8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported:   February  1, 2005

Lifestream Technologies, Inc.

(Exact name of registrant as specified in its charter)

Nevada	0-29058	82-0487965
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

510 Clearwater Loop, #101, Post Falls, ID 83854

(Address of principal executive offices)  (Zip Code)

Registrant’s telephone number, including area code 208-457-9409

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.

Entry Into A Material Definitive Agreement

Effective February 1, 2005, Lifestream and LifeNexus, Inc. entered into an Intellectual Property and Capital Interest Agreement pursuant to which Lifestream agreed to assign certain intellectual property rights pertaining to a secured data acquisition, transmission, storage and analysis system for use by LifeNexus in the development and marketing of smart card technologies that include credit card features in conjunction with emergency medical and insurance data, personal medical savings account and emergency medical insurance.  The assignment will be consummated upon LifeNexus completing its initial funding of $500,000 within six months, at which time Lifestream will receive a conversion value of 49% of the initial equity value in LifeNexus through the issuance of convertible preferred stock. LifeNexus is then obligated to raise an additional $4 million within 18 months, at which time Lifestream’ s 49% interest will be converted to common shares of LifeNexus adjusted as provided for in the Agreement.  LifeNexus has granted Lifestream a non-exclusive, royalty-free worldwide perpetual license in the intellectual property transferred as it relates to Lifestream’s point-of-care health related diagnostic devices.

Lifestream determined that it was not in a position to commercialize the technology assigned to LifeNexus based on market conditions and costs related to exploit the technology for areas unrelated to its core business of point-of-care health related diagnostic devices.  LifeNexus was recently organized in order to provide universal solutions for the portability of medical records.  In connection with the assignment, Lifestream agreed to allow its president and chief executive officer, Christopher Maus, to assist LifeNexus in the initial phases of product development and rollout for an undetermined period of time. Mr. Maus will receive compensation from LifeNexus during the period that he serves as a Director of LifeNexus.  Mr. Maus and the Company believe that Mr. Maus will still be able to devote the majority of his time to Lifestream, and no adjustment is being made in Mr. Maus’ compen sation that he is currently receiving from Lifestream, for which Mr. Maus had previously accepted a reduction in his compensation program from Lifestream.

Lifestream’s Board of Directors unanimously approved the transaction following determination that it was unlikely that the Company would be able to derive any commercial benefit from this technology at the present time, and that the assignment to LifeNexus offered the Company the most optimal arrangement for obtaining a financial benefit from the technology.

Item 9.01.

Financial Statements And Exhibits

(c)

Exhibits.

10.25

Intellectual Property and Capital Interest Agreement effective as of February 1, 2005

99.1

Press release dated February 8, 2005

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LIFESTREAM TECHNOLOGIES, INC.
By:	/s/ CHRISTOPHER MAUS
	Christopher Maus
	Chief Executive Officer

Dated:  February 8, 2005

3

EX-10.25

                                                                   EXHIBIT 10.25


              INTELLECTUAL PROPERTY AND CAPITAL INTEREST AGREEMENT

         THIS AGREEMENT, entered into and effective as of February 1, 2005 (the
"Effective Date"), is by and between Lifestream Technologies, Inc.
("Lifestream"), a Nevada corporation with a post office address at 510
Clearwater Loop, Suite 101, Post Falls, Idaho 83854; and LifeNexus, Inc.
("LifeNexus") a Nevada corporation with a post office address at 370 Interlocken
Boulevard, Fourth Floor, Broomfield, Colorado 80021.

                                   BACKGROUND
         WHEREAS Lifestream is the owner of certain intellectual property rights
including a registered U.S. trademark and several U.S. and international patent
applications pertaining to a secured data acquisition, transmission, storage and
analysis system, as listed on Exhibit "A" hereto; and
         WHEREAS LifeNexus is desirous of obtaining and commercializing these
intellectual property rights under the terms set forth below.
         NOW THEREFORE, in consideration of ten dollars ($10) in hand paid and
the promised performance by each of the parties of the terms set forth herein,
the parties hereto, intending to be legally bound, mutually agree as follows:

                               TERMS OF AGREEMENT
         I.  CONDITIONAL ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS
         1.1 Subject to satisfaction of the Condition Precedent as set forth in
paragraph 1.2, below, Lifestream will assign to LifeNexus the intellectual
property rights listed in Exhibit "A" to the extent that such intellectual
property rights pertain to the secured data acquisition, transmission, storage
and analysis system (the "Intellectual Property Assets"), it being understood
and agreed that Lifestream retains all rights in these intellectual property
rights to the extent that they do not pertain to the secured data acquisition,
transmission, storage and analysis system.



         1.2 Assignment of the Intellectual property Assets as set forth in the
paragraph 1.1, above, is subject to the satisfaction of the following Condition
Precedent: Completion by LifeNexus of raising five hundred thousand dollars
($500,000) within six (6) months from the Effective Date of this Agreement plus
the remaining portion of the Calendar month in which said Effective Date occurs
(the "Condition Precedent Satisfaction Period") in a manner that limits the
total potential of dilution (i.e., if all issued warrants, with the exception of
any employee stock options, are exercised and all convertible interests are
convert into equity) such that Lifestream's equity interest in LifesNexus will
not be reduced below forty-nine percent (49%) upon the conclusion of the
obligation set forth in this section 1.3.

         1.3 LifeNexus must also raise additional four million dollars
($4,000,000) in equity, debt or other new capital contributions (other income)
within twelve (12) calendar months following the end of the Condition Precedent
Satisfaction Period, in a manner that limits the total potential of dilution
(i.e., if all issued warrants, with the exception of any employee stock options,
are exercised and all convertible interests are convert into equity) such that
Lifestream's equity interest in LifesNexus will not be reduced below forty-nine
percent (49%) upon the conclusion of the obligation set forth in this section
1.3

         1.4 Lifestream further grants to LifeNexus the right to attempt to
revive and pursue, at its own cost and discretion, patents relating to
Lifestream's recently abandoned patent applications in Israel, Australia and New
Zealand, which may or may not be revivable under the governing laws.

         II.  GRANT BACK LICENSE
         2.1 Upon completion of the assignment as set forth in paragraph 1.1,
above, LifeNexus grants to Lifestream a royalty-free, worldwide, non-terminable,
non-sublicensable (except to parties who manufacture products for Lifestream)
exclusive license (the "License") to use the Intellectual Property Assets, as
well as any other intellectual property rights obtained by LifeNexus pertaining
to the secured data acquisition, transmission, storage and analysis system, as
potentially improved by LifeNexus, in connection with point-of-care
health-related diagnostic devices (the "Lifestream Exclusive Field of Use").

                                       2


         III.  CAPITAL INTEREST IN LIFENEXUS
         3.1 Upon completion of the initial financing by LifeNexus pursuant to
paragraph 1.2, above, LifeNexus will convey to Lifestream 100,000 shares of
convertible preferred shares of LifeNexus stock (such shares will be convertible
into 2,450,000 shares of common or 49% LifeNexus stock upon completion of the
additional financing under terms set forth in this agreement) without any
further warrant, conversion or other actual or potential equity interest granted
for the benefit of Lifestream, such that the capital stock of LifeNexus upon
completion of this initial financing will be as follows:

         Management under contract: At least twenty percent (20% in stock and
         and or options); Lifestream: No greater than thirty forty-nine (49%
         when converted to common); Investing Entities: No greater than ten
         percent (10% when fully diluted).

         3.2 Upon completion of the additional financing by LifeNexus pursuant
to paragraph 1.3, above, 60,000 shares or 60% of Lifestream's 100,000 shares of
preferred shares in LifeNexus will automatically convert, and Lifestream
Technologies, Inc. will then be obligated to sell the balance of 40,000
preferred share sufficient portion of itsin LifeNexus, to an independent party,
at a rate no less than the stock share price paid by the last investing entity
pursuant to paragraph 1.3, above, such that Lifestream's total remaining
interest in the capital stock of LifeNexus will be no greater than thirty
percent (30%) of the total outstanding capital stock in LifeNexus, upon the sale
of the 40,000 preferred shares to an independent party those shares will
immediately convert into Common Shares in LifeNexus. Lifestream and LifeNexus
will cooperate and each will use its best efforts to complete this transaction
prior to or in conjunction with LifeNexus' next round of financing. Upon
completion of this transaction, the capital stock ownership in LifeNexus will be
as follows:

         Management under contract:  At approximately twenty percent (20%);
         Lifestream:       No greater than thirty (30%);
         Investing Entities:        Approximately fifty percent (50%).

                                       3


         IV.  TERM AND TERMINATION
         41. In the event that the Condition Precedent is not satisfied within
the Condition Precedent Satisfaction Period, this Agreement will automatically
terminate at the end of the Condition Precedent Satisfaction Period unless the
Agreement is extended in writing by both parties.
         4.2 In the event that the Condition Precedent is satisfied within the
Condition Precedent Satisfaction Period, this Agreement will remain in effect
until six (6) years following expiration of the last surviving patent, trademark
or copyright relating to the Intellectual Property Assets.
         4.3 LifeNexus will have a reasonable right to inspect all products and
processes manufactured, used, imported or sold by Lifestream in the United
States that bear a trademark owned by LifeNexus, and LifeNexus may terminate
Lifestream's license to use any such trademark in the event that any product or
process manufactured, used, imported or sold by Lifestream in the United State
that bears a trademark owned by LifeNexus fails to meet the normal and customary
standards of LifeNexus upon six month's notice of such failure unless such
failure is cured within this six month period; provided, however that all
products and processes presently manufactured, used, imported or sold by
Lifestream in the United States do, by stipulation of the parties, satisfy the
normal and customary standards of LifeNexus.
         4.4 This Agreement will automatically terminate upon the filing for
bankruptcy, and upon such termination the Intellectual Property Assets will
automatically revert, and will be automatically conveyed by LifeNexus, to
Lifestream without any conditions or the need for Lifestream to take any action
or give any notice whatsoever. , Tthis provision will remain in full effect
until such time that Lifestream's equity holdings is reduced to less than 10%.

         V.  MANUFACTURE AND MARKETING
         5.1 LifeNexus will have the sole right and responsibility for
determining how to exploit the Intellectual Property Assets except within the
Lifestream Exclusive Field of Use.
         5.2 Lifestream will have the sole right and responsibility for
determining how to exploit the Intellectual Property Assets within the
Lifestream Exclusive Field of Use.
         5.3 LifeNexus will affix appropriate patent markings identifying any
issued U.S. Patents resulting from the Intellectual Property Assets pursuant to
35 U.S.C. ss. 287 (a) to any products covered by said U.S. Patents that are
manufactured, imported or sold by LifeNexus in the United States.


                                       4


         5.4 Lifestream will affix appropriate patent markings identifying any
issued U.S. Patents resulting from the Intellectual Property Assets pursuant to
35 U.S.C. ss. 287 (a) to any products covered by said U.S. Patents that are
manufactured, imported or sold by Lifestream in the United States.

         VI.  PATENT PROSECUTION AND ENFORCEMENT
         6.1 LifeNexus will have the exclusive right to revive, maintain,
enforce and defend the Intellectual Property Assets at its sole discretion and
for its own benefit except to the extent that said Intellectual Property Assets
are used within the Lifestream Exclusive Field of Use.
         6.2 Lifestream will have the exclusive right to revive, maintain,
enforce and defend the Intellectual Property Assets at its sole discretion and
for its own benefit within the Lifestream Exclusive Field of Use.
         6.3 In the event of legal action concerning the Intellectual Property
Assets, each party will provide reasonable assistance to the other party in
connection with the legal action at its own cost.
         6.4 Neither party will be required by this Agreement to become a party
to any dispute or litigation of any kind with third parties.
         6.5 Lifestream will provide LifeNexus with reasonable assistance in
connection with perfecting its interest in the Intellectual Property Assets, at
its own cost, including but not limited to executing appropriate papers relating
to the prosecution and assignment of patent and trademark rights.
         6.6 Each party will promptly notify the other party in the event that
it becomes aware of another entity that is suspected, upon information and
belief, to be infringing any of the Intellectual Property Assets.

                                       5


         VII.  ADDITIONAL COOPERATION
         7.1 Lifestream, at no charge to LifeNexus other than its actual
out-of-pocket costs, will provide LifeNexus with support regarding
implementation of its technology, integration of its technology with
Lifestream's products and services, and pursuit of intellectual property rights
during the term of this Agreement.

         7.2 The parties to this Agreement acknowledge that Christopher Maus is
integral to the success of LifeNexus and the maximization of the return on the
investment of both parties. LifeNexus, therefore agrees to use their best
efforts to encourage Christopher Maus to make his services available to
LifeNexus. It is further understood that LifeNexus would not engage in this
agreement without the availability of the services of Christopher Maus.
LifeNexus agrees to use it's best efforts in good faith, independently of
Lifestream, to negotiate with Christopher Maus the terms of compensation and
other matters relating to these services to assure the success of the LifeNexus
venture. Both parties acknowledge that Mr. Maus expects to spend approximately
25% of his time supporting the LifeNexus venture. Lifestream agrees to
facilitate these efforts by not reducing Mr. Maus' compensation from Lifestream
on account of this engagement by LifeNexus so as long as such services do not
interfere with the day-to-day activity of Lifestream. The foregoing
notwithstanding, nothing contained herein shall preclude Lifestream from
reducing the compensation of Mr. Maus for circumstances other than that
attributable to his engagement or employment by LifeNexus, provided that any
such reduction shall be preceded by 90 days' written notice as to the basis for
such reduction. It is understood that due the curreant relationship between
Lifestream Technologies, Inc. and Christopher's Maus no options can be converted
into to common shares of LifeNexus stock to cause a consolidated balance sheet
with Lifestream Technologies, Inc.

         7.3 Lifestream will not take any action relative to LifeNexus which
will result in Lifestream having to include LifeNexus in its consolidated
financial statements for accounting or tax purposes.

         VIII.  WARRANTIES AND INDEMNITIES
         8.1 Lifestream warrants that it is the owner of the Intellectual
Property Assets, and that it has an unencumbered legal right to enter into and
perform as required by this Agreement.
         8.2 LifeNexus warrants that it has an unencumbered legal right to enter
into and perform as required by this Agreement.


                                       6


         8.3 LIFESTREAM MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND AS TO
THE VALIDITY OF THE INTELLECTUAL PROPERTY ASSETS, WHETHER ANY PRODUCT OR PROCESS
DESCRIBED IN THE INTELLECTUAL PROPERTY ASSETS IS COVERED BY THE INTELLECTUAL
PROPERTY ASSETS AS CLAIMED IN THE ASSOCIATED DOCUMENTS, WHETHER ANY PRODUCT OR
PROCESS DESCRIBED IN THE INTELLECTUAL PROPERTY ASSETS DOES OR DOES NOT INFRINGE
ANY PATENT, TRADEMARK, COPYRIGHT, UTILITY MODEL OR OTHER RIGHT OF ANY THIRD
PARTY, WHETHER ANY PRODUCT OR PROCESS DESCRIBED IN THE INTELLECTUAL PROPERTY
ASSETS IS FUNCTIONAL FOR ANY INTENDED PURPOSE, OR WHETHER ANY PRODUCT OR PROCESS
DESCRIBED IN THE INTELLECTUAL PROPERTY ASSETS IS MERCHANTABLE FOR ANY PURPOSE.
         8.4 LifeNexus indemnifies, holds harmless, and agrees to defend
Lifestream with respect to any claim or cause of action arising out of
manufacture, use, sale or importation of products and products as described in
the Intellectual Property Assets by LifeNexus including, without limitation,
personal injury to persons using or misusing the products or products as
described in the Intellectual Property Assets, or loss or damage to medical or
other data resulting from using or misusing the products or products as
described in the Intellectual Property Assets.
         8.5 LifeNexus indemnifies, holds harmless, and agrees to defend
Lifestream with respect to any right, claim or cause of action arising out of
sublicensing by LifeNexus of the Intellectual Property Assets.
         8.6 Lifestream indemnifies, holds harmless, and agrees to defend
LifeNexus with respect to any right, claim or cause of action arising out of
manufacture, use, sale or importation of products and processes as described in
the Intellectual Property Assets by Lifestream including, without limitation,
personal injury to persons using or misusing the products or products as
described in the Intellectual Property Assets, or loss or damage to medical or
other data resulting form using or misusing the products or products as
described in the Intellectual Property Assets.
         8.7 Lifestream indemnifies, holds harmless, and agrees to defend
LifeNexus with respect to any right, claim or cause of action arising out of
sublicensing by Lifestream of the Intellectual Property Assets.

                                       7


         IX.  CONFIDENTIALITY
         9.1 Each party will keep the terms of this Agreement confidential and
will not disclose the terms of this Agreement without the express written
permission of the other party, except and only to the extent that such
information is or becomes available in the public domain through no fault of
disclosing party; is available from another source in good faith and without
limitation as to use, or disclosure is required by court order or other
mandatory legal requirement.

         X.  MISCELLANEOUS
         10.1 All written notices, correspondence and payments under this
Agreement will be delivered to the addresses of record as stated in the preamble
of this Agreement. Either party may change its address of record with written
notice.
         10.2 This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof, supersedes all previous
express or implied promises or understandings related to the subject matter
addressed by this Agreement, and may not be varied, amended, or supplemented
except by a writing of even or subsequent date executed by both parties and
containing express reference to this Agreement.
         10.3 The failure of either party to enforce at any time any of the
provisions of this Agreement, or any rights in respect thereto, will in no way
be considered a waiver of such provisions, rights, or elections with respect to
subsequent events or in any way to affect the validity and the enforceability of
this Agreement.
         10.4 In the event that any provision of this Agreement is declared
invalid or legally unenforceable by a court of competent jurisdiction from which
no appeal is or can be taken, the invalid provision will be deemed replaced by a
similar but valid and legally enforceable provision as near in effect as the
invalid or legally unenforceable provision, and the remainder of this Agreement
will be deemed modified to conform thereto and will remain in effect.
         10.5 Lifestream may assign its rights and responsibilities under this
Agreement in whole or in part.
         10.6 LifeNexus may not assign or otherwise transfer its rights or
obligations under this Agreement except by transfer to a successor corporation
through merger or acquisition of LifeNexus or the portion of the LifeNexus
business to which the Intellectual Property Assets pertain without the express,
written approval of Lifestream, which approval will not be unreasonably
withheld, and LifeNexus may not sublicense its rights except as provided in this
Agreement.

                                       8


         10.7 This Agreement will be binding upon and inure to the benefit of
the parties and their respective heirs, successors, and permitted assigns.
         10.8 All monetary values in this Agreement are stated in United States
Dollars.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate, each of which constitutes an original, to be effective as of the
February 1, 2005.

         By:      /s/ David Hurley                             Date:   1/7/05
            --------------------------------------------------         ------
                  LifeNexus, Inc.
                  By:      David Hurley
                  Title:   Chief Executive Officer



         By:      /s/ Robert Boyle                             Date:   1/7/05
            --------------------------------------------------         ------
                  Lifestream Technologies, Inc.
                  By:      Robert Boyle
                  Title:   Secretary/Treasurer, Board of Director, Member

                                       9

EX-99.1

                                                                    Exhibit 99.1

FOR IMMEDIATE RELEASE
- ---------------------

CONTACT:
Investor Relations
Gerri Vance
208-457-9409 ext. 1221


                 LIFESTREAM TECHNOLOGIES SIGNS AGREEMENT TO SELL
                       INTELLECTUAL PROPERTY TO LIFENEXUS

LIFESTREAM SEES A BRIGHT FUTURE FOR PERSONAL HEALTH CARD.

POST FALLS, IDAHO--FEBRUARY 8, 2005-- Lifestream Technologies, Inc.
(OTCBB:LFTC), a leading supplier of cholesterol monitors, announced today that
it has assigned the intellectual property of its subsidiary, Secured Interactive
Technologies, to LifeNexus, Inc.

"We are pleased to have this opportunity to receive a benefit from the transfer
of our smart card technology since our current resources are being focused on
our core business," stated Christopher Maus, Lifestream's CEO. "This technology,
which has no material value to the Company, has not been commercialized as
market conditions were not conducive to support the costs related to an
effective rollout. With national attention focused on revamping the healthcare
information system, we believe this sale provides the most favorable opportunity
for Lifestream and its shareholders. LifeNexus has proposed an innovative
approach, a portable medical record in concert with powerful healthcare
financial services, to create a viable opportunity for commercializing this
technology. We look forward to profiting from its success."

"I look forward to working directly with LifeNexus to make this proposition
successful. It brings considerable value to consumers as it is a universal
solution for the portability of medical records," said Maus.

LifeNexus, Inc., is a recently organized, privately-held company focused on the
development and marketing of personal healthcare on a smart card platform
incorporating emergency medical information, emergency medical insurance,
accidental life and other financial products.

Lifestream has entered into an agreement whereby, upon completion of LifeNexus'
financing, Lifestream will receive a 49% equity position in LifeNexus and rights
to the technology will transfer to LifeNexus. Maus is required by LifeNexus to
facilitate the early phase of product development and it has, therefore, entered
into an independent agreement wherein Maus will receive compensation as a member
of the board of directors of LifeNexus. No changes are foreseen in his
responsibilities at Lifestream.

ABOUT LIFESTREAM TECHNOLOGIES
The Company developed and currently markets a line of cholesterol monitors to
consumers and healthcare professionals that provide test results in three
minutes.



The Company's product line aids the health conscious consumer in monitoring
their risk of heart disease. By regularly testing cholesterol at home,
individuals can monitor the benefits of their diet, exercise and/or drug therapy
programs. Monitoring these benefits can support the physician and the
individual's efforts to improve compliance. Lifestream's products also integrate
a smart card reader further supporting compliance by storing test results on an
individual's personal health card for future retrieval, trend analysis and
assessment.

Lifestream's monitors are affordable, hand-held devices that provide users with
accurate results in less than three minutes. The product line has been designed
to accommodate The Data Concern(TM) Personal Health Card(R) allowing multiple
users the ability to store their personal results. Lifestream's products are now
available in pharmacy and retail outlets nationwide. To find retailers that
carry Lifestream's products, go to "Store Locator" on www.knowitforlife.com or
contact Customer Care at 888-954-LIFE. For Company information, visit
www.lifestreamtech.com.


                                       ###

This news release includes certain forward-looking statements within the meaning
of the safe harbor protections of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements include, but are not limited to, statements
regarding our current business plans, strategies and objectives that involve
risks and uncertainties, and in particular statements referring to our
expectations for increased market penetration and improved gross margins from
our recently introduced second generation consumer monitors and statements
regarding our expectations that we can obtain necessary additional financing and
investment. These forward-looking statements involve risks and uncertainties
that could cause actual results to differ from anticipated results. The
forward-looking statements are based on our current expectations and what we
believe are reasonable assumptions given our knowledge of the relevant markets;
however, our actual performance, results and achievements could differ
materially from those expressed in, or implied by, these forward-looking
statements. Factors, within and beyond our control, that could cause or
contribute to such differences include, among others, the following: the success
of our capital-raising and cost-cutting efforts, developing and marketing
relatively new medical diagnostic devices, including technological advancements
and innovations; consumer receptivity and preferences; availability,
affordability and coverage terms of private and public medical insurance;
political and regulatory environments and general economic and business
conditions; the effects of our competition; the success of our operating,
marketing and growth initiatives; development and operating costs; the amount
and effectiveness of our advertising and promotional efforts; brand awareness;
the existence of adverse publicity; changes in business strategies or
development plans; quality and experience of our management; availability, terms
and deployment of capital; labor and employee benefit costs; as well as those
factors discussed in our most recent Registration Statement on Form SB-2 filed
January 12, 2005, and in "Item 1 - Business," "Item 6 - Management's Discussion
and Analysis or Plan of Operation," particularly the discussion under "Risk
Factors - Substantial Doubt regarding our Ability to Continue as a Going
Concern" and elsewhere in our most recent Annual Report on Form 10-KSB for our
fiscal year ended June 30, 2004, both filed with the United States Securities
and Exchange Commission. Readers are urged to carefully review and consider the
various disclosures made by us in this report, in the aforementioned Form SB-2
and Form 10-KSB, and those detailed from time to time in our other reports and
filings with the United States Securities and Exchange Commission that attempt
to advise interested parties of the risks and factors that are likely to affect
our business.