As filed with the Securities and Exchange Commission on February 27, 2006
Registration No. 333-

------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
LocatePLUS Holdings Corporation
(Exact Name of Registrant as Specified in Its Charter)

Delaware 7379 04-3332304
(State or Other Jurisdiction of (Primary Standard (I.R.S. Employer
Incorporation or Organization) Industrial Identification
Classification Number)
Code Number)

100 Cummings Center
Suite 235M
Beverly, Massachusetts 01915
(978) 921-2727
(Address and telephone number of principal executive offices and principal
place of business)
------------------
Jon R. Latorella
President and Chief Executive Officer
LocatePLUS Holdings Corporation
100 Cummings Center
Suite 235M
Beverly, Massachusetts 01915
(978) 921-2727
(Name, Address, and Telephone Number of Agent for Service)
------------------

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------------------------------
CALCULATION OF REGISTRATION FEE

TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED (1) SHARE (2) PRICE (2) REGISTRATION FEE (2)

Common Stock, $.01
par value per share 2,634,708 $ 2.85 $ 7,508,918 $ 803.45

(1) Pursuant to a private placement that concluded on August 15, 2005, the
Registrant issued a series of promissory notes convertible into up to 1,810,928
shares of the Registrant's capital stock and common stock purchase warrants
exercisable for up to 823,780 shares of the Registrant's capital stock. All of
the notes converted.
(2) The offering price is estimated solely for the purpose of calculating
the registration fee in accordance with Rule 457(c), using the closing price of
the Registrant's Common stock as reported on the OTCBB on February 24, 2006,
which was $2.85 per share.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

DATED FEBRUARY 27, 2006

[GRAPHIC OMITED]

LOCATEPLUS HOLDINGS CORPORATION

PROSPECTUS

The information contained in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement containing
this prospectus, which was filed with the Securities and Exchange Commission, is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.

SUBJECT TO COMPLETION, DATED FEBRUARY 27, 2006

LOCATEPLUS HOLDINGS CORPORATION

2,634,708 Shares of Common Stock $.01 par value

This prospectus relates to the offer and sale from time to time of up to
1,810,928 shares of our Common Stock, and up to 823,780 shares of our Common
Stock issuable upon the exercise of currently exercisable common stock purchase
warrants held by certain selling stockholders named in this prospectus.

The prices at which these stockholders may sell the shares in this offering will
be determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares.

Our Common Stock is listed on the Over the Counter Bulletin Board under the
symbol "LPHC." On February 24, 2006, the last reported sale price of our common
stock was $2.85 per share.

INVESTING IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS. YOU SHOULD
CAREFULLY REVIEW THE SECTION OF THIS PROSPECTUS TITLED "RISK FACTORS", WHICH
BEGINS ON PAGE 5, BEFORE YOU MAKE AN INVESTMENT DECISION.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
AUTHORITY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR THEIR OFFER OR
SALE, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This prospectus is dated February 27 2006.

TABLE OF CONTENTS
-----------------
PAGE
----
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . 9
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Selling Security Holders. . . . . . . . . . . . . . . . . . . . . . . . . 9
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . 15
Management's Discussion and Analysis of Financial Condition and Results of
Condition and Results of Operations. . . . . . . . . . . . . . . . . . . 16
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Executive Officers and Directors . . . . . . . . . . . . . . . . . . . . 31
Organization Within the Past Five Years. . . . . . . . . . . . . . . . 37
Certain Relationships and Related Transactions. . . . . . . . . . . . . 38
Market for Common Equity . . . . . . . . . . . . . . . . . . . . . . . . 39
Principal Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . 42
Shares Eligible for Future Sale . . . . . . . . . . . . . . . . . . . . 45
Transfer Agent and Registrar . . . . . . . . . . . . . . . . . . . . . . 45
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Index to Financial Statements F-1

* * *

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information in this prospectus regarding us and the risks associated with
purchasing our securities.

OUR COMPANY
-----------

We are a provider of public information via our proprietary data
integration solutions through our wholly-owned subsidiaries, LocatePLUS
Corporation, Worldwide Information, Inc., Certifion Corporation (d/b/a
Entersect), Dataphant, Inc., and Metrigenics, Inc. (together with LocatePLUS
Holdings Corporation, we refer to these companies collectively as the
"LocatePLUS Group").

Since 1996, we have sold a CD-ROM-based product, which we refer to as
Worldwide Information , that enables users to search certain motor vehicle
records and drivers' license information in multiple states through a dynamic
search engine, using complete or partial information.

Since March 1, 2000, we have maintained a database that is accessible
through the Internet known as LocatePLUS. Our LocatePLUS database contains
searchable and cross-referenced public information about individuals throughout
the United States, including individuals' names, addresses, dates of birth,
bankruptcies, social security numbers, prior residences and probable
acquaintances (such as neighbors and other individuals sharing a residence) and,
in certain circumstances, real estate holdings, liens, judgments, drivers'
license information and motor vehicle records. Information in our LocatePLUS
database is integrated in a manner that allows users to access it rapidly and
efficiently. During December 2002, we launched another version of our
LocatePLUS database that is accessible using certain wireless devices
manufactured by third parties, such as personal digital assistants and e-mail
capable pagers. We refer to that product as LocatePLUS AnyWhere .

Our wholly-owned subsidiary, Certifion Corporation (d/b/a Entersect), has
offered on-line self-certification products since September 2003. Metrigenics,
Inc., another wholly-owned subsidiary, was formed in January 2004 to develop
methods for using DNA to determine biometrics, such as height, body-type, foot
and hand size, head shape, facial features, and ethnic origin.

SUMMARY OF THE OFFERING
-----------------------

This offering relates to the offer and sale of up to 1,810,928 shares of
our Common Stock, and up to 823,780 shares of our Common Stock issuable upon the
exercise of currently exercisable common stock purchase warrants held by certain
selling stockholders named in this prospectus. Although we have agreed to pay
the expenses related to the registration of the shares being offered, we will
not receive any of the proceeds from the sale of the shares. We estimate our
total registration costs to be $27,000.

The selling stockholders may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares or interests in shares on any
stock exchange, market or trading facility on which the shares are traded or in
private transactions. These dispositions may be at fixed prices, at prevailing
market prices at the time of sale, at prices related to the prevailing market
price, at varying prices determined at the time of sale, or at negotiated
prices. The selling stockholders may use any one or more of the methods
described in this prospectus when disposing of shares or interests therein.

We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus (as it may be supplemented
or amended from time to time) available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act
of 1933. We have agreed to indemnify the selling stockholders against
liabilities, including liabilities under the Securities Act of 1933 and state
securities laws, relating to the registration of the shares offered by this
prospectus.

We have agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective until the
earlier of (1) such time as all of the shares covered by this prospectus have
been disposed of pursuant to and in accordance with the registration statement
or (2) the date on which the shares may be sold pursuant to Rule 144(k) of the
Securities Act of 1933.

IMPORTANT NOTE CONCERNING OUR FINANCIAL CONDITION
-------------------------------------------------

Our financial statements were prepared on the assumption that we will
continue as a going concern, and our independent accountants have expressed
doubt as to that assumption. Our management estimates that our projected cash
flow from operations, plus our cash reserves, will be sufficient to permit us to
continue our current level of operations for at least twelve months from the
date of this prospectus. However, we plan to increase our sales and marketing,
product development, and administrative expenses. We will not receive any of
the proceeds from the sale of the shares covered by this prospectus. For more
information on this matter, you should review our financial statements, which
begin on page F-1 of this prospectus, as well as the section of this prospectus
titled "Management's Discussion and Analysis of Financial Condition and Results
of Operations".

OUR CAPITAL STRUCTURE AND SHARES ELIGIBLE FOR FUTURE SALE
---------------------------------------------------------

The following table outlines our capital stock as of February 24, 2006:

Shares of Class A Voting Common Stock outstanding 6,214,738(1)

(1) Assuming no exercise or conversion of warrants and options to purchase
2,353,203 shares of Common Stock outstanding as of February 24, 2006.

HOW TO CONTACT US
-----------------

Our executive offices are located at 100 Cummings Center, Suite 235M,
Beverly, Massachusetts 01915. Our phone number is (978) 921-2727. Our website
is http://www.locateplus.com. Information on our website is not intended to be
incorporated into this prospectus.

* * *

RISK FACTORS

Any investment in our securities involves a high degree of risk. You
should carefully consider the risks described below and all of the information
contained in this prospectus before deciding whether to purchase any of our
securities. We have not attempted to rank the following risks in order of their
likelihood.

RISKS RELATED TO OUR BUSINESS
-----------------------------

OUR FINANCIAL STATEMENTS WERE PREPARED ON THE ASSUMPTION THAT WE WILL CONTINUE
AS A GOING CONCERN, AND OUR INDEPENDENT ACCOUNTANTS HAVE EXPRESSED DOUBT AS TO
THAT ASSUMPTION.

Our financial statements were prepared on the assumption that we will
continue as a going concern, and our independent accountants have expressed
doubt as to that assumption. If sufficient capital is not available, we would
likely be required to reduce or discontinue our operations. We plan to increase
our sales and marketing, product development, and administrative expenses. We
will not receive any of the proceeds from the sale of the shares covered by this
prospectus. As a result, we may be required to raise additional capital, which
may not be available to us on favorable terms, if at all. If we are unable to
generate sufficient cash from operations and we are unable to raise additional
capital, we will be forced to discontinue some or all of our operations, reduce
the development of some or all of our products, or reduce our workforce, all of
which would materially adversely affect our business.

WE HAVE A HISTORY OF LOSSES, EXPECT FUTURE LOSSES AND CANNOT ASSURE YOU THAT WE
WILL ACHIEVE PROFITABILITY.

We have incurred significant net losses since our inception. We incurred
net losses of approximately $4.4 million in 2003, $7.5 million in 2004 and $4.2
million for the nine months ended September 30, 2005. Our accumulated deficit
as of September 30, 2005 was approximately $34 million. We anticipate that our
expenses relating to our sales and marketing and product development, as well as
our general and administrative expenses, to stabilize in the foreseeable future.
To achieve profitability, we must generate more revenue than we have in prior
years. Even if we ultimately achieve profitability, we may not be able to
sustain or increase our profitability. If our revenue grows more slowly than we
anticipate, or if our operating expenses exceed our expectations, our operating
results and financial condition will be adversely affected. For more
information on our history of losses, you should review our financial
statements, which are included in this prospectus beginning on page F-1.

OUR RIGHT TO USE CERTAIN THIRD PARTY DATA IS SUBJECT TO TERMINATION BY OUR
CURRENT DATA PROVIDERS. ANY SUCH TERMINATION COULD DISRUPT OUR BUSINESS.

We obtain our data from a variety of sources. Some of our data providers
may terminate our right to use their data in their sole discretion and without
any recourse to us. If our access to certain data sources is restricted, there
can be no assurance that we would be able to obtain and integrate replacement
data on a timely basis. In such an event, our products would likely be less
attractive to current and potential customers and our revenue would likely
decrease, which could materially adversely affect our business.

OUR FUTURE QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY, WHICH COULD
ADVERSELY AFFECT THE PRICE OF OUR SECURITIES.

You should not rely on quarter-to-quarter comparisons of our historical
results as an indication of our future performance. If our quarterly operating
results do not meet the expectations of our investors, the market price of our
securities will likely decline. Our future quarterly results may fluctuate as a
result of many factors, some of which are outside our control, including:

- - legal and regulatory developments that may adversely affect our ability to
collect or disseminate data;
- - the timing, introduction and commercialization of our new products and
services (including the integration of additional datasets into our databases);
- - increased unemployment in the United States, which may result in reduced
use of our products by human resources personnel;
- - the potential costs of protecting our intellectual property rights;
- - the operating costs and capital expenditures related to the expansion of
our business operations and infrastructure, including the retention of key
personnel, the addition of new employees and the acquisition and integration of
new datasets;

- - the introduction of similar or substitute databases by our competitors; and
- - the timing and establishment of our marketing and channel partnership
arrangements.

WE HAVE LIMITED PRODUCT OFFERINGS, AND IF DEMAND FOR THESE PRODUCTS DECLINES OR
FAILS TO DEVELOP AS WE EXPECT, OUR REVENUE WILL DECLINE.

We derive the majority of our current consolidated net revenue from two
products. Specifically, in the year ended December 31, 2004, and in the nine
months ended September 30, 2005, we derived substantially all of our recurring
consolidated revenue from our CD-ROM-based Worldwide Information and
Internet-based LocatePLUS products. We expect that revenue from our
Internet-based and CD-ROM-based products will continue to account for a
significant portion of our total revenue for the foreseeable future. As a
result, continued and widespread market acceptance of our existing products is
critical to our future success. We cannot assure you that our current products
will achieve market acceptance at the rates at which we expect, or that demand
for our products will continue to grow. If our products do not achieve
increasing market acceptance, our revenue would most likely decline and our
financial condition would be adversely affected.

WE OBTAIN DATA FROM A VARIETY OF SOURCES. IF WE ARE UNABLE TO OBTAIN NECESSARY
DATA, OUR PRODUCTS MAY NOT BE ATTRACTIVE TO OUR TARGET CUSTOMERS.

Sources of our data include both private and government data providers,
including federal, state and local government agencies. From time to time,
certain sources of publicly available data, such as state motor vehicle
registries, have refused to release data to us. As a result, we have, on
occasion, been forced to obtain such data through the exercise of our rights
under the Freedom of Information Act. Such efforts can be costly and time
consuming, and we cannot guarantee that we will be able to successfully acquire
such data on a consistent basis. From time to time, we may also be required to
license or purchase additional data to expand our product offerings or maintain
our databases. We cannot assure you that such third-party licenses will be
available to us on commercially reasonable terms, or at all. Our inability to
maintain or obtain any third-party license required to sell or develop our
products or product enhancements could require us to obtain substitute data,
which may be less current. In such an event, our products would likely be less
attractive to current and potential customers and our revenue would likely
decrease, which could materially adversely affect our business.

IF WE CANNOT INTEGRATE, UPDATE AND IMPROVE OUR PRODUCTS, OUR PRODUCTS MAY BE
LESS ATTRACTIVE TO OUR TARGET MARKET, WHICH WOULD ADVERSELY AFFECT OUR REVENUES
AND FINANCIAL CONDITION.

We must continuously update our databases so that we may provide datasets
to customers that are accurate and current. We must also integrate additional
datasets for our products to remain competitive. Updating our databases and
integrating additional datasets are time-consuming processes and often require
extensive resources, as we often obtain public documents in a form that is not
suitable for use in any of our products. For example, we often receive "raw
data" on electronic tape media from state motor vehicle licensing agencies that
must be modified so that it can be searched rapidly based upon partial
information. We can give no assurance that we will have adequate resources to
update our datasets or to integrate new datasets. If we are unable to update
our datasets or integrate new datasets, our products are likely to be less
desirable to our target market than those of our competitors, and our sales and
financial condition would be adversely affected.

THE MARKET FOR DATABASE PRODUCTS AND SERVICES IS HIGHLY COMPETITIVE, AND WE MAY
NOT BE ABLE TO EFFECTIVELY COMPETE IN THIS MARKET.

Our industry is intensely competitive and we expect competition to continue
to increase from both existing competitors and new market entrants. Many of the
companies that currently compete with us, as well as other companies with whom
we may compete in the future, are national or international in scope and have
greater resources than we do. Those resources could enable those companies to
initiate price cuts or take other measures in an effort to gain market share in
our target markets. We may have inadequate resources to compete against such
businesses.

For example, our LocatePLUS product competes with products offered by:
- - confi-chek.com;
- - FlatRateInfo;

- - Accurint;
- - ChoicePoint; and
- - Lexis-Nexis.

Our Worldwide Information product primarily competes with the registries
of motor vehicles of various states that sell their data to screened users.
These state agencies generally provide data in "raw form" without the search
capabilities that we provide in our Worldwide Information product.

We cannot assure you that we will be able to compete successfully against these
or other current and future participants in our markets or against alternative
technologies, nor can we assure you that the competitive pressures that we face
will not adversely affect our business.

WE FACE RISKS ASSOCIATED WITH OUR STRATEGIC ALLIANCES, WHICH COULD LIMIT OUR
ABILITY TO INCREASE OUR MARKET SHARE.

From time to time, we enter into "channel partner" arrangements and similar
strategic alliances, through which we license access to our databases to third
parties in exchange for royalties. We can give no assurance that we will be
able to identify and secure appropriate channel partners or that any channel
partner arrangements will be profitable. If we are unable to enter into
appropriate channel partner arrangements, use of our database may not grow
sufficiently to meet our business objectives. Disruptions in our relations with
our channel partners may adversely effect our financial condition and the
results of our operations.

TO INCREASE OUR REVENUE, WE MUST INCREASE OUR SALES FORCE AND EXPAND OUR
DISTRIBUTION CHANNELS. WE CANNOT ASSURE YOU THAT WE WILL BE SUCCESSFUL IN THESE
EFFORTS.

To date, we have sold our products primarily through our direct sales and
tele-sales force. Our future revenue growth will depend in large part on
recruiting and training additional direct sales and tele-sales personnel and
expanding our distribution channels. We may experience difficulty recruiting
qualified sales and support personnel and establishing third-party distribution
relationships, such as channel partner arrangements. We may not be able to
successfully expand our tele-sales force or other distribution channels, and any
such expansion, if achieved, may not result in increased revenue or profits.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, AND WE MAY
BE SUBJECT TO INFRINGEMENT CLAIMS THAT MAY ADVERSELY AFFECT OUR BUSINESS AND
FINANCIAL CONDITION.

Our products consist of publicly available, third-party data that we
organize to permit rapid and effective computerized searches. Because our
datasets consist of publicly available data, we cannot prevent competitors from
developing equivalent databases. We anticipate that our success will depend, in
part, on our proprietary data integration and linking methodologies. We have
not obtained, and do not anticipate that we will obtain, patent protection for
these methodologies. We rely on trade secret rights, confidentiality agreements
and procedures and licensing arrangements to establish and protect our
proprietary rights with respect to our data integration methodologies. Despite
our efforts, third parties could attempt to copy or otherwise obtain and make
unauthorized use of our products or independently develop similar products.

WE FACE SIGNIFICANT SECURITY RISKS RELATED TO OUR ELECTRONIC TRANSMISSION OF
CONFIDENTIAL INFORMATION. IF WE ARE UNABLE TO ADEQUATELY PROTECT CERTAIN
CONFIDENTIAL INFORMATION, OUR REPUTATION AND BUSINESS WOULD BE ADVERSELY
AFFECTED, AND WE COULD BE SUBJECT TO LIABILITY IN CERTAIN JURISDICTIONS.

We rely on commercially available encryption software and other
technologies to provide system security and to effect secure transmission of
confidential information, such as credit card numbers. Advances in computer
capabilities, new discoveries in the field of cryptography, or other events or
developments may result in a compromise or breach of the security measures used
by us to protect customer transaction data. If our security systems were to be
compromised, it could have a material adverse effect on our reputation and
business and, under the laws of certain jurisdictions, we may be subject to
significant liabilities and reporting obligations. A party who is able to
circumvent our security measures could misappropriate our information, cause
interruptions in our operations, damage our reputation and customers'
willingness to use our products and subject us to possible liability under
applicable states' privacy laws. We may be required to expend significant
capital and other resources to protect against these security breaches or to
alleviate problems caused by these breaches.

OUR PRODUCTS MAY HAVE UNKNOWN DEFECTS WHICH COULD HAVE ADVERSE EFFECTS ON OUR
CUSTOMER RELATIONS AND FINANCIAL RESULTS.

Datasets as complex as those that we develop may contain undetected defects
or errors. For example, our products may contain unknown defects due to errors
in the data that we purchase from our data providers. Despite testing, defects
or errors may occur in our existing or new products, which could make them less
attractive to our target markets. As a result, defects and errors in our
datasets could result in loss of revenue or market share, failure to achieve
market acceptance, diversion of development resources, injury to our reputation
and an adverse effect on our business, financial condition and results of
operation.

DEFECTS OR ERRORS COULD RESULT IN PRODUCT LIABILITY CLAIMS THAT MAY NOT BE
COVERED BY OUR INSURANCE.

Our datasets may contain errors, which may give rise to claims against us.
We generally disclaim all warranties on the data we include in our products.
However, our disclaimers may not be enforceable. In such an event, or if
liabilities arise that are not contractually limited, our business could be
adversely affected. We currently do not maintain professional liability
insurance, and our general liability insurance may not cover claims of this
nature.

WE MAY ENCOUNTER DIFFICULTIES MANAGING OUR PLANNED GROWTH.

We intend to expand our customer base and develop new products. To manage
our anticipated growth, we must continue to improve our operational and
financial systems and expand, train, retain and manage our employee base. Any
growth of our business may place a strain on our managerial and financial
resources.

IF WE ARE NOT ABLE TO HIRE, INTEGRATE OR RETAIN QUALIFIED PERSONNEL, WE MAY NOT
BE ABLE TO CONTINUE OUR BUSINESS AS PRESENTLY CONDUCTED.

The recent growth in our business has resulted in an increase in the
responsibilities of our personnel. Several of our personnel are presently
serving in more than one capacity. Competition for experienced and qualified
personnel in our industry is intense. We may not be able to retain our current
key employees, or attract, integrate or retain other qualified personnel in the
future. If we do not succeed in attracting new personnel or in integrating,
retaining and motivating our current personnel, our business could be harmed.

WE DEPEND ON OUR KEY EMPLOYEES FOR OUR FUTURE SUCCESS; THE LOSS OF ANY OF OUR
KEY EMPLOYEES COULD DELAY OUR PLANNED GROWTH AND LIMIT OUR ABILITY TO ACHIEVE
PROFITABILITY.

Our success depends to a significant extent on the performance and
continued service of our senior management and other key employees, and
particularly those of our President and Chief Executive Officer, Mr. Jon R.
Latorella. We have no employment agreements with any of our employees. The
loss of the services of any of our senior management or any of our other key
employees would disrupt our operations and would delay our planned growth while
we worked to replace those employees. We do not maintain "key man" life
insurance on any of our employees. As a result, if any of our key employees
were to die or become unable to provide services for us, our operations would be
disrupted and we would have no means of recovering any resulting losses.

WE DO NOT CURRENTLY PAY DIVIDENDS, NOR DO WE ANTICIPATE DOING SO IN THE
IMMEDIATE FUTURE. ACCORDINGLY, THERE IS NO ASSURANCE THAT WE WILL PAY DIVIDENDS
IN THE FUTURE.

We have never declared or paid a dividend. At this time, we do not
anticipate paying any dividends in the future. We are under no legal or
contractual obligation to declare or to pay dividends. The timing and amount of
any future dividends and distributions is at the discretion of our Board of
Directors and will depend, among other things, on our future after-tax earnings,
operations, capital requirements, borrowing capacity, financial condition and
general business conditions. We plan to retain any earnings for use in the
operation of our business. You should not purchase our securities on the
expectation of future dividends.

RISKS RELATED TO OUR INDUSTRY
-----------------------------

EXISTING GOVERNMENT REGULATIONS AND INDUSTRY STANDARDS MAY LIMIT OUR ABILITY TO
ACQUIRE OR DISSEMINATE DATA. IF OUR ABILITY TO ACQUIRE OR DISSEMINATE DATA IS
LIMITED, OUR REVENUES WILL DECREASE AND OUR FINANCIAL CONDITION WILL BE
ADVERSELY AFFECTED. WE MAY ALSO BE SUBJECT TO LIABILITY ARISING FROM SUCH
REGULATIONS.

Much of the data we provide is subject to regulation by the Federal Trade
Commission under the Federal Fair Credit Reporting Act and Title V of the
Financial Services Modernization Act (which is also referred to as the
"Gramm-Leach-Bliley Act"), and by various other federal, state and local
regulatory authorities pursuant to a variety of laws. These laws and
regulations are designed to protect individuals from the misuse of their
personal information.

We have not engaged counsel or any other third party to review our activity
in light of these laws and regulations, although we believe that our activities
do not violate any law specifically applicable to the dissemination of data
concerning individuals. However, our belief may be incorrect, and we may be in
violation of laws governing the dissemination of data. In such a case, we may
be subject to enforcement action by regulatory agencies and claims against us by
individuals (to the extent such laws permit private rights of action). Any such
claims could significantly disrupt our business and operations. We do not
currently maintain liability insurance to cover such claims.

FUTURE GOVERNMENT REGULATION MAY FURTHER LIMIT OUR ABILITY TO PROVIDE OUR
PRODUCTS TO CUSTOMERS AND CAUSE US TO LOSE REVENUE.

Future laws or regulations that further restrict the use of personal or
public record information could disrupt our business and could cause us to lose
revenue. For example, if laws were enacted that restricted our use of Social
Security numbers, our ability to provide meaningful data to our customers would
be adversely affected. If we are unable to respond to regulatory or industry
standards effectively, our business, financial condition and results of
operation would be adversely affected. Our future success will depend, in part,
on our ability to enhance and improve the responsiveness, functionality and
features of our products and services in accordance with newly-imposed
regulatory or industry standards, of which we can give no assurance.

WE COULD FACE LIABILITY BASED ON THE NATURE OF OUR SERVICES AND THE CONTENT OF
THE MATERIALS THAT WE PROVIDE.

We may face potential liability from individuals, government agencies or
businesses for defamation, invasion of privacy, negligence, copyright, patent or
trademark infringement and other claims based on the nature and content of the
data contained in our products. Although we carry a limited amount of general
liability insurance, our insurance may not cover claims of these types and may
not be adequate to indemnify us for liability that may be imposed. Any
imposition of liability, particularly liability that is not covered by insurance
or which is in excess of our insurance coverage, would negatively affect our
reputation, business, financial condition and results of operations.

RISKS ASSOCIATED WITH AN INVESTMENT IN OUR SECURITIES
-----------------------------------------------------

WE HAVE A LARGE NUMBER OF SECURITIES THAT ARE AVAILABLE FOR RESALE. SALES OF
THESE SECURITIES COULD CAUSE THE PRICE OF OUR SECURITIES TO DECLINE.

Sales of a large number of shares of our securities in the public markets,
or the potential for such sales, could decrease the trading price of our
securities and could impair our ability to raise capital through future sales of
our securities. As of February 24, 2006, we had 6,214,738 shares ofCommon Stock
issued and outstanding. If all of our options, put rights, warrants and
convertible securities issued as of December 20, 2005 were exercised as of that
date, we would have had 8,567,941 shares of Common Stock issued and outstanding.

WE HAVE ISSUED A SUBSTANTIAL NUMBER OF WARRANTS AND OTHER CONVERTIBLE
SECURITIES. OUR WARRANTS AND CONVERTIBLE SECURITIES MAY CAUSE THE TRADING PRICE
OF OUR SECURITIES TO DECLINE, AND MAY LIMIT OUR ABILITY TO RAISE CAPITAL FROM
OTHER SOURCES.

As of February 24, 2006, there were 2,353,203 shares of Common Stock
issuable upon the exercise of options and warrants

While these securities are outstanding, the holders will have the opportunity to
profit from a rise in the price of our securities with a resulting dilution
(upon exercise or conversion) in the value of the interests of our other
security holders. Our ability to obtain additional financing during the period
these convertible securities are outstanding may be adversely affected and their
existence may have a negative effect on the price of our securities. The
holders of these securities are likely to exercise them at a time when we would,
in all likelihood, be able to obtain any needed

capital by a new offering of securities on terms more favorable to us than those
of the outstanding warrants and convertible promissory notes.

OUR SECURITIES HAVE BEEN THINLY TRADED ON THE OVER-THE-COUNTER BULLETIN BOARD,
WHICH MAY NOT PROVIDE LIQUIDITY FOR OUR INVESTORS.

Our securities are quoted on the Over-the-Counter Bulletin Board. The
Over-the-Counter Bulletin Board is an inter-dealer, over-the-counter market that
provides significantly less liquidity than the NASDAQ Stock Market or national
or regional exchanges. Securities traded on the Over-the-Counter Bulletin Board
are usually thinly traded, highly volatile, have fewer market makers and are not
followed by analysts. The Securities and Exchange Commission's order handling
rules, which apply to NASDAQ-listed securities, do not apply to securities
quoted on the Over-the-Counter Bulletin Board. Quotes for stocks included on
the Over-the-Counter Bulletin Board are not listed in newspapers. Therefore,
prices for securities traded solely on the Over-the-Counter Bulletin Board may
be difficult to obtain and holders of our securities may be unable to resell
their securities at or near their original acquisition price or at any price.

"PENNY STOCK" RULES MAY MAKE BUYING OR SELLING OUR SECURITIES DIFFICULT.

Trading in our securities is subject to the Securities and Exchange
Commission's "penny stock" rules, and we anticipate that trading in our
securities will continue to be subject to the penny stock rules for the
foreseeable future. The Securities and Exchange Commission has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
These rules require that any broker-dealer who recommends our securities to
persons other than prior customers and accredited investors must, prior to the
sale, make a special written suitability determination for the purchaser and
receive the purchaser's written agreement to execute the transaction. Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated with trading in the penny stock
market. In addition, broker-dealers must disclose commissions payable to both
the broker-dealer and the registered representative and current quotations for
the securities they offer. The additional burdens imposed upon broker-dealers
by such requirements may discourage broker-dealers from recommending
transactions in our securities, which could severely limit the liquidity of our
securities and consequently adversely affect the market price for our
securities.

WE MAY SELL ADDITIONAL SHARES IN THE FUTURE, WHICH COULD CAUSE THE PRICE OF OUR
SECURITIES TO DECLINE.

We currently have 25,000,000 shares of Common Stock. As a result, we have
substantial amounts of authorized but unissued capital stock. Our Second
Amended and Restated Certificate of Incorporation and applicable provisions of
Delaware law provide that we may issue authorized capital stock at the approval
of our Board of Directors, and no stockholder vote or other form of stockholder
approval is required for us to issue such capital stock. Consequently, we could
issue shares of either class of our common stock in connection with future
financings or acquisitions or in conjunction with equity compensation
arrangements. The offering prices in connection with those future issuances
could be less than the current sales prices of our securities. Any future
issuances of any of our securities could cause the trading price of our
securities to decline.

INVESTORS MUST CONTACT A BROKER-DEALER TO TRADE OVER-THE-COUNTER BULLETIN BOARD
SECURITIES. AS A RESULT, YOU MAY NOT BE ABLE TO BUY OR SELL OUR SECURITIES AT
THE TIMES THAT YOU MAY WISH.

Even though our securities are quoted on the Over-the-Counter Bulletin
Board, the Over-the-Counter Bulletin Board may not permit our investors to sell
securities when and in the manner that they wish. Because there are no
automated systems for negotiating trades on the Over-the-Counter Bulletin Board,
they are conducted via telephone. In times of heavy market volume, the
limitations of this process may result in a significant increase in the time it
takes to execute investor orders. Therefore, when investors place market orders
- - an order to buy or sell a specific number of shares at the current market
price - it is possible for the price of a stock to go up or down significantly
during the lapse of time between placing a market order and its execution.

COMPLIANCE WITH THE RULES ESTABLISHED BY THE SEC PURSUANT TO SECTION 404 OF THE
SARBANES-OXLEY ACT OF 2002 WILL BE COMPLEX. FAILURE TO COMPLY IN A TIMELY
MANNER COULD ADVERSELY AFFECT INVESTOR CONFIDENCE AND OUR STOCK PRICE.

Rules adopted by the Securities and Exchange Commission pursuant to Section
404 of the Sarbanes-Oxley Act of 2002 require us to perform an annual assessment
of our internal controls over financial reporting, certify the

effectiveness of those controls and secure an attestation of our assessment by
our independent registered public accountants. Currently, this requirement will
first apply to us during the preparation and filing of our annual report for
fiscal year 2007. The standards that must be met for management to assess the
internal controls over financial reporting as now in effect are new and complex,
and require significant documentation, testing and possible remediation to meet
the detailed standards. We may encounter problems or delays in completing
activities necessary to make an assessment of our internal controls over
financial reporting. In addition, the attestation process by our independent
registered public accountants is new and we may encounter problems or delays in
completing the implementation of any requested improvements and receiving an
attestation of the assessment by our independent registered public accountants.
If we cannot perform the assessment or certify that our internal controls over
financial reporting are effective, or our independent registered public
accountants are unable to provide an unqualified attestation on such assessment,
investor confidence and share value may be negatively impacted.

IF WE FAIL TO MAINTAIN EFFECTIVE INTERNAL CONTROLS OVER FINANCIAL REPORTING, THE
PRICE OF OUR COMMON STOCK MAY BE ADVERSELY AFFECTED.

The assessment required pursuant to rules adopted by the SEC pursuant to
Section 404 of the Sarbanes-Oxley Act of 2002 may uncover weaknesses in our
internal controls over financial reporting and conditions that need to be
addressed, the disclosure of which may have an adverse impact on investor
confidence and the price of our common stock. Failure to establish and maintain
appropriate internal controls over financial reporting, or any failure of those
controls once established, could adversely impact our business, financial
condition or results of operations or raise concerns for investors. Any actual
or perceived weaknesses and conditions in our internal controls over financial
reporting that need to be addressed may have an adverse impact on the price of
our common stock.

FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and elsewhere in this prospectus constitute
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements involve known and unknown risks, uncertainties, and other factors
that may cause our or our industry's actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," "continue" or
the negative of these terms or other comparable terminology. Although we
believe that the assumptions underlying our forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements.

USE OF PROCEEDS

This prospectus relates to the resale of shares of our Common Stock which
will be owned by certain investors upon the exercise of common stock purchase
warrants or upon the conversion of convertible term notes. We will not receive
any of the proceeds from the resale of the shares of either class of common
stock owned by the selling security holders.

DIVIDEND POLICY

We have never declared or paid a cash dividend. At this time, we do not
anticipate paying dividends in the future. We are under no legal or contractual
obligation to declare or to pay dividends, and the timing and amount of any
future cash dividends or distributions is at the discretion of our Board of
Directors and will depend, among other things, on our future after-tax earnings,
operations, capital requirements, borrowing capacity, financial condition and
general business conditions. We plan to retain any earnings for use in the
operation of our business and to fund future growth. You should not purchase
any of our securities on the expectation of future dividends.

SELLING SECURITY HOLDERS

This prospectus relates to the resale from time to time of shares issued
upon conversion of a series of convertible term notes and warrants that we
issued in connection with a private offering completed on August 15, 2005. All
of the notes are converted, and the warrants are exercisable into Common Stock,
par value $0.01 per share.

BENEFICIAL
OWNERSHIP OF BENEFICIAL
SELLING SECURITY OWNERSHIP OF
HOLDER SHARES
PRIOR TO AFTER
------------------- -----------------
OFFERING OFFERING
NUMBER OF -
SECURITIES
OFFERED
NAME OF SELLING SECURITY HOLDER NUMBER HEREBY NUMBER PERCENT

Special Situations Fund III, L.P. . . . . . . . . . . . . . . . . . . . . . 705,000 705,000 - -
Special Situations Private Equity Fund, L.P.. . . . . . . . . . . . . . . . 705,000 705,000 - -
SRB Greenway Capital, (QP), L.P.. . . . . . . . . . . . . . . . . . . . . . 232,030 232,030 - -
infoUSA INC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,000 141,000 - -
Marcus, Fred. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,650 91,650 - -
First Mirage, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,300 42,300 - -
SRB Greenway Capital, L.P.. . . . . . . . . . . . . . . . . . . . . . . . . 30,512 30,512 - -
Hargreave Hale Nominees Ltd.. . . . . . . . . . . . . . . . . . . . . . . . 28,200 28,200 - -
Riven Co. Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,200 28,200 - -
Rubin, Alan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,200 28,200 - -
Cape May Investors, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . 28,200 28,200 - -
Cary Sucoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,390 21,390 - -
Harvey Kohn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,390 21,390 - -
Prajna Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,150 21,150 - -
SRB Greenway Offshore Operating Fund, L.P.. . . . . . . . . . . . . . . . . 19,458 19,458 - -
Kohn, Harvey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,920 16,920 - -
Molleur, Robert J. Molleur Ttee Robert J. Molleur Trust . . . . . . . . . . 15,510 15,510 - -
Scott Sucoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,973 14,973 - -
Lewis Mason . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,973 14,973 - -
Bell, Nelson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 14,100 - -
Ekman, Donald . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 14,100 - -
King, Terry F.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 14,100 - -
Napier, Dr. James . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 14,100 - -
Charles M. Seergy, Jr.. . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 14,100 - -
Gregg M. Greenberg. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 14,100 - -
Bonanza Trust Jeff Zaluda, Trustee. . . . . . . . . . . . . . . . . . . . . 12,834 12,834 - -
Dianthus LLC Jeff Zaluda, Trustee . . . . . . . . . . . . . . . . . . . . . 12,834 12,834 - -
Carcap Co. LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,152 10,152 - -
Erb, James A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,870 9,870 - -
Schoenfeld Con IRA, Joel M. . . . . . . . . . . . . . . . . . . . . . . . . 9,870 9,870 - -
LW Marjac LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,460 8,460 - -
Roush, David L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,460 8,460 - -
Swingle, John R.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,460 8,460 - -
Acree, Marion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Bernstein, Con. IRA, Hartley. . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Borne, Tim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Deck LLC, J.E.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Emig, Glenn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Gardyn JTWROS, Jorge & Catherine M. . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Gila Products LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Glassman, Jeffrey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Houge, Douglas & Alexis Ten. Com. . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Krinick, Ronald M.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Libs, David & Lori Libs ttees of Libs Chiropractic Def. PSP d 12/15/84. . . 7,050 7,050 - -
Marcucilli, JTWROS Judy & Ted . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Mason, Frayda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
O'Mahoney, John . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Pudvah, JTWROS, Dennis & Emma . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Rasmussen, Jorgen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Rizzolo, Franco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Shapiro, Alan & July ttees T/V/A Judy Shapiro u/a/d 5/15/01 . . . . . . . . 7,050 7,050 - -
Silverstein, Jerome . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Wolff, Alan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Wolff, Michael. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Bassin, Ira Gerald ttee FBO Ira Bassin Revocable Living Trust d 7/14/00 . . 7,050 7,050 - -
Elliot Brooks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Edward Gutman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Dale E. Para. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Alan R. Silberman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,050 7,050 - -
Cohen, Marc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,640 5,640 - -
Crowther, Scott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,640 5,640 - -
Kwiatek, Matthew. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,640 5,640 - -
McGuire, JTWROS, Robert & Nancy . . . . . . . . . . . . . . . . . . . . . . 5,640 5,640 - -
Mosenson, Gayle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,640 5,640 - -
Carr, James C.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,076 5,076 - -
Golish Productions, Richard L.. . . . . . . . . . . . . . . . . . . . . . . 4,794 4,794 - -
Gemelli, John . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,512 4,512 - -
Eastman Family Trust 12/4/91, Raymond V. Eastman & Barbara R. Eastman ttees 4,230 4,230 - -
Mason, Alan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,230 4,230 - -
Schoenauer, Thomas E. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,230 4,230 - -
Paul J. Kerz. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,230 4,230 - -
Greenwood Partners LP . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,906 3,906 - -
Harte, Mary Lynn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,666 3,666 - -
Golish SEP IRA Richard L. . . . . . . . . . . . . . . . . . . . . . . . . . 2,820 2,820 - -
Muffet, David . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,820 2,820 - -
Raben, Lila Leigh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,820 2,820 - -
Francis Anderson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,139 2,139 - -
Maryellen Spedale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,139 2,139 - -

_________________________
* Less than one percent of outstanding shares of class.

PLAN OF DISTRIBUTION

The selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

The selling stockholders may use any one or more of the following methods
when disposing of shares or interests therein:

- - ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

- - block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;

- - purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

- - an exchange distribution in accordance with the rules of the applicable
exchange;

- - privately negotiated transactions;

- - short sales effected after the date the registration statement of which
this Prospectus is a part is declared effective by the SEC;

- - through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;

- - broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share; and

- - a combination of any such methods of sale.

The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus. The selling
stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering.
Upon any exercise of the warrants by payment of cash, however, we will receive
the exercise price of the warrants.

The selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act of
1933, provided that they meet the criteria and conform to the requirements of
that rule.

The selling stockholders and any underwriters, broker-dealers or agents
that participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act of
1933. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the Securities
Act of 1933. Selling stockholders who are "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933 will be subject to the prospectus
delivery requirements of the Securities Act of 1933.

To the extent required, the shares of our common stock to be sold, the
names of the selling stockholders, the respective purchase prices and public
offering prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

In order to comply with the securities laws of some states, if applicable,
the common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.

We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus (as it may be supplemented
or amended from time to time) available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act
of 1933. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act of 1933.

We have agreed to indemnify the selling stockholders against liabilities,
including liabilities under the Securities Act of 1933 and state securities
laws, relating to the registration of the shares offered by this prospectus.

CAPITALIZATION

Prior to December 5, 2005, the Company had outstanding two classes of
stock, Class A Voting Common Stock of which there were 150,000,000 shares
authorized with 111,424,416 issued, and Class B Non-Voting Common Stock of which
there were 250,000,000 shares authorized with 74,505,730 issued. At the annual
meeting of the shareholders held on November 12, 2005, the shareholders approved
a plan of recapitalization whereby 1) each outstanding share of our Class A
Voting Common Stock and our Class B Non-Voting Common Stock combine into a
single class of voting Common Stock with 400,000,000 authorized and 185,930,146
issued, 2) effect a one-for-fifty reverse split of this new class of Common
Stock resulting in a 8,000,000 authorized and 3,718,603 issued, and 3) increase
the authorized from 8,000,000 to 25,000,000. The combination of the two classes
of stock was completed on December 5, 2005. The reverse split and change in
authorized shares was completed on December 12, 2005. In addition, the
completion of the recapitalization triggered the mandatory conversion of certain
notes payable in the amount of $8,965,000 into 1,793,000 shares of the new
Common Stock.

The table below sets forth our capitalization as of September 30, 2005, as well
as pro-forma based on the above recapitalization plan.

You should read this table in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and our consolidated
financial statements and the related notes beginning on page F-1 of this
prospectus.

SEPTEMBER 30, SEPTEMBER 30,
2005 2005
(in thousands) (in thousands)
Pro-Forma
DEBT:

Current portion of notes, convertible
debt and capital lease obligations. . . . $ 11,101 $ 2,136
Capital lease obligations and notes,
net of current portion. . . . . . . . . . 84 84
--------------- -----------
Total Debt. . . . . . . . . . . . . . . . 11,185 2,220
--------------- -----------
STOCKHOLDERS' EQUITY:
Common Stock, par value $0.01 per share:
Class A Voting Common Stock,
150,000,000 shares authorized;. . . . . . 1,114 -
111,424,416 shares issued and outstanding
Class B Non-Voting Common Stock,
250,000,000 shares authorized;
74,505,730 shares issued and outstanding. 745 -
Common Stock, par value $0.01 per share:. - 55
Additional paid-in capital. . . . . . . . 26,880 37,651
Warrants. . . . . . . . . . . . . . . . . 2,410 2,410
Common stock subscriptions receivable . . (200) (200)
Impaired value of securities. . . . . . . (808) (808)
--------------- -----------
Accumulated deficit . . . . . . . . . . . (34,474) (34,474)
--------------- -----------
TOTAL STOCKHOLDERS' EQUITY. . . . . . . . (4,331) 4,632
--------------- -----------
TOTAL CAPITALIZATION. . . . . . . . . . . $ 6,854 $ 6,854
=============== ===========

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the selected financial data set forth below in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and the related notes
included elsewhere in this prospectus. The statement of operations data set
forth on the following page for the years ended December 31, 2003 and 2004 and
the balance sheet data as of December 31, 2004 have been derived from our
audited consolidated financial statements included elsewhere in this prospectus.
The statement of operations data set forth on the following page for the nine
months ended September 30, 2004 and 2005 and the balance sheet data as of
September 30, 2005 have been derived from our un-audited consolidated financial
statements included elsewhere in this prospectus. These historical results are
not necessarily indicative of results to be expected for any future period.

STATEMENTS OF OPERATIONS DATA: NINE MONTHS ENDED SEPTEMBER 30 YEAR ENDED
(UN-AUDITED) DECEMBER 31,
2005 2004 2004 2003
------------- -------------- ------------- -------------

REVENUES:
Information Sales
- -CD-Rom . . . . . . . . . . . . . $ 369,996 $ 458,004 $ 550,923 $ 478,278
- -Online . . . . . . . . . . . . . 4,671,406 2,799,275 4,107,714 2,543,581
- -Channel Partner. . . . . . . . . 3,109,902 574,156 1,028,650 263,834
- -Wireless . . . . . . . . . . . . 9,435 4,625 13,095 7,417
Engineering services . . . . . 505,000 147,200 562,200 105,667
------------- -------------- ------------- -------------
Total revenues . . . . . . . . . 8,665,739 3,983,260 6,262,582 3,398,777
------------- -------------- ------------- -------------

COSTS AND EXPENSES:
Costs of revenues:
-CD-Rom . . . . . . . . . . . 106,582 67,996 96,683 91,775
-Online and Channel Partner . 2,998,852 2,875,798 3,652,714 2,606,875
-Engineering services . . . . 123,750 0 124,175 2,749
-Wireless . . . . . . . . . . 0 871 870 26,025
Selling and marketing. . . . . 1,892,015 1,039,767 1,900,984 1,049,381
General and administrative . . 5,240,852 5,046,712 6,467,306 3,804,200
Research & Development . . . . 163,655 239,076 316,941 0
------------- -------------- ------------- -------------
Total operating expenses . . . . 10,525,706 9,270,220 12,559,674 7,581,005
------------- -------------- ------------- -------------
OPERATING LOSS. . . . . . . . . . (1,859,967) (5,286,960) (6,297,091) (4,182,228)
------------- -------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest income. . . . . . . . 16,282 68,239 159,461 137,253
Interest expense . . . . . . . (2,244,075) (494,887) (747,279) (686,315)
Interest expense - amort.
of discounts . . . . . . . . . (149,765) (199,369) (193,131) 0
Other income . . . . . . . . . 1,649 25,844 30,280 40,605
Write-off accrued license fees 0 0 0 283,500
Impairment of Note Receivable 0 0 (500,000) 0
------------- -------------- ------------- -------------
Net loss . . . . . . . . . . . . $ (4,235,876) $ (5,887,133) $ (7,547,760) $ (4,407,185)
============= ============== ============= =============
BASIC AND DILUTED
NET LOSS PER SHARE. . . . . . . . $ (0.02) $ (0.04) $ (0.04) $ (0.03)
------------- -------------- ------------- -------------
SHARES USED IN
COMPUTING BASIC AND
DILUTED NET LOSS
PER SHARE . . . . . . . . . . . . 176,285,908 159,413,850 161,506,032 130,299,353
------------- -------------- ------------- -------------

AS OF AS OF
SEPTEMBER 30, 2005 DECEMBER 31, 2004
-------------------- -------------------
BALANCE SHEET DATA: (UNAUDITED)

Cash and cash equivalents. $ 240,571 $ 1,186,939
Total current assets . . . 5,078,665 2,907,173
Total assets . . . . . . . 8,066,434 7,203,201
Total current liabilities. 12,312,828 5,823,082
Total stockholders' equity (4,330,872) (1,223,608)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our consolidated
financial condition and results of operations together with our unaudited
consolidated financial statements and related notes included elsewhere in this
report. This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21 E of the Securities
Exchange Act of 1934, each as amended. Such forward-looking statements are
based on current information and expectations and are subject to certain risks
and uncertainties that may cause actual results to differ materially from those
described. Factors that may cause such differences include but are not limited
to, uncertainties relating to our ability to successfully compete in our
industry, uncertainties regarding our ability to obtain financial and other
resources for our product development and commercial activities, and
uncertainties relating to privacy regulations. These factors, and others, are
discussed from time to time in the Company's filings with the Securities and
Exchange Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date they are made. We
undertake no obligation to publicly update or revise these forward-looking
statements to reflect events or circumstances after the date they are made.
Further discussion of risk factors is also available in our registration
statements filed with the Securities and Exchange Commission.

OVERVIEW

The LocatePLUS Group is a business-to-business and business-to-government
provider of public information via our proprietary data integration solutions.
Since 1996, we have sold a CD-ROM-based product, which we refer to as Worldwide
Information , that enables users to search certain motor vehicle records and
driver's license information in multiple states through a dynamic search engine,
using complete or partial information. Since March 1, 2000, we have maintained
a database that is accessible through the Internet, known as LocatePLUS. Our
LocatePLUS product contains searchable and cross-referenced public information
on individuals throughout the United States, including individuals' names,
addresses, dates of birth, Social Security numbers, prior residences, and, in
certain circumstances, real estate holdings, recorded bankruptcies, liens,
judgments, drivers' license information and motor vehicle records. Since
September 2003, our wholly-owned subsidiary, Certifion, has offered personal
information for self-certification purposes through its Entersect product.

We distribute our content both directly (through the Internet in the case
of our LocatePLUS product and through the mail in the case of our Worldwide
Information CD-ROM) and through "channel partner" arrangements, by which
third-party database providers provide access to our databases in consideration
for a royalty (such as job search and on-line dating sites, in the case of our
Entersect product).

On September 1, 2003, through our newly formed, wholly owned subsidiary
Certifion Corporation, we acquired all the assets of Project Entersect
Corporation in consideration for $62,662. The acquisition was accounted for as
a purchase and is recorded and reflected with our operations from the time of
purchase. The subsidiary operates under the trade name Entersect. Entersect
provides a self-identification and validation service for online job posting and
dating sites.

On October 17, 2003, through our newly formed, wholly owned subsidiary
Dataphant, Inc., we acquired Voice Power Technologies, Inc., a Texas-based
provider of data technology. In connection with this acquisition, Voice Power
Technologies, Inc. merged with and into Dataphant, Inc. As consideration for
the merger, shareholders of Voice Power Technologies, Inc. received an aggregate
of 2,500,000 shares of LocatePLUS Class B Non-Voting Common Stock. Through this
acquisition we now have information concerning virtually all landline phone
numbers in the United States and approximately 25% of United States cell phone
numbers. This data has been integrated into our current product lines.

On January 6, 2004, we formed Metrigenics, Inc, a wholly-owned subsidiary to
develop methods for using DNA to determine biometrics, such as height,
body-type, foot and hand size, head shape, facial features, and ethnic origin.
Metrigenics is developing products capable of matching DNA with facial
characteristics and expects to complete development of first stage products by
the fourth quarter of 2006.

From time to time, we also provide engineering services in connection with
the implementation and rollout of our channel partnership arrangements.

Although our products consist primarily of publicly available - and therefore
non-proprietary - information, we

integrate data in our products in a proprietary manner that allows users to
access data rapidly and efficiently. In addition, our LocatePLUS product
utilizes proprietary methodologies to link data from different sources
associated with a given individual to a single background report, even though
the sources of data with respect to a given individual may be incomplete or
contain only partial information with respect to that individual.

During the quarter ended June 30, 2003 we launched our new patent-pending
Bull's-Eye technology, which is currently integrated into our LocatePLUS
product. Bull's-Eye is the first search tool in our industry that allows users
to correctly identify a person's current address based upon certain currently
available information. Typically, when a search is performed on an individual
using competing technologies, a number of addresses are pulled from a database
of public records. Bull's-Eye enhances or improves the search process by
cross-referencing current public utility and telephone records with historical
data to more accurately identify a person's current address. We have also
sought patent protection with respect to aspects of our CareerScan and TrustmeID
products.

Revenue associated with our Worldwide Information product is recognized
upon delivery to the customer of a CD-ROM, provided that no significant
obligations remain, evidence of the arrangement exists, the fee is fixed or
determinable and collectibility is reasonably assured. Information in our
Worldwide Information product is updated and released either quarterly or twice
a year. In the case of our LocatePLUS product, we charge a fee to customers,
which varies based upon the type and quantity of information requested.
Capitalizing on the synergies gained through the Companies acquisitions, in
2004, Worldwide was able to utilize the technology acquired through Voicepower
Technologies, when it merged into Dataphant, to develop the industry's first
ever searchable non-published and cell phone CD-ROM. This product became
Worldwide's fastest growing CD-ROM product to date. In addition, Worldwide,
using the search capabilities built into the CD-ROM search engine, has expanded
beyond CD-ROMs. Worldwide recently entered into an exclusive partnership with
the State of New Hampshire's Department of Safety to implement its technology on
the state's Intranet. Sonia Bejjani, one of our co-founders and President of
Worldwide, was profiled in "Women to Watch in 2005" by Women's Business Boston,
January 2005 issue.

Revenue from our LocatePLUS product is recognized when there is either an agreed
upon royalty fee or the requested information is downloaded, there is evidence
of an arrangement, the fee is fixed or determinable, and collectability is
reasonably assured. We directly charge the credit cards of approximately 60% of
our LocatePLUS customer base for fees related to their use of the LocatePLUS
product. We bill the remaining approximately 40% of the customers for that
product by monthly invoice. During 2004, our LocatePLUS online customer base
exceeded 16,500 customers. Within that customer base, the subscriptions for
ChoicePlan billing plans, which are billing plans for committed revenue per
customer ranging from $25 per month to $5,000 per month, increased to 700
customers. In addition, we made a significant change to our billing practice in
2004, with the implementation of a new minimum usage fee. We expect this change
will increase annual billings by at least $1 million per year.

Revenue from our Entersect product is recognized when certifications are
purchased online (and paid for via credit card) or the requested information is
downloaded, there is evidence of an arrangement, the fee is fixed or
determinable, and collectibility is reasonably assured.

Revenue from Dataphant is generated exclusively through inter-company sales
to our other wholly owned subsidiaries and eliminated on consolidation.

Our costs of revenue consist primarily of our costs to obtain data and
software maintenance expenses, which consist primarily of payroll and related
expenses for information technology personnel, Internet access and hosting
charges, and expenses relating to Web content and design. We obtain our data
from multiple sources, and we have entered into various license agreements with
related data providers. In the nine months ended September 30, 2005 and 2004,
we recorded $2,998,852 and $2,875,798 respectively, in costs related to these
agreements. If any of our primary sources of data were to become unavailable to
us, we believe that we would be able to integrate alternate sources of data
without significant disruption to our business or operations, as there are
currently a number of providers of such data. However, we cannot be certain
such sources will be available to us if we need them or at prices consistent
with our current sources.

Our selling and marketing expenses consist of salaries and commissions paid
to sales representatives for the products that we offer, as well as direct mail
advertising campaigns and magazine and Internet-banner advertisements.

General and administrative expenses consist of payroll and related expenses for
non-sales, non-research and development and executive and administrative
personnel, facilities expenses, insurance, professional services, travel and
other miscellaneous expenses.

Interest income consists of earnings on our cash and cash equivalents,
short-term investments and notes receivable. Interest expense is primarily
attributable to various notes issued through June 30, 2005. As of September 30,
2005, we had notes payable (current and long-term) totaling $10,883,208.

We have incurred significant net losses since our inception. We incurred
net losses of approximately $4.2 million during the nine months ended September
30, 2005 and $5.8 million during the nine months ended September 30, 2004. Our
accumulated deficit as of September 30, 2005 was approximately $34 million. We
raised approximately $3.8 million from sales of our equity during 2004 and
approximately $9 million from the sale of equity and issuance of notes payable
during the nine months ended September 30, 2005. In August 2003, we issued a
put to one investor, which, subject to certain limitations, provides us the
right to sell, at our discretion, up to $5 million in shares of our Class A
Voting Common Stock to the investor for a purchase price equal to 95% of the
lowest closing bid price for our Class A Voting Common Stock during a ten-day
pricing period. The number of shares that we may sell to this investor is
limited by the trading volume of our Class A Voting Common Stock and certain
customary closing conditions. Under this put, we sold 2,708,637 shares for a
total $651,068 in net proceeds through December 31, 2003. The remaining
available under the put at December 31, 2003 was $4,348,932. Through September
30, 2005, we have issued 17,042,761 shares of Class A Voting Common Stock in
connection with our exercise of the put, resulting in net proceeds of $4,846,291
to us.

On June 17, 2004 we entered into a Securities Purchase Agreement with Laurus
Master Fund, Ltd., a Cayman Islands company, relating to the private placement
of a convertible term note issued by the Company in the principal amount of
$3,000,000 due June 17, 2007 (the "Note"), and a common stock purchase warrant
(the "Warrant"). On November 30, 2004, this note was amended to increase the
principal amount to $4,000,000 and an additional warrant. The terms, as
amended, allow for this note to convert into 6,666,667 shares of our Class A
Voting Common Stock at a fixed conversion rate of $0.30 per share and 5,000,000
shares of our Class A Voting Common Stock at a fixed conversion rate of $0.40
per share. One Warrant provides for the purchase of up to 1,320,000 shares of
Class A Common Stock at a price of $0.45 per share, subject to customary
adjustments, until June 17, 2009, and the additional Warrant provides for the
purchase of up to 650,000 shares of Class A Common Stock at a price of $0.35 per
share, subject to customary adjustments, until November 30, 2009. On March 31,
2005, the Company amended its convertible term note issued by the Company to
Laurus Master Fund, Ltd., a Cayman Islands company. The terms, as amended,
allow for this note to convert into 6,250,000 shares of our Class A Voting
Common Stock at a fixed conversion rate of $0.16 per share, 3,333,333 shares of
our Class A Voting Common Stock at a fixed conversion rate of $0.30 per share
and 5,000,000 shares of our Class A Voting Common Stock at a fixed conversion
rate of $0.40 per share. On July 8, 2005 the Company used $4 million from the
proceeds of an offering of convertible debt to pay in full the remaining amounts
due under this note. The Warrant was unaffected by this repayment. As of July
8, 2005, the balance on this note was paid in full.

In connection with an offering that closed on August 15, 2005 we entered into a
Purchase Agreement with certain institutional and accredited investors relating
to the private placement of convertible term notes issued by the Company in the
principal amount of $8,965,000 and warrants to purchase up to 41,189,000 shares
of our capital stock. Of the proceeds from this offering, approximately $4.1
million was used to retire current secured convertible notes, and the remainder
will be used for general working capital.

All of the notes are convertible, and the warrants are exercisable, first into
as many shares of our Class A Voting Common Stock, par value $0.01 per share, as
are available for issuance at the time of conversion or exercise, and then into
shares of our Class B Non-Voting Common Stock, par value $0.01 per share. As
part of our agreement with these investors, we have agreed to seek the approval
from our stockholders of the recapitalization of each outstanding share of our
Class A Voting Common Stock and our Class B Non-Voting Common Stock into a
single class of voting common stock, as well as a one-for-fifty reverse split of
this new class of common stock. If our stockholders approve these measures, the
notes will automatically convert into shares of the new class of common stock,
and any unexercised warrants will be exercisable for shares of that class of
stock as well. As there are currently no unissued shares of our Class A Voting
Common Stock that are not otherwise reserved for issuance, we anticipate that
these notes and warrants will be exercisable for shares of either our Class B
Non-Voting Common Stock or the newly created class of common stock, if approved.
Without taking into consideration interest payable on the notes, the notes are
convertible into 89,650,000 shares of our common stock (regardless of class) at
a current conversion rate of $0.10 per share and the warrants are exercisable
for ten years from the date they were issued for

up to 41,189,000 shares of our common stock (regardless of class) at a current
exercise price of $0.15 per share. The conversion price of the notes and the
exercise price of the warrants are each subject adjustment for a variety of
events, including, for example, payment of dividends, certain mergers or asset
sales, and certain securities issuances. In conjunction with this offering, we
also entered into related Registration Rights and Voting Agreements.

Prior to December 5, 2005, the Company had outstanding two classes of stock,
Class A Voting Common Stock of which there were 150,000,000 shares authorized
with 111,424,416 issued, and Class B Non-Voting Common Stock of which there were
250,000,000 shares authorized with 74,505,730 issued. At the annual meeting of
the shareholders held on November 12, 2005, the shareholders approved a plan of
recapitalization whereby 1) each outstanding share of our Class A Voting Common
Stock and our Class B Non-Voting Common Stock combine into a single class of
voting common stock with 400,000,000 authorized and 185,930,146 issued, 2)
effect a one-for-fifty reverse split of this new class of common stock resulting
in a 8,000,000 authorized and 3,718,603 issued, and 3) increase the authorized
from 8,000,000 to 25,000,000. The combination of the two classes of stock was
completed on December 5, 2005. The reverse split and change in authorized
shares was completed on December 12, 2005. In addition, the completion of the
recapitalization triggered the mandatory conversion of certain notes payable in
the amount of $8,965,000 into 1,793,000 of the new common stock.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2004

Revenues. Revenues from our Worldwide InformationTM CD-ROM product
decreased to $369,996 for the nine months ended September 30, 2005 from $458,004
for the nine months ended September 30, 2004, a decrease of 19%. This decrease
is attributable to reduced sales in certain states. Revenues from our
Internet-based product, LocatePLUS, increased to $4,671,406 for the nine months
ended September 30, 2005, as compared to $2,799,275 for the nine months ended
September 30, 2004, an increase of 66%. Approximately $557,000 of this
increase, or 30%, was due to the implementation of a minimum usage fee charged
to LocatePLUS' online customers effective November 2004, which had the effect of
increasing usage. Management believes that the contribution of the minimum fee
to overall revenue will decrease in the future as users increase usage in excess
of the minimum. Additionally, approximately $692,532 of the increase, or 37%
was due to an increase in customers using the Entersect product. The remaining
$622,599 increase, or 33% was due to the increase in LocatePLUS' customers from
16,910 at September 30, 2004 to 19,367 at September 30, 2005, a 14.5% increase.
Revenue from channel partners increased to $3,109,902 from $574,156, an increase
of 441%. The increase is attributable to gaining greater acceptance by partners
for streaming XML as well as the addition of one major channel (a distribution
method for our data). Revenues from our wireless product, LocatePLUS AnyWhere ,
were $9,435 during the nine months ended September 30, 2005 as compared to
$4,625 during the nine months ended September 30, 2004, an increase of 104%.
Engineering services revenue increased to $505,000 for the nine months ended
September 30, 2005, as compared to $147,200 for the nine months ended September
30, 2004, an increase of 243%. From time to time, we also provide engineering
services in connection with the implementation and rollout of our channel
partnership arrangements.

Costs of revenues. For the nine months ended September 30, 2005, costs of
revenues for Worldwide InformationTM were $106,582 as compared to $67,996 for
the nine months ended September 30, 2004, an increase of 56%. This increase is
due to an increase in certain data costs. For the nine months ended September
30, 2005, our costs of revenues associated with LocatePLUS online and channel
were $2,998,852 as compared to $2,875,798 for the nine months ended September
30, 2004, an increase of 4%. Costs of revenue associated with LocatePLUS are
not expected to increase significantly over the next twelve months as we have
acquired most of the data planned for that product.

Selling and marketing expenses. Selling and marketing expenses for the nine
months ended September 30, 2005 were $1,892,015 as compared to $1,039,767 for
the nine months ended September 30, 2004, an increase of 82%. This increase is
attributable to an increase in the headcount of our sales staff and additional
costs associated with advertising.

General and administrative expenses. General and administrative expenses
for the nine months ended September 30, 2005 were $5,240,852 as compared to
$5,046,712 for the nine months ended September 30, 2004. Included in this
increase is investor relations activities accounting for $797,728, of which
$233,558 was non-cash stock based compensation. Investor relation expenses are
not core to the operation of the company and had we not incurred these expenses,
general and administrative expenses would have decreased to $4,443,124.

Research and Development expenses. Research and development expenses for the
nine months ended September 30, 2005 were $163,655 as compared to $239,076 for
the nine months ended September 30, 2004, a decrease of 31%. This decrease is
due to expenses associated with certain testing conducted in 2004. These
expenses are expected to remain stable unless testing proves successful in the
Metrigenics subsidiary.

Interest income. Interest income decreased to $16,282 for the nine months ended
September 30, 2005, from $68,239 for the nine months ended September 30, 2004.
This decrease is attributable to a decrease on the balance of notes receivable
from 2004.

Interest expense. Interest expense increased to $2,393,840 for the nine
months ended September 30, 2005, from $694,256 for the nine months ended
September 30, 2004. $982,160 of this increase is attributable to the early
payoff of certain debt and $244,501 is attributable to the amortization of
financing fees associated with certain notes payable issued in the third
quarter. Interest expense is expected to decrease in the future upon the
conversion of note payable.

YEAR ENDED DECEMBER 31, 2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003

Revenues. Revenue from our Worldwide InformationTM CD-ROM product
increased to $550,923 for the year ended December 31, 2004 from $478,278 for the
year ended December 31, 2003, an increase of 15.2%. The increase was due to an
increase in customers in 2004 from 2003. Revenue from our LocatePLUS and
Entersect products, increased to $4,107,714 for the year ended December 31, 2004
as compared to $2,543,581 for the year ended December 31, 2003, an increase of
61.5%. Approximately $270,000 of this increase, or 10.6%, was due to the
implementation of a minimum usage fee charged to LocatePLUS' online customers
effective November 2004, which had the effect of increasing usage. Management
believes that the contribution of the minimum fee to overall revenue will
decrease in the future as users increase usage in excess of the minimum.
Additionally, approximately $473,000 of the increase, or 18.6% was due to a full
year of revenue for Entersect versus three months in 2003. The remaining
$821,000 increase, or 32.3% was due to the increase in LocatePLUS' customers
from 14,184 at December 31, 2003 to 17,632 at December 31, 2004, a 24.3%
increase. Revenue from our channel partners increased to $1,028,650 for the
year ended December 31, 2004 as compared to $263,834 for the year ended December
31, 2003 an increase of 289.9%. The increase is attributed to the addition of
new channel partners and additional sales to existing channel partners. As part
of deploying channel partner agreements, we occasionally provide engineering
services. In 2004 we recognized $562,200 in engineering revenue as compared to
$105,667 recognized in 2003 an increase of 432%. These services are not
recurring and are dependent on customer needs. We recognized wireless revenue
of $13,095 in 2004 as compared to $7,417 in 2003, an increase of 76%. We expect
online, wireless, and channel revenue to increase and CD-ROM revenue to be
stable during the next twelve months.

Costs of revenues. For the year ended December 31, 2004 our costs of
revenue for Worldwide InformationTM were $96,683 as compared to $91,775 for the
year ended December 31, 2003. Data costs are relatively fixed. Even as revenue
from the product increases, we generally do not realize a marked increase in
costs. For the year ended December 31, 2004, our costs of revenue associated
with LocatePLUS and channel partner sales were $3,652,714, as compared to
$2,606,875 for the year ended December 31, 2003, an increase of approximately
40%. This increase is primarily attributable to costs associated with the
acquisition of new data sets. We expect costs of revenues to stabilize at about
$3.5 million annually, as that amount represents the cost for the required data
sets. As revenue increases, costs of revenue are not expected to increase
proportionately. We allocated costs of engineering services based on time spent
for engineering services. Costs of wireless revenues are primarily the cost of
wireless connectivity and the amortized cost of devices sold to end users.

Selling and marketing expenses. Selling and marketing expenses for the
year ended December 31, 2004 were $1,900,984, as compared to $1,049,381for the
year ended December 31, 2003, an increase of approximately 81%. This increase
in expenses is attributable primarily to an increase in our marketing activities
for our Entersect product, additional direct marketing performed in 2004, and an
increase in our sales force. We expect selling and marketing expense to
increase over the next twelve months as we focus greater efforts on increasing
revenue.

General and administrative expenses. General and administrative expenses
for the year ended December 31, 2004 were $6,467,306 as compared to $3,804,200
for the year ended December 31, 2003, an increase of 70%. This increase is
attributable primarily to four cost groups: legal and investor relations,
employee expenditures, non-compete agreement amortization associated with the
Voice Power acquisition and equipment lease terminations. The largest
group-legal and investor relations-accounted for approximately $820,000 of the
increase. We do not

expect these expenses to continue at the same level as some, if not all, of
these expenditures are either discretionary of for items we do not expect to
continue. We expect expenses related to employee expenditures, which account
for approximately $350,000 of the increase, to continue, as most of these
expenditures relate to the build-up of customer service. The cost increase
associated with non-compete agreement amortization associated with the Voice
Power acquisition is a non-cash expense that will be completely amortized by
October 2005. The amount of the increase associated with this amortization is
approximately $140,000. The cost increase associated with equipment lease
terminations accounted for approximately $75,000 of the increase. We anticipate
general and administrative expenses to decrease over the next twelve months.

Research and development expenses. Research and development expenses for
the year ended December 31, 2004 were $316,941. These expenses are a result of
investigation of new biometric data products through the creation of
Metrigenics. We anticipate these expenses will continue and increase for the
foreseeable future.

Interest income. Interest income increased to $159,461 for the year ended
December 31, 2004, from $137,253 for the year ended December 31, 2003, a
decrease of approximately 16%. This decrease is attributable to interest earned
on certain notes issued to us in 2003, of which $838,508 of principal remained
outstanding as of December 31, 2003. As of December 31, 2004, approximately
$454,000 of principal on this loan remained outstanding.

Interest expense. Interest expense increased to $940,410 for the year
ended December 31, 2004, from $686,315 for the year ended December 31, 2003, an
increase of 37%. This increase is attributable to the notes payable we issued
in 2004.

Other Income. Other income decreased to $30,280 for the year ended
December 31, 2004 from $40,605 for the year ended December 31, 2003, a decrease
of approximately 25%.

LIQUIDITY AND CAPITAL RESOURCES

From our incorporation in 1996 through September 30, 2005, we raised
approximately $36 million through a series of private and public placements of
equity and convertible debt to fund marketing and sales efforts and develop our
products and services. As of September 30, 2005, our cash and investments
totaled $240,571.

During the nine months ended September 30, 2005 and 2004, we used
approximately $6.8 million and $4.3 million, respectively, in operating
activities principally to fund our net losses.

During 2002, we loaned $1.0 million to Andover Secure Resources, Inc, an
unaffiliated third party leasing company. This loan is payable upon our demand
and bears interest at 11% per annum. The remaining principal balance at
September 30, 2005 was $358,508. At December 31, 2004, substantial doubt
existed on collectability of these balances. An allowance of $500,000 was
recorded against the outstanding balance and accrued interest.

In December 2002, we issued a one-year term note for $250,000 with ten
year, fully vested detachable warrants to an individual who, as a condition of
his investment, required that he be appointed to the Board of Directors of the
Company. The note bears interest at the rate of 10% per annum and is payable in
one lump sum at maturity. The detachable warrants provide for the purchase of
250,000 shares of our Class B Non-Voting Common Stock with an exercise price of
$0.22 per share. This note was repaid in January 2004.

During 2003, we received $1.6 million, net of issuance costs, by issuing
subordinated promissory notes bearing simple interest ranging from 10% to 12%
per annum. In conjunction with the issuance of these notes, warrants to
purchase 2,500,000 shares of Class B Non-Voting Common stock with a weighted
average exercise price of $0.14 were also issued.

In August 2003, we issued a put to one investor, which, subject to certain
limitations, provides us the right to sell, at our discretion, up to $5 million
in shares of our Class A Voting Common Stock to the investor for a purchase
price equal to 95% of the lowest closing bid price for our Class A Voting Common
Stock during a ten-day pricing period. The number of shares that we may sell to
this investor is limited by the trading volume of our Class A Voting Common
Stock and certain customary closing conditions. Through June 30, 2005, we have
issued 17,042,761 shares of Class A Voting Common Stock in connection with our
exercise of the put, resulting in net proceeds of $4,846,291 to the Company.

On June 17, 2004 we entered into a Securities Purchase Agreement with
Laurus Master Fund, Ltd., a Cayman Islands company, relating to the private
placement of a convertible term note issued by the Company in the principal
amount of $3,000,000 due June 17, 2007 (the "Note"), and a common stock purchase
warrant (the "Warrant"). On November 30, 2004, this note was amended to
increase the principal amount to $4,000,000 and add an additional warrant. The
terms, as amended, allow for this note to convert into 6,666,667 shares of our
Class A Voting Common Stock at a fixed conversion rate of $0.30 per share and
5,000,000 shares of our Class A Voting Common Stock at a fixed conversion rate
of $0.40 per share. One Warrant provides for the purchase of up to 1,320,000
shares of Class A Common Stock at a price of $0.45 each, subject to customary
adjustments, until June 17, 2009, and the additional Warrant provides for the
purchase of up to 650,000 shares of Class A Common Stock at a price of $0.35
each, subject to customary adjustments, until November 30, 2009. On March 31,
2005, the Company amended its convertible term note issued by the Company to
Laurus Master Fund, Ltd., a Cayman Islands company. The terms, as amended,
allow for this note to convert into 6,250,000 shares of our Class A Voting
Common Stock at a fixed conversion rate of $0.16 per share, 3,333,333 shares of
our Class A Voting Common Stock at a fixed conversion rate of $0.30 per share
and 5,000,000 shares of our Class A Voting Common Stock at a fixed conversion
rate of $0.40 per share. On July 8, 2005 the Company used $4 million from the
proceeds of an offering of convertible debt to pay in full the remaining amounts
due under this note. The Warrant was unaffected by this repayment. As of July
8, 2005, the balance on this note was paid in full.

In connection with an offering that closed on August 15, 2005 we entered
into a Purchase Agreement with certain institutional and accredited investors
relating to the private placement of convertible term notes issued by the
Company in the principal amount of $8,965,000 and warrants to purchase up to
41,189,000 shares of our capital stock. Of the proceeds from this offering,
approximately $4.1 million was used to retire current secured convertible notes,
and the remainder will be used for general working capital.

All of the notes are convertible, and the warrants are exercisable, first
into as many shares of our Class A Voting Common Stock, par value $0.01 per
share, as are available for issuance at the time of conversion or exercise, and
then into shares of our Class B Non-Voting Common Stock, par value $0.01 per
share. As part of our agreement with these investors, we have agreed to seek
the approval from our stockholders of the recapitalization of each outstanding
share of our Class A Voting Common Stock and our Class B Non-Voting Common Stock
into a single class of voting common stock, as well as a one-for-fifty reverse
split of this new class of common stock. If our stockholders approve these
measures, the notes will automatically convert into shares of the new class of
common stock, and any unexercised warrants will be exercisable for shares of
that class of stock as well. As there are currently no unissued shares of our
Class A Voting Common Stock that are not otherwise reserved for issuance, we
anticipate that these notes and warrants will be exercisable for shares of
either our Class B Non-Voting Common Stock or the newly created class of common
stock, if approved. Without taking into consideration interest payable on the
notes, the notes are convertible into 89,650,000 shares of our common stock
(regardless of class) at a current conversion rate of $0.10 per share and the
warrants are exercisable for ten years from the date they were issued for up to
41,189,000 shares of our common stock (regardless of class) at a current
exercise price of $0.15 per share. The conversion price of the notes and the
exercise price of the warrants are each subject adjustment for a variety of
events, including, for example, payment of dividends, certain mergers or asset
sales, and certain securities issuances. In conjunction with this offering, we
also entered into related Registration Rights and Voting Agreements.

Prior to December 5, 2005, the Company had outstanding two classes of stock,
Class A Voting Common Stock of which there were 150,000,000 shares authorized
with 111,424,416 issued, and Class B Non-Voting Common Stock of which there were
250,000,000 shares authorized with 74,505,730 issued. At the annual meeting of
the shareholders held on November 12, 2005, the shareholders approved a plan of
recapitalization whereby 1) each outstanding share of our Class A Voting Common
Stock and our Class B Non-Voting Common Stock combine into a single class of
voting common stock with 400,000,000 authorized and 185,930,146 issued, 2)
effect a one-for-fifty reverse split of this new class of common stock resulting
in a 8,000,000 authorized and 3,718,603 issued, and 3) increase the authorized
from 8,000,000 to 25,000,000. The combination of the two classes of stock was
completed on December 5, 2005. The reverse split and change in authorized
shares was completed on December 12, 2005. In addition, the completion of the
recapitalization triggered the mandatory conversion of certain notes payable in
the amount of $8,965,000 into 1,793,000 of the new common stock.

COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

We lease office space and equipment under various operating lease
agreements which terminate on various dates through 2007. Future minimum
payments under our non-cancelable operating leases total $644,099.

CAPITAL LEASES

Through September 30, 2005, we entered into certain long-term equipment
lease agreements. These agreements are classified as capital leases and expire
in 2007. Future minimum lease payments under our non-cancelable capital leases
total $318,367.

LICENSE AGREEMENTS

We have entered into various data acquisition agreements under which we are
required to make minimum payments totaling $1,350,000 through 2010.

CERTAIN RELATED PARTY TRANSACTIONS

LOANS FROM DIRECTORS

In December 2002, we issued a one-year term note for $250,000 with ten
year, fully vested detachable warrants to Robert Kite. As a condition of his
investment, Mr. Kite required that he be appointed to the Board of Directors of
the Company. The note bears interest at the rate of 10% per annum and is
payable in one lump sum at maturity. The detachable warrants provide for the
purchase of 250,000 shares of our Class B Non-Voting Common Stock with an
exercise price of $0.22 per share. This note was repaid January 2004.

NON-EMPLOYEE DIRECTORS STOCK OPTION POLICY

In May 2004, and pursuant to our Non-employee Directors' Stock Option Policy, we
granted options to purchase an aggregate of 5,000,000 shares of Class A Voting
Common Stock, with an exercise price of $1.50 to five of our Directors (Messrs.
Kite, Houlihan, Garlock, Scalley and Murphy).

USE OF OUR ASSETS

Certain of our executives are allowed use of company-owned or leased
vehicles for both business and personal purposes. The owned vehicles have been
capitalized as assets of the Company, totaling $102,954 as of June 30, 2005.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29." APB Opinion No. 29, "Accounting for
Nonmonetary Transactions," is based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of the assets
exchanged. SFAS No. 153 amends APB Opinion No. 29, eliminating the exception to
fair value accounting for nonmonetary exchanges of similar productive assets and
replaces it with a general exception to fair value accounting for nonmonetary
exchanges that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The statement is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. The Company does not expect this statement to have a material impact on
its financial statements.

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment."
SFAS No. 123R requires employee stock options and rights to purchase shares
under stock participation plans to be accounted for under the fair value method,
and eliminates the ability to account for these instruments under the intrinsic
value method prescribed by APB Opinion No. 25, and allowed under the original
provisions of SFAS No. 123. SFAS No. 123R requires the use of an option pricing
model for estimating fair value, which is amortized to expense over the service
periods. The requirements of SFAS No. 123R are effective for fiscal periods
beginning after June 15, 2005. If the Company had applied the provisions of SFAS
No. 123R to the financial statements for the period ending December 31, 2004,
net income would have been reduced by approximately $1.4 million. SFAS No. 123R
allows for either prospective recognition of compensation expense or
retrospective recognition, which may be back to the original issuance of SFAS
No. 123 or only to interim periods in the year of adoption. The Company is
currently evaluating these transition methods.

settlement of preexisting relationships and the re-acquisition of certain rights
in a business combination. This consensus was effective for the fourth quarter
of 2004 and was adopted by the Company in that quarter. This adoption did not
have a material effect on the Company's results of operations, cash flows or
financial position, but may impact future transactions.

OFF-BALANCE-SHEET ARRANGEMENTS

The Company has no off-balance-sheet arrangements currently in effect or in
effect during the year ended December 31, 2004, including but not limited to any
guarantee contracts that has the characteristics defined in paragraph 3 of FASB
Interpretation No. 45 (November 2002), as amended; any retained or contingent
interest in assets transferred to an unconsolidated entity or similar
arrangement, any obligation that could be accounted for as a derivative
instrument, or any obligation arising out of a variable interest (as referenced
in FASB Interpretation No. 46, as amended).

BUSINESS

OVERVIEW

We, through LocatePLUS Holdings Corporation and our wholly-owned subsidiaries,
LocatePLUS Corporation, Worldwide Information, Inc., Certifion Corporation,
Dataphant, Inc., and Metrigenics, Inc. (collectively, the "LocatePLUS Group"),
are business-to-business, business-to-government and business-to-consumer
providers of public information via our proprietary data integration solutions.
Since 1996, we have sold a CD-ROM-based product, which we refer to as Worldwide
Information , which enables users to search certain motor vehicle records and
driver's license information in multiple states. Since March 1, 2000, we have
maintained a database that is accessible through the Internet, known as
LocatePLUS. Our LocatePLUS product contains searchable and cross-referenced
public information on individuals throughout the United States, including
individuals' names, addresses, dates of birth, Social Security numbers, prior
residences, and, in certain circumstances, real estate holdings, recorded
bankruptcies, liens, judgments, drivers' license information and motor vehicle
records. On September 1, 2003, our newly formed wholly-owned subsidiary,
Certifion Corporation, acquired all of the assets of Project Entersect
Corporation a provider of data technology. Certifion provides self-screening
for both resume and online dating services and has filed for patent protection
for both of these services. In October 2003, our newly formed wholly-owned
subsidiary, Dataphant, Inc. acquired Voice Power Technology through a merger.
Through this merger, Dataphant now has information on virtually every land-based
phone number in the United States and approximately 30% of the cell phone
numbers in the United States. On January 6, 2004, the Company formed a new
wholly-owned subsidiary, Metrigenics, Inc., with operations located in New York
state. Metrigenics was formed to develop methods for using DNA to determine
biometric information, such as height, body-type, foot and hand size, head
shape, facial features, and ethnic origin. Metrigenics has finished first-stage
testing on matching DNA to facial characteristics and expects to have
first-stage products by the fourth quarter of 2006.

INDUSTRY BACKGROUND

We are a public information provider. Users of our information have
historically included law enforcement agencies, other government agencies, law
firms, investigation companies, private investigators and insurance companies.
Information is used by those entities for various activities ranging from legal
discovery to the detection of fraud and the prevention of crime and terrorism.
Additional users, such as large businesses, have increasingly availed themselves
of our information services in connection with their identity validation and
other business decisions.

Non-traditional users, such as individuals using job search and on-line
dating service sites, have also begun to avail themselves of background
information in response to concerns about identity theft.

The majority of the data in the database is publicly available and it is
only our proprietary matching and searching technology that creates significant
value to the data. Examples of such public data include:

- - names and addresses - property ownership
- - aliases - bankruptcies
- - nationwide court records - certain criminal records

The sources of these types of public data, however, are often fragmented
and geographically dispersed. In addition, the reliability of this information
and the data provided by various sources may not be consistent. In this
environment, users that wish to use public information are faced with the
time-consuming, costly and difficult task of gathering data from numerous
locations and sources, verifying the information acquired and organizing it into
a useful format. While services and technologies have developed to enable
remote access to certain information sources, there have historically been few
comprehensive access points for information available about individuals.
Traditional sources of information, including credit reporting services and
other database services, make available only limited types of information for
specific purposes, such as verifying credit worthiness. Such services may also
be limited by applicable law to specified uses and users. Almost none of those
sources is integrated in a manner that allows easy and rapid access to data.

BUSINESS STRATEGY

Our business plan is to provide an entire suite of information products and
services for professionals in law enforcement agencies, law firms, insurance
underwriters, fraud investigators, private equity funds, private investigators
and financial institutions. We believe that we will be able to compete with
comparable services based upon the pricing of our services and certain technical
advantages incorporated in our systems. We have proprietary matching and
searching capabilities that give us an advantage over our competitors. In
addition, we acquired the technology to gather virtually all the landline phone
numbers and 30% of cell phone numbers, capabilities which we believe none of our
known competitors have. To date, our products have primarily focused on the
United States market. With the recent formation of Metrigenics, a research and
development company, we are expanding into products with worldwide
applicability. Metrigenics is developing methods for using DNA to determine
biometric information, such as height, body-type, foot and hand size, head
shape, facial features, and ethnic origin. With the success of early trials, we
expect to complete development of first stage products by the fourth quarter of
2006.

OUR TARGET MARKET AND SCREENING OF USERS

Our products have historically been marketed and sold to federal, state and
local government agencies (including law enforcement agencies), private
investigators, human resource professionals and the legal profession. Our
products have been used in:

- - crime and terrorism investigation (e.g., in conjunction with federal and
state investigations in the aftermath of the September 11th terrorist attacks
and the subsequent anthrax incidents);
- - detection of fraud;
- - "skip tracing" (i.e., the location of debtors and individuals in violation
of parole or bail restrictions);
- - background checks;
- - legal due diligence;
- - identity self-certification;
- - private security; and
- - risk management.

Certifion offers data for self-certification purposes in connection with job
search and Internet dating services and has provided an addition channel in
which to distribute the same data developed by LocatePLUS. Our LocatePLUS and
Worldwide Information products are generally marketed and sold only to
pre-screened business and government end users. Before obtaining access to our
LocatePLUS database or our Worldwide Information product, we generally require
commercial customers to provide background information about their business need
for data and about themselves, such as business licenses, bar admission cards or
private investigator licenses. Individuals involved in law enforcement must
provide similar evidence of their authority.

To prevent the misuse of our data, we have adopted a three-tier security schema
for our LocatePLUS Group products. We believe that we lead the market in
protecting access to our data. With recent challenges in the industry relating
to data access, we have been ahead of the curve in adopting a schema that
restricts the most sensitive data. Our groups are classified in the following
manner.

LEVEL INDUSTRY USERS SAMPLE DATASETS AVAILABLE TO USERS

Names, Addresses and Phone Numbers
I General Business Past Residences, Neighbors and Affiliates
Real Property

Private Investigators Level I Data, plus:
Insurance Liens and Judgments
II Attorneys/Law Firms Drivers' Records
Government Certain Motor Vehicle Records
Corporate Security

Level I and II Data, plus:
III Law Enforcement Comprehensive Criminal Records
Restricted Motor Vehicle Records
Certain Credit Reporting Data

As we move forward, we expect to further define user groups and data available
to those groups and to launch a new version of our search engine by the end of
2005 that allows us to apply these definitions.

LOCATEPLUS

We launched our LocatePLUS Internet site in March 2000. Our LocatePLUS
database contains searchable and cross-referenced public information on
individuals throughout the United States. Information is presented in a
dynamic, hyper-linked fashion, permitting users to rapidly identify and obtain
personal information relating to individuals and their associated residences,
possible acquaintances, and a variety of other types of data. Our LocatePLUS
database consists of approximately five billion individual data entries.
According to our estimates, we have data entries relating to approximately 205
million adult individuals in the United States (or approximately 98% of the
adult population of the United States, based on the 2000 United States Census).

Datasets currently integrated in our LocatePLUS product include nationwide
records relating to:

- - names and addresses - real estate records
- - aliases - prior residences
- - dates of birth - recorded bankruptcies
- - Social Security numbers - liens
- - driver's license information - motor vehicle records
- - residential address information - certain death records
(including dates of residence)
- - certain criminal arrest, conviction - phone numbers
and incarceration records - vessel registrations

We intend to continue integration of datasets into our LocatePLUS product,
including:

- - certain hunting and fishing licenses - certain professional licenses
- - certain facial image files - certain fingerprint files
- - certain gun licenses - Federal Aviation Administration
records

We can currently give no assurance as to the timing of integration of such
datasets, however, or whether these new datasets will be integrated with our
LocatePLUS product at all.

We believe that one of the significant advantages of our LocatePLUS
product, in comparison with many products with which we compete, is the ability
of LocatePLUS to "tie" data associated with a given individual to produce a
single report. Our LocatePLUS system uses a proprietary methodology to
associate data in a manner that generally results in a matching of data entries
across diverse data sources, allowing users to obtain a single, comprehensive
data report about an individual, even when there is no single element that ties
data entries together (such as a Social Security number). This comprehensive
data report is itself linked to other data potentially relevant to a business or
government agency researching an individual, such as names and addresses of
possible acquaintances, relatives and neighbors of that individual. Another of
the advantages that LocatePLUS Group is its unlisted and cell phone listings
which we believe no other competitor has.

LOCATEPLUS ANYWHERE

We also offer a version of our LocatePLUS product that is accessible
through wireless personal digital assistants and e-mail capable pagers, which we
refer to as LocatePLUS AnyWhere. LocatePLUS AnyWhere was commercially launched
in mid-December 2002. This product is being marketed primarily to law
enforcement. The product is sold on a subscription fee basis, permitting
unlimited access to our LocatePLUS database for a flat monthly fee provided that
that the user agrees to a fixed term commitment. As of December 31, 2004, we
had realized only nominal revenue from this product.

WORLDWIDE INFORMATION

Since 1996, we have produced CD-ROM products that enable users to quickly
search motor vehicle records in multiple states through a dynamic search engine,
known as Worldwide Information . Our Worldwide Information product enables
users to search certain motor vehicle records and drivers' license information
in multiple states through a dynamic search engine. Unlike many competing
products, our Worldwide Information product enables users to rapidly identify
vehicles or drivers using complete or partial search criteria. We believe that
this ability to search partial data is a valuable tool in circumstances in which
incomplete information is available, as is often the case in criminal
investigations. Unlike data provided by Internet-based services, searches on
our CD-ROM product are confidential and unavailable to any person other than the
user of our CD-ROM product. We believe that the confidential nature of this
CD-ROM product makes it particularly attractive to law enforcement agencies,
which must often conduct criminal investigations in strict secrecy.

As of December 31, 2004, there were approximately 2,500 pre-screened purchasers
of our Worldwide Information CD-ROM product.

ENTERSECT

On September 1, 2003, our newly formed wholly-owned subsidiary, Certifion
Corporation, acquired all of the assets of Project Entersect Corporation a
provider of data technology. Certifion operates under the trade name of
"Entersect," and it provides self-screening for both resume and online dating
services.

DATAPHANT

In October 2003, Voice Power Technology merged into our newly formed,
wholly-owned subsidiary, Dataphant, Inc. Through this merger, Dataphant now has
information on virtually every land-based phone number in the United States and
approximately 30% of the cell phone numbers in the United States. We believe
that we are the only company that has this information. The Dataphant data has
been integrated into both LocatePLUS and Worldwide Information products.
Currently the only distribution of this data is through our other subsidiaries.

METRIGENICS

On January 6, 2004, the Company formed a new wholly-owned subsidiary,
Metrigenics, Inc., with operations located in New York state. Metrigenics was
formed to develop methods for using DNA to determine biometric information, such
as height, body-type, foot and hand size, head shape, facial features, and
ethnic origin. Metrigenics has finished first stage testing on products capable
of matching DNA to facial characteristics and expects to have first stage
products by the fourth quarter of 2006.

SOURCES OF OUR DATA

Our operations depend upon information derived from a wide variety of
automated and manual sources. External sources of data include public records
information companies, governmental authorities and on-line search systems. We
license or otherwise obtain our data from five primary sources, as well as over
twenty other ancillary sources (including both private and government sources).
In the event that any of our primary sources of data were no longer available to
us, we believe that we would be able to integrate alternate sources of data
without significant disruption to our business or operations, as we believe
there are currently a number of equivalent providers of such data. However, we
cannot be certain such sources will be available to us if we need them or at
prices consistent with our current sources.

REGULATORY RESTRICTIONS ON OUR BUSINESS

Both federal and state law regulates the sale of data. Recently, consumer
advocates and federal regulators have voiced concerns regarding public access
to, or commercial use of, personal information. As a result, increased pressure
has been placed upon federal and state legislators to regulate the dissemination
or commercial use of personal information.

One such legislative enactment that has had an effect on our business was the
Financial Services Modernization Act of 2000, also known as the
"Gramm-Leach-Bliley Act". Among other things, this law restricts the
collection, use, and transfer of certain data that includes "credit header"
information, which had historically functioned as the

backbone of our data resources. Implementation of this law's restrictions by
the Federal Trade Commission significantly limited the availability of certain
data for our database, but we have subsequently developed datasets that function
independently of "credit header" information. Although we have not engaged
counsel to review this matter or the conduct of our operations generally, we
believe that our operations are currently unaffected by the Gramm-Leach-Bliley
Act or any law specifically applicable to the dissemination of data concerning
individuals. More recently, congress has been addressing the access to public
data such as ours. Any further restriction on our use of personal information
could limit the usefulness and have a material adverse affect on our operations
and our products, including our LocatePLUS product. Federal and state law
prohibits us from selling information about minors. Our products have been
designed to prevent the dissemination of such data.

DISTRIBUTION OF OUR PRODUCTS

We distribute our content both directly (though the Internet, in the case
of our LocatePLUS product, and through the mail, in the case of our Worldwide
Information CD-ROM) and through "channel partner" arrangements, by which third
parties provide access to our databases in consideration for a royalty. We
also, from time to time, provide certain consulting services to third party
database providers on the integration and assimilation of public data. To date,
our efforts to license data have resulted in several channel partnerships. For
the year ending December 31, 2004, we recognized revenue of $ 1,028,650 on these
agreements.

COMPETITION

Current competitors for our LocatePLUS and Entersect products include
ChoicePoint, Confi-chek.com, Accurint, FlatRateInfo and Lexis-Nexis. Many of
the companies that currently compete with these products, as well as other
companies with whom we may compete in the future, are national or international
in scope and have greater resources than we do. Those resources could enable
those companies to initiate price cuts or take other measures in an effort to
gain market share in our target markets.
Our Worldwide Information product primarily competes with the registries of
motor vehicles of various states that sell their data to screened users. These
state agencies generally provide data in "raw form" without the search
capabilities that we provide in our Worldwide Information product.

EMPLOYEES

As of December 31, 2005, the LocatePLUS Group had 81 employees, all of whom
were fulltime employees of the Company. We believe that our relations with our
employees are good.

DESCRIPTION OF PROPERTY
FACILITIES
LocatePLUS Holdings Corporation and LocatePLUS Corporation, are presently
headquartered in Beverly, Massachusetts, where we lease approximately 32,000
square feet. The lease on that facility expires on February 28, 2007, and our
annual lease obligation is approximately $443,000.

Worldwide Information, Inc., is presently located in Byfield, Massachusetts,
where it leases approximately 2,700 square feet. The lease on the Byfield
facility expires on December 31, 2005. Our annual lease payments on that
facility in 2004 were approximately $25,000. We are currently negotiating to
extend this lease to December 2007.

Dataphant, Inc., is located in Austin, Texas, where it leases approximately
3,000 square feet pursuant to a month-to-month lease, with current monthly rent
of $3,680 (which includes the use of office equipment).

Certifion Corporation is located in Santa Ana, California, where it leases
approximately 1,900 square feet pursuant to a month-to-month lease with current
monthly rent of $3,028.

Metrigenics Inc., has access to University office and lab space with no lease or
rental commitment.

We believe that our facilities are sufficient for our projected needs.

INTELLECTUAL PROPERTY

Publicly available data concerning individuals is generally
non-proprietary. As a result, our intellectual property consists largely of
certain trade secrets and know-how associated with the integration of databases
and our ability to link diverse datasets. We rely on a combination of
confidentiality agreements, restrictions on access to our proprietary systems,
and contractual provisions (such as in our user agreements) to protect our
intellectual property.

We have registered LOCATEPLUS.COM as a trademark with the United States
Patent and Trademark Office. We also maintain LOCATEPLUS, WORLDWIDE INFORMATION
, ENTERSECT , CareerScan , and TrustmeID as unregistered trademarks relating to
our products. We may, from time to time, claim certain other rights under
trademark law, however, we currently have no other marks registered or pending
with the United States Patent and Trademark Office or the equivalent agency of
any other country.

In 2003, we filed for patent protection covering certain aspects of two of
our products. We have filed for patent protection covering certain aspects of
our unique search product, "Bull's Eye," that electronically matches database
information with current public phone and utility information to identify
current information. We also filed, through our Certifion subsidiary, for
patent protection covering certain aspects of our self-validation products
Career Screen and TrustmeID and at present time these patents are pending.

LEGAL PROCEEDINGS
We are not currently involved in any material legal proceedings, although
claims may arise from time to time in the conduct of our operations. There can
be no assurance at this time that any claims that may arise in connection with
the conduct of our business will not materially adversely effect our business or
operations, or divert our critical resources.
* * *

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth specific information regarding our executive
officers and directors as of December 31, 2005.

EXECUTIVE OFFICERS AND DIRECTORS AGE POSITIONS
- -------------------------------- --- -----------------------------------
Jon R. Latorella 42 Chairman of the Board, President
and Chief ExecutiveOfficer
Sonia P. Bejjani 37 Director; President-Worldwide
Information, Inc.
James C. Fields 38 Vice President of Finance,
Treasurer Secretary, and Acting
Chief Financial Officer
Thomas E. Murphy 46 Director
Ralph Caruso 56 Director
David Skerrett 56 Director
John P. Houlihan 59 Director
Chris Romeo 43 Director
Mike Ryan 47 Director
Peter Zekos 44 Director

CURRENT DIRECTORS AND OFFICERS
SONIA P. BEJJANI, 36, co-founded our business in 1991 and has been a member of
our Board of Directors and employed by us in various capacities since we
commenced our activities. During the five years ending August 1, 2001, Ms.
Bejjani was our Vice President - Sales and Customer Service. Since August 1,
2001, Ms. Bejjani has been the President of Worldwide Information, Inc., our
wholly-owned subsidiary. Ms. Bejjani has been elected in 2005 to serve a three
year term.

RALPH CARUSO 56, is the founder and President of Caruso Companies, a
conglomerate involved in many facets of industrial construction that has been in
business for over 25 years. Mr. Caruso has been elected in 2005 to serve a one
year term.

DAVID SKERRETT, 52, has been Vice President of the Middlesex Corporation for 23
years. Middlesex Corporation is in the top 400 heavy civil construction
companies in the nation with $140 million in revenue. Mr. Skerrett holds a
Bachelor of Engineering from College of Technology. Mr. Skerrett has been
elected in 2005 to serve a one year term.

JOHN P. HOULIHAN, 58, has been President and owner of Zalkin, Inc., a worldwide
exporter of used clothing with offices in Council Bluffs, Iowa and Brownsville,
Texas, since 1979. Before that, Mr. Houlihan owned Goodrich Dairy, a chain of
47 retail stores, and Riekes Equipment, a material handling and forklift
company. Mr. Houlihan holds a Bachelor of Arts from Creighton University, which
he received in 1968, and a Juris Doctorate from Creighton University, which he
received in 1971. Mr. Houlihan joined our Board of Directors in January 2001,
and he is currently the Chairman of the Compensation Committee of our Board of
Directors and has been elected in 2005 to serve a one year term.

JON R. LATORELLA, 42, co-founded our business in 1991 and has been our Chief
Executive Officer since we commenced our activities. Mr. Latorella is also the
Chairman of our Board of Directors. Before founding our business, Mr. Latorella
served as a consultant to various local and state law enforcement agencies. Mr.
Latorella holds a Bachelor of Science/Bachelor of Arts from the University of
Massachusetts, which he received in 1994. Mr. Latorella has been elected in
2005 to serve a three year term.

CHRIS ROMEO, 43, is an attorney that has had a private practice since 1992 and
holds a Bachelors Degree from Wesleyan University and received a Doctorate of
Jurisprudence from the New England School of Law in 1987. Mr. Romeo will be a
new member to the Board of Directors and has been elected in 2005 to serve a two
year term.

MIKE RYAN, 47, is an attorney that has had a private practice since 1992 and
holds a Bachelors Degree from Merrimack College and received a Doctorate of
Jurisprudence from the New England School of Law in 1987. Mr. Ryan will be a
new member to the Board of Directors and has been elected in 2005 to serve a two
year term.

PETER ZEKOS, 44, is founder and President of Excel Staffing, Inc., founded in
1999, an executive search and temporary staffing company located in Worcester,
Massachusetts. Mr. Zekos holds a Bachelors of Science in

Business Administration from Clark University in Worcester, Massachusetts which
he received in 1984. Mr. Zekos joined our Board of Directors in 2005 and has
been elected in 2005 to serve a three year term.

THOMAS E. MURPHY was employed by Oftring & Company, Inc., a registered
broker-dealer located in Worcester, Massachusetts, from 1989 to 2004, where he
held the title of Senior Vice President. Mr. Murphy holds a Bachelors of the
Arts in Investments from Babson College, which he received in 1981. Mr. Murphy
joined our Board of Directors on March 28, 2003, and he is currently the
chairman of the Audit Committee of our Board of Directors

Each of the directors holds such his or her office until his or her
successor is duly chosen and qualified, or until his or her earlier resignation
or removal. The Company is not aware of any family relationships between any of
the officers and any of the Company's directors. Each of the officers holds such
office until his or her successor shall have been duly chosen and shall have
been qualified, or until his earlier resignation or removal. We do not have any
employment agreements with any of our employees.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors is responsible for the
appointment, compensation and oversight of our independent auditors, reviews the
scope of the audit services provided by our independent accountants, and reviews
our accounting practices and internal accounting controls.

Mr. Murphy serves as the Chairman of the Audit Committee. The Board has
determined that Mr. Murphy is a financial expert for the purposes of the
Securities Exchange Act of 1934, as amended.

COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors reviews and recommends
to the Board of Directors the salaries, benefits and stock option grants of all
employees, consultants, directors and other individuals compensated by us. The
Compensation Committee also administers our equity compensation plan and other
employee benefits plans that we may adopt from time to time. The members of the
Compensation Committee areto be elected when the board meets in January

CODE OF ETHICS

The Company adopted a Code of Ethics at a meeting of the Board of Directors
held on May 19, 2004.

EXECUTIVE COMPENSATION

Prior to December 5, 2005, the Company had outstanding two classes of stock,
Class A Voting Common Stock of which there were 150,000,000 shares authorized
with 111,424,416 issued, and Class B Non-Voting Common Stock of which there were
250,000,000 shares authorized with 74,505,730 issued. At the annual meeting of
the shareholders held on November 12, 2005, the shareholders approved a plan of
recapitalization whereby 1) each outstanding share of our Class A Voting Common
Stock and our Class B Non-Voting Common Stock combine into a single class of
voting Common Stock with 400,000,000 authorized and 185,930,146 issued, 2)
effect a one-for-fifty reverse split of this new class of Common Stock resulting
in a 8,000,000 authorized and 3,718,603 issued, and 3) increase the authorized
from 8,000,000 to 25,000,000. The combination of the two classes of stock was
completed on December 5, 2005. The reverse split and change in authorized
shares was completed on December 12, 2005. In addition, the completion of the
recapitalization triggered the mandatory conversion of certain notes payable in
the amount of $8,965,000 into 1,793,000 of the new Common Stock.

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation for the last three fiscal
years of the Corporation's Chief Executive Officer, prior to the effect of the
recapitalization, and all other executive officers whose annual compensation
during that period exceeded $100,000 (the "Named Executive Officers"):

SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL YEAR SALARY BONUS OPTIONS COMPENSATION
POSITION ($) ($) (#) ($)
- ------------------------ ---- ---------- -------- ------------ -------------

JON R. LATORELLA . . . . 2004 193,955(1) 100,000 3,500,000 15,000(1)
President and. . . . . . 2003 58.209(1) - 9,350,000 13,200(1)
Chief Executive Officer. 2002 50,100(1) - - 13,200(1)

JAMES C. FIELDS(2) . . . 2004 134,967 - 1,000,000 10,000(3)
Acting Chief Financial . 2003 112,901 - 1,250,000 -
Officer, Treasurer and . 2002 104,160 - - -
Secretary. . . . . . . .

ROBERT A. GODDARD(4) . . 2003 61,539 - 250,000 -
Former Chief Financial . 2002 123,658 - - 8,079(5)
Officer, Treasurer and .
Secretary. . . . . . . .

(1) Mr. Latorella and his family are allowed use of two company vehicles,
the value to Mr. Latorella of which was approximately $1,250 per month during
2004.
(2) Mr. Fields commenced his employment with us in 2001. Mr. Fields became
an executive officer with the Corporation on March 31, 2003.
(3) Beginning in April 2004, Mr. Fields was allowed the use of a
company-leased vehicle, the value of which is approximately $1,100 per month.
(4) Mr. Goddard ceased employment with us on March 31, 2003. As part of a
severance arrangement that we entered into with Mr. Goddard, an incentive stock
option to purchase 1,000,000 shares of Class A Voting Common Stock owned by Mr.
Goddard was cancelled and, in lieu of that option, Mr. Goddard was issued a
fully vested non-qualified stock option to purchase 250,000 shares of Class A
Voting Common Stock with an exercise price of $0.15 per share.
(5) Mr. Goddard received a monthly automobile allowance of $523 and a fuel
allowance as part of his compensation and severance. This benefit terminated on
June 30, 2003.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

Number Of Secu- Percent of Total
rities Underlying Options/SARs Exercise Of
Options/SARs Granted To Base Price Expiration
Name Granted Employees In ($/Sh) Date
(#) Fiscal Year
- ------------------------------------- ------------------ ----------------- ------------- ----------

Jon R. Latorella. . . . . . . . . . . 1,000,000(1) 6% $ 1.50 5/19/2009
------------------ ----------------- ------------- ----------
President and Chief Executive Officer 2,500,000(1) 15% $ 0.39 5/19/2009
James C. Fields . . . . . . . . . . . 1,000,000(1) 6% $ 0.39 5/19/2009
Acting Chief Financial Officer

(1) Class A Voting Common Stock

NUMBER OF SECURITIES -
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
DECEMBER 31, 2004 AT DECEMBER 31, 2004
----------------------------- ------------------------------------
NAME (#) ($)
CLASS EXERCISABLE UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE(1)
----------- -------------- -------------- ----------------- ----------------

JON R. LATORELLA. Class A 12,873,757 0 $ 212,500 0
President and
Chief Executive
Officer . . . . . Class B 100,000 0 $ 10,000 0
JAMES C. FIELDS
Acting Chief
Financial Officer
Treasurer and
Secretary . . . . Class A 2,250,000 500,000 $ 93,750 68,750

(1) Based on a closing price of $0.30 per share of our Class A Voting Common
Stock as quoted on the Over-the-Counter

Bulletin Board on December 31, 2004. This amount reflects inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions.

EQUITY COMPENSATION PLANS

1999 STOCK OPTION PLAN

On November 16, 1999, our Shareholders ratified and adopted an Incentive and
Non-Qualified Stock Option Plan, which we refer to as the "1999 Stock Option
Plan". The 1999 Stock Option Plan set aside 15,000,000 shares of our Common
Stock (then referred to as our "Common Stock") for issuance pursuant to the
exercise of incentive and non-qualified stock options to be awarded to our
employees, officers and directors at the recommendation of the equity
compensation plan's administrator and subject to the approval of our Board of
Directors. We strongly believe in the concept of each employee having some form
of equity participation as an incentive toward excellence in individual
performance and our further success.

In June 2000, our 1999 Stock Option Plan was amended and restated to provide
greater flexibility to the equity compensation plan's administrator in the
granting of various forms of equity compensation. Adjusting for the effects of
the reverse split, as of September 30, 2005, 189,126 stock options were
outstanding under the equity compensation plan. The weighted average exercise
price of all options granted under the equity compensation plan was $7.75 per
share as of September 30, 2005. The 1999 Stock Option Plan is administered by
the Compensation Committee of the Board of Directors.

2003 STOCK OPTION PLAN

On May 29, 2003, our Shareholders ratified and adopted an Incentive and
Non-Qualified Stock Option Plan, which we refer to as the "2003 Stock Option
Plan." The 2003 Stock Option Plan set aside 25,000,000 shares of our Class A
Voting Common Stock and 25,000,000 shares of our Class B Non-Voting Common Stock
for issuance pursuant to the exercise of incentive and non-qualified stock
options to be awarded to our employees, officers and directors at the
recommendation of the equity compensation plan's administrator and subject to
the approval of our Board of Directors. Adjusting for the combination and
reverse split, the plan may issue up to 1,000,000 of Common Stock. We strongly
believe in the concept of each employee having some form of equity participation
as an incentive toward excellence in individual performance and our further
success.

As of September 30, 2005, 514,000 stock options were outstanding under the
equity compensation plan. The weighted average exercise price of all options
granted under the equity compensation plan was $23.60 per share as of September
30, 2005. The 2003 Stock Option Plan is administered by the Compensation
Committee of the Board of Directors.

PLANS NOT APPROVED BY SECURITY HOLDERS

From time to time, we have issued options or warrants to employees and
non-employees (such as directors, consultants, advisors, vendors, customers,
suppliers and lenders) in exchange for services or other consideration provided
to us. These issuances have not been made pursuant to a formal policy or plan,
but instead are issued with such terms and conditions as may be determined by
our Board of Directors from time to time. Generally, our stockholders have not
approved or disapproved these issuances.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table reflects equity compensation granted or issued by us as of
the September 30, 2005, to employees and non-employees (such as directors,
consultants, advisors, vendors, customers, suppliers and lenders) in exchange
for consideration in the form of goods or services.

- NUMBER OF SECURITIES
NUMBER OF SECURITIES REMAINING AVAILABLE
TO BE ISSUED UPON WEIGHTED-AVERAGE FOR FUTURE ISSUANCE
EXERCISE OF EXERCISE PRICE OF UNDER EQUITY
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, COMPENSATION
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS PLANS(1)
- --------------------- -------------------- --------------------- ---------------------

EQUITY COMPENSATION .
PLANS APPROVED . . .
BY SECURITY HOLDERS:.
Common Stock. . . . . 703,126 $ 19.45 488,071
- --------------------- -------------------- --------------------- ---------------------
EQUITY COMPENSATION .
PLANS NOT APPROVED .
BY SECURITY HOLDERS:
Common Stock. . . . . 1,650,077 $ 9.87 N/A
- --------------------- -------------------- --------------------- ---------------------
TOTAL:. . . . . . . . N/A
Common Stock. . . . . 2,353,203 $ 13.48 N/A
- --------------------- -------------------- --------------------- ---------------------

(1) Excludes securities reflected in column titled "Number of securities to
be issued upon exercise of outstanding options, warrants and rights."

401(K) PLAN

We sponsor a defined contribution plan under the provisions of Section 401(k) of
the Internal Revenue Code, which covers substantially all of our employees. We
may make discretionary matching contributions up to 1% of annual employee
contributions. Employees are eligible to participate in the 401(k) Plan after
one year of service. Our matching contributions vest ratably over a five-year
period. We pay the administrative expenses of this plan.

NON-EMPLOYEE DIRECTORS STOCK OPTION POLICY

On February 1, 2002 we adopted a Non-employee Director Stock Option Policy.
Under the Non-employee Director Stock Option Policy, we will make annual grants
(beginning on the date of adoption of the policy or the first day that a
director is elected to our Board of Directors, if later) to our non-employee
directors of warrants to purchase 35,000 shares of our Class B Non-Voting Common
Stock as compensation for service on our Board of Directors (and any
committees). These grants are made in lieu of any other compensation to our
non-employee directors. Each of these warrants will be immediately exercisable
and will have an exercise price that is equal to the fair market value of our
Class B Non-Voting Common Stock as of the date of grant. No separate
compensation is provided to directors for service on either of our two
committees.

We reimburse our directors for out-of-pocket costs associated with their
activities on the Board of Directors.

Directors who are also employees of LocatePLUS Holdings Corporation or any of
its subsidiaries (currently, Mr. Latorella and Ms. Bejjani) are not paid any
compensation for their service as directors.

Pursuant to the Non-employee Directors Stock Option Policy:

- - On March 28, 2003, Messrs. Garlock, Houlihan, and Kite were each issued a
warrant to purchase 35,000 shares of our Class B Non-Voting Common Stock for
$0.15 per share.

- - In 2004, Messrs. Garlock, Houlihan, Kite, Murphy, and Scalley were each
issued an option to purchase 1,000,000 shares of our Class A Voting Common Stock
for $1.50 per share pursuant to our Non-employee Directors Stock Option and
Compensation Policy.

ADVISORY BOARD

On December 2, 1999, our Board of Directors authorized the formation of an
Advisory Board, consisting of up to eight members, to provide ongoing advice and
consultation to the Board of Directors to enhance the development

and operation of our LocatePLUS product. The Advisory Board members (none of
whom are employees or directors) are selected by the Board of Directors based on
each candidate's experience, accomplishments and national recognition in the
fields encompassed by our target markets. Compensation for members of our
advisory board consists of expense reimbursement and a one-time grant of fully
vested non-qualified stock options or immediately exercisable warrants to
purchase thirty five thousand shares of Class B Non-Voting Common Stock. The
Advisory Board meets informally from time to time with management.

The current members of the Advisory Board are:

DALE C. JENKINS, JR.

On December 2, 1999, we appointed Dale C. Jenkins, Jr., as the first member
of our Advisory Board. In 1999 Mr. Jenkins was appointed to the position of
Special Assistant for Law Enforcement and Public Safety to the Chancellor of
Higher Education of the Commonwealth of Massachusetts. Mr. Jenkins was also
appointed to the Advisory Board of the U.S. Commission on Civil Rights and the
Massachusetts Governor's Crime Watch Committee and was a consultant to the U.S.
Department of Justice. In addition, Mr. Jenkins directed the Lead Advanced
Security Team for Presidents Ronald Reagan and George H. W. Bush and acted as
Deputy Director of Inaugural Security for then President-Elect George H. W.
Bush. On November 17, 1999, our Board of Directors granted a ten-year option to
Mr. Jenkins to purchase 25,000 shares of our Class A Voting Common Stock with an
exercise price of $0.20 per share as compensation for his services on the
Advisory Board.

JAMES A. CORRY

On July 20, 2000 our Board of Directors appointed James A. Corry as the
second member of our Advisory Board. Since July 2001, Mr. Corry has been the
Chief Operating Officer of Abel Telecom, Inc., based in Scottsdale, Arizona.
Prior to that, Mr. Corry was a criminal investigation and security expert for
the United States Secret Service. During his more than twenty years with that
agency, Mr. Corry worked on security issues globally, conducting criminal and
fraud investigations and managing the security of political personnel, including
President George H. W. Bush. On June 1, 2001, the Board of Directors issued to
Mr. Corry a ten-year option to purchase 25,000 shares of our Class A Voting
Common Stock with an exercise price of $0.20 per share as compensation for his
services on the Advisory Board.

WILLIAM H. SHAHEEN

On October 1, 2001 our Board of Directors appointed William H. Shaheen to
our Advisory Board. Mr. Shaheen is currently the Managing Partner of the law
firm of Shaheen and Cohen, with offices in Concord and Dover, New Hampshire.
Mr. Shaheen served as U.S. Attorney for the District of New Hampshire from 1976
to 1981. In 1981, he was appointed a New Hampshire District Court Judge in
Durham, New Hampshire. Mr. Shaheen resigned his judgeship in 1997 upon the
election of his wife as Governor of the State of New Hampshire. On October 12,
2001 in consideration for his services on the Advisory Board, Mr. Shaheen
received a ten-year warrant to purchase 25,000 shares of our Class B Non-Voting
Common Stock, with an exercise price of $0.20 per share.

DAVID G. DUCHESNEAU

On October 1, 2001 our Board of Directors also appointed David G.
Duchesneau to our Advisory Board. From 1991 to the present, Mr. Duchesneau has
been General Manager of Standa, Inc., a full service private investigative
agency and consulting firm. From 1971 to 1991, Mr. Duchesneau was the Commander
and Senior Officer of the Organized Crime Unit and Fugitive Apprehensive Unit of
the New Hampshire State Police. On October 12, 2001 Mr. Duchesneau was issued a
ten-year warrant to purchase 25,000 shares of our Class B Non-Voting Common
Stock, with an exercise price of $0.20 per share in consideration for his
services on the Advisory Board.

CHARLES LYONS

On November 20, 2001 our Board of Director appointed Charles Lyons to the
Advisory Board. Mr. Lyons is the Superintendent Director of the Shawsheen
Valley Technical School District located in Billerica, Massachusetts. He is
also the Chairman of the Arlington, Massachusetts Board of Selectmen. On that
date, our Board of Directors granted a ten-year warrant to Mr. Lyons to purchase
12,500 shares of our Class B Non-Voting Common Stock with an exercise price of
$0.20 per share as compensation for his services on the Advisory Board.

ORGANIZATION WITHIN THE PAST FIVE YEARS

We were incorporated in Massachusetts in 1996 as Worldwide Information,
Inc. In July 1999, we reincorporated in Delaware to take advantage of certain
favorable corporate excise tax rates relative to Massachusetts as well as
Delaware's well-established corporate law. As part of that re-incorporation, we
changed our name to LocatePLUS.com, Inc.

On August 1, 2001, we changed our name from LocatePLUS.com, Inc. to
LocatePLUS Holdings Corporation as part of a corporate restructuring. In
conjunction with that corporate restructuring, we created two wholly-owned
subsidiaries, LocatePLUS Corporation, a Delaware corporation, and Worldwide
Information, Inc., a Delaware corporation. We capitalized LocatePLUS Corporation
with all of our Internet-based LocatePLUS business, in consideration for all of
its outstanding equity. We capitalized Worldwide Information, Inc. with all of
our CD-ROM-based Worldwide Information business, in consideration for all of
its outstanding equity. We created these subsidiaries for two primary reasons:

- - We wished to isolate any potential liabilities in one of our products in a
manner that would reduce the impact of any such liabilities on our other product
line. There are no claims pending relating to errors or omissions in either of
our two product lines, nor does management currently anticipate any such claims.
However, as disclosed above, claims associated with defects in our databases may
arise from time to time.

- - We wished to administratively separate the operations associated with our
LocatePLUS product from our Worldwide Information product. Operations
associated with our Worldwide Information product have historically been
conducted through our Byfield, Massachusetts office. Operations associated with
our LocatePLUS product have been conducted through our Beverly, Massachusetts
office. Although each of these products is marketed to similar users, the
acquisition and integration of data for and the operation of these two products
differs significantly.

Subsequently, we acquired all of the securities of Entersect Corporation
and Dataphant, Inc. and formed Metrigenics, Inc. We presently hold all of the
equity of each of these five subsidiaries, and we account for each subsidiary on
a consolidated basis.

LocatePLUS Holdings Corporation provides certain administrative and
executive functions on behalf of each of its subsidiaries, such as management of
payroll and other accounts payable.

No options, warrants or similar rights to acquire equity in any subsidiary
currently exists, nor do we anticipate any such rights being created in the
future. We have no present intention of selling or otherwise disposing of any
subsidiary.

* * *

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On June 17, 2002, the Board of Directors adopted our Interested Parties
Transaction Policy, pursuant to which the Company will not enter into any
agreement, arrangement or understanding with any director, officer, or 5% or
greater stockholder of The Company unless (i) the terms of such agreement,
arrangement or understanding are consistent with the terms of equivalent
agreements or arrangements that the Company could obtain from third parties; and
(ii) the agreement, arrangement or understanding is fair to the Company.

Below is a description of certain transactions between us and certain related
parties during the past two years.

JON R. LATORELLA

Mr. Latorella is our President and Chief Executive Officer and is Chairman
of our Board of Directors.

Incentive Loan

In connection with a term loan to Mr. Latorella for $275,000 which was
forgiven according to its terms in 2003, we made a tax equalization payment to
Mr. Latorella in 2004 in the amount of $147,427.

* * *

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

Prior to December 5, 2005, the Company had outstanding two classes of
stock, Class A Voting Common Stock of which there were 150,000,000 shares
authorized with 111,424,416 issued, and Class B Non-Voting Common Stock of which
there were 250,000,000 shares authorized with 74,505,730 issued. At the annual
meeting of the shareholders held on November 12, 2005, the shareholders approved
a plan of recapitalization whereby 1) each outstanding share of our Class A
Voting Common Stock and our Class B Non-Voting Common Stock combine into a
single class of voting common stock with 400,000,000 authorized and 185,930,146
issued, 2) effect a one-for-fifty reverse split of this new class of common
stock resulting in a 8,000,000 authorized and 3,718,603 issued, and 3) increase
the authorized from 8,000,000 to 25,000,000. The combination of the two classes
of stock was completed on December 5, 2005. The reverse split and change in
authorized shares was completed on December 12, 2005. In addition, the
completion of the recapitalization triggered the mandatory conversion of certain
notes payable in the amount of $8,965,000 into 1,793,000 of the new Common
Stock.

We had three securities that began trading on the Over-the-Counter Bulletin
Board on December 12, 2002:

- - shares of our Class A Voting Common Stock are quoted under the symbol
"LPLHA";

- - shares of our Class B Non-Voting Common Stock are quoted under the symbol
"LPLHB"; and

- - our public warrants (redeemable warrants to purchase one share of our
Class A Voting Common Stock with an exercise price of $0.50 per share) are
quoted under the symbol "LPLHW".

The following tables set forth the high and low closing sales prices per
share (and per public warrant), for our Class A Voting Common Stock, Class B
Non-Voting Common Stock and public warrants for each quarter during fiscal years
2003 and 2004 and for the three completed quarters of 2005, as reported by the
Over-the-Counter Bulletin Board.

2003 2004
THREE MONTHS ENDED THREE MONTHS ENDED
---------------------------------------------- ----------------------------------------------
MAR 31 JUN 30 SEP 30 DEC 31 MAR 31 JUN 30 SEP 30 DEC 31
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----

LPLHA.OB 0.40 0.14 0.42 0.12 0.38 0.28 0.34 0.24 0.63 0.29 0.58 0.37 0.39 0.25 0.37 0.25
- -------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
LPLHB.OB 0.29 0.10 0.29 0.10 0.35 0.20 0.25 0.13 0.41 0.20 0.44 0.32 0.38 0.22 0.32 0.21
- -------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
LPLHW.OB 0.10 0.00 0.12 0.00 0.13 0.03 0.09 0.05 0.26 0.07 0.19 0.09 0.13 0.04 0.12 0.05
- -------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----

2005
THREE MONTHS ENDED
----------------------------------------
MAR 31 JUN 30 SEP 30
------------ ------------ ------------
HIGH LOW HIGH LOW HIGH LOW
----- ----- ----- ----- ----- -----

LPLHA.OB 0.315 0.172 0.217 0.125 0.15 0.072
- -------- ----- ----- ----- ----- ----- -----
LPLHB.OB 0.265 0.172 0.21 0.12 0.155 0.081
- -------- ----- ----- ----- ----- ----- -----
LPLHW.OB 0.08 0.04 0.055 0.03 0.055 0.007
- -------- ----- ----- ----- ----- ----- -----

The price quotations above reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions.

HOLDERS

As of December 20, 2005, there were approximately 350 holders of record of
Common Stock and 66 holders of record of our public warrants.

DIVIDENDS

any future cash dividends or distributions is at the discretion of our Board of
Directors and will depend, among other things, on our future after-tax earnings,
operations, capital requirements, borrowing capacity, financial condition and
general business conditions. We plan to retain any earnings for use in the
operation of our business and to fund future growth.

PRINCIPAL STOCKHOLDERS

As of the close of business on December 20, 2005, there were 5,511,603
shares of Common Stock issued and outstanding. There were also unexercised
options and warrants issued to purchase 2,353,203 shares of Common Stock
(including both vested and unvested options) outstanding on that date.

The following table sets forth certain information known to us with respect
to the beneficial ownership of our Common Stock as of the close of business on
December 20, 2005, by:
- -Each of our directors;
- -Each of our executive officers;
- -Each person known to us to beneficially own more than 5% of either class of our
common stock; and
- -All of our directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage of ownership of that person,
shares of common stock underlying options or warrants held by that person that
are currently exercisable or will become exercisable within 60 days of September
30, 2005 are deemed outstanding, while such shares are not deemed outstanding
for computing percentage ownership of any other person. To our knowledge,
except as indicated in the footnotes to this table, each stockholder identified
in the table possesses sole voting and investment power with respect to all
shares shown as beneficially owned by such stockholder. Each of our directors
and executive officers can be contacted at 100 Cummings Center, Suite 235M,
Beverly, Massachusetts 01915.

CLASS A VOTING COMMON

NUMBER OF SHARES PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ---------------- ------------------ --------
Directors
JON R. LATORELLA 983,735(1) 16.37%
SONIA P. BEJJANI 92,508(2) 1.65%
RALPH CARUSO 22,944 *
DAVID SKERRETT 1,995(3) *
JOHN P. HOULIHAN 80,595(4) 1.46%
PETER ZEKOS 20,700(5) *
CHRIS ROMEO - -
MIKE RYAN - -

Officers
JAMES C. FIELDS 65,000(6) 1.17%

5% or More Shareholders
SPECIAL SITUATION FUNDS
153 E. 53rd Street
55th Floor
New York, NY 10022 1,410,000(7) 23,85%

SRB GREENWAY CAPITAL
300 Crescent Court
Suite 1111
Dallas, TX 75201 282,000(8) 5.04%

All directors and
executive officers
as a group (10 persons) 2,959,477(9) 44,31%

* Less than one percent of outstanding shares.
(1) Includes 499,475 shares issuable upon exercise of a fully vested stock
options, with a weighted average exercise price of $17.45 per share.
(2) Includes 90,000 shares issuable upon exercise of a fully vested stock
options, with an average exercise price of $26.16 per share.
(3) Consists of 225 held in IRA and 1,770 in trusts for which he is the
custodian.

(4) Includes 1,500 shares held by the Houlihan Trust, over which Mr.
Houlihan has voting and dispositional authority. Also includes 24,900 shares of
issuable upon exercise of certain immediately exercisable warrants with an
exercise price of $62.07 per share.
(5) Includes 700 shares issuable upon exercise of a fully vested stock
options, with an average exercise price of $15.00 per share.
(6) Includes the vested portion of stock incentive stock options to purchase
up to 65,000 shares with a weighted average exercise price of $11.65 per share.
(7) Includes 505,000 shares and 200,000 shares issuable upon the exercise of
warrants with an exercise price of $7.50 per share held by Special Situations
Fund III, L.P. and 505,000 shares 200,000 shares issuable upon the exercise of
warrants with an exercise price of $7.50 per share held by Special Situations
Private Equity Fund, L.P.
(8) Includes 166,206 shares and 65,824 shares issuable upon the exercise of
warrants with an exercise price of $0.15 per share held by SRB Greenway Capital,
(QP), L.P., 21,856 shares and 8,656 shares issuable upon the exercise of
warrants with an exercise price of $0.15 per share held by SRB Greenway Capital,
L.P., and 13,938 shares and 5,520 shares issuable upon the exercise of warrants
with an exercise price of $7.50 per share held by SRB Greenway Offshore
Operating Fund, L.P.
(9) ncludes1,167,575 shares issuable upon the exercise of warrants. .
* * *

DESCRIPTION OF CAPITAL STOCK

The authorized capital of LocatePLUS Holdings Corporation consists of:

- - 25,000,000 shares of Common Stock.

The following description of our capital stock does not purport to be complete
and is governed by and qualified by our Second Amended and Restated Certificate
of Incorporation (which we refer to as our "Charter"), included as an exhibit to
this filing, and By-laws, which are included as an exhibit to the Corporation's
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on March 28, 2002 (Registration No. 333-85154).

COMMON STOCK

Prior to December 5, 2005, the Company had outstanding two classes of stock,
Class A Voting Common Stock of which there were 150,000,000 shares authorized
with 111,424,416 issued, and Class B Non-Voting Common Stock of which there were
250,000,000 shares authorized with 74,505,730 issued. At the annual meeting of
the shareholders held on November 12, 2005, the shareholders approved a plan of
recapitalization whereby 1) each outstanding share of our Class A Voting Common
Stock and our Class B Non-Voting Common Stock combine into a single class of
voting common stock with 400,000,000 authorized and 185,930,146 issued, 2)
effect a one-for-fifty reverse split of this new class of common stock resulting
in a 8,000,000 authorized and 3,718,603 issued, and 3) increase the authorized
from 8,000,000 to 25,000,000. The combination of the two classes of stock was
completed on December 5, 2005. The reverse split and change in authorized
shares was completed on December 12, 2005. In addition, the completion of the
recapitalization triggered the mandatory conversion of certain notes payable in
the amount of $8,965,000 into 1,793,000 of the new common stock.

As of December 20, 2005, there were 5,511,603 shares of Common Stock issued
and outstanding.

The holders of our common stock are entitled to receive ratably dividends,
if any, as may be declared from time to time by the Board of Directors out of
funds legally available for that purpose. In the event of our liquidation,
dissolution or winding up, the holders of our common stock are entitled to share
ratably in all assets remaining after payment of liabilities. Our common stock
does not have any preemptive or conversion rights or other subscription rights.
There are no redemption or sinking fund provisions applicable to our common
stock.

COMMON STOCK

Shares of Common Stock are entitled to one vote per share held of record on
all matters submitted to a vote of stockholders. Holders of Common Stock do not
have cumulative voting rights.

CLASS A REDEEMABLE WARRANTS

GENERAL

Each Common Stock Redeemable Warrant, or "public warrant," entitles the
holder of 50 public warrants to purchase one share of our Common Stock for
$25.00 per share. The exercise price is subject to adjustment upon the
occurrence of certain events as provided in the Common Stock Redeemable Warrant
certificate and as summarized below. Subject to certain limitations which are
described below, our Common Stock Redeemable Warrants with an original
expiration of October 12, 2005 may now be exercised at any time until April 12,
2007, which is their expiration date. Those of our Common Stock Redeemable
Warrants which have not previously been exercised will expire on April 12, 2007,
at the close of business (5:00 p.m. Boston time). A Common Stock Redeemable
Warrant holder will not be deemed to be a holder of the underlying shares of our
Common Stock for any purpose until the Common Stock Redeemable Warrant has been
properly exercised.

EXERCISE

A Common Stock Redeemable Warrant holder may exercise our Common Stock
Redeemable Warrants only if an appropriate registration statement is then in
effect with the Securities and Exchange Commission and if the shares of Common
Stock underlying our Common Stock Redeemable Warrants are qualified or
registered for sale under the securities laws of the state in which the holder
resides (or an exemption from registration is available). We will use
commercially reasonable efforts to maintain the registration of the Common Stock
underlying the warrants until

April 12, 2007, and to qualify for sale the shares of Common Stock in each U.S.
jurisdiction in which our Common Stock Redeemable Warrant holders reside,
although we can give no guarantee that such registration will be permitted under
applicable state law.

Our Common Stock Redeemable Warrants may be exercised by delivering to our
Transfer Agent the applicable Public Warrant certificate on or prior to the
expiration date, with the form on the reverse side of the certificate executed
as indicated, accompanied by payment of the full exercise price for the number
of Common Stock Redeemable Warrants being exercised plus payment of any taxes
required by the holder's jurisdiction. Fractional shares of Common Stock will
not be issued upon exercise of our Common Stock Redeemable Warrants.

ADJUSTMENTS OF EXERCISE PRICE

If we effect any stock split or stock combination with respect to our Class
A Voting Common Stock, the exercise price in effect immediately prior to such
stock split or combination will be proportionately reduced or increased, as the
case may be. Any adjustment of the exercise price will also result in an
adjustment of the number of shares purchasable upon exercise of a Common Stock
Redeemable Warrant.

REDEMPTION

We may repurchase the Common Stock Redeemable Warrants for $0.001 per
warrant upon 30 days' notice to the holders of the Class A Redeemable Warrants
in the event that the closing bid on the Over-the-Counter Bulletin Board for our
Class A Voting Common Stock is at or above $62.50 per share for five consecutive
days.

RESTRICTED WARRANTS

As of December 20, 2005, we had issued restricted warrants to purchase an
aggregate of 1,410,077 shares of our Common Stock, for which the weighted
average exercise price of these warrants is $7.29 per share. As of September
30, 2005, we also had issued restricted warrants to purchase an aggregate of
23,735,875 shares of our Class B Non-Voting Common Stock, for which the weighted
average exercise price of these warrants is $0.20 per share. These restricted
warrants include "net issuance" provisions, permitting a holder to exchange a
portion of the warrants for shares of the underlying security in lieu of payment
of a cash exercise price.

CONVERTIBLE NOTE

In consideration for a $10,000 loan made to us on March 9, 2001, we issued
a convertible promissory note. This convertible promissory note bears interest
at the rate of 12% per annum. This note is convertible into 889 shares of our
Common Stock at the election of the holder. The note originally matured on
September 9, 2001. On July 22, 2002, the holder of the note agreed with us to
convert the note into a demand note providing for quarterly payments of interest
on the note until the principal of the note is repaid or converted. The current
outstanding balance of this Note is $10,000.

On July 8, 2005 we entered into a Securities Purchase Agreement with certain
institutional and accredited investors and, in a private placement exempt from
the registration requirements of the Securities Act of 1933, we issued a series
of convertible term notes with an aggregate principal amount of $8,000,000 due
November 5, 2005, if not converted prior to such date. As part of that
offering, we also issued warrants to purchase up to 32,000,000 shares of our
capital stock. As part of the same offering, on August 15, 2005 we issued
additional notes with an aggregate principal amount of $965,000 and terms
identical to the notes issued on July 8, 2005, as well as warrants to purchase
up to 3,860,000 shares of our capital stock. All of the notes are convertible,
and the warrants are exercisable, first into as many shares of our Class A
Voting Common Stock, par value $0.01 per share, as are available for issuance at
the time of conversion or exercise, and then into shares of our Class B
Non-Voting Common Stock, par value $0.01 per share. As part of our agreement
with these investors, we have agreed to seek the approval from our stockholders
of the recapitalization of each outstanding share of our Class A Voting Common
Stock and our Class B Non-Voting Common Stock into a single class of voting
common stock, as well as a one-for-fifty reverse split of this new class of
common stock. If our stockholders approve these measures, the notes will
automatically convert into shares of the new class of common stock, and any
unexercised warrants will be exercisable for shares of that class of stock as
well. As there are currently no unissued shares of our Class A Voting Common
Stock that are not otherwise reserved for issuance, we anticipate that these
notes and warrants will be exercisable for shares of either our Class B
Non-Voting Common Stock or the newly created class of common stock, if approved.
Without taking into consideration interest payable on the notes, the notes are
convertible into 89,650,000 shares of our common stock

(regardless of class) at a current conversion rate of $0.10 per share and the
warrants are exercisable for ten years from the date they were issued for up to
41,189,000 shares of our common stock (regardless of class) at a current
exercise price of $0.15 per share. The conversion price of the notes and the
exercise price of the warrants are each subject adjustment for a variety of
events, including, for example, payment of dividends, certain mergers or asset
sales, and certain securities issuances. The completion of the recapitalization
triggered the mandatory conversion of these notes into 1,793,000 of Common
Stock.

We also entered into a Registration Rights Agreement whereby, among other
things, we agreed to file a registration statement, of which this prospectus is
a part, with the SEC, to register the resale of the shares of our capital stock
that we will issue upon exercise, if any, of the warrants and conversion of the
notes. We have agreed to keep the registration statement effective until all of
the shares registered by this prospectus are sold or can be sold without
registration and without restriction as to the number of shares that may be
sold.

LIMITATIONS ON DIRECTORS' LIABILITIES AND INDEMNIFICATION

Our Charter provides that members of our Board of Directors will not be
personally liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director except for liability:

- - for any breach of the director's duty of loyalty to the corporation or its
stockholders;
- - for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- - under Section 174 of the General Corporation Law of the State of Delaware
(relating to distributions by insolvent corporations); or
- - for any transaction from which the director derived an improper personal
benefit.

Our Charter also provides that if the General Corporation Law of the State
of Delaware is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of members of
our Board of Directors will be eliminated or limited to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as so
amended.

Our Charter and By-laws also provide that we may indemnify our directors
and officers to the fullest extent permitted by Delaware law. A right of
indemnification shall continue as to a person who has ceased to be a director or
officer and will inure to the benefit of the heirs and personal representatives
of such a person. The indemnification provided by our Charter and By-laws will
not be deemed exclusive of any other rights that may be provided now or in the
future under any provision currently in effect or hereafter adopted by our
Charter, By-laws, by any agreement, by vote of our stockholders, by resolution
of our directors, by provision of law or otherwise.

We have also secured directors' and officers' liability insurance on behalf
of our directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons in
accordance with the provisions contained in our Charter and By-laws, Delaware
law or otherwise, we have been advised that, in the opinion of the Securities
and Exchange Commission, this indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. If a
claim for indemnification against such liabilities (other than the payment by us
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer or controlling person, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act of 1933 and we will
follow the court's determination.

SHARES ELIGIBLE FOR FUTURE SALE

The following table outlines our capital stock as of September 30, 2005:

Shares Common Stock outstanding 5,511,603(1)

______________

(1) Assuming no exercise or conversion of warrants and options to purchase
2,353,203 shares of Common Stock outstanding as of December 20, 2005.

As of December 20, 2005, our affiliates held 1,791,902 shares of our Common
Stock. In general, under Rule 144, as currently in effect after the date of
this prospectus, a person (or persons whose shares are aggregated) who has
beneficially owned shares of our common stock for at least one year, including
any person who is deemed to be our affiliate, will be entitled to sell, within
any three-month period, a number of shares that does not exceed:

- - 1% of the number of shares of such class of common stock then outstanding,
which will equal approximately 55,116 shares.

Sales under Rule 144 are also governed by other requirements regarding the
manner of sale, notice filing and the availability of current public information
about us. Under Rule 144(k), however, a person who is not, and for the three
months prior to the sale of such shares has not been, an affiliate of the
Company will be free to sell "restricted securities" (e.g., shares issued in a
private placement) which have been held for at least two years without regard to
the limitations described above.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our securities is Transfer Online,
Inc. Transfer Online's address is 227 SW Pine Street, Suite 300, Portland,
Oregon 97204.

LEGAL MATTERS

The validity of the securities offered by this prospectus will be passed
upon for us by Geoffrey T. Chalmers, Esq.

EXPERTS

The financial statements for the year ended December 31, 2003 included in
this prospectus have been so included in reliance on the report (which contains
an explanatory paragraph relating to our ability to continue as a going concern
as described in Note 1 to the financial statements) of Carlin, Charron, & Rosen,
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The financial statements for the year ended December 31, 2004 included in this
prospectus have been so included in reliance on the report (which contains an
explanatory paragraph relating to our ability to continue as a going concern as
described in Note 1 to the financial statements) of Livingston and Haynes, LP.,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

ADDITIONAL INFORMATION

We filed with the Securities and Exchange Commission a registration
statement on Form SB-2 under the Securities Act of 1933 for the shares of Common
Stock in the offering, of which this prospectus is a part. This prospectus does
not contain all of the information in the registration statement and the
exhibits and schedule that were filed with the registration statement. For
further information with respect to us and our securities, we refer you to the
registration statement and the exhibits and schedule that were filed with the
registration statement.

Statements contained in this prospectus about the contents of any contract
or any other document that is filed as an exhibit to the registration statement
are not necessarily complete, and we refer you to the full text of the contract

or other document filed as an exhibit to the registration statement. A copy of
the registration statement and the exhibits and schedules that were filed with
the registration statement may be inspected without charge at the Public
Reference Room maintained by the Securities and Exchange Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of all or any part of the
registration statement may be obtained from the Securities and Exchange
Commission upon payment of the prescribed fee. Information regarding the
operation of the Public Reference Room may be obtained by calling the Securities
and Exchange Commission at 1-800-SEC-0330.

The Securities and Exchange Commission maintains a web site that contains
reports, proxy and information statements, and other information regarding
registrants that file electronically with the SEC. The address of the site is
www.sec.gov.

* * *

LOCATEPLUS HOLDINGS CORPORATION

INDEX TO FINANCIAL STATEMENTS

Page
----
Report of Independent Accountants. . . . . . . . . . . . . . . . . . . . F-2
Consolidated Balance Sheet as of December 31, 2004
and September 30, 2005 (unaudited). . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Operations for the years
Ended December 31, 2004 and 2003, and for the nine
months ended September 30, 2005 and 2004 (unaudited). . . . . . . . . . . F-4

Consolidated Statements of Stockholders' Equity
(Deficit) for the years ended December 31, 2004
and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated Statements of Cash Flows for the years
ended December 31, 2004 and 2003, and for the nine
months ended September 30, 2005 and 2004 (unaudited). . . . . . . . . . . F-6

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . F-7

F-1

INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors of
LocatePLUS Holdings Corporation
Beverly, Massachusetts

We have audited the accompanying consolidated balance sheet of LocatePLUS
Holdings Corporation as of December 31, 2004, and the related consolidated
statements of operations, stockholders' equity (deficit) and cash flows for the
year ended December 31, 2004. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of LocatePLUS
Holdings Corporation and its subsidiaries as of December 31, 2004, and the
results of its consolidated operations and its consolidated cash flows for the
year ended December 31, 2004, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As disclosed in the financial
statements, the Company has an accumulated deficit at December 31, 2004 and has
suffered substantial net losses in each of the last two years, which raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are disclosed in Note 1. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/LIVINGSTON & HAYNES, P.C.
Livingston & Haynes, P.C.
Wellesley, Massachusetts

The accompanying financial statements as of September 30, 2005 and for the snine
months ended September 30, 2005, have not been audited as disclosed in Note 1.

September 30, 2005

F-2

REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

To the Stockholders and Board of Directors of
LocatePLUS Holdings Corporation
Beverly, Massachusetts

We have audited the accompanying consolidated balance sheet of LocatePLUS
Holdings Corporation as of December 31, 2003, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
two years in the period ended December 31, 2003. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of LocatePLUS
Holdings Corporation as of December 31, 2003, and the results of its
consolidated operations and its consolidated cash flows for each of the two
years in the period ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As disclosed in the financial
statements, the Company has an accumulated deficit at December 31, 2003 and has
suffered substantial net losses in each of the last two years, which raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are disclosed in Note 1. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

CARLIN, CHARRON & ROSEN LLP
Westborough, Massachusetts
March 18, 2004

The accompanying financial statements for the nine months ended September 30,
2004, have not been audited as disclosed in Note 1.

F-3

LOCATEPLUS HOLDINGS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2005 2004
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 240,571 $ 1,186,939
Accounts receivable, less
allowance for doubtful accounts
of 275,926 and
180,031 at September 30, 2005
and December 31, 2004 respectively. . . . . . . 3,689,640 956,711
Prepaid expenses and other current assets . . . 951,118 308,065
Notes receivable. . . . . . . . . . . . . . . . 197,336 455,458

Total current assets . . . . . . . . . . . . . . 5,078,665 2,907,173

Property and equipment, net . . . . . . . . . . . 2,765,679 3,000,651
Other assets. . . . . . . . . . . . . . . . . . . 222,090 1,295,377

Total assets . . . . . . . . . . . . . . . . . . $ 8,066,434 $ 7,203,201

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . 932,793 2,032,557
Accrued expenses. . . . . . . . . . . . . . . . 210,528 232,169
Deferred revenue. . . . . . . . . . . . . . . . 68,173 58,244
Current portion of capital lease obligation . . 235,184 597,933
Current Notes Payable . . . . . . . . . . . . . 1,891,151 1,518,739
Current Convertible notes payable . . . . . . . 8,974,999 1,383,440

Total current liabilities. . . . . . . . . . . . 12,312,828 5,823,082

Capital lease obligation, net of current portion. 67,420 231,358
Notes payable . . . . . . . . . . . . . . . . . . 17,058 206,576
Convertible notes payable . . . . . . . . . . . . - 2,165,793

Total liabilities. . . . . . . . . . . . . . . . 12,397,306 8,426,809

Commitments and contingencies . . . . . . . . . . --

Class A common stock, $0.01
par value; 150,000,000 shares
authorized; 111,424,416 and
96,890,978 shares issued and
outstanding at September 30, 2005
and December 31, 2004 respectively. . . . . . . 1,114,244 968,909
Class B common stock, $0.01
par value, 250,000,000 shares
authorized; 74,505,730 shares
issued and outstanding at
September 30, 2005 and
December 31, 2004 respectively. . . . . . . . . . 745,057 731,692
Additional paid-in capital. . . . . . . . . . . 26,880,363 25,391,509
Warrants. . . . . . . . . . . . . . . . . . . . 2,410,787 2,410,787
Common stock subscription receivable. . . . . . (200,000) (488,558)
Impaired value of securities. . . . . . . . . . (807,500)
Accumulated deficit . . . . . . . . . . . . . . (34,473,823) (30,237,947)

Total stockholders' equity . . . . . . . . . . . (4,330,872) (1,223,608)

Total liabilities and stockholders' equity . . . $ 8,066,434 $ 7,203,201

See independent auditors' report and notes to consolidated financial statements.
F-4

LOCATEPLUS HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED FOR THE YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------------ ----------------------------
2005 2004 2004 2003
(unaudited) (unaudited)
-------------- -------------- ------------- -------------

Revenues
Information sales - CD-Rom. . . . . $ 369,996 $ 458,004 $ 550,923 $ 478,278
Information sales - online. . . . . 4,671,406 2,799,275 4,107,714 2,543,581
Information sales - channel . . . . 3,109,902 574,156 1,028,650 263,834
Information sales - wireless. . . . 9,435 4,625 13,095 7,417
Engineering services. . . . . . . . 505,000 147,200 562,200 105,667
-------------- -------------- ------------- -------------
Total revenues. . . . . . . . . . . 8,665,739 3,983,260 6,262,582 3,398,777
-------------- -------------- ------------- -------------
Costs and expenses:
Costs of revenues
CD-Rom. . . . . . . . . . . . . . . . 106,582 67,996 96,683 91,775
Online and channel. . . . . . . . . . 2,998,852 2,875,798 3,652,714 2,606,875
Wireless. . . . . . . . . . . . . . . 871 870 2,749
Engineering . . . . . . . . . . . . . 123,750 124,175 26,025
Selling and marketing . . . . . . . 1,892,015 1,039,767 1,900,984 1,049,381
General and administrative. . . . . 5,240,852 5,046,712 6,467,306 3,804,200
Research and Development. . . . . . 163,655 239,076 316,941 -
-------------- -------------- ------------- -------------
Total operating expenses. . . . . . . 10,525,706 9,270,220 12,559,674 7,581,005
-------------- -------------- ------------- -------------
Operating loss . . . . . . . . . . . . (1,859,967) (5,286,960) ( 6,297,091) (4,182,228)
-------------- -------------- ------------- -------------
Other income (expense):
Interest income . . . . . . . . . . 16,282 68,239 159,461 137,253
Interest expense. . . . . . . . . . (2,393,840) (694,256) (747,279) (686,315)
Interest expense -
amortization of discounts . . . . - - (193,131) -
Other income. . . . . . . . . . . . 1,649 25,844 30,280 40,605
Write-off accrued license fees. . . - - - 283,500
Impairment of Note Receivable . . . (500,000)
-------------- -------------- ------------- -------------
Net loss . . . . . . . . . . . . . . . $ (4,235,876) $ (5,887,133) $( 7,547,760) $ (4,407,185)
============== ============== ============= =============
Basic and diluted net loss per share . $ (0.02) $ (0.04) $ (0.04) $ (0.03)

Shares used in computing
basic and diluted net loss per share 176,285,908 159,413,850 161,506,032 130,299,353

See independent auditors' report and notes to consolidated financial statements.
F-5

LOCATEPLUS HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
CLASS A CLASS B ADDITIONAL
COMMON STOCK COMMON STOCK PAID-IN
SHARES AMOUNT SHARES AMOUNT CAPITAL

---------- -------- ---------- ----------- ------------
Balance at December 31, 2002. . . . . . . . . . . . . . . 54,850,292 $548,503 68,640,726 $ 686,407 $17,749,748
Payment of stock subscription receivable. . . . . . . . .
Issuance of detachable warrants to purchase . . . . . . .
common stock in conjunction with debt . . . . . . . . . .
and lease financing . . . . . . . . . . . . . . . . . . .
Issuance of common stock in exchange
for services. . . . . . . . . . . . . . . . . . . . . . . 3,547,519 35,475 1,262,500 12,625 551,900
Issuance of Units at $0.16 per unit . . . . . . . . . . . 2,477,250 24,773 257,695
Issuance of common stock in exchange
for services. . . . . . . . . . . . . . . . . . . . . . . 125,000 1,250 12,500
Issuance of detachable warrants to purchase common
stock in exchange for service . . . . . . . . . . . . . .
Issuance of options to purchase common
stock as part of severance agreement. . . . . . . . . . . 17,870
Exercise of options @ $0.20 . . . . . . . . . . . . . . . 1,414,450 14,145 268,746
Net Issuance options exercised. . . . . . . . . . . . . . 2,170,909 21,709 (21,709)
Issuance of Units at $0.16 per unit . . . . . . . . . . . 370,370 3,704 55,227
Issuance of shares throughout the year. . . . . . . . . . 8,907,634 89,076 1,189,013
Issuance of shares in accordance with put option. . . . . 2,708,637 27,086 623,982
Issuance of commons stock for investment in subsidiary. . 2,500,000 25,000 262,500
Net loss for the year ended
December 31, 2003 . . . . . . . . . . . . . . . . . . . .
---------- -------- ---------- ----------- ------------
Balance at December 31, 2003. . . . . . . . . . . . . . . 76,076,691 $760,767 72,898,596 728,986 20,967,472
Issuance of shares. . . . . . . . . . . . . . . . . . . . 2,791,532 27,915 502,460
Issuance of shares. . . . . . . . . . . . . . . . . . . . 8,600,841 86,008 3,228,850
Exercise of options @ $0.15 . . . . . . . . . . . . . . . 250,000 2,500 35,000
Exercise of options . . . . . . . . . . . . . . . . . . . 3,604,350 36,044 107,327
Net Issuance options/warrants exercised . . . . . . . . . 964,821 9,648 260,582 2,606 (12,254)
Warrants exercised. . . . . . . . . . . . . . . . . . . . 1,000 10 10,000 100 2,589
Issuance of stock and warrants in exchange
for services. . . . . . . . . . . . . . . . . . . . . . . 4,601,743 46,017 560,065
Net loss for the year ended
December 31, 2004 . . . . . . . . . . . . . . . . . . . .
---------- -------- ---------- ----------- ------------
Balance at December 31, 2004. . . . . . . . . . . . . . . 96,890,978 968,909 73,169,178 731,692 25,391,509

LOCATEPLUS HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
WARRANTS STOCK TOTAL STOCKHOLDERS'
SUBSCRIPTION ACCUM EQUITY
RECEIVABLE DEFICIT (DEFICIT)

------------- ---------- ----------------- ------------
Balance at December 31, 2002. . . . . . . . . . . . . . . $ 1,824,833 $(174,908) $ (18,283,002)) $ 2,351,581
Payment of stock subscription receivable. . . . . . . . . 174,908 174,908
Issuance of detachable warrants to purchase
common stock in conjunction with debt
and lease financing . . . . . . . . . . . . . . . . . . . 208,481 208,481
Issuance of common stock in exchange
for services. . . . . . . . . . . . . . . . . . . . . . . 600,000
Issuance of Units at $0.16 per unit . . . . . . . . . . . 113,892 396,360
Issuance of common stock in exchange
for services. . . . . . . . . . . . . . . . . . . . . . . 13,750
Issuance of detachable warrants to purchase common
stock in exchange for service . . . . . . . . . . . . . . 49,173 49,173
Issuance of options to purchase common
stock as part of severance agreement. . . . . . . . . . .
Exercise of options @ $0.20 . . . . . . . . . . . . . . . 282,890
Net Issuance options exercised. . . . . . . . . . . . . . -
Issuance of Units at $0.16 per unit . . . . . . . . . . . 41,069 100,000
Issuance of shares throughout the year. . . . . . . . . . 1,278,089
Issuance of shares in accordance with put option. . . . . 651,068
Issuance of commons stock for investment in subsidiary. . 287,500
Net loss for the year ended
December 31, 2003 . . . . . . . . . . . . . . . . . . . . (4,407,185) (4,407,185)
------------- ---------- ----------------- ------------
Balance at December 31, 2003. . . . . . . . . . . . . . . $ 2,237,448 $ $ (22,690,187) $ 2,004,486
Issuance of shares. . . . . . . . . . . . . . . . . . . . 530,375
Issuance of shares. . . . . . . . . . . . . . . . . . . . 3,314,858
Exercise of options @ $0.15 . . . . . . . . . . . . . . . 37,500
Exercise of options . . . . . . . . . . . . . . . . . . . 143,370
Net Issuance options/warrants exercised . . . . . . . . . -
Warrants exercised. . . . . . . . . . . . . . . . . . . . 2,699
Issuance of stock and warrants in exchange
for services. . . . . . . . . . . . . . . . . . . . . . . 173,339 (488,558) 290,863

Net loss for the year ended
December 31, 2004 . . . . . . . . . . . . . . . . . . . . (7,547,760) (7,047,760)
------------- ---------- ----------------- ------------
Balance at December 31, 2004. . . . . . . . . . . . . . . 2,410,787 (488,558) (30,237,947) (1,223,608)
============= ========== ================= ============

See independent auditors' report and notes to consolidated financial statements.

F-6

LOCATEPLUS HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED FOR THE YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
2005 2004 2004 2003
(unaudited) (unaudited)
-------------- -------------- -------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . ($4,235,876) ($5,887,133) ($7,547,760) ($4,407,185)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization of
property and equipment . . . . . . . . . . 765,244 677,570 943,473 571,527
Provision for doubtful accounts . . . . . . . . 95,895 87,182 69,573 150,603
Interest expense related to
warrants issued with debt . . . . . . . . . 199,369 132,257 193,131 327,420
Amortization of notes receivable
from related parties. . . . . . . . . . . . - - - 9,722
Amortization of intangible assets . . . . . . . 118,059 119,198 158,551 28,512
Write down of accrued license fees. . . . . . . - - - 283,500
Impairment of Note Receivable . . . . . . . . . - - 500,000 -
Expense recorded for fair value of
stock, options, and warrants
issued for services . . . . . . . . . . . . 705,448 11,422 290,864 261,309
Changes in assets and liabilities:
Accounts receivable. . . . . . . . . . . . (2,828,824) (396,808) ( 457,472) (449,848)
Prepaid expenses and other assets. . . . . (643,052) 402,045 345,099 (5,006)
Accounts payable . . . . . . . . . . . . . (1,099,764) 523,850 ( 476,909) (113,772)
Accrued expenses . . . . . . . . . . . . . (21,641) (211,127) 809,756 (292,170)
Deferred revenue . . . . . . . . . . . . . 9,929 (40,317)) (206,283) 24,510
Security Deposits. . . . . . . . . . . . . 147,728 236,134 ( 42,105) (24,112)
-------------- -------------- -------------- ------------
Net cash used in operating activities . (6,787,485) (4,345,707) ( 5,420,082) (3,634,990)
-------------- -------------- -------------- ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Principal repayment of purchased note receivable . . 333,333 235,000 422,500 539,767
Purchase of note receivable. . . . . . . . . . . . . (75,211) (64,388) ( 119,638) (210,021)
Purchases of property and equipment. . . . . . . . . (530,272) (566,352) ( 647,517) (74,568)
Proceeds from sale of property and equipment . . . . - 1,500
-------------- -------------- -------------- ------------
Net cash provided by investing activities (272,150) (395,740) (344,655) 256,678
-------------- -------------- -------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt. . . . . . . . . . . . . . . . . . (4,331,363) (642,897) ( 1,013,911) (561,790)
Proceeds from issuance of debt . . . . . . . . . . . 9,740,653 3,250,000 4,250,000 1,816,000
Financing fees on issuance of debt . . . . . . . . . - (297,000) ( 312,000)
Payments of obligations under capital lease. . . . . (526,687) (1,029,338) (1,246,893) (737,504)
Proceeds from issuance of common
stock and collection of stock
subscriptions receivable, net of
issuance costs. . . . . . . . . . . . . . . . . . 1,230,664 3,557,931 3,751,558 2,723,315
-------------- -------------- -------------- ------------
Net cash provided by financing activities 6,113,267 4,838,696 5,428,754 3,240,021
-------------- -------------- -------------- ------------
Net (decrease) increase in cash and cash equivalents. . . . . (946,368) 97,249 ( 335,983) (138,291)

Cash and cash equivalents, beginning of period. . . . . . . . 1,186,939 1,522,922 1,522,922 1,661,213
-------------- -------------- -------------- ------------
Cash and cash equivalents, end of period. . . . . . . . . . . $ 240,571 $ 1,620,171 1,186,939 1,522,922
============== ============== ============== ============
Supplemental disclosures of cash
flows information:
Cash paid for interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 691,429 $ 378,894

Supplemental disclosure of non-cash
investing and financing activities:
Acquisition of property and equipment
under capital leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805,431 $ 1,658,416
Relative fair value of detachable warrants
issued in conjunction with convertible debt . . . . . . . . . . . . . . . . . . . . . . . . 268,866 327,420
Issuance of common stock for subscription
receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488,558 -
Fair value of warrants issued in conjunction
with services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261,308 261,308

See independent auditors' report and notes to consolidated financial statements.

F-7

LOCATEPLUS HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

LocatePLUS Holdings Corporation (the "Company") was initially incorporated
in Massachusetts in 1996 as Worldwide Information, Inc. In July 1999, the
Company reincorporated in Delaware and changed its name to LocatePLUS.com, Inc.
On August 1, 2001, the Company changed its name from LocatePLUS.com, Inc. to
LocatePLUS Holdings Corporation as part of a corporate restructuring. Also, as
part of the restructuring, the Company created two wholly-owned subsidiaries,
LocatePLUS Corporation and Worldwide Information, Inc. The restructuring was
completed by commonly-controlled entities and, accordingly, was accounted for
based on historical cost. In September 2003, the Company, through its newly
formed wholly owned subsidiary Certifion Corporation, acquired all of the assets
of Project Entersect Corporation. The acquisition was accounted for as a
purchase and is recorded with the Company's operations from the date of purchase
through December 31, 2003. In October 2003, the Company merged Voice Power
Technology into its newly formed wholly owned subsidiary Dataphant, Inc. There
were no assets acquired in this acquisition and the Company issued 2,500,000
shares of its Class B Non-Voting common stock to the stockholders of Voice Power
Technology in consideration for a two year non-competition agreement with these
stockholders. All intercompany accounts and transactions have been eliminated
in consolidation.

The Company provides access to public information such as bankruptcies,
real estate transactions, motor vehicles, and drivers' licenses to commercial,
private sector and law enforcement entities in the United States. Prior to
March 2000, the Company delivered information to customers on compact disks. In
March 2000, the Company began providing information through the Internet and in
2002 began providing information through the use of handheld wireless devices.

UN-AUDITED INTERIM FINANCIAL STATEMENTS
The accompanying interim consolidated condensed financial statements are
unaudited and have been prepared in accordance with accounting principles
generally accepted in the United States of America. These statements include
the accounts of LocatePlus Holdings Corporation and its subsidiaries. Certain
information and footnote disclosures normally included in LocatePlus Holdings
Corporation's annual consolidated financial statements have been condensed or
omitted in accordance with Securities and Exchange Commission ("SEC") rules for
interim financial statements. The interim consolidated financial statements, in
the opinion of management, reflect all adjustments (consisting only of normal
recurring accruals) necessary to fairly present the financial position as of
September 30, 2005 and the results of operations and cash flows for the three
months and nine months then ended. There were no material unusual charges or
credits to operations during the recently completed fiscal quarter.

The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the entire fiscal
year. These interim consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the year
ended December 31, 2004, which are contained in LocatePlus Holdings
Corporation's Annual Report filed on Form 10-KSB filed with the SEC on May 17,
2005.

LIQUIDITY AND OPERATIONS
The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates
continuity of operations, realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. The Company has
incurred substantial losses in each of the last two years as well as during the
nine

F-8

months ended September 30, 2005, and has incurred an accumulated deficit of
approximately $30 million through December 31, 2004 and $34 million through
September 30, 2005. These circumstances raise substantial doubt about the
Company's ability to continue as a going concern. These financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

During August 2003, the Company issued a put to one investor through an equity
agreement, which provides that the Company, subject to certain limitations, has
the right to sell, at its discretion, up to $5 million in shares of the
Company's Class A Voting Common Stock to the investor at a purchase price equal
to 95% of the lowest closing bid price for the Company's Class A Voting Common
Stock during a ten-day pricing period. The number of shares that the Company
may sell to that investor is limited by the trading volume of the Company's
Class A Voting Common Stock and certain customary closing conditions. The
Company sold 17,042,761 shares for a total $4,846,291 in net proceeds from the
investor through September 30, 2005.

On June 17, 2004 the Company entered into a Securities Purchase Agreement with
Laurus Master Fund, Ltd., a Cayman Islands company, relating to the private
placement of a convertible term note issued by the Company in the principal
amount of $3,000,000 due June 17, 2007 (the "Note"), and a common stock purchase
warrant (the "Warrant"). On November 30, 2004, this note was amended to
increase the principal amount to $4,000,000 and add an additional warrant. The
terms, as amended, allow for this note to convert into 6,666,667 shares of our
Class A Voting Common Stock at a fixed conversion rate of $0.30 per share and
5,000,000 shares of our Class A Voting Common Stock at a fixed conversion rate
of $0.40 per share. One Warrant provides for the purchase of up to 1,320,000
shares of Class A Common Stock at a price of $0.45 each, subject to customary
adjustments, until June 17, 2009, and the additional Warrant provides for the
purchase of up to 650,000 shares of Class A Common Stock at a price of $0.35
each, subject to customary adjustments, until November 30, 2009. On March 31,
2005, the Company amended its convertible term note issued by the Company to
Laurus Master Fund, Ltd., a Cayman Islands company. The terms, as amended,
allow for this note to convert into 6,250,000 shares of our Class A Voting
Common Stock at a fixed conversion rate of $0.16 per share, 3,333,333 shares of
our Class A Voting Common Stock at a fixed conversion rate of $0.30 per share
and 5,000,000 shares of our Class A Voting Common Stock at a fixed conversion
rate of $0.40 per share. On July 8, 2005 the Company used $4 million from the
proceeds of an offering of convertible debt to pay in full the remaining amounts
due under this note. The Warrant was unaffected by this repayment.

In July, 2005, the company raised $9 million through the issuance of convertible
debt. The net proceeds were used to pay down existing debt of $4 million and
the balance will be used to fund operations. Management's plans include
increasing sales, expanding infrastructure, and hiring additional staff that may
require the Company to obtain additional financing (through sales of equity
securities or debt instruments). There can be no assurance, however that the
Company's operations will be profitable or will generate sufficient cash to fund
the Company's business in the future or that the Company will be able to obtain
additional financing if needed. The Company's financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

In connection with an offering that closed on August 15, 2005 we entered
into a Purchase Agreement with certain institutional and accredited investors
relating to the private placement of convertible term notes issued by the
Company in the principal amount of $8,965,000 and warrants to purchase up to
41,189,000 shares of our capital stock. Of the proceeds from this offering,
approximately $4.1 million was used to retire current secured convertible notes,
and the remainder will be used for general working capital.

F-9

All of the notes are convertible, and the warrants are exercisable, first into
as many shares of our Class A Voting Common Stock, par value $0.01 per share, as
are available for issuance at the time of conversion or exercise, and then into
shares of our Class B Non-Voting Common Stock, par value $0.01 per share. As
part of our agreement with these investors, we have agreed to seek the approval
from our stockholders of the recapitalization of each outstanding share of our
Class A Voting Common Stock and our Class B Non-Voting Common Stock into a
single class of voting common stock, as well as a one-for-fifty reverse split of
this new class of common stock. If our stockholders approve these measures, the
notes will automatically convert into shares of the new class of common stock,
and any unexercised warrants will be exercisable for shares of that class of
stock as well. As there are currently no un-issued shares of our Class A Voting
Common Stock that are not otherwise reserved for issuance, we anticipate that
these notes and warrants will be exercisable for shares of either our Class B
Non-Voting Common Stock or the newly created class of common stock, if approved.
Without taking into consideration interest payable on the notes, the notes are
convertible into 89,650,000 shares of our common stock (regardless of class) at
a current conversion rate of $0.10 per share and the warrants are exercisable
for ten years from the date they were issued for up to 41,189,000 shares of our
common stock (regardless of class) at a current exercise price of $0.15 per
share. The conversion price of the notes and the exercise price of the warrants
are each subject to adjustment for a variety of events, including, for example,
payment of dividends, certain mergers or asset sales, and certain securities
issuances. In conjunction with this offering, we also entered into related
Registration Rights and Voting Agreements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH EQUIVALENTS
The Company considers all money market funds, bank certificates of deposit,
and short term investments with original maturities of three months or less at
the date of purchase to be cash equivalents.

CONCENTRATION OF CREDIT RISK
Financial instruments that subject the Company to credit risk consist of
cash and cash equivalents, accounts receivable and notes receivable. The risk
with respect to cash and cash equivalents is minimized by the Company's policies
in which such investments are placed only with highly rated financial
institutions and in instruments with relatively short maturities. The financial
stability of these financial institutions is frequently reviewed by senior
management. The notes receivable are placed with unrelated companies that are
also reviewed by management. Consequently, the carrying value of cash and cash
equivalents, and notes receivable approximates their fair value based on the
short-term maturities of these instruments. The risk with respect to accounts
receivable is minimized by the large number of customers comprising the
Company's customer base, none of which are individually significant, and by
their dispersion across many geographical regions. The Company generally does
not require collateral, but evaluations of customers' credit and financial
condition are performed periodically.

PROPERTY AND EQUIPMENT
Property and equipment are carried at cost less accumulated depreciation.
Depreciation is calculated using the straight-line method at rates sufficient to
write off the cost of the assets over their estimated useful lives.

F-10

INTANGIBLE ASSETS
Costs of acquiring businesses, such as customer lists and non-compete
agreements, are being amortized on a straight-line basis over 2-3 years, while
deferred financing costs are being amortized over the term of the related debt.

INCOME TAXES
The Company accounts for income taxes using the liability method under
which deferred tax assets and liabilities are determined based on differences
between financial reporting and income tax bases of assets and liabilities and
are measured using the enacted tax rates and laws that will be in effect when
the differences are expected to reverse. The majority of the Company's deferred
tax asset has been established for the expected future benefit of net operating
tax loss and credit carryforwards. A valuation reserve against net deferred tax
assets is required if, based upon available evidence, it is more likely than not
that some or all of the deferred tax assets will not be realized.

REVENUE RECOGNITION
The Company provides access to public information such as bankruptcies,
real estate transactions, motor vehicles and drivers' licenses. The Company
provides this information as an online service through its website, wirelessly
to handheld wireless devices, via XML over the Internet to Channel Partners, or
through licenses of the information on compact disks.

The Company updates the information contained in compact disks (CD-Roms)
either quarterly or semi-annually. Revenue is recognized upon delivery to the
customer of a compact disk, provided that no significant obligations remain,
evidence of the arrangement exists, the fees are fixed or determinable, and
collectibility is reasonably assured. In October 2002, the Company changed its
method of selling compact disks. Prior to October 2002, compact disks were sold
with an upfront purchase of an annual supply of compact disks, with the purchase
price allocated equally based on the number of compact disks to which the
customer was entitled. Deferred revenue principally related to undelivered
compact disks. Subsequent to October 2002, compact disks are sold individually
and customers may choose to have the disks automatically shipped and billed at
predetermined times.

Online customers are charged fees which vary based on the type of
information requested. Revenue is recognized when the information requested is
downloaded, there is evidence of an arrangement, the fees are fixed or
determinable, and collectibility is reasonably assured.
Wireless customers using LocatePlus Anywhere are charged a monthly
subscription fee billed in arrears. Revenue is recognized on a monthly basis
when there is evidence of an arrangement, the fees are fixed or determinable,
and collectibility is reasonably assured.

Channel partners are charged royalty fees, which vary based on the type of
information requested. Revenue is recognized when the information requested is
downloaded, there is evidence of an arrangement, the fees are fixed or
determinable, and collectibility is reasonably assured.

Engineering services relate to integration services provided to a third
party database provider with whom the Company has an arrangement whereby the
Company provides the third party access to the Company's database. Revenue is
recognized over the term of the contract when there is evidence of an
arrangement, the fees are fixed or determinable, and collectibility is
reasonably assured.

COSTS OF REVENUES AND SOFTWARE DEVELOPMENT COSTS
Costs of revenues relating to CD-Rom sales consist primarily of costs for
data acquisition, materials and costs associated with compilation of compact
disks, such as labor. Costs of

F-11

revenues relating to online sales consist primarily of costs for license
agreements related to data acquisition, software development and maintenance
costs and costs associated with delivery of such services that include labor and
depreciation.

Software development costs are generally charged to operations as incurred,
as they relate to ongoing maintenance of data and the Company's website. The
Company evaluates certain software development costs for capitalization in
accordance with the American Institute of Certified Public Accountants Statement
of Position 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." Costs incurred relating to the
Company's own personnel and outside consultants who are directly associated with
software developed for internal use may be capitalized. Costs eligible for
capitalization under SOP 98-1 have been immaterial to date.

STOCK COMPENSATION PLANS
The Company applies the disclosure only provisions of the Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123") and SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition Disclosure" (SFAS 148") for employee stock option
awards. Had compensation cost for the Company's stock option plan been
determined in accordance with the fair value-based method prescribed under SFAS
123, the Company's net loss and basic and diluted net loss per share would have
approximated the pro forma amounts indicated below.

NINE MONTHS
ENDED YEAR ENDED DECEMBER 31
SEPTEMBER 30,
2005 2004 2003
(unaudited)

Net loss - reported . . . $ (4,235,876) $ (6,958,522 ) $ (4,383,229)
--------------- -------------- -------------
Amortization of stock
compensation expense. . . ( 969,485 ) ( 1,367,513 ) (84,246)
Pro forma net loss. . . . $ (5,205,361) $ ( 8,326,035) $ (4,467,475)
--------------- -------------- -------------
Pro forma net loss per
share - basic and diluted $ (0.03) $ (0.05) $ (0.03)
=============== ============== =============

The weighted average fair value of options granted during 2004 and 2003 was
$0.05 and $0.03 respectively. The Company recognizes forfeitures as they occur.
For purposes of this disclosure, the estimated fair value of the options is
amortized to expense over the options' vesting periods.

In 2004, the fair value of stock options used to compute pro forma net loss
and net loss per share disclosures was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions: dividend yield of 0%; expected volatility of 34%; average risk-free
interest rate of 4.03%; and an expected option holding period of 6 years. In
2003, the fair value of stock options used to compute pro forma net loss and net
loss per share disclosures was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions: dividend yield of 0%; expected volatility of 25%; average risk-free
interest rate of 3.54%; and an expected option holding period of 6 years.

ADVERTISING
The Company charges advertising costs to operations when incurred.
Advertising expense was $308,500 in 2004 and $9,225 in 2003.

F-12

EARNINGS PER SHARE
Basic earnings per share is based upon the weighted average number of
common shares outstanding during each period. Diluted earnings per share gives
effect to all dilutive potential common shares outstanding during the period.
The computation of diluted earnings per share does not assume the issuance of
potential common shares that have an anti-dilutive effect. Diluted per share
computations are not presented since the effect would be antidilutive.

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 disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

RECENT PRONOUNCEMENTS
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29." APB Opinion No. 29, "Accounting for
Nonmonetary Transactions," is based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of the assets
exchanged. SFAS No. 153 amends APB Opinion No. 29, eliminating the exception to
fair value accounting for nonmonetary exchanges of similar productive assets and
replaces it with a general exception to fair value accounting for nonmonetary
exchanges that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The statement is effective for
non-monetary asset exchanges occurring in fiscal periods beginning after
September 15, 2005. The Company does not expect this statement to have a
material impact on its financial statements.

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment."
SFAS No. 123R requires employee stock options and rights to purchase shares
under stock participation plans to be accounted for under the fair value method,
and eliminates the ability to account for these instruments under the intrinsic
value method prescribed by APB Opinion No. 25, and allowed under the original
provisions of SFAS No. 123. SFAS No. 123R requires the use of an option pricing
model for estimating fair value, which is amortized to expense over the service
periods. The requirements of SFAS No. 123R are effective for fiscal periods
beginning after September 15, 2005. If the Company had applied the provisions of
SFAS No. 123R to the financial statements for the period ending December 31,
2004, net income would have been reduced by approximately $1.4 million. SFAS No.
123R allows for either prospective recognition of compensation expense or
retrospective recognition, which may be back to the original issuance of SFAS
No. 123 or only to interim periods in the year of adoption. The Company is
currently evaluating these transition methods.

In October 2004, the FASB ratified the EITF consensus on Issue 04-1,
Accounting for Preexisting Relationships between the Parties to a Business
Combination. This consensus describes the accounting for the settlement of
preexisting relationships and the re-acquisition of certain rights in a business
combination. This consensus was effective for the fourth quarter of 2004 and was
adopted by the Company in that quarter. This adoption did not have a material
effect on the Company's results of operations, cash flows or financial position,
but may impact future transactions.

3. ACCOUNTS RECEIVABLE, TRADE
Trade accounts receivable are presented net of an allowance for doubtful
collections of $180,031 at December 31, 2004. In determining this allowance,
objective evidence that a single receivable is uncollectible as well as a
historical pattern of collections of accounts receivable that indicate

F-13

that the entire face amount of a portfolio of accounts receivable may not be
collectible is considered at each balance sheet date.

4. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets primarily consist of
approximately $98,000 in prepaid insurance and data, $107,055 in fees for
financing that are being amortized over the length of the term, and $386,331 in
interest receivable on notes receivable.

5. NOTES RECEIVABLE

The Compant holds a demand promissory note receivable from an unrelated
leasing company, with interest at 11%. The Company advanced one million dollars
to an unrelated leasing company near the end of 2002 as proceeds from the
Company's initial public offering were collected. There is no business
relationship between the Company and this leasing company or any officers or
directors of either company. Interest income on the note receivable was
approximately $137,291.71 in 2004 and $100,000 in 2003 and $319,092 is unpaid at
December 31, 2004 and is included in prepaid expenses and other current assets.
The remaining principal balance at December 31, 2004 was $453,508 and the
remaining principal balance at September 30, 2005 was $358,508. At December 31,
2004, substantial doubt existed on collectability of these balances. An
allowance of $500,000 was recorded against the outstanding balance.

The Company holds an unsecured note receivable with Paradigm Tactical Products,
Inc.. There is an oral agreement to advance up to $250,000 on this note. None
of the Company's officers or directors are officers or directors of Paradigm nor
do any of the Company's officers or directors own stock in or have any business
relationship with such entity, except that the Company is currently performing
some administrative and bookkeeping services for Paradigm in exchange for
approximately $1,000 per month. The Company has advanced as much as $250,000 to
Paradigm in the form of cash and services. The balance of this loan at December
31, 2004 was $182,859. The balance including accrued interest at September 30,
2005 was $19,736. In October, this note was paid in full and the agreement has
been cancelled.

7. PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2004, consists of the following:

Equipment $ 4,443,774
Vehicles 113,368
Software 208,234
Furniture and fixtures 389,782
Leasehold improvements 618,093
---------
5,773,251
---------
Less accumulated depreciation and amortization 2,772,600
---------
Property and equipment, net $ 3,000,651
==========

The carrying value of assets under capital leases was $ 1,545,293.20, net
of amortization of $ 976,133.38, as of December 31, 2004.

Depreciation and amortization expense was $943,473 and $576,081 for the
years ended December 31, 2004 and 2003, respectively, which includes
amortization expense on the equipment under capital lease of $353,835 and
$277,828 for the years ended December 31, 2004 and 2003, respectively.

F-14

8. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following at
December 31, 2004:

Accrued interest receivable $ 319,092
Prepaid expenses 179,264
Deferred financing costs 107,055
Other 21,746
---------
Total $ 627,157
=========

9. OTHER ASSETS
Other assets consist of the following at:
SEPTEMBER 30, DECEMBER 31,
2005 2004

Restricted trading securities $ 67,500 $ 875,000
Customer lists and non-compete
agreement net of amortization 59,576 177,636
Deferred financing costs - 152,150
Security deposits 95,014 90,591
--------- -----------
Total $ 222,090 $ 1,295,377
========= ===========

Restricted trading securities consist of 200,000 restricted shares of common
stock in Data Evolution Holdings, Inc. (DEH), which trades over the counter
under the symbol DTEV. These shares were acquired as part of an agreement to
provide service and data to DEH. The service and data was at valued at
$875,000. At the time the service and data was valued, November 22, 2004, the
trailing 10 day average closing price of DTEV was $5.96 per share, or
$1,192,000. Due to the fact that these shares were restricted, a mutually
agreed upon 25% liquidity discount was applied to the value, or $894,000, as
such 200,000 shares were exchanged for the service. At December 31, 2004, the
10-day trailing average closing price was $4.94 per share, or the value of the
shares was $988,000. No impairment to the current value has been recorded since
the carrying value is still at a 12% discount to the 10-day trailing average
market value. Had the securities been adjusted to the original 25% discount,
the Company would have recorded an impairment of $134,000 and the adjusted
carrying value would have been $741,000. At September 30, 2005, the 10-day
trailing average closing price was $0.45 per share, or the value of the shares
was $90,000. An impairment to the current value has been recorded to adjust the
security carrying value to the original 25% discount. The company recorded an
impairment of $807,500 and the adjusted carrying value is now $67,500.

10. ACCRUED EXPENSES

Accrued expenses consist of the following at December 31, 2004:

Payroll and related taxes $ 111,120
Sales tax 37,051
Accounting, legal and professional fees 70,000
Other 13,998
----------
Total $ 232,169
==========

11. NOTES PAYABLE
In March 2001 the Company issued a convertible promissory note that bears
interest at the rate of 12% per annum. The note is convertible into 44,444
shares of Class A Voting Common Stock at

F-15

the note holder's option. The note requires quarterly payment of interest until
the principal is repaid, converted or the note holder demands payment.

During 2003, the Company received $2.3 million, by issuing subordinated
promissory notes bearing simple interest ranging from 10% to 12% per annum. The
balance of this debt at September 30, 2005 is $1,705,000. The remaining debt is
due in 2005, except for $200,000 due in 2006. In conjunction with the issuance
of these notes, the Company issued warrants to purchase 2,500,000 shares of
Class B Non-Voting Common stock with a weighted average exercise price of $0.14.

The Company allocated the investment proceeds between the notes and warrants
based on their relative fair values. The relative fair value of the warrants
was determined to be $218,482, which was recorded as debt discount, a reduction
of the carrying amount of the notes. This amount is being amortized to interest
expense over the term of the debt. The unamortized balance of this debt
discount is $124,899 at December 31, 2003 ($4,491 long-term). The fair value of
the warrants was based on the Black-Scholes model. The Black-Scholes
calculation incorporated the following assumptions: 0% dividend yield, 29%
volatility, 3.6% average risk-free interest rate, a ten-year life and an
underlying Class B Non-Voting Common Stock value of $0.14 per share.

On June 17, 2004 the Company entered into a Securities Purchase Agreement with
Laurus Master Fund, Ltd., a Cayman Islands company, relating to the private
placement of a convertible term note issued by the Company in the principal
amount of $3,000,000 due June 17, 2007 (the "Note"), and a common stock purchase
warrant (the "Warrant"). On November 30, 2004, this note was amended to
increase the principal amount to $4,000,000 and an additional warrant. The
terms, as amended, allow for this note to convert into 6,666,667 shares of our
Class A Voting Common Stock at a fixed conversion rate of $0.30 per share and
5,000,000 shares of our Class A Voting Common Stock at a fixed conversion rate
of $0.40 per share. One Warrant provides for the purchase of up to 1,320,000
shares of Class A Common Stock at a price of $0.45 each, subject to customary
adjustments, until June 17, 2009, and the additional Warrant provides for the
purchase of up to 650,000 shares of Class A Common Stock at a price of $0.35
each, subject to customary adjustments, until November 30, 2009. On March 31,
2005, the Company amended its convertible term note issued by the Company to
Laurus Master Fund, Ltd., a Cayman Islands company. The terms, as amended,
allow for this note to convert into 6,250,000 shares of our Class A Voting
Common Stock at a fixed conversion rate of $0.16 per share, 3,333,333 shares of
our Class A Voting Common Stock at a fixed conversion rate of $0.30 per share
and 5,000,000 shares of our Class A Voting Common Stock at a fixed conversion
rate of $0.40 per share. On July 8, 2005 the Company used $4 million from the
proceeds of an offering of convertible debt to pay in full the remaining amounts
due under this note. The Warrant was unaffected by this repayment.

In connection with an offering that closed on August 15, 2005 we entered
into a Purchase Agreement with certain institutional and accredited investors
relating to the private placement of convertible term notes issued by the
Company in the principal amount of $8,965,000 and warrants to purchase up to
41,189,000 shares of our capital stock. Of the proceeds from this offering,
approximately $4.1 million was used to retire current secured convertible notes,
and the remainder will be used for general working capital.

F-16

the new class of common stock, and any unexercised warrants will be exercisable
for shares of that class of stock as well. As there are currently no unissued
shares of our Class A Voting Common Stock that are not otherwise reserved for
issuance, we anticipate that these notes and warrants will be exercisable for
shares of either our Class B Non-Voting Common Stock or the newly created class
of common stock, if approved. Without taking into consideration interest
payable on the notes, the notes are convertible into 89,650,000 shares of our
common stock (regardless of class) at a current conversion rate of $0.10 per
share and the warrants are exercisable for ten years from the date they were
issued for up to 41,189,000 shares of our common stock (regardless of class) at
a current exercise price of $0.15 per share. The conversion price of the notes
and the exercise price of the warrants are each subject adjustment for a variety
of events, including, for example, payment of dividends, certain mergers or
asset sales, and certain securities issuances. In conjunction with this
offering, we also entered into related Registration Rights and Voting
Agreements.

12. RELATED PARTY TRANSACTIONS

In 2004, the Company granted options to purchase an aggregate of 5,000,000
shares of Class A Voting Common Stock with an average exercise price of $1.50
per share in consideration for services rendered by members of the Company's
Board of Directors.

13. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES
The Company leases office space and equipment under various non-cancelable
operating lease agreements which terminate on various dates through 2007. Rent
expense amounted to $476,292 and $579,419 during 2004 and 2003, respectively.

Future minimum payments under non-cancelable operating leases are as
follows:

YEAR ENDING DECEMBER 31,
2005 $ 487,249
2006 462,074
2007 92,775
2008 6,308
-----------
Total $ 1,048,406
===========
CAPITAL LEASES

The Company acquired equipment under long-term capital leases. The economic
substance of the leases is that the Company is financing the acquisition of the
assets through the leases.
The following is a schedule by years of future minimum lease payments under
the capital leases, together with the net present value of the minimum lease
payments at December 31, 2004.

YEAR ENDING DECEMBER 31,
2005 $ 658,467
2006 207,156
2007 49,536
---------
915,159
Less: amounts representing interest and executory costs 88,868
---------
Present value of future minimum lease payments 829,291
Less: current portion of obligation under capital lease 597,933
---------
Long-term obligation under capital lease $ 231,358
---------

F-17

LICENSE AGREEMENTS
The Company obtains its data from multiple sources and has entered into
various license agreements with the related data providers. In 2004 and 2003,
the Company recorded $2,617,681 and $1,738,849 respectively in costs related to
these agreements. In the event that any of the primary sources of data are no
longer available to the Company, management believes that it would be able to
integrate alternate sources of data without significant disruption to the
business or operations, as there are currently a number of providers of such
data. However, management cannot be certain such sources will be available to
the Company if it needs them or at prices consistent with the Company's current
sources. The Company is required to make minimum payments under these
agreements as follows:

YEAR ENDING DECEMBER 31,

2005 $ 637,755
----------
$ 637,755
==========

The Company's operations depend upon information that includes public
records. If material changes were to occur in federal or state laws regulating
or prohibiting the distribution of public records, particularly credit header
records, the Company's financial condition and results of operations could be
materially affected. In the event that such a termination occurred, management
believes it could acquire replacement data from other sources; however, such
termination might have an adverse effect on the Company's operations.

LEGAL PROCEEDINGS
The Company is from time to time subject to legal proceedings and claims
which arise in the normal course of its business. Management believes the
outcome of any pending or known matters will not have a materially adverse
effect on the Company's financial position or results of operations.

DATA EVOLUTION HOLDINGS, INC.
The Company has entered into a services agreement with Data Evolution
Holdings, Inc. (DEH), which trades over the counter under the symbol DTEV. The
agreement calls for the Company to purchase services from DEH that will expand
our ability to distribute our product through DEH PowerSys products. The
agreement calls for the Company to purchase access to PowerSys products, a
feasibility study, a two-year support plan, and become a strategic alliance
partner. The value of these services has not yet been determined by DEH,
however, the payment of these services will be made in Company Class A Common
Voting Stock that will have a four year lock-up period.

14. INCOME TAXES

Deferred tax assets consist of the following at December 31:

2004
-----------
Net operating loss carry forwards $10,350,000
Depreciation and amortization 300,000
Bad debt reserve 73,000
Investment loss 202,500
Capitalized research and development 1,000,000
----------
Gross deferred tax assets 11,925,500
Valuation allowance (11,925,500)
----------
$ -
=============

F-18

The Company has provided a valuation allowance for the full amount of the
deferred tax assets since realization of these future benefits is not
sufficiently assured. As the Company achieves profitability, these deferred tax
assets may be available to offset future income tax liabilities and expenses.

At December 31, 2004, the Company had net operating loss carryforwards for
federal and state income tax reporting purposes of approximately $25,500,000.
The federal and state net operating loss carryforwards expire through 2024.

Certain substantial changes in the Company's ownership may occur. As a result,
under the provisions of the Internal Revenue Code, the amount of net operating
loss carryforwards available annually to offset future taxable income may be
limited. The amount of this annual limitation is determined based upon the
Company's value prior to the ownership changes taking place. Subsequent
ownership changes could further affect the limitation in future years.

15. COMMON STOCK

DESCRIPTION OF COMMON STOCK
On March 23, 2001, the Company amended its articles of incorporation
wherein it renamed all of the authorized 150,000,000 shares of common stock, par
value $0.01 per share, Class A Voting Common Stock and created a new class of
stock, the Class B Non-Voting Common Stock, with 250,000,000 shares authorized
for issuance.

Each Class A Voting Common stockholder is entitled to one vote for each share
held on all matters submitted to a vote of stockholders. The holders of both
classes of common stock are entitled to dividends on a pro rata basis, when and
if declared by the Company's board of directors. Through December 31, 2004, no
dividends have been declared or paid.

On August 12, 2002, the Company commenced its initial public offering of
securities (Registration No. 333-85154, effective August 12, 2002), pursuant to
which the Company offered up 12,000,000 units for $0.30 per unit. Each unit
consisted of one share of Class B Non-Voting Common Stock and a three year
redeemable warrant to purchase one share of Class A Voting Common Stock with an
exercise price of $0.50 per share.

As of December 31, 2004, a total of 17,274,989 shares of Class A Voting
Common Stock were reserved for issuance upon exercise of outstanding stock
option and warrant agreements. As of December 31, 2004, 10,735,875 shares of
Class B Non-Voting Common Stock were reserved for issuance upon exercise of
outstanding warrant agreements.

STOCK OPTIONS AND WARRANTS
During 2002, the Company issued options to purchase 261,739 shares of Class
A Voting Common Stock at an average exercise price of $0.90 per share and
warrants to purchase 1,304,158 shares of Class B Non-Voting Common Stock at an
average exercise price of $0.15 per share to third parties in exchange for
services. The Company recorded expense of $59,573 and $190,586, respectively,
associated with these options and warrants.

During 2002, the Company issued warrants to purchase 307,184 shares of
Class B Non-Voting Common Stock at an average exercise price of $0.23 per share
to third parties as part of financing arrangements. The Company will record
interest expense of $51,549 over the life of the financing agreements associated
with these warrants.

During 2002, the Company issued warrants to purchase 250,000 shares of
Class B Non-Voting Common Stock at an exercise price of $0.22 per share to third
parties in exchange for legal services. The Company will record legal expense
of $29,113 over the life of the contract associated with these warrants.

F-19

During 2002, the Company issued 36,000 shares of Class A Voting Common
Stock for the exercise of warrants associated with manditorily convertible debt.

During 2002, the Company issued 24,000 shares of Class A Voting Common
Stock for the cashless exercise of 120,000 warrants associated with manditorily
convertible debt.

During 2002, the fair value of the options and warrants to purchase shares
of Class A Voting Common Stock was based on the Black-Scholes model. The
Black-Scholes calculation incorporated the following assumptions: 0% dividend
yield, 100% volatility, 5.0% average risk-free interest rate, a ten-year life
and an underlying Class A Voting Common Stock average value of $0.90 per share.

During 2002, the fair value of the warrants to purchase shares of Class B
Non-Voting Common Stock was based on the Black-Scholes Model. The Black-Scholes
calculation incorporated the following assumptions: 0% dividend yield, 100%
volatility, 4.4% average risk-free interest rate, a ten-year life and an
underlying Class B Non-Voting Common Stock average value of $0.18 per share.

During 2003, the Company issued notes payable with detachable warrants for
the purchase of 2,880,000 shares of Class B Non-Voting Common Stock with an
average exercise price of $0.17 per share that are exercisable for a period of
ten years from the date of issuance.

During 2003, the Company issued units consisting of one share of Class B
Non-Voting Common Stock and a warrant that is convertible into three shares of
Class B Non-Voting Common Stock with an exercise price of $0.27 per share. A
price adjustment mechanism included in the warrants provides that, if the stock
price decreases, the warrants will nevertheless permit the holder to receive,
upon a cashless exercise of the warrants, at least one share of Class A Voting
Common Stock per unit without any cash payment. Warrants convertible into
1,111,110 shares were issued under this agreement.

During 2003, the Company issued units consisting of one share of Class A
Voting Common Stock and a warrant that is convertible into three shares of Class
A Voting Common Stock with an exercise price of $0.16 per share. A price
adjustment mechanism included in the warrants provides that, if the stock price
decreases, the warrants will nevertheless permit the holder to receive, upon a
cashless exercise of the warrants, at least one share of Class A Voting Common
Stock per unit without any cash payment. Warrants convertible into 7,431,750
shares were issued under this agreement. As of December 31, 2003, 4,218,750
warrants had been exercised resulting in a net issuance of 2,107,909 shares of
Class A Common Stock.

During 2003, the Company issued warrants to purchase 1,775,000 shares of
Class B Non-Voting Common Stock at an average exercise price of $0.22 per share
to third parties in exchange for services. The Company recorded expense of
$49,173 associated with these warrants.

During 2004, the Company issued warrants to purchase 2,570,000 shares of
Class A Voting Common Stock at an average exercise price of $0.40 per share to
third parties in exchange for services. The Company recorded a discount to Note
payable or expense of $173,339 associated with these warrants.

During 2003, the fair value of the options and warrants to purchase shares
of Class A Voting Common Stock was based on the Black-Scholes model. The
Black-Scholes calculation incorporated the following assumptions: 0% dividend
yield, 18% volatility, 3.9% average risk-free interest rate, a ten-year life and
an underlying Class A Voting Common Stock average value of $0.40 per share.

F-20

As of December 31, 2004, not including the Company's publicly traded
warrant for the purchase of 12,000,000 shares of Class A Voting Common Stock,
there were a total of 5,275,989 options and warrants to purchase shares of Class
A Voting Common Stock and 10,735,875 options and warrants to purchase shares of
Class B Non-Voting Common Stock issued outside the Stock Plans.

16. STOCK OPTION PLANS

On November 16, 1999, the Board of Directors approved the Incentive and
Non-Qualified Stock Option Plan as amended (the "1999 Plan"). Under the terms
of the 1999 Plan, the Company is authorized to grant incentive and nonqualified
stock options to purchase shares of common stock to its employees, officers and
directors, and consultants or advisors. The Board of Directors administers the
Plan. A maximum of 15,000,000 shares of Class A Voting Common Stock has been
approved for issuance under the 1999 Plan of which 18,534 are available for
grant at December 31, 2004. The options are not transferable except by will or
domestic relations order.

On March 28, 2003, the Board of Directors approved the Incentive and
Non-Qualified Stock Option Plan (the "2003 Plan"), which was approved by the
stockholders at the May 29, 2003 annual meeting. Under the terms of the 2003
Plan, the Company is authorized to grant incentive and nonqualified stock
options to purchase shares of common stock to its employees, officers and
directors, and consultants or advisors. The Board of Directors administers the
2003 Plan. A maximum of 25,000,000 shares of Class A Voting Common Stock and
25,000,000 shares of Class B Non-Voting Common Stock has been approved for
issuance under the 2003 Plan of which 5,000,000 and 19,300,000 Class A and Class
B, respectively, were available for grant at December 31, 2004. The options are
not transferable except by will or domestic relations order.

The Board of Directors determines the exercise price and vesting period of
the options at the date of grant. The exercise price for incentive stock
options shall not be less than 100% of the fair market value of the Company's
stock on the date of grant. The option exercise period will not exceed ten
years from the date of grant. The options are generally fully exercisable when
issued to directors and consultants and exercisable 25% per year and continuing
over four years for employees (based on continual employment). If a grantee owns
stock representing more than 10% of the outstanding shares on the date such an
incentive option is granted, the price shall be at least 110% of fair market
value and the maximum term of the options will be five years. The following
table presents activity under the Plans for the years ended December 31, 2004
and 2003:

CLASS A CLASS B
--------------------- ------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
----------- -------- --------- --------

Outstanding at December 31, 2002 10,732,716 0.20 - -
Issued . . . . . . . . . . . . . 11,480,000 0.57 5,700,000 0.20
Exercised. . . . . . . . . . . . (1,414,450) 0.20 - -
Canceled . . . . . . . . . . . . (1,022,500) 0.20 - -
----------- -------- --------- --------
Outstanding at December 31, 2003 19,775,766 0.42 5,700,000 0.20
Issued . . . . . . . . . . . . . 16,046,000 0.80 -
Exercised. . . . . . . . . . . . (4,162,412) 0.06 - -
Canceled . . . . . . . . . . . . (2,694,750) 0.21 - -
----------- -------- --------- --------
Outstanding at December 31, 2004 28,964,604 0.42 5,700,000 0.20
----------- -------- --------- --------

F-21

The following summarizes information relating to options outstanding at
December 31, 2004:

CLASS A
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------- ----------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
RANGE OF REMAINING AVERAGE AVERAGE
EXERCISE CONTRACTUAL EXERCISE EXERCISE
PRICE SHARES LIFE (YEARS) PRICE SHARES PRICE

0.00-0.19. . 762,881 8.83 $ 0.10 421,000 $ 0.04

0.20 - $0.49 16,201,723 7.91 $ 0.28 13,662,798 $ 0.28

0.50-1.50. . 12,000,000 8.99 $ 1.29 12,000,000 $ 1.29
----------- ------------ --------- ----------- ---------
28,964,604 8.38 $ 0.69 26,083,798 $ 0.74
----------- ------------ --------- ----------- ---------

CLASS B
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------- ---------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
RANGE OF REMAINING AVERAGE AVERAGE
EXERCISE CONTRACTUAL EXERCISE EXERCISE
PRICE SHARES LIFE (YEARS) PRICE SHARES PRICE

..20. . . 5,700,000 8.69 $ 0.20 5,700,000 $ 0.20
----------- ------------ --------- ----------- ---------
. . . . 5,700,000 8.69 $ 0.20 5,700,000 $ 0.20
----------- ------------ --------- ----------- ---------

17. DEFINED CONTRIBUTION RETIREMENT PLAN
The Company sponsors a defined contribution retirement plan under the
provisions of Section 401(k) of the Internal Revenue Code, which covers
substantially all employees. The Company may make discretionary matching
contributions up to 1% of employee contributions. Company contributions vest
ratably over a six-year period. Company matching contributions amounted to
$6,022 and $5,925 in 2004 and 2003, respectively.

18. SEGMENT INFORMATION
The Company has two reportable segments which management operates as
distinct sales organizations; these two segments are segregated by the nature of
products and services provided. The Company measures and evaluates its two
reportable segments based on revenues and costs of revenues. The CD-Rom segment
provides information on motor vehicles and drivers' licenses, contained on
compact disks. The online segment provides information on individuals
throughout the United States of America through the Company's website. No
material operating costs, other than costs of revenues, or assets and
liabilities relate to the CD-Rom segment.

FOR THE NINE MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2005 2004 2004 2003
(UNAUDITED) (UNAUDITED)
Information sales:

CD-Rom . . . . . . . . . . . . . $ 131,690 $ 159,110 $ 550,923 $ 478,278
Online and Channel . . . . . . . 2,866,067 1,136,456 5,136,364 2,807,415
-------------- ------------- ----------- ----------
Total information sales . . . . . $ 2,997,757 $ 1,259,566 5,687,287 3,285,693
-------------- ------------- ----------- ----------
Costs of Information sales:
CD-Rom . . . . . . . . . . . . 41,682 22,353 96,683 91,775
Online and Channel . . . . . . 1,324,492 973,095 3,466,738 2,606,875
-------------- ------------- ----------- ----------
Total costs of Information sales. $ 1,366,174 $ 995,448 3,563,421 2,698,650
-------------- ------------- ----------- ----------

LOCATEPLUS HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED)

F-22

19. SUBSEQUENT EVENTS
In connection with an offering that closed on August 15, 2005 we entered into a
Purchase Agreement with certain institutional and accredited investors relating
to the private placement of convertible term notes issued by the Company in the
principal amount of $8,965,000 and warrants to purchase up to 41,189,000 shares
of our capital stock. Of the proceeds from this offering, approximately $4.1
million was used to retire current secured convertible notes, and the remainder
will be used for general working capital.
All of the notes are convertible, and the warrants are exercisable, first into
as many shares of our Class A Voting Common Stock, par value $0.01 per share, as
are available for issuance at the time of conversion or exercise, and then into
shares of our Class B Non-Voting Common Stock, par value $0.01 per share. As
part of our agreement with these investors, we have agreed to seek the approval
from our stockholders of the recapitalization of each outstanding share of our
Class A Voting Common Stock and our Class B Non-Voting Common Stock into a
single class of voting common stock, as well as a one-for-fifty reverse split of
this new class of common stock. If our stockholders approve these measures, the
notes will automatically convert into shares of the new class of common stock,
and any unexercised warrants will be exercisable for shares of that class of
stock as well. As there are currently no unissued shares of our Class A Voting
Common Stock that are not otherwise reserved for issuance, we anticipate that
these notes and warrants will be exercisable for shares of either our Class B
Non-Voting Common Stock or the newly created class of common stock, if approved.
Without taking into consideration interest payable on the notes, the notes are
convertible into 89,650,000 shares of our common stock (regardless of class) at
a current conversion rate of $0.10 per share and the warrants are exercisable
for ten years from the date they were issued for up to 41,189,000 shares of our
common stock (regardless of class) at a current exercise price of $0.15 per
share. The conversion price of the notes and the exercise price of the warrants
are each subject adjustment for a variety of events, including, for example,
payment of dividends, certain mergers or asset sales, and certain securities
issuances. In conjunction with this offering, we also entered into related
Registration Rights and Voting Agreements.
SEE INDEPENDENT AUDITORS REPORT
F-23

* * *

[GRAPHIC OMITED]

Please read this prospectus carefully. It describes our business, products and
services, and financial condition and results of operations.

We have prepared this prospectus so that you will have the information
necessary to make an informed investment decision. You should rely only on the
information contained in this prospectus. The information contained in this
prospectus is accurate only as of its date, regardless of the time this
prospectus is delivered or that our securities are sold.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted against the Registrant by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The Registrant estimates that the approximate expenses in connection with
this Registration Statement, as amended, will be as follows:

SEC registration fee $ 2,000
Legal fees and expenses 15,000
Accounting fees and expenses 5,000
Miscellaneous 5,000
----------
Total $27,000

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

The following is a list of the Registrant's securities sold within the
past three years without registration under the Securities Act of 1933, as
amended.

- - From November 1999 to June 2001, the Registrant granted options to
purchase 11,142,716 shares our Common Stock (now referred to as Class A Voting
Common Stock) to 43 employees and consultants under the terms of the
Registrant's Incentive and Non-qualified Stock Option Plan. These options have
varying exercise prices. Of these options to purchase 11,142,716 shares, options
to purchase 1,176,700 shares of Common Stock have been exercised. The offer and
sale of these securities were exempt from registration under the Securities Act
of 1933 pursuant to Rules 701 and 506 promulgated thereunder.

- - From December 1999 to February 2000, the Registrant sold 3,000,000 shares
of Common Stock (now referred to as Class A Voting Common Stock) to 120
accredited investors as such term is defined in Rule 501(a) of Regulation D, for
$1.00 per share. The offer and sale of these securities were exempt from
registration under the Securities Act of 1933 under the provisions of Rules 506
and 508 promulgated under the Securities Act of 1933, as the Registrant received
representations from all offerees that they were accredited investors at the
time of the offer and sale and no general solicitation was undertaken.

- - From March 2000 to September 2000, the Registrant sold 3,000,000 shares of
Common Stock (now referred to as Class A Voting Common Stock) to 96 accredited
investors as such term is defined in Rule 501(a) of Regulation D, for $1.00 per
share. The offer and sale of these securities were exempt from registration
under the Securities Act of 1933 under the provisions of Rules 506 and 508
promulgated thereunder, as we received representations from all offerees that
they were accredited investors at the time of the offer and sale and no general
solicitation was undertaken. A Form D Notice of Sale of Securities Pursuant to
Regulation D was not filed with the Securities and Exchange Commission in a
timely manner.

- - From October 2000 through January 2001, the Registrant issued a total of
$312,000 in convertible promissory notes with detachable restricted warrants to
nine accredited investors as such term is defined in Rule 501(a) of Regulation
D, The offer and sale of these securities were exempt from registration under
the Securities Act of 1933 under the provisions of Rules 506 and 508 promulgated
thereunder, as the Registrant received representations from all offerees that
they were accredited investors at the time of the offer and sale and no general
solicitation was undertaken.

- - In January 2001, the Registrant issued $200,000 in the form of a
convertible promissory note with a detachable warrant to one accredited investor
as such term is defined in Rule 501(a) of Regulation D, then a member of the
Registrant's Board of Directors. The offer and sale of that security were exempt
from registration under the Securities Act of 1933 under the provisions of Rules
506 and 508 promulgated thereunder.

- - In February and March 2001, the Registrant issued $345,000 in six-month
convertible term promissory notes to 11 accredited investors as such term is
defined in Rule 501(a) of Regulation D, The offer and sale of that security were
exempt from registration under the Securities Act of 1933 under the provisions
of Rules 506 and 508 promulgated thereunder, as the Registrant received
representations from all offerees that they were accredited investors at the
time of the offer and sale and no general solicitation was undertaken.

- - In April 2001, the Registrant made a non-transferable offer to its
stockholders who qualified as accredited investors as such term is defined in
Rule 501(a) of Regulation D, to sell three shares of the Registrant's Class B
Non-Voting Common Stock for $0.10 per share for each share of Class A Voting
Common Stock held by each stockholder. Pursuant to that offer, the Registrant
sold approximately 31.6 million shares of Class B Non-Voting Common Stock to 270
of the Registrant's stockholders. The offer and sale of these securities were
exempt from registration under the Securities Act of 1933 under the provisions
of Rules 506 and 508 promulgated thereunder, as the Registrant received
representations from all offerees that they were accredited investors at the
time of the offer and sale and no general solicitation was undertaken. A Form D
Notice of Sale of Securities Pursuant to Regulation D was not filed with the
Securities and Exchange Commission in a timely manner.

- - At various times from November 17, 2000 to March 12, 2002, the Registrant
issued warrants to purchase an aggregate of 537,902 shares of Class A Voting
Common Stock to 11 consultants who qualified as accredited investors as such
term is defined in Rule 501(a) of Regulation D, and to members of the
Registrant's Advisory Board in consideration for services rendered. The offer
and sale of these securities were exempt from registration under the Securities
Act of 1933 under the provisions of Rules 506 and 508 promulgated thereunder, as
the Registrant received representations from all offerees that they were
accredited investors at the time of the offer and sale and no general
solicitation was undertaken. A Form D Notice of Sale of Securities Pursuant to
Regulation D was not filed with the Securities and Exchange Commission in a
timely manner.

- - From August 2001 to April 2002, the Registrant issued warrants to purchase
an aggregate of 3,272,455 shares of Class B Non-Voting Common Stock to 17
consultants who qualified as accredited investors as such term is defined in
Rule 501(a) of Regulation D, and to members of the Registrant's Advisory Board
in consideration for services rendered. The offer and sale of these securities
were exempt from registration under the Securities Act of 1933 under the
provisions of Rules 506 and 508 promulgated thereunder, as the Registrant
received representations from all offerees that they were accredited investors
at the time of the offer and sale and no general solicitation was undertaken. A
Form D Notice of Sale of Securities Pursuant to Regulation D was not filed with
the Securities and Exchange Commission in a timely manner.

- - From September 2001 through February 13, 2002, the Registrant sold
20,421,510 shares of Class B Non-Voting Common Stock to 175 accredited investors
as such term is defined in Rule 501(a) of Regulation D (of which 82 were
existing stockholders), for $0.15 per share. The offer and sale of these
securities were exempt from registration under the Securities Act of 1933 under
the provisions of Rule 506 promulgated

thereunder, as we received representations from all offerees that they were
accredited investors at the time of the offer and sale and no general
solicitation was undertaken. A Form D Notice of Sale of Securities Pursuant to
Regulation D was not filed with the Securities and Exchange Commission in a
timely manner.

- - On May 22, 2002 the Registrant received $190,000 by issuing subordinated
promissory notes with simple interest at ten percent per annum to five lenders.
The Registrant does not believe that these subordinated promissory notes
constitute securities because the subordinated promissory notes do not convert
into our equity and are in the nature of commercial loans.

- - On August 27, 2002, the Registrant issued warrants to purchase an
aggregate of 70,000 shares of Class B Non-Voting Common Stock to two members of
our Board of Directors pursuant to our Non-employee Director Stock Option
Policy. The offer and sale of these securities were exempt from registration
under the Securities Act of 1933 under the provisions of Rules 506 and 508
promulgated thereunder, as both recipients are accredited and no general
solicitation was undertaken.

- - In December 2002, we issued a one-year term note with ten year, fully
vested detachable warrants to an individual who, as a condition of his
investment, required that he be appointed to the Board of Directors of the
Company. The note bears interest at the rate of 10% per annum and is payable in
one lump sum at maturity. The detachable warrants provide for the purchase of
250,000 shares of our Class B Non-Voting Common Stock with an exercise price of
$0.22 per share. The offer and sale of these securities were exempt from
registration under the Securities Act of 1933 under the provisions of Rules 506
and 508 promulgated thereunder, as the recipient is an accredited investor as
such term is defined in Rule 501(a) of Regulation D, and no general solicitation
was undertaken.

- - On March 28, 2003, the Registrant issued warrants to purchase 105,000
shares of Class B Non-Voting Common Stock to three members of the Registrant's
Board of Directors pursuant to the Registrant's Non-employee Director Stock
Option Policy. The offer and sale of these securities were exempt from
registration under the Securities Act of 1933 under the provisions of Rules 506
and 508 promulgated thereunder, as the recipients were accredited investors as
such term is defined in Rule 501(a) of Regulation D, and no general solicitation
was undertaken.

- - Through May 2003, the Registrant issued multiple notes payable with
detachable warrants in exchange for $1,500,000. The notes have an
eighteen-month term and bear interest at a rate of 12% per annum payable
monthly. The detachable warrants were for the purchase of 1,300,000 shares of
the Company's Class B Non-Voting Common Stock at $0.10 per share. The offer and
sale of these securities were exempt from registration under the Securities Act
of 1933 under the provisions of Rule 506 promulgated thereunder, as the
recipient was an accredited investor as such term is defined in Rule 501(a) of
Regulation D, and no general solicitation was undertaken.

- - During 2003, the Registrant received $440,000, net of issuance costs, by
issuing subordinated promissory notes with simple interest at 10% per annum.
The terms on $75,000 of the notes require repayment 12 months from issuance and
the remaining notes require repayment 18 months from issuance. In conjunction
with the notes, warrants to purchase 485,000 shares of Class B Non-Voting Common
stock with a weighted average exercise price of $0.14 were also issued. The
offer and sale of these securities was exempt from registration under the
Securities Act of 1933 under the provisions of Rule 506 promulgated thereunder,
as the recipient was an accredited as such term is defined in Rule 501(a) of
Regulation D, and no general solicitation was undertaken.

- - During 2003, the Registrant received $398,000 by issuing units at $0.16
per unit. Each unit consists of one share of Class A Voting Common stock and a
warrant that is exercisable for three shares of Class A Voting Common Stock with
an exercise price at $0.16 per share. A price adjustment mechanism included in
the warrants provides that, if the stock price decreases, the warrants will
nevertheless permit the holder to receive, upon a cashless exercise of the
warrants, at least one share of Class A Voting Common Stock per warrant without
any cash payment. The offer and sale of these securities was exempt from
registration under the Securities Act of 1933 under the provisions of Rule 506
promulgated thereunder, as the recipient was an accredited as such term is
defined in Rule 501(a) of Regulation D, and no general solicitation was
undertaken.

- - During June 2003, the Registrant issued 2,500,000 shares of Class A Voting
Common Stock to one accredited investor as such term is defined in Rule 501(a)
of Regulation D, and 125,000 shares of Class B Non-Voting Common Stock to three
accredited investors as such term is defined in Rule 501(a) of Regulation D.
The Registrant believes that the offer and sale of these securities were exempt
from registration under the Securities Act of 1933 under the provisions of
Section 4(2) thereunder.

- - During June 2003, the Registrant issued a put to one investor, which
provides that the Registrant, subject to certain limitations, may sell up to $5
million in shares of Class A Voting Common Stock. The offer and sale of these
securities were exempt from registration under the Securities Act of 1933 under
the provisions of Rules 506 and 508 promulgated thereunder, as the Registrant
received representations from the purchaser that it was an accredited investor
as such term is defined in Rule 501(a) of Regulation D, at the time of the offer
and sale and no general solicitation was undertaken. To date, the Registrant
has issued 7,915,427 shares of Class A Voting Common Stock pursuant to its
exercise of the put, resulting in net proceeds of $2,797,914 to the Registrant.

- - On June 8, 2004, the Registrant issued 4,000,000 shares of Class A Votin
Stock to NFC Corporation in exchange for certain investor relations services to
be performed by NFC for the benefit of the Registrant. The offer and sale of
these securities were exempt from the registration provisions of the Securities
Act of 1933 pursuant to Section 4(2) and Rule 506 promulgated thereunder as the
Registrant received representations from the purchaser that it was an accredited
investor at the time of the offer and sale and no general solicitation was
undertaken.

- - On June 17, 2004 we entered into a Securities Purchase Agreement with
Laurus Master Fund, Ltd., a Cayman Islands company, relating to the private
placement of a convertible term note issued by the Company in the principal
amount of $3,000,000 due June 17, 2007 (the "Note"), and a common stock purchase
warrant (the "Warrant"). We also entered into related security documents and a
Registration Rights Agreement. The Note is convertible into 7,500,000 shares of
our Class A Voting Common Stock at a fixed conversion rate of $0.40 per share
and the Warrant provides for the purchase of up to 1,320,000 shares of Class A
Common Stock at a price of $0.45 each, subject to customary adjustments, until
June 17, 2009. On July 8, 2005 the Company used $4 million from the proceeds of
an offering of convertible debt to pay in full the remaining amounts due under
this note. The Warrant was unaffected by this repayment. Therefore, an
aggregate of 1,320,000 shares of Class A Common Stock are issuable upon exercise
of the Warrant.

- - On July 8, 2005 we entered into a Securities Purchase Agreement with
certain institutional and accredited investors and, in a private placement
exempt from the registration requirements of the Securities Act of 1933, we
issued a series of convertible term notes with an aggregate principal amount of
$8,000,000 due November 5, 2005, if not converted prior to such date. As part
of that offering, we also issued warrants to purchase up to 32,000,000 shares of
our capital stock. As part of the same offering, on August 15, 2005 we issued
additional notes with an aggregate principal amount of $965,000 and terms
identical to the notes issued on July 8, 2005, as well as warrants to purchase
up to 3,860,000 shares of our capital stock. All of the notes are convertible,
and the warrants are exercisable, first into as many shares of our Class A
Voting Common Stock, par value $0.01 per share, as are available for issuance at
the time of conversion or exercise, and then into shares of our Class B
Non-Voting Common Stock, par value $0.01 per share. As part of our agreement
with these investors, we have agreed to seek the approval from our stockholders
of the recapitalization of each outstanding share of our Class A Voting Common
Stock and our Class B Non-Voting Common Stock into a single class of voting
common stock, as well as a one-for-fifty reverse split of this new class of
common stock. If our stockholders approve these measures, the notes will
automatically convert into shares of the new class of common stock, and any
unexercised warrants will be exercisable for shares of that class of stock as
well. Without taking into consideration interest payable on the notes, the
notes are convertible into 89,650,000 shares of our common stock (regardless of
class) at a current conversion rate of $0.10 per share and the warrants are
exercisable for ten years from the date they were issued for up to 41,189,000
shares of our common stock (regardless of class) at a current exercise price of

$0.15 per share. The conversion price of the notes and the exercise price of
the warrants are each subject adjustment for a variety of events, including, for
example, payment of dividends, certain mergers or asset sales, and certain
securities issuances.
We also entered into a Registration Rights Agreement whereby, among other
things, we agreed to file a registration statement, of which this prospectus is
a part, with the SEC, to register the resale of the shares of our capital stock
that we will issue upon exercise, if any, of the warrants and conversion of the
notes. We have agreed to keep the registration statement effective until all of
the shares registered by this prospectus are sold or can be sold without
registration and without restriction as to the number of shares that may be
sold.

ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1.1 Underwriting Agreement between LocatePLUS Holdings Corporation and
Oftring & Company, Inc., dated March 15, 2002.**
1.2 Amendment to Underwriting Agreement between LocatePLUS Holdings
Corporation and Oftring & Company, Inc., dated June 18, 2002.**
1.3 Second Amendment to Underwriting Agreement between LocatePLUS
Holdings Corporation and Oftring & Company, Inc., dated July 22, 2002.**
3.1 Second Amended and Restated Certificate of Incorporation of LocatePLUS
Holdings Corporation, as filed with the Secretary of State of the State of
Delaware on March 19, 2002.**
3.2 By-Laws of LocatePLUS Holdings Corporation.**
4.1 Warrant and Unit Agreement by and between LocatePLUS Holdings
Corporation and Transfer Online, Inc., dated March 22, 2002.**
4.2 Form of Warrant Certificate.**
4.3 Form of Unit Certificate.**
4.4 Form of Class A Voting Common Stock Certificate.**
4.5 Form of Class B Non-Voting Common Stock Certificate.**
4.6 Form of Restricted Warrant Agreement (Warrant to Purchase Shares of
Class A Voting Common Stock).**
4.7 Form of Restricted Warrant Agreement (Warrant to Purchase Shares of
Class B Non-Voting Common Stock).**
4.8 Form of Convertible Subordinated Promissory Note ("Bridge Note").**
4.9 Form of Detachable Warrant Agreement ("Bridge Warrant").**
4.10 $10,000 Convertible Promissory Note, dated March 9, 2001.**
4.11 Amended form of Warrant Certificate.**
4.12 Amended and Restated Warrant and Unit Agreement by and between
LocatePLUS Holdings Corporation and Transfer Online, Inc., dated June 20,
2002.**
4.13 Amendment to $10,000 Convertible Promissory Note, dated July 23,
2002.**
5.1 Opinion of Geoffrey T. Chalmers, Esq.
10.1 Master Lease Agreement between Cummings Properties, Inc. and Worldwide
Information, Inc., dated November 20, 1999.**
10.2 Database License Agreement between Worldwide Information, Inc. and
TransUnion Corporation, undated.(1)**
10.3 Database License Agreement between LocatePLUS.com, Inc. and Hogan
Information Services Co., dated November 27, 2001.(1)**
10.4 License Agreement between Worldwide Information, Inc. and First
American Real Estate Solutions, LLC, dated March 31, 1999.(1)**
10.5 Channel Partner Agreement between LocatePLUS Holdings Corporation and
Intellicorp LTD, dated September 1, 2001.**
10.6 Letter Agreement between LocatePLUS Holdings Corporation and
Intellicorp LTD, dated December 19, 2001.**
10.7 Secured Note, dated June 1, 2001.**
10.8 $750,000 Loan Agreement between LocatePLUS Holdings Corporation and
Gemstone Investment Company, Inc., dated June 4, 2002.**
10.9 Security Agreement between LocatePLUS Holdings Corporation and Gemstone
Investment Company, Inc., dated June 4, 2002.**
10.10 Pledge Agreement between Jon R. Latorella and Gemstone Investment
Company, Inc., dated June 4, 2002.**
10.11 Mortgage between Jon R. Latorella and Gemstone Investment Company,
Inc., dated June 4, 2002.**
10.12 Guaranty Agreement, between Jon R. Latorella and Gemstone Investment
Company, Inc., dated June 4, 2002.**
10.13 $175,000 Ten Year Term Promissory Note, made by Jon R. Latorella,
dated January 3, 2000.**
10.14 $100,000 Ten Year Term Promissory Note, made by Jon R. Latorella,
dated January 3, 2000.**
10.15 $125,000 Ten Year Term Promissory Note, made by Robert A. Goddard,
dated January 3, 2000.**
10.16 $750,000 Promissory Note, made by LocatePLUS Holdings Corporation,
dated June 4, 2002.**
10.17 Amendment to $750,000 Promissory Note, dated August 30, 2002.**
10.18 Securities Purchase Agreement dated June 17, 2004, by and between
LocatePLUS Holdings Corporation and Laurus Master Fund, Ltd.**
10.19 Convertible Term Note dated June 17, 2004, by and between LocatePLUS
Holdings Corporation and Laurus Master Fund, Ltd.**
10.20 Registration Rights Agreement dated June 17, 2004, by and between
LocatePLUS Holdings Corporation and Laurus Master Fund, Ltd.**
10.21 Common Stock Purchase Warrant issued to the Laurus Master Fund, Ltd.
under the Securities Purchase Agreement.**
10.22 Master Security Agreement dated June 17, 2004, by LocatePLUS Holdings
Corporation and its subsidiaries.**
10.23 Stock Pledge Agreement dated June 17, 2004, by and among Laurus Master
Fund, Ltd., LocatePLUS Holdings Corporation and its subsidiaries.**
10.24 Subsidiary Guaranty dated June 17, 2004, by the subsidiaries of
LocatePLUS Holdings Corporation.**
10.25 Investor Relations Consulting Agreement with NFC Corporation dated
June 8, 2004.
10.26 Purchase Agreement dated July 8, 2005, by and between LocatePLUS
Holdings Corporation and certain Investors named therein, as amended August 12,
2005.**
10.27 Form of 3% Senior Convertible Note dated July 8, 2005 and August 15,
2005, by and between LocatePLUS Holdings Corporation and each of the Investors
named in Exhibit 10.26.**
10.28 Registration Rights Agreement dated July 8, 2005, by and between
LocatePLUS Holdings Corporation and certain Investors named therein, as amended
August 12, 2005.**
10.29 Form of Common Stock Purchase Warrant issued to the Investors named in
Exhibit 10.26.**
10.30 Voting Agreement dated July 8, 2005, by LocatePLUS Holdings
Corporation, the Investors named therein, and Jon R. Latorella.**
10.31 Financial Advisory Agreement between LocatePLUS Holdings Corporation
and Laidlaw & Company, Ltd. dated May 25, 2005.**
21.1 Subsidiaries of LocatePLUS Holdings Corporation.**
23.1 Consent of Geoffrey T. Chalmers, Esq. (filed with exhibit 5.1)
23.2 Consent of Livingston & Haynes, P.C.
23.3 Consent of Carlin, Charron & Rosen LLP.
99.1 Escrow Agreement by and between American Pacific Bank, Transfer Online,
Inc., Oftring & Co., Inc. and LocatePLUS Holdings Corporation, dated June 20,
2002.**
99.2 Subscription Agreement (for use in states in which the Registrant's
securities are being registered by coordination or qualification).**
99.3 Subscription Agreement (for use in the Commonwealth of Massachusetts
only).**

** Previously filed with the Commission.
(1) Confidential treatment sought by the Registrant.

ITEM 28. UNDERTAKINGS

The undersigned Registrant hereby undertakes to:

(1) For determining any liability under the Securities Act of 1933, treat
the information omitted from this form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant under Rule 424(b)(1), or (4) or 497(h) under
the Securities Act of 1933 as part of this registration statement as of the time
the Securities and Exchange Commission declared it effective.

(2) For determining any liability under the Securities Act of 1933, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in this registration
statement, and that offering of the securities at that time as the initial bona
fide offering of those securities.

The undersigned Registrant hereby undertakes with respect to the securities
being offered and sold in the offering:

(1) To file, during any period in which it offers or sells securities, a
post- effective amendment to this Registration Statement to:

(A) Include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;

(B) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in this registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
and

(2) For determining liability under the Securities Act of 1933, treat
each post- effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by a director, officer or
controlling person relating to the securities being registered hereunder, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Registration
Statement, as amended, to be signed on its behalf by the undersigned, in the
Commonwealth of Massachusetts, on September 23, 2004.

LOCATEPLUS HOLDINGS CORPORATION
(Registrant)

By Jon R. Latorella
Chairman, President and Chief Executive Officer

Each person whose signature appears below appoints Jon R. Latorella as his
or her attorney-in-fact, with full power of substitution and re-substitution, to
sign any and all amendments (including post-effective amendments) to this
Registration Statement, as amended, on Form SB-2 of LocatePlus Holdings
Corporation and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all the said attorney-in-fact and agent or his or her
substitute or substitutes may lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement, as amended, was signed by the following persons in the
capacities and on the dates stated.

SIGNATURE TITLE DATE
- ----------------- ------------------------------------- -----------------

Jon R. Latorella Chairman of the Board, President February 27, 2006
and Chief Executive Officer

James C. Fields Acting Chief Financial Officer February 27, 2006
(Chief Accounting Officer)

Sonia P. Bejjani Director, February 27, 2006
President, Worldwide Information, Inc.

John P. Houlihan Director February 27, 2006

Peter Zekos Director February 27, 2006

Thom Murphy Director February 27, 2006

Mike Ryan Director February 27, 2006

Chris Romeo Director February 27, 2006

Ralph Caruso Director February 27, 2006

David Skerrett Director February 27, 2006