss of the services of key personnel may create a negative perception of our business and adversely affect our ability to achieve our business goals. Our success also depends on our ability to recruit, retain and motivate highly skilled sales and marketing, operational, technical and managerial personnel. Competition for these people is intense and we may not be able to successfully recruit, train or retain qualified personnel. If we fail to do so, we may be unable to develop new products or services or continue to provide a high level of customer service, which could result in the loss of customers and revenues. We do not have long-term employment agreements with any of our key personnel. In addition, we do not maintain key person life insurance on our employees and have no plans to do so. The loss of the services of one or more of our current key personnel could make it difficult to successfully implement our business objectives.

We rely on patents to protect our proprietary rights, and if these rights are not sufficiently protected, our ability to compete and generate revenue could be harmed.

We rely on patents to establish and protect our proprietary rights, which we view as critical to our success. The process of seeking patent protection can be lengthy and expensive and we cannot assure you that our patent applications will result in patents being issued, or that our existing or future issued patents will be sufficient to provide us with meaningful protection or commercial advantages. While we have secured some patents, we cannot assure you that those patents or any additional patents that we procure will be sufficient to provide meaningful protection from competition.

Despite the precautionary measures we take, unauthorized third parties may infringe or copy portions of our services or reverse engineer or obtain and use information that we regard as proprietary, which could harm our competitive position and market share. We also cannot assure you that our current or potential competitors do not have, and will not obtain, patents that will prevent, limit or interfere with our ability to make, use or sell our products.

Further, our proprietary rights may not be adequately protected because:

laws and contractual restrictions may not prevent misappropriation of our technologies or deter others from developing similar technologies; and

policing unauthorized use of our products and trademarks is difficult, expensive and time-consuming, and we may be unable to determine the extent of this unauthorized use.

In addition, the laws of some foreign countries may not protect proprietary rights to the same extent as do the laws of the United States. Our means of protecting proprietary rights in the United States or abroad may not be adequate and competitors may independently develop similar technology. Additionally, we cannot be certain that our products do not infringe issued patents that may relate to our products. In addition, because patent applications in the United States are not publicly disclosed at filing and in some cases until the patent is issued, applications may have been filed which relate to our products.

Because our principal assets are located outside of the United States and, except for Zirk Engelbrecht (who is a resident of the United States), all of our directors and all our officers reside outside of the United States, it may be difficult for you to use the United States Federal securities laws to enforce your rights against us and our officers and some directors in the United States or to enforce judgments of United States courts against us or them in the Korea.

All of our present officers and directors (other than Zirk Engelbrecht, who is a resident of the United States) reside outside of the United States. In addition, our operating subsidiary, AIMMS, is located in Korea and substantially all of its assets are located outside of the United States. It may therefore be difficult for investors in the United States to enforce their legal rights based on the civil liability provisions of the United States Federal securities laws against us in the courts of either the United States or Korea and, even if civil judgments are obtained in courts of the United States, to enforce such judgments in Korean courts. Further, it is unclear if extradition treaties now in effect between the United States and Korea would permit effective enforcement against us or our officers and directors of criminal penalties, under the United States Federal securities laws or otherwise.

Risks Related to an Investment in our Common Stock.

Our officers, directors and affiliates control us through their positions and stock ownership and their interests may differ from other stockholders.

Our officers, directors and affiliates (which for this purpose are defined as beneficial holders of more than 10% of our outstanding common stock) beneficially own approximately 34.7% of our common stock. As a result, they are able to influence the outcome of stockholder votes on various matters, including the election of directors and extraordinary corporate transactions, including business combinations. The interests of our directors, officers and affiliates may differ from other stockholders. Furthermore, the current ratios of ownership of our common stock reduce the public float and liquidity of our common stock which can in turn affect the market price of our common stock.

Our common stock is illiquid and subject to price volatility unrelated to our operations.

The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of other companies in the same industry, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

The sale of the shares of our common stock acquired in private placements could cause the price of our common stock to decline.

Under the terms of the Noteholders Agreement, the Notes converted into 2,000,000 shares of our common stock. The holders of those shares may rely on the provisions of Rule 144 to effect sales and may resell the shares of our common stock acquired upon the conversion of the Notes. Generally, we will not have any way of knowing whether or when such shares may be sold. Depending upon market liquidity at the time, a sale of shares at any given time could cause the trading price of our common stock to decline. The sale of a substantial number of shares of our common stock, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

We may issue additional shares of our capital stock, including through convertible debt securities, to finance future operations or complete a business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership.

Although we have no commitments as of the date of this report to issue any additional securities, we may issue a substantial number of additional shares of our common stock or preferred stock, or a combination of both, including through convertible debt securities, to finance future operations or complete a business combination. The issuance of additional shares of our common stock or any number of shares of preferred stock, including upon conversion of any debt securities:

may significantly reduce the equity interest of our current stockholders;

will likely cause a change in control if a substantial number of our shares of common stock or voting preferred stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could also result in a change in management; and

may adversely affect prevailing market prices for our common stock.

We are unlikely to pay cash dividends in the foreseeable future.

We currently intend to retain any future earnings for use in the operation and expansion of our business. We do not expect to pay any cash dividends in the foreseeable future but will review this policy as circumstances dictate. Should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary. In addition, our operating subsidiary, from time to time, may be subject to restrictions on its ability to make distributions to us, including as a result of restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions.

Our common stock is traded on the OTCBB, which may be detrimental to investors.

Our shares of common stock are currently traded on the OTCBB. Stocks traded on the OTCBB generally have limited trading volume and exhibit a wide spread between the bid/ask quotation.

Our common stock is subject to penny stock rules.

Our common stock is subject to Rule 15g-1 through 15g-9 under the Exchange Act, which imposes certain sales practice requirements on broker-dealers which sell our common stock to persons other than established customers and "accredited investors" (generally, individuals with net worth's in excess of $1,000,000 or annual incomes exceeding $200,000 (or $300,000 together with their spouses)). For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to the sale. This rule adversely affects the ability of broker-dealers to sell our common stock and purchasers of our common stock to sell their shares of such common stock. Additionally, our common stock is subject to the SEC regulations for "penny stock." Penny stock includes any equity security that is not listed on a national exchange and has a market price of less than $5.00 per share, subject to certain exceptions. The regulations require that prior to any non-exempt buy/sell transaction in a penny stock, a disclosure schedule set forth by the SEC relating to the penny stock market must be delivered to the purchaser of such penny stock. This disclosure must include the amount of commissions payable to both the broker-dealer and the registered representative and current price quotations for the common stock. The regulations also require that monthly statements be sent to holders of penny stock which disclose recent price information for the penny stock and information of the limited market for penny stocks. These requirements adversely affect the market liquidity of our common stock.

Management's Discussion and Analysis or Plan of Operations

The following discussion and analysis of the consolidated financial condition and results of operations should be read with our consolidated financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under "Risk Factors" and elsewhere in this report.