AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 2006

                                                     Registration No. 333-______

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                ________________

                                    FORM SB-2
                             REGISTRATION STATEMENT
                                    UNDER THE
                             SECURITIES ACT OF 1933
                                ________________

                           DYNAMIC LEISURE CORPORATION
                     (FORMERLY KNOWN AS DYNECO CORPORATION)
                 (Name of Small Business Issuer in Its Charter)

           Minnesota                        4700                  41-1508703
(State or Other Jurisdiction of (Primary Standard Industrial  (I.R.S. Employer
Incorporation or Organization)     Classification Number)    Identification No.)

                         2203 N. Lois Avenue, 9th Floor
                                 Tampa, FL 33607
                                 (813) 877-6300

             On or about June 1, 2006, the Company shall relocate to
                             5680A W. Cypress Street
                                 Tampa, FL 33607
          (Address and Telephone Number of Principal Executive Offices)
                                ________________

                          Daniel G. Brandano, President
                         2203 N. Lois Avenue, 9th Floor
                                 Tampa, FL 33607
                                 (813) 877-6300
            (Name, Address and Telephone Number of Agent For Service)

                                 With a copy to:
                              Scott C. Kline, Esq.
                               Crone Law Group LLP
                         201 Mission Street, Suite 1930
                             San Francisco, CA 94105
                                 (415) 495-8900
                                ________________

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act, 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

                                                 Proposed           Proposed
       Title of Each                              Maximum            Maximum          Amount of
    Class of Securities        Amount to be   Offering Price        Aggregate       Registration
      to be Registered          Registered    Per Security(1)   Offering Price(1)      Fee(1)
- ----------------------------   ------------   ---------------   -----------------   ------------
                                                                        
Common Stock, par value
$.01 per share .............    1,340,000(2)     $ 1.93 (3)      $ 2,586,200.00      $   276.73

Common Stock, par value
$.01 per share, underlying
convertible notes ..........    3,649,667        $ 1.93 (4)      $ 7,043,857.31      $   753.70

Common Stock, par value
$.01 per share, underlying
warrants ...................    2,045,500        $ 1.93 (5)      $ 3,946,850.00      $   422.32
                                                                                     ----------

Total Registration Fee .....                                                         $ 1,452.75
                                                                                     ==========

__________

(1) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457.

(2) Includes 100,000 "150% coverage" shares required by contract

(3) Fee computed based upon the average of the closing bid and asked prices for
    the common stock within five trading days prior to filing the registration
    statement.

(4) Fee computed based upon the higher of the conversion price of the notes and
    the average of the closing bid and asked prices for the common stock within
    five trading days prior to filing the registration statement.

(5) Fee computed based upon the higher of the exercise price of the warrants and
    the average of the closing bid and asked prices for the common stock within
    five trading days prior to filing the registration statement.

Pursuant to Rule 416, this registration statement also covers such additional
number of common shares as may be necessary to prevent dilution resulting from
stock splits, stock dividends or similar transactions attributable to the
securities being registered.

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 THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.

                                       ii


Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.


                       Subject to Completion, May 12, 2006


                                   PROSPECTUS

                           DYNAMIC LEISURE CORPORATION

                        7,035,167 SHARES OF COMMON STOCK


         This prospectus relates to the resale of up to an aggregate of
7,035,167 shares of our common stock, of which 1,240,000 shares have been issued
and are outstanding, 100,000 are being registered as "150% coverage shares"
required by contract, 3,649,667 shares are issuable upon conversion of
outstanding convertible promissory notes, and 2,045,500 shares are issuable upon
exercise of outstanding warrants. The selling security holders listed on page 17
may sell these shares from time to time. We are not selling any shares of common
stock under this prospectus and we will not receive any proceeds from sales of
shares by the selling stockholders.

         The selling security holders may sell all or any portion of the shares
for their own account from time to time in one or more transactions through
brokers or dealers at market prices then prevailing, in underwritten
transactions at prices related to then-current market prices or in individually
negotiated transactions at such prices as may be agreed upon. See "Plan of
Distribution."

         We will pay all expenses in connection with the registration of the
shares under the Securities Act of 1933, as amended, including the preparation
of this prospectus. See "Plan of Distribution."

         Our common stock is traded on the over-the-counter bulletin board under
the symbol "DYLI." On May 10, 2006, the closing bid price for our common stock
was $1.81 per share.

         THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 6.

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


                  The date of this prospectus is _______, 2006



NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF
ANY OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THE INFORMATION SET FORTH HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF.


                                TABLE OF CONTENTS
                                -----------------
                                                                            Page
                                                                            ----

About this Prospectus ...................................................... 1

Forward-Looking Statements ................................................. 1

Note Regarding Reverse Stock Split, Share Quantities and Prices ............ 1

Summary Information and Risk Factors........................................ 2

Risk Factors ............................................................... 6

Use of Proceeds ............................................................ 17

Determination of Offering Price ............................................ 17

Selling Security Holders ................................................... 17

Plan of Distribution ....................................................... 21

Legal Proceedings .......................................................... 24

Directors, Executive Officers, Promoters and Control Persons ............... 24

Security Ownership of Certain Beneficial Owners and Management ............. 26

Description of Securities .................................................. 28

Interest of Named Experts and Counsel ...................................... 30

Disclosure of Commission Position of Indemnification for Securities Act
 Liabilities ............................................................... 30

Description of Business .................................................... 30

Management's Discussion and Analysis or Plan of Operation .................. 43

Description of Property .................................................... 48

Certain Relationships and Related Transactions ............................. 49

Market for Common Stock and Related Stockholder Matters .................... 50

Executive Compensation ..................................................... 55

Changes in and Disagreements with Accountants on Accounting
 and Financial Disclosure .................................................. 56

Financial Statements ....................................................... F-1



                              ABOUT THIS PROSPECTUS

         You should only rely on the information contained in this document or
to which we have referred you. We have not authorized anyone to provide you with
information that is different. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an offer
to sell these securities in any jurisdiction where the offer or sale is not
permitted. Our business, financial condition, results of operations and
prospectus may have changed since that date.


                           FORWARD-LOOKING STATEMENTS

         This prospectus, including the Management's Discussion and Analysis or
Plan of Operation, contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, Section 21E of the
Securities and Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, as amended. These forward-looking statements are
subject to risks and uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from the
results, performance or achievements expressed or implied by the forward-looking
statements. You should not unduly rely on these statements. Our forward-looking
statements in this prospectus are not protected by the safe harbor provisions of
Section 27A of the Securities Act of 1933, as amended, Section 21E of the
Securities and Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, as amended.

         Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts. They use words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe,"
"project," "contemplate," "would," "should," "could," or "may."

         With respect to any forward-looking statement that includes a statement
of its underlying assumptions or bases, we believe such assumptions or bases to
be reasonable and have formed them in good faith, assumed facts or bases almost
always vary from actual results, and the differences between assumed facts or
bases and actual results can be material depending on the circumstances. When,
in any forward-looking statement, we express an expectation or belief as to
future results, that expectation or belief is expressed in good faith and is
believed to have a reasonable basis, but there can be no assurance that the
stated expectation or belief will result or be achieved or accomplished. All
subsequent written and oral forward-looking statements attributable to us, or
anyone acting on our behalf, are expressly qualified in their entirety by the
cautionary statements. We do not undertake any obligations to publicly release
any revisions to any forward-looking statements to reflect events or
circumstances after the date of this report or to reflect unanticipated events
that may occur.

         Factors that may cause our actual results to differ materially from
those described in forward-looking statements include the risks discussed
elsewhere in this prospectus under the caption "Risk Factors".

         NOTE REGARDING REVERSE STOCK SPLIT, SHARE QUANTITIES AND PRICES

         Due to a 1:30 reverse stock split effective at close of business on
March 3, 2006, all stock and warrant prices and quantities (including historical
transactions) are stated herein in post-split prices and quantities.

                                        1


                      SUMMARY INFORMATION AND RISK FACTORS

         You should read the following summary together with the more detailed
information regarding us and the securities being offered for sale by means of
this prospectus and our financial statements and notes to those statements
appearing elsewhere in this prospectus. This summary highlights information
contained elsewhere in this prospectus.

         In this prospectus, unless the context requires otherwise, references
to the "Company", "Dynamic", "we", "us" and "our" are to Dynamic Leisure
Corporation, formerly known as DynEco Corporation, and its wholly-owned
subsidiaries, DynEco International, Inc., Dynamic Leisure Group North America,
Inc., Changes in L'Attitudes, Inc., Island Resort Tours, Inc., and International
Travel and Resorts, Inc.

THE COMPANY

         Historically, our Company has devoted its business efforts to the
development of high-efficiency compressors and pumps with potential commercial
applications. In 2005, the Company defaulted on certain loans, had no revenue
from existing operations, had limited financial resources, and was in danger of
ceasing operations. However, on January 13, 2006, the Company entered into a
Stock Exchange Agreement with Dynamic Leisure Group, Inc., now known as Dynamic
Leisure Group North America, Inc., and as a result the Company will be focused
on the leisure travel field under the name Dynamic Leisure Corporation. In March
2006, the Company's common stock underwent a 1:30 reverse stock split in an
effort to make the stock more attractive to investors.

         Since January 2006, the Company has proceeded to follow a plan of
strategic acquisitions in the travel industry. On February 8, 2006, the Company
acquired Changes in L'Attitudes, Inc., a Largo, Florida online leisure travel
company. On March 6, 2006, the Company acquired Island Resort Tours, Inc. and
International Travel and Resorts, Inc., two New York based wholesale tour
operators.

         The Company's strategy focuses on the acquisition and integration of
key assets in the leisure travel industry to provide an ongoing business base,
including the implementation of its proprietary Tourscape dynamic packaging
travel software. The Company intends to continue its growth, focusing on the
leisure travel market and developing a more prominent Internet presence.

         Our executive offices are currently located at 2203 N. Lois Avenue, 9th
Floor, Tampa, Florida 33607, and our telephone number there is (813) 877-6300.
On or about June 1, 2006, our executive offices will relocate to 5680A W.
Cypress Street, Tampa, Florida 33607.

THE OFFERING:  RESALE

         This prospectus covers the resale of a total of 7,035,167 shares of our
common stock by selling security holders. Of those shares covered by this
prospectus, 1,240,000 shares have been issued and are currently outstanding,
100,000 additional shares are being registered as "150% coverage shares"
required by contract, 3,649,667 shares are issuable upon conversion of
outstanding convertible promissory notes, and 2,045,500 shares are issuable upon
exercise of outstanding warrants. Selling security holders may resell their
shares from time-to-time, including through broker-dealers, at prevailing market
prices. We will not receive any proceeds from the resale of our shares by the
selling security holders. We will pay all of the fees and expenses associated
with registration of the shares covered by this prospectus.

                                        2


Common Stock:

   Outstanding Shares ................. 9,597,810 shares, including 7,035,167
                                        shares the resale of which is covered by
                                        this prospectus issued and issuable upon
                                        the exercise of outstanding promissory
                                        notes and warrants (and including
                                        additional "150% coverage" shares
                                        required by contract). The promissory
                                        notes are convertible at prices ranging
                                        from $1.00 per share to $1.50 per share,
                                        subject to adjustment. The warrants are
                                        exercisable at prices ranging from $1.00
                                        per share to $1.50 per share, subject to
                                        adjustment.

   Common Stock Reserved: ............. 104,539 shares issuable on exercise of
                                        options (including options that have
                                        been granted and options that may be
                                        granted under our equity compensation
                                        plans), 4,902,237 shares issuable upon
                                        conversion of promissory notes
                                        (including interest through maturity and
                                        including 3,649,667 shares that are
                                        issuable upon conversion of promissory
                                        notes, the resale of which is covered by
                                        this prospectus), and 4,469,658 shares
                                        issuable upon exercise of outstanding
                                        warrants (including warrants to purchase
                                        2,045,500 shares the resale of which is
                                        covered by this prospectus). The
                                        promissory notes are convertible at
                                        $0.75 per share to $1.50 per share,
                                        subject to adjustment. The warrants are
                                        exercisable at prices ranging from $0.68
                                        per share to $11.25 per share, subject
                                        to adjustment.

OTC BULLETIN BOARD SYMBOL               DYLI

REGISTRATION RIGHTS                     We filed the registration statement of
                                        which this prospectus is a part pursuant
                                        to a Modification and Waiver Agreement,
                                        dated as of January 13, 2006, and its
                                        underlying Subscription Agreement,
                                        between the Company and two selling
                                        security holders. The Modification and
                                        Waiver Agreement requires us to cause
                                        the registration statement of which this
                                        prospectus is a part to be filed with
                                        the SEC not later than one hundred
                                        twenty (120) days following January 13,
                                        2006 and declared effective by the SEC
                                        not later than one hundred eighty (180)
                                        days following January 13, 2006. We are
                                        required to maintain the effectiveness
                                        of the registration statement for three
                                        (3) years. We are required to

                                        3


                                        pay all fees and expenses incident to
                                        the registration of the shares,
                                        exclusive of all underwriting discounts
                                        and commissions and transfer taxes, if
                                        any, and documentary stamp taxes, if
                                        any, relating to the disposition of the
                                        selling security holder's shares. The
                                        Company also agreed to pay liquidated
                                        damages to the selling security holders
                                        of two percent (2%) per month for which
                                        the registration statement of which this
                                        prospectus is a part is not timely filed
                                        or made effective. We and the selling
                                        security holders have each agreed to
                                        indemnify the other against certain
                                        liabilities, including certain
                                        liabilities under the Securities Act, or
                                        will be entitled to contribution in
                                        connection with these liabilities.

                                        For more information regarding the
                                        Modification and Waiver Agreement and
                                        its underlying Subscription Agreement,
                                        see Exhibit 10.19.

                                        We also filed the registration statement
                                        of which this prospectus is a part
                                        pursuant to a Secured Convertible
                                        Promissory Note, dated as of January 13,
                                        2006, between us and another selling
                                        security holder. The Secured Convertible
                                        Promissory Note requires that the
                                        registration statement of which this
                                        prospectus is a part be declared
                                        effective by the SEC not later than one
                                        hundred eighty (180) days following
                                        January 13, 2006. We are required to
                                        maintain the effectiveness of the
                                        registration statement for ninety (90)
                                        days. If the Company breaches its
                                        obligations under the Secured
                                        Convertible Promissory Note and related
                                        documents, the selling security holder
                                        may declare a default, accelerate the
                                        indebtedness due under the Secured
                                        Convertible Promissory Note plus simple
                                        interest at the greater of ten percent
                                        (10%) per annum or the maximum amount
                                        permitted by applicable law, and
                                        exercise its rights under a Security
                                        Agreement. The Company is required to
                                        pay all expenses incurred in connection
                                        with the registration of the selling
                                        security holder's common stock,
                                        including without limitation all
                                        registration and qualification fees,
                                        accounting fees, fees and disbursements
                                        of counsel for the Company, and

                                        4


                                        reasonable fees and expenses of a single
                                        special counsel for the selling security
                                        holder.

                                        For more information regarding the
                                        Secured Convertible Promissory Note, see
                                        Exhibit 10.21.

                                        In connection with the acquisition on
                                        February 8, 2006 of Changes in
                                        L'Attitudes, Inc., a Florida corporation
                                        (the "First Acquisition), the Company
                                        executed a Purchase Agreement under
                                        which we agreed to include in our next
                                        registration statement the shares of
                                        common stock issued to the selling
                                        security holder in the First
                                        Acquisition, at no cost to that selling
                                        security holder.

                                        In connection with the acquisition on
                                        March 6, 2006 of Island Resort Tours,
                                        Inc. and International Travel and
                                        Resorts, Inc., both New York
                                        corporations (the "Second Acquisition"),
                                        the Company executed a Purchase
                                        Agreement under which we again agreed to
                                        include in our next registration
                                        statement the shares of common stock
                                        issued to the selling security holder in
                                        the Second Acquisition, at no cost to
                                        that selling security holder.

RISK  FACTORS                           See "Risk Factors" beginning on page 6
                                        and other information set forth in this
                                        prospectus for a discussion of factors
                                        that you should carefully consider
                                        before deciding to invest in the shares
                                        of our common stock.

PLAN OF DISTRIBUTION                    The shares of common stock offered for
                                        resale may be sold by the selling
                                        security holders pursuant to this
                                        prospectus in the manner described under
                                        "Plan of Distribution" on page 21.

SELECTED FINANCIAL DATA

         The following summary of our financial information for the years ended
December 31, 2005 and 2004 has been derived from, and should be read in
conjunction with, our audited financial statements included elsewhere in this
prospectus. In addition, on or about May 15, 2006, the Company will be filing
its first 2006 Quarterly Report on Form 10-QSB, which should be read in
conjunction with the financial data set forth herein.

                                        5


                                                    Years Ended December 31,
                                                    ------------------------
                                                   2005                  2004
                                                   ----                  ----

Revenues ...........................            $     -0-             $ 286,900

Cost of Revenues ...................                  -0-                16,096

Operating expenses .................              497,698               670,213

Net (loss) .........................            $(526,195)            $(434,523)

Net (loss) per share ...............            $   (0.47)            $   (0.39)


                                                      December 31, 2005
                                                      -----------------

         Working capital deficit ............            $1,033,565

         Current liabilities ................             1,033,565

         Total liabilities ..................             1,168,284

         Shareholders' deficit ..............            $1,105,911


RISK FACTORS

         AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE IN NATURE
AND INVOLVES A HIGH DEGREE OF RISK. THE FOLLOWING FACTORS ARE BELIEVED BY
MANAGEMENT TO BE ALL OF THE MATERIAL RISKS THAT SHOULD BE CAREFULLY CONSIDERED
BY INVESTORS BEFORE PURCHASING OUR SHARES.

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM HAS RAISED DOUBT OVER OUR
CONTINUED EXISTENCE AS A GOING CONCERN.

         We have incurred substantial operating and net losses, as well as
negative operating cash flow, since our inception. As a result, we continue to
have significant working capital and stockholders' deficits including a
substantial accumulated deficit at December 31, 2005 and December 31, 2004. In
recognition of such, our independent registered public accounting firm has
included an explanatory paragraph in their report on our consolidated financial
statements for the fiscal years ended December 31, 2005 and December 31, 2004
that expressed substantial doubt regarding our ability to continue as a going
concern.

WE HAVE EXPERIENCED HISTORICAL LOSSES AND A SUBSTANTIAL ACCUMULATED DEFICIT. IF
WE ARE UNABLE TO REVERSE THIS TREND, WE WILL LIKELY BE FORCED TO CEASE
OPERATIONS.

         For the fiscal years ended December 31, 2005 and 2004, we experienced
net losses of $526,195 and $434,523, respectively. In addition, at December 31,
2005, we had an accumulated deficit of $8,661,023. Our operating results for
future periods will include significant expenses, including new product
development expenses, potential marketing costs, professional fees and
administrative expenses, and will be subject to numerous uncertainties. As a
result, we are unable to predict whether we will achieve profitability in the
future, or at all.

                                        6


WE HAVE A WORKING CAPITAL DEFICIT AND SIGNIFICANT CAPITAL REQUIREMENTS. SINCE WE
WILL CONTINUE TO INCUR LOSSES UNTIL WE ARE ABLE TO GENERATE SUFFICIENT REVENUES
TO OFFSET OUR EXPENSES, INVESTORS MAY BE UNABLE TO SELL OUR SHARES AT A PROFIT
OR AT ALL.

         As of December 31, 2005, our current liabilities were approximately
$1,033,565; we had no current assets and therefore have a working capital
deficit equal to our current liabilities. To date, our operating expenses have
greatly exceeded our limited revenues. We immediately require substantial
working capital, but we have received no commitments for funding from any third
parties. If we are unable to generate substantial revenues from operations or
obtain working capital from external sources, we will be forced to curtail or
cease operations in which event investors will lose their investment in our
company.

WE HAVE BEEN HISTORICALLY UNSUCCESSFUL IN OUR ATTEMPTS TO RAISE SUFFICIENT
CAPITAL TO FUND OUR PLANS. IF WE ARE UNABLE TO DO SO, WE MAY CEASE OPERATIONS.

         Historically, we have funded our operations through limited revenues
and debt and equity financing. Although we were successful in obtaining a
$2,000,000 financing in January 2006, we have been unsuccessful in attracting
significant additional private funding for our business. We continue to incur
operating expenses, including executive and staff salaries, lease obligations
and acquisition costs, but we have not yet integrated our acquired businesses
and technologies, acquired other target companies according to our business
model, obtained sufficient financing to carry out our plans, or received
sufficient operating revenues to support our human and equipment
infrastructures. Until such time, if ever, that we are successful in obtaining
additional financing to carry out our strategy, there is significant risk that
we may be required to cease operations.

THERE IS NO SIGNIFICANT ACTIVE TRADING MARKET FOR OUR SHARES, AND IF AN ACTIVE
TRADING MARKET DOES NOT DEVELOP, PURCHASERS OF OUR SHARES MAY BE UNABLE TO
RESELL THEM PUBLICLY.

         There is no significant active trading market for our shares and we do
not know if an active trading market will develop. An active market will not
develop unless broker-dealers develop interest in trading our shares, and we may
be unable to generate interest in our shares among broker-dealers until we
generate meaningful revenues and profits from operations. Until that time
occurs, if it does at all, purchasers of our shares may be unable to sell them
publicly. In the absence of an active trading market:

         -  Investors may have difficulty buying and selling our shares or
            obtaining market quotations;

         -  Market visibility for our common stock may be limited; and

         -  A lack of visibility for our common stock may depress the market
            price for our shares.

IN THE EVENT THAT WE ISSUE ADDITIONAL SHARES, CONVERTIBLE PROMISSORY NOTES,
WARRANTS AND OPTIONS, THE MARKET PRICE FOR OUR SHARES MAY BE ADVERSELY AFFECTED.

         As of May 10, 2006, we have executed convertible promissory notes,
granted options and issued warrants to purchase an aggregate of 9,476,434 shares
of our common stock. The options are exercisable at prices ranging from $1.50
per share to $11.40 per share, the notes are convertible at prices ranging from
$0.75 to $1.50 per share, subject to adjustment, and the warrants are
exercisable ranging from $0.68 per share to $11.25 per share. In addition, as we
procure additional financing and acquire additional business assets, we shall
undoubtedly grant additional shares, as well as warrants and options, to the
financiers and shareholders of target companies. To the extent that additional
shares are issued, notes are converted, and options and warrants are exercised,
the shares that are issued may result in an oversupply


                                        7


of shares and an undersupply of purchasers, thereby diluting the market for our
shares. The existence of options and options that are exercisable at below
market may have a depressive effect on the market price for our common stock.

THIS PROSPECTUS PERMITS SELLING SECURITY HOLDERS TO RESELL THEIR SHARES. IF THEY
DO SO, THE MARKET PRICE FOR OUR SHARES MAY FALL, AND PURCHASERS OF OUR SHARES
MAY BE UNABLE TO RESELL THEM.

         This prospectus includes 7,035,167 shares potentially being offered by
existing stockholders, including 6,035,167 shares issuable upon the exercise of
outstanding warrants and the conversion of outstanding promissory notes. To the
extent that these shares are sold into the market for our shares, there may be
an oversupply of shares and an undersupply of purchasers. If this occurs the
market price for our shares may decline significantly and investors may be
unable to sell their shares at a profit, or at all. The existence of warrants
and notes that are exercisable or convertible at below market may have a
depressive effect on the market price for our shares. In the event that the
warrants and notes are exercised and converted at a price per share that is
below the market price for our shares, the issuance of shares upon exercise may
be dilutive to existing stockholders.

WE MAY BE EXPOSED TO POTENTIAL RISKS RELATING TO OUR INTERNAL CONTROLS OVER
FINANCIAL REPORTING AND OUR ABILITY TO HAVE THOSE CONTROLS ATTESTED TO BY OUR
INDEPENDENT AUDITORS.

         As directed by Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX
404"), the Securities and Exchange Commission adopted rules requiring public
companies to include a report of management on the company's internal controls
over financial reporting in their annual reports, including Form 10-KSB. In
addition, the independent registered public accounting firm auditing a company's
financial statements must also attest to and report on management's assessment
of the effectiveness of the company's internal controls over financial reporting
as well as the operating effectiveness of the company's internal controls. We
were not subject to these requirements for the fiscal year ended December 31,
2005. We are evaluating our internal control systems in order to allow our
management to report on, and our independent auditors attest to, our internal
controls, as a required part of our Annual Report on Form 10-KSB beginning with
our report for the fiscal year ended December 31, 2007.

         While we expect to expend significant resources in developing the
necessary documentation and testing procedures required by SOX 404, there is a
risk that we will not comply with all of the requirements imposed thereby. At
present, there is no precedent available with which to measure compliance
adequacy. Accordingly, there can be no positive assurance that we will receive a
positive attestation from our independent auditors.

         In the event we identify significant deficiencies or material
weaknesses in our internal controls that we cannot remediate in a timely manner
or we are unable to receive a positive attestation from our independent auditors
with respect to our internal controls, investors and others may lose confidence
in the reliability of our financial statements and our ability to obtain equity
or debt financing could suffer.

EVOLVING GOVERNMENT REGULATION COULD IMPOSE TAXES OR OTHER BURDENS ON OUR
BUSINESS, WHICH COULD INCREASE OUR COSTS OR DECREASE DEMAND FOR OUR PRODUCTS.

         We must comply with laws and regulations applicable to online commerce.
Increased regulation of the Internet or different application of existing laws
might slow the growth in the use of the Internet and commercial online services,
which could decrease demand for our products, increase the cost of doing
business or otherwise reduce our sales and revenues. The statutes and case law
governing online

                                        8


commerce are still evolving, and new laws, regulations or judicial decisions may
impose on us additional risks and costs of operations. In addition, new
regulations, domestic and/or international, regarding the privacy of our users'
personally identifiable information may impose on us additional costs and
operational constraints.

BECAUSE THE TRAVEL MARKET IS SEASONAL, OUR QUARTERLY RESULTS MAY FLUCTUATE.

         Our business experiences seasonal fluctuations, reflecting seasonal
trends for the products offered by our website, as well as Internet services
generally. For example, traditional leisure travel bookings are higher in the
first two calendar quarters of the year in anticipation of spring and summer
vacations and holiday periods, but online travel reservations may decline with
reduced Internet usage during the summer months. In the last two quarters of the
calendar year, demand for travel products generally declines and the number of
bookings flattens. These factors could cause our revenues to fluctuate from
quarter to quarter. Our results may also be affected by seasonal fluctuations in
the inventory made available to us by travel suppliers.

WE OPERATE IN THE HIGHLY COMPETITIVE TRAVEL MARKET, AND WE MAY NOT BE ABLE TO
COMPETE EFFECTIVELY.

         The market for travel product is intensely competitive. We compete with
a variety of companies with respect to each product or service we offer.

         -  We compete with online travel retailers including Expedia, Orbitz,
            Travelocity, and many smaller companies in providing online travel
            products.

         -  We compete with airlines, hotels, rental car companies, cruise
            operators and other travel service providers, whether working
            individually or collectively, some of which are suppliers to our
            websites.

         -  We compete with local, regional, national and international
            traditional travel agencies.

         -  We compete with consolidators and wholesalers of airline tickets,
            lodging and other travel products, including Cheaptickets.com,
            Priceline.com, Hotwire, Hotels.com, and TravelWeb.

         -  We compete with operators of GDS's, which control the computer
            systems through which travel reservations historically have been
            booked.

         -  We compete with operators of travel industry reservation databases.

         Our competitors have longer operating histories, larger customer bases,
greater brand recognition, and significantly greater financial, marketing and
other resources than we have. Some of our competitors also benefit from vertical
integration with GDS's. Consequently, we may not be able to compete effectively
in the market.

IF WE FAIL TO CREATE AND INCREASE OUR BRAND RECOGNITION AMONG CONSUMERS, WE MAY
NOT BE ABLE TO ATTRACT AND EXPAND ONLINE TRAVEL SALES.

         We believe that maintaining and enhancing our brands is a critical
aspect of our efforts to attract and expand our online traffic. The number of
Internet sites that offer competing services increases the

                                        9


importance of maintaining and enhancing brand recognition. Promotion of our
brands will depend largely on our success in providing a high-quality online
experience supported by a high level of customer service. In addition, we intend
to spend substantial amounts on marketing and advertising with the intention of
continuing to expand our brand recognition to attract and retain online users
and to respond to competitive pressures. However, we cannot assure you that
these expenditures will be effective to promote our brands or that our marketing
efforts generally will achieve our goals.

THE SUCCESS OF OUR BUSINESS DEPENDS ON CONTINUED GROWTH OF ONLINE TRAVEL
COMMERCE.

         Our sales and revenues will not grow as we plan if consumers do not
purchase significantly more travel products online than they currently do and if
the use of the Internet as a medium of commerce for travel products does not
continue to grow or grows more slowly than expected. Consumers have
traditionally relied on travel agents and travel suppliers and are accustomed to
a high degree of human interaction in purchasing travel products. The success of
our business is dependent on the number of consumers who use the Internet to
purchase travel products increasing significantly.

OUR BUSINESS IS EXPOSED TO RISKS ASSOCIATED WITH ONLINE COMMERCE SECURITY AND
CREDIT CARD FRAUD.

         Consumer concerns over the security of transactions conducted on the
Internet or the privacy of users may inhibit the growth of the Internet and
online commerce. To transmit confidential information such as customer credit
card numbers securely, we rely on encryption and authentication technology.
Unanticipated events or developments could result in a compromise or breach of
the systems we use to protect customer transaction data. Furthermore, our
servers and those of our service providers may be vulnerable to viruses or other
harmful code or activity transmitted over the Internet. While we proactively
check for intrusions into our infrastructure, a virus or other harmful activity
could cause a service disruption.

         In addition, we bear financial risk from reservations placed with
fraudulent credit card data. Although we have implemented anti-fraud measures, a
failure to control fraudulent credit care transactions adequately could
adversely affect our business. Because of our limited operation history, we
cannot assure you that our anti-fraud measures are sufficient to prevent
material financial loss.

WE DEPEND ON OUR RELATIONSHIPS WITH TRAVEL SUPPLIERS AND COMPUTER RESERVATION
SYSTEMS, AND CHANGES IN THESE RELATIONSHIPS COULD MATERIALLY AND ADVERSELY
AFFECT OUR BUSINESS.

         Our business relies on relationships with travel suppliers, and it
would be negatively affected by adverse changes in these relationships. We
depend on travel suppliers to enable us to offer our customers comprehensive
access to travel services and products. Consistent with industry practices, we
currently have few agreements with our travel suppliers obligating them to sell
services or products through our websites. Our travel suppliers generally can
cancel or modify their agreements with us upon no or relatively short notice. It
is possible that travel suppliers may choose not to make their inventory of
services and products available through online distribution. Travel suppliers
could elect to sell exclusively through other sales and distribution channels or
to restrict our access to their inventory, either of which could significantly
decrease the amount of breadth of our inventory of available travel offerings.
Adverse changes in any of these relationships could reduce the amount of
inventory that we are able to offer through our websites. In addition, any
decline in the quality of travel products and services provided by these
suppliers or a perception by travelers of such a decline could adversely affect
our reputation.

                                       10


INTERRUPTION IN SERVICE FROM THIRD PARTIES COULD IMPAIR THE QUALITY OF OUR
SERVICE

         We rely on third-party computer systems and third-party providers,
including the computerized central reservation systems of the airline, hotel and
car rental industries, to make airline ticket, hotel room and car rental
reservations and credit card verifications and confirmations.

         Currently, a majority of our transactions are processed through Sabre,
Inc. Any interruption or deterioration in these third-party services or
deterioration in their performance could impair the quality of our service. If
our arrangement with any of these third parties is terminated, we may not find
an alternate source of systems support on a timely basis or on commercially
reasonable terms. In particular, any migration form the Sabre system could
require a substantial commitment of time and resources and hurt our business.

OUR SUCCESS DEPENDS UPON IMPLEMENTING AND INTEGRATING OUR TOURSCAPE TECHNOLOGY.

         Touscape is a dynamic travel-packaging technology purchased by our
subsidiary in 2005. Our company has recently acquired two wholesale travel
companies and plans on acquiring several more in the near future. As part of our
business model, the implementation and integration of the Tourscape technology
is vital to increasing these companies' efficiencies and thus increasing overall
revenues and profitability. If we cannot successfully implement and integrate
the Tourscape technology, our profitability may not increase as planned, if at
all.

OUR NEW TECHNOLOGY MAY NOT BE SUCCESSFULLY DEVELOPED, INSTALLED OR IMPLEMENTED
WITHOUT DISRUPTING OUR BUSINESS.

         We are currently replacing many of our existing computer systems and
websites with systems designed to operate with our websites. There can be no
assurance that these new systems will be successfully developed, installed
according to the expected time frame or within the anticipated budget,
implemented without any disruption to our business or result in the intended
operational benefits and cost efficiencies.

RAPID TECHNOLOGICAL CHANGES MAY RENDER OUR TECHNOLOGY OBSOLETE OR DECREASE THE
ATTRACTIVENESS OF OUR PRODUCTS TO CONSUMERS.

         To remain competitive in the online travel industry, we must continue
to enhance and improve the functionality of and features of our websites. The
Internet and the online commerce industry are rapidly changing. In particular,
the online travel industry is characterized by increasingly complex systems and
infrastructures and new business models. If competitors introduce new products
embodying new technologies, or if new industry standards and practices emerge,
our existing website, technology and systems may become obsolete. Our future
success will depend on our ability to do the following:

         -  enhance our existing products;

         -  develop and license new products and technologies, such as our
            supplier link technology, that address the increasingly
            sophisticated and varied needs of our prospective customers and
            suppliers; and

                                       11


         -  respond to technological advances and emerging industry standards
            and practices on a cost effective and timely basis.

         Developing our website and other technology entails significant
technical and business risks. We may use new technologies ineffectively or we
may fail to adapt our website, transaction processing systems and network
infrastructure to consumer requirements or emerging industry standards. For
instance, our website functionality that allows searches and displays of ticket
pricing and travel itineraries is a critical part of our service, and it may
become out-of-date or insufficient from our customers' perspective and in
relation to the search and display functionality of our competitors' websites.
If we face material delays in introducing new services, products and
enhancements, our customers and suppliers may forego the use of our products and
use those of our competitors. The technology and methodologies to attract
customers to specific websites is constantly changing. Customer preferences on
which websites to use and the comfort level regarding reliability, safety of
personal information, and ease of use continues to evolve. If we are unable to
achieve the level of customer activity and follow-through purchases, we may not
be able to achieve the level of revenue and profitability that we require, which
could negatively affect our stock price.

OUR COMPUTER SYSTEMS MAY SUFFER FAILURES, CAPACITY CONSTRAINTS AND BUSINESS
INTERRUPTIONS THAT COULD INCREASE OUR OPERATION COSTS AND CAUSE US TO LOSE
CUSTOMERS.

         In order to be successful, we must continue to provide reliable,
real-time access to our systems for our customers and suppliers. As our
operations continue to grow in both size and scope, domestically and
internationally, we shall need to improve and upgrade our systems and
infrastructure to offer an increasing number of customers and travel suppliers
enhanced products, services, features and functionality. The expansion of our
systems and infrastructure will require us to commit substantial financial,
operational and technical resources before the volume of business will increase.
Consumers and suppliers will not tolerate a service hampered by slow delivery
times, unreliable service levels or insufficient capacity, any of which could
have a material adverse effect on our business, operating results and financial
condition.

         Our operations face the risk of systems failures. Our systems and
operations are vulnerable to damage or interruption from fire, flood, power
loss, telecommunications failure, computer hacking break-ins, earthquake,
terrorism and similar events. The occurrence of natural disaster or
unanticipated problems at our facilities in Tampa or at the locations of key
vendors such as Sabre could cause interruptions or delays in our business, loss
of data or render us unable to process reservations. In addition, the failure of
our computer and communications systems to provide the data communications
capacity required by us, as a result of human error, natural disaster of other
occurrence of any or all of these events could adversely affect our reputation,
brand and business.

         In these circumstances, our redundant systems or disaster recovery
plans may not be adequate. Business interruption insurance may not adequately
compensate us for losses that may occur. Similarly, although many of our
contracts with our service providers require them to have disaster recovery
plans, we cannot be certain that these will be adequate or implemented properly.
In addition, our business interruption insurance may not adequately compensate
us for losses that may occur.

WE HAVE ACQUIRED TWO BUSINESSES AND PLAN TO ACQUIRE OTHER BUSINESSES AND
PRODUCTS; IF WE DO, WE MAY BE UNABLE TO INTEGRATE THEM WITH OUR BUSINESS, OR WE
MAY IMPAIR OUR FINANCIAL PERFORMANCE.

                                       12


         If appropriate opportunities present themselves, we may acquire
businesses, products or technologies that we believe are strategic. We do not
currently have any understanding, commitments or agreements with respect to any
acquisition. We may not be able to identify, negotiate or finance any future
acquisition successfully. Even if we do succeed in acquiring a business, product
or technology, we have no experience in integrating an acquisition into our
business; the process of integration may produce unforeseen operating
difficulties and expenditures and may absorb significant attention of our
management that would otherwise be available for the ongoing development of our
business. If we make future acquisitions, we may issue shares of stock that
dilute other stockholders, expend cash, incur debt, assume contingent
liabilities or create additional expenses related to amortizing other intangible
assets with estimable useful lives, any of which might harm our business,
financial condition or results of operations.

OUR PLANNED GROWTH INVOLVES A NUMBER OF RISKS THAT COULD HAVE A NEGATIVE IMPACT
ON OPERATIONS.

         Our management group has been assembled only recently and, as a result,
our management group may be unable to manage effectively our organization and/or
implement our Internet-business based strategy. In addition, the ongoing
transition of our current business to an Internet based model has, and will
continue to, place additional strain on our personnel, accounting, management
information, technology and corporate support systems. Any inadequacy in these
systems to manage the increased size and scope of operations resulting from our
transition and any future growth or our inability to integrate successfully any
future acquisition could materially adversely affect our business, financial
condition and results of operations.

WE MAY BE UNABLE TO MAKE ATTRACTIVE ACQUISITIONS OR INTEGRATE ACQUIRED
COMPANIES, WHICH COULD SEVERELY DISRUPT OUR OPERATIONS AND ONGOING BUSINESS.

         We plan to acquire or make investments in complementary businesses,
products, services or technologies. However, we cannot assure you that we shall
be able to identify suitable acquisition or investment candidates.

         Even if we do identify suitable candidates, we cannot assure you that
we will be able to make acquisitions or investments on commercially acceptable
terms. If we buy a business, we could have difficulty in assimilating that
company's personnel, operations, products, services or technologies into our
operations. We have experienced such difficulties in the past. If we encounter
these difficulties in the future, there will be disruptions in our ongoing
business, distractions to our management and employees, and increases in our
expenses, all of which will adversely affect our results of operations.

ANY FUTURE ACQUISITIONS WE MAKE MAY NOT BE PROFITABLE.

         Part of our Internet business strategy is to identify and acquire
travel-related Internet organizations in the travel services industry. Future
acquisitions may involve a number of risks that could adversely affect our
business, results of operations and financial condition. These could include
adverse short-term effects on our reported operating results such as those
caused by severance payments to employees of acquired companies, difficulties in
eliminating duplicative costs, restructuring charges associated with the
acquisitions and other expenses associated with the change of control, as well
as non-recurring acquisition costs. Acquisitions may also divert management's
attention, create difficulties with retention, hiring and training of key
personnel, raise risks associated with unanticipated problems or legal
liabilities and require non-cash accounting charges associated with the
amortization of acquired intangible assets. Furthermore, although we conduct due
diligence and generally require representations, warranties

                                       13


and indemnification from the former owners of acquired companies, those former
owners may not accurately represent the financial and operating conditions of
their companies and may not have the means to satisfy their indemnification
obligations. If an acquired company's financial or operating results were
misrepresented, the acquisition could have a material adverse affect on our
business, financial condition and results of operations.

FINANCING OF FUTURE ACQUISITIONS WILL DILUTE EXISTING STOCKHOLDER OWNERSHIP.

         We intend to finance future acquisitions by using shares of our common
stock or preferred stock for a substantial portion of the consideration to be
paid. This reliance upon the use of common stock or preferred stock as
consideration will dilute shareholders' interest in the Company.

OUR SUCCESS DEPENDS ON MAINTAINING THE INTEGRITY OF OUR SYSTEMS AND
INFRASTRUCTURE.

         In order to be successful, we must continue to provide reliable,
real-time access to our systems for our customers and suppliers. As our
operations continue to grow in both size and scope, domestically and
internationally, we shall need to improve and upgrade our systems and
infrastructure to offer an increasing number of customers and travel suppliers
enhanced products, services, features and functionality. The expansion of our
systems and infrastructure will require us to commit substantial financial,
operational and technical resources before the volume of business will increase.
Consumers and suppliers will not tolerate a service hampered by slow delivery
times, unreliable service levels or insufficient capacity, any of which could
have a material adverse effect on our business, operating results and financial
condition.

THE SUCCESS OF OUR BUSINESS DEPENDS UPON THE CONTINUING CONTRIBUTION OF OUR KEY
PERSONNEL, INCLUDING MR. DANIEL BRANDANO, OUR PRESIDENT AND CHIEF EXECUTIVE
OFFICER, WHOSE KNOWLEDGE OF OUR BUSINESS WOULD BE DIFFICULT TO REPLACE IN THE
EVENT WE LOSE HIS SERVICES.

         Our operations are dependent on the efforts and relationships of Daniel
Brandano and the other executive officers as well as the senior management of
our organization. We will likely be dependent on the senior management of our
organization for the foreseeable future. If any of these individuals becomes
unable to continue in their role, our business or prospects could be adversely
affected. For example, the loss of Mr. Brandano could inhibit the development
and enhancement of our websites and could damage customer relations and our
brand and could restrict our ability to raise additional working capital if and
when needed. There can be no assurance that he will continue in his present
capacity for any particular period of time.

THE TRAVEL INDUSTRY IS SUBJECT TO NUMEROUS AND UNIQUE RISKS THAT MAY ALSO AFFECT
OUR BUSINESS, FINANCIAL CONDITION, AND OPERATIONS.

         Our results of operations will depend upon factors affecting the
vacation industry in general. Our revenues and earnings are especially sensitive
to events that affect domestic and international air travel and the level of car
rentals and hotel reservations. A number of factors could result in a temporary
or long-term overall decline and demand for packaged vacations, including the
following examples:

         - International Terrorism: The September 11, 2001 attacks against the
United States halted airline travel and changed forever the government's
security measures and consumers' views concerning travel safety. The July 2005
bombings in the London Underground similarly heightened safety awareness in
Europe.

                                       14


         - Extreme Weather Conditions: In March 2006, forty-one days of rain on
the Hawaiian islands caused flash floods, landslides, mudslides, and a dam break
on the island of Kauai. In August 2005, Hurricane Katrina laid waste to
substantial portions of the United States, including New Orleans, Louisiana,
Biloxi and Gulfport, Mississippi, and Mobile, Alabama. Hurricanes Emily and
Wilma both caused significant damage to Cozumel, Mexico, in July and October
2005. In December 2004, a tsunami in the Indian Ocean devastated areas of India,
Indonesia, Kenya, Malaysia, the Maldives, Myanmar, the Seychelles, Somalia, Sri
Lanka, Thailand, and the United Republic of Tanzania.

         - Political Instability, Security Issues, and Labor Disturbances: In
2006, rioting in France led to street clashes with police, the shutdown of major
tourist attractions, and labor strikes. In May 2005, the disappearance of
Natalee Holloway in Aruba, and the follow-up criminal investigation, cast
concerns over the safety of travelers in Aruba. The United States State
Department issues travel warnings recommending that Americans avoid certain
countries. As of April 9, 2006, warnings were issued for Uzbekistan, Pakistan,
Bosnia-Herzegovina, Liberia, the Ivory Coast, Israel, Nigeria, Algeria, Sudan,
Colombia, Afghanistan, Kenya, Iran, Iraq, Saudi Arabia, Nepal, Indonesia,
Zimbabwe, Lebanon, Yemen, Burundi, Somalia, the Central African Republic, and
the Philippines.

         - Illnesses: The Avian Influenza (Bird Flu) has caused significant
concern for Asia and Europe, and federal and state agencies in the United States
are currently developing strategies to combat potential outbreaks in America.
The Severe Acute Respiratory Syndrome (SARS) was first reported in Asia in 2003
but spread to more than two dozen countries in North America, South America,
Europe, and Asia before the global outbreak was contained. In November 2003, a
stomach illness struck dozens of passengers and crew members aboard a cruise
ship. Nearly every month illnesses are reported on multiple cruise ships.

         - Air and Sea Disasters: Cruise ships have reported missing passengers,
presumed lost overboard, as follows: four lost through early April 2006;
thirteen lost in 2005; eleven lost in 2004; and nine lost in 2003. In addition,
cruise ships often strike land or run aground, often with fatal results. In
March 2006, a fatal fire broke out on a cruise ship in the Carribean. In
November 2005, pirates attempted to overtake a cruise ship in Somalia. On May 3,
2006, an Armenian commercial airliner crashed into the Black Sea near southern
Russia. In December 2005, two fatal commercial air crashes occurred, in Miami
and Nigeria. In October 2005, another fatal aircraft crash occurred near Lissa,
Niegeria. In September 2005, a commercial aircraft crashed in Medan, Indonesia.
In August 2005, fatal air crashes occurred in Peru, Venezuela, Greece and Italy.

         Demand for our products and services may be significantly affected by
any of these unique risks. In addition, any significant economic downturn or any
recession could have a material adverse effect on our business, financial
condition and operations results.

THE COMPANY CONTINUES TO HOLD LICENSING RIGHTS ON CERTAIN INTELLECTUAL PROPERTY,
AND THERE ARE RISK FACTORS ATTENDANT TO THOSE RIGHTS.

WE HAVE A STRATEGIC BUSINESS PARTNER FOR OUR PATENT AND LICENSE RIGHTS, AND IF
OUR PARTNER IS UNABLE TO SUCCESSFULLY DEVELOP, MANUFACTURE OR MARKET PRODUCTS OR
OTHER PRODUCTS INCORPORATING OUR TECHNOLOGY, WE WILL NOT GENERATE SUBSTANTIAL
REVENUES FROM OUR PATENT AND LICENSE RIGHTS.

                                       15


         We have granted an exclusive, worldwide license to Parker-Hannifin
Corporation for our air UniVane compressors, hydrogen circulators and related
technology. In connection with this license, Parker-Hannifin is responsible for
the development, manufacture and marketing of products incorporating the
licensed technology. While Parker-Hannifin is producing demonstration
compressors and hydrogen circulators incorporating our licensed technology,
Parker-Hannifin has not yet manufactured commercial products that incorporate
our technology. We are entitled to a royalty fee from Parker-Hannifin
Corporation that is based upon its sale of our products and products
incorporating our technology. However, Parker-Hannifin may not be successful in
marketing these products, in which event we will not receive royalty fees from
Parker-Hannifin. While we depend upon Parker-Hannifin for sales of
royalty-generating products, we have no control over Parker-Hannifin's technical
and manufacturing development or marketing activities, and Parker-Hannifin is
only required to use reasonable commercial efforts to market these products. If
Parker-Hannifin does not successfully market royalty-generating products under
our license agreement, we will not receive royalty fees. To date,
Parker-Hannifin has not sold any products as to which we are entitled to a
royalty payment.

SINCE WE PLACE EXCLUSIVE RELIANCE ON PARKER-HANNIFIN FOR UNIVANE PRODUCT SALES,
OUR REVENUES MAY BE ADVERSELY AFFECTED BECAUSE WE HAVE NO ASSURANCE THAT SALES
BY PARKER-HANNIFIN WILL BE SUBSTANTIAL.

         During the term of our exclusive license agreement with
Parker-Hannifin, which, in general, continues for the life of the licensed
patent, we are prohibited from selling our UniVane devices to any other party
for use in fuel cells. While Parker-Hannifin has agreed to use commercially
reasonable efforts to develop, manufacture or sell our products during the
period that the exclusive license agreement is in effect, we will forgo
potential sales of UniVane devices to third parties. Moreover, Parker-Hannifin
may not be successful in its marketing efforts.

FUEL CELL TECHNOLOGY HAS NOT YET BECOME A WIDELY-ACCEPTED ALTERNATIVE FUEL
SOURCE.

         Fuel cell systems represent a relatively new technology, and our
success depends on this technology achieving market acceptance. The development
of a substantial market for fuel cell systems may be impacted by many factors,
all of which are out of our control, including:

         -  Cost competitiveness of cell systems;

         -  User acceptance of fuel cell systems;

         -  Cost of hydrogen fuel;

         -  User perception of fuel cell systems' safety; and

         -  Emergence of newer, more competitive technologies and products.

         The success of our license agreement with Parker-Hannifin Corporation,
and our receipt of royalty payments under the license agreement, is dependent
upon the success of Parker-Hannifin in developing and marketing fuel cell
products incorporating the technology we have licensed to them. If a substantial
fuel cell systems market develops slower than anticipated or fails to develop,
Parker-Hannifin's efforts may be delayed or frustrated, and we may not be able
to recover the expenses we incurred to develop our fuel cell compressor
products. Moreover, our UniVane compressors are based upon and rely solely upon
our unique technology. They have not been produced on a commercial basis

                                       16


and have not received substantial compressor product market acceptance for
several reasons, including manufacturing cost.

WE HAVE NO COMMERCIAL PRODUCT SALES AND ONLY LIMITED SALES OF PROTOTYPES. THERE
IS NO GUARANTEE THAT PARKER-HANNIFIN WILL GENERATE SIGNIFICANT SALES OF OUR
PRODUCTS.

         Parker-Hannifin may not be able to manufacture or commercialize our
UniVane compressor and hydrogen circulator products in a cost effective manner.
Through 2004, we derived revenues principally from consulting fees and research
and development contracts. Our compressor and hydrogen circulator product sales
have been limited to demonstration and prototype models. We have not made any
commercial sales of units that include fuel-processing capabilities.
Parker-Hannifin may not be able to produce or commercialize any of our fuel cell
compressor products in a cost-effective manner, and, if produced, may be unable
to successfully market these products.

         Parker-Hannifin may not be able to develop manufacturing technologies
and processes or expand their manufacturing facilities to the point of being
capable of economically or profitably satisfying large commercial orders that
may occur. Development and expansion of these technologies and processes require
extensive lead times and the commitment of significant financial, engineering
and human resources. Parker-Hannifin may choose not to develop the required
manufacturing technologies and processes.

         WE CANNOT PREDICT WHETHER WE WILL SUCCESSFULLY EFFECTUATE OUR
EVER-DEVELOPING BUSINESS PLAN. EACH PROSPECTIVE PURCHASER IS ENCOURAGED TO
CAREFULLY ANALYZE THE RISKS AND MERITS OF AN INVESTMENT IN THE SHARES AND SHOULD
TAKE INTO CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHERS, THE RISK
FACTORS DISCUSSED ABOVE.


                                 USE OF PROCEEDS

         The selling security holders will receive the proceeds from the resale
of the shares of common stock registered under this prospectus. We shall not
receive any proceeds upon the sale of shares by the selling security holders.


                         DETERMINATION OF OFFERING PRICE

         As the registration covers shares transferable by certain selling
security holders (see below), the Company has not determined an offering price.
Market information for the Company's common stock is set forth on page 50 below.


                            SELLING SECURITY HOLDERS

BACKGROUND OF THE TRANSACTIONS

         This prospectus covers the resale of 7,035,167 shares of our common
stock issued or issuable in connection with the following transactions:

                                       17


January 13, 2006
- ----------------

         On January 13, 2006, the Company entered into a Stock Exchange
Agreement (the "reverse merger") with all of the shareholders of Dynamic Leisure
Group, Inc., a Florida corporation (now known as Dynamic Leisure Group North
America, Inc.).

         As part of the reverse merger transaction, and to cure a default with
two of the selling security holders, the Company entered into Restructured
Financing, further described below, under which 100,000 (post-reverse split)
shares of common stock were issued to Alpha Capital Aktiengesellschaft and
another 100,000 (post-reverse split) shares of common stock were issued to JM
Investors, LLC. Under the terms of the Restructured Financing, the Company is
required to register shares sufficient to cover one hundred fifty percent (150%)
of the common stock issued. In addition, under the terms of the anti-dilution
terms of the Restructured Financing, Alpha Capital Aktiengesellschaft has been
granted an additional 29,800 warrants, and JM Investors, LLC has been granted an
additional 15,700 warrants, both covered by the registration statement.

         Also as part of the reverse merger transaction, the Company entered
into a New Financing, described further below, including issuance of a Secured
Convertible Promissory Note to MMA Capital LLC, a Delaware limited liability
company, in the amount of $2,000,000, with simple interest at the rate of eight
percent (8%) per annum, convertible into shares of the Company's common stock at
a conversion price of one dollar ($1.00) per share. In addition, the Company
issued warrants to MMA Capital, LLC to purchase 2,000,000 shares of the
Company's common stock at an exercise price of one dollar ($1.00) per share.

Acquisitions
- ------------

         On February 8, 2006, the Company entered into a Purchase Agreement with
Raymon Valdes, the sole shareholder of Changes in L'Attitudes, Inc., a Florida
corporation ("CLA"), under which the Company purchased all (100%) of the
outstanding shares of CLA (the "First Acquisition"). As a result of that
transaction, the selling security holder was issued 340,000 shares of the
Company's common stock and may be issued up to an additional 170,000 shares of
common stock if, in a future acquisition, another person or entity is issued
shares at a rate less than $1.50 per share. In addition, as a result of that
transaction, the security holder was issued a Convertible Promissory Note in the
amount of $600,000, with interest at the rate of nine percent (9%) per annum,
convertible to up to 654,000 shares of the Company's common stock. As of today,
no acquisition has occurred giving more favorable terms to another security
holder, so the registration statement covers the 340,000 shares of common stock
issued to the selling security holder plus 436,000 shares of common stock
potentially convertible upon maturity of the Convertible Promissory Note. It
should be recognized that, under the terms of the First Acquisition, the selling
security holder has agreed that his shares may not be sold, gifted, assigned or
otherwise transferred until February 8, 2007, without the express written
permission of the Company, which has not been given.

         On March 6, 2006, the Company entered into a Purchase Agreement with
Stephen A. Hicks, the sole shareholder of Island Resort Tours, Inc. and
International Travel and Resorts, Inc., both New York corporations ("IRT/ITR"),
under which the Company purchased all (100%) of the outstanding shares of
IRT/ITR (the "Second Acquisition"). As a result of that transaction, the selling
security holder was issued 700,000 shares of the Company's common stock and may
be issued an additional 350,000 shares of common stock if, in a future
acquisition, another person or entity is issued shares at a rate less than $1.50
per share. In addition, as a result of that transaction, the security holder was
issued a Convertible Promissory Note in the amount of $1,450,000, with interest
at the rate of nine percent (9%) per annum,

                                       18


convertible up to 1,580,500 shares of the Company's common stock. As of today,
no acquisition has occurred giving more favorable terms to another security
holder, so the registration statement covers the 700,000 shares of common stock
issued to the selling security holder plus 1,053,667 shares of common stock
potentially convertible upon maturity of the Convertible Promissory Note. It
should be recognized that, under the terms of the Second Acquisition, the
selling security holder has agreed that his shares may not be sold, gifted,
assigned or otherwise transferred until March 6, 2007, without the express
written permission of the Company, which has not been given.

SELLING SECURITY HOLDERS

         The following table sets forth:

         o  the name of each selling security holder;

         o  the number or shares of common stock beneficially owned by each
            selling security holder as of the date of this prospectus, giving
            effect to potential conversion of the selling security holders'
            convertible promissory notes and the potential exercise of the
            selling security holders' warrants;

         o  the number of shares being offered by each selling security holder;
            and

         o  the number of shares to be owned by each selling security holder
            following completion of this offering.

         Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to securities
and includes any securities which the person has the right to acquire within 60
days through the conversion or exercise of options, warrants, promissory notes
and any other security or other right. The information as to the number of
shares of our common stock owned by each selling security holder is based upon
our records and information provided by our transfer agent.

         We may amend or supplement this prospectus from time to time to update
the disclosure set forth in the table. Because the selling security holders
identified in the table may sell some or all of the shares owned by them which
are included in this prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the shares, no
estimate can be given as to the number of shares available for resale hereby
that will be held by the selling security holders upon termination of the
offering made hereby. We have therefore assumed, for the purposes of the
following table, that the selling security holders will sell all of the shares
owned by them that are being offered hereby, but will not sell any other shares
of our common stock that they presently own. We do not believe that any of the
selling security holders are broker-dealers or affiliated with broker-dealers.

         The shares of common stock being offered have been registered to permit
public sales and the selling security holders may offer all or part of the
shares for resale from time to time. All expenses of the registration of the
common stock on behalf of the selling security holder are being borne by us. The
Company will receive none of the proceeds from the sale of any securities
covered by this registration.

                                       19



                            Shares Owned
                            Beneficially     Shares Available     Shares        Percent of
                            Prior to this      Pursuant to      Owned After       Class
Selling Security Holder       Offering       this Prospectus     Offering     After Offering
- -----------------------   ----------------   ----------------   -----------   --------------
                                                                  
Alpha Capital
  Aktiengesellschaft        429,801 (1)(2)       129,800 (3)         --             --
JM Investors                270,200 (4)(2)       115,700 (5)         --             --
MMA Capital, LLC          4,160,000 (6)        4,160,000             --             --
Raymon Valdes               776,000 (7)          776,000             --             --
Stephen A. Hicks          1,753,667 (8)        1,753,667             --             --

                          ---------            ---------        -----------   --------------
TOTAL                     7,389,668            6,935,167

__________________

(1) Consists of 100,000 shares issued to this selling security holder pursuant
to the Restructured Financing, 133,334 shares of common stock issuable upon
conversion of promissory notes, and 196,467 shares issuable upon exercise of
currently exercisable warrants. The address of the selling security holder is
Pradafant 7, 9490 Furstentums, Vaduz, Lichtenstein. Konrad Ackerman and Rainer
Posch of the selling security holder make decisions as to the voting and
disposition of the securities.

(2) The exercise of warrants or conversion of convertible promissory notes by
the named selling security holder was, on the effective date of this Prospectus,
subject to a 4.99% beneficial ownership limitation that the named selling
security holder may have at any point in time while the warrants or notes are
outstanding, unless such limitation is voided by the selling security holder on
at least 61 days' notice to us.

(3) Consists of 100,000 shares of common stock issued to this selling security
holder as part of the Restructured Financing plus 29,800 additional warrants
issued pursuant to the anti-dilution provisions of the Restructured Financing.
Does not include "150% coverage shares" required by the Restructured Financing.

(4) Consists of 100,000 shares of common stock issued to this selling security
holder pursuant to the Restructured financing, 66,667 shares of common stock
issuable upon conversion of promissory notes, and 103,533 shares issuable upon
exercise of currently exercisable warrants. The address of the selling security
holder is 152 East 9th Street, Lakewood, New Jersey 08701. Jeffrey Rubin makes
decisions as to the voting and disposition of the securities.

(5) Consists of 100,000 shares of common stock issued to this selling security
holder as part of the Restructured Financing plus 15,700 additional warrants
issued pursuant to the anti-dilution provisions of the Restructured Financing.

(6) Consists of 2,160,000 shares of common stock issuable upon conversion of the
Secured Convertible Promissory Note, including principal and interest at
maturity, plus 2,000,000 shares issuable upon exercise of currently exercisable
warrants. The address of the selling security holder is 456 Montgomery Street,
Suite 220, San Francisco, California 94104. Gary Armitage makes decisions as to
the voting and disposition of the securities.

(7) Consists of 340,000 shares of common stock issued to the selling security
holder and 436,000 shares of common stock issuable upon conversion of the
Convertible Promissory Note, including principal and interest at maturity. The
address of the selling security holder is 2140 Bayshore, Belleair Beach, Florida
33786.

(8) Consists of 700,000 shares of common stock issued to the selling security
holder and 1,053,667 shares of common stock issuable upon conversion of the
Convertible Promissory Note, including principal and interest at maturity. The
address of the selling security holder is 300 East 40th Street, New York, New
York 10016.

                                       20


                              PLAN OF DISTRIBUTION

The selling security holders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices.

The selling security holders may use any one or more of the following methods
when selling shares:

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

         o  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;

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

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

         o  privately negotiated transactions;

         o  settlement of short sales;

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

         o  a combination of any such methods of sale; and

         o  any other method permitted pursuant to applicable law.

         To our knowledge, there are currently no plans, arrangements or
understandings between the selling security holders and any underwriter,
broker-dealer or agent regarding the sale of the common stock by the selling
security holders. The selling security holders may decide not to sell all or a
portion of the common stock offered by them pursuant to this prospectus. In
addition, any selling security holder may transfer, devise or give the common
stock by other means not described in this prospectus. Any common stock covered
by this prospectus that qualifies for sale pursuant to Rule 144 or Rule 144A
under the Securities Act, or Regulation S under the Securities Act, may be sold
under Rule 144 or Rule 144A or Regulation S rather than pursuant to this
prospectus.

         The aggregate proceeds to the selling security holders from the sale of
the common stock offered pursuant to this prospectus will be the purchase price
of such common stock less discounts and commissions, if any. The selling
security holders reserve the right to accept and, together with its agents from
time to time, reject, in whole or part, any proposed purchase of common stock to
be made directly or through its agents. The Company will not receive any of the
proceeds from this offering.

         Broker-dealers engaged by the selling security holders may arrange for
other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. The selling security holders do not expect these
commissions and discounts to exceed

                                       21


what is customary in the types of transactions involved. Broker-dealers may
agree to sell a specified number of such shares at a stipulated price per share,
and, to the extent such broker-dealer is unable to do so acting as agent for us
or a selling stockholder, to purchase as principal any unsold shares at the
price required to fulfill the broker-dealer commitment. Broker-dealers who
acquire shares as principal may thereafter resell such shares from time to time
in transactions, which may involve block transactions and sales to and through
other broker-dealers, including transactions of the nature described above, in
the over-the-counter markets or otherwise at prices and on terms then prevailing
at the time of sale, at prices then related to the then-current market price or
in negotiated transactions. In connection with such resales, broker-dealers may
pay to or receive from the purchasers of such shares, commissions as described
above. In the event that shares are resold to any broker-dealer, as principal,
who is acting as an underwriter, we will file a post-effective amendment to the
registration statement of which this prospectus forms a part, identifying the
broker-dealer(s), providing required information relating to the plan of
distribution and filing any agreement(s) with such broker-dealer(s) as an
exhibit. The involvement of a broker-dealer as an underwriter in the offering
will require prior clearance of the terms of underwriting compensation and
arrangements from the Corporate Finance Department of the National Association
of Securities Dealers, Inc.

         The selling security holders may, from time to time, pledge or grant a
security interest in some or all of the shares or common stock or warrants 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 security holders to include the
pledgee, transferee or other successors-in-interest as selling security holders
under this prospectus.

         The selling security holders 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.

         The selling security holders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933. The selling security
holders have informed us that they do not have any agreement or understanding,
directly or indirectly, with any person to distribute the common stock.

         Under the a Subscription Agreement dated as of March 2, 2005 between
the Company and certain selling security holders, as amended by the Modification
and Waiver Agreement dated as of January 13, 2006 (together, the "Restructured
Financing"), the Company agreed to cause the registration statement of which
this prospectus is a part to be filed with the SEC not later than one hundred
twenty (120) days following January 13, 2006 and declared effective by the SEC
not later than one hundred eighty (180) days following January 13, 2006. We are
required to maintain the effectiveness of the registration statement for three
(3) years. We are required to pay all fees and expenses incident to the
registration of the shares, exclusive of all underwriting discounts and
commissions and transfer taxes, if any, and documentary stamp taxes, if any,
relating to the disposition of the selling security holder's shares.

         In the Restructured Financing, the Company also agreed to pay
liquidated damages to the selling security holders of two percent (2%) per month
for which the registration statement of which this

                                       22


prospectus is a part is not timely filed or made effective. Under the
Restructured Financing, we and the selling security holders have each agreed to
indemnify the other against certain liabilities, including certain liabilities
under the Securities Act, or will be entitled to contribution in connection with
these liabilities.

         In addition, under a Secured Convertible Promissory Note issued as of
January 13, 2006, between the Company and another selling security holder (the
"New Financing"), the Company agreed to cause the registration statement of
which this prospectus is a part to be declared effective by the SEC not later
than one hundred eighty (180) days following January 13, 2006. We are required
to maintain the effectiveness of the registration statement for ninety (90)
days. If the Company breaches its obligations under the New Financing, the
selling security holder may declare a default, accelerate the indebtedness due
under the Secured Convertible Promissory Note plus simple interest at the
greater of ten percent (10%) per annum or the maximum amount permitted by
applicable law, and exercise its rights under a Security Agreement executed as
part of the New Financing. The Company is required to pay all expenses incurred
in connection with the registration of the selling security holder's common
stock, including without limitation all registration and qualification fees,
accounting fees, fees and disbursements of counsel for the Company, and
reasonable fees and expenses of a single special counsel for the selling
security holder.

         In connection with the acquisition on February 8, 2006 of Changes in
L'Attitudes, Inc., a Florida corporation (the "First Acquisition), the Company
executed a Purchase Agreement under which we agreed to include the securities
issued to the selling security holder in the First Acquisition, at no cost to
that selling security holder.

         In connection with the acquisition on March 6, 2006 of Island Resort
Tours, Inc. and International Travel and Resorts, Inc., both New York
corporations (the "Second Acquisition"), the Company executed a Purchase
Agreement under which we again agreed to include the securities issued to the
selling security holder in the Second Acquisition, at no cost to that selling
security holder.


SHARES ELIGIBLE FOR FUTURE SALE

         As of the date of this prospectus, we had 9,597,810 shares of common
stock issued and outstanding. Of the issued and outstanding shares,
approximately 1,117,440 shares of our common stock (6,666 of which were then
owned by our then-current officers, directors and principal stockholders) had
been held for in excess of one year and are available for public resale pursuant
to Rule 144 promulgated under the Securities Act. Resale of 272,500 shares of
common stock are covered by a registration statement that became effective on
December 30, 2004. Resale of 445,000 shares of common stock are covered by a
registration statement that was filed on April 22, 2005 and originally became
effective on May 6, 2005. Not included in the registration statement filed with
this prospectus are 104,539 shares issuable upon exercise of options that have
been granted, 755,247 shares issuable on the converstion of outstanding notes,
and 2,424,158 shares that are issuable on exercise of outstanding warrants. They
may be resold by their holders as long as they are covered by a current
registration statement or under an available exemption from registration.

         In general, Rule 144 permits a shareholder who has owned restricted
shares for at least one year, to sell without registration, within a three-month
period, up to one percent of our then outstanding common stock. We must be
current in our reporting obligations in order for a shareholder to sell shares
under Rule 144. In addition, shareholders other than our officers, directors or
5% or greater shareholders who have owned their shares for at least two years
may sell them without volume limitation or the need for our reports to be
current.

                                       23


         We cannot predict the effect, if any, that market sales of common stock
or the availability of these shares for sale will have on the market price of
the shares from time to time. Nevertheless, the possibility that substantial
amounts of common stock may be sold in the public market could adversely affect
market prices for the common stock and could damage our ability to raise capital
through the sale of our equity securities.


                                LEGAL PROCEEDINGS

         We are not a party to any pending legal proceeding, nor are we aware of
any legal proceedings being contemplated against us by any governmental
authority. We are not aware of any legal proceeding in which any of our
officers, directors, affiliates or security holders is a party adverse to us or
in which any of them have a material interest adverse to us.


          DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

DIRECTORS AND EXECUTIVE OFFICERS

         At a Meeting of Shareholders on January 31, 2006, the following persons
were elected to serve as officers and directors of the Company until the next
annual meeting of shareholders and until their successors are duly elected and
qualified; the table includes the names, positions held, and ages of our
executive officers and directors:

NAME                          AGE            POSITION
- ------------------            ---            ----------------------------

Daniel G. Brandano            56             Director, President, CEO

Thomas W. Busch               50             Director, VP, Treasurer, CFO

Robert A.G. LeVine            44             Director, Secretary

Leonard Sculler               67             Director

         Daniel Brandano, Director, President and Chief Executive Officer, has
served as President, Chief Executive Officer, and Chairman of the Board of
Directors of Dynamic Leisure Group North America, Inc. (formerly known as
Dynamic Leisure Group, Inc.) since May 2005. Since May 2003, Mr. Brandano has
served as the Managing Director of Street Venture Partners, LLC, a consulting
firm designed to identify opportunities in the travel and technology industry
for mergers, acquisitions and alternative exit strategies. From 1998 through
2002, Mr. Brandano served as the Chief Executive Officer for Affinity
International Travel Systems, Inc., based in St. Petersburg, Florida.

         Thomas Busch, Director, Vice President and Chief Financial Officer, has
served as Vice President, Treasurer, Chief Financial Officer, and Director of
Dynamic Leisure Group North America, Inc. (formerly known as Dynamic Leisure
Group, Inc.) since May 2005. From April 2001 to April 2005, Mr. Busch was an
independent Financial Consultant. From September 2000 to May 2001, Mr. Busch
served as the Chief Financial Officer for Affinity International Travel Systems,
Inc. based in St. Petersburg, Florida.

         Robert A.G. LeVine, Director, Secretary and General Counsel, has served
as Secretary and Director of Dynamic Leisure Group North America, Inc. (formerly
known as Dynamic Leisure Group, Inc.) since May 2005. Mr. LeVine has been a
licensed attorney in good standing in the State of Florida since 1987 and has,

                                       24


since 1992, been a principal in his own private practice. Mr. LeVine earned a
Bachelor of Arts degree from Harvard College and his Juris Doctor degree from
the University of Cincinnati College of Law, where he served as Executive Editor
of the Cincinnati Law Review.

         Leonard Sculler has served on the Board of Directors of the Company
since June 2003. Mr. Sculler founded M&R Marking Systems, Inc. in 1960, and
served as its chief executive officer until his retirement in May 2001. During
his tenure, M&R Marking Systems, a privately held company, grew to become the
largest manufacturer of hand-held embossers in the world, and is currently the
largest US manufacturer of hand-held marking products, with sales in over 85
countries. Mr. Sculler has served as Chairman of the Board of M&R Marking
Systems since 1992.

         All directors serve for one year and until their successors are elected
and qualify. Directors do not presently receive monetary compensation for
serving as directors but have received stock and stock options. Officers are
appointed by the board of directors, and, subject to employment agreements,
their terms of office are at the discretion of the board of directors.

         There are no family relationships between any of our officers or
directors.

CORPORATE GOVERNANCE MATTERS

         Audit Committee. The board of directors has not yet established an
audit committee, and the functions of the audit committee are currently
performed by our Chief Financial Officer, with assistance by expert independent
accounting personnel and oversight by the entire board of directors. We are not
currently subject to any law, rule or regulation requiring that we establish or
maintain an audit committee. We may establish an audit committee in the future
if the board determines it to be advisable or we are otherwise required to do so
by applicable law, rule or regulation.

         Board of Directors Independence. Our board of directors consists of
four members. We are not currently subject to any law, rule or regulation
requiring that all or any portion of our board of directors include
"independent" directors. However, one of our directors - Leonard Sculler - is
"independent" within the meaning of Section 10A-3 of the Securities Exchange Act
of 1934 and Nasdaq Marketplace Rule 4200.

         Audit Committee Financial Expert. We do not yet have an audit
committee, but one member of our board of directors -- Thomas W. Busch -- is an
"audit committee financial expert" within the meaning of Item 401(e) of
Regulation S-B. In general, an "audit committee financial expert" is an
individual member of the audit committee (board of directors) who (a)
understands generally accepted accounting principles and financial statements,
(b) is able to assess the general application of such principles in connection
with accounting for estimates, accruals and reserves, (c) has experience
preparing, auditing, analyzing or evaluating financial statements comparable to
the breadth and complexity to the Company's financial statements, (d)
understands internal controls over financial reporting and (e) understands audit
committee functions. Mr. Busch is not "independent" within the meaning of that
term under federal securities laws and regulations.

         Code of Ethics. We adopted a Code of Business Conduct and Ethics on
April 12, 2005 applicable to all of our Officers, Directors and Employees. The
Code of Business Conduct and Ethics is a written standard designed to deter
wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair,
accurate, timely and understandable disclosure in regulatory filings and public
statements, (c) compliance with applicable laws, rules and regulations, (d) the
prompt reporting violation of the code and (e) accountability for adherence to
the Code. We are not currently subject to any law, rule or regulation requiring

                                       25


that we adopt a Code of Ethics. The Code of Business Conduct and Ethics was
filed with the SEC on April 22, 2005. We shall provide a copy, without charge,
to any person desiring a copy of the Code of Ethics, by written request to us at
our principal offices.

         Nominating Committee. We have not yet established a nominating
committee. Our board of directors, sitting as a board, performs the role of a
nominating committee. We are not currently subject to any law, rule or
regulation requiring that we establish a nominating committee.

         Compensation Committee. We have not yet established a nominating
committee. Our board of directors, sitting as a board, performs the role of a
compensation committee. We are not currently subject to any law, rule or
regulation requiring that we establish a compensation committee.


         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information known to us as of May 5,
2006, relating to the beneficial ownership of shares of our common stock by:

         o  each person who is known by us to be the beneficial owner of more
            than five percent of our outstanding common stock;

         o  each director;

         o  each executive officer; and

         o  all executive officers and directors as a group.

         Unless otherwise indicated, the address of each beneficial owner in the
table set forth below is care of Dynamic Leisure Corporation, 2203 North Lois
Avenue, 9th Floor, Tampa, Florida 33607.

         We believe that all persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as being owned
by them.

         Under securities laws, a person is considered to be the beneficial
owner of securities owned by him (or certain persons whose ownership is
attributed to him) and that can be acquired by him within 60 days from the date
of this Report, including upon the exercise of options, warrants or convertible
securities. We determine a beneficial owner's percentage ownership by assuming
that options, warrants or convertible securities that are held by him, but not
those held by any other person, and which are exercisable within 60 days of the
date of this prospectus, have been exercised or converted.

         The table is based on 9,597,810 shares of common stock currently
outstanding. Each share of Series A Preferred Stock carries 1,000 votes per
share on each matter submitted to a vote of shareholders, and is convertible
into 1,000 shares of common stock. Under the Stock Exchange Agreement, the
Company issued Series A Preferred Stock convertible into our common stock at
such time as we increased our authorized shares sufficiently to permit the
Series A Preferred Stock to be converted into common stock. The Company's Board
of directors and our shareholders authorized an increase in the number of
authorized shares of common stock to 300,000,000 shares. Except as otherwise
required by SEC rules relating to beneficial ownership, the table does not give
effect to the issuance of up to:

         o    104,539  shares upon exercise of options that have been granted;
         o  4,469,658  shares upon exercise of outstanding stock purchase
                        warrants; and
         o  4,744,914  shares upon conversion of outstanding convertible
                        promissory notes*

         * (including interest through July 14, 2006).

                                       26


                                       Amount and Nature of Beneficial Ownership
                                       -----------------------------------------
                                                     Common Shares
                                       -----------------------------------------
Name                                   Number of Shares         Percent of Class
- ----                                   ----------------         ----------------

Daniel G. Brandano (1) ................   3,031,558                   29.2%

Thomas W. Busch (2) ...................     866,666                    9.0%

Robert A. G. LeVine (3) ...............     266,666                    2.8%

Leonard Sculler .......................       6,666                       *

Officers and Directors as Group
(4 persons) ...........................   4,171,566                   40.0%

Diversified Acquisition Trust, LLC (4)
50 Braintree Hill Park, Ste. 108
Braintree, MA .........................   2,831,832                   26.9%

MMA Capital, LLC (5)
456 Montgomery Street, Ste. 2200
San Francisco, CA 94104 ...............   4,079,781                   29.8%

Stephen A. Hicks(6)
300 East 40th Street
New York, NY 10016 ....................   1,697,177                   16.0%

Raymon Valdes(7)
2140 Bayshore
Belleair Beach, FL  33786 .............     755,386                    7.5%

Claudale Limited (8)
c/o T&T Management Services Limited
28 Irish Town, Gibraltar ..............     693,333                    7.2%

GRQ Consultants, Inc. (9)
595 S. Federal Hwy, Ste. 600
Boca Raton, FL 33432 ..................     533,332                    5.5%

_________

* Less than 1%.

(1) Includes shares registered to Street Ventures Partners, LLC, a limited
liability company in which Mr. Brandano shares equal ownership with his spouse.
Consists of (a) 833,333 shares of common stock, (b) 1,066,666 shares of common
stock registered to Street Venture Partners, LLC, (c) 333,333 shares of common
stock held by family members (d) 409,341 shares issuable upon exercise of the
convertible feature of a note held by Street Venture Partners, LLC, and (e)
388,885 shares issuable upon exercise of currently exercisable warrants held by
Street Venture Partners, LLC.

(2) Consists of 866,666 shares of common stock.

                                       27


(3) Consists of 266,666 shares of common stock.

(4) Geoffrey J. Eiten is the sole beneficial owner of Diversified Acquisition
Trust, LLC. Mr. Eiten, through the trustee, exercises sole investment and voting
powers over the shares included in the table. Consists of (a) 1,906,666 shares
of common stock, (b) 480,726 shares issuable upon exercise of the convertible
feature of a note, and (c) 444,440 shares issuable upon exercise of currently
exercisable warrants.

(5) Consists of (a) 2,079,781 shares issuable upon exercise of the convertible
feature of a note and (b) 2,000,000 shares issuable upon exercise of outstanding
warrants.

(6) Consists of (a) 700,000 shares of common stock and (b) 997,177 shares
issuable upon exercise of the convertible feature of a note.

(7) Consists of (a) 340,000 shares of common stock and (b) 415,386 shares
issuable upon exercise of the convertible feature of a note.

(8) Claudale Limited is a Gibraltar company which owns 693,333 shares of common
stock. Claudale Limited also manages a family trust for Mr. Daniel Brandano. Mr.
Brandano has no ownership interest in Claudale Limited and disclaims beneficial
ownership or control of any of the Company's shares owned by Claudale Limited.

(9) Consists of (a) 400,000 shares of common stock, (b) 133,332 shares issuable
upon exercise of outstanding warrants.


                            DESCRIPTION OF SECURITIES

GENERAL

         The following description of our capital stock and provisions of our
Articles of Incorporation is a summary thereof and is qualified by reference to
our Articles of Incorporation, copies of which may be obtained upon request. Our
authorized capital currently consists of 300,000,000 shares of common stock, par
value $.01 per share, and 20,000,000 shares of preferred stock, par value $.01
per share. Currently, 9,597,810 shares of common stock are issued and
outstanding; preferred stock previously issued to the shareholders of Dynamic
Leisure Group, Inc. pursuant to the Stock Exchange Agreement dated January 13,
2006 were automatically converted to shares of common stock upon the increase in
authorized shares in February 2006.

COMMON STOCK

         Holders of shares of common stock are entitled to share, on a ratable
basis, such dividends as may be declared by the board of directors out of funds,
legally available therefor. Upon our liquidation, dissolution or winding up,
after payment to creditors, our assets will be divided pro rata on a per share
basis among the holders of our common stock.

                                       28


         Each share of common stock entitles the holders thereof to one vote.
Holders of common stock do not have cumulative voting rights which means that
the holders of more than 50% of the shares voting for the election of directors
can elect all of the directors if they choose to do so, and, in such event, the
holders of the remaining shares will not be able to elect any directors. Our
By-Laws require that only a majority of our issued and outstanding shares need
be represented to constitute a quorum and to transact business at a
stockholders' meeting. Our common stock has no preemptive, subscription or
conversion rights and is not redeemable by us.

PREFERRED STOCK

         We are authorized to issue 20,000,000 shares of preferred stock, par
value $.01 per share, having such designations, rights, preferences, powers and
limitations as may be determined by the board of directors at the time of
designation. No preferred stock is issued and outstanding, and we have no plans
to issue any preferred stock at this time or in the near future.

COMMON STOCK PURCHASE WARRANTS

         There are currently outstanding common stock purchase warrants to
purchase an aggregate of 4,469,658 shares of our common stock. The warrants were
issued in connection with various financing transactions, as well as to
employees and non-employees, including directors, consultants, advisers,
suppliers, vendors, customers and lenders for purposes including to provide
continued incentives, as compensation for services and/or to satisfy outstanding
indebtedness to them. The warrants are exercisable at prices ranging from $.68
per share to $11.25 per share and expire on various dates through June 15, 2010.
We are entitled to call warrants to purchase 394,504 shares of common stock, on
ten days' prior written notice in the event that our common stock (a) is
included for quotation on the OTC Bulletin Board or any Nasdaq quotation system
and (b) the closing bid price of our common stock is $8.10 or more for 20
consecutive trading days. Any callable warrants not exercised prior to
expiration of the ten-day period shall terminate and cease to be of any further
force or effect. We may require holders of 100,000 warrants to exercise those
warrants if the closing price for our common stock is $4.50 or more for 30
consecutive trading days, and average daily volume during such period is at
least 8,333 shares. The exercise of warrants to purchase 300,000 shares is also
subject to a 4.99% cap on the beneficial ownership that each holder may have at
any point in time while any of the warrants (or the promissory notes in
connection with which the warrants were issued) are outstanding.

CONVERTIBLE PROMISSORY NOTES

         There are currently outstanding convertible promissory notes which,
upon conversion (including interest through July 15, 2006) could result in the
issuance of 4,902,237 in the Company's common stock. The notes were issued in
connection with various financing transactions, as well as to employees and
non-employees, including directors, consultants, advisers, suppliers, vendors,
customers and lenders for purposes including to provide continued incentives, as
compensation for services and/or to satisfy outstanding indebtedness to them.
The notes are exercisable at prices ranging from $.68 per share to $11.25 per
share and expire on various dates through June 15, 2010.

TRANSFER AGENT AND REGISTRAR

         The transfer agent and registrar for our common stock is Stock Trans,
Inc., 44 West Lancaster Avenue, Ardmore, PA 19003. Our transfer agent may be
reached by telephone at 610.649.7300.

                                       29


                      INTEREST OF NAMED EXPERTS AND COUNSEL

         Neither the Company's legal counsel, Crone Law Group LLP of San
Francisco, California, nor the Company's Independent Registered Public
Accounting Firm, Salberg & Company, P.A. of Boca Raton, Florida, has any
interest in the Company.


              DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
                         FOR SECURITIES ACT LIABILITIES

         Our Amended and Restated Articles of Incorporation contain a provision
eliminating the liability of a director to us and our stockholders for monetary
damages for breaches of fiduciary duty as a director, to the fullest extent
permitted by law.

         Our Amended and Restated Articles of Incorporation and our Amended and
Restated Bylaws also authorize the Company to indemnify any director, officer or
agent of the Company, or any other person, to the full extent permitted by law.
This indemnification may include the right to be paid the expenses incurred in
defending any action, suit or proceeding in advance of its final disposition.
Our Amended and Restated Bylaws require the Company to indemnify directors,
officers or employees in connection with certain actions, suits or proceedings,
subject to certain limitations.

         Any repeal or modification of our Amended and Restated Articles of
Incorporation shall be prospective only and shall not adversely affect any right
or protection of our directors or officers existing at the time of a repeal or
modification for any breach covered by the Amended and Restated Articles of
Incorporation which occurred prior to such repeal or modification.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, we have been informed 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 us of expenses incurred or paid by our directors, officers or
controlling persons in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, 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 it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.


                             DESCRIPTION OF BUSINESS

COMPANY HISTORY

         We were incorporated under the laws of the state of Minnesota in
December 1984, under the name TERTM, Inc. In 1989, we changed our name to TERTM
Technology Corporation and, in December 1993, again changed our name to DynEco
Corporation. Most recently, in March 2006, we again changed our name to Dynamic
Leisure Corporation.

                                       30


         Prior to 1991, we engaged in the design, development, manufacture and
marketing of certain proprietary products using a proprietary production process
known as the Thermal Expansion Resin Transfer Molding Process. We also marketed
and licensed a design engineering and contract manufacturing capability of
products using the TERTM process to third parties. We discontinued these
operations in 1991 and, until the acquisition of the compressor assets and
business of DynEco International, Inc. ("DynEco International") in March 1994,
we only engaged in licensing the TERTM process and providing application
engineering consulting with respect to those licenses. We ceased all
TERTM-related activities in March 1994.

         In January 1993, we were introduced to DynEco International, a
developmental stage company engaged in the development of proprietary compressor
technology intended to be commercially exploited primarily through licensing to
third parties. While DynEco International expressed interest in being acquired
by us, due to our financial obligations, DynEco International was unwilling to
consummate a business combination with us until we restructured our obligations.
In order to do so, on July 12, 1993, we filed a Plan of Reorganization and a
Disclosure Statement under Chapter 11 of the Federal Bankruptcy laws with the
United States Bankruptcy Court for the District of Minnesota. The Plan of
Reorganization was subsequently confirmed by the Order of the Bankruptcy Court
on December 17, 1993. The Chapter 11 case was closed by the Order of the
Bankruptcy Court in June 1994.

         On March 31, 1994, we consummated the acquisition of all of the issued
and outstanding shares of capital stock of DynEco International in exchange for
(a) approximately 130,867 shares of our common stock and (b) warrants to
purchase approximately 9,753 shares of our common stock. Those warrants have
since expired unexercised. On the effective date of the acquisition, DynEco
International became our wholly-owned subsidiary, and DynEco International's
security holders collectively became our majority shareholders. At the same
time, our directors and officers resigned their positions, and the directors and
officers of DynEco International became our directors and officers.

         From the time of our acquisition of DynEco International until May
2003, we engaged in the development and commercialization of the patented
technologies licensed to us by our then Chief Executive Officer, Thomas C.
Edwards, Ph.D. We funded those activities through limited revenues and sales of
our equity securities. The focus of our activities was the development of
products that could be used in fuel cell applications. However, we were unable
to successfully develop these products on a commercial basis due to our limited
financial resources, the lack of public acceptance of fuel cells as an
alternative energy source and our inability to attract manufacturers willing to
devote resources to altering their manufacturing processes to accommodate the
production of our products.

         In May 2003, we entered into the exclusive license agreement with
Parker-Hannifin Corporation. Between that time and December 31, 2005, our
activities were limited to our consulting services rendered to Parker Hannifin
and our continued development of non-fuel cell applications for our UniVane
technology. All of our existing material agreements have been executed and are
being performed by the Company. As a result, the operations of DynEco
International as an operating subsidiary have ceased, and DynEco International
is not currently engaged in active operations.

         In January 2006, we entered into a Stock Exchange Agreement with the
former shareholders of Dynamic Leisure Group, Inc. ("Dynamic"), under which the
Company acquired all of the outstanding capital stock of Dynamic, and Dynamic
became a wholly-owned subsidiary of the Company. Dynamic was founded in May 2005
for the purpose of consolidating leisure-based travel products, such as
airfares, hotels, car rentals, excursions, and tours, using proprietary computer
software and broadband communication technology. Currently, we plan to operate

                                       31


primarily in the wholesale travel industry, after several years of operating in
the industrial goods industry. For further information on the Stock Exchange
Agreement with Dynamic and the corporate name change, see Exhibits 10.17 and
3.3.


HISTORICAL BUSINESS - PATENTING AND LICENSING OF COMPRESSOR AND PUMP TECHNOLOGY

         Over the last several years, and through January 13, 2006, we were
engaged primarily in the development of high efficiency compressors and pumps
believed to have commercial application in products. The technology underlying
our compressors and pumps was created by Dr. Thomas Edwards, our founder and
former Chief Executive Officer. The technology is the subject of three patents
that have been issued by the United States Patent and Trademark Office. As the
Company retains certain patent and license rights, we include a description of
the Company's efforts in compressor and pump technology in this prospectus.

FUEL CELLS

         Over the past several years, environmental and economic concerns have
led to searches for alternative sources of power for electricity generation and
transportation. Fuel cells are an emerging energy source that is being developed
as an alternative to traditional energy sources such as gasoline and coal. A
fuel cell is a device that is much like a battery. However, rather than storing
energy in the manner that a battery does, a fuel cell continuously changes the
chemical energy of hydrogen and oxygen into electrical energy and heat, without
combustion. Fuel cells convert hydrogen and oxygen into electricity through a
process that can be twice as efficient as conventional electrical energy
production, and they result in virtually no emissions while producing only heat
and water as by-products. Fuel cells are similar to batteries with the exception
that if they are continuously provided with oxygen from the air and hydrogen
fuel, they continue to provide electricity and, therefore, they do not "run
down." Fuel cells can be used in stationary applications, such as generating
electricity or heating buildings, and for non-stationary applications, such as
powering vehicles including automobiles, buses and trains. Fuel cells have
emerged as a leading source of power for these applications, as they are an
inherently cleaner, more efficient and a more reliable source of power than
current generation methods. Some fuel cell applications have progressed to the
pre-production stage and have received significant attention in the financial
and popular press.

DYNECO UNIVANE(R) COMPRESSOR AND HYDROGEN CIRCULATOR

         We developed a line of compressors and pumps incorporating Dr. Edwards'
technology, known as UniVane devices. We believe that our compressors and pumps
enable fuel cells to operate more efficiently and with greater power output,
thereby promoting the development and adoption of compact, economical fuel cell
power systems. Although numerous compressor manufacturers produce lubricant-free
(oiless) compressors, the primary innovation in our lubricant-free compressors
and pumps is that they are more reliable and efficient than other oiless
compressors and pumps. We believe that our UniVane devices can be successfully
incorporated into commercially viable fuel cell applications.

         We control the rights to two proprietary mechanisms - Orbital Vane(R)
and UniVane devices. UniVane compressors operate without a lubrication system, a
primary requirement for fuel cell compressors. On the other hand, Orbital Vane
machines require lubricant systems and, therefore, unlike the UniVane, are
unsuitable for fuel cell applications. The Company no longer renews patent
annuity/maintenance fees for Orbital Vane patents, which hastens the transition
of these patents to the public domain.

                                       32


         The UniVane compressor and hydrogen circulator provide a flow of oxygen
or hydrogen to an entire fuel cell. UniVane technology can be used for hydrogen
circulator pumps, natural gas/air mixing compressors, cathode air compressors
and as a duel compressor for gas and air. It is a high-efficiency device that is
designed to offer higher flow at lower pressures than alternative systems. The
Company's UniVane devices produce a greater flow while utilizing about one half
the energy of a conventional product.

         UniVane compressors consist of a closed stationary cylindrical housing
containing a rotor fitted with a single vane. These rotating parts are suspended
in the housing by non-lubricated ceramic ball bearings so that neither rotating
component actually touches the inner surfaces of the housing. Energy-efficient
non-contact sealing is achieved, and results in essentially no friction or wear
among the parts, even over thousands of hours. These attributes enable the
design and manufacture of subsystems that we believe, for example, can be used
to reliably and efficiently supply air to and circulate hydrogen through fuel
cells.

LICENSE AGREEMENT WITH DR. THOMAS C. EDWARDS

         On February 4, 2004, we executed an Exclusive Patent and Know-How
License Agreement (the "2004 License Agreement") with Thomas C. Edwards, Ph.D.,
our former president and chief executive officer. The 2004 License Agreement
replaced and superceded a license agreement that we entered into with Dr.
Edwards on March 9, 1992.

         Under the 2004 License Agreement, we were granted the exclusive,
worldwide, royalty-bearing license to use certain patented technology owned by
Dr. Edwards, as well as the related technical know-how, for the lives of the
respective patents. The license agreement with Dr. Edwards covers three patents
issued by the United States Patent and Trademark Office, including Dr. Edwards'
patents for UniVane technology. We are permitted to sublicense the licensed
technology, and have sublicensed the licensed technology to Parker-Hannifin
under our exclusive license agreement with Parker-Hannifin (see below).

         Under the 2004 License Agreement, we were required to pay Dr. Edwards a
royalty fee equal to 1% of the sales or lease price of all products sold or
leased by us that incorporate the licensed technology. We were also obligated to
pay Dr. Edwards a royalty fee equal to 10% of gross royalty fees in excess of
$500,000 per calendar year received by us from sublicenses of the licensed
technology. No royalty fees are due and owing to Dr. Edwards under this license
agreement.

         Under a January 12, 2006 Exclusive Patent and Know-How License
Agreement, Dr. Edwards relinquished any entitlement to royalty payments under
the prior Exclusive Patent and Know-How License Agreement and has assigned and
transferred to us all of his right, title and interest under the 2004 License
Agreement. For further information on the January 12, 2006 Exclusive Patent and
Know-How License Agreement, see Exhibit 10.20.

LICENSE AGREEMENT WITH PARKER-HANNIFIN CORPORATION

         Our limited financial resources prevented us from commercializing our
UniVane devices into revenue-producing products. Consequently, in May 2003 we
entered into a license agreement with Parker-Hannifin Corporation, a Fortune 500
industrial company that, among other things, designs, develops, manufactures and
distributes a wide range of industrial and consumer products and has been
engaged in, among other things, the development of fuel cells as an alternative
energy source.

                                       33


         Under the license agreement, we granted Parker-Hannifin a sublicense
agreement that grants them exclusive worldwide rights to develop, manufacture,
sell and use our UniVane air compressors and hydrogen circulators, as well as
the technology and patents incorporated in our products. Under the license
agreement, we are precluded from manufacturing, using or selling our air
compressors and hydrogen circulators to anyone other than Parker-Hannifin, and
from developing or licensing our UniVane technology air compressor and hydrogen
circulator technology to any other party.

         In consideration for the license grant, Parker-Hannifin agreed to pay
us a royalty for each air compressor and hydrogen circulator incorporating our
UniVane technology and sold by Parker-Hannifin. To the extent that
Parker-Hannifin is successful in developing and marketing fuel cell devices or
other products that incorporate our UniVane devices, we will be entitled to
royalty payments from Parker-Hannifin based upon product sales. The royalty is
payable quarterly, will be calculated as a percentage of the net selling price
of the UniVane air compressor or hydrogen circulator included in the product
sold by Parker-Hannifin, and is based upon attaining the following levels of
product sales:

         Annual Number of Products      Percentage of Net Selling Price
         -------------------------      -------------------------------

               1  -      50                           15%
              51  -     250                           10%
             251  -  10,000                            8%
               10,000 +                                6%

         After the third year of the license agreement, royalties will not be
paid on products sold into a country where none of our technology is covered by
a valid patent. In the event that royalty fees from Parker-Hannifin are less
than $100,000 in any calendar year beginning with the calendar year commencing
January 1, 2007, Parker-Hannifin may elect to either (a) pay us the difference
between $100,000 and the amount of royalty fees paid for that year, or (b)
permit the license granted to it to become non-exclusive.

         In 2005, our UniVane fuel cell compressors and hydrogen circulators
were our only products capable of generating revenues, leaving us substantially
dependent upon Parker-Hannifin for sales of royalty-generating products.
However, we have no control over Parker-Hannifin's technical and manufacturing
development or marketing activities, and Parker-Hannifin is only required to use
reasonable commercial efforts to market these products; there is no assurance
that commercial applications for our UniVane devices will be developed or, even
if developed, that they will be successfully marketed. With the exception of an
immaterial number of sales of prototype units, no sales of licensed products
have been made to date, and we cannot predict whether Parker-Hannifin will
successfully sell licensed products incorporating our technology. If
Parker-Hannifin does not successfully market royalty-generating products under
our license agreement, we do not receive royalty fees. In 2005, we received no
royalty fees.

         The license agreement with Parker-Hannifin will continue until the
earliest to occur of (a) expiration of the licensed patent, (b) the final use of
the licensed technology by a customer of Parker-Hannifin, (c) termination of the
license agreement by one party due to a material uncured breach by the other
party, (d) termination of the license agreement by a party due to a bankruptcy
or similar proceeding involving the other party, or (e) the mutual agreement of
the parties.

                                       34


         In connection with the license agreement, we provided consulting
services to Parker-Hannifin to assist in transitioning our UniVane technology to
them and for developing and improving products covered by the license agreement.
The consulting agreement provided for an initial term of one year terminating
May 31, 2004, subject to automatic month-to-month renewals unless one party
provided 90-days notice of termination to the other. We received consulting fees
of $25,000 per month under the agreement. Following expiration of the initial
12-month period, we continued to provide consulting services to Parker-Hannifin
until November 2004, when Parker-Hannifin concluded that development of our
UniVane technology had progressed to the point that it no longer required our
consulting services in connection with their product development activities.
Accordingly, we mutually orally agreed with Parker-Hannifin that our consulting
services would cease to be provided as of December 10, 2004. The cessation of
consulting services does not alter our rights and obligations relating to our
right to future royalty payments based upon sales of products incorporating our
UniVane devices.

SUPPLY AGREEMENT WITH PARKER-HANNIFIN CORPORATION

         On August 6, 2004, we entered into a supply agreement with
Parker-Hannifin, under which Parker-Hannifin agreed to supply us with our
requirements of UniVane products for resale in non-fuel cell applications, if
any, that we may develop in the future. Under the supply agreement, any UniVane
products we purchase from Parker-Hannifin will be sold to us at the standard
distributor pricing established by Parker-Hannifin from time-to-time. We are
under no obligation to purchase any products from Parker Hannifin and have made
no commitment to purchase any products under the supply agreement. If we are
able to develop non-fuel cell applications for our UniVane devices, we have
granted Parker-Hannifin a right of first refusal to supply us with systems
incorporating those devices, if Parker-Hannifin demonstrates that it can supply
systems meeting our technical requirements at pricing that is reasonably
competitive with other suppliers. As of the date of this Report, we have not
developed any non-fuel cell applications that would be subject to the provisions
of the supply agreement with Parker-Hannifin.

TECHNOLOGICAL RESEARCH AND DEVELOPMENT AUTHORITY FUNDING AGREEMENT

         Effective November 20, 2002, we entered into a funding agreement with
the Technological Research and Development Authority, headquartered in
Titusville, Florida. Under the funding agreement, we are entitled to receive a
maximum of $150,000 from the Authority to provide partial funding for the
development and commercialization of our UniVane compressors and hydrogen
circulators. During 2003, we received the entire $150,000 funding commitment
under this agreement.

         As consideration for the funding, we are required to pay the Authority
a royalty equal to 5% of our revenues from the sale, distribution, lease or
other disposal of our UniVane compressors and hydrogen circulators. The royalty
is payable until such time as total royalty payments equal $450,000. The
agreement is for a term of 10 years.

RESEARCH AND DEVELOPMENT

         For each of the two years ended December 31, 2005 and 2004, we spent
approximately $100,383 and $145,171, respectively, on research and development
activities.

                                       35


GOVERNMENT REGULATION

         As of December 31, 2005, our principal products and services consisted
of our UniVane device licenses. During 2005, we were also engaged in technology
development unrelated to our UniVane devices. None of our principal products or
services required governmental approvals, and we do not believe or anticipate
that existing or probable government regulations will have a material effect on
our business. To the extent that fuel cells or other products developed by
Parker-Hannifin are or will be subject to government regulation, or require or
will require governmental approvals, Parker-Hannifin is responsible for
necessary compliance and securing any necessary approvals.

         Our current activities do not subject us to the costs or effects of
compliance with environmental laws, rules or regulations. To the extent that
these laws, rules or regulations are applicable to the activities of
Parker-Hannifin, the costs and effects are borne by Parker-Hannifin.

         It should be noted that the Company retains its licensing rights with
Parker-Hannifin.


                      CURRENT BUSINESS - TRAVEL OPERATIONS

         On January 13, 2006, we entered into a Stock Exchange Agreement with
the former shareholders of Dynamic Leisure Group, Inc. ("Dynamic"), now known as
Dynamic Leisure Group North America, Inc., a privately-held Florida corporation,
under which we acquired all of the outstanding capital stock of Dynamic, and
Dynamic became a wholly-owned subsidiary of the Company. For audited financial
statements of Dynamic Leisure Group Inc., see the Company's 8-K/A filed with the
SEC on March 29, 2006.

         The Company, operating primarily through its wholly-owned subsidiary,
Dynamic Leisure Group North America, Inc., is engaged in the business of
marketing, selling and distributing a variety of wholesale and retail
travel-related products and services. Specifically, we market, sell and
distribute vacation packages, tours, cruises, domestic and international airline
tickets, car rentals and accommodation products and services to travel agencies
and consumers. We are currently implementing a business strategy to utilize the
Internet as a delivery platform for our inventory of travel related products and
services.

         We intend to fulfill demand for our travel product by aggregating our
inventory of packaged leisure travel products and using the Internet as the
primary delivery platform.

         We believe we have developed and acquired the infrastructure necessary
to implement our Internet business strategy. Specifically, we have:

         -  developed and acquired technologies;

         -  developed specialized knowledge and experience concerning certain
            geographic destinations; and

         -  established relationships with travel suppliers that enable us to
            offer a large inventory base at competitive rates.

         A key component of our Internet business strategy is to focus our
resources in two segments: the business to consumer and business to business
travel arena. We intend to concentrate our resources on the direct-to-consumer
travel arena, where our objective is to sell leisure travel products that

                                       36


traditionally have had higher margins than airline ticket sales, including,
among others, vacation packages, tours, and cruises. We also intend to continue
to sell our leisure travel products to other travel providers, through existing
and potential new relationships.

         With our current infrastructure, we believe we are well-positioned to
take advantage of the potential growth in the domestic and international travel
industries and in online travel. Our strategy is to focus on the sale and
distribution of travel products, such as vacation packages, tours and cruises,
which traditionally have had higher margins than airline ticket sales.

         Our Internet business strategy is centered on the development,
implementation and integration of several websites. Our sites, many currently in
development, are being designed to attract a loyal customer base in the United
States, Europe, Asia and Latin America, and to convert these potential customers
into leisure travel buyers.

OUR INTERNET BUSINESS STRATEGY

         We believe that in order to become profitable we must begin selling
travel products such as vacation packages, tours and cruises, which
traditionally have had higher margin than airline ticket sales. Our Internet
business strategy, which is centered on the development of our websites and is
focused on the online sale of specialized vacation and tour packages, is
designed to sell such traditionally higher margin products. Specifically, our
strategy is designed to:

         - Attract and acquire a substantial base of travel customers in the
U.S., Europe and Latin America, by developing a compelling and functional web
presence, launching the appropriate marketing and strategic partnership
initiatives and offering the necessary customer service mechanisms; and

         - Convert customers into leisure travel buyers by offering attractive
prices on personalized vacation packages, tours and cruises utilizing our
TourScape operating system.

         To achieve the goals of our business strategy, however, we need to
successfully develop our websites into full-service websites that will use our
existing hardware and software infrastructure, as well as our strategic
partnerships and existing vendor contracts.

OUR INFRASTRUCTURE

         We believe we are acquiring and developing the infrastructure necessary
to effectively carry out our Internet business strategy. This infrastructure is
comprised of our network architecture, Internet-enabled software engines,
back-end operations and strategic and contract-based relationships.

         Network Architecture. We are developing and implementing a network
architecture designed to support our Internet and enterprise-based activities.
This architecture takes advantage of, and builds upon, our existing
technologies. Our systems are being designed and developed by a series of
vendors, including but not limited to SABRE, and by our internal technology
staff. We believe that our systems will be capable of supporting all of our
internal operations and Internet-related initiatives, including:

                                       37


         -  A processing capability for online users' query and booking
            transactions;

         -  An ability to provide on and off-site agents with the tools and
            resources necessary to deliver superior customer service; and

         -  A means to support expansion that meets growing corporate needs and
            consumer demands.

         Internet-Enabled Software Systems. We have made significant investments
in the software infrastructure that will be integrated into the Company's
website. Our software systems include Tourscape, a tour/wholesale reservation
software system. TourScape, developed by the SABRE Group, improves productivity,
efficiency, record-keeping and business tracking, and reduces operator training
and booking time. It also supports multiple product lines, unlimited packaging
capabilities, numerous pricing and costing methods and various commission
levels.

         Internal Operations. Despite the automation of the real-time booking
processes, travel reservations often still require some human interaction for
completion. At a minimum, this involves physically handling and mailing paper
airline tickets to customers, where applicable, and manually reviewing tour
package transactions for accuracy and completeness. Under our Internet business
strategy, we plan to provide live agent customer support to those customers
requiring it. Because of our expertise as a wholesale distributor as well as a
telephone-based travel operator, we believe we are well-positioned to expand
these operational capabilities to our Internet activities.

         Contractual Relationships. The leisure tours and packages we currently
market, which are critical component to the overall success of our Internet
initiatives, are the result of contracts we have secured with travel industry
vendors. As a travel wholesaler, we believe we have a competitive advantage over
suppliers and other online travel agencies that lack such relationships. These
contractual relationships, along with the other relationships we have created
with others in the Internet and travel industries help lay the foundation for
our Internet initiatives. These contracts can be canceled or modified by the
supplier upon no or relatively short notice.

OUR MARKETING STRATEGY

         We are employing the following marketing strategies:

         FOCUSING ON THE SALE OF SPECIALIZED LEISURE TRAVEL PACKAGES. As noted
by industry analysts, it is imperative that online travel agencies begin selling
products that traditionally have had higher margins than airline ticket sales,
such as vacation packages, tours and cruises in order to generate profitable
operations. We believe that, in order to be profitable, online agencies, must:

         -  Have specialized vacation package inventory available to consumers;

         -  Utilize online tools that help facilitate complex leisure travel
            purchases; and

         -  Provide the customer service, both online and off, that is necessary
            to make the customer feel comfortable booking these types of
            transactions online.

         We believe we are well-positioned to compete in the online travel
business for the following reasons:

                                       38


         Our TourScape booking technology will provide consumers with a
user-friendly mechanism for booking complex and specialized travel packages.

         Our existing base of travel specialists can provide the requisite
e-travel personal assistance through real-time chat, Internet telephony, 800
telephone service, and in the near future, Internet-based video communication.

         Finally, because of our status as a travel wholesaler and distributor,
with established travel vendor relationships, we expect that our websites will
offer a wide variety of specialized packages at rates that travel consumers will
find attractive.

         COMBAT THE TRADITIONALLY HIGH "LOOK-TO-BOOK" RATIO. According to
reliable research,, a high percentage of online travel visitors have looked, but
not booked, online. Of those, most have bought their tickets through an 800
number of conventional travel agent after researching online. Therefore, as
means of capturing maximum revenue, the Company's customers will be encouraged
to utilize the services of our travel agent staff through live chat, Internet
call button, or an 800 number if, for some reason, they are not inclined to
purchase online. To further combat this trend, personalization technology, which
will store a customer's travel preferences, will be implemented into the
Company's websites. By combining our agent-based customer service and
personalization technology, we believe the Company will be positioned to improve
on the industry's current "look-to-book" ratio.

         FOSTER STRATEGIC PARTNERSHIPS AND PRIVATE LABEL PROGRAMS. We believe
that one of the most important aspects of developing a successful online travel
web site is the process of creating and managing the requisite strategic
partnerships and alliances. Strategic partnerships with web portals, e-commerce
companies and content providers have the potential to generate revenue from
transactions and advertisements, and also place the brand in front of Internet
users.

         We intend to pursue these types of strategic online partnerships as a
means to generate traffic, customer acquisition and revenue. We intend to enter
into private label agreements to provide fulfillment on all travel purchased on
several heavily trafficked e-commerce web sites.

         ESTABLISH A DYNAMIC AFFILIATE PROGRAM. Thousands of Web sites are
currently utilizing the affiliate (also known as associate or referral) programs
of online vendors to offer their visitors the opportunity to buy everything from
books to sporting goods to cars. These programs allow any web site owner to
create banner links that transport visitors to the affiliate e-commerce web site
in the hope they will make a purchase, thereby entitling the web site owner to a
commission. By establishing and promoting an affiliate program, we believe we
will create an opportunity to sell travel products in appropriate contextual
settings on complementary we sites. We are currently identifying e-commerce
companies to establish our affiliate program.

         TARGET UNTAPPED INTERNATIONAL MARKETS. We believe online travel
agencies have traditionally underappreciated non-U.S. travel market. Recognizing
the opportunities presented by rapid growth in use of the Internet abroad, we
have formed Dynamic Leisure Group Europe, a wholly-owned subsidiary located in
London, England, in an effort to expand our target market. We believe the
European market is a potentially large source of business for the U.S. vacation
accommodation product and that our presence in the market provides a base for
potential expansion and a hub for customer service in the European online and
offline market.

                                       39


COMPETITION

         Our competitors in the online travel industry include travel suppliers
and travel agencies. Each of these types of competitors and factors upon which
we compete are described below. Many of our competitors have greater experience,
brand name recognition and/or financial resources than we do. We may be unable
to compete successfully and our failure to compete successfully may have a
material adverse effect on our business, financial condition and results of
operation.

         SUPPLIERS. Suppliers primarily encompass airlines, hotels, car rental
agencies and some cruise lines. This includes not only enhancing their web sites
and adding the Internet as a significant distribution channel to consumers, but
also expanding their marketing efforts and forming new strategic alliances with
other key online players.

         Advantages of suppliers over their agency counterparts include, among
others,

         -  Well-established brands and consumer confidence in those brands;

         -  Customer loyalty

         -  Existing operational infrastructure and fulfillment of capabilities;

         -  Access to additional inventories and pricing incentives;

         -  Other incentives such as frequent flyer miles programs; and

         -  Availability of extensive financial resources to invest in Internet
            initiatives.

         TRAVEL AGENCIES. Travel agencies with an online presence are comprised
of both the online companies and established brick-and mortar operations.
According to studies of online travel, some of the leaders in online travel
include, among others:

         -  Travelocity

         -  Expedia

         -  GetThere.com

         -  Travel Network

         -  Uniglobe Travel

         -  Lowestfare.com

         All of the leaders mentioned above offer price and availability search
capabilities for air, hotel and care rental and allow the user to book directly
online without human intervention. Most of the agencies also offer special deals
and discounted offerings. Some provide destination content. One of the areas
some agencies are endeavoring to enhance is their offering of tour packages and
cruises.

INTELLECTUAL PROPERTY

         We regard the protection of our intellectual property as important to
our future success and rely on a combination of copyright, trademark, service
mark and trade secret laws, license agreements and contractual restrictions to
establish and protect intellectual property rights in our web site architecture
and technology, products, content and services. We plan to enter into
confidentiality and invention assignment agreements with our employees and
contractors in order to limit disclosure of our confidential information and to

                                       40


protect our ownership interest in our website architecture and technology. We
cannot assure you that these contractual arrangements or the other steps taken
by us to protect our intellectual property will prove sufficient to prevent
misappropriation of our technology or deter independent third-party development
of similar technologies.

REGULATORY ENVIRONMENT

         Regulation of the Travel Industry

         Many travel suppliers, particularly airlines, are subject to extensive
regulation by federal, state and foreign governments. In addition, the travel
services industry is subject to certain special taxes by federal, state, local
and foreign governments, including hotel bed taxes, car rental taxes, airline
excise taxes and airport taxes and fees. New or different regulatory schemes and
changes in tax policy could have an adverse impact on the travel service
industry in general and could have a material adverse affect on our business,
financial condition, and results of operations. Changes in tax policy for online
purchases, including travel purchases, could also have a material adverse affect
on our business, financial condition and results of operations.

         Regulation of the Internet

         At the present time the amount of state and federal governmental
regulation applicable to the Internet is relatively small when compared to other
areas of communication and commerce. As the size, use and popularity of the
Internet increases, it is possible that laws and regulations may be enacted with
respect to the Internet, covering issues such as user privacy, pricing,
taxation, content, copyrights, distribution, antitrust and quality of products
and services. Additionally, the rapid growth of electronic commerce may trigger
the development of tougher consumer protection laws. The adoption of such laws
or regulations could reduce the rate of growth of the Internet and could make it
more difficult and expensive for us to carry on our planned business activities.

         Due to the increasing use of the Internet and the burden it has placed
on the current telecommunications infrastructure, telephone carriers have
requested the Federal Communications Commission, the FCC, to regulate Internet
service providers and online service providers and impose access fees on those
providers. IF the FCC imposes access fees, the costs of using the Internet could
increase dramatically. These regulations, if promulgated, could result in the
reduced use of the Internet as a medium for commerce, which could have a
material adverse effect on our business, financial condition and results of
operations.

         Regulation Concerning Privacy

         Specific laws and regulations concerning use of the Internet have been
enacted, both in the United States and in the European Union. While we expect to
have a privacy policy designed to ensure the protection of the privacy our
users, there can be no assurance that these programs will conform to any
regulations which have been adopted by the FTC or the European Union directive.
We do intend to take the necessary measures to ensure that our web site complies
with industry standards relating to user privacy.

                                       41


RECENT ACQUISITIONS

CASUAL CAR GENERAL SERVICE AGREEMENT

         On January 3, 2006, Street Venture Partners, LLC, sold the US rights to
the Casual Car General Service Agreement (GSA) to Dynamic Leisure Group, Inc.
"Dynamic") for an unsecured convertible Promissory Note in the amount of
350,000, and a warrant to purchase 388,889 shares of the Company's common stock
at a fixed price of $.90 per share. The GSA allows the Company to sell car
rental products to leisure travelers primarily in Europe and the United Kingdom,
through Skycars International Rent a Car, Middlesex, United Kingdom.

         The Company plans to continue with the Casual Car GSA, selling direct
to the final consumer via the Internet, under the Casual Car rental brand. The
Casual Car GSA allows the Company to begin to establish a foundation in certain
desired leisure travel markets with multiple product offerings.

STOCK EXCHANGE AGREEMENT DATED JANUARY 13, 2006

         On January 13, 2006, we entered into a Stock Exchange Agreement with
the former shareholders of Dynamic Leisure Group, Inc. ("Dynamic"), now known as
Dynamic Leisure Group North America, Inc., a privately-held Florida corporation,
under which we acquired all of the outstanding capital stock of Dynamic, and
Dynamic became a wholly-owned subsidiary of the Company. As consideration for
its acquisition of the outstanding capital stock of Dynamic, the Company issued
an aggregate of 197,000 shares of its Series A Preferred Stock to the former
shareholders of Dynamic, which automatically converted to common stock upon the
increase in authorized shares occurring in February 2006. See Exhibits 3.1 and
3.2. The transaction was exempt from the registration requirements of the
Securities Act by reason of Section 4(2) thereunder as a transaction by an
issuer not involving any public offering.

FEBRUARY 8, 2006 ACQUISITION OF CHANGES IN L'ATTITUDES, INC.

         On February 8, 2006, the Company consummated the purchase of all of the
issued and outstanding capital stock of Changes in L'Attitudes, Inc. ("CLA"),
for a purchase price of $1,750,000. The purchase price consists of a combination
of cash ($640,000), shares of our common stock (340,000 shares), and a one-year
secured Convertible Debenture in the principal amount of $600,000. The
acquisition of CLA is expected to provide the Company with a direct-to-consumer
selling channel via the internet to the strategically desirable Caribbean
leisure market.

MARCH 6, 2006 ACQUISITION OF ISLAND RESORT TOURS, INC. AND INTERNATIONAL TRAVEL
AND RESORTS, INC.

         On March 6, 2006, the Company purchased all of the issued and
outstanding capital stock of Island Resort Tours, Inc. ("IRT") and International
Travel and Resorts, Inc. ("ITR"), for a purchase price of $4,000,000. The
purchase price consists of a combination of cash ($1,500,000), shares of the
Company's common stock (700,000 shares), and a one-year secured Convertible
Promissory Note in the principal amount of $1,450,000. The acquisition of IRT
and ITR is expected to increase the Company's presence in the desired Caribbean
leisure travel market, provide access to key travel industry products, including
air travel, and add to the expertise of the Company's management team.

EMPLOYEES

         As of the date of this Prospectus, the Company employed approximately
40 people and was actively hiring further personnel. No employee is a party to a
collective bargaining agreement.

                                       42


            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following analysis of our consolidated financial condition and
results of operations for the years ended December 31, 2005 and 2004 should be
read in conjunction with the Consolidated Financial Statements and other
information presented elsewhere in this Prospectus.

GENERAL

         Through January 13, 2006, we were engaged primarily in developing and
commercializing patented high efficiency low-pressure non-lubricated air
compressors and hydrogen circulators, known collectively as UniVane devices. The
basic UniVane compressor technology development is based upon the concepts,
innovations and embodiments of the patents Dr. Edwards has exclusively licensed
to us. That license agreement was entered into in January 2004, which replaced a
license agreement entered into in 1992. Under the license agreement, we are
required to pay Dr. Edwards one percent of revenues we receive from sales of
products incorporating the licensed technology, and ten percent of gross royalty
fees in excess of $500,000 per calendar year received by us from sublicenses of
the licensed technology. The underlying UniVane patent #6,623,261, filed July
21, 2001 has a term of twenty years and expires on July 21, 2021. During May
2003, we granted an exclusive, worldwide patent license to Parker-Hannifin
Corporation to further develop, enhance, manufacture and market our UniVane
devices for all product applications into which the UniVane is incorporated.
Subsequent to year-end, on January 12, 2006, Dr. Edwards entered into in an
Exclusive Patent and Know-How License Agreement, in which Dr. Edwards
relinquished any entitlement to royalty payments under the Exclusive Patent and
Know-How License Agreement dated February 4, 2004 and has assigned and
transferred to the Company all of his right, title and interest under the
Exclusive Patent and Know-How License Agreement dated February 4, 2004.

         Under the license agreement, Parker-Hannifin is responsible for
generating production UniVane compressor engineering designs and producing and
marketing them. As a result, in 2005 our technical efforts were re-directed to
generating potentially improved UniVane manufacturing designs, decreasing costs,
increasing UniVane operational speeds and capacities and creating initial
engineering conceptual layouts for different size UniVanes. In addition to
engineering efforts to improve UniVane machines, we were also identifying
non-fuel cell markets for UniVane compressors and designing systems that would
employ the machines in those markets.

         We have historically incurred losses primarily resulting from
expenditures related to the research, development, testing and preliminary
marketing of our proprietary technology. To date, no products incorporating our
UniVane technology have been commercially manufactured, and we have not yet
generated revenues, including royalty income, from the sale of products
incorporating our UniVane technology. Until we established our relationship with
Parker-Hannifin, we were unable to identify manufacturers who were willing to
aid in the commercialization of products incorporating our UniVane technology.
However, we expect that operating losses will continue until such time as either
our future royalty income generates sufficient revenues to fund continuing
operations or a combination of royalties and profits that may be generated from
the sale of systems, such as aerators, that use UniVane air compressors.

                                       43


         Under the Parker-Hannifin License Agreement, we were being paid $25,000
per month for twelve months primarily to transfer UniVane technology to
Parker-Hannifin and to aid in the transition from prototype production to
commercial manufacturing. We continued to provide these services to
Parker-Hannifin on a monthly basis until December 2004, when Parker-Hannifin
concluded that development of our UniVane technology had progressed to the point
that it no longer required our consulting services in connection with their
product development activities. Accordingly, we mutually agreed with
Parker-Hannifin that our consulting services would cease to be provided
effective December 10, 2004. The cessation of consulting services did not alter
our rights and obligations relating to our right to future royalty payments
based upon sales of products incorporating our UniVane devices. Prior to 2003,
we were developing and attempting to commercialize the licensed UniVane
technology with its own limited resources.

         On January 13, 2006, we entered into a Stock Exchange Agreement with
the former shareholders of Dynamic Leisure Group, Inc. ("Dynamic") a privately
held, Florida corporation, under which we acquired all of the outstanding
capital stock of Dynamic, and Dynamic became a wholly-owned subsidiary of the
Company. Following the agreement, the Company changed the focus of its business
strategy to pursue opportunities in the leisure travel market, primarily as a
wholesaler of travel packages to frequently traveled destinations such as
Florida, Las Vegas, California and Hawaii in the US and the Caribbean, Mexico,
Central and South America, the United Kingdom and Europe. As part of the Stock
Exchange Agreement with Dynamic, we issued 6,566,667 shares of our common stock.

         The Company expects its new focus on the leisure travel market will be
obtained through the combination of acquiring existing well-established
businesses and via internal organic growth. Subsequent to year end, in order to
pursue this strategy, the Company acquired Changes in L'Attitudes, Inc. a
Florida-based direct-to-consumer internet seller of vacation packages primarily
to the Caribbean and Mexico, and Island Resort Tours, Inc. and International
Travel and Resorts, Inc. ("ITR"), wholesalers of Caribbean travel primarily
through established networks of travel agencies, and a provider of telephone and
marketing support to various Caribbean locations.

CRITICAL ACCOUNTING ESTIMATES

         Valuation of Patent Rights
         --------------------------

         The valuation of patent rights has a material impact on our reported
financial condition and operating performance. Patent rights consist of the
costs incurred to obtain patent rights associated with compressor technology.
Patent rights are amortized using the straight-line method over their seventeen
to twenty-year lives commencing upon patent issuance and the generation of
revenues utilizing the underlying technology. Future revenues, if any, generated
by these patents will be in the form of royalties from Parker-Hannifin. There is
no assurance that commercial applications will be developed.

         Due to: (a) uncertainties in the developing fuel cell industry, (b)
inherent risk of competing future technologies, and (c) our reliance on
Parker-Hannifin, in 2004 we recognized an impairment loss of the entire net
carrying value of patent rights of $144,603. This loss is reflected as an
operating expense and increased the stockholders' deficit to $719,196 at
December 31, 2004.

         We recorded and charged to operations impairment losses of $0 and
$144,603, relating to patent rights, for the years ended December 31, 2005 and
2004, respectively.

                                       44


         Stock-Based Compensation Plans
         ------------------------------

         We have two active stock based compensation plans. The board of
directors administers these plans and may grant options to key individuals at
their discretion. Terms and prices are to be determined by the compensation
committee or the board. These plans have an aggregate of 83,333 shares of common
stock reserved for issuance. Options outstanding were for 104,539 and 82,039 of
shares of common stock at December 31, 2005 and 2004, respectively. In 2004,
stock options were granted to an individual in lieu of issuing common stock, but
this transaction was outside the stock-based compensation plans. The Company
issued stock options to directors, employees, and the chief executive officer
totaling 23,333 and zero, respectively, in 2005 and 2004. No stock-based
employee compensation cost is reflected in net income during 2005 and 2004, in
accordance with the provisions of Accounting Principles Board Opinion No. 25.
The Company issued 19,167 options and recorded $56,925 in expense for options
issued to consultants in 2005, in accordance with the fair value method of SFAS
123.

RESULTS OF OPERATIONS

         We had no revenue for 2005, and in 2004, revenues were primarily
derived from consulting fees under the agreement with Parker-Hannifin. Our
monthly consulting fee terminated in December of 2004.

         To date, there have been no sales of UniVane products that generated
any royalty fees. In general, our license agreement with Parker-Hannifin does
not expire until the later to occur of the last licensed UniVane patent
expiration (i.e., July 21, 2021), or the final use of UniVane-related technology
by Parker-Hannifin.

         In 2006, the business changed to focus on the leisure travel market.
Revenues for the near term will depend upon our receipt of royalty payments, if
any, related to the sale of systems that employ our UniVane technology from
Parker-Hannifin Corporation; upon the success of our acquisitions of Changes in
L'Attitudes, International Travel and Resorts, and Island Resort Tours in early
2006; and upon our ability to add revenue through internal growth.

YEAR ENDED DECEMBER 31, 2005 COMPARED TO THE YEAR ENDED DECEMBER 31, 2004

         The Company produced no revenue from consulting fees during 2005
compared with $275,000 in 2004. Prototype sales decreased from $11,900 in 2004
to zero in 2005. These consulting fees related to the Parker-Hannifin consulting
agreement entered into during May 2003. Other revenues were from prototype
sales. We now rely on Parker-Hannifin for the commercialization of the licensed
technology.

         Gross margin decreased to zero in 2005 from $270,804 in 2004 due to no
sales being recorded in 2005.

         Operating expenses decreased 25.7% to $497,698 in 2005 from $670,213 in
2004. General and administrative expenses decreased by $2,930 from 2004 to 2005.
During 2004, an impairment loss of $144,603 was recorded for patented technology
because there is no determinable income directly related to our patents. In
2005, the Company did not have an impairment loss.

         Our net loss for 2005 increased $91,672 to $526,195 from $434,523.
Interest expense increased to $199,041 for 2005 from $35,427 for 2004, primarily
because of the amortization of the debt discount on the convertible debentures.
The valuation of certain features of the warrants issued on March 2, 2005
resulted in a non-cash income of $86,408 for 2005.

                                       45


Financial Condition - Liquidity and Capital Resources

         The Company continued to develop technology with potentially marketable
commercial applications through December 31, 2005. Our financial condition was
reliant on continuing equity investment until, if ever, Parker-Hannifin is
successful in commercializing the UniVane technology. During 2005 we had no
revenue while in 2004 equity funding was augmented by prototype sales and
consulting fees.

         In 2005, the Company was primarily financed by the proceeds from
issuance of $300,000 in convertible promissory notes, and by the proceeds of
$85,000 from common stock issuance. These proceeds were used to fund an
operating cash deficit of $355,352, to repay $17,211 of the convertible
promissory notes and to pay the debt issue cost associated with the promissory
notes of $21,726. During 2005, investing activities were minimal with $1,011 of
fixed assets purchased. In 2004, the operating cash deficit of $176,100 and the
cash used in investing activities of $9,540 were funded by the reduction of cash
from $199,441 at the end of 2003 to $16,899 at the end of 2004. The cash
provided by financing activities in 2004 of $3,088 was due from the sales of
common stock, less repayment of shareholder loans and capital lease obligations.
From time-to-time, we issue stock, options and warrants to satisfy operating
expenses, which provides us with a form of liquidity. For example, during
February 2004, the Company settled an outstanding legal services agreement from
August 1, 2001, in which the holder was owed $10,000 payable with 3,333 shares
of issuable common stock, which had been reflected in the Company's records as
common stock issuable. In February 2004, the Company granted stock options on
3,333 shares in lieu of issuing shares. In April 2004, the Company issued 6,666
shares of common stock to a director for services rendered and 3,333 common
stock purchase warrants to a consultant for services rendered. In April 2005,
the Company issued 19,167 options and recorded $56,925 in expense for options
issued to consultants. Due in part to our lack of earnings, our success in
attracting additional funding has been limited to transactions in which our
equity is used as currency. Equity financings of the type previously completed
are dilutive to our stockholders and adversely impact the market price for our
shares.

         In November 2002, we entered into an agreement with the Technological
Research and Development Authority that provided $150,000 in funding for the
development and commercialization of the Company's UniVane compressors and
hydrogen circulators for fuel cell applications. In consideration of the
funding, we are obligated to make royalty payments to the Authority equal to
five percent of future UniVane-related sales up to an amount equal to three
times the amount the Company receives from the Authority. During 2003, the
entire $150,000 funding commitment was received. The agreement expires in
November 2012. We do not anticipate any additional funding from the
Technological Research and Development Authority. No royalty payments were made
to the Technological Research and Development Authority during the year ended
December 31, 2005 or 2004.

         As of December 31, 2005, we had an overdrawn cash position of $232,
which is reflected as a current liability in the financial statements and no
accounts receivable. The working capital deficit was $1,033,565. We had total
assets of $62,373, all long-term, consisting of $33,418 of net property and
equipment and $28,955, primarily net debt issue costs. Our current liabilities
totaling $1,033,565 included $62,921 of accounts payable, $363,584 of accrued
liabilities, $213,640 loans payable $37,216 of current maturities of long-term
debt, a warrant liability of $240,592 and $115,380 of convertible promissory
notes. Total shareholders' deficit was $1,105,911. At December 31, 2005, we had
an accumulated deficit of $8,661,023.

                                       46


         We were in default of the repayment terms on notes payable aggregating
$35,000 at December 31, 2004, and no extension has been granted by the debt
holders. The notes were issued to David O'Brien and Edward Werner, neither of
whom is affiliated with us. The proceeds of the loans were used for general
working capital purposes. Currently, there have been no actions taken by the
debt holders to foreclose since the notes payable were unsecured.

         As of December 31, 2005, our sources of internal and external financing
are limited. In January 2005, the Company issued an additional 8,333 common
shares and 4,167 warrants exercisable for two years in exchange $25,000 cash. In
March of 2005 the Company completed a $300,000 financing consisting of secured
convertible promissory notes and common stock purchase warrants. In the third
quarter of 2005, we sold 39,999 shares of common stock and common stock purchase
warrants to purchase 39,999 shares to two investors for an aggregate purchase
price of $60,000 cash. It is not expected that the internal sources of liquidity
will improve until net cash is provided from operating activities, and until
such time, we will rely upon external sources of liquidity, including additional
private placements of our common stock and exercise of various outstanding stock
warrants and stock options. In December 2004, we completed regulatory review of
a public registration of 272,500 shares of our common stock, comprised of
134,167 for shares outstanding and 138,333 for shares issuable to an option
holder and warrant holders at an exercise price of $5.40 per share. In January
2005, our shares were listed on the OTC Bulletin Board.

         Historically, we relied upon limited revenues from consulting fees and
equity financing in order to fund operations. While these activities provided
limited resources, they have never resulted in cash flow in excess of
immediately needed funding. Our inability to generate cash flow in excess of
immediately needed funds was, in large part responsible for our decision to
enter into the strategic relationship with Parker-Hannifin as a means to develop
commercially viable products and a potential source of revenue generation.

         The continued inability to generate cash flow or revenue from fuel cell
products influenced us to pursue other revenue sources and the Stock Exchange
Agreement with Dynamic. We expect the leisure travel business to continue to
increase significantly as the primary focus of our future.

         On January 13, 2006, we received $2,000,000 of financing by the
issuance of a convertible secured promissory note, convertible at $1.00 per
share and a warrant to purchase up to 2,000,000 million shares of the Company's
common stock at $1.00 per share. The proceeds from the financing will be used
for initial cash payments towards acquisitions of companies in the leisure
travel market, partial repayment of a convertible promissory note outstanding
and certain other outstanding obligations of the Company, infrastructure
including computer hardware and software, and general working capital. We will
continue to require external financing which will likely create additional
dilution to our existing shareholders.

         On January 31, 2006, shareholders approved a 1:30 reverse split of the
Company's common stock. As a result of the reverse stock split, every thirty
(30) shares of our common stock outstanding on the effective date were
automatically combined into one (1) share. The reverse stock split became
effective at the close of business on March 3, 2006, and post-reverse trading
began at market open on March 6, 2006. The accompanying financial statements
have been retroactively adjusted for the subsequent affect of the reverse stock
split and the Stock Exchange Agreement of January 13, 2006.

         On February 8, 2006, we acquired Changes in L'Attitudes, Inc., and on
March 6, 2006, we acquired Island Resort Tours, Inc. and International Travel
and Resorts, Inc. The purchase prices included our issuing 1,040,000 shares of
our common stock and $2,050,000 of convertible notes that may be converted to

                                       47


our common stock at a price of $1.50. The acquisitions have provided us with new
sources of revenue, but also involved issuing common stock that is dilutive to
our current shareholders and may either cause additional dilution if the notes
are converted to common stock, or increase our need for additional cash flow
from operations or outside financing to meet our obligations.

         We are hopeful the exposure of a securities exchange might help
increase the Company's market capitalization and encourage the exercise of
outstanding warrants. We have no understandings or commitments from anyone with
respect to external financing, and we cannot predict whether we will be able to
secure necessary funding when needed, or at all.

         Our cash and anticipated receipt of funds from financings have been
insufficient to satisfy our anticipated costs associated with new product
development. There can be no assurance, however, that we will be able to
generate sufficient cash from operations, if any, in future periods to satisfy
our capital requirements. While we now have revenue and operations, there is no
history of our ability to generate sufficient working capital to meet our
operational and debt service needs. Therefore, we will have to continue to rely
on external financing activities, including the sale of our equity securities,
to satisfy our capital requirements for the foreseeable future. Due, in part, to
our lack of earnings, our success in attracting additional funding has been
limited to transactions in which our equity is used as currency. In light of the
availability of this type of financing, and the lack of alternative proposals,
the continued use of our equity for these purposes may be necessary if we are to
sustain operations. Equity financings of the type we have historically
completed, including our recent financing and acquisitions are dilutive to our
stockholders and may adversely impact the market price for our shares.

         We have no commitments for borrowings or additional sales of equity.
The precise terms upon which we may be able to attract additional funding is not
known at this time, and there can be no assurance that we will be successful in
consummating any such future financing transactions on terms satisfactory to us,
or at all.

SEASONALITY AND INFLATION

         Our previous business was not seasonal in nature, and was not expected
to be affected by inflationary forces. If the recent increase in oil prices
proves to be long lasting, we believe the interest in fuel cell development will
only increase. Our future success in fuel cells is dependent upon the successful
development and market acceptance of fuel cell systems.

         The leisure travel market may be affected by weather conditions,
inflation, and the overall economy in the US, UK, and Europe. During 2004 and
2005, an unusually large quantity of hurricanes, a number of which were severe,
affected travel to the Caribbean and Mexico, and the Southeastern United States,
including a number of locations that incurred long term damage to properties and
infrastructure. While we believe that diversifying destinations and points of
originations will reduce the potential exposure to seasonality and the weather,
we shall need to add additional products and services to our existing business.


                             DESCRIPTION OF PROPERTY

         Subsequent to the Stock Exchange with the former shareholders of
Dynamic, the corporate offices were moved to 2203 N. Lois Avenue, Suite 900,
Tampa, FL 33607, where we lease space on a monthly basis. For further
information on the Stock Exchange Agreement, see Exhibit 10.17.

                                       48


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Effective January 1, 2004, we entered into an Exclusive Patent and
Know-How License Agreement with Thomas C. Edwards, Ph.D., our president and
chief executive officer. The license agreement is more fully described elsewhere
in this prospectus. The license agreement superceded and replaced the 1992
license agreement with Dr. Edwards. During each of the two years ended December
31, 2002, we neither accrued nor made any payments to Dr. Edwards under either
of the license agreements. See Exhibit 10.5.

         On December 11, 2003, we issued 6,666 shares of common stock to each of
Kevin S. Hooper and Leonard Sculler, as consideration for their services as
directors, valued at the contemporaneous cash sales price of $3.60 per share.

         On April 27, 2004, we issued 6,666 shares of common stock to George R.
Schell, as consideration for his services as a director, valued at $3.60 per
share.

         On August 17, 2004, we entered into an Amended and Restated Business
and Advisory Consulting Agreement with MBN Consulting, LLC. MBN is the
beneficial owner of approximately 6% of our common stock. The agreement replaces
and supercedes a consulting agreement dated November 10, 2003 between DynEco and
MBN. Under the amended and restated agreement, MBN has agreed to (a) advise us
with respect to the implementation of short and long range strategic planning to
fully develop and enhance DynEco's assets, resources, products and services, (b)
serving as liaison between DynEco and its shareholders; and providing such
investor relations services as we may request, (c) identifying and providing
advice and consultation in the areas of strategic alliances and business
combinations, including mergers and acquisitions; and preparation for and
attendance at meetings and conferences relating thereto, (d) arranging meetings
between representatives of DynEco and members of the investment community at
which presentations concerning DynEco and its business operations may be
discussed; (e) providing advice and consultation relating to internal business
operations including (i) advice regarding the formation of corporate goals and
their implementation, advice regarding the financial structure of DynEco and its
divisions or subsidiaries, (iii) advice regarding the securing of debt and/or
equity financing and (iv) advice regarding corporate organization and personnel,
(f) serving as liaison between DynEco and its legal and accounting advisors, and
(g) providing such other services as may be mutually agreed upon by DynEco and
MBN. For its services, MBN is entitled to a monthly fee of $3,000, commencing
upon our receipt of combined equity and debt funding from any sources in an
amount of at least $1,000,000. Under the original consulting agreement, MBN also
received 2,000,000 shares of our common stock as consideration for advising
DynEco in connection with restructuring its board of directors; providing advice
and consultation prior to and in connection with DynEco's relationship with
Parker-Hannifin Corporation, including the May 2003 License Agreement; serving
as liaison to DynEco's shareholders and providing investor relations services;
serving as DynEco's liaison to its financial and legal advisers; providing
administrative support and services to relieve DynEco's chief executive officer
of those responsibilities so that he could attend to his designated duties; and,
providing advice and consultation with respect to new business development. In
March 2005, we requested MBN to devote additional time to our business matters
and, in light of the additional responsibilities undertaken by MBN, we verbally
agreed to pay MBN a monthly consulting fee of $3,000 commencing March 1, 2005
(in lieu of the monthly consulting fee provided for in the Amended and Restated
Consulting Agreement).

                                       49


         Effective January 16, 2006, the Company entered a new Consulting
Agreement with MBN. The new agreement covers a two-year term, provides payment
to MBN of $5,000 per month for the first two months and $7,500 for each month
thereafter, and provides 200,000 five-year warrants to purchase common stock at
$1.25 per share.


             MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         Our common stock commenced trading on the over-the-counter bulletin
board on January 25, 2005, under the symbol "DYCO". From March 1994 until
January 25, 2005, our shares were listed on the pink sheets under the symbol
"DYCO." However, the trading market for our shares on the pink sheets was not
active. The following table sets forth the high and low bid prices for our
common stock on the pink sheets from January 1, 2004 to January 24, 2005 and on
the over-the-counter bulletin board from January 25, 2005 to May 5, 2006. The
bid prices are inter-dealer prices, without retail markup, markdown or
commission, and do not reflect actual transactions. Our stock began trading
under the symbol "DYLI" at market open on March 6, 2006.

                 PERIOD                         HIGH BID              LOW BID
   ------------------------------------         --------              -------

   April 1, 2006 to May 5, 2006                  $2.60                 $1.25
   January 1, 2006 to March 31, 2006             $4.00                 $0.81
   October 1, 2005 to December 31, 2005          $2.25                 $0.30
   July 1, 2005 to September 30, 2005            $3.30                 $1.35
   April 1, 2005 to June 30, 2005                $4.20                 $2.46
   January 1, 2005 to March 31, 2005             $6.00                 $2.43

   October 1, 2004 to December 31, 2004          $5.40                 $2.40
   July 1, 2004 to September 30, 2004            $5.40                 $3.00
   April 1, 2004 to June 30, 2004                $6.30                 $3.60
   January 1, 2004 to March 31, 2004             $8.10                 $5.10

The prices reflect a 1:30 reverse-stock split that became effective at business
close on March 3, 2006.

SHAREHOLDERS OF RECORD

         As of May 10, 2006, there were 9,597,810 shares of our common stock
issued and outstanding. We have also reserved a total of 4,902,237 shares for
issuance upon conversion of convertible promissory notes, 4,469,658 shares for
exercise of outstanding common stock purchase warrants, and 104,539 shares upon
exercise of outstanding options to purchase shares of our common stock.

INFORMATION RELATED TO OUTSTANDING SHARES

         Of the issued and outstanding shares, approximately 1,117,440 shares of
our common stock (6,666 of which are owned by one of our directors) have been
held for in excess of one year and are available for public resale pursuant to
Rule 144 promulgated under the Securities Act. The resale of another 134,167
shares, and 138,333 shares issuable upon exercise of outstanding warrants and
options, is covered by a Registration Statement filed on Form SB-2 (SEC File No.

                                       50


333-112585). The resale of another 15,000 shares, and 430,000 shares issuable
upon exercise of outstanding warrants and options, is covered by the
Registration Statement filed with the SEC on April 22, 2005 on Form SB-2 (SEC
File No. 333-124283), originally effective on May 6, 2006, and by a
post-effective amendment filed with the SEC on April 13, 2006. The resale of
another 7,035,167 shares is covered by the Registration Statement filed with the
SEC on May 12, 2006 but not yet effective.

         Unless covered by an effective registration statement, the resale of
our shares of common stock owned by officers, directors and affiliates is
subject to the volume limitations of Rule 144. In general, Rule 144 permits our
shareholders who have beneficially-owned restricted shares of common stock for
at least one year to sell without registration, within a three-month period, a
number of shares not exceeding one percent of the then outstanding shares of
common stock. Furthermore, if such shares are held for at least two years by a
person not affiliated with us (in general, a person who is not one of our
executive officers, directors or principal shareholders during the three month
period prior to resale), such restricted shares can be sold without any volume
limitation.

         Sales of our common stock under Rule 144 or pursuant to registration
may have a depressive effect on the market price for our common stock.

DIVIDENDS

         We have never paid cash dividends on our common stock. We intend to
keep future earnings, if any, to finance the expansion of our business, and we
do not anticipate that any cash dividends will be paid in the foreseeable
future. Our future payment of dividends will depend on our earnings, capital
requirements, expansion plans, financial condition and other relevant factors.
Our retained earnings deficit currently limits our ability to pay dividends.

SEC "PENNY STOCK" RULES

         The Securities and Exchange Commission has adopted regulations which
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. Depending on
market fluctuations, our common stock could be considered to be a "penny stock".
A penny stock is subject to rules that impose additional sales practice
requirements on broker/dealers who sell these securities to persons other than
established customers and accredited investors. For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase of these securities. In addition he must receive the purchaser's
written consent to the transaction prior to the purchase. He must also provide
certain written disclosures to the purchaser. Consequently, the "penny stock"
rules may restrict the ability of broker/dealers to sell our securities, and may
negatively affect the ability of holders of shares of our common stock to resell
them.

                                       51


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The following table sets forth information relating to our outstanding
equity compensation plans as of December 31, 2005:


                                                                                                   AVAILABLE FOR FUTURE
                                        NUMBER OF SECURITIES TO          WEIGHTED-AVERAGE          ISSUANCE UNDER EQUITY
                                        BE ISSUED UPON EXERCISE          EXERCISE PRICE OF           COMPENSATION PLAN
                                        OF OUTSTANDING OPTIONS,        OUTSTANDING OPTIONS,        (EXCLUDING SECURITIES
                                          WARRANTS AND RIGHTS           WARRANTS AND RIGHTS       REFLECTED IN COLUMN a)
                                        -----------------------        --------------------       ----------------------
                                                                                                  
Equity Compensation Plans Approved
by Security Holders:

2001 Equity Incentive Plan                       22,278                        $3.00                       11,055

1993 Corporate Stock Option Plan                 21,667                        $3.05                        3,333

1993 Advisors Stock Option Plan                   6,667                        $3.60                            0

Equity Compensation Plans Not
Approved by Security Holders:

Options                                          73,928                        $8.75                            0

Warrants                                         99,104                        $5.40                            0

Total                                           223,644                        $5.99                       14,388


OPTION GRANTS IN LAST FISCAL YEAR

         The following table sets forth information concerning our grant of
options to purchase shares of our common stock during the fiscal year ended
December 31, 2005 to each person named in the Summary Compensation table.


                                                               PERCENT OF          EXERCISE
                              NUMBER OF SECURITIES     TOTAL OPTION/SARS GRANTED   OR BASE
                             UNDERLYING OPTION/SARS      TO EMPLOYEES IN FISCAL    PRICE
         NAME                      GRANTS (#)                     YEAR              ($/SH)    EXPIRATION DATE
- ------------------------     ----------------------    -------------------------   --------   ---------------
                                                                                           
Thomas C. Edwards, Ph.D.             3.330                        7.8%               $3.00       April 2008


2001 EQUITY INCENTIVE PLAN

         In October 2001, our board of directors authorized and approved the
2001 Equity Incentive Plan. The plan was approved and ratified by our
shareholders on October 25, 2001. Under the 2001 Equity Incentive Plan, we have
reserved a total of 33,333 shares of our common stock for issuance upon exercise
of incentive and non-qualified stock options, stock bonuses and rights to
purchase awarded from time-to-time, to our officers, directors, employees and
consultants.

         The 2001 Equity Incentive Plan is currently administered by our board
of directors. Under the plan, the board determines which of our employees,
officers, directors and consultants are to be granted awards, as well as the
material terms if each award, including whether options are to be incentive
stock options or non-qualified stock options.

                                       52


         Subject to the provisions of the plan, and the Internal Revenue Code
with respect to incentive stock options, the board determines who shall receive
awards, the number of shares of common stock that may be purchased under the
awards, the time and manner of exercise of options and exercise prices. At its
discretion, the board also determines the form of consideration to be received
upon exercise and may permit the exercise price of options granted under the
plan to be paid in whole or in part with previously acquired shares and/or the
surrender of options. The term of options granted under the stock option plan
may not exceed ten years, or five years for an incentive stock option granted to
an optionee owning more than 10% of our voting stock. The exercise price for
incentive stock options may not be less than 100% of the fair market value of
our common stock at the time the option is granted. However, incentive stock
options granted to a 10% holder of our voting stock may not be exercisable at
less than 110% of the fair market value of our common stock on the date of the
grant. The exercise price for non-qualified options will be set by the board, in
its discretion, but in no event shall the exercise price be less than 85% of the
fair market value of our common stock on the date of grant.

         Absent registration under the Securities Act of 1933, as amended, or
the availability of an applicable exemption therefrom, shares of common stock
issued upon the exercise of options or as restricted stock awards will be
subject to restrictions on sale or transfer. As of the date of this prospectus,
options to purchase 22,278 shares have been granted under the 2001 Equity
Incentive Plan.

1993 CORPORATE STOCK OPTION PLAN

         In May 1993, our board of directors authorized and approved the 1993
Corporate Stock Option Plan. The plan was approved and ratified by our
shareholders on March 31, 1994. Under the 1993 Corporate Stock Option Plan, we
have reserved a total of 25,000 shares of our common stock for issuance upon
exercise of stock options granted, from time-to-time, to our officers,
directors, and employees.

         The Corporate Stock Option Plan is currently administered by our board
of directors. Under the plan, the board determines which of our employees,
officers and directors are to be granted options. The committee or board
determines whether options are to be incentive stock options or non-qualified
stock options.

         Subject to the provisions of the plan, and the Internal Revenue Code
with respect to incentive stock options, the board determines who shall receive
options, the number of shares of common stock that may be purchased under the
options, the time and manner of exercise of options and exercise prices. At its
discretion, the board also determines the form of consideration to be received
and may permit the exercise price of options granted under the plan to be paid
in whole or in part with previously acquired shares and/or the surrender of
options. The term of options granted under the stock option plan may not exceed
ten years, or five years for an incentive stock option granted to an optionee
owning more than 10% of our voting stock. The exercise price for incentive stock
options may not be less than 100% of the fair market value of our common stock
at the time the option is granted. However, incentive stock options granted to a
10% holder of our voting stock may not be exercisable at less than 110% of the
fair market value of our common stock on the date of the grant. The exercise
price for non-qualified options will be set by the board, in its discretion, but
in no event shall the exercise price be less than 85% of the fair market value
of our common stock on the date of grant.

         Absent registration under the Securities Act of 1933, as amended, or
the availability of an applicable exemption therefrom, shares of common stock
issued upon the exercise of options will be subject to restrictions on sale or
transfer. As of the date of this report, options to purchase 21,667 shares are
outstanding under the 1993 Corporate Stock Option Plan. No incentive stock
option may be granted under the plan after April 30, 2003.

                                       53


1993 ADVISORS STOCK OPTION PLAN

         In May1993, our board of directors authorized and approved the 1993
Advisors Stock Option Plan. The plan was approved and ratified by our
shareholders on March 31, 1994. Under the 1993 Advisors Stock Option Plan, we
have reserved a total of 6,667 shares of our common stock for issuance upon
exercise of stock options granted, from time-to-time, to our advisors and
consultants.

         The Advisors Stock Option Plan is currently administered by our board
of directors. Under the plan, the board determines which of our consultants
and/or advisors are to be granted options. Options granted under the plan are
non-qualified stock options. Subject to the provisions of the plan, the board
determines the number of shares of common stock that may be purchased under the
options, the time and manner of exercise of options and exercise prices. At its
discretion, the board also determines the form of consideration to be received
and may permit the exercise price of options granted under the plan to be paid
in whole or in part with previously acquired shares and/or the surrender of
options. The exercise price for options granted under the plan are set by the
board, at its discretion, but in no event may the exercise price be less than
85% of the fair market value of our common stock on the date of grant.

         Absent registration under the Securities Act of 1933, as amended, or
the availability of an applicable exemption therefrom, shares of common stock
issued upon the exercise of options are subject to restrictions on sale or
transfer. As of the date of this report, options to purchase 6,667 shares had
been granted and are outstanding under the 1993 Advisors Stock Option Plan. The
1993 Advisors Stock Option Plan has terminated and no further awards may be made
thereunder, however, outstanding awards of 6,667 shares remain effective until
their termination date on December 31, 2008.

OTHER PLANS

         Other plans include equity compensation plans not approved by
shareholders. These plans are comprised of options granted and/or warrants
issued to employees and non-employees, including directors, consultants,
advisers, suppliers, vendors, customers and lenders for purposes including to
provide continued incentives, as compensation for services and/or to satisfy
outstanding indebtedness to them.

         As of December 31, 2005, we had outstanding options covering 124,539
shares of our common stock and warrants covering 859,337 shares of our common
stock under equity plans not approved by shareholders. The options have exercise
prices ranging from $1.50 per share to $11.40 per share and expiration dates
ranging from January 2006 to December 2008. The warrants are exercisable at
$1.50 per share to $11.25 per share and expiration dates ranges from September
2006 to June 2010.

         The grants of these options were approved on a case-by-case basis by
the board of directors, and are within the limits of the number of shares that
we are authorized to issue. The grant of these options and warrants were not
authorized by our shareholders. We may, in the future, authorize the grant of
additional options and/or issuance of additional warrants for the foregoing
purposes and other valid corporate purposes.

OPTION EXERCISES AND HOLDINGS

         The following table contains information with respect to the exercise
of options to purchase shares of common stock during the fiscal year ended
December 31, 2005 to each person named in the Summary Compensation Table.

                                       54



              AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES

                                                                                                         VALUE OF
                                                                                                        UNEXERCISED
                                                                                                       IN-THE-MONEY
                                                                    NUMBER OF SECURITIES UNDERLYING    OPTIONS/SARS
                                                                      UNEXERCISED OPTIONS/SARS AT      AT FY-END ($)
                         SHARES ACQUIRED ON                                    FY-END( #)              EXERCISABLE /
                            EXERCISE (#)       VALUE REALIZED ($)      EXERCISABLE/UNEXERCISABLE       UNEXERCISABLE
                         ------------------    ------------------   -------------------------------    -------------
                                                                                               
Thomas C. Edwards,
Ph.D.
Chief Executive
Officer                         -0-                   -0-                        70,594                    $0/$0



                             EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table sets forth information relating to all compensation
awarded to, earned by or paid by us (a) to our Chief Executive Officer during
each of the three fiscal years ending December 31, 2005; (b) to each of our
executive officers who was awarded, earned or we paid more than $100,000 for the
fiscal year ended December 31, 2005; and (c) to our two highest compensated
executive officers in 2006 to date:


NAME AND PRINCIPAL         FISCAL                              OTHER ANNUAL      OPTIONS    LTIP         ALL OTHER
POSITION                    YEAR       SALARY       BONUS      COMPENSATION       / (#)     PAYOUTS     COMPENSATION
- -----------------------    ------     ---------     -----      ------------      -------    -------     ------------
                                                                                    
Daniel G. Brandano, CEO     2006      $225,000*     Tbd*           Tbd*            -0-        -0-        $7,207.65**

Thomas W. Busch, CFO        2006      $175,000*     Tbd*           Tbd*            -0-        -0-            -0-

Thomas C. Edwards, CEO
and CFO***                  2005       $56,806       -0-           -0-             -0-        -0-            -0-

Thomas C. Edwards, CEO
and CFO***                  2004       $60,000       -0-            0              -0-        -0-             0

Thomas C. Edwards, CEO
and CFO***                  2003       $60,000       -0-            0              -0-        -0-             0

__________________

         *Estimated annual salary for 2006; bonus and other compensation to be
determined based upon performance

         **Estimated annual Company contribution for health insurance benefits

         ***Effective January 1, 2004, we entered into an employment agreement
with Thomas C. Edwards, Ph.D., for his services as our chief executive officer
and chief technical officer. The employment agreement was for a term of five
years, but on January 13, 2006 Dr. Edwards resigned from the Company and his
employment agreement was terminated. See Exhibit 10.18.

                                       55


                              FINANCIAL STATEMENTS

         See Exhibit F-1. See also the Company's first 2006 Quarterly Report
filed with the SEC on or about May 15, 2006.


         CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                              FINANCIAL DISCLOSURE

         There have been no changes to or disagreements with our accountants
that are required to be disclosed.

                                       56


                PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Section 302A.521, subdivision 2, of the Minnesota Statutes requires the
Company to indemnify a person made or threatened to be made a party to a
proceeding by reason of the former or present official capacity of the person
with respect to the Company, against judgments, penalties, fines, including,
without limitation, excise taxes assessed against the person with respect to an
employee benefit plan, settlements, and reasonable expenses, including
attorneys' fees and disbursements, incurred by the person in connection with the
proceeding with respect to the same acts or omissions if such person (1) has not
been indemnified by another organization or employee benefit plan for the same
judgments, penalties or fines; (2) acted in good faith; (3) received no improper
personal benefit, and statutory procedure has been followed in the case of any
conflict of interest by a director; (4) in the case of a criminal proceeding,
had no reasonable cause to believe the conduct was unlawful; and (5) in the case
of acts or omissions occurring in the person's performance in the official
capacity of director or, for a person not a director, in the official capacity
of officer, board committee member or employee, reasonably believed that the
conduct was in the best interests of the Company, or, in the case of performance
by a director, officer or employee of the Company involving service as a
director, officer, partner, trustee, employee or agent of another organization
or employee benefit plan, reasonably believed that the conduct was not opposed
to the best interests of the Company. In addition, Section 302A.521, subdivision
3, requires payment by the Company, upon written request, of reasonable expenses
in advance of final disposition of the proceeding in certain instances. A
decision as to required indemnification is made by a disinterested majority of
the board of directors present at a meeting at which a disinterested quorum is
present, or by a designated committee of the board, by special legal counsel, by
the shareholders, or by a court.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, we have been informed 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.


                   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

         The estimated expenses in connection with the distribution of the
securities being registered, all of which are payable by the Company, are as
follows:

SEC Registration and Filing Fee....................................  $  1,522.96
Legal Fees and Expenses*...........................................  $ 10,000.00
Accounting Fees and Expenses*......................................  $  3,000.00
Financial Printing*................................................  $  2,500.00
Transfer Agent Fees*...............................................  $  1,500.00
Blue Sky Fees and Expenses*........................................  $      0.00
Miscellaneous*.....................................................  $  1,474.04
                                                                     -----------

          TOTAL....................................................  $ 20,000.00
                                                                     ===========

* Estimated

                                      II-1


                     RECENT SALES OF UNREGISTERED SECURITIES

         On June 30, 2003, we issued 11,667 shares of common stock to the
following four employees for services rendered, valued at the contemporaneous
cash sales price of $3.60 per share.

         Name                          Shares
         ----                          ------

Michael Owens .......................   4,167
Jennifer Dockery ....................   2,500
Paul Esparza ........................   2,500
Phil Keener .........................   2,500

         Each of the employees had a preexisting business relationship with the
Company, were provided access to business and financial about the Company and
had such knowledge and experience in business and financial matters that they
were able to evaluate the risks and merits of an investment in the Company.
Accordingly, the investors were "sophisticated" within the meaning of federal
securities laws. Each certificate evidencing securities issued in the
transaction included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transaction. The
transaction was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereunder as a transaction by an issuer not involving
any public offering.

         On November 10, 2003, we issued 66,667 shares of common stock to MBN
Consulting, LLC, a consulting firm, for services rendered, valued at the
contemporaneous cash sales price of $3.60 per share. The investor had a
preexisting business relationship with the Company, was provided access to
business and financial about the Company and had such knowledge and experience
in business and financial matters that it was able to evaluate the risks and
merits of an investment in the Company. Accordingly, the investor was
"sophisticated" within the meaning of federal securities laws. Each certificate
evidencing securities issued in the transaction included a legend to the effect
that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
therefrom. No general solicitation or advertising was used in connection with
the transaction. The transaction was exempt from the registration requirements
of the Securities Act by reason of Section 4(2) thereunder as a transaction by
an issuer not involving any public offering.

         On November 18, 2003, we issued 66,667 shares of common stock to the
following four investors, for a purchase price of $240,000.

         Name                          Shares
         ----                          ------

Blaine Schmidt ......................   13,333
Avonlea Homes Investments Ltd. ......   20,000
Corporate Capital Group Int'l .......   16,667
Centaurus Capital Corp. .............   16,667

         In connection with this transaction, we also issued warrants to
purchase 133,333 shares of common stock to Centaurus Capital Corp. On March 24,
2004, Centaurus Capital Corp. assigned warrants to purchase 100,000 shares to
Sausilito Ltd. The warrants are exercisable until November 30, 2005
(subsequently extended to November 30, 2006), at an exercise price of $5.40 per
share. Each of the investors was provided access to business and financial

                                      II-2


about the Company and had such knowledge and experience in business and
financial matters that they were able to evaluate the risks and merits of an
investment in the Company. Accordingly, the investors were "sophisticated"
within the meaning of federal securities laws. Each certificate evidencing
securities issued in the transaction included a legend to the effect that the
securities were not registered under the Securities Act and could not be resold
absent registration or the availability of an applicable exemption therefrom. No
general solicitation or advertising was used in connection with the transaction.
The transaction was exempt from the registration requirements of the Securities
Act by reason of Section 4(2) thereunder as a transaction by an issuer not
involving any public offering.

         On December 11, 2003, we issued 6,666 shares of common stock to each of
Kevin Hooper and Leonard Sculler, as consideration for their services as
directors of the Company, valued at the contemporaneous cash sales price of
$3.60 per share. Each of the directors had a preexisting business relationship
with the Company, were provided access to business and financial about the
Company and had such knowledge and experience in business and financial matters
that they were able to evaluate the risks and merits of an investment in the
Company. Accordingly, the investors were "sophisticated" within the meaning of
federal securities laws. Each certificate evidencing securities issued in the
transaction included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transaction. The
transaction was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereunder as a transaction by an issuer not involving
any public offering.

         On December 11, 2003, we issued 833 shares of common stock and warrants
to purchase an additional 1,667 shares to the following designees of Schneider
Weinberger & Beilly LLP, (now former) counsel to the Company, for services
rendered, valued at the contemporaneous cash sales price of $3.60 per share:

         Name                          Shares         Warrants
         ----                          ------         --------

Susan Schneider .....................    392             750
Steven Weinberger ...................    392             750
Sydney Monda ........................     50             167

         The warrants are exercisable until June 30, 2006, at an exercise price
of $5.40 per share. Schneider Weinberger & Beilly LLP had a preexisting business
relationship with the Company, was provided access to business and financial
about the Company and had such knowledge and experience in business and
financial matters that it was able to evaluate the risks and merits of an
investment in the Company. Accordingly, the investor was "sophisticated" within
the meaning of federal securities laws. Each certificate evidencing securities
issued in the transaction included a legend to the effect that the securities
were not registered under the Securities Act and could not be resold absent
registration or the availability of an applicable exemption therefrom. No
general solicitation or advertising was used in connection with the transaction.
The transaction was exempt from the registration requirements of the Securities
Act by reason of Section 4(2) thereunder as a transaction by an issuer not
involving any public offering.

         On April 27, 2004, we issued 6,667 shares of common stock to George
Schell, as consideration for his services as a director of a Company, valued at
$3.60 per share. Mr. Schell had a preexisting business relationship with the
Company, was provided access to business and financial about the

                                      II-3


Company and had such knowledge and experience in business and financial matters
that it was able to evaluate the risks and merits of an investment in the
Company. Accordingly, the investor was "sophisticated" within the meaning of
federal securities laws. Each certificate evidencing securities issued in the
transaction included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transaction. The
transaction was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereunder as a transaction by an issuer not involving
any public offering.

         During the period from December 7, 2004 to January 31, 2005, we sold an
aggregate of 15,000 shares of common stock for an aggregate purchase price of
$45,000, or $3.00 per share. For each two shares purchased, the purchaser also
received one warrant to purchase one additional share of common stock,
exercisable until December 31, 2006, at an exercise price of $4.50 per share.
The proceeds from the sales are being used for general working capital purposes.
The shares and warrants were sold to the following four persons, each of whom we
had reasonable grounds to believe was an "accredited investor" within the
meaning of Rule 501 of Regulation D under the Securities Act. Each investor was
provided access to business and financial information about us and had such
knowledge and experience in business and financial matters that it was able to
evaluate the risks and merits of an investment. Accordingly, each investor was
also "sophisticated" within the meaning of federal securities laws. Each
certificate evidencing securities issued to the investors included a legend to
the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. No commissions, similar compensation or other
remuneration was paid in connection with the sales. The issuance of the shares
and warrants was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) of the Securities Act and the rules and regulations
thereunder, as transactions by an issuer not involving any public offering.

         Name                          Shares         Warrants
         ----                          ------         --------

Ralph A. Beinser ....................   3,333           1,667
Jason W. Sanders ....................   1,667             833
Mitchell Levy .......................   1,667             833
Norman Nick .........................   8,333           4,167

         On March 2, 2005, we completed a $300,000 financing consisting of our
convertible promissory notes and common stock purchase warrants. The notes are
convertible at the option of the holder into shares of our common stock, at a
price of $3.00 per share, subject to adjustment. We also issued the investors
common stock purchase warrants to purchase an aggregate of 250,000 shares of
common stock, consisting of (a) five year warrants to purchase 100,000 shares at
an exercise price of $4.31 per share, subject to adjustment, (b) five-year
warrants to purchase 50,000 shares at an exercise price of $7.50 per share,
subject to adjustment and (c) five year warrants to purchase 100,000 shares at
$3.00 per share, subject to adjustment. The conversion of the notes and exercise
of warrants is subject to a 4.99% cap on the beneficial ownership that each
investor may have at any point in time while the notes and warrants are
outstanding. Repayment of the notes is collateralized by a general security
interest in all of our assets. The notes and warrants were sold to the following
investors, each of whom we had reasonable grounds to believe was an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act:

                                      II-4


         Name                          Note Principal         Warrants
         ----                          --------------         --------

Alpha Capital Aktiengesellschaft ....     $200,000            166,667
JM Investors ........................     $100,000             83,333

         Each investor was provided access to business and financial about the
Company and had such knowledge and experience in business and financial matters
that it was able to evaluate the risks and merits of an investment. Each
certificate evidencing securities issued to the investors included a legend to
the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption from registration. No general solicitation or advertising was used in
connection with the transactions. We paid unaffiliated finders a total of
$27,000, by the issuance of our promissory notes payable in the same manner as
the investor notes, and issued the finders five-year warrants to purchase a
total of 9,000 shares of common stock. The issuance of the shares and warrants
was exempt from the registration requirements of the Securities Act by reason of
Sections 4(2) and 4(6) of the Securities Act and the rules and regulations,
including Rule 506 of Regulation D thereunder, as transactions by an issuer not
involving a public offering.

         In June 2005, we issued common stock purchase warrants to purchase
10,000 shares to one company as part of a consulting agreement. The warrants are
exercisable for a period of five years at various exercise prices, with
one-third at $3.75 per share, one-third at $7.50 per share and one-third at
$11.25 per share. The consulting firm is in the financial consulting business,
and therefore, has access to business and financial information about us and had
such knowledge and experience in business and financial matters that it was able
to evaluate the risks and merits of taking warrants from the Company in lieu of
cash payment. The warrants contain a legend restricting transferability of the
shares issuable upon exercise of the warrants unless the shares are registered
under the Securities Act of 1933, as amended. No placement agent was involved,
no commissions were paid, and no general solicitation or advertising was used in
connection with this transaction. The issue of the warrants was exempt from the
registration requirements of the Securities Act of 1933, as amended, by reason
of Section 4(2) thereof and the rules and regulations thereunder.

         On August 26, 2005, we sold an aggregate of 6,666 shares of common
stock for an aggregate purchase price of $10,000, or $1.50 per share. For each
share purchased, the purchaser also received one warrant to purchase one
additional share of common stock, exercisable until September 23, 2008, at an
exercise price of $3.00 per share. The proceeds from the sales were used for
general working capital purposes. The shares and warrants were sold to the
following two persons, each of whom we had reasonable grounds to believe was an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act.

         Name                          Shares         Warrants
         ----                          ------         --------

Margaret Galbraith ..................   3,333           3,333
Richard Galbraith ...................   3,333           3,333

         Each investor was provided access to business and financial about us
and had such knowledge and experience in business and financial matters that it
was able to evaluate the risks and merits of an investment. Accordingly, each
investor was also "sophisticated" within the meaning of federal securities laws.
Each certificate evidencing securities issued to the investors includes a legend
to the effect that the securities were not registered under the Securities Act
and could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in

                                      II-5


connection with the transactions. No commissions, similar compensation or other
remuneration was paid in connection with the sales. The issuance of the shares
and warrants was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) of the Securities Act and the rules and regulations
thereunder, as transactions by an issuer not involving any public offering.

         On September 22, 2005, we sold an aggregate of 33,333 shares of common
stock for an aggregate purchase price of $50,000, or $3.00 per share. For each
shares purchased, the purchaser also received one warrant to purchase one
additional share of common stock, exercisable until September 23, 2006, at an
exercise price of $1.50 per share. The proceeds from the sales were used for
general working capital purposes. The shares and warrants were sold to the
following person, who we had reasonable grounds to believe was an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act.

         Name                          Shares         Warrants
         ----                          ------         --------

James Praggastis ....................  33,333          33,333

         The investor was provided access to business and financial about us and
had such knowledge and experience in business and financial matters that it was
able to evaluate the risks and merits of an investment. Accordingly, the
investor was also "sophisticated" within the meaning of federal securities laws.
The certificate evidencing securities issued to the investor included a legend
to the effect that the securities were not registered under the Securities Act
and could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. No commissions, similar compensation or other
remuneration was paid in connection with the sales. The issuance of the shares
and warrants was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) of the Securities Act and the rules and regulations
thereunder, as transactions by an issuer not involving any public offering.

Dynamic Leisure Group, Inc. Securities
- --------------------------------------

         Prior to the Stock Exchange Agreement of January 13, 2006, Dynamic
Leisure Group, Inc., a privately-held Florida corporation ("DLG"), issued
securities to several investors in exchange for financing. Those securities were
automatically converted into securities of the Company on January 13, 2006 upon
closing of the Stock Exchange Agreement and related transactions.

         On June 15, 2005, DLG issued to Richard T. Fisher a Convertible
Promissory Note in the amount of $100,000, with interest at the rate of ten
percent (10%) per annum, convertible into shares of the Company's common stock
at a conversion price of ninety cents ($0.90) per share. In addition, the
security holder enjoyed 133,200 warrants to purchase shares of the Company's
common stock at an exercise price of sixty-eight cents ($0.68) per share. On
March 15, 2006, the security holder converted the note and exercised the
warrants and was issued 252,525 shares of the Company's common stock. The
Company has reasonable grounds to believe that the security holder was an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act. The investor was provided access to business and financial about
us and had such knowledge and experience in business and financial matters that
it was able to evaluate the risks and merits of an investment. Accordingly, the
investor was also "sophisticated" within the meaning of federal securities laws.
The certificate evidencing securities issued to the investor included a legend
to the effect that the securities were not registered under the Securities Act
and could not be resold absent registration or the availability of an applicable
exemption therefrom.

                                      II-6


No general solicitation or advertising was used in connection with the
transactions. The issuance of the shares and warrants was exempt from the
registration requirements of the Securities Act by reason of Section 4(2) of the
Securities Act and the rules and regulations thereunder, as transactions by an
issuer not involving any public offering.

         On June 23, 2005, DLG issued a Convertible Promissory Note in the
amount of $50,000 to GRQ Consultants, Inc. 401K Plan. That Note has been fully
paid by the Company. The security holder still enjoys 133,200 warrants to
purchase shares of the Company's common stock at an exercise price of ninety
cents ($0.90) per share, equivalent to 133,200 shares upon exercise. The Company
has reasonable grounds to believe that the security holder was an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act. The investor was provided access to business and financial about us and had
such knowledge and experience in business and financial matters that it was able
to evaluate the risks and merits of an investment. Accordingly, the investor was
also "sophisticated" within the meaning of federal securities laws. The
certificate evidencing securities issued to the investor included a legend to
the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. The issuance of the shares and warrants was
exempt from the registration requirements of the Securities Act by reason of
Section 4(2) of the Securities Act and the rules and regulations thereunder, as
transactions by an issuer not involving any public offering.

         On July 27, 2005, DLG issued to Timothy Minnehan a Convertible
Promissory Note in the amount of $75,000, with interest at the rate of ten
percent (10%) per annum, convertible into shares of the Company's common stock
at a conversion price of ninety cents ($0.90) per share. On April 3, 2006, the
security holder converted the note into 88,953 shares of the Company's common
stock. In addition, the security holder enjoys 99,900 warrants to purchase
shares of the Company's common stock at an exercise price of sixty-eight cents
($0.68) per share. The Company has reasonable grounds to believe that the
security holder was an "accredited investor" within the meaning of Rule 501 of
Regulation D under the Securities Act. The investor was provided access to
business and financial about us and had such knowledge and experience in
business and financial matters that it was able to evaluate the risks and merits
of an investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transactions. The
issuance of the shares and warrants was exempt from the registration
requirements of the Securities Act by reason of Section 4(2) of the Securities
Act and the rules and regulations thereunder, as transactions by an issuer not
involving any public offering.

         On August 1, 2005, DLG issued to Paul D. Bemiss a Convertible
Promissory Note in the amount of $25,000, with interest at the rate of ten
percent (10%) per annum, convertible into shares of the Company's common stock
at a conversion price of ninety cents ($0.90) per share. On March 15, 2006, the
security holder converted the note into 29,470 shares of the Company's common
stock. In addition, the security holder enjoys 36,963 warrants to purchase
shares of the Company's common stock at an exercise price of sixty-eight cents
($0.68) per share. The Company has reasonable grounds to believe that the
security holder was an "accredited investor" within the meaning of Rule 501 of
Regulation D under the Securities Act. The investor was provided access to
business and financial about us and had such knowledge and experience in
business and financial matters that it was able to evaluate the risks and merits
of an investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect

                                      II-7


that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
therefrom. No general solicitation or advertising was used in connection with
the transactions. The issuance of the shares and warrants was exempt from the
registration requirements of the Securities Act by reason of Section 4(2) of the
Securities Act and the rules and regulations thereunder, as transactions by an
issuer not involving any public offering.

         On August 2, 2005, DLG issued to Gary Anderson a Convertible Promissory
Note in the amount of $25,000, with interest at the rate of ten percent (10%)
per annum, convertible into shares of the Company's common stock at a conversion
price of ninety cents ($0.90) per share. On March 8, 2006, the security holder
converted the note into 29,415 shares of the Company's common stock. In
addition, the security holder enjoys 36,963 warrants to purchase shares of the
Company's common stock at an exercise price of sixty-eight cents ($0.68) per
share. The Company has reasonable grounds to believe that the security holder
was an "accredited investor" within the meaning of Rule 501 of Regulation D
under the Securities Act. The investor was provided access to business and
financial about us and had such knowledge and experience in business and
financial matters that it was able to evaluate the risks and merits of an
investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transactions. The
issuance of the shares and warrants was exempt from the registration
requirements of the Securities Act by reason of Section 4(2) of the Securities
Act and the rules and regulations thereunder, as transactions by an issuer not
involving any public offering.

         On September 5, 2005, DLG issued to Diversified Acquisition Trust a
Convertible Promissory Note in the amount of $400,000, with interest at the rate
of ten percent (10%) per annum, convertible into shares of the Company's common
stock at a conversion price of ninety cents ($0.90) per share. In addition, the
security holder enjoys 444,000 warrants to purchase shares of the Company's
common stock at an exercise price of ninety cents ($0.90) per share. Should the
security holder decide to convert the note on the maturity date and exercise his
warrants, the Company would issue a total of 932,400 shares of common stock to
the security holder. The Company has reasonable grounds to believe that the
security holder was an "accredited investor" within the meaning of Rule 501 of
Regulation D under the Securities Act. The investor was provided access to
business and financial about us and had such knowledge and experience in
business and financial matters that it was able to evaluate the risks and merits
of an investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transactions. The
issuance of the shares and warrants was exempt from the registration
requirements of the Securities Act by reason of Section 4(2) of the Securities
Act and the rules and regulations thereunder, as transactions by an issuer not
involving any public offering.

         On October 11, 2005, DLG issued to the Denno Family Limited Partnership
a Convertible Promissory Note in the amount of $50,000, with interest at the
rate of ten percent (10%) per annum, convertible into shares of the Company's
common stock at a conversion price of ninety cents ($0.90) per share. In
addition, the security holder enjoyed 66,600 warrants to purchase shares of the
Company's common stock at an exercise price of sixty-eight cents ($0.68)) per
share. On April 14, 2006, the security holder converted the note and exercised
the warrants. The Company has issued a total of 128,205 shares to the security
holder. The Company has reasonable grounds to believe that the security holder
was an "accredited investor" within the meaning of Rule 501 of Regulation D
under the Securities Act. The investor was provided access to business and

                                      II-8


financial about us and had such knowledge and experience in business and
financial matters that it was able to evaluate the risks and merits of an
investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transactions. The
issuance of the shares and warrants was exempt from the registration
requirements of the Securities Act by reason of Section 4(2) of the Securities
Act and the rules and regulations thereunder, as transactions by an issuer not
involving any public offering.

         On October 21, 2005, DLG issued to James D. Davidson a Convertible
Promissory Note in the amount of $25,000, with interest at the rate of ten
percent (10%) per annum, due and payable on June 30, 2006 but convertible into
shares of the Company's common stock at the rate of ninety cents ($0.90) per
share. In addition, the security holder enjoys 33,300 warrants to purchase
shares of the Company's common stock at an exercise price of sixty-eight cents
($0.68) per share. Should the security holder decide to convert the note on the
maturity date and exercise his warrants, the Company would issue a total of
62,965 shares of common stock to the security holder. The Company has reasonable
grounds to believe that the security holder was an "accredited investor" within
the meaning of Rule 501 of Regulation D under the Securities Act. The investor
was provided access to business and financial about us and had such knowledge
and experience in business and financial matters that it was able to evaluate
the risks and merits of an investment. Accordingly, the investor was also
"sophisticated" within the meaning of federal securities laws. The certificate
evidencing securities issued to the investor included a legend to the effect
that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
therefrom. No general solicitation or advertising was used in connection with
the transactions. The issuance of the shares and warrants was exempt from the
registration requirements of the Securities Act by reason of Section 4(2) of the
Securities Act and the rules and regulations thereunder, as transactions by an
issuer not involving any public offering.

         On October 27, 2005, DLG issued to Monarch Capital Fund, Ltd. a
Convertible Promissory Note in the amount of $75,000, with interest at the rate
of ten percent (10%) per annum, due and payable on June 30, 2006 but convertible
into shares of the Company's common stock at the rate of ninety cents ($0.90)
per share. In addition, the security holder enjoys 99,900 warrants to purchase
shares of the Company's common stock at an exercise price of sixty-eight cents
($0.68) per share. Should the security holder decide to convert the note on the
maturity date and exercise his warrants, the Company would issue a total of
188,728 shares of common stock to the security holder. The Company has
reasonable grounds to believe that the security holder was an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act. The investor was provided access to business and financial about us and had
such knowledge and experience in business and financial matters that it was able
to evaluate the risks and merits of an investment. Accordingly, the investor was
also "sophisticated" within the meaning of federal securities laws. The
certificate evidencing securities issued to the investor included a legend to
the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. The issuance of the shares and warrants was
exempt from the registration requirements of the Securities Act by reason of
Section 4(2) of the Securities Act and the rules and regulations thereunder, as
transactions by an issuer not involving any public offering.

                                      II-9


         On November 21, 2005, DLG issued a Convertible Promissory Note to
Andrew Allen in the amount of $10,000, with interest at the rate of ten percent
(10%) per annum, due and payable on June 30, 2006 but convertible into shares of
the Company's common stock at the rate of ninety cents ($0.90) per share. In
addition, as a result of the November 21, 2005 transaction, the security holder
enjoys 13,320 warrants to purchase shares of the Company's common stock at an
exercise price of sixty-eight cents ($0.68) per share. On February 3, 2006, the
Company issued a Convertible Promissory Note to this security holder in the
amount of $10,000, with interest at the rate of ten percent (10%) per annum,
convertible into shares of the Company's common stock at the rate of one dollar
($1.00) per share. The Company also issued the security holder 10,000 warrants
to purchase shares of the Company's common stock at an exercise price of one
dollar ($1.00) per share. Should the security holder decide to convert both
notes on their maturity dates and exercise all of his warrants, the Company
would issue a total of 46,097 shares of common stock to the security holder. The
Company has reasonable grounds to believe that the security holder was an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act. The investor was provided access to business and financial about
us and had such knowledge and experience in business and financial matters that
it was able to evaluate the risks and merits of an investment. Accordingly, the
investor was also "sophisticated" within the meaning of federal securities laws.
The certificate evidencing securities issued to the investor included a legend
to the effect that the securities were not registered under the Securities Act
and could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. The issuance of the shares and warrants was
exempt from the registration requirements of the Securities Act by reason of
Section 4(2) of the Securities Act and the rules and regulations thereunder, as
transactions by an issuer not involving any public offering.

         On December 20, 2005, DLG issued a Convertible Promissory Note to Paul
Welch in the amount of $12,500, with interest at the rate of ten percent (10%)
per annum, due and payable on June 30, 2006 but convertible into shares of the
Company's common stock at the rate of ninety cents ($0.90) per share. In
addition, the security holder enjoys 13,875 warrants to purchase shares of the
Company's common stock at an exercise price of sixty-eight cents ($0.68) per
share. Should the security holder decide to convert the note on the maturity
date and exercise his warrants, the Company would issue a total of 28,472 shares
of common stock to the security holder. The Company has reasonable grounds to
believe that the security holder was an "accredited investor" within the meaning
of Rule 501 of Regulation D under the Securities Act. The investor was provided
access to business and financial about us and had such knowledge and experience
in business and financial matters that it was able to evaluate the risks and
merits of an investment. Accordingly, the investor was also "sophisticated"
within the meaning of federal securities laws. The certificate evidencing
securities issued to the investor included a legend to the effect that the
securities were not registered under the Securities Act and could not be resold
absent registration or the availability of an applicable exemption therefrom. No
general solicitation or advertising was used in connection with the
transactions. The issuance of the shares and warrants was exempt from the
registration requirements of the Securities Act by reason of Section 4(2) of the
Securities Act and the rules and regulations thereunder, as transactions by an
issuer not involving any public offering.

         On January 3, 2006, DLG issued a Convertible Promissory Note to Street
Venture Partners, LLC in the amount of $350,000, with interest at the rate of
ten percent (10%) per annum, due and payable on January 3, 2007 but convertible
into shares of the Company's common stock at the rate of ninety cents ($0.90)
per share. In addition, the security holder enjoys 388,500 warrants to purchase
shares of the Company's common stock at an exercise price of ninety cents
($0.90) per share. Should the security holder decide to convert the note on the
maturity date and exercise its warrants, the Company would issue a total of
427,350 shares of common stock to the security holder. The Company has
reasonable grounds to believe that the security holder was an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act. The investor was provided access to business and financial about us and had
such knowledge and experience in business and financial matters that it was able
to evaluate the risks and merits of an investment. Accordingly, the investor was
also "sophisticated" within the meaning of federal securities laws. The
certificate evidencing securities issued to the investor included a legend to

                                     II-10


the effect that the securities were not registered under the Securities Act and
could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. The issuance of the shares and warrants was
exempt from the registration requirements of the Securities Act by reason of
Section 4(2) of the Securities Act and the rules and regulations thereunder, as
transactions by an issuer not involving any public offering.

January 13, 2006
- ----------------

         On January 13, 2006, the Company entered into a Stock Exchange
Agreement (the "reverse merger") with all of the shareholders of DLG.

         As part of the reverse merger transaction, the Company issued preferred
shares to the former shareholders of DLG, which preferred shares automatically
converted into 1,000 shares of common stock of the Company. As a result, the
following security holders have received the following shares of common as a
result of the reverse merger:

         Daniel G. Brandano ....................      833,333
         Thomas W. Busch .......................      866,666
         Robert A.G. LeVine ....................      266,666
         Brian Brandano ........................      333,333
         Diversified Acquisition Trust .........    1,906,666
         Claudale Ltd. .........................      693,333
         GRQ Consultants, Inc. .................      400,000
         MBN Consulting, LLC ...................      200,000
         Street Venture Partners ...............    1,066,666

         Each investor was provided access to business and financial about us
and had such knowledge and experience in business and financial matters that it
was able to evaluate the risks and merits of an investment. Accordingly, the
investor was also "sophisticated" within the meaning of federal securities laws.
The certificate evidencing securities issued to the investor included a legend
to the effect that the securities were not registered under the Securities Act
and could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. No commissions, similar compensation or other
remuneration was paid in connection with the sales. The issuance of the shares
and warrants was exempt from the registration requirements of the Securities Act
by reason of Section 4(2) of the Securities Act and the rules and regulations
thereunder, as transactions by an issuer not involving any public offering.

         As part of the reverse merger transaction, and to cure a default with
two of the selling security holders, the Company entered into a Modification and
Waiver Agreement under which 100,000 (post-reverse split) shares of common stock
were issued to Alpha Capital Aktiengesellschaft and another 100,000
(post-reverse split) shares of common stock were issued to JM Investors, LLC. In
connection with the reverse stock split effective at the close of business on
March 3, 2006, the Company issued additional warrants for the Company's common
stock, exercisable at one dollar ($1.00) per share, pursuant to the
anti-dilution provisions of the Restructured Financing, as follows: 29,800
warrants to Alpha Capital Aktiengesellschaft, and 15,700 warrants to JM
Investors, LLC. The Company had reasonable grounds to believe that the security
holder was an "accredited investor" within the meaning of Rule 501 of Regulation
D under the Securities Act. The investor was provided access to business and
financial about us and had such knowledge and experience in business and
financial matters that it was able to evaluate the risks and merits of an
investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transactions. The
issuance of the shares and warrants was exempt from the registration
requirements of the Securities Act by reason of Section 4(2) of the Securities
Act and the rules and regulations thereunder, as transactions by an issuer not
involving any public offering.

                                     II-11


         Also as part of the reverse merger transaction, the Company issued a
Secured Convertible Promissory Note to MMA Capital LLC, a Delaware limited
liability company, in the amount of $2,000,000, with simple interest at the rate
of eight percent (8%) per annum, convertible into shares of the Company's common
stock at a conversion price of one dollar ($1.00) per share. In addition, the
Company issued warrants to MMA Capital, LLC to purchase 2,000,000 shares of the
Company's common stock at an exercise price of one dollar ($1.00) per share. The
Company had reasonable grounds to believe that the security holder was an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act. The investor was provided access to business and financial about
us and had such knowledge and experience in business and financial matters that
it was able to evaluate the risks and merits of an investment. Accordingly, the
investor was also "sophisticated" within the meaning of federal securities laws.
The certificate evidencing securities issued to the investor included a legend
to the effect that the securities were not registered under the Securities Act
and could not be resold absent registration or the availability of an applicable
exemption therefrom. No general solicitation or advertising was used in
connection with the transactions. The issuance of the shares and warrants was
exempt from the registration requirements of the Securities Act by reason of
Section 4(2) of the Securities Act and the rules and regulations thereunder, as
transactions by an issuer not involving any public offering.

Post-Merger Transactions
- ------------------------

         On January 16, 2006, the Company entered into a Consulting Agreement
with MBN Consulting, LLC, under which the security holder was granted 200,000
warrants to purchase shares of the Company's common stock at an exercise price
of one dollar twenty-five cents ($1.25) per share. The Company had reasonable
grounds to believe that the security holder was an "accredited investor" within
the meaning of Rule 501 of Regulation D under the Securities Act. The investor
was provided access to business and financial about us and had such knowledge
and experience in business and financial matters that it was able to evaluate
the risks and merits of an investment. Accordingly, the investor was also
"sophisticated" within the meaning of federal securities laws. The certificate
evidencing securities issued to the investor included a legend to the effect
that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
therefrom. No general solicitation or advertising was used in connection with
the transactions. The issuance of the shares and warrants was exempt from the
registration requirements of the Securities Act by reason of Section 4(2) of the
Securities Act and the rules and regulations thereunder, as transactions by an
issuer not involving any public offering.

         On January 25, 2006, the Company issued a Convertible Promissory Note
in the amount of $50,000 to Peter H. Clark in exchange for financing. On March
9, 2006, the security holder converted the note, and the Company has issued
55,500 shares to the security holder. In addition, the security holder enjoys
50,000 warrants to purchase common stock of the Company at an exercise price of
one dollar ($1.00) per share. The Company had reasonable grounds to believe that
the security holder was an "accredited investor" within the meaning of Rule 501
of Regulation D under the Securities Act. The investor was provided access to
business and financial about us and had such knowledge and experience in
business and financial matters that it was able to evaluate the risks and merits
of an investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transactions. The
issuance of the shares and warrants was exempt from the registration
requirements of the Securities Act by reason of Section 4(2) of the Securities
Act and the rules and regulations thereunder, as transactions by an issuer not
involving any public offering.

                                     II-12


         On February 8, 2006, the Company entered into a Purchase Agreement with
Raymon Valdes to purchase all of the shares of Changes in L'Attitudes, Inc., a
Florida corporation. As a result of that transaction, the security holder has
been issued 340,000 shares of the Company's common stock and may be issued up to
an additional 170,000 shares of common stock if, in a future acquisition,
another person or entity is issued shares at a rate less than $1.50 per share.
In addition, as a result of that transaction, the security holder was issued a
Convertible Promissory Note in the amount of $600,000, with interest at the rate
of nine percent (9%) per annum, convertible to up to 654,000 shares of the
Company's common stock. The investor was provided access to business and
financial about us and had such knowledge and experience in business and
financial matters that it was able to evaluate the risks and merits of an
investment. Accordingly, the investor was also "sophisticated" within the
meaning of federal securities laws. The certificate evidencing securities issued
to the investor included a legend to the effect that the securities were not
registered under the Securities Act and could not be resold absent registration
or the availability of an applicable exemption therefrom. No general
solicitation or advertising was used in connection with the transactions. No
commissions, similar compensation or other remuneration was paid in connection
with the sales. The issuance of the shares and warrants was exempt from the
registration requirements of the Securities Act by reason of Section 4(2) of the
Securities Act and the rules and regulations thereunder, as transactions by an
issuer not involving any public offering.

         On March 6, 2006, the Company entered into a Purchase Agreement with
Stephen A. Hicks to purchase all of the shares of Island Resort Tours, Inc. and
International Travel and Resorts, Inc., both New York corporations. As a result
of that transaction, the security holder has been issued 700,000 shares of the
Company's common stock and may be issued an additional 350,000 shares of common
stock if, in a future acquisition, another person or entity is issued shares at
a rate less than $1.50 per share. In addition, as a result of that transaction,
the security holder was issued a Convertible Promissory Note in the amount of
$1,450,000, with interest at the rate of nine percent (9%) per annum,
convertible up to 1,580,500 shares of the Company's common stock. The investor
was provided access to business and financial about us and had such knowledge
and experience in business and financial matters that it was able to evaluate
the risks and merits of an investment. Accordingly, the investor was also
"sophisticated" within the meaning of federal securities laws. The certificate
evidencing securities issued to the investor included a legend to the effect
that the securities were not registered under the Securities Act and could not
be resold absent registration or the availability of an applicable exemption
therefrom. No general solicitation or advertising was used in connection with
the transactions. No commissions, similar compensation or other remuneration was
paid in connection with the sales. The issuance of the shares and warrants was
exempt from the registration requirements of the Securities Act by reason of
Section 4(2) of the Securities Act and the rules and regulations thereunder, as
transactions by an issuer not involving any public offering.

         On April 25, 2006, the Company entered into a Subscription Agreement
with David Halperin, under which the Company issued 50,000 shares of common
stock to the security holder. In addition, the security holder enjoys 50,000
warrants to purchase the common stock of the Company at an exercise price of one
dollar ($1.00) per share. The investor was provided access to business and
financial information about the Company and had such knowledge and experience in
business and financial matters that it was able to evaluate the risks and merits
of an investment. Each certificate evidencing securities issued to the investors
included a legend to the effect that the securities were not registered under
the Securities Act and could not be resold absent registration or the
availability of an applicable exemption from registration. No general
solicitation or advertising was used in connection with the transactions.

                                     II-13


                   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit No.                   Description of Document
- -----------                   -----------------------

3.1      Amended and Restated Articles of Incorporation +
3.2      Bylaws ++
3.1      Articles of Amendment Designating Series A Preferred Stock (1)
3.2      Certificate of Amendment of Amended Articles of Incorporation, filed
         and effective February 2, 2006 (2)
3.3      Articles of Correction, filed on February 28, 2006 and effective at
         close of business on March 3, 2006 (3)
3.4      Articles of Correction, filed on February 28, 2006 and effective at
         close of business on March 3, 2006 (4)
5        Legal Opinion of Crone Law Group LLP dated May 12, 2006 (incorporating
         consent)**
10.1     2001 Equity Compensation Plan ++ *
10.2     1993 Corporate Stock Option Plan ++ *
10.3     1993 Advisors Option Plan ++ *
10.4     Amended and Restated Business Advisory and Consulting Agreement dated
         August 17, 2004 with MBN Consulting, LLC +++
10.5     License Agreement dated February 4, 2004 between DynEco Corporation and
         Dr. Thomas Edwards ++
10.6     Funding Agreement dated November 20, 2002 between DynEco Corporation
         and the Florida Technological Research and Development Authority ++
10.7     Employment Agreement dated January 1, 2004 with Thomas C. Edwards,
         Ph.D. ++ *
10.8     Exclusive Worldwide License Agreement dated May 1, 2003 between DynEco
         Corporation and Parker-Hannifin Corporation ++
10.9     Agreements dated August 1, 2001 and February 5, 2004 with Mark Vieno
         ++++
10.10    Supply Agreement dated August 6, 2004 with Parker-Hannifin Corporation
         +++
10.11    Subscription Agreement dated March 2, 2005 used in connection with
         $300,000 financing transaction +++++
10.12    Form of Convertible Promissory Note dated March 2, 2005 used in
         connection with $300,000 financing transaction +++++
10.13    Security Agreement dated March 2, 2005 used in connection with $300,000
         financing transaction +++++
10.14    Collateral Agent Agreement dated March 2, 2005 used in connection with
         $300,000 financing transaction +++++
10.15    Form of Non-Callable Warrant used in connection with $300,000 financing
         transaction +++++
10.16    Form of Callable Warrant used in connection with $300,000 financing
         transaction +++++
10.17    Stock Exchange Agreement dated January 13, 2006 by and between DynEco
         Corporation and the former shareholders of Dynamic Leisure Group, Inc.
         (1)
10.18    Separation Agreement dated January 13, 2006 by and between DynEco
         Corporation and Dr. Thomas Edwards (1)
10.19    Modification and Waiver Agreement dated January 13, 2006 by and between
         DynEco Corporation and Alpha Capital Aktiengesellschaft, JM Investors,
         LLC, Libra Finance, S.A. and RJ Prager Corporation (1)
10.20    Exclusive Patent and Know-How License Agreement dated January 12, 2006
         by and between DynEco Corporation and Dr. Thomas Edwards (1)
10.21    Secured Convertible Promissory Note dated January 13, 2006 to MMA
         Capital, LLC (1)
10.22    Security Agreement dated January 13, 2006 with MMA Capital, LLC (1)
10.23    Common Stock Purchase Warrant dated January 13, 2006 to MMA Capital,
         LLC (1)
10.24    Purchase Agreement, dated February 8, 2006 between Dynamic Leisure
         Group, Inc. and Raymon Valdes (2)
10.25    Security Agreement, dated February 8, 2006 between Dynamic Leisure
         Group, Inc and Raymon Valdes (2)
10.26    Purchase Agreement, dated March 6, 2006 between Dynamic Leisure Group,
         Inc. and Stephen A. Hicks (3)
10.11    Consulting Agreement dated January 16, 2006 with MBN Consulting, LLC
         (4)
14       Code of Ethics (5)
23.1     Consent of Salberg & Company PA **

                                     II-14


__________________

*        Compensatory Agreement.
**       Filed herewith.
+        Incorporated by reference from the Company's registration statement on
         Form SB-2, filed with the Securities and Exchange Commission on August
         23, 2004.
++       Incorporated by reference from the Company's registration statement on
         Form SB-2, filed with the Securities and Exchange Commission on
         February 6, 2004.
+++      Incorporated by reference from the Company's registration statement on
         Form SB-2, filed with the Securities and Exchange Commission on August
         23, 2004.
++++     Incorporated by reference from the Company's registration statement on
         Form SB-2, filed with the Securities and Exchange Commission on June
         18, 2004.
+++++    Incorporated by reference from the Company's Annual Report on Form
         10-KSB, filed with the Securities and Exchange Commission on March 31,
         2005.
(1)      Incorporated by reference from the Company's Current Report on Form 8-K
         filed with the Securities and Exchange Commission on January 23, 2006.
(2)      Incorporated by reference from the Company's Current Report on Form 8-K
         filed with the Securities and Exchange Commission on February 13, 2006.
(3)      Incorporated by reference from the Company's Current Report on Form 8-K
         filed with the Securities and Exchange Commission on March 8, 2006.
(4)      Incorporated by reference from the Company's Annual Report on Form
         10-KSB filed with the Securities and Exchange Commission on March 31,
         2006
(5)      Incorporated by reference from the Company's Registration Statement on
         Form SB-2 filed with the Securities and Exchange Commission on April
         22, 2005.


                                  UNDERTAKINGS

The undersigned Registrant also undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                  (i) To include any prospectus required by section 10(a)(3) of
                  the Securities Act of 1933;

                  (ii) To reflect in the prospectus any facts or events arising
                  after the effective date of the registration statement (or the
                  most recent post-effective amendment thereof) which,
                  individually or in the aggregate, represent a fundamental
                  change in the information set forth in the registration
                  statement;

                  (iii) To include any material information with respect to the
                  plan of distribution not previously disclosed in the
                  registration statement or any material change to such
                  information in the registration statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

                                     II-15


         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") 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 (the "Commission") such indemnification is against
public policy as expressed in the Securities 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 Registrant in the
successful defense of any action, suit or preceding) is asserted 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 Securities Act and will be governed by the final
adjudication of such.


                                  LEGAL MATTERS

         The legality of the resale of securities covered by this prospectus has
been passed upon for us by Crone Law Group LLP, San Francisco, California. No
members of the Crone Law Group are security holders of the Company.


                                     EXPERTS

         The consolidated financial statements of DynEco Corporation, now known
as Dynamic Leisure Corporation, as of December 31, 2005 and 2004, respectively,
and for each of the two years then ended appearing in this prospectus and
registration statement have been audited by Salberg & Company, P.A., Independent
Registered Public Accounting Firm, as set forth in their report thereon
appearing elsewhere in this prospectus, and are included in reliance upon this
report given on the authority of such firm as experts in auditing and
accounting.


                             ADDITIONAL INFORMATION

         We filed with the SEC a registration statement on Form SB-2 under the
Securities Act for the common stock offered by this prospectus. This prospectus,
which is a part of the registration statement, does not contain all of the
information in the registration statement and the exhibits filed with it,
portions of which have been omitted as permitted by SEC rules and regulations.
For further information concerning us and the securities offered by this
prospectus, we refer to the registration statement and to the exhibits filed
with it. Statements contained in this prospectus as to the content of any
contract or other document referred to are not necessarily complete. In each
instance, we refer you to the copy of the contracts and/or other documents filed
as exhibits to the registration statement, and these statements are qualified in
their entirety by reference to the contract or document. In addition, we refer
you to the Company's first 2006 Quarterly Report, filed on Form 10-QSB on or
about May 15, 2006.

         The registration statement, including all exhibits, and other materials
we file with the SEC, may be inspected without charge at the SEC's Public
Reference Room at 450 Fifth Street, N.W. Washington, D.C. 20549. Copies of these
materials may also be obtained from the SEC's Public Reference at 450 Fifth
Street, N.W., Room 1024, Washington D.C. 20549, upon the payment of prescribed
fees. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330.

                                     II-16


         The registration statement, including all exhibits and schedules and
amendments, has been filed with the SEC through the Electronic Data Gathering,
Analysis and Retrieval (EDGAR) system. We file periodic reports with the SEC;
however, following the effective date of the registration statement relating to
this prospectus, we will become a reporting company and will file annual,
quarterly and current reports, and other information with the SEC. Copies of all
of our filings with the SEC may be viewed on the SEC's Internet web site at
http://www.sec.gov.

         For so long as we are a reporting company, we will be required to file
annual reports with the SEC, containing audited financial statements. However,
unless we register our common stock under Section 12(g) of the Exchange Act, we
will not be required to deliver an annual report containing audited financial
statements to security holders. We currently have no plans to register our
common stock under Section 12(g) of the Exchange Act. If we are not required to
deliver an annual report to security holders, we do not intend to voluntarily
deliver annual reports to security holders containing audited financial
statements.

                                     II-17


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Tampa, Florida on May 12, 2006.


                            DYNAMIC LEISURE CORPORATION


                            By: /s/ Daniel G. Brandano.
                                ------------------------------------------------
                                President, Chief Executive Officer, and Director


         Pursuant to the requirements of the Securities Act of 1933, this Form
SB-2 registration statement has been signed by the following persons in the
capacities and on the dates indicated.


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


/s/Daniel G. Brandano           President,                          May 12, 2006
- ---------------------
                                Chief Executive Officer, and
                                Director

/s/ Thomas W. Busch             Vice President, Treasurer           May 12, 2006
- -------------------
                                Chief Financial Officer, and
                                Director

/s/ Robert A.G. LeVine          Secretary and                       May 12, 2006
- ----------------------
                                Director

/s/ Leonard Sculler             Director                            May 12, 2006
- -------------------







                        DYNECO CORPORATION AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2005 and 2004




                                       F-1


                        DYNECO CORPORATION AND SUBSIDIARY

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2005 and 2004


                                                                        Page(s)
                                                                        -------

Report of Independent Registered Public Accounting Firm ...............    F-3

Consolidated Balance Sheets ...........................................    F-4

Consolidated Statement of Operations ..................................    F-5

Consolidated Statement of Changes in Stockholders' Deficiency .........    F-6

Consolidated Statement of Cash Flows ..................................    F-7

Notes to Financial Statements ......................................... F-8 - 31


The Company also refers you to its first 2006 Quarterly Report, filed on Form
10-QSB on or about May 15, 2006.


                                       F-2


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------

To the Board of Directors and Shareholders of:
   DynEco Corporation:

We have audited the accompanying consolidated balance sheets of DynEco
Corporation as of December 31, 2005 and 2004 and the related consolidated
statements of operations, changes in stockholders' equity (deficit), and cash
flows for each of the two years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of DynEco
Corporation as of December 31, 2005 and 2004 and the consolidated results of its
operations and its cash flows for the each of the two years then ended in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company's net loss in 2005 of $526,195,
net cash used in operations in 2005 of $355,352, and working capital deficit of
$1,033,565 accumulated deficit of $8,661,023 and stockholders' deficiency of
$1,105,911 at December 31, 2005 and default on $35,000 of notes payable as well
as default on $309,789 of convertible promissory notes raise substantial doubt
about its ability to continue as a going concern. Management's plans as to these
matters are also described in Note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


SALBERG & COMPANY, P.A.
Boca Raton, Florida
March 20, 2006

                                       F-3


                        DYNECO CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                        As of December 31, 2005 and 2004

                                     ASSETS
                                                          2005         2004
                                                      -----------   -----------
Current Assets
  Cash .............................................. $         -   $    16,889
  Accounts receivable ...............................           -         6,875
  Other current assets ..............................           -         5,143
                                                      -----------   -----------
    Total Current Assets ............................           -        28,907

Property and equipment, net .........................      33,418        59,448
                                                      -----------   -----------

Other Assets
  Deposits ..........................................         521           566
  Debt issue costs, net .............................      28,434             -
                                                      -----------   -----------
    Total Other Assets ..............................      28,955           566

    Total Assets .................................... $    62,373   $    88,921
                                                      ===========   ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
  Convertible promissory notes, net of discount ..... $   115,380   $         -
  Bank overdraft liability ..........................         232             -
  Accounts payable ..................................      62,921       126,240
  Accrued compensation ..............................     283,625       280,708
  Accrued interest ..................................      59,930        24,850
  Other accrued liabilities .........................      20,029         5,859
  Loan payable ......................................     208,987       190,935
  Loan payable-Bank .................................       4,653        37,102
  Current maturity of notes payable - Shareholders ..      37,216         1,538
  Warrant liability .................................     240,592             -
                                                      -----------   -----------

    Total Current Liabilities .......................   1,033,565       667,232

Long Term Liabilities
  Loans payable-Bank, net of current portion ........      15,501       120,549
  Notes payable-Shareholders, net of current portion      119,218        20,336
                                                      -----------   -----------

    Total Long Term Liabilities .....................     134,719       140,885

    Total Liabilities ............................... $ 1,168,284   $   808,117
                                                      -----------   -----------

Commitments and contingencies

Stockholders' Deficit
  Preferred stock, $0.01 par value, 19,650,000
   shares authorized, none issued and outstanding ... $         -   $         -
  Preferred stock series A, $0.01 par value, 350,000
   shares authorized, none issued and outstanding ...           -             -
  Common stock, $0.01 par value, 300,000,000 shares
   authorized, 1,157,951 shares and 1,103,766 issued
   and outstanding as of 12/31/2005 and 12/31/2004,
   respectively .....................................      11,580        11,038
  Common stock issuable, at par value (6,667 shares)            -            67
  Additional paid-in capital ........................   7,543,532     7,404,527
  Accumulated deficit ...............................  (8,661,023)   (8,134,828)
                                                      -----------   -----------

    Total Stockholders' Deficit .....................  (1,105,911)     (719,196)
                                                      -----------   -----------

    Total Liabilities and Stockholders' Deficit ..... $    62,373   $    88,921
                                                      ===========   ===========

               See accompanying notes to the financial statements
                                       F-4


                        DYNECO CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 2005 and 2004

                                                       Year Ended December 31,
                                                     --------------------------
                                                        2005            2004
                                                        ----            ----

Revenues - Consulting ............................   $         -    $   275,000
  Compressor prototypes ..........................             -         11,900
                                                     -----------    -----------
    Total Revenues ...............................             -        286,900

Cost of revenues .................................             -         16,096
                                                     -----------    -----------

  Gross Profit ...................................             -        270,804

Operating Expenses
  Compensation ...................................       141,603        168,541
  General and administrative .....................       354,139        357,069
  Impairment loss ................................             -        144,603
  Bad debt expense ...............................         1,956              -
                                                     -----------    -----------

    Total Operating Expenses .....................       497,698        670,213
                                                     -----------    -----------

    Loss from Operations .........................      (497,698)      (399,409)

Other Income (Expense)
  Interest income ................................         1,257            313
  Other income ...................................        82,879              -
  Interest expense ...............................      (199,041)       (35,427)
  Warrant valuation income .......................        86,408              -
                                                     -----------    -----------

    Total Other Expense, net .....................       (28,497)       (35,114)
                                                     -----------    -----------

    Net Loss .....................................   $  (526,195)   $  (434,523)
                                                     ===========    ===========

Net Loss Per Share - Basic and Diluted ...........   $     (0.47)   $     (0.39)
                                                     ===========    ===========

Weighted average number of shares outstanding
  during the period - basic and diluted ..........     1,125,327      1,102,332
                                                     ===========    ===========

               See accompanying notes to the financial statements
                                       F-5



                                          DYNECO CORPORATION AND SUBSIDIARY
                              CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                                    For the Years Ended December 31, 2005 and 2004

                                                                                                           Total
                                                            Common Stock      Paid In     Accumulated   Stockholders'
                                       Common Stock           Issuable        Capital       Deficit        Equity
                                   ---------------------   --------------   -----------   -----------   -----------
                                                                                   
BALANCE AT DECEMBER 31, 2003 ....   1,097,099   $ 10,971   $ 3,333   $ 33   $ 7,349,628   $(7,700,305)  $  (339,673)
Exchange of issuable Common stock
  For Common Stock Option .......           -          -    (3,333)   (33)           33             -             -
Common stock issued for services        6,667         67         -      -        23,933             -        24,000
Common stock warrants granted for
services ........................           -          -         -      -        11,000             -        11,000
Common stock issuable for cash ..           -          -     6,667     67        19,933             -        20,000
Net Loss for 2004 ...............           -          -         -      -             -      (434,523)     (434,523)
                                   ----------   --------   -------   ----   -----------   -----------   -----------

BALANCE AT DECEMBER 31, 2004 ....   1,103,766     11,038     6,667     67     7,404,527    (8,134,828)     (719,196)

Common stock issued from 2004 ...       6,667         67    (6,667)   (67)            -             -             -
Common stock issued for cash ....      48,333        483         -      -        84,517             -        85,000
Option Grant ....................           -          -         -      -        56,925             -        56,925
Common stock surrendered for Note        (815)        (8)        -      -        (2,437)            -        (2,445)
Net Loss for 2005 ...............           -          -         -      -             -      (526,195)     (526,195)
                                   ----------   --------   -------   ----   -----------   -----------   -----------

BALANCE AT DECEMBER 31, 2005 ....   1,157,951   $ 11,580   $     -   $  -   $ 7,543,532   $(8,661,023)  $(1,105,911)
                                   ==========   ========   =======   ====   ===========   ===========   ===========

                                  See accompanying notes to the financial statements
                                                        F-6



                        DYNECO CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2005 and 2004

                                                        Years Ended December 31,
                                                           2005          2004
                                                           ----          ----
Cash Flows from Operating Activities:
  Net loss ...........................................   $(526,195)   $(434,523)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation and amortization ....................      27,041       28,757
    Amortization of debt issue costs .................      20,291            -
    Amortization of debt discount ....................     132,591            -
    Interest accretion on loan payable ...............      21,936       19,633
    Impairment loss ..................................           -      144,603
    Bad debt expense .................................       1,956            -
    Write off of deposit .............................          46            -
    Common stock issued for services .................           -       24,000
    Common stock issued for warrants .................           -       11,000
    Stock option grant for consultants ...............      56,925            -
    Write off of accounts payable ....................     (82,879)           -
    Warrant valuation expense ........................     (86,408)           -
  (Increase) decrease in current assets:
    Accounts receivable ..............................       6,875       18,125
    Other current assets .............................         742        1,940
    Other  assets ....................................           -         (521)
  Increase (decrease) in current liabilities:
    Accounts payable .................................      19,560        9,250
    Accrued expenses .................................           -       (4,223)
    Accrued salaries .................................       2,917            -
    Accrued Interest Payable .........................      35,080            -
    Other accrued liabilities ........................      14,170        5,859
                                                         ---------    ---------

    Net Cash Used In Operating Activities ............    (355,352)    (176,100)
                                                         ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of property and equipment ..............      (1,011)      (8,491)
  Disbursements relating to patent rights ............           -       (1,049)
                                                         ---------    ---------

    Net Cash Used In Investing Activities ............      (1,011)      (9,540)
                                                         ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Note repayments ....................................      (1,217)      (2,309)
  Loan repayments ....................................      (4,066)     (14,603)
  Increase in loans payable ..........................           -            -
  Proceeds from convertible promissory notes .........     300,000            -
  Repayment of convertible promissory notes ..........     (17,211)           -
  Repayment of capital lease obligation ..............      (1,538)           -
  Debt issue costs ...................................     (21,726)           -
  Proceeds from common stock .........................      85,000       20,000
  Cash overdraft .....................................         232            -
                                                         ---------    ---------

    Net Cash Provided By  Financing Activities .......     339,474        3,088
                                                         ---------    ---------

Net Decrease in Cash .................................     (16,889)    (182,552)

Cash at Beginning of Year ............................      16,889      199,441
                                                         ---------    ---------

Cash at End of Year ..................................   $       -    $  16,889
                                                         =========    =========

Supplemental disclosure of cash flow information:

  Cash paid during the year for income taxes .........   $       -    $       -
                                                         =========    =========
  Cash paid during the year for interest .............   $   9,411    $  10,544
                                                         =========    =========

Supplemental Disclosure of non-cash investing and
financing activities:

  Exchange of employee receivable for stock receivable   $   2,250    $       -
                                                         =========    =========
  Issuance of promissory notes as debt issue cost ....   $  27,000    $       -
                                                         =========    =========
  Discount on promissory notes .......................   $ 327,000    $       -
                                                         =========    =========
  Refinance of lease obligation ......................   $       -    $  24,525
                                                         =========    =========

               See accompanying notes to the financial statements
                                       F-7


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Nature of Business

            DynEco Corporation and Subsidiary ("DynEco", "we", "us", "our" or
            the "Company") is engaged primarily in developing and
            commercializing patented air and hydrogen compressors, known
            collectively as UniVane(R) devices, for stationary and automotive
            fuel cells. During 2005 and 2004, the Company's wholly-owned
            subsidiary, DynEco International, Inc., was inactive.

         Principles of Consolidation:

            For the years ended December 31, 2005 and 2004, the financial
            statements include the accounts of DynEco Corporation and its
            wholly-owned subsidiary, DynEco International, Inc. All references
            to "the Company" in these financial statements relate to the
            consolidated entity. All significant intercompany accounts and
            transactions have been eliminated in consolidation.

         Use of Estimates:

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make certain
            estimates and assumptions about the future outcome of current
            transactions which may affect the reporting and disclosure of these
            transactions. Accordingly, actual results could differ from those
            estimates used in the preparation of these financial statements.

            Significant estimates in 2005 and 2004 include an estimate of the
            deferred tax asset valuation allowance, allowance for doubtful
            accounts on accounts receivable, amortization period on patent
            rights, valuation of patent rights, depreciable lives on equipment
            and valuation of stock based compensation.

         Cash and Cash Equivalents:

            For the purpose of the cash flow statement, the Company considers
            all highly liquid investments with original maturities of three
            months or less at the time of purchase to be cash equivalents.

         Property and Equipment:

            Property and equipment is stated at cost. Depreciation is computed
            using the straight-line method and is expensed based upon the
            estimated useful lives of the assets which ranges from three to
            seven years. Expenditures for additions and improvements are
            capitalized, while repairs and maintenance are expensed as incurred.

         Patent Rights:

            Patent rights consist of the costs incurred to obtain patent rights
            associated with compressor technology. Patent rights are amortized
            using the straight-line method

                                       F-8


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

            over their seventeen to twenty year life commencing upon patent
            issuance and the generation of revenues utilizing the underlying
            technology. The Company reviews its patent rights for impairment
            whenever events or changes in circumstances indicate that its
            carrying amount may not be recoverable. If the undiscounted future
            cash flows of the patent rights are less than their carrying
            amounts, their carrying amounts are reduced to fair value and an
            impairment loss is recognized. The Company recorded and charged to
            operations, impairment losses of $144,603, relating to patent
            rights, for the year ended December 31, 2004. All expenditures
            during 2005 were charged to operations.

         Impairment of Other Long-Lived Assets:

            The Company reviews other long-lived assets and certain identifiable
            assets related to those assets for impairment whenever circumstances
            and situations change such that there is an indication that the
            carrying amounts may not be recoverable. If the undiscounted future
            cash flows of the long-lived assets are less than their carrying
            amounts, their carrying amounts are reduced to fair value and an
            impairment loss is recognized.

         Stock-Based Compensation:

            The Company has two active stock-based compensation plans, which are
            described more fully in Note 10. The Company accounts for stock
            options issued to employees in accordance with the provisions of
            Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
            Stock Issued to Employees," and related interpretations. As such,
            compensation cost is measured on the date of grant as the excess of
            the current market price of the underlying stock over the exercise
            price. Such compensation amounts are amortized over the respective
            vesting periods of the option grant. The Company issued stock
            options to directors, employees, and the chief executive officer
            totaling 23,333 and zero, respectively, in 2005 and 2004. No
            stock-based employee compensation cost is reflected in net income
            during 2005 and 2004. The Company issued 19,167 options and recorded
            $56,925 in expense for options issued to consultants in 2005.

            The Company adopted the disclosure provisions of SFAS No. 123
            "Accounting for Stock-Based Compensation," and SFAS No. 148
            "Accounting for Stock Based Compensation - Transition and
            Disclosure," which permits entities to provide pro forma net income
            (loss) and pro forma earnings (loss) per share disclosures for
            employee stock option grants as if the fair-valued based method
            defined in SFAS No. 123 had been applied.

            The Company accounts for stock options or warrants issued to
            non-employees for goods or services in accordance with the fair
            value method of SFAS 123. Under this method, the Company records an
            expense equal to the fair value of the options or warrants issued.
            The fair value is computed using an options pricing model.

            The following table illustrates the effect on net income and
            earnings per share if the company had applied the fair value
            recognition provisions of FASB Statement No.

                                       F-9


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

            123, Accounting for Stock-Based Compensation, to stock-based
            employee compensation as of December 31:

                                                         2005         2004
                                                      ----------   ----------
            Net loss, as reported ..................  $ (526,195)  $ (434,523)
            Add: Stock-based  employee compensation
              expense included in reported net
              income, net of related tax effects ...           -            -
                                                      ----------   ----------
            Deduct: Total stock-based compensation
              expense, determined under fair value
              based method for all awards, net of
              related tax effects ..................      69,300            -
                                                      ----------   ----------
            Pro forma net loss .....................  $ (595,495)  $ (434,523)
                                                      ==========   ==========
            Basic and diluted per share information:
            Net loss per share, as reported ........  $    (0.47)  $    (0.39)
                                                      ==========   ==========
            Net loss per share, pro forma ..........  $    (0.53)  $    (0.39)
                                                      ==========   ==========

         Revenue Recognition:

            The Company follows the guidance of the Securities and Exchange
            Commission's Staff Accounting Bulletin 104 for revenue recognition.
            In general, the Company records revenue when persuasive evidence of
            an arrangement exists, services have been rendered or product
            delivery has occurred, the sales price to the customer is fixed or
            determinable, and collectability is reasonably assured. The
            following policies reflect specific criteria for the various
            revenues streams of the Company:

            The Company had two sources of revenues totaling $0 and $286,900
            during the years ended December 31, 2005 and 2004 respectively;
            compressor revenues and contract consulting revenue.

            Compressor revenues totaled $11,900 for 2004. Sales revenues for
            customer orders of compressors are recognized at the time of order
            completion, defined as when all Company manufacturing and internal
            inspection obligations related to that order have been satisfied.
            This occurs upon order shipment.

            Contract consulting revenue totaled $275,000 for 2004 and related to
            the Parker-Hannifin ("Parker") agreement stipulating a monthly fee
            of $25,000 per month starting in June 2003. Contract consulting
            revenue is recognized for service contracts at the time of
            satisfaction of all obligations pursuant to the underlying contract.
            That contract terminated after November 2004.

         Research and Development

            In accordance with Statement of Financial Accounting Standards No. 2
            "Accounting For Research and Development Costs," the Company
            expenses all research and development costs. Research and
            development expenses included in General and administrative expenses
            were $1,771 and $6,819 in 2005 and 2004, respectively.

                                      F-10


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         Income Taxes:

            The Company accounts for income taxes under the Financial Accounting
            Standards No. 109 "Accounting for Income Taxes" ("Statement 109").
            Under Statement 109, deferred tax assets and liabilities are
            recognized for the future tax consequences attributable to
            differences between the financial statement carrying amounts of
            existing assets and liabilities and their respective tax bases.
            Deferred tax assets and liabilities are measured using enacted tax
            rates expected to apply to taxable income in the years in which
            those temporary differences are expected to be recovered or settled.
            Under Statement 109, the effect on deferred tax assets and
            liabilities of a change in tax rates is recognized in income in the
            period, which includes the enactment date.

         Basic and Diluted Net Income (Loss) Per Share:

            Basic net income (loss) per common share (Basic EPS) excludes
            dilution and is computed by dividing net income (loss) by the
            weighted average number of common shares outstanding during the
            year. Diluted net income per share (Diluted EPS) reflects the
            potential dilution that could occur if stock options or other
            contracts to issue common stock, such as convertible notes, were
            exercised or converted into common stock. At December 31, 2005,
            there were warrants and options convertible into 983,876 common
            shares and debt convertible into 109,000 common shares which may
            dilute future earnings per share. There is no calculation of fully
            diluted earnings per share in 2005 or 2004 due to the Company
            reporting a net loss and the exercise or conversion of common stock
            equivalents would have been anti-dilutive.

         Concentration of Credit Risk and Other Concentrations

            Financial instruments that potentially subject the Company to
            concentration of credit risk consist principally of accounts
            receivable. Accounts receivable arose principally from consulting
            contract revenues with Parker-Hannifin Corporation in 2004, from the
            sale of developmental compressor products to the Company's customer
            base consisting of businesses in the stationary and automotive fuel
            cell industries located throughout the world.

            The Company performs ongoing credit evaluations of its customers'
            financial condition, and generally requires no collateral from its
            customers. The Company's credit losses are subject to general
            economic conditions of the emerging fuel cell industry. There were
            no accounts receivable at December 31, 2005. At December 31, 2004,
            $6,797 or 99% of the accounts receivable balance was due from one
            customer.

            The Company had no revenue in 2005, and recognized $275,000 or 96%
            in revenues for the year ended December 31, 2004 from one customer.

            As of December 31, 2005, the Company's business is dependent upon
            three U.S. patents along with several related foreign patents and
            foreign patents pending. All patents issued and pending are in the
            name of a current officer/director of the Company, which the Company
            licenses from that officer/director pursuant to the terms of a
            Technology License Agreement (see Note 9).

                                      F-11


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

            The Company is relying on its Parker-Hannifin Exclusive Worldwide
            License Agreement for future revenues (see Note 9).

         Fair Value of Financial Instruments:

            Statement of Financial Accounting Standards No. 107, "Disclosures
            about Fair Value of Financial Instruments," requires disclosures of
            information about the fair value of certain financial instruments
            for which it is practicable to estimate the value. For purpose of
            this disclosure, the fair value of a financial instrument is the
            amount at which the instrument could be exchanged in a current
            transaction between willing parties, other than in a forced sale or
            liquidation.

            The Company's financial instruments include cash, accounts
            receivable, accounts payable, accrued liabilities, notes payable and
            capital leases. The fair values of cash, accounts receivable,
            accounts payable and accrued liabilities approximated carrying
            values due to the short-term nature of these instruments. Fair
            values for notes payable and capital leases are not readily
            available, but the carrying values are believed to approximate fair
            value.

         New Accounting Pronouncements:

            The Financial Accounting Standards Board has recently issued several
            new accounting pronouncements, which may apply to the Company.

            In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and
            Error Corrections" ("SFAS 154"). This statement replaces APB Opinion
            No. 20 "Accounting Changes" and FASB Statement No. 3 "Reporting
            Accounting Changes in Interim Financial Statements". SFAS 154
            applies to all voluntary changes in accounting principle and to
            changes required by an accounting pronouncement in the unusual
            instance that the pronouncement does not include specific transition
            provisions. SFAS 154 requires retrospective application to prior
            periods' financial statements of changes in accounting principle,
            unless it is impracticable to determine either the period-specific
            effects or the cumulative effect of the change. When it is
            impracticable to determine the period-specific effects of an
            accounting change on one or more individual prior periods presented,
            this SFAS requires that the new accounting principle be applied to
            the balances of assets and liabilities as of the beginning of the
            earliest period for which retrospective application is practicable
            and that a corresponding adjustment be made to the opening balance
            of equity or net assets for that period rather than being reported
            in an income statement. When it is impracticable to determine the
            cumulative effect of applying a change in accounting principle to
            all prior periods, this SFAS requires that the new accounting
            principle be applied as if it were adopted prospectively from the
            earliest date practicable. The Company adopted this SFAS as of
            January 1, 2006. There is no current impact on the Company's
            financial statements with the adoption of this FASB.

         Reclassifications

            Certain amounts in the 2004 financial statements have been
            reclassified to conform with the 2005 presentation.

                                      F-12


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE 2   GOING CONCERN

         The Company has a net loss of $526,195 and net cash used in operations
         of $355,352 for the year ended December 31, 2005, a working capital
         deficiency of $1,033,565, accumulated deficit of $8,661,023, and a
         stockholders' deficiency of $1,105,911 at December 31, 2005.
         Additionally, the Company was in default of the repayment terms on
         notes payable aggregating $35,000 as well as defaulting on the
         repayment terms of the convertible promissory notes aggregating
         $309,789 at December 31, 2005. Because the Company's developmental
         contracts generate insufficient operating capital and given these
         financial results along with the Company's expected cash requirements
         in 2006, additional capital investment will be necessary to develop and
         sustain the Company's operations.

         Management's plans to raise additional capital have been successful.
         The Company was forced to cease its present operations. In January
         2006, the Company entered into a Stock Exchange Agreement with Dynamic
         Leisure Group, Inc. ("DLG"). The shareholders of DLG acquired
         sufficient shares in the exchange to obtain more than 80% control of
         the Company (see Note 12). The financial statements do not contain any
         adjustments, which might be necessary if the Company is unable to
         continue as a going concern.

         In September 2004, the Company received 90 days notice from Parker
         Hannifin to cancel the consulting agreement as laid out in the original
         exclusive worldwide license agreement dated May 1, 2003. The consulting
         agreement terminated after November 2004. Once released to production,
         the Company will forgo the first $75,000 of royalties owed by Parker,
         although this amount will be credited toward any minimums due under the
         agreement. The original agreement will stand in all other respects.

NOTE 3   PATENT RIGHTS

         Patent rights are licensed from an officer/director and consisted of
         the following at December 31:

                                                                   Estimated
                                                                  Useful Life
                                            2005        2004       in Years
                                          ---------   ---------   -----------
         Patent Rights ................   $       0   $ 223,995     17 - 20
         Less: accumulated amortization           0     (79,392)
         Impairment Loss ..............           0    (144,603)
                                          ---------   ---------
         Patent rights, net ...........   $  -        $       -
                                          =========   =========

         Amortization expense was $0 in 2005 and $15,561 in 2004.

         During the year ending December 31, 2004, the Company recognized an
         impairment loss of $144,603 on its UniVane(R) patent rights. Although
         the license agreement with a customer is still in effect, since license
         revenues have not started and since the consulting agreement was
         cancelled, the Company has been unable to project a positive cash flow
         from this product or establish a fair market value of the patent using
         other valuation techniques.

                                      F-13


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE 4   PROPERTY AND EQUIPMENT

         Property and equipment consisted of the following at December 31:

                                                                    Estimated
                                                                  Useful Life in
                                            2005        2004          Years
                                          ---------   ---------   --------------
         Machinery and equipment ......   $ 136,322   $ 136,322        3-10
         Equipment under capital lease      108,840     108,840         7
         Office furniture and equipment      58,878      57,685        3-10
         Leasehold improvements .......       4,615       4,615         5
                                          ---------   ---------
         Total property and equipment .   $ 308,655   $ 307,642
         Less accumulated depreciation     (275,237)   (248,194)
                                          ---------   ---------
         Property and equipment, net ..   $  33,418   $  59,448
                                          =========   =========

         Depreciation expense, including that on equipment under capital lease,
         was $27,041 in 2005 and $13,196 in 2004.

NOTE 5   LOANS PAYABLE

         Loans Payable

         Technological Research and Development Authority Funding Agreement:

            In November 2002, the Company entered into an agreement with the
            Florida Technological Research and Development Authority (TRDA),
            which provides for up to $150,000 in funding for the development and
            commercialization of DynEco's UniVane(R) compressors and hydrogen
            circulators for fuel cell applications. In consideration of the
            funding, the Company is obligated to make royalty payments to TRDA
            equal to five percent of future UniVane(R)-related sales up to an
            amount equal to three times the amount DynEco receives from TRDA.
            During 2003, the entire $150,000 funding commitment was received.
            The agreement expires in November 2012. Pursuant to EITF No. 88-18
            "Sale of Future Revenues", the Company recorded the funding as a
            current liability and in connection with APB No. 21 "Interest on
            Receivables and Payables," accretes interest to the maximum value of
            $450,000 through the November 2012 expiration date. At December 31,
            2005, in connection with the accretion of interest, the Company
            charged $21,936 to interest expense. The accreted balance due as of
            December 31, 2005 was $208,987 and is included in loans payable in
            the accompanying balance sheet.

         Loan Payable to Finance Company

            The Company refinanced a capital lease obligation through a new
            finance company in November of 2004. The loan requires 60 monthly
            payments of $521 consisting of principal and interest. The principal
            balance at December 31, 2005 was $20,154 consisting of $4,653
            current portion included in loans payable and $15,501 included in
            loans payable, net of current portion.

                                      F-14


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE 6   CONVERTIBLE PROMISSORY NOTES & WARRANTS

         On March 2, 2005, the Company completed a $300,000 financing consisting
         of secured convertible promissory notes and common stock purchase
         warrants. The notes mature on March 2, 2007. Interest accrues and is
         payable monthly at the rate of 5% per annum or a default interest rate
         of 10% per annum. Principal amortization payments, each in the amount
         of $15,789 plus accrued interest, are to be paid in 19 equal monthly
         installments, commencing July 2, 2005. The note holders must convert
         the monthly payment amount into shares of our common stock, at a fixed
         conversion price of $3.00 per share. However, the notes are only
         convertible if the average 5 days lowest closing bid prices of the
         Company's common stock for the 20 consecutive days prior to the
         conversion date is equal to or greater than 100% of the fixed
         conversion price. If the holder cannot convert due to the limitations
         then the Company shall make the monthly amortization payments in cash
         with a 10% premium or at its option, in registered common stock, at a
         20% discount to market. Amortization payments in common stock are
         subject to (a) a limitation based upon the weighted average trading
         volume of the common stock for the 20 trading days preceding the
         payment date and (b) a 4.99% cap on the beneficial ownership that each
         investor may have at any point in time while the notes and warrants are
         outstanding.

         The secured convertible promissory notes are subject to a redemption
         clause whereby if there is any event of default, as defined in the
         notes or related subscription agreement, the investor may require
         redemption at the greater of (i) 120% of the principal amount of the
         debt or (ii) the conversion share quantity (computed using the fixed
         rate) times the highest closing price of the common stock for the
         period commencing on the deemed conversion date until the day prior to
         receipt of the redemption payment.

         The Company evaluated whether or not the secured convertible promissory
         notes contain embedded conversion options which meet the definition of
         derivatives under SFAS 133 "Accounting for Derivative Instruments and
         Hedging Activities" and related interpretations. The Company concluded
         that since the fixed conversion rate does not change at the holders
         option, the notes qualify as conventional convertible debt and thus are
         not considered derivatives. Therefore the Company reviewed the notes
         for any beneficial conversion values that existed under EITF 98-5 and
         00-27. There was no beneficial conversion value determined since all
         debt discount was allocated to the value of the warrants (see below).

         We also issued the investors immediately exercisable common stock
         purchase warrants to purchase an aggregate of 250,000 shares of common
         stock, consisting of (a) five-year warrants to purchase 100,000 shares
         at an exercise price of $4.3125 per share, subject to adjustment under
         Company control, (b) five-year warrants to purchase 50,000 shares at an
         exercise price of $7.50 per share (see reduced exercise price below),
         subject to adjustment under Company control and (c) five-year warrants
         to purchase 100,000 shares at $3.00 per share, subject to adjustment
         under Company control. We may require the investors to exercise the
         warrants described in (c) if the closing price for our common stock is
         $4.50 or more for 30 consecutive trading days, and average daily volume
         during such period is at least 8,333 shares. The exercise of warrants
         is also subject to the 4.99% cap on the beneficial ownership that each
         investor may have at any point in time while the notes and warrants are
         outstanding. If certain registration statement requirements as
         discussed below are not met, the warrants holders may exercise the
         warrants on a cashless basis. The exercise price of the warrants
         described in subparagraph (b) was reduced to $5.40 per share.

                                      F-15


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         We agreed to file a registration statement covering the shares issuable
         upon conversion or payment of the notes and exercise of the warrants.
         The registration statement was to be filed by April 20, 2005 and
         effective within 90 days from the filing date and maintained effective
         during the defined period of distribution or we would incur liquidated
         damages equal to 2% of the promissory note principal balance per 30
         days of non-compliance. However, there was a limitation on the amount
         of liquidated damages payable. Liquidated damages shall not accrue or
         be payable during periods which the registerable securities are
         transferable by the holder pursuant to Rule 144(K) of the 1933 Act. We
         may not issue unregistered shares to the warrant holders upon exercise
         of the warrants unless they consent. The registration statement was
         timely filed and is currently available to permit resales by the note
         and warrant holders.

         Repayment of the notes is collateralized by a general security interest
         in all of our assets.

         If the Company does not issue unlegended shares under the provisions of
         the agreements, the Company may be liable for damages, including
         liquidated damages of $100 per day for each $10,000 of purchase price
         per 30 days of non-compliance.

         We paid unaffiliated finders a total of $27,000, by the issuance of
         promissory notes payable in the same manner and with the same terms as
         the investor notes, and issued the finders five-year warrants to
         purchase a total of 9,000 shares of common stock, exercisable at
         $4.3125 per share, subject to adjustment under Company control. The
         total monthly principle payment is $15,789 ($300,000 notes) plus $1,421
         ($27,000 note) or $17,210. The total debt issue costs of $48,726 are
         amortized over the debt term.

         The Company evaluated whether or not the warrants and registration
         rights meet the definition of derivatives under SFAS 133 "Accounting
         for Derivative Instruments and Hedging Activities" and related
         interpretations. Pursuant to EITF 05-4 the Company concluded that since
         the Company must issue registered shares under the warrant agreements
         or be subject to a potentially cash payment at the holder option, the
         instruments must be combined and classified as a derivative liabilities
         at fair value with changes in fair value recorded in other income or
         expense.

         The value of the 250,000 warrants issued with the convertible
         promissory notes was $905,318 which exceeded the $300,000 promissory
         note value and accordingly, the full amount of the note $300,000 was
         allocated to the warrant value by recording a debt discount of $300,000
         and recording a $300,000 warrant liability. In addition, the excess of
         the value over the note amount, aggregating $605,318 was recorded as a
         warrant liability and charged to other income (expense) as a change in
         fair value of warrant liability. The debt discount will be amortized to
         interest expense over the debt term. The warrants were valued using the
         Black-Scholes option pricing method with a common stock price of $.12
         based on the quoted trade price, five-year expected term, zero expected
         dividends, volatility of 354% and a discount rate of 4.18%. As there
         was no value allocated to the debt, there was no beneficial conversion
         amount to record. The warrant value for the 9,000 finder warrants using
         the same Black-Scholes assumptions as above was $27,000, also recorded
         as debt discount and as warrant liability.

                                      F-16


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         At December 31, 2005 in accordance with SFAS 133, the Company revalued
         the total 259,000 warrants underlying the warrant liability which total
         value was $240,592 using the following Black-Scholes assumptions:
         common stock price of $.93, 4.2 years expected term, zero expected
         dividends, volatility of 334% and a discount rate of 4.35%.

         The revaluation resulted in a decrease to the warrant liability of
         $691,726 from the initial recording in March 2005 and a corresponding
         credit to change in fair value of warrant liability. Accordingly, the
         net change in the fair value of the warrant liability during fiscal
         2005 resulted in other income of $86,408.

         Convertible debentures ..........................   $ 327,000
         Debt discount ...................................    (194,409)
         Repayments ......................................     (17,211)
                                                             ---------
         Convertible debentures, net of discount .........   $ 115,380
                                                             =========

         Debt issue costs ................................   $  48,726
         Amortization of costs thru December 31, 2005 ....      20,292
                                                             ---------
         Debt issue costs, net of amortization ...........   $  28,434
                                                             =========

         On July 1, 2005, the Company failed to make the required installment
         payments under the secured convertible promissory notes. The delinquent
         payments to the five note holders aggregated $17,211 of principal plus
         accrued interest. On August 3, 2005, the note holders waived the
         Company's default in making the July 1, 2005 payments and agreed not to
         assert any remedies they have under the notes and related loan
         agreements. As consideration for the waivers and agreements on the part
         of the note holders, the Company:

            o  Agreed to pay in August two note holders a total of $18,721
               representing the July 1, 2005 installment of principal and agreed
               upon accrued interest under their notes,

            o  Reduced the exercise price of warrants to purchase a total of
               50,000 shares of the Company's common stock issued to the two
               note holders, from $7.50 per share to $5.40 per share; and

            o  Agreed with the other three note holders to defer repayment of
               the unpaid principal installment of $1,421 plus accrued interest
               on their notes until the March 2, 2007 maturity date of the
               notes, and agreed that those note holders could convert the
               deferred payments into shares of our common stock at the lesser
               of $2.01 per share or the then applicable conversion price of the
               note.

         Notwithstanding the waivers and settlement agreement, we failed to make
         the installment payments, plus interest, and we have failed to make
         required installment payments to the note holders in September,
         October, November and December 2005. Accordingly, the Company has
         accrued interest at the default rate since August 1, 2005.

         On September 1st, October 1st, November 1st, and December 1st, the
         Company failed to make the required installment payments under the
         secured convertible promissory notes. The delinquent payments to the
         five note holders aggregated $17,211 per month of principal, plus
         accrued interest. As a result of the default, the loan is now
         considered a current liability. The note holders have not commenced

                                      F-17


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         legal proceedings against us or sought to foreclose on the security
         interest collateralizing the promissory notes. In January 2006, holders
         of the secured convertible promissory notes signed a Modification and
         Waiver Agreement, revising the required repayment schedule and certain
         terms of the original agreement (see Note 12).

NOTE 7   NOTES PAYABLE-SHAREHOLDERS

         Notes payable - shareholders consisted of the following at December 31:

                                                         2005          2004
                                                      ---------     ---------
         Promissory notes payable - shareholders;
           Interest bearing at rates ranging from
           5% to 15%, unsecured and due at various
           dates through August 2007 .............    $ 156,434     $ 157,651
         Less current maturities .................      (37,216)      (37,102)
                                                      ---------     ---------
         Long - term portion of notes payable
           - shareholders ........................    $ 119,218     $ 120,549
                                                      =========     =========

         Future maturities of notes payable - shareholders are as follows for
         years ending December 31:

            2006        37,216
            2007       119,218
                     ---------
                     $ 156,434
                     =========

         The Company repaid $1,217 of notes payable to a shareholder during the
         year ended December 30, 2005.

         At December 31, 2005, the Company was in default of the repayment terms
         on notes aggregating $35,000. This amount is included in the current
         maturities of notes payable on the accompanying consolidated balance
         sheet at December 31, 2005.

NOTE 8   CAPITAL LEASES

         The company repaid $1,538 of capital leases during the year ended
         December 31, 2005 including the lease obligation that was refinanced as
         mentioned above.

NOTE 9   COMMITMENTS AND CONTINGENCIES

         Edwards Technology License Agreement:

            During February 2004, under an amendment to a 1992 license
            agreement, the Company was granted an exclusive license to utilize
            certain compressor technology, which includes the current UniVane(R)
            technology, developed by an officer/director, Dr. Thomas Edwards, in
            exchange for future royalty payments based on the underlying
            technology-producing income. The Company was obligated to pay Dr.
            Edwards quarterly royalties equal to one percent of sales of related
            products and sublicensed products and ten percent of any royalty
            income received from sublicense agreements. As of December 31, 2005,
            no royalty payments were incurred or due as

                                      F-18


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

            no related sales have yet occurred, and there are no minimum
            payments required. The February 2004 agreement was superceded by a
            Exclusive Patent and Know-How License Agreement dated January 12,
            2006. (See Note 13)

         Technological Research and Development Authority Funding Agreement:

            See Note 5

         Parker-Hannifin Exclusive Worldwide License Agreement and Consulting
         Agreement:

            During May 2003, the Company granted an exclusive worldwide license
            agreement to Parker to manufacture and market the Company's
            UniVane(R) air compressors and hydrogen circulators. In
            consideration of the license, Parker is obligated to pay the Company
            a royalty fee on a quarterly basis. The royalty rate ranges from 15%
            of the licensed technology's net sales for the first 50 units sold
            on an annual basis to 6% for units sold in excess of 10,000
            annually. Beginning in 2007, the minimum annual royalty fee is
            $100,000. If units sold are insufficient to reach the minimum annual
            royalty, Parker has the right to remit the difference or the
            Agreement converts to a non-exclusive license. This Agreement
            expires at the later date of either the last licensed UniVane(R)
            patent expiration, or the final use of UniVane(R)-related technology
            by Parker-Hannifin.

            Additionally in June 2003, the Company entered into a product
            consulting agreement with Parker. In exchange for continued product
            development and engineering services from the Company, Parker is
            obligated to pay a monthly fee of $25,000 for the first year of
            service. In November 2004, the consulting agreement terminated. In
            conjunction with the termination, the Company will forgo the first
            $75,000 of royalties owed by Parker.

         Operating Lease:

            The Company currently leases space on a month-to-month basis. Rent
            expense for the years ending December 31, 2005 and 2004 were $12,000
            and $18,888, respectively.

NOTE 10  STOCKHOLDERS' DEFICIT

         Common Stock Issued for Cash

            On December 15, 2004, the Company accepted $20,000 for 6,666 shares
            of common stock from three individuals. The transfer agent had not
            issued the shares as of December 31, 2004 and accordingly, the
            shares were reflected as issuable at December 31, 2004 and were
            reclassified as issued in 2005.

            In 2005, the Company accepted $85,000 for 48,333 shares of stock
            from 4 individuals. The shares were all issued by the end of the
            year.

            The company also received 815 shares of stock in repayment of a note
            receivable during the 3rd quarter of 2005.

                                      F-19


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         Common Stock Issued for Debt and Services:

            All shares of common stock issued in settlement of debt or for
            payment of services received were valued at the stated share price
            actually received in the respective year's contemporaneous private
            placement offerings. During 2005 no shares were issued, and during
            2004, the stated share price received was $3.60.

            On February 5, 2004, the Company settled an outstanding legal
            services agreement from August 1, 2001, in which the holder was owed
            $10,000 payable with 3,333 shares of issuable common stock, which
            had been reflected in the Company's records as common stock
            issuable. In February 2004, the Company granted a stock option in
            lieu of issuing shares. Under the terms of the option, which expires
            August 1, 2006, the holder could exercise an option to purchase
            3,333 shares with an exercise price of $3.00 per share. The Company
            has determined that the exercise price has been pre-paid but the
            option has not been exercised as of the balance sheet date. As a
            result of this exchange of one equity instrument for another, there
            is no additional compensation expense pursuant to the rules of SFAS
            No. 123. Accordingly, $1,000 was reclassified from common stock
            issuable to additional paid-in capital.

            On June 29, 2004, the Company issued 6,667 shares of common stock
            having a fair value of $24,000 to its Chairman of the Board of
            Directors for services rendered. The shares were valued at $3.60 per
            share, which reflected recent cash offering prices of the Company's
            common stock since the Company was not yet publicly trading its
            common stock (See Note 11).

         Common Stock Warrants:

            At December 31, 2005, the Company had warrants outstanding as
            follows:

            Common Shares      Exercise Price        Expiration
            Under Warrant        Per Share              Date
            -------------      --------------      --------------
               133,333             $ 5.40           November 2006
                 3,333             $ 5.40          September 2006
                 7,500             $ 4.50           December 2006
               406,171             $ 5.40             June 2007
                40,000             $ 3.00          September 2008
               109,000             $ 4.31            March 2010
                50,000             $ 5.40            March 2010
               100,000             $ 3.00            March 2010
                 3,333             $ 3.75             June 2010
                 3,333             $ 7.50             June 2010
                 3,334             $11.25             June 2010
               -------
               859,337
               =======

                                      F-20


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

            A summary of changes in stock warrants during 2005 and 2004 is
            presented below:

                                                  2005        2004
                                                --------    --------
            Outstanding at beginning of year     546,170     540,504
            Granted ........................     313,167       6,666
            Expired or Cancelled ...........           0      (1,000)
                                                --------    --------
            Balance at December 31, ........     859,337     546,170
                                                ========    ========

         Stock-Based Compensation Plans:

            At December 31, 2005, the Company has two active stock-based
            compensation plans, as follows: The 1993 Corporate Stock Option
            Plan, and the 2001 Equity Incentive Plan. The 1993 Advisors Stock
            Option Plan has terminated however, outstanding grants under the
            plan will continue according to their terms until exercised or
            expired.

            The 1993 Corporate and Advisors Stock Option plans have an aggregate
            50,000 shares of common stock reserved for issuance under the plans.
            The Corporate Plan provides for the issuance of incentive stock
            options and nonqualified stock options, whereas, the Advisors Plan
            only allows for the issuance of nonqualified stock options. Pursuant
            to the plans, the board of directors may grant options to key
            individuals at their discretion. Options are granted under the
            Corporate and Advisors plans on such terms and at prices as
            determined by the compensation committee. All options granted by the
            Company have been at prices equal to the current offering's private
            placement stated per share prices.

            The 2001 Equity Incentive Plan has an aggregate 33,333 shares of
            common stock reserved for issuance under the plan. The Equity
            Incentive Plan provides for the issuance of incentive stock options,
            nonstatutory options, stock bonuses, and rights to purchase
            restricted stock. The board of directors administers the Plan and
            options, stock bonuses and stock rights are granted to key
            individuals at their discretion. The maximum option term is ten
            years. There have been no stock options, stock bonuses or stock
            rights granted under the 2001 Equity Incentive Plan through December
            31, 2004.

            At December 31, 2005, the Company had the following non-qualified
            options outstanding and exercisable as follows:

               Range of      Common Shares   Weighted Average   Weighted Average
            Exercise Price   Under Option     Remaining Life     Exercise Price
            --------------   -------------   ----------------   ----------------
                $  3.00          20,000          0.1 Years           $  3.00
                $  1.50           1,111          0.5 Years           $  1.50
                $  3.00           3,333          0.6 Years           $  3.00
                $ 11.40             333          1.4 Years           $ 11.40
                $  3.00          42,500          2.3 Years           $  3.00
                $ 11.40          50,595          2.9 Years           $ 11.40
                $  3.60           6,667          3.0 Years           $  3.60
                                -------
                                124,539
                                =======

                                      F-21


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

            All options are presently exercisable.

            A summary of the changes in stock options outstanding during 2005
            and 2004 is presented below:

                                        2005                     2004
                              ------------------------  ------------------------
                                           Weighted                 Weighted
                                           Average                   Average
                               Shares   Exercise Price   Shares   Exercise Price
                              --------  --------------  --------  --------------
Options outstanding at the
  beginning of the year ....    82,039    $    8.24     157,112     $   9.90
Options granted ............    42,500    $    3.00       3,333     $   3.00
Options exercised ..........         -    $       -           -     $
Options forfeited ..........         -    $       -     (78,406)    $ (11.10)
                              --------    ---------     -------     --------
Options outstanding at end
  of year ..................   124,539    $    6.45      82,039     $   8.24
                              ========    =========     =======     ========
Weighted average fair value
  of options granted during
  the year .................              $ 137,500                 $      -

NOTE 11  RELATED PARTY TRANSACTIONS

         Employment Agreement:

            On January 1, 2004, the Company entered into an employment agreement
            with an individual acting as the Company's Chief Technical Officer
            and Chief Executive Officer. As part of the transaction related to
            the January 13, 2006 Stock Exchange Agreement, this individual
            signed a Separation Agreement, terminating his employment agreement
            with the Company. In addition to terminating his employment as of
            the Separation Agreement date, the individual agreed to forego all
            unpaid or accrued salary due under the January 1, 2004 and prior
            agreements (See Note 13).

            On June 29, 2004, the Company issued 6,667 shares of common stock
            having a fair value of $24,000 to its Chairman of the Board of
            Directors for services rendered (See Note 10).

            Patent rights are licensed from an officer/director of the Company
            (See Notes 3 and 9).

NOTE 12  INCOME TAXES

         The effective tax rate varies from the maximum federal statutory rate
         as a result of the following items:

                                                             2005      2004
                                                           -------   -------
         Tax benefit computed at the maximum
            federal statutory rate ....................    (34.0)%   (34.0)%
         Net (increase) due to various
            basis differences in assets and liabilities      4.4       5.1
         Net operating loss carryforward ..............     29.6      28.9
                                                           -----      ----

         Income tax provision .........................        - %       - %
                                                           =====      ====

                                      F-22


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         The tax effect of temporary differences at December 31 were as follows:

                                                        2005            2004
                                                    -----------     -----------
         Asset:
            Net operating loss carryforward ....    $ 2,515,236     $ 2,389,507
            Other individually immaterial items          65,566          81,125
                                                    -----------     -----------
         Net deferred tax asset before valuation
          allowance ............................      2,580,802       2,470,632
         Less valuation allowance ..............     (2,580,802)     (2,470,632)
                                                    -----------     -----------

         Net deferred tax asset ................    $         -     $        -
                                                    ===========     ===========

         For financial statement purposes, no tax benefit has been reported in
         2005 or 2004 as the Company has had significant losses since inception
         and realization of the tax benefits is uncertain. Accordingly, a
         valuation allowance has been established for the full amount of the
         deferred tax asset. The change in the valuation allowance was a
         decrease of approximately $110,000 and $526,000 in 2005 and 2004,
         respectively.

         At December 31, 2005, the Company had net operating loss carryforwards
         as follows for income tax purposes:

             Carryforward           Net Operating
         Expires December 31      Loss Carryforwards
         -------------------      ------------------
                 2006                   206,000
                 2007                   236,000
                 2008                   274,000
                 2009                   716,000
                 2010                 1,110,000
                 2011                 1,718,000
                 2012                 1,017,000
                 2018                   436,000
                 2019                   392,000
                 2020                   195,000
                 2021                   180,000
                 2022                   337,000
                 2023                   603,000
                 2024                   425,000
                 2025                   594,000
                                    -----------
                                    $ 8,439,000
                                    ===========

         The utilization of the carryforwards is dependent upon the ability to
         generate sufficient taxable income during the carryforward period. In
         addition, utilization of these carryforwards may be limited due to
         ownership changes which occurred subsequent to year-end, (See Note 13)
         as defined in the Internal Revenue Code. Furthermore, carryforwards
         relating to DynEco International, Inc., prior to its March 31, 1994
         acquisition (approximately $400,000) are subject to separate return
         limitation regulations.

                                      F-23


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

NOTE 13  SUBSEQUENT EVENTS

         CASUAL CAR GENERAL SERVICE AGREEMENT

         On January 3, 2006 Street Venture Partners, LLC, sold the US rights to
         the Casual Car General Service Agreement (GSA) to Dynamic Leisure
         Group, Inc. ("Dynamic") for an unsecured convertible Promissory Note in
         the amount of $350,000, and a warrant to purchase 388,889 shares of the
         Company's common stock at a fixed price of $.90 per share. The
         Promissory Note is convertible to the Company's common stock at $.90
         per share and paying 10% interest annually. The GSA allows the Company
         to sell car rental products to leisure travelers primarily in Europe
         and the United Kingdom, through Skycars International Rent a Car,
         Middlesex, United Kingdom.

         The Company plans to continue with the Casual Car GSA, selling direct
         to the final consumer via the Internet, under the Casual Car rental
         brand. The Casual Car GSA allows the Company to begin to establish a
         foundation in certain desired leisure travel markets with multiple
         product offerings.

         STOCK EXCHANGE AGREEMENT DATED JANUARY 13, 2006

         On January 13, 2006, the Company entered into an agreement with the
         former shareholders of Dynamic, under which the Company acquired all of
         the outstanding capital stock of Dynamic, and Dynamic became a wholly
         owned subsidiary of the Company.

         As consideration for its acquisition of the outstanding capital stock
         of Dynamic, the Company issued an aggregate of 197,000 shares of its
         Series A Preferred Stock to the former shareholders of Dynamic.

         Issuance of the Series A Preferred Stock in exchange for the
         outstanding capital stock of Dynamic pursuant to the Stock Exchange
         Agreement resulted in a change in control of DynEco where (a) the
         former shareholders of Dynamic acquired voting rights over
         approximately 83% of the currently outstanding voting securities of the
         Company and (b) the designees of the former shareholders of Dynamic
         were appointed as the executive officers and a majority of the board of
         directors of DynEco. The Series A Preferred Stock converted into
         6,566,667 shares of the common stock of the Company when DynEco's
         Articles of Incorporation were amended to increase the number of
         authorized shares of the Company's common stock sufficient to permit
         full conversion of the Series A Preferred Stock. The Company also
         agreed that the currently outstanding options and warrants of Dynamic
         would be exchanged for options and warrants to purchase an aggregate of
         1,493,887 post reverse shares of common stock of the Company, and that
         the currently outstanding convertible promissory notes of Dynamic would
         become convertible into 1,386,111 post reverse shares of common stock
         of the Company.

         The transaction was exempt from the registration requirements of the
         Securities Act by reason of Section 4(2) thereunder as a transaction by
         an issuer not involving any public offering.

                                      F-24


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         The transaction is treated as a recapitalization of Dynamic Leisure
         Group, Inc. Accordingly, the financial statements of the Company just
         subsequent to the recapitalization consists of the balance sheets of
         both companies at historical cost, the historical operations of
         Dynamic, and the operations of Dynamic Leisure Corporation, f/k/a
         DynEco Corporation from the recapitalization date.

         SEPARATION AGREEMENT DATED JANUARY 13, 2006

         In connection with the transactions contemplated by the Stock Exchange
         Agreement described elsewhere in this Report, DynEco Corporation and
         Dr. Thomas Edwards entered into a Separation Agreement dated January
         13, 2006 under which:

         o  The Employment Agreement dated as of January 1, 2004 by and between
            DynEco Corporation and Dr. Edwards was terminated;

         o  Dr. Edwards irrevocably waived, forfeited and relinquished any right
            to receive any accrued or deferred compensation in connection with
            his prior services rendered to DynEco Corporation. As of December
            31, 2005, $283,625 in deferred compensation payable to Dr. Edwards
            was accrued ;

         o  The parties confirmed that they entered into a modification
            agreement relating to the Exclusive Patent License and Know-How
            Agreement dated February 4, 2004;

         o  DynEco irrevocably waived, forfeited and relinquished any right,
            title or interest in any intellectual property created by Dr.
            Edwards during the course of his services to DynEco, other than the
            intellectual property covered by the Exclusive Patent License and
            Know-How Agreement dated February 4, 2004;

         o  DynEco transferred and assigned to Dr. Edwards, all of DynEco's
            right, title and interest in the lease covering DynEco's facilities
            in Rockledge, Florida, and Dr. Edwards assumed all of DynEco's
            obligations thereunder; and

         o  DynEco transferred and assigned to Dr. Edwards, all of DynEco's
            right, title and interest in the furniture, property and equipment
            located at DynEco's facilities in Rockledge, Florida, and Dr.
            Edwards has assumed all of DynEco's obligations thereunder.

         The Separation Agreement will result in the Company recording a benefit
         of approximately $283,625 in 2006, related to the forfeiture of accrued
         compensation by Dr. Edwards.

         MANAGEMENT OF DYNECO CORPORATION

         In connection with the transactions contemplated by the Stock Exchange
         Agreement dated January 13, 2006 described elsewhere in this Note,
         Thomas C. Edwards resigned as an officer (President and Chief Executive
         Officer) and director of DynEco Corporation, and Kevin Hooper resigned
         as a director of DynEco Corporation. In accordance with the terms of
         the Stock Exchange Agreement, Leonard Sculler, who has served as a
         director of DynEco Corporation since June 2003, continues to serve as a
         director of the Company for a period of at least one year. George R.
         Schell, who served as a director of DynEco since 1998, confirmed in a
         January 2006 telephone conversation with the Company's General Counsel
         that he had informally resigned as a director of DynEco Corporation,
         and was not re-elected at a January 31, 2006 Special Meeting of
         Shareholders.

                                      F-25


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         At the Special Meeting of Shareholders, the following persons were
         elected to serve as directors of the Company until the next annual
         meeting of shareholders and until their successors are duly elected and
         qualified:

         Daniel G. Brandano
         Thomas W. Busch
         Robert A.G. LeVine
         Leonard Sculler

         In connection with the transactions contemplated by the Stock Exchange
         Agreement dated January 13, 2006 described elsewhere in this Report,
         the following persons have been appointed to serve as officers of the
         Company, in the capacities indicated, until the next annual meeting of
         the board of directors and until their successors are duly elected and
         qualified:

         Daniel G. Brandano - President
         Thomas W. Busch - Vice President and Treasurer
         Robert A.G. LeVine - Secretary

         MODIFICATION AND WAIVER AGREEMENT DATED JANUARY 13, 2006

         On January 13, 2006, the Company entered into a Modification and Waiver
         Agreement with Alpha Capital Aktiengesellschaft, JM Investors, LLC,
         Libra Finance, S.A. and RG Prager Corporation. The parties to the
         Modification and Waiver Agreement are also parties to a series of
         agreements dated March 2, 2005, as amended, under which DynEco issued
         convertible promissory notes aggregating of $327,000. At the time of
         execution of the Modification and Waiver Agreement, the Company was in
         default of its obligations under the March 2, 2005 agreements.

         Under the Modification and Waiver Agreement, interest on the
         convertible promissory notes at the rate of 5% per annum will be paid
         quarterly, commencing March 31, 2006. Monthly principal amortization
         payments of approximately $29,700 are to commence on June 1, 2006. In
         accordance with the terms of the Modification and Waiver Agreement,
         upon receipt of the funding of $2 million in a January 13, 2006
         Financing Transaction, the note holders opted to receive payment, and
         the Company paid a total of approximately $245,250 to the note holders,
         consisting of approximately $163,500 in principal amount of promissory
         notes and a premium in the amount of approximately $81,750. The notes
         are convertible at $.75 per share, subject to certain adjustments. As
         part of the terms of the Financing Transaction, the note holders
         released their security interest in the Company's assets.

         As additional consideration to induce the note holders to enter into
         the Modification and Waiver Agreement, the Company issued an aggregate
         of 200,000 shares of its common stock to the two investors under the
         March 2, 2005 transaction documents. Pursuant to the terms of the
         Modification and Waiver Agreement (a) those provisions of the
         transaction documents dated March 2, 2005 providing exceptions to the
         adjustment provisions of the notes and warrants have been eliminated,
         (b) the exercise price of the warrants to purchase up to 259,000 shares
         of DynEco common stock issued under the March 2, 2005 transaction
         documents was changed to $1.00 per share and the warrants are

                                      F-26


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         exercisable until 3 years from the filing of the Form 8-K announcing
         the recapitalization of Dynamic and DynEco, (c) the number of shares
         issuable upon exercise of those warrants to the investors cannot be
         reduced to less than 300,000 shares. Under the Modification and Waiver
         Agreement, under certain circumstances, we may require the investors to
         exercise the 300,000 warrants. The Company may prepay the note at 150%
         of the principle due, plus interests and other amounts due, through the
         redemption date but only if an effective registration statement exists.

         We have agreed to file an amendment to the existing registration
         statement covering resale of the shares issuable under the transaction
         documents dated March 2, 2005. Such registration statement must be
         filed on or before April 13, 2006 and become effective not later than
         60 days after the date of filing, or the Company will be subject to the
         payment of liquidated damages to the note holders. In addition, we have
         agreed to file a new registration statement covering the resale of
         those shares issuable under the Modification and Waiver Agreement the
         resale of which are not covered by the existing registration statement.
         Such additional registration statement must be filed by May 13, 2006
         and become effective not later than 60 days after the date of filing,
         or the Company will be subject to the payment of liquidated damages to
         the note holders. In the event that a Form 8-K/A, including the audited
         financial statements of Dynamic is not filed on or prior to April 5,
         2006, then the Modification and Waiver Agreement will become null and
         void, except that the note holders are entitled to retain the 200,000
         shares issued to induce them to enter into the Modification and Waiver
         Agreement.

         EXCLUSIVE PATENT AND KNOW-HOW LICENSE AGREEMENT DATED JANUARY 12, 2006

         On January 12, 2006, the Company and Dr. Thomas C. Edwards entered into
         an Exclusive Patent and Know-How License Agreement that amends and
         supersedes the Exclusive Patent and Know-How License Agreement dated
         February 4, 2004, by and between the Company and Dr. Edwards. The 1994
         Agreement granted us the exclusive license to use certain patented
         technology owned by Dr. Edwards, in return for a royalty payment to Dr.
         Edwards based upon a percentage of revenues generated from sales of
         products incorporating the licensed technology. The Company
         subsequently granted the Parker-Hannifin Corporation an exclusive
         license to use the technology covered by 1994 License Agreement in
         UniVane(R) products developed by Parker-Hannifin.

         Under the January 12, 2006 Exclusive Patent and Know-How License
         Agreement, Dr. Edwards has relinquished any entitlement to royalty
         payments under the Exclusive Patent and Know-How License Agreement
         dated February 4, 2004 and has assigned and transferred to the Company
         all of his right, title and interest under the Exclusive Patent and
         Know-How License Agreement dated February 4, 2004.

         There is no financial affect from the January 12, 2006 agreement.

         ARTICLES OF AMENDMENT DESIGNATING SERIES A PREFERRED STOCK

         The designations, rights, powers, preferences and limitations of the
         Series A preferred Stock of the Company are set forth in Articles of
         Amendment to the Company's Articles of Incorporation that were filed
         with the Secretary of State of Minnesota. The Articles of Amendment
         provide that a series of Preferred Stock, denominated as Series A

                                      F-27


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         Preferred Stock and consisting of 350,000 shares, was created by the
         Board of Directors in furtherance of the authority conferred upon the
         Board by the Company's Articles of Incorporation.

         The Articles of Amendment provide that (a) the Series A Preferred Stock
         shall vote as a group with the holders of the Company's common stock on
         each matter that is submitted to a vote of common shareholders, (b)
         each share of Series A Preferred Stock is entitled to 1,000 votes per
         share on each matter submitted to a vote of shareholders, (c) each
         share of Series A Preferred Stock shall automatically be converted into
         33.33 shares of the Company's common stock at such time as the Company
         has amended its Articles of Incorporation to authorize the issuance of
         a sufficient number of shares of common stock to permit all of the then
         outstanding shares of Series A Preferred Stock to be converted and (d)
         the Series A Preferred Stock shall rank pari passu with our common
         stock as to dividend, liquidation and redemption rights.

         Of the 350,000 authorized shares of Series A Preferred Stock, 197,000
         were issued to the former shareholders of Dynamic in connection with
         the closing of the Stock Exchange Agreement described elsewhere in this
         Note, and the balance were reserved for issuance in the event of
         exercise of outstanding options and warrants, and conversion of
         convertible promissory notes, that are now convertible into shares of
         the Company. Subsequent to the increase in the number of shares of
         common stock we are authorized to issue, the 197,000 outstanding shares
         of Series A Preferred Stock were exchanged for 6,566,667 shares of our
         common stock, as previously disclosed in the Stock Exchange Agreement
         section of this Note. (See reverse split of common stock below.)

         ARTICLES OF AMENDMENT INCREASING AUTHORIZED SHARES OF COMMON STOCK

         On January 31, 2006, shareholders authorized an increase in the number
         of shares of common stock the Company is authorized to issue to
         300,000,000. On February 2, 2006, we filed Articles of Amendment with
         the Secretary of State of Minnesota, amending Article III of the
         Amended Articles of Incorporation, increasing the authorized shares of
         common stock to 300,000,000 from 80,000,000. The aggregate number of
         common and preferred shares that the Company has authority to issue was
         restated to 320,000,000 from 100,000,000. The Amended Articles of
         Incorporation were effective upon filing.

         JANUARY 13, 2006 FINANCING TRANSACTION

         On January 13, 2006, the Company entered into a series of documents
         with MMA Capital, LLC, under which we borrowed $2,000,000 and issued to
         MMA Capital a Convertible Secured Promissory Note in the aggregate
         principal amount of $2,000,000. Interest is payable quarterly at the
         rate of 8% per annum and the outstanding principal amount of the note,
         together with accrued but unpaid interest, becomes due and payable on
         January 11, 2007. In the event of default, the interest rate is the
         greater of ten percent (10%) per annum or the maximum amount permitted
         by applicable law from the date of the Event of Default until paid in
         full.

         At the option of the holder, the outstanding principal amount of the
         promissory note and accrued but unpaid interest may be converted into
         shares of common stock of the Company at the rate of $1.00 per share,
         subject to adjustment in the event we issues

                                      F-28


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         shares for a consideration of less than $1.00 per share and to reflect
         the occurrence of forward or reverse stock splits, corporate
         reorganization or certain other corporate events. The Company agreed to
         file a registration statement under the Securities Act of 1933, as
         amended, to register the shares issuable upon conversion of the
         promissory note. It constitutes an event of default under the note, and
         subjects us to the payment of liquidated damages, if the registration
         statement does not become effective on or before July 12, 2006, and
         does not remain effective for a period of at least 90 days. For each
         week of non-compliance, liquidated damages will be 2% of the product of
         (a) the sum of the holder's shares of stock not registered on a timely
         basis and (b) the weekly average closing price of the shares of the
         Company's common stock. The Company's obligations under the promissory
         note are collateralized by a security interest in substantially all of
         our assets.

         In connection with the transaction, we issued a common stock purchase
         warrant in favor of MMA Capital to purchase up to 2,000,000 shares of
         the Company's common stock, exercisable for a period of three years, at
         an exercise price of $1.00 per share, subject to adjustment in the
         event we issue shares for a consideration of less than $1.00 per share
         and to reflect the occurrence of forward or reverse stock splits,
         corporate reorganization or certain other corporate events. If, at the
         time of exercise, there is not an effective registration statement
         covering resale of the shares issuable upon exercise of the warrant,
         the warrant holder may exercise the warrant on a cashless basis,
         whereby the holder surrenders a portion of the warrants in lieu of
         paying the exercise price in cash.

         A fee equal to 8% of the proceeds ($160,000) was paid to Forte Capital
         Partners LLC, an unaffiliated third party, who assisted MMA Capital in
         connection with the transaction. The transaction was exempt from the
         registration requirements of the Securities Act by reason of Section
         4(2) thereunder as a transaction by an issuer not involving any public
         offering. The $160,000 will be recorded as a deferred debt issuance
         cost asset to be amortized over the debt term.

         Per SFAS 133 and EITF 00-19, the convertible note will be classified as
         one financial instrument as it is considered conventional convertible
         debt. In addition, the warrants are classified as a liability at their
         fair value of approximately $1,800,000 with a corresponding charge to
         debt discount. The beneficial conversion value of $200,000 associated
         with the convertible debt is recorded as a debt discount and additional
         paid in capital. The debt discount will be amortized over the term of
         the debt.

         FEBRUARY 8, 2006 ACQUISITION OF CHANGES IN L'ATTITUDES, INC.

         On February 8, 2006 the Company consummated the purchase of all of the
         issued and outstanding capital stock of Changes in L'Attitudes, Inc.
         ("CLA"), for a purchase price of $1,750,000. The purchase price
         consists of a combination of cash ($640,000), shares of our common
         stock (340,000 shares), and a one-year secured Convertible Debenture in
         the principal amount of $600,000. The cash portion consists of $200,000
         delivered at closing, with the balance to be delivered on or before
         June 9, 2006, following completion of audits of the financial
         statements of CLA for the years ended December 31, 2004, and December
         31, 2005. The balance of the cash payment will be reduced by any trade
         payables in excess of short term liquid assets.

                                      F-29


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         Additional shares of our common stock may be issued if the Company, as
         part of any subsequent business acquisitions on or before December 31,
         2006, issues to the acquiree/seller our common stock at a rate of less
         than $1.50 per share.

         The Debenture is payable with interest at the rate of 9% per annum, and
         matures on February 7, 2007 ("Maturity Date"). The Debenture is
         convertible into our common stock, on or before the Maturity Date, at a
         rate of $1.50 per share. The conversion rate may be adjusted downward
         if we, in subsequent acquisitions on or before December 31, 2006,
         provide consideration that includes convertible securities with a
         conversion rate of less than $1.50 per share. In the event of any such
         adjustment, the conversion rate will be adjusted to the most favorable
         rate offered, but no lower than $1.00 per share. Subsequent to the
         Closing Date, if the Company obtains cumulative net external financing
         of $2,500,000 or more, early repayment of 50% of the outstanding
         balance on the Debenture may be required. If the Company receives in
         excess of $5,000,000 in cumulative net external financing, an early
         repayment of the full outstanding balance on the Debenture may be
         required. The Company has agreed to include resale of the shares
         issued, and those issuable upon conversion of the Debenture in the next
         registration statement filed by us. The Convertible Debenture is
         secured by a lien on the assets of CLA.

         The acquisition of CLA is expected to provide the Company with a direct
         to consumer selling channel via the internet to the strategically
         desirable Caribbean leisure market.

         ARTICLES OF CORRECTION TO CHANGE DYNECO CORPORATION'S NAME

         On February 28, 2006, we filed Articles of Correction with the
         Secretary of State of Minnesota, to change the Company's name to
         Dynamic Leisure Corporation. These Articles were effective in the State
         of Minnesota at the close of business on March 3, 2006.

         There was no financial affect related to this filing.

         MARCH 3, 2006 REVERSE SPLIT OF COMMON STOCK

         On January 31, 2006, shareholders approved a 1:30 reverse split of our
         common stock. On February 28, 2006, we filed Articles of Correction
         with the Secretary of State of Minnesota, restating previously amended
         Article III with explanation of the approved reverse stock split to be
         effective at the close of business on March 3, 2006. Dynamic Leisure
         Corporation's (f/k/a DynEco Corporation) stock began trading post-split
         on the NASDAQ exchange at the open of business on March 6, 2006. As a
         result of the reverse stock split, every thirty (30) shares of our
         common stock outstanding on the effective date was automatically
         combined into one (1) share. Except as provided with respect to
         fractional interests, no cash was paid or distributed as a result of
         the reverse stock split nor were any fractional shares issued as a
         result of the reverse stock split. In settlement of fractional
         interests which arose as a result of the reverse stock split, the
         shareholder was entitled to cash in an amount equal to (a) the market
         price of one (1) share of common stock immediately following the
         reverse stock split, multiplied by (b) the fractional share amount
         immediately following the reverse stock split. Distributions of amounts
         which may be due shareholders as a result of fractional interests are
         to be handled for the Company by its transfer agent.

                                      F-30


                        DYNECO CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2005 and 2004

         The accompanying financial statements as of and for the years ended
         December 31, 2005 and December 31, 2004 have been retroactively
         adjusted for the subsequent affect of the reverse stock split and the
         Stock Exchange Agreement of January 13, 2006 with Dynamic.

         MARCH 6, 2006 ACQUISITION OF ISLAND RESORT TOURS, INC. AND
         INTERNATIONAL TRAVEL AND RESORTS, INC.

         On March 6, 2006, the Company purchased all of the issued and
         outstanding capital stock of Island Resort Tours, Inc. ("IRT") and
         International Travel and Resorts, Inc. ("ITR"), for a purchase price of
         $4,000,000.

         The purchase price consists of a combination of cash ($1,500,000),
         shares of the Company's common stock (700,000 shares), and a one-year
         secured Convertible Promissory Note in the principal amount of
         $1,450,000. The cash portion consists of $500,000 delivered at closing,
         with the balance to be delivered on or before May 5, 2006, following
         completion of audits of the financial statements of IRT and ITR for the
         years ended December 31, 2004 and December 31, 2005. The balance of the
         cash payment will be reduced by any trade payables in excess of
         short-term liquid assets.

         Additional shares of our common stock may be issued if the Company, as
         part of any subsequent business acquisitions on or before December 31,
         2006, issues our common stock to an acquiree/seller at a rate less than
         $1.50 per share. In such event, additional shares may be issued
         equivalent to the most favorable rate, but in no event at a rate less
         than $1.00 per share. Up to an additional 350,000 shares of our common
         stock could be issued as a result of this adjustment provision.

         The Promissory Note is payable with interest at the rate of 9% per
         annum and matures on March 6, 2007 (the "Maturity Date"). The Note is
         convertible into the Company's common stock on or before the Maturity
         Date at a rate of $1.50 per share. The conversion rate may be adjusted
         downward if the Company, in subsequent acquisitions on or before
         December 31, 2006, provides consideration that includes convertible
         securities with a conversion rate of less than $1.50 per share. In the
         event of any such adjustment, the conversion rate will be adjusted to
         the most favorable rate offered, but no lower than $1.00 per share.

         Subsequent to the Closing Date, if the Company obtains cumulative net
         external financing of $3,500,000 or more prior to the maturity date,
         early repayment of 50% of the outstanding balance on the Note may be
         required. If we receive in excess of $7,000,000 in cumulative net
         external financing prior to the maturity date, an early repayment of
         the full outstanding balance on the Note may be required. The Company
         has agreed to include resale of the shares issued and those issuable
         upon conversion of the Note in the next registration statement filed by
         us.

         The Convertible Note is secured by a lien on assets of IRT and ITR. The
         acquisition of IRT and ITR is expected to increase the Company's
         presence in the desired Caribbean leisure travel market, provide access
         to key travel industry products, and add to the expertise of the
         Company's management team.

                                      F-31