sec document

424B3 1 form424b306603_11062006.htm sec document

Filed pursuant to Rule 424(b)(3)
Registration number 333-136471

PROSPECTUS

204,025,000 SHARES

SWMX
SOFTWAVE MEDIA EXCHANGE

COMMON STOCK

This prospectus relates to the reoffer and resale of up to 204,025,000
shares of our common stock by the selling stockholders named in this prospectus.

The selling stockholders may offer or sell all or a portion of its
shares publicly or through private transactions at prevailing market prices or
at negotiated prices. We will not receive any of the proceeds from the sale of
the securities owned by the selling stockholders.

Our common stock is traded and quoted on the Over the Counter Bulletin
Board (the "OTCBB") under the symbol "SWMX.OB." On October 31, 2006, the last
reported sale price of our common stock was $3.25 per share. As of October 31,
2006 we had 205,925,000 shares of common stock outstanding.

Our principal executive offices are located at 1 Bridge Street,
Irvington, NY 10533, and our telephone number is (914) 406-8400.

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INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 2 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE BUYING
OUR COMMON STOCK.

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

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The date of this prospectus is November 6, 2006.

TABLE OF CONTENTS

Prospectus Summary.............................................................1
Risk Factors...................................................................2
Special Note Regarding Forward-Looking Statements.............................13
Use of Proceeds...............................................................13
Market for Our Common Stock and Related Stockholder Matters...................13
Management's Discussion and Analysis or Plan of Operation.....................14
Selling Stockholders..........................................................18
Plan of Distribution..........................................................26
Business......................................................................28
Directors, Executive Officers, Promoters and Control Persons..................38
Limitation of Liability and Indemnification Matters...........................42
Security Ownership of Certain Beneficial Owners and Management................43
Description of Capital Stock .................................................44
Certain Relationships and Related Transactions................................46
Legal Matters.................................................................47
Experts.......................................................................47
Changes In Accountant.........................................................47
Where You Can Find More Information...........................................47

You should rely only on the information contained in this prospectus.
We have not authorized any other person to provide you with different
information. 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 an offer or sale is not permitted. You should assume
that the information appearing in this prospectus is accurate as of the date on
the front cover of this prospectus only, regardless of the time of delivery of
this prospectus or of any sale of our common stock. Our business, financial
condition, results of operations and prospects may have changed since that date.

SWMX Television, SWMX TV, SWMX Radio, Media Manager, Campaign Manager,
Broadcaster Dashboard, ROI Optimizer and Remnant Radio are trademarks of a
wholly-owned subsidiary of SWMX, Inc. This prospectus also contains trademarks
and service marks of other companies.

PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION INCLUDED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION YOU SHOULD
CONSIDER BEFORE PURCHASING THE COMMON STOCK OFFERED BY THIS PROSPECTUS. YOU
SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE "RISK FACTORS" AND
"SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" SECTIONS AND OUR FINANCIAL
STATEMENTS AND THE NOTES TO THOSE FINANCIAL STATEMENTS BEFORE MAKING AN
INVESTMENT DECISION.

THE COMPANY

The company was formed as a Nevada corporation on April 12, 2005, under
the name Edgemont Resources Corp., and on July 25, 2006, was reincorporated in
the State of Delaware. On July 26, 2006, we consummated a reverse merger, or the
Merger, with a privately-held company, SoftWave Media Exchange, Inc., or
SoftWave, pursuant to which the privately-held company became our wholly-owned
subsidiary. We had been in the development stage since inception and had not
commenced significant business operations prior to the Merger. Through the
acquisition of SoftWave, we are engaged in the operation and development of an
electronic open marketplace for the purchase and sale of advertising media,
which we call the SWMX Marketplace, and the sale and the development of products
and systems that support those activities. Revenues are generated primarily
through transaction fees charged for media placements through the SWMX
Marketplace.

On July 26, 2006, we sold an aggregate of 4,000,000 shares of common
stock and received gross proceeds of $12,000,000, including the conversion of
$2,600,000 of accrued liabilities owed to Alowex, LLC, or Alowex, and Remnant
Media, LLC, entities affiliated with certain of our officers, in a private
placement to accredited investors.

Our principal executive offices are located at 1 Bridge Street,
Irvington, NY 10533, and our telephone number is (914) 406-8400.

Unless the context requires otherwise, references in this prospectus to
"SWMX," "we," "our," "us" and similar expressions refer to SWMX, Inc., a
Delaware corporation, and its predecessors and its subsidiaries.

THE OFFERING

Common stock offered by
the selling stockholders...................204,025,000 shares of our common
stock, including 4,000,000 shares
issued to purchasers in our private
placement.

Common stock outstanding...................205,925,000 shares

Use of proceeds............................We will not receive any of the
proceeds from the sale of shares of
common stock by the selling
stockholders.

Ticker symbol..............................SWMX.OB

RISK FACTORS

AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. THE
FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN ADDITION TO THE OTHER
INFORMATION IN THIS PROSPECTUS, INCLUDING UNDER "SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS," BEFORE MAKING AN INVESTMENT IN OUR COMMON STOCK.

RISKS RELATING TO OUR BUSINESS

WE HAVE A LIMITED OPERATING HISTORY ON WHICH AN INVESTOR CAN EVALUATE OUR
BUSINESS.

We began operations in August 2005 and have a limited operating
history. Our limited operating history makes it difficult to predict future
revenues and operating expenses. You must consider the risks, expenses and
difficulties typically encountered by companies with limited operating
histories, particularly companies in new and rapidly expanding markets such as
Internet-based media advertising. These risks include our ability to:

o achieve the level of recognition and trust necessary to develop
and sustain the relationships with broadcast companies,
advertisers and third parties that will allow us to maintain our
growth and withstand competition;

o generate the ideas and resources, including both financial and
human resources, necessary to continue to develop and upgrade our
technology in order to sustain our business strategy and maintain
our viability in the fast-paced and rapidly changing field of
Internet technologies;

o implement and improve operational, financial and management
information systems appropriate to our expanding and changing
operations; and

o respond to competitive developments and adapt to industry
conditions such as consolidation of existing competitors and the
entry of new competitors.

AS AN EARLY STAGE COMPANY, WE ARE SUBJECT TO MANY UNFORESEEN BUSINESS RISKS.

The development of Internet-based electronic marketplaces for the media
advertising market is in its infancy. As a result, we may be subject to risks
that we have not foreseen or fully appreciated. We are subject to all the risks
inherent in a small company seeking to develop, market and distribute new
products. The likelihood of our success must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with developing, introducing, marketing and
distributing new products or services in a competitive environment. We cannot
guarantee that we will achieve our goals or meet our projections.

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS HAVE STATED IN THEIR REPORT THAT
THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

We have limited cash resources and have a working capital deficit. Our
independent registered public accountants have stated in their report that they
have a substantial doubt about our ability to continue as a going concern. By
being categorized in this manner, we may find it more difficult in the short
term to either locate financing for future projects or to identify lenders
willing to provide loans at attractive rates, which may require us to use our
cash reserves in order to expand. Should this occur, and unforeseen events also
require greater cash expenditures than expected, we could be forced to cease all
or a part of our operations.

OUR BUSINESS MODEL INVOLVES THE ASSUMPTION OF SIGNIFICANT CREDIT RISK.

In order to serve as a reliable intermediary between broadcasters and
advertisers, we have assumed the payment risk associated with media purchases by
advertisers. Thus, although we will purchase media time from broadcasters on
behalf of an advertiser, we will act as a principal with respect to the
broadcaster. Accordingly, we may from time to time assume substantial risks
associated with receivables from advertisers who may default in payment due to

insolvency or other circumstances. While we believe the reserves we have
established at June 30, 2006 are adequate, there can be no assurance that the
reserves will be sufficient to entirely mitigate this risk.

DEVELOPMENT DELAYS OR COST OVERRUNS MAY NEGATIVELY AFFECT OUR OPERATING RESULTS.

We may experience development delays and cost overruns in our
development efforts. Delays and cost overruns could affect our ability to
respond to technological changes, evolving industry standards, competitive
developments or customer requirements. Also, our products may contain undetected
errors, including security errors that could cause increased development costs,
loss of revenue, adverse publicity, reduced market acceptance of our products or
services or lawsuits by customers.

WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP SWMX TELEVISION.

We are currently developing our SWMX Television product. We began beta
testing this product in June 2006. This development effort could experience
technological difficulties as it expands or could take more time than expected.
Any delays in the development process may increase our development costs and
delay our ability to generate revenues from this new product. Such a delay would
alter the financial projections provided herein. In addition, any difficulties
in the development process may divert management's attention from other areas of
our business which could materially adversely affect us.

OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO SUCCESSFULLY IMPLEMENT OUR BUSINESS
MODEL.

A significant part of our business model is to generate revenue by
providing interactive marketing solutions to advertisers, advertising agencies
and broadcast companies. The profit potential for this business model is
unproven. We will need to achieve broad market acceptance by advertisers,
advertising agencies and broadcast companies to be successful. Our ability to
generate significant revenue from advertisers will depend, in part, on our
ability to contract with radio and television stations that have adequate
available advertisement space inventory. Further, these broadcast companies must
generate sufficient user traffic with demographic characteristics attractive to
our advertisers. The intense competition among media advertising sellers has led
to the creation of a number of pricing alternatives for media advertising. These
alternatives make it difficult for us to project future levels of advertising
revenue and applicable gross margin that can be sustained by us or the media
advertising industry in general.

Intensive marketing and sales efforts may be necessary to educate
prospective advertisers regarding the uses and benefits of, and to generate
demand for, our products and services. Advertisers may be reluctant or slow to
adopt a new approach that may replace, limit or compete with their existing
direct marketing systems. In addition, as online direct marketing is emerging as
a new and distinct business, potential adopters of online direct marketing
services will increasingly demand functionality tailored to their specific
requirements. We may be unable to meet the demands of these clients. Acceptance
of our new solutions will depend on the continued emergence of Internet
commerce, communication and advertising. Demand for our new solutions may not
occur or be sustained.

WE MAY REQUIRE ADDITIONAL FUNDING TO CONTINUE DEVELOPING OUR TECHNOLOGY AND
MARKETING OUR PRODUCTS.

Even with the proceeds of our July 2006 private placement, we may
require additional funding to achieve the goals stated in our business plan. In
particular, we may require working capital to support the initial marketing and
distribution of our planned new products. If we experience delays in producing
our new products or entering into agreements with broadcast companies and
advertisers, we may need more funding than we currently anticipate.

Whatever our capital requirements, adequate funding, whether in the
form of debt or equity, may not be available on favorable terms, or at all.

OUR CONTINUED SUCCESS MAY ATTRACT NUMEROUS IMITATORS.

The success of the SWMX Marketplace may spawn imitators. It is the
nature of web-based businesses that competitors could create the superficial
appearance of providing a marketplace for media placements without a significant

investment, even though their systems do not provide the features of our system
or the robust infrastructure underlying our systems. If our potential customers
have disappointing experiences with such competitors, it may hinder our ability
to persuade them to participate in our system. In addition, our success may
encourage larger, better known and better financed firms to replicate or reverse
engineer our systems, or induce key employees to work for them, allowing them to
quickly gain significant market share at our expense, despite our best efforts
to protect our proprietary systems, processes and know how.

LARGER AND BETTER-FINANCED COMPETITORS MAY AFFECT OUR ABILITY TO OPERATE OUR
BUSINESS AND ACHIEVE PROFITABILITY.

Management is aware of similar products that compete directly with our
products and some of the companies developing these similar products are larger,
better-financed companies that may develop products superior to ours. Many of
our current and prospective competitors are larger and have greater financial
resources, which could create significant competitive advantages for those
companies. Our future success depends on our ability to compete effectively with
our competitors. As a result, we may have difficulty competing with larger,
established competitor companies. Generally, these competitors have:

o substantially greater financial, technical and marketing
resources;

o larger customer bases;

o better name recognition; and

o potentially more expansive product offerings.

These competitors are likely to command a larger market share, which
may enable them to establish a stronger competitive position than we have, in
part, through greater marketing opportunities. If we fail to address competitive
developments quickly and effectively, we may not be able to remain a viable
entity.

WE DEPEND ON OUR KEY PERSONNEL AND THE LOSS OF THEIR SERVICES OR THE FAILURE TO
ATTRACT ADDITIONAL HIGHLY SKILLED PERSONNEL COULD ADVERSELY AFFECT OUR
OPERATIONS.

If we are unable to maintain our key personnel and attract new
employees with high levels of expertise in those areas in which we propose to
engage, without unreasonably increasing our labor costs, the execution of our
business strategy may be hindered and our growth limited. We believe that our
success is largely dependent on the continued employment of our senior
management and the hiring of strategic key personnel at reasonable costs. We do
not have "key-person" insurance on the lives of any of our key officers or
management personnel to mitigate the impact to our company that the loss of any
of them would cause. Specifically, the loss of any of our executive officers
would disrupt our operations and divert the time and attention of our remaining
officers. If any of our current senior managers were unable or unwilling to
continue in his or her present position, or if we were unable to attract a
sufficient number of qualified employees at reasonable rates, our business,
results of operations and financial condition will be materially adversely
affected.

OUR ANTICIPATED GROWTH COULD STRAIN OUR RESOURCES.

We expect to grow at a rate that will place a significant strain on our
managerial, operational and financial resources. To manage this growth, we will
have to develop and install operational and financial systems, as well as hire,
train and manage new employees. We may not be able to locate, hire and train the
individuals needed to sustain the growth of our business at the levels we
anticipate. We cannot assure you that we have made adequate allowances for the
costs and risks associated with this growth, that our procedures or controls
will be adequate to support our operations, or that our management will be able
to successfully offer and expand our products. If we are unable to manage our
growth effectively, our business could be materially adversely affected.

OUR REVENUE COULD DECLINE IF WE FAIL TO EFFECTIVELY MANAGE THE EXISTING
ADVERTISING INVENTORY MADE AVAILABLE TO US, AND OUR GROWTH COULD BE IMPEDED IF
WE FAIL TO ACQUIRE ACCESS TO NEW ADVERTISING INVENTORY.

Our success depends in part on our ability to effectively market and
manage the advertising inventory made available on the SWMX Marketplace. The
broadcast companies that list their advertising inventory with us are not bound
by long-term contracts. In addition, broadcast companies can change the amount
of inventory they make available to us at any time. If a media outlet decides
not to make advertising space from its stations available to us, we may not be
able to replace this advertising space with advertising space from other
broadcast companies that have comparable traffic patterns and user demographics
quickly enough to fulfill our advertisers' requests. This would result in lost
revenue. We expect that our customers' requirements will become more
sophisticated as customers become more accustomed to our system as a means of
purchasing advertising time. If we fail to manage our system effectively to meet
our customers' changing requirements, our revenue could decline. Our growth also
depends on our ability to expand our advertising inventory. To attract new
advertisers, we must maintain a consistent supply of attractive advertising
space. Our ability to attract new broadcast companies to our network and to
retain broadcast companies currently in our network will depend on various
factors, some of which are beyond our control. These factors include our ability
to introduce new and innovative services, our ability to efficiently manage our
existing advertising inventory, our pricing policies and the cost-efficiency to
broadcast companies of outsourcing all or part of their advertising sales. In
addition, the number of competing intermediaries that purchase advertising
inventory from broadcast companies continues to increase. The size of our
inventory may not increase or even remain constant in the future.

OUR TECHNOLOGY SOLUTIONS MAY NOT BE SUCCESSFUL AND MAY CAUSE BUSINESS
DISRUPTION.

The SWMX Marketplace is intended to serve as our sole platform for the
purchase, sale, management and distribution of advertising media inventory. We
have developed a variety of products to work on or with this platform. Some of
these products are not yet available or are only available in beta version. We
must, among other things, ensure that the technology will function efficiently
at high volumes, interact properly with our database, offer the functionality
demanded by our customers and integrate our sales and reporting functions. We
must further complete development of our beta products. This development effort
could fail technologically or could take more time than expected. Customers may
become dissatisfied by any system failure that interrupts our ability to provide
services to them, including failures affecting our ability to deliver
advertisements without significant delay to the viewer or listener. Sustained or
repeated system failures would reduce the attractiveness of our solutions to
advertisers, advertising agencies and broadcast companies and result in contract
terminations, fee rebates and other accommodations that would likely reduce our
revenue. Slower response time or system failures may also result from straining
the capacity of our systems due to an increase in the volume of advertising
delivered through our servers. If we fail to effectively address any capacity
constraints or system failures, our business, results of operations and
financial condition could be materially and adversely affected.

WE MIGHT EXPERIENCE SIGNIFICANT DEFECTS IN OUR PRODUCTS.

Software products frequently contain errors or failures, especially
when first introduced or when new versions are released. We might experience
significant errors or failures in our products, or they might not work with
other hardware or software as expected, which could delay the enhancement of our
products, or which could adversely affect market acceptance of our products. Any
significant product errors or design flaws would slow the adoption of our
products and cause damage to our reputation, which would seriously harm our
business. If customers were dissatisfied with product functionality or
performance, we could lose revenue or be subject to liability for service or
warranty costs and claims, and our business, operating results and financial
condition could be adversely affected.

OUR NETWORK IS SUBJECT TO SECURITY RISKS THAT COULD HARM OUR BUSINESS AND
REPUTATION AND EXPOSE US TO LITIGATION OR LIABILITY.

Online commerce and communications depend on the ability to transmit
confidential information and licensed intellectual property securely over
private and public networks. Any compromise of our ability to transmit and store
such information and data securely, and any costs associated with preventing or
eliminating such problems, could damage our business, hurt our ability to
distribute products and services and collect revenue, threaten the proprietary

or confidential nature of our technology, harm our reputation and expose us to
litigation or liability. We also may be required to expend significant capital
or other resources to protect against the threat of security breaches or hacker
attacks or to alleviate problems caused by such breaches or attacks. Any
successful attack or breach of our security could hurt consumer demand for our
products and services, expose us to consumer class action lawsuits and harm our
business.

OUR REVENUES ARE SUBJECT TO FLUCTUATIONS DUE TO GENERAL ECONOMIC CONDITIONS.

Expenditures by advertisers tend to vary in cycles that reflect overall
economic conditions as well as budgeting and buying patterns. Our revenue could
be materially reduced by a decline in the economic prospects of advertisers or
the economy in general, which could alter current or prospective advertisers'
spending priorities or budget cycles or extend our sales cycle. Due to such
risks, you should not rely on quarter-to-quarter comparisons of our results of
operations as an indicator of our future results.

WE MAY BE UNABLE TO PROMOTE AND MAINTAIN OUR BRANDS.

We believe that establishing and maintaining the brand identities of
our products and services is a critical aspect of attracting and expanding a
large client base. Promotion and enhancement of our brands will depend largely
on our success in continuing to provide high quality service. If businesses do
not perceive our existing services to be of high quality, or if we introduce new
services or enter into new business ventures that are not favorably received by
businesses, we will risk diluting our brand identities and decreasing our
attractiveness to existing and potential customers.

In order to attract and retain customers and to promote and maintain
brands in response to competitive pressures, we may also have to increase
substantially our financial commitment to creating and maintaining a distinct
brand loyalty among our customers. If we incur significant expenses in an
attempt to improve our services or to promote and maintain our brands, our
business, prospects, financial condition and results of operations could be
materially adversely affected. Moreover, any brand identities we establish may
be diluted as a result of any inability to protect our trademarks and service
marks or domain names, which could have a material adverse effect on our
business, prospects, financial condition and results of operations.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS, WHICH WOULD
HAVE A NEGATIVE IMPACT ON OUR OPERATIONS.

Our ability to compete partly depends on the superiority, uniqueness
and value of our technology, including both internally developed technology and
technology licensed from third parties. To protect our proprietary rights, we
rely on a combination of patent, trademark, copyright and trade secret laws,
confidentiality agreements with our employees and third parties, and protective
contractual provisions. Despite these efforts, any of the following may reduce
the value of our intellectual property:

o Our applications for patents, trademarks and copyrights relating
to our business may not be granted and, if granted, may be
challenged or invalidated;

o Issued patents, trademarks and copyrights may not provide us with
any competitive advantages;

o Our efforts to protect our intellectual property rights may not be
effective in preventing misappropriation of our technology;

o Our efforts may not prevent the development and design by others
of products or technologies similar to or competitive with, or
superior to those we develop; or

o Another party may obtain a blocking patent and we would need to
either obtain a license or design around the patent in order to
continue to offer the contested feature or service in our
products.

In addition, we may not be able to effectively protect our intellectual
property rights in certain foreign countries where we may do business in the
future or from which competitors may operate. Our inability to adequately
protect our proprietary rights would have a negative impact on our operations.

WE MAY BE FORCED TO LITIGATE TO DEFEND OUR INTELLECTUAL PROPERTY RIGHTS, OR TO
DEFEND AGAINST CLAIMS BY THIRD PARTIES AGAINST US RELATING TO INTELLECTUAL
PROPERTY RIGHTS.

Disputes regarding the ownership of technologies and rights associated
with media, digital distribution and online businesses are common and likely to
arise in the future. We may be forced to litigate to enforce or defend our
intellectual property rights, to protect our trade secrets or to determine the
validity and scope of other parties' proprietary rights. Any such litigation
could be very costly and could distract our management from focusing on
operating our business. The existence and/or outcome of any such litigation
could harm our business.

WE MAY BE SUBJECT TO CLAIMS THAT WE HAVE INFRINGED THE PROPRIETARY RIGHTS OF
OTHERS OR EXCEEDED THE SCOPE OF LICENSES THAT WE HAVE PREVIOUSLY OBTAINED, WHICH
COULD REQUIRE US TO OBTAIN A LICENSE OR PAY ADDITIONAL FEES OR CHANGE OUR
DESIGNS OR TECHNOLOGY.

We can give no assurances that infringement or invalidity claims (or
claims for indemnification resulting from infringement claims) will not be
asserted or prosecuted against us or that any such assertions or prosecutions
will not materially adversely affect our business. Regardless of whether any
such claims are valid or can be successfully asserted, defending against such
claims could cause us to incur significant costs and could divert resources away
from our other activities. In addition, assertion of infringement claims could
result in injunctions that prevent us from distributing our products. If any
claims or actions are asserted against us, we may seek to obtain a license to
the intellectual property rights that are in dispute. Such a license may not be
available on reasonable terms, or at all, which could force us to change our
software designs or other technology.

IF WE EXPAND INTO INTERNATIONAL MARKETS, OUR INEXPERIENCE OUTSIDE THE UNITED
STATES WOULD INCREASE THE RISK THAT OUR INTERNATIONAL EXPANSION EFFORTS WILL NOT
BE SUCCESSFUL, WHICH WOULD IN TURN LIMIT OUR PROSPECTS FOR GROWTH.

We may explore expanding our business to other countries. Expansion
into international markets requires significant management attention and
financial resources. In addition, we may face the following risks associated
with any expansion outside the United States:

o challenges caused by distance, language and cultural differences;

o legal, legislative and regulatory restrictions;

o currency exchange rate fluctuations;

o economic instability;

o longer payment cycles in some countries;

o credit risk and higher levels of payment fraud;

o potentially adverse tax consequences; and

o higher costs associated with doing business internationally.

These risks could harm our international expansion efforts, which would
in turn harm our business prospects.

OUR BUSINESS AND OPERATING RESULTS WILL SUFFER IF OUR SYSTEMS OR NETWORKS FAIL,
BECOME UNAVAILABLE OR PERFORM POORLY SO THAT CURRENT OR POTENTIAL USERS DO NOT
HAVE ADEQUATE ACCESS TO OUR PRODUCTS, SERVICES AND WEBSITES.

Our ability to provide our products and services to our customers and
operate our business depends, in part, on the continued operation of our
information systems and networks. A significant or repeated reduction in the
performance, reliability or availability of our information systems and network
infrastructure could harm our ability to conduct our business, and harm our
reputation and ability to attract and retain users, customers, advertisers and
content providers.

Problems with our systems and networks could result from our failure to
adequately maintain and enhance these systems and networks, natural disasters
and similar events, power failures, intentional actions to disrupt our systems
and networks and many other causes.

We do not currently have fully redundant systems or a formal disaster
recovery plan, and we may not have adequate business interruption insurance to
compensate us for losses that may occur from a system outage.

WE MAY BE SUBJECT TO MARKET RISK AND LEGAL LIABILITY IN CONNECTION WITH THE DATA
COLLECTION CAPABILITIES OF OUR PRODUCTS AND SERVICES.

Many of our products are interactive Internet applications that by
their very nature require communication between a client and server to operate.
To provide better consumer experiences and to operate effectively, our products
send information to our servers. Many of the services we provide also require
that a user provide certain information to us. We post an extensive privacy
policy concerning the collection, use and disclosure of user data involved in
interactions between our client and server products. Any failure by us to comply
with our posted privacy policy and existing or new legislation regarding privacy
issues could impact the market for our products and services, subject us to
litigation and harm our business.

MANAGEMENT CHANGES AT THE RADIO AND TELEVISION STATIONS WITH WHOM WE DO BUSINESS
COULD HAVE AN ADVERSE AFFECT ON OUR BUSINESS.

Many of the arrangements with radio and television stations with whom
we do business are based on personal relationships with the stations' current
management. A change in the management of these stations may result in new
management discontinuing the use of our services. The loss of stations could
result in a reduction in our revenues, which would have an adverse effect our
business.

WE MAY BE EXPOSED TO POTENTIAL LIABILITIES, INCLUDING LIABILITIES ARISING FROM
ALLEGATIONS THAT OUR CLIENTS' ADVERTISING CLAIMS ARE FALSE OR MISLEADING OR OUR
CLIENTS' PRODUCTS ARE DEFECTIVE.

From time to time, we may be, or may be joined as, a defendant in
litigation brought against our clients by third parties, including our clients'
competitors, governmental or regulatory bodies or consumers for advertisements
that are broadcast on stations through our order process. These litigations
could include claims alleging that:

o advertising claims made with respect to our clients' products or
services are false, deceptive or misleading;

o our clients' products are defective or injurious; or

o marketing and communications materials created for our clients
infringe on the proprietary rights of third parties.

If, in those circumstances, we are not insured under the terms of our
insurance policies or are not indemnified under the terms of our agreements with
clients or this indemnification is unavailable for these claims, then the
damages, costs, expenses or attorneys' fees arising from any of these claims
could have an adverse effect on our prospects, business, results of operations
and financial condition. Although we maintain insurance, this insurance may not

be available, or if available may not be sufficient to cover any claim, if a
significant adverse claim is made.

ADVERTISERS MAY DISCONTINUE USING OUR SERVICES IF THEIR CAMPAIGNS ARE
UNSUCCESSFUL, WHICH COULD RESULT IN A LOSS IN REVENUES THAT WOULD ADVERSELY
AFFECT OUR BUSINESS.

Success in advertising involves many factors including, among others,
ratings, creative, frequency of ad time, station selection and location.
Although we will endeavor to ensure the success of our advertisers' campaign,
there is no assurance that the campaign will be successful. If our advertisers'
campaigns are unsuccessful, we may lose their business as well as fail to
attract new advertisers. This could result in a loss in revenues that would
adversely affect our business.

WE HAVE A CONCENTRATION OF SALES FROM A LIMITED AMOUNT OF ADVERTISERS, THE LOSS
OF WHICH COULD HAVE A MATERIAL ADVERSE AFFECT ON OUR BUSINESS.

Our five largest advertisers represented 82% of our total net revenue
for the period from our inception (August 23, 2005) through December 31, 2005.
Similarly, for the nine months ended September 30, 2006, our five largest
advertisers contributed 60% of our total net revenues. Under present conditions,
the loss of any one of these advertisers could have a material adverse effect on
our operations and financial condition. We have filed a lawsuit against a
customer, which represented 17% of our revenue for the nine months ended
September 30, 2006, to recover amounts owed to us. We have provided no services
to this customer since June 2006.

WE MAY BE ADVERSELY AFFECTED IF DATA FROM THIRD PARTY PROVIDERS IS NO LONGER
AVAILABLE TO US.

We are dependent on data from third party providers such as Nielsen
Media Research, Arbitron, Inc. and FYI Television, Inc. Although we currently
have contracts with these vendors to provide us this data, we cannot guarantee
that these contracts will be renewed or, if renewed, that such terms are
acceptable to us. If we are unable to obtain such data, our business will be
adversely affected.

RISKS RELATING TO OUR INDUSTRY

INTERPRETATION OF EXISTING LAWS OR REGULATIONS THAT DID NOT ORIGINALLY
CONTEMPLATE THE INTERNET COULD HARM OUR BUSINESS AND OPERATING RESULTS.

The application of existing laws governing issues such as property
ownership, copyright and other intellectual property issues to the Internet is
not clear. Many of these laws were adopted before the advent of the Internet and
do not address the unique issues associated with the Internet and related
technologies. In many cases, the relationship of these laws to the Internet has
not yet been interpreted. New interpretations of existing laws may increase our
costs, require us to change business practices or otherwise harm our business.

CHANGES IN THE EXISTING LAWS OR REGULATIONS IN RESPONSE TO THE CHANGES IN OUR
INDUSTRY COULD HARM OUR BUSINESS AND OPERATING RESULTS.

Broadcasters and, to a lesser extent, advertisers are subject to
various laws and regulations that may be changed in response to changes in
industry practices, such as the development of our marketplace. Such changes may
increase our costs, require us to change business practices or otherwise harm
our business.

In particular, the operation of radio and television broadcast stations
is subject to regulation by the Federal Communications Commission, or the FCC.
Congress and the FCC are currently considering new laws, regulations and
policies regarding a wide variety of matters, including requiring stations to
provide free political time. The amount of time available for advertising may be
reduced if such a regulation were to be implemented. A reduction in the amount
of available advertising time could cause a reduction in our revenues, which
would adversely affect our business.

RISKS RELATING TO OUR COMMON STOCK

OUR STOCK PRICE MAY BE VOLATILE.

The market price of our common stock is likely to be highly volatile
and could fluctuate widely in price in response to various factors, many of
which are beyond our control, including the following:

o technological innovations or new products and services by us or
our competitors;

o intellectual property disputes;

o additions or departures of key personnel;

o sales of our common stock;

o our ability to execute our business plan;

o operating results that fall below expectations;

o loss of any strategic relationship;

o industry developments;

o economic and other external factors; and

o period-to-period fluctuations in our financial results.

In addition, the securities markets have from time to time experienced
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. These market fluctuations may also
materially and adversely affect the market price of our common stock.

WE HAVE NEVER PAID DIVIDENDS AND DO NOT EXPECT TO PAY DIVIDENDS IN THE
FORESEEABLE FUTURE. ANY RETURN ON INVESTMENT MAY BE LIMITED TO THE VALUE OF OUR
COMMON STOCK.

We have never paid cash dividends on our common stock and do not
anticipate doing so in the foreseeable future. The payment of dividends on our
common stock will depend on earnings, financial condition and other business and
economic factors affecting it at such time as our board of directors may
consider relevant. If we do not pay dividends, a return on an investment in our
common stock will only occur if our stock price appreciates.

AS WE HAVE BECOME PUBLIC BY MEANS OF A REVERSE MERGER, WE MAY NOT BE ABLE TO
ATTRACT THE ATTENTION OF MAJOR BROKERAGE FIRMS.

There may be risks associated with our becoming a public company
through a "reverse merger." Securities analysts of major brokerage firms may not
provide coverage of us. We cannot assure you that brokerage firms will, in the
future, assign analysts to cover us or want to conduct any secondary offerings
on our behalf.

OUR COMMON STOCK MAY BE DEEMED A "PENNY STOCK", WHICH WOULD MAKE IT MORE
DIFFICULT FOR OUR INVESTORS TO SELL THEIR SHARES.

Our common stock may be subject to the "penny stock" rules adopted
under Section 15(g) of the Securities Exchange Act of 1934, as amended, or the
Exchange Act. The penny stock rules apply to non-Nasdaq companies whose common
stock trades at less than $5.00 per share or that have tangible net worth of
less than $5.0 million ($2.0 million if the company has been operating for three
or more years). These rules require, among other things, that brokers who trade
penny stock to persons other than "established customers" complete certain
documentation, make suitability inquiries of investors and provide investors

with certain information concerning trading in the security, including a risk
disclosure document and quote information under certain circumstances. Many
brokers have decided not to trade penny stocks because of the requirements of
the penny stock rules and, as a result, the number of broker-dealers willing to
act as market makers in such securities is limited. Remaining subject to the
penny stock rules for any significant period could have an adverse effect on the
market, if any, for our securities. If our securities are subject to the penny
stock rules, investors will find it more difficult to dispose of our securities.

Furthermore, for companies whose securities are traded on the OTCBB, it
is more difficult to obtain accurate quotations, obtain coverage for significant
news events because major wire services generally do not publish press releases
about such companies and obtain needed capital.

SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK MAY CAUSE THE PRICE
OF OUR COMMON STOCK TO DECLINE.

We have registered for resale all 204,025,000 shares of common stock
that are not currently freely tradeable. If our stockholders sell substantial
amounts of our common stock in the public market, including shares issued upon
the exercise of outstanding options, the market price of our common stock could
fall. These sales also may make it more difficult for us to sell equity or
equity-related securities in the future at a time and price that we deem
reasonable or appropriate.

ADDITIONAL STOCK OFFERINGS MAY DILUTE CURRENT STOCKHOLDERS.

Given our expansion plans and our expectation that we may need
additional capital and personnel, we may need to issue additional shares of
capital stock or securities convertible or exercisable for shares of capital
stock, including preferred stock, options or warrants. The issuance of
additional capital stock may dilute the ownership of our current stockholders.

OUR DIRECTORS, EXECUTIVE OFFICERS AND ENTITIES AFFILIATED WITH THEM BENEFICIALLY
OWN A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK, WHICH GIVES THEM
SIGNIFICANT CONTROL OVER CERTAIN MAJOR DECISIONS ON WHICH OUR STOCKHOLDERS MAY
VOTE AND MAY DISCOURAGE AN ACQUISITION OF US.

Our executive officers, directors and affiliated persons beneficially
own, in the aggregate, approximately 52.5% of our outstanding common stock. This
does not reflect the increased percentages that the officers and directors would
own if they exercise any stock options that may be granted to them under
employee incentive plans or if they otherwise acquire additional shares of our
common stock. The interests of our current officers and directors may differ
from the interests of other stockholders. As a result, these current officers,
directors and affiliated persons will have significant influence over all
corporate actions requiring stockholder approval, irrespective of how our other
stockholders may vote, including the following actions:

o elect or defeat the election of our directors;

o amend or prevent amendment of our certificate of incorporation or
bylaws;

o effect or prevent a merger, sale of assets or other corporate
transaction; and

o control the outcome of any other matter submitted to the
stockholders for vote.

Management's stock ownership may discourage a potential acquirer from
making a tender offer or otherwise attempting to obtain control of us, which in
turn could reduce our stock price or prevent our shareholders from realizing a
premium over our stock price.

PROVISIONS IN OUR CHARTER DOCUMENTS AND UNDER DELAWARE LAW MAY PREVENT OR DELAY
A CHANGE OF CONTROL OF US AND COULD ALSO LIMIT THE MARKET PRICE OF OUR COMMON
STOCK.

Provisions of our certificate of incorporation, as amended, and bylaws,
as well as provisions of Delaware corporate law, may discourage, delay or
prevent a merger, acquisition or other change in control of our company, even if
such a change in control would be beneficial to our stockholders. These
provisions may also prevent or frustrate attempts by our stockholders to replace
or remove our management. These provisions include:

o prohibiting the stockholders from fixing the number of our
directors;

o authorizing our board of directors to designate the terms of and
issue new series of preferred stock without additional stockholder
approvals;

o limiting the individuals who may call a special meeting to our
non-executive chairman, chief executive officer, president, the
majority of our board of directors or the majority of our
stockholders; and

o requiring advance notice for stockholder proposals and
nominations.

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, which limits business combination transactions with
stockholders of 15% or more of our outstanding voting stock that our board of
directors has not approved. These provisions and other similar provisions make
it more difficult for stockholders or potential acquirers to acquire us without
negotiation. These provisions may apply even if some stockholders may consider
the transaction beneficial to them.

These provisions could limit the price that investors are willing to
pay in the future for shares of our common stock. These provisions might also
discourage a potential acquisition proposal or tender offer, even if the
acquisition proposal or tender offer is at a premium over the then current
market price for our common stock.

FAILURE TO CAUSE A REGISTRATION STATEMENT TO BECOME EFFECTIVE IN A TIMELY MANNER
COULD MATERIALLY ADVERSELY AFFECT US.

We have agreed, at our expense, to prepare a registration statement
covering the shares of common stock offered in our July 2006 private placement
and to use our best efforts to have that registration statement declared
effective by the Securities and Exchange Commission, or the Commission, within
120 days of the first closing of the private placement. There are many reasons,
including those over which we have no control, which could delay the
effectiveness of the registration statement, including delays resulting from the
Commission review process and comments raised by the Commission during that
process. Failure to respond to comments from the Commission in a timely manner
could materially adversely affect us and result in fees in the form of cash or
stock to be paid to investors in our July 2006 private placement.

BEING A PUBLIC COMPANY WILL INCREASE OUR ADMINISTRATIVE COSTS AND MAY ADD OTHER
BURDENS.

As a public company, we will incur significant legal, accounting and
other expenses that we did not incur as a private company. In addition, the
Sarbanes-Oxley Act of 2002, rules implemented by the Commission, and new listing
requirements of the Nasdaq Global Market and securities exchanges have required
changes in corporate governance practices of public companies. We expect these
new rules and regulations to increase our legal and financial compliance costs
and to make some activities more time consuming and costly. We also expect these
new rules and regulations to make it more difficult and more expensive for us to
obtain director and officer liability insurance, and we may be required to
accept reduced coverage or incur substantially higher costs to obtain coverage.
These new rules and regulations could also make it more difficult for us to
attract and retain qualified members of our board of directors, particularly
those serving on our audit committee.

WE WILL BE EXPOSED TO RISKS RELATING TO EVALUATIONS OF OUR INTERNAL CONTROLS
OVER FINANCIAL REPORTING REQUIRED BY SECTION 404 OF THE SARBANES-OXLEY ACT OF
2002.

As a public company, absent an available exemption, we will be required
to comply with Section 404 of the Sarbanes-Oxley Act by no later than December
31, 2007. However, we cannot be certain as to the timing of completion of our
evaluation, testing and remediation actions or the impact of the same on our
operations. Furthermore, upon completion of this process, we may identify
control deficiencies of varying degrees of severity that remain unremediated. As
a public company, we will be required to report, among other things, control
deficiencies that constitute a "material weakness." A "material weakness" is a
significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the annual or
interim financial statements will not be prevented or detected. If we fail to
implement the requirements of Section 404 in a timely manner, we might be
subject to sanctions or investigation by regulatory agencies such as the
Commission. In addition, failure to comply with Section 404 or the report by us
of a material weakness may cause investors to lose confidence in our financial
statements and the trading price of our common stock may decline. If we fail to
remedy any material weakness, our financial statements may be inaccurate, our
access to the capital markets may be restricted and the trading price of our
common stock may decline.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward looking statements within the meaning
of Section 27A of Securities Act of 1933, a amended, or the Securities Act,
Section 21E of the Exchange Act and the Private Securities Litigation Reform Act
of 1995, including statements regarding our expected financial position,
business and financing plans. These forward-looking statements reflect our views
with respect to future events and financial performance. When used or
incorporated by reference in this prospectus, statements which are not
historical in nature, including the words "may," "will," "should," "continue,"
"future," "potential," "believe," "expect," "anticipate," "project," "plan,"
"intend," "seek," "estimate" and similar expressions are intended to identify
forward-looking statements.

The forward-looking statements in this prospectus are based upon our
management's beliefs, assumptions and expectations of our future operations and
economic performance, taking into account the information currently available to
us. These statements are not statements of historical fact. These
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance or financial
condition to be materially different from any future results expressed or
implied by these statements. These factors include, among other things, the
risks discussed in this prospectus under the caption "Risk Factors."

In light of these and other uncertainties, the forward-looking
statements included or incorporated by reference in this prospectus should not
be regarded as a representation by us that our plans and objectives will be
achieved. You should not place undue reliance on any forward-looking statements,
and we undertake no obligation to publicly update or revise any forward-looking
statements after the date of this prospectus, whether as a result of new
information, future events or otherwise.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the shares
owned by the selling stockholders.

MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Our common stock is quoted on the OTCBB under the symbol SWMX.OB. As of
October 31, 2006, there were approximately 398 holders of record of our common
stock. The following table sets forth the high and low bid prices for our common
stock for the periods indicated as reported by the OTCBB. Prior to July 31,
2006, there was no active trading market for our common stock. The prices state
inter-dealer quotations, which do not include retail mark-ups, mark-downs or
commissions. These prices do not necessarily represent actual transactions.

Fiscal year ending December 31, 2006 High Low
---- ---
Third Quarter $ 11.50 $ 1.80
Fourth Quarter (through October 31, 2006) $ 3.50 $ 2.55

We have not paid any dividends on our common stock and do not
anticipate declaring or paying any cash dividends in the foreseeable future. We
currently expect to retain future earnings, if any, to finance the growth and
development of our business. The holders of our common stock are entitled to
dividends when and if declared by our board of directors from legally available
funds.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

This prospectus contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The
following discussion may contain forward-looking statements regarding us, our
business, prospects and our results of operations that are subject to certain
risks and uncertainties posed by many factors and events that could cause our
actual business, prospects and results of operations to differ materially from
those that may be anticipated by such forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those described in the "Risk Factors" section of our Current Report on Form 8-K,
as filed with the Securities and Exchange Commission on July 27, 2006. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this report. We undertake no obligation to
revise any forward-looking statements in order to reflect events or
circumstances that may subsequently arise. Readers are urged to carefully review
and consider the various disclosures made by us in this report and in our other
reports filed with the Securities and Exchange Commission that advise interested
parties of the risks and factors that may affect our business. This discussion
should be read in conjunction with the audited financial statements of Soft Wave
Media, LLC for the period from inception (August 23, 2005) through December 31,
2005 as well as the unaudited financial statements for the three and nine months
ended September 30, 2006.

The following discussion reflects management's analysis of the
financial condition, results of operations and the operating history of SoftWave
Media Exchange, Inc. and its predecessor entity, Soft Wave Media, LLC. As such,
the discussion only represents management's current assessment of the operations
of the business. Since these operations began only recently, August 2005,
management is unable to evaluate its performance against truly comparable
periods from prior periods.

On July 26, 2006, Edgemont Resources, Inc. created a wholly-owned
subsidiary, SWMX Acquisition, Inc., to acquire and merge with and into SoftWave
Media Exchange, Inc., pursuant to a merger agreement. Upon conclusion of the
merger, Edgemont Resources, Inc. changed its name to SWMX, Inc. and the
subsidiary changed its name to SoftWave Media Exchange, Inc.

The merger of a private operating company, SoftWave Media Exchange,
Inc. into a non-operating public shell corporation, Edgemont Resources, Inc.,
with nominal assets or liabilities resulted in the shareholders of SoftWave
Media Exchange, Inc. having actual operating control of the merged company after
the transaction. The transaction is considered to be a capital transaction in
substance, rather than a business combination. That is, the transaction is the
equivalent to the issuance of stock by the private company for the net monetary
assets of the shell company, accompanied by a recapitalization. Accordingly, the
outstanding shares of SoftWave Media Exchange, Inc. have been restated in the
accompanying balance sheets and statement of changes in stockholders' equity
(deficit) to give effect to the merger. Pursuant to the merger agreement the
common stock exchange ratio was one to one. The restated shares have been used
in the computation of loss per share.

On January 19, 2006, SoftWave Media Exchange, Inc. entered into a
contribution agreement with Soft Wave Media, LLC and its members, Alowex, LLC
("Alowex") and Remnant Media, LLC, whereby Soft Wave Media, LLC (the
"Predecessor") contributed all of its assets and all of its liabilities to
SoftWave Media Exchange, Inc. These assets included but were not limited to
software, intellectual property, domain name and website content. This
transaction effectively merged the Predecessor into SoftWave Media Exchange,
Inc. and did not result in any change in ownership or control. As such the
assets and liabilities of SoftWave Media Exchange, Inc., as of the contribution
date, are reflected at the carryover basis of the Predecessor.

OVERVIEW

We operate as an intermediary in implementing the buying and selling of
media time. Our long-term goal is to establish and operate a broad-based
electronic media marketplace and to develop the clientele and systems to support
that marketplace on a phased basis. We are in our early stage of implementing
this strategy. In August 2005, we were organized as a limited liability company
after acquiring the right to operate a platform for the sale of radio
advertising that had been developed and tested by several affiliated companies
during the previous several years. After adding additional personnel and
securing additional investors, the business entity was merged into a corporation
in January 2006.

Since inception, we have considered that the ability to achieve rapid
growth in the number of entities that participate in our marketplace and to
quickly expand the marketplace to include additional segments of the media
market will be essential to our long run competitiveness and success. This
policy has dictated that the support systems that have been designed for the
marketplace be sufficiently robust to accommodate large, rapid increases in
volume and be inherently scalable so that the marketplace can be expanded to
incorporate additional market segments without the need for fundamental redesign
of our underlying systems. Consequently, the level of expenses has been high
relative to revenues and significant losses have been incurred through September
30, 2006.

The policy of pursuing rapid growth is based on the assessment that one
of the primary risks we face is the relatively low cost of simulating our
business model through the creation and marketing of web sites that appear to
offer a product similar to the SWMX Marketplace, but without the underlying
support systems and productivity features that we provide. To the extent that
such low cost competitors fail to fully deliver on the promise of an electronic
media exchange, the resulting confusion and disappointment could inhibit the
acceptance of the SWMX Marketplace. In addition, our management believes that,
to the extent that we are successful in our efforts to achieve dramatic,
industry-wide efficiencies in as large a market as global advertising media
sales, we will and already are attracting large, well-funded competitors that
may be successful in capturing a significant share of the market. Although we
consider such competition to be to some extent inevitable and perhaps even
beneficial, we believe that a key component of success for any such marketplace
will be the ability to achieve a large volume of participants in its system
early in the trend.

A related risk is the risk that we will not be able to raise sufficient
capital to sustain the level of growth that management considers optimal,
particularly because our current business model is to promote confidence in our
marketplace by acting as a principal in guaranteeing payment for advertising
placements. To the extent that payables to broadcasters are incurred and
satisfied faster than receivables from advertisers, our position as a principal
in supporting our marketplace results in increased credit risk and a heightened
need for cash.

Other major risks that management has been addressing since inception
are risks associated with developing the human, physical, technological and
management resources necessary to sustain such a high level of growth in our
system, the risk of unanticipated equipment or other systems failures, the risk
of unforeseen legal or regulatory problems and the need to develop robust
control systems for a rapidly growing enterprise.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussions of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting policies generally accepted in the United States
of America, or GAAP. The preparation of financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the period. On an ongoing
basis, we evaluate our estimates and assumptions, including those related to
revenue recognition, bad debts, fixed assets, stock-based compensation and
certain accruals. Actual results could differ from those estimates. The critical
accounting policies discussed herein are not intended to be a comprehensive list
of all of our accounting policies. In many cases, the accounting treatment of a
particular transaction is specifically dictated by GAAP and does not result in
significant management judgment in the application of such principles. There are
also areas in which management's judgment in selecting any available alternative
would not produce a materially different result from the result derived from the
application of our critical accounting policies. We believe that the following
accounting policies are most critical to us in that they represent the primary
areas where financial information is subject to the application of management's
estimates, assumptions and judgment in the preparation of our consolidated
financial statements.

CAPITALIZED SOFTWARE

In accordance with Statement of Position 98-1, Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use ("SOP 98-1"),
certain direct development costs associated with internal-use software are
capitalized. These costs include external direct costs of service and payroll
costs for employees devoting time to software projects principally related to
software coding, designing system interfaces and installation and testing of the
software. These costs are recorded as fixed assets and are amortized over a
period not to exceed three years beginning when the asset is substantially ready
for use. Certain other costs incurred during the preliminary project stage, as
well as maintenance and training costs, are expensed as incurred. Through
September 30, 2006, we have only capitalized the cost of the software purchased
from Alowex, LLC, a related party, based on the criteria of SOP 98-1.

REVENUE RECOGNITION AND PRESENTATION

We recognize revenue when all of the following criteria have been met:
persuasive evidence of an arrangement exists; services have been rendered; the
price to the customer is fixed and determinable and collectibility from the
customer is reasonably assured. Generally, these criteria are met when the
customer's advertisement is aired, and it is at this point that we recognize
revenue. In compliance with Emerging Issues Task Force ("EITF") Issue No. 99-19,
Reporting Revenue Gross as a Principal versus Net as an Agent, we assess whether
we or the third party broadcaster is the primary obligor. In addition, we give
appropriate consideration to other key indicators such as latitude in
establishing price, discretion in broadcaster selection and who has credit risk.
As we operate broadly as a network exchange and the advertising industry
practice is to generally record revenue on a net versus gross basis, we believe
that there must be strong evidence in place to overcome the presumption of net
revenue accounting. Accordingly, we have historically recorded revenue net of
pass-through charges, based on our assessment of the key indicators, resulting
in our net transaction fees as revenue. Should we enter into transactions where
the key indicators suggest it is acting as a principal, then we will record the
gross amount billed as revenue.

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

Based on experience and judgment, we establish an allowance for
uncollectible accounts. Our judgment includes evaluating the willingness and the
ability of the customer to satisfy his obligation to us. Although we believe
that our reserves are adequate, if the financial condition of our customers
deteriorates, resulting in an impairment of their ability to make payments, or
if we underestimate the allowance required, additional allowances may be
necessary, which will result in increased selling, general and administrative
expenses in the period such determination is made.

Our bad debt expense for the three and nine months ended September 30,
2006 was $50,000 and $1,282,000, respectively. As of September 30, 2006 and 2005
our allowance for doubtful account balance was $1,282,000 and zero,
respectively.

EFFECT OF INFLATION

Inflation has not had a material effect on our operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 157, "Fair Value Measurements". This Statement defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
This Statement applies under other accounting pronouncements that require or
permit fair value measurements, the FASB having previously concluded in those
accounting pronouncements that fair value is the relevant measurement attribute.
Accordingly, this Statement does not require any new fair value measurements.
However, for some entities, the application of this Statement will change
current practice. This Statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. We are currently evaluating the impact of this Statement on
our financial statements.

In July 2006, the FASB issued Financial Interpretation No. 48 (FIN 48)
("Accounting for Uncertainty in Income Taxes, as Interpretation of FASB
Statement No. 109"). This Interpretation clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial statements
in accordance with FASB Statement No. 109, "Accounting for Income Taxes". FIN 48
prescribes a recognition and measurement threshold attributable for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
recognition, classification, interest and penalties, accounting in interim
periods, disclosures and transition. FIN 48 is effective for fiscal years
beginning after December 15, 2006. We are currently evaluating the impact of
this Interpretation on our financial statements.

RESULTS OF OPERATIONS

The following table sets forth selected consolidated statements of
operations data for each of the periods indicated:

Period from Inception
Three months ended Nine months ended (August 23, 2005) to
September 30, 2006 September 30, 2006 September 30, 2005
------------------ ------------------ ------------------

Net revenues $ 632,579 $ 1,546,059 $ 49,387

Costs and expenses:
Cost of revenues 336,850 785,131 34,500
Selling, general and administrative 3,117,341 6,973,536 21,273
----------- ----------- -----------
Total costs and expenses 3,454,191 7,758,667 55,773
----------- ----------- -----------
Operating loss (2,821,612) (6,212,608) (6,386)

Interest expense, net 1,434 235,812 1,528

----------- ----------- -----------
Net Loss $(2,823,046) $(6,448,420) $ (7,914)
=========== =========== ===========

REVENUES. Our revenues for the three and nine months ended September
30, 2006 were $633,000 and $1,546,000, respectively, and $49,000 for the period
from inception of the Company (August 23, 2005) to September 30, 2005. Revenues
generated by our Marketplace are largely determined by the total number of ad
spots sold, the value of these spots and the transaction fees we earn on a
particular spot, which are subject to change due to the type of spot (remnant or
flighted), seasonal and other factors, such as the impact of political
campaigns, as well as the participants in the transaction. Through May 2006 our
marketplace only facilitated the buying and selling of radio spots purchased
within seven days of airing, referred to as remnant buys. Since May 1, 2006 we
have also facilitated the buying and selling of scheduled radio spots, referred
to as flighted buys. Also, beginning in August of 2006 we began facilitating the
buying and selling of political spots, for both individual campaigns and issues.
For the three and nine months ended September 30, 2006 approximately 86% and 70%
of our revenues came from flighted buys. For the three and nine months ended
September 30, 2006, approximately 57% and 52% of our revenues came from three
customers, each contributing in excess of 10% of revenues.

COST OF REVENUES. Our cost of revenues for the three and nine months
ended September 30, 2006 were $337,000 and $785,000, respectively, and $35,000
for the period from inception of the Company (August 23, 2005) to September 30,
2005. Cost of revenues consists of the expenses associated with the operation of
the Company's data centers including depreciation, labor and bandwidth costs.
Cost of revenues also include expenses related to the amortization of
capitalized software development costs, acquired technologies as well as other
software development costs that are expensed in accordance with SOP 98-1.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Our selling, general and
administrative expenses for the three and nine months ended September 30, 2006
were $3,117,000 and $6,974,000, respectively, and $21,000 for the period from
inception of the Company (August 23, 2005) to September 30, 2005. Our selling,
general and administrative expenses have and continue to grow as we execute our
business plan, including increasing our employee base from 10 employees at the
beginning of the year to 49 as of September 30, 2006, to support our revenue
growth. For the three and nine months ended September 30, 2006, our personnel
related costs accounted for approximately 37% and 35% of our total selling,
general and administrative expenses, respectively. Also, included in selling,
general and administrative expenses were the following: stock based compensation
expense of $306,000 and $642,000 for the three and nine months ended September
30, 2006, reverse merger deal costs of $400,000, representing the cash paid by
us to the shareholders of Edgemont Resources, Inc. (the non-operating public
shell company). In addition, we recognized $50,000 and $1,282,000 of bad debt
expense for the three and nine months ended September 30, 2006, respectively, of
which $1,182,000 related to one customer and represented a 100% reserve of the
balance of our gross billings to them. This one customer accounted for 0% and
17% of our revenue for the three and nine months ended September 30, 2006,
respectively. We are vigorously pursuing all legal avenues available to us in an
effort to collect on this receivable.

INTEREST EXPENSE, NET. Our interest expense, net for the three and nine
months ended September 30, 2006 was $1,000 and $236,000, respectively and $2,000
for the period from inception of the Company (August 23, 2005) to September 30,
2005. Included in our interest expense for the nine months ended September 30,
2006 is the write off of the unamortized debt discount and interest of $206,889
related to a note payable to a related party.

INCOME TAXES. The Company has incurred losses since its formation, and
such losses create a deferred tax asset. The Company has established a valuation
reserve equal to this asset.

LIQUIDITY AND CAPITAL RESOURCES

We have historically met our cash requirements and financed our growth
through private placement transactions in which the Company has raised gross
proceeds of $14 million, $200,000 of such proceeds were received in December
2005. The Company also had a $1.5 million revolving credit facility with an
entity owned by shareholders of the Company from January 2006 through July 2006,
with an interest rate of 8%. The revolving credit facility expired in accordance
with its terms upon the completion of the private placement transaction in July
2006. Cash flows are summarized in the table below.

Period from Inception
Nine Months ended (August 23, 2005) to
September 30, 2006 September 30, 2005
------------------ ------------------
Net cash used in operating activities $(6,279,226) $ 120,268
Net cash used in investing activities (1,244,604) --
Net cash provided by financing activities 9,413,212 --

As of September 30, 2006 we had cash of $1,969,000, compared to $80,000
as of December 31, 2005. For the nine months ended September 30, 2006 cash has
increased by approximately $1,889,000 from December 31, 2005. This increase is
the result of the two private placement transactions we completed during the
nine months ended September 30, 2006. The net cash proceeds to the Company from
these two private placements was approximately $10,665,000, which has been used
to fund operations, repay a related party note in the amount of $1.4 million as
well as the revolving line of credit of $1.5 million referred to above.

As of September 30, 2006 and December 31, 2005, the deficit that
accumulated since inception was ($9,658,006) and ($3,209,586), respectively. As
a result of the operating losses from inception and the growth of activity in
the SWMX Marketplace, which resulted in an increase in accounts receivable,
$6,279,226 and $120,268 has been used in operating activities for nine months
ended September 30, 2006 and the period ended December 31, 2005, respectively.
In the nine months ended September 30, 2006, $1,244,604 was used in investing
activities to acquire computer and other office equipment as well as software,
in addition the Company loaned a related party funds to pay certain vendors that
were common to both entities, $200,000 remains outstanding on this loan.

We believe we will continue to incur significant operating expenses,
including significant expenditures on computer hardware, in order to execute our
current business plan. While we believe that we have access to sources of
working capital that are sufficient to fund our operations for the year ending
December 31, 2006, there can be no assurance that such amounts will be
sufficient to meet our business objectives.

SELLING STOCKHOLDERS

The following table sets forth the names of each of the selling
stockholders, the number of shares beneficially owned by each of the selling
stockholders, the number of shares that may be offered under this prospectus and
the number of shares of common stock owned by each of the selling stockholders
after the offering is completed.

Number of
Shares/Percentage of
Number of Shares Class to Be Owned
Owned Prior to the Number of Shares After Completion of
Name Offering to be Offered the Offering
---- -------- ------------- ------------
84 Limited LLC (1) 5,760,000 5,760,000 0/0%
Parry Aftab (2) 154,000 154,000 0/0%
Jill W. Albert 10,666 10,666 0/0%
Christos Aloizos 240,000 240,000 0/0%
Doreen Aloizos 5,000,000 5,000,000 0/0%
Kiki Aloizos 240,000 240,000 0/0%
Maria Aloizos 240,000 240,000 0/0%
Stavros Aloizos (3) 25,000,000 25,000,000 0/0%
Aloizos AAU Fund LLC (4) 15,000 15,000 0/0%
Aloizos Family LLC (5) 5,000,000 5,000,000 0/0%
Aloizos Family Trust (6) 3,000,000 3,000,000 0/0%
Alowex, LLC (7) 433,334 433,334 0/0%
Patrick C. Angus 25,000 25,000 0/0%
Donald Appel 20,000 20,000 0/0%
Tremaine Atkinson 66,667 66,667 0/0%
Betty Lind Barbatsuly 13,500 13,500 0/0%
Maria Aloizos as custodian for Anastasia
Barnes 75,000 75,000 0/0%
Christopher Barnes 75,000 75,000 0/0%
Maria Aloizos as custodian for Daniel Barnes 75,000 75,000 0/0%
Edward Barnes 120,000 120,000 0/0%
Maria Aloizos as custodian for Katie Barnes 75,000 75,000 0/0%
Maria Aloizos as custodian for Kiki Barnes 75,000 75,000 0/0%
Vincent Arquilla 3,333 3,333 0/0%
Mark Barrett 25,000 25,000 0/0%

Number of
Shares/Percentage of
Number of Shares Class to Be Owned
Owned Prior to the Number of Shares After Completion of
Name Offering to be Offered the Offering
---- -------- ------------- ------------
IRA FBO David Barrett VFTC as Custodian . 25,000 25,000 0/0%
Anthony Batelli 24,000 24,000 0/0%
Alvin G. Becker 3,334 3,334 0/0%
Bradley Samuel Beile 8,333 8,333 0/0%
Michael A. Bellantoni 10,000 10,000 0/0%
Roy & Joanne Benjamin Tenants in Common . 50,000 50,000 0/0%
Howard Berg 10,000 10,000 0/0%
Berman Living Trust dated 2/17/00 (8) 300,000 300,000 0/0%
Debbie Berman 500,000 500,000 0/0%
Richard Berman 51,000 51,000 0/0%
Robert Berman (9) 9,400,000 9,400,000 0/0%
Eugene Berthiaume 120,000 120,000 0/0%
Trust for Eugene Berthiaume, Jr. (10) 240,000 240,000 0/0%
Natalie Berthiaume 120,000 120,000 0/0%
Trust for Todd Berthiaume (11) 240,000 240,000 0/0%
David B. Blackmore 25,000 25,000 0/0%
Ross Bleckner 50,000 50,000 0/0%
Travis & Monica Bohnert 7,500 7,500 0/0%
James Patrick Brady 133,333 133,333 0/0%
John P. Bucciarelli and Anna Bucciarelli
JTWROS 10,000 10,000 0/0%
Ben A. Buettell Living Trust Dated 7/25/01
(12) 16,667 16,667 0/0%
Emily Bullock 20,000 20,000 0/0%
Eric Bullock 20,000 20,000 0/0%
Jack Burke and Jean Burke 12,500 12,500 0/0%
Greg M. Busch 25,000 25,000 0/0%
Christopher Butler 41,667 41,667 0/0%
Frank Capaci 4,000 4,000 0/0%
Jamie Caporuscio 24,000 24,000 0/0%
Caprio Family Health & Educational Trust
(13) 1,200,000 1,200,000 0/0%
Michael Caprio (14) 15,586,824 15,586,824 0/0%
Taylor Caprio 240,000 240,000 0/0%
Christopher Cardozo 66,666 66,666 0/0%
Sonia Caycho 20,000 20,000 0/0%
John F. Chuhinko 10,000 10,000 0/0%
Michael Cirilli 13,000 13,000 0/0%
William R. Cox & Marie L. Cox JTWROS 50,000 50,000 0/0%
Crane & Vacco, LLC (15) 12,500 12,500 0/0%
Kevin Davidsen 16,666 16,666 0/0%
Joel Davidsen 6,666 6,666 0/0%
Norton A. Davidson 30,000 30,000 0/0%
Marquette de Bary 12,500 12,500 0/0%
Paul deBary IRA (16) 800,000 800,000 0/0%
Dario Di Lello 96,000 96,000 0/0%
Eric David DeMicco 10,000 10,000 0/0%
Thomas Dietz 20,000 20,000 0/0%
The DJ Treble Cove Trust (17) 16,666 16,666 0/0%
Anthony Domino, Jr 10,000 10,000 0/0%
Dream Trust 9,500,000 9,500,000 0/0%
Garrett Duquesne 700 700 0/0%
Richard Duquesne 1,000 1,000 0/0%

Number of
Shares/Percentage of
Number of Shares Class to Be Owned
Owned Prior to the Number of Shares After Completion of
Name Offering to be Offered the Offering
---- -------- ------------- ------------
Debra Durben and Richard Durben JTWROS 10,000 10,000 0/0%
Clifford Ehrlich 12,500 12,500 0/0%
Jonathan Farrow 320,000 320,000 0/0%
Anthony J. Fasolino 20,000 20,000 0/0%
Anthony S. Fasolino 1,000 1,000 0/0%
Nicole A. Fasolino 1,000 1,000 0/0%
Todd M. Fedore 1,333 1,333 0/0
Serena Fernandez (18) 10,000 10,000 0/0%
William R. Figenshu (19) 3,334 3,334 0/0%
Rayburn J. Fisher, Jr 125,000 125,000 0/0%
David S. Fleisher 5,000 5,000 0/0%
Carol Florez 240,000 240,000 0/0%
James & Carolanne Florez 10,000 10,000 0/0%
Michael Bernard Flynn 13,334 13,334 0/0%
Bruce J. Fogel 66,667 66,667 0/0%
Fox Hollow Lane, LLC (20) 500,000 500,000 0/0%
Robert H. Friedman (21) 600,000 600,000 0/0%
Richard E. Fritz 50,000 50,000 0/0%
Robert S. Gallay 8,333 8,333 0/0%
Bonnie Geller IRA 20,973 20,973 0/0%
Trust for Jeannine Germaine (22) 240,000 240,000 0/0%
Amy Gershman 240,000 240,000 0/0%
Jonathan Gershman 240,000 240,000 0/0%
Laurence Gershman IRA 26,000 26,000 0/0%
Laurence and Bonnie Gershman JTWROS (23) 7,417,858 7,417,858 0/0%
Richard Gershman 80,000 80,000 0/0%
Judy Giuffrida 240,000 240,000 0/0%
Robert Giuffrida 240,000 240,000 0/0%
Salvatore Giuffrida 246,000 246,000 0/0%
Salvatore Giuffrida as Custodian for
Salvatore J. Giuffrida 1,000 1,000 0/0%
David Goodstein 20,000 20,000 0/0%
Elliot Goldstein 13,000 13,000 0/0%
Ronald Goodstein 20,000 20,000 0/0%
Glenn Goord 20,000 20,000 0/0%
Barry Gosin 33,334 33,334 0/0%
Marc Guild 20,000 20,000 0/0%
Alden C. Gunther 15,000 15,000 0/0%
Aaron Gural 16,667 16,667 0/0%
Jeffrey Gural 33,334 33,334 0/0%
Ellen M. Hardy 8,000 8,000 0/0%
Denton and Carolyn Harris JTWROS 50,000 50,000 0/0%
Timothy R. Hartigan 16,667 16,667 0/0%
Christine A. Henderson 6,625 6,625 0/0%
Danielle T. Henderson 6,625 6,625 0/0%
Edward Henderson 25,000 25,000 0/0%
Edwin J. Henderson 6,625 6,625 0/0%
Grace T. Henderson 6,625 6,625 0/0%
James I. Hisiger 8,334 8,334 0/0%
William W. Hopson 25,000 25,000 0/0%
Penni Horwich 10,000 10,000 0/0%
Paul L. Hugo 25,000 25,000 0/0%
Michael T. Joyce and Deborah R. Joyce 3,333 3,333 0/0%
David Kang (24) 40,000 40,000 0/0%
Kaniewski Family Limited Partnership (25) 1,435,000 1,435,000 0/0%
Scott Kaniewski (26) 16,667 16,667 0/0%

Number of
Shares/Percentage of
Number of Shares Class to Be Owned
Owned Prior to the Number of Shares After Completion of
Name Offering to be Offered the Offering
---- -------- ------------- ------------
Stacey Kaniewski 2,000,000 2,000,000 0/0%
Steven Kapito 20,000 20,000 0/0%
Brad Kaplan 20,000 20,000 0/0%
Keay Family LLC (26) 1,920,000 1,920,000 0/0%
Hunter Kent Keay Trust (28) 480,000 480,000 0/0%
John I. Keay, Jr. (29) 17,866,825 17,866,825 0/0%
John I. Keay, Sr 240,000 240,000 0/0%
Morgan Gaines Keay Trust (30) 480,000 480,000 0/0%
Nancy Smith Keay 240,000 240,000 0/0%
Suzanne Keay 1,920,000 1,920,000 0/0%
KFP Trust (31) 3,700,000 3,700,000 0/0%
Christian Kitchell 100,000 100,000 0/0%
Rich E. Klemann and Geneva Desilets Klemann 1,000 1,000 0/0%
Gail Kocher 20,000 20,000 0/0%
Phyllis H. Kramer 16,667 16,667 0/0%
Paul LeVasseur 26,666 26,666 0/0%
Gary Lee (32) 25,000 25,000 0/0%
Trust for Alecia Leger (33) 467,000 467,000 0/0%
Daniel Leger Trust (34) 467,000 467,000 0/0%
Carlo Liccardi 120,000 120,000 0/0%
Maureen Liccardi 120,000 120,000 0/0%
Jeff Louisot 24,000 24,000 0/0%
James J. Ludewig 100,000 100,000 0/0%
Kevin Mannix (35) 905,524 905,524 0/0%
George Marone 20,000 20,000 0/0%
Joseph P. Matturro 25,000 25,000 0/0%
Dawson K. McKeown & Mary A. McKeown JTWROS 13,500 13,500 0/0%
Michael McRee and Mary Lynn McRee JTWROS 10,000 10,000 0/0%
Susan Mediterraneo 10,000 10,000 0/0%
Don Middleberg (36) 25,000 25,000 0/0%
Jeffrey F. Miller 12,500 12,500 0/0%
Lawrence T. Mintz & Sandra Mintz JTWROS . 10,000 10,000 0/0%
Momar Corporation (37) 1,000,000 1,000,000 0/0%
Edward J. Morehouse, Jr 1,000 1,000 0/0%
David E. Mortell 8,334 8,334 0/0%
Mark Mosello 8,000 8,000 0/0%
David M. Murdock & Eileen A. Murdock JTWROS 10,000 10,000 0/0%
Charles M. Murphy and Linda A. Murphy 6,000 6,000 0/0%
Matthew P. Murphy 10,000 10,000 0/0%
David A. Muslin 83,333 83,333 0/0%
Douglas J. Myers 10,000 10,000 0/0%
Steven B. Nasatir and Carolyn H. Rosenberg 25,000 25,000 0/0%
Brian J. Nastruz 11,334 11,334 0/0%
Brian J. Nastruz as custodian for Alex G
Nastruz 8,000 8,000 0/0%
Brian J. Nastruz as custodian for Lucas E
Nastruz 8,000 8,000 0/0%
Brian J. Nastruz as custodian for Nicholas
A. Nastruz 8,000 8,000 0/0%

Number of
Shares/Percentage of
Number of Shares Class to Be Owned
Owned Prior to the Number of Shares After Completion of
Name Offering to be Offered the Offering
---- -------- ------------- ------------
Neuberger Berman, LLC TTEE, Emanuel
Genauer, IRA Rollover 521-30380 16,666 16,666 0/0%
Marvin Newman 20,000 20,000 0/0%
Paul B. Noonan and Clorinda E. Noonan
JTWROS (38) 10,000 10,000 0/0%
Notchview Pediatrics Retirement Plan FBO
Ralph E. Caprio (39) 13,333 13,333 0/0%
Wayne Douglas Ohlandt 15,000 15,000 0/0%
Charles Omphalius (40) 12,330,824 12,330,824 0/0%
Omphalius Family Health & Educational Trust
(41) 1,184,000 1,184,000 0/0%
Omphalius Family LLC (42) 4,776,000 4,776,000 0/0%
Trust for Jamey Omphalius (43) 478,000 478,000 0/0%
Kathleen Omphalius (44) 130,000 130,000 0/0%
Trust for Kimberly Omphalius (45) 2,152,000 2,152,000 0/0%
William Omphalius 120,000 120,000 0/0%
Anthony J. Orrico Revocable Trust UAD
2/17/95 (46) 25,000 25,000 0/0%
Vincent M. Orrico 25,000 25,000 0/0%
Robert J. Palazzolo & Margaret A. Palazzolo
JTWROS 17,000 17,000 0/0%
Matt Palmatier 200 200 0/0%
Paul Pashkow 25,000 25,000 0/0%
Susan Pashkow 25,000 25,000 0/0%
Timothy Phipps 20,000 20,000 0/0%
Pinkert Investors LLC (47) 16,667 16,667 0/0%
Stephen M. Reiches 8,333 8,333 0/0%
Alan Richter 10,000 10,000 0/0%
Robin R. Rose IRA 25,000 25,000 0/0%
Richard P. Roth 4,000 4,000 0/0%
Stephen E. Roth 13,333 13,333 0/0%
Kimberly J. Sabatini 33,333 33,333 0/0%
Robyn Saffian (48) 20,000 20,000 0/0%
Jason Saltsberg as custodian for Kimberly
Robyn Saltsberg 2,500 2,500 0/0%
Jason Saltsberg as custodian for Wendy
Golda Saltsberg 2,500 2,500 0/0%
Peter John Samponaro 25,000 25,000 0/0%
Andrea Sardelli 50,000 50,000 0/0%
Carol Schappen 34,000 34,000 0/0%
Stephen Schnurmacher 10,000 10,000 0/0%
Clark Schubach 1,000,000 1,000,000 0/0%
Douglas Schultz 300,000 300,000 0/0%
Lora K. Schultz 33,333 33,333 0/0%
Eric Scuccimarra (49) 1,000,000 1,000,000 0/0%
Sarah Seligman 144,000 144,000 0/0%
Brian Seltzer 30,000 30,000 0/0%
Ronald J. Shay IRA 7,500 7,500 0/0%
Linda Soreff Siegel Revocable
Trust (50) 200,000 200,000 0/0%
Michael Patrick Simons 25,000 25,000 0/0%
Erin Sine 666 666 0/0%
John L. Sine 4,700 4,700 0/0%
Peter Sine 333 333 0/0%
Donna L. Smith IRA 10,000 10,000 0/0%
SMTM Equity Partners LLC (51) 67,000 67,000 0/0%

Number of
Shares/Percentage of
Number of Shares Class to Be Owned
Owned Prior to the Number of Shares After Completion of
Name Offering to be Offered the Offering
---- -------- ------------- ------------
Softwave Holdings Trust 7,000,000 7,000,000 0/0%
Deborah Sokobin 240,000 240,000 0/0%
Vincent Spera 16,000 16,000 0/0%
Jean A. Stanulwich 16,666 16,666 0/0%
Terrence R. Stanulwich 50,149 50,149 0/0%
Susan Stanullwich 400 400 0/0%
Starlight Trust (52) 500,000 500,000 0/0%
Nathan Steingart 20,000 20,000 0/0%
Ira Steingart 20,000 20,000 0/0%
Tim Sweeney 22,000 22,000 0/0%
Robert M. Taylor and Karin O. Taylor 200 200 0/0%
Edward A. Tedeschi 20,000 20,000 0/0%
William J. Thompson 75,000 75,000 0/0%
Luke Vaccaro 5,000 5,000 0/0%
Kinch Morgan Varner, III 100,000 100,000 0/0%
Edward J. Vickers 25,000 25,000 0/0%
The Vintox Fund (53) 60,000 60,000 0/0%
Vista Development, LLC (54) 780,000 780,000 0/0%
Charles A. Walwyn III 666 666 0/0%
Michael S. Warner 59,000 59,000 0/0%
Alan Weiner and Anahid Weiner, as Joint
Tenants 25,000 25,000 0/0%
The Greg Richards, Larry Polatsch and Scott
Weingard Memorial Fund, Inc. (55) 240,000 240,000 0/0%
Wex Holdings LLC (56) 7,000,000 7,000,000 0/0%
Christine Wexler 5,000,000 5,000,000 0/0%
Wexler Family Trust (57) 3,000,000 3,000,000 0/0%
Jonathan Wexler 240,000 240,000 0/0%
Joshua Wexler (58) 22,080,000 22,080,000 0/0%
Richard and Roberta Wexler JTWROS 505,000 505,000 0/0%
Timothy J. Whealon 50,000 50,000 0/0%
Amber Wheeler 666 666 0/0%
Alexander Wild 10,000 10,000 0/0%
Ben J. Wild 66,666 66,666 0/0%
Charles D. Wild 7,667 7,667 0/0%
Peter D. Wild 10,000 10,000 0/0%
Shawn Wiles 20,000 20,000 0/0%
Roth IRA FBO Clarence Williams 1,333 1,333 0/0%
Kimbra Willison 20,000 20,000 0/0%
Alisha Wingerter (59) 10,000 10,000 0/0%
W. Anderson Wittekind 12,500 12,500 0/0%
Chris Wong 25,000 25,000 0/0%
Robert Wong (60) 1,003,993 1,003,993 0/0%
Paul Yeaple 2,000 2,000 0/0%
The Zittlosen Vollbracht, LLC (61) 800,000 800,000 0/0%
TOTAL: 204,025,0000 204,025,0000

(1) Michael Caprio, a member of 84 Limited LLC, has voting and dispositive
power over the shares of common stock held by 84 Limited LLC.

(2) Parry Aftab provided consulting services to us.

(3) Stavros Aloizos is our chief technology officer and a director.

(4) Stavros Aloizos, the sole member of Aloizos AAU Fund LLC, has voting
and dispositive power over the shares of common stock held by Aloizos
AAU Fund LLC.

(5) Stavros Aloizos, the manager of Aloizos Family LLC, has voting and
dispositive power over the shares of common stock held by Aloizos
Family LLC.

(6) Robert Barnes and Doreen Aloizos, the co-trustees of Aloizos Family
Trust, share voting and dispositive power over the shares of common
stock held by Aloizos Family Trust.

(7) Stavros Aloizos and Joshua Wexler, the managers of Alowex, LLC, share
voting and dispositive power over the shares of common stock held by
Alowex, LLC

(8) Pamela Berman, the trustee of the Berman Living Trust, has voting and
dispositive power over the shares of common stock held by the Berman
Living Trust.

(9) Robert Berman, as the manager of Vista Development, LLC, provides
advisory services to us.

(10) W. Whitfield Wells, the trustee of the Trust for Eugene Berthiaume,
Jr., has voting and dispositive power over the shares of common stock
held by the Trust for Eugene Berthiaume, Jr.

(11) W. Whitfield Wells, the trustee of the Trust for Todd Berthiaume, has
voting and dispositive power over the shares of common stock held by
the Trust for Todd Berthiaume.

(12) Ben A. Buettell, the trustee of Ben A. Buettell Living Trust Dated
7/25/01, has voting and dispositive power over the shares of common
stock held by Ben A. Buettell Living Trust Dated 7/25/01.

(13) Erik DeMicco, the trustee of the Caprio Health & Educational Trust, has
voting and dispositive power over the shares of common stock held by
the Caprio Health & Educational Trust.

(14) Michael Caprio is our executive vice president and secretary.

(15) Constance K. Crane and Dennis C. Vacco, joint members of Crane & Vacco,
LLC, share voting and dispositive power over the shares of common stock
held by Crane & Vacco, LLC.

(16) Paul deBary provided consulting services to us.

(17) Fernand Leger, the trustee of The D.J. Treble Cove Trust, has voting
and dispositive power over the shares of common stock held by The D.J.
Treble Cove Trust.

(18) Serena Fernandez is our employee.

(19) William A. Figenshu is our chief operating officer.

(20) Charles Degliomini, the manager of Fox Hollow Lane, LLC, has voting and
dispositive power over the shares of common stock held by Fox Hollow
Lane, LLC.

(21) Robert H. Friedman, a member of Olshan Grundman Frome Rosenzweig &
Woloksy LLP, provides legal services to us.

(22) W. Whitfield Wells, the trustee of the Trust for Jeannine Germaine, has
voting and dispositive power over the shares of common stock held by
the Trust for Jeannine Germaine.

(23) Laurence Gershman was a member of Remnant Media, LLC, a predecessor of
SoftWave.

(24) David Kang is our employee.

(25) Scott Kaniewski, the general partner of the Kaniewski Family Limited
Partnership, has voting and dispositive power over the shares of common
stock held by the Kaniewski Family Limited Partnership.

(26) Scott Kaniewski, through his employment with Vista Development, LLC,
serves as an advisor to us.

(27) John I. Keay, Jr., a member of the Keay Family LLC, has voting and
dispositive power over the shares of common stock held by the Keay
Family LLC.

(28) Anthony Fasolino, the trustee of the Hunter Kent Keay Trust, has voting
and dispositive power over the shares of common stock held by the
Hunter Kent Keay Trust.

(29) John I. Keay, Jr. is our employee.

(30) Anthony Fasolino, the trustee of the Morgan Gaines Keay Trust, has
voting and dispositive power over the shares of common stock held by
the Morgan Gaines Keay Trust.

(31) Stacey Kaniewski, the trustee of the KFP Trust, has voting and
dispositive power over the shares of common stock held by the KFP
Trust.

(32) Gary Lee is our non-executive chairman and a director.

(33) W. Whitfield Wells, the trustee of the Trust for Alecia Leger, has
voting and dispositive power over the shares of common stock held by
the Trust for Alecia Leger.

(34) W. Whitfield Wells, the trustee of the Daniel Leger Trust, has voting
and dispositive power over the shares of common stock held by the
Daniel Leger Trust.

(35) Kevin Mannix is our employee.

(36) Don Middleberg is a consultant to us.

(37) Moses Marx, Joseph M. Fink and Philippe D. Katz, officers of Momar
Corporation, share voting and dispositive power over the shares of
common stock held by Momar Corporation.

(38) Paul Noonan is our employee.

(39) Ralph E. Caprio, the trustee of Notchview Pediatrics Retirement Plan,
has voting and dispositive power over the shares of common stock held
by Notchview Pediatrics Retirement Plan.

(40) Charles Omphalius is a director.

(41) W. Whitfield Wells, the trustee of the Omphalius Family Health &
Educational Trust, has voting and dispositive power over the shares of
common stock held by the Omphalius Family Health & Educational Trust.

(42) Charles Omphalius, the manager of the Omphalius Family LLC, has voting
and dispositive power over the shares of common stock held by the
Omphalius Family LLC.

(43) W. Whitfield Wells, the trustee of the Trust for Jamey Omphalius, has
voting and dispositive power over the shares of common stock held by
the Trust for Jamey Omphalius.

(44) Kathleen Omphalius provided consulting services to us.

(45) W. Whitfield Wells, the trustee of the Trust for Kimberly Omphalius,
has voting and dispositive power over the shares of common stock held
by the Trust for Kimberly Omphalius.

(46) Anthony J. Orrico, the trustee of Anthony J. Orrico Revocable Trust UAD
2/17/95, has voting and dispositive power over the shares of common
stock held by Anthony J. Orrico Revocable Trust UAD 2/17/95.

(47) Dale R. Pinkert, the sole member of Pinkert Investors LLC, has voting
and dispositive power over the shares of common stock held by Pinkert
Investors LLC.

(48) Robyn Saffian is our employee.

(49) Eric Scuccimarra is our employee.

(50) Linda Soreff Siegel, the trustee of Linda Soreff Siegel Revocable
Trust, has voting and dispositive power over the shares of common stock
held by Linda Soreff Siegel Revocable Trust.

(51) Andrew Freilich and Marc Turner, joint members of SMTM Equity Partners
LLC, share voting and dispositive power over the shares of common stock
held by SMTM Equity Partners LLC.

(52) Scott Kaniewski, the trustee of the Starlight Trust, has voting and
dispositive power over the shares of common stock held by the Starlight
Trust.

(53) Robert. R. Topping, the General Partner of The Vintox Fund, has voting
and dispositive power over all shares of common stock held by The
Vintox Fund.

(54) Robert Berman, the manager of Vista Development, LLC, has voting and
dispositive power over the shares of common stock held by Vista
Development, LLC. Vista Development, LLC provides advisory services to
us.

(55) Andrew Kaminsky, Dan Polatsch and Jared Feldman, executive director and
board members, respectively, of The Greg Richards, Larry Polatsch and
Scott Weingard Memorial Fund, Inc., share voting and dispositive power
over the shares of common stock held by The Greg Richards, Larry
Polatsch and Scott Weingard Memorial Fund, Inc.

(56) Joshua Wexler, the manager of Wex Holdings LLC, has voting and
dispositive power over the shares of common stock held by Wex Holdings
LLC.

(57) Stephen J. Donovan, the trustee of the Wexler Family Trust, has voting
and dispositive power over the shares of common stock held by the
Wexler Family Trust.

(58) Joshua Wexler is our chief executive officer, treasurer and a director.

(59) Alisha Wingerter is our former employee.

(60) Robert Wong, through his employment with Vista Development, LLC, serves
as an advisor to us.

(61) Maria Elizabeth Montero, the director of The Zittlosen Vollbracht, LLC,
has voting and dispositive power over the shares of common stock held
by The Zittlosen Vollbracht, LLC.

Our registration of the shares included in this prospectus does not
necessarily mean that the selling stockholders will opt to sell any of the
shares offered hereby. The shares covered by this prospectus may be sold from
time to time by the selling stockholders so long as this prospectus remains in
effect.

All shares of common stock held by our founders (together with the
shares held by certain of their respective affiliates), aggregating 150,063,636
shares of common stock, or the Lock Up Shares, are subject to lock-up provisions
that provide restrictions on the future sale of common stock by the holders.
Under these provisions provide, in general, that the Lock Up Shares may not,
directly or indirectly, be offered, sold, offered for sale, contracted for sale,
hedged or otherwise transferred or disposed of for a period of nine (9) months
after the date of the closing of our July 2006 private placement except that
holders may dispose of up to one percent (1%) of their holdings beginning six
(6) months after the date of such closing.

In addition, our board of directors has adopted a policy that generally
limits trading in our securities by our directors, officers and employees and
their affiliates to 15 business days each quarter.

PLAN OF DISTRIBUTION

We are registering the resale of 204,025,000 shares of common stock on
behalf of the selling stockholders, as well as on behalf of their donees,
pledgees, transferees or other successors-in-interest, if any, who may sell
shares received as gifts, pledges, distributions or other non-sale related
transfers. Neither we, nor the selling stockholders, have employed an
underwriter for the sale of common stock by the selling stockholders. We have
been advised that none of the selling stockholders has entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is there an
underwriter or coordinating broker acting in connection with the proposed sale
of the shares by the selling stockholders. We will not receive any proceeds from
the sale of the shares of common stock by the selling stockholders. We will bear
all expenses in connection with the preparation of this prospectus and
registration of the shares. The selling stockholders will bear brokerage
commissions and similar selling expenses associated with the sale of their
common stock.

If any shares of common stock being registered for resale in the
accompanying registration statement are transferred from the selling
stockholders listed in this prospectus and such transferees wish to rely on this
prospectus to resell these shares, then a prospectus supplement or, if
appropriate, a post-effective amendment to the registration statement of which
this prospectus is a part, would need to be filed with the Commission naming
these individuals as selling stockholders.

The selling stockholders may offer their shares of common stock from
time to time directly or through pledgees, donees, transferees or other
successors in interest in one or more of the following transactions (which may
include block transactions):

o On any stock exchange or automated quotation system on which the
shares of common stock may be listed at the time of sale;

o In negotiated transactions;

o In the over-the-counter market;

o Put or call option transactions relating to the shares;

o Short sales relating to the shares; or

o In a combination of any of the above transactions.

The selling stockholders may offer their shares of common stock at any
of the following prices, which may reflect discounts from the prevailing market
prices at the time of sale:

o Fixed prices that may be changed;

o Market prices prevailing at the time of sale;

o Prices related to such prevailing market prices;

o At negotiated prices; or

o Varying prices determined at the time of sale.

The selling stockholders may effect such transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the selling stockholders and/or the
purchasers of shares of common stock for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).

Any broker-dealer acquiring common stock from the selling stockholders
may sell the shares either directly, in its normal market-making activities,
through or to other brokers on a principal or agency basis or to its customers.
Any such sales may be at prices then prevailing on the OTCBB or at prices
related to such prevailing market prices or at negotiated prices to its
customers or a combination of such methods. The selling stockholders and any
broker-dealers that act in connection with the sale of the common stock
hereunder might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act any commissions received by such broker-dealers and
any profit on the resale of shares sold by them as principals might be deemed to
be underwriting discounts and commissions under the Securities Act. The selling
stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.

As selling stockholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act the selling stockholders will be
subject to the prospectus delivery requirements of the Securities Act. We have
advised the selling stockholders that the anti-manipulative rules of Regulation
M under the Exchange Act may apply to sales in the market.

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

If we are notified by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of the
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, we will file a
post-effective amendment to the registration statement of which this prospectus
is a part under the Securities Act disclosing:

o the name of each such selling stockholder and of the participating
broker-dealer(s);

o the number of shares involved;

o the price at which such shares were sold;

o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;

o that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and

o other facts material to the transaction.

Except for Ben A. Buettell Living Trust, Norton A. Davidson, Marquette
deBary, Anthony Domino, Jr., Edward Henderson, Edward J. Morehouse, Jr., Douglas
J. Myers, Wayne Douglas Ohlandt, Stephen Roth, Clark Schubach, Michael Warner,
Charles D. Wild, Roth IRA FBO Clarence Williams, none of the selling
stockholders is a broker-dealer or an affiliate of a broker-dealer. We have been
advised that each of the aforementioned selling stockholders purchased their
securities in the ordinary course of business and at the time of the purchase of
the securities to be resold, each had no agreements or understandings, directly
or indirectly, with any person to distribute such securities.

There can be no assurance that the selling stockholders will sell any
or all of the shares offered by them under this prospectus.

BUSINESS

OVERVIEW

We operate the SWMX Marketplace, an electronic open marketplace for the
purchase and sale of radio and cable television media time, and plan to expand
that marketplace to include other media. The SWMX Marketplace enables
independent and in-house advertising agencies to purchase, and radio and
television broadcasters to sell, radio and television advertising time on an
open marketplace accessed through our web portals at www.swmxradio.com and
www.swmxtv.com.

Since the launch and beta testing of the SWMX Radio electronic
marketplace in 2005, revenues from and transactions completed using the SWMX
Marketplace have grown steadily and currently provides our advertising customer
base with access to an Internet-based market representing radio stations in all
of the top 50 radio markets across the United States, as measured by Arbitron.
Advertisers registered on the SWMX Marketplace consist of a broad range of
independent and in-house advertising agencies. Registered broadcasters currently
include over 1,400 radio stations. Using the categories established by Arbitron,
a leading statistical source for the U.S. media markets, the broadcaster base
includes 15 of the top 15 broadcast groups and 38 of the top 50 U. S. radio
stations, representing a potential daily national audience of over 8.5 million
radio listeners, or more than 39% of the total U.S. broadcast radio market.

Initially, the SWMX Marketplace's inventory of radio placements was
limited to spot placements within seven days of run. In May 2006, the SWMX
Marketplace was expanded to permit long-term purchases and sales of scheduled
media placements, a practice known as flighting in the advertising industry.
This was part of a planned transition to provide broader coverage of the radio
market, as well as to prepare our entry into the broadcast and cable TV market.
Launched in June 2006 to serve the local spot cable market, SWMX Television
currently covers 50 of the nation's 200 cable television markets and a potential
national daily audience of millions of cable viewers.

In connection with these initiatives, we completed the integration into
our platform of functions contained in Media Manager and Campaign Manager, a
suite of software products developed by our affiliates Alowex, the company that
developed the SWMX Radio software platform, and Zysys Solutions, Inc., or Zysys,
a technology company providing small and mid-sized companies with a variety of
information technology services. The addition of this functionality into the
SWMX Marketplace platform provides advertisers with an integrated set of tools
that can be used to design an advertising campaign, evaluate available
opportunities and execute transactions, as well as to monitor, verify and assess
the effectiveness of those transactions, all within the same system. For
broadcasters, the system provides similar start to finish capabilities for
managing inventory, executing and implementing spot placements and invoicing.

Our overall strategy is to build on our operations in the radio and
cable TV marketplace by expanding into local broadcast TV, network TV and other
advertising markets so as to become a leading facilitator of media buying. Our
overall objective is to enable advertisers and broadcasters to implement,
execute and manage sophisticated media transactions in one process, from a
single location in real-time, with reduced overhead and no additional cost of
sale. We plan to build applications that provide customized and flexible access
to our marketplace together with a largely automated transaction and reporting
process. Our goal is to create significant efficiencies and productivity
increases in the advertising business both through the use of integrated digital
systems and the creation of a broad-based electronic marketplace.

All of these functions have various adoption rates. Our recent
experience has taught us that our customers have different needs within the
platform. Our assistance in helping them apply our technology to their campaign
varies from account to account. As our customers become more familiar and
comfortable with the system, the more automated the transaction will become. The
SWMX platform allows a "migration" to a fully automated campaign based on the
advertisers comfort level. We believe this flexibility is a key component to our
success.

THE MEDIA ADVERTISING MARKET

The media advertising market is extensive and varied, spread across
different formats such as television, radio, Internet and print, each with its
own segments. It is also a dynamic market that has experienced many changes and
innovations in recent years, particularly Internet-based media and mobile
digital media. However, media sales are generally executed using a similar
system across these formats and the customs and practices used have remained
remarkably similar over the last 80 years. The products offered for sale are
commoditized into uniform components, consisting principally of units of
broadcast time or print space. The traditional sales process relies heavily on
person-to-person negotiations that can take weeks to complete, and is prone to
erroneous execution and reporting. As the process employs a cumbersome and
laborious paper-based reporting system, it often lacks accountability. This
results in additional cost and lost time and revenue for both parties and makes
results difficult, if not impossible, to quantify and evaluate properly.

We believe that the current media buying system is inefficient and that
we are capable of using new technologies to help both advertisers and
broadcasters increase efficiency and maximize profitability amid ever increasing
competition for audience both among traditional media and from emerging formats,
including web and podcasting, satellite programming and more. The digital
revolution also enables the content that is the subject of these transactions to
be reduced to electronic form, consisting of audio, video, graphics and text
files that use standardized formats. We believe that these underlying factors
facilitate the development of an electronic marketplace that can allow
participants to achieve considerable efficiencies in execution.

Technological infrastructure and protocols that enable a high volume of
efficient transactions have been developed for other products that have
traditionally benefited from open marketplaces, such as commodities and
financial instruments. We are seeking to establish a similarly broad-based
marketplace for the sale of media advertising and have initiated this process by
launching SWMX Radio and SWMX TV, marketplaces for the sale of radio and
television advertising time, respectively.

According to the Bear Stearns Radio Fact Book for December 2005, the
estimated total U.S. advertising expenditure for 2005 was $281.0 billion and is
expected to grow to $299.2 billion in 2006. The report estimated total U.S.
radio advertising expenditure for 2005 at $20.0 billion, the cable TV and spot
TV markets at approximately $24.0 billion each and the network and syndicated TV
market at $20.0 billion. The remaining markets include Internet, magazines,
newspapers, outdoor and direct mail. While we believe that the SWMX Marketplace
might ultimately facilitate media placements in most of these markets in the
United States and abroad, our current focus is on the U.S. radio and TV markets.

RADIO. Of the estimated $20.0 billion expenditure for radio in 2005,
the Bear Stearns Radio Fact Book for December 2005 estimated that $15.5 billion
was attributable to local spot advertising, with the remainder attributable to
national spot and network placements. Our analysis of Arbitron data also
indicates that currently nearly 80% of all radio broadcast revenue comes from
local spot advertising.

Our analysis of Arbitron data also indicates that, on average, 20-25%
of radio station inventory goes unsold each year and that, as of June 1, 2006,
over 70% of SWMX Radio advertisers were new to radio. In a $20 billion
marketplace, this represents an average of approximately $5.0 billion of lost
revenue for broadcasters, indicating a total radio market opportunity of up to
$25.0 billion for us. We believe that the economies of scale and the reduced
transaction time achieved using our products and services can facilitate the
liquidation of that unused inventory, producing incremental revenue for
broadcasters by bringing new advertisers to the market and increasing the use by
existing advertisers of additional and more narrowly focused and cost effective
placements.

We believe that local radio broadcasters continue to search for new and
innovative ways to facilitate greater control over their inventory and for
quantifiable, results-driven initiatives to attract new advertisers to the
market. The increasing support by advertisers for adoption of more accurate
audience measurement technology (Personal People Meter (PPM) vs. Diary), despite
significant implementation costs in an environment of reduced profitability and
stagnant growth, is one example.

Based on our analysis, we implemented the first phase of the SWMX
Marketplace by developing Remnant Radio, focusing initially on unsold inventory
for the following week's broadcast. After a successful beta test in 2005 and
several months of full-scale operations, we expanded the SWMX Marketplace to
include flighted sales that incorporated scheduled placements over a longer
term. In addition, starting in September 2006 we introduced a political platform
to take advantage of the increased political campaign spending in both radio and
TV. SWMX has enabled the platform to include political based "issue"
advertising, a key area of anticipated growth for the Company prior to the 2008
U.S. Presidential Election.

CABLE TELEVISION. According to Bear Stearns Radio Fact Book for
December 2005, the estimated total U.S. cable advertising expenditure for 2005
was $24.5 billion. Based on our analysis of data received from a top-three
national cable Multiple Systems Operator, the average advertising inventory
sell-out rate is only 30-35%. On average, 30% of the remaining inventory is used
for self-promotion or public interest advertising. Examples include advertising
a triple play (voice, data, cable) package, upcoming station programming or the
benefits of cable advertising. Further, because the internal data transmission,
transaction and order processing operations are more advanced in television than
radio from an automation standpoint, the platform development, functionality,
management and reporting processes are more straightforward, enabling an even
greater level of system efficiency. We estimate that the annual total lost
revenue within the U.S. cable market could be as high as $40 billion within a
total applicable market of up to $60 billion in cable television advertising
sales.

We also believe that the continued growth of the direct response
market, which last year totaled $161.3 billion according to the Direct Market
Association, complements our focus on return on investment. Based on these
factors, we implemented SWMX TV because we believe that the cable TV market is
another segment of the market that will be receptive to the use of the SWMX
Marketplace. Based on our initial marketing efforts, a number of larger
broadcast groups, agencies and direct marketers have expressed an interest in
executing business on the SWMX Marketplace now that it is has been expanded to
include cable TV. Currently, the SWMX Marketplace offers advertisers access to
millions of viewers in over 50 of the nation's 200 cable TV markets.

OTHER MARKETS. Other segments and media markets include local and
network television, satellite TV and radio, high definition radio, or HDR, IPTV,
VOD, web, podcasting, and print. While there are significant differences between
other segments of the media markets, we believe that they share many of the
inefficient business methods that our proprietary systems have been designed to
address. The media operations of local and network TV are quite similar to cable

TV and radio. In addition, HDR could have a significant impact on the radio
market if it achieves broad acceptance. Most HDR broadcasts would be expected to
be in stereo and have broader reach. Stations will also be able to offer a wider
variety of formats under a single umbrella. As a result, HDR could provide
advertisers with significant new opportunities for demographic targeting,
particularly if broadcasters adopt more efficient models of selling and managing
inventory. However, using current methods of transacting media advertising
sales, broadcast organizations would experience high costs if they were to
maintain personnel to sell each of the various formats and demographic profiles
in a station group on a targeted basis and manage all back-end processes.
Without giving advertisers the ability to target spots more specifically and to
evaluate the results, broadcasters would likely need to package disparate
inventory and sell it at a low flat rate, similar to how network advertising is
currently sold. Accordingly, we believe that the local and network TV and HDR
markets could provide future opportunities to expand the SWMX Marketplace and
that an expanding base of advertisers will further facilitate our entry into
more differentiated markets, such as web and podcasting, satellite TV and print.

OUR PRODUCTS AND SERVICES

THE SWMX MARKETPLACE. Our objective in developing the SWMX Marketplace
is to reduce the inefficiencies that exist in the media advertising market and
make transactions easier to execute, more reliable and, ultimately, more cost
effective. Our systems employ a variety of integrated functions based on
proprietary software products. These tools enable users to collect and manage on
a single platform the multiple sources of disparate data necessary to plan,
manage and evaluate the media buying process from beginning to end. Currently,
the data used in this process is available in a variety of formats from a
variety of sources. The SWMX Marketplace platform is designed to provide
real-time query, order execution and management functions, and to facilitate the
distribution of media inventory, through a single intuitive interface that
provides customers with fast and reliable electronic execution, transparency and
open market access.

As the proprietary functions that we provide to support users of the
SWMX Marketplace are built in to an Internet browser-based exchange and
management engine, customers can execute transactions securely from any computer
with Internet access. There is no hardware to purchase or software to install.
We designed our systems to reduce the complexity of customers' data management
and content distribution operations by centralizing and facilitating the
management of all campaign information and content on our secure servers. To
implement these objectives, the SWMX Marketplace uses the following features:

ARCHITECTURE. At the core of the SWMX Marketplace is an
algorithm-based architecture designed to seamlessly integrate
a wide range of platform data formats and facilitate very high
levels of volume throughput. As a result, users are able to
execute any combination of commands from a single point, as
part of a unified process, in real time. The architecture is
cross-platform compatible for data integration with existing
client systems, and provides compliance monitoring to ensure
proper user execution, including spot loading and selection.
It also enables clients to view running totals of current
activity, as well as their full account history.

ACCESS. The SWMX Marketplace is a web-based application
service provider, or ASP, enabling users to sign on at any
time from any computer with an Internet connection. As our
products are web-based, they do not consume users' valuable
desktop resources.

SECURITY. The SWMX Marketplace employs leading industry
security through multiple levels of firewall protection for
both global and local traffic and at the server level.

RELIABILITY. The SWMX Marketplace is fully redundant and
co-located through a third party relationship with Level 3
Communications, Inc. to protect against site failure. Level 3
Communications, Inc. is an international communications and
information services company that operates one of the largest
communications and Internet backbones in the world. The SWMX
Marketplace uses a system based on sequential query language,

or SQL, enabling it to accommodate very high data loads. SQL
is the current standard for large data set applications that
require high volume throughput and is currently employed by
industry leaders including Google, Yahoo and eBay.

SCALABILITY. The underlying architecture of the system
supporting the SWMX Marketplace is designed to be scalable, so
that we will be able to support a large number of users
executing complex orders simultaneously with the addition of
readily available hardware. Throughput capability can be
expanded by adding additional servers to the existing
application cluster, while the use of Level 3 Communications,
Inc. for collocation services provides virtually limitless
bandwidth expansion with no disruption to service.

CONTENT MANAGEMENT. The SWMX Marketplace maintains a running
data store of all current and historic content for broadcaster
and advertiser access, including insertion orders and
advertising spots for reference and/or distribution at any
time.

PROPRIETARY PRODUCTS. Two products designed by Alowex, an affiliate of
SWMX, have been integrated into the overall system that supports the SWMX
Marketplace. The Campaign Manager product is designed to facilitate the planning
and execution of spot media sales, including pricing and budgeting functions, as
well as order execution, spot verification, invoicing and reporting. The Media
Manager product has been designed to facilitate the overall management of media
operations on a long-term basis, including spot verification, invoicing and
reporting. The incorporation of these products into the SWMX Marketplace makes
it possible for all users to benefit from the full functionality of these
products through the user interface without additional cost or the need to
install additional software.

THE ADVERTISER INTERFACE. Using the integrated features of the Campaign
Manager and Media Manager products, the system directs new independent and
in-house advertising agency clients through account creation, which immediately
enables the setup of an advertising campaign. To create a new campaign, clients
are guided through a comprehensive prompt sequence, including:

o Product name

o Copy name

o Overall budget

o Source code for spot tracking

o Agency commission where applicable

o Spot length

o Spot upload (the loading of an mp3 file of spot copy by the
advertiser)

The system has been designed so that, once registered, new advertisers
can create an entire advertising campaign in a matter of minutes. The customer
enters the specific days for which it wants budget presented as well as the
daypart and spotload parameters. The customer also can select desired
demographics, geographical market and format preferences. Once all of these
parameters are entered, the system screens the selected criteria against all
stations in the SWMX Marketplace database and presents a list of registered
stations that meet the specific targeting requirements. Once stations are
presented, the customer can select the desired stations and set the cost per
thousand, or CPM, rate offers (at the station level) and refine the campaign
parameters for more focused targeting.

Once the parameters are selected, the system provides a campaign cost
projection. Customers can either advance to the next step in the process, if
satisfied, or refine the campaign further. After the cost projections are
approved, customers set the campaign weighting, which directs the system to
present clients, products and/or copy according to preferences relative to
overall budget and campaign objectives. When weighting is completed, the
campaign is executed through the system.

Once a campaign is running, customers can upload daily sales data and
the system will plot results using a graphic return on investment map to
illustrate campaign efficacy based on sales - either retail or direct response -
relative to spots played. SWMX's ROI Optimizer can process daily client data
uploads to enable real-time campaign tracking and sales analysis. Using this
function, customers are able to view and analyze a broad range of customizable
campaign data including:

o recent sales figures, either by retail location, website, or call
center;

o individual station statistics including format, audience and
campaign delivery;

o lead generation and conversion information by zip code, date and
time of call; and

o ROI for each dollar spent and all historical campaign information.

This analysis provides the customer with the ability to view how a
campaign is performing and permits the customer to modify the parameters,
including rates and stations offered, to maximize its ROI in real time. The
customer may then further refine and target the campaign to optimize results. We
are in the process of enabling customers to view an ongoing account summary
updated daily, including budget and spots placed, current campaign data and
balance due dates.

THE BROADCASTER INTERFACE. The broadcaster ordering process can also be
executed in minutes. Stations can register within the system by providing all
pertinent demographic, reach and format information. Once the registration is
complete, the station is screened against all advertisers in the system and
notified of advertisers with budget requirements that the station can fulfill.
When broadcasters login to the SWMX Marketplace after registration is complete,
they are taken to the Broadcaster Dashboard, or the Dashboard, which serves as
their control center. Features of the Dashboard include:

o any ad copy changes requiring attention;

o a list of advertisers waiting to book orders;

o access to electronic invoices; and

o a link to view their complete account history.

If the station wishes to pursue a lead, the station is guided through
the inventory placement process. Once inventory is placed, stations are
presented with a list of all viable advertisers and offered CPM rates. Existing
broadcast clients are notified via email to alert them when budget is available,
providing a link to the copy for review and order terms, including offered CPM
rate and scheduling parameters.

After the desired advertisers and rates are selected, the station is
presented with a tentative order schedule. If the schedule is approved, the
station accepts the offer and the system produces an insertion order. The
station can then forward the spot copy to its traffic department for placement
and the order process is complete. The Dashboard also includes access to
automated back-end functions as well, including spot delivery, spot
verification, invoicing and reporting, which help to reduce administrative
processes and can improve a broadcaster's overall operating efficiency.
Broadcast clients receive a consolidated monthly invoice of activity and can
access historical order activity. We are in the process of enabling stations to
view an ongoing account summary updated daily including spot placement, revenue
due and payment date.

RECONCILIATION AND INVOICING. The system provides advertisers and
broadcasters with accurate and predictable reconciliation and billing. The
system uses eMedia Trade for automated invoicing, which further streamlines the
billing process. eMedia Trade is currently used by over 1,000 radio stations
nationally, as well as by numerous cable systems and broadcast TV stations.

Once orders are executed and station invoices are received, the system
performs spot verification and reconciliation to confirm order execution. Using
integrated Arbitron ratings data, the system determines spot clearance. Upon
reconciliation, an invoice is generated and distributed to advertisers. Stations
receive order approvals confirming payment will be remitted on the next
scheduled date.

We are also working to implement spot monitoring technology in the
system. This is a high-frequency audio tag applied to spot copy for order
tracking. Once integrated, spot monitoring will enable us to conduct real-time
spot tracking to provide greater accountability, accelerate reconciliation and
payment schedules and increase volume and order flow. It will also enable
internal budget optimization. As soon as we know a scheduled spot has not run as
ordered, the budget will be returned to the system immediately for station
availability. We anticipate that this increased speed and efficiency will
improve volume and order flow and enable us to increase our inventory
fulfillment rate.

REVENUE SOURCES

While a majority of an advertiser's media advertising budget represents
direct compensation to broadcasters, there are significant transaction fees that
vary depending on the arrangements between market participants. The earnings of
both independent and in-house advertising agencies are typically derived from a
fee or discount equal to approximately 15% of the total cost of the media buy,
although commission rates vary by advertiser and advertising agency. In
addition, station affiliates and various firms representing broadcasters may
earn additional commissions. We designed the SWMX Marketplace system to
accommodate these various fees so that agency and third party vendor fees can be
incorporated into a single process, permitting broadcasters and agencies to deal
with the system as they typically would with each other. We earn transaction
fees from both the broadcaster and the advertiser, based on the discounts and
fees currently in use in the industry, on all orders generated through the
system. In addition, for certain clients, we can receive additional fees for
origination and management services. This fee structure allows the system to
accommodate standardized pricing conventions in the industry while providing
automated executions and service efficiencies. We expect to gain market
acceptance primarily from the improved productivity, accountability and
transparency that our proprietary products and processes create, including the
automation of process management, order execution, content delivery, spot-run
verification and invoicing, rather than through restructuring the fee system in
the industry. We believe that the significant gains in productivity that
participants in the system can realize through the use of the SWMX Marketplace
will provide us with the opportunity to be a competitive force without the need
to engage in discounting or other disruptive price cutting strategies.

The fees and discounts we earn vary according to the structure of the
transaction. For the nine months ended September 30, 2006, our fees represented
an average of 17% of the total exchange volume, but this level is expected to
fall if we increase transaction volume on the SWMX Marketplace by accommodating
a broader variety of transaction structures and market participants. Currently,
we are focusing on areas that provide higher level margins as we maximize the
benefits of our current technological competitiveness. However, as participation
in the SWMX Marketplace continues to expand, available margins may be more
constricting. In addition, competitive forces in the future may result in
reduced per transaction compensation. Thus, in the long run, we expect to
increase revenues by focusing more on increasing transaction volume than on
capturing a high percentage of the total exchange volume.

STRATEGY

Our strategy in creating our electronic marketplace for commercial
radio time was to develop an intuitive interface through which an advertiser
could quickly and efficiently create a customized campaign to the widest sought
audience. Our goal was to enable a new user that logs in to the system to create
a profile and to execute a media buy across the entire national footprint, based
on the demographics they select, on as many or few stations as they choose, at
prices consistent with their budget requirements in a matter of minutes.
Accordingly, the systems supporting the SWMX Marketplace were designed so that
all of the reporting functions, including order execution, delivery of creative

content, spot verification, reporting and invoicing, can be automated, allowing
the user to quickly assess results and further optimize its operations.

Using current practices, a media campaign can take weeks to implement
and require several layers of administrative support. Moreover, we believe that
most users would find it prohibitively expensive to achieve the degree of
targeting, accountability and results provided to the users of the SWMX
Marketplace without additional cost. Accordingly, our development efforts have
been focused on developing integrated functions that enable advertisers to
create a customized radio media campaign according to any combination of
user-defined criteria that best meets their targeting objectives, including:
demographic, format/program type, market and geographic region, down to a
specific zip code. The recent expansion of our system to provide flighting
capability enables customers to execute any structure of radio media buy that
they currently employ. These efforts are continuing with the objective of
integrating socio-economic segmentation within the screening process, enabling
advertisers to target their prospective audience based on factors such as median
income, marriage status, ethnicity and population makeup so that the system can
facilitate integrated socio-economic segmentation to a detailed level. In
addition, starting in September 2006 we introduced a political platform to take
advantage of the robust campaign spending in both radio and TV. This platform
includes "issue" advertising and is expected to increase our potential as the
country builds towards the 2008 presidential election.

For broadcasters, we directed our efforts at putting more robust
control of the station inventory in the hands of the managers making the
decisions on a daily basis. Our strategy is to eventually enable advertisers and
broadcasters to achieve their objectives through a single platform that is
efficient, intuitive, cost effective and accretive directly to their bottom
line.

The ability of SWMX Radio to meet the needs of the radio segment of the
media market has provided us with increased confidence in our strategic plan. We
believe that we are positioned to serve a broader segment of the media industry.
We launched SWMX Television to serve the local spot cable TV segment of the
television market, in June 2006 and believe the initial revenue and market
penetration opportunities presented by the cable TV market should exceed those
presented in the radio market. Our ultimate goal is to serve as the media
trading exchange across all viable formats, including cable and local network
TV, satellite TV and radio, web and podcasting and print media. We believe that
the platform developed for SWMX Radio has the potential to be expanded into a
broad-based electronic marketplace for a variety of media products. We believe
we can more efficiently serve the needs of media buyers and sellers, most of
whom use multiple formats and operate in multiple regions, and that our
Internet-enabled marketplace will allow advertisers to engage in more dynamic
demographic targeting and better customize their advertising campaigns, while
enabling broadcasters to more actively manage and better control their
inventory.

In addition, in order to ensure that the SWMX Marketplace serves the
needs of global advertisers, we plan to expand marketplace as expeditiously as
possible to include regions outside of the United States.

SWMX MARKETPLACE GROWTH

After executing just under $1.0 million of radio advertising time
during beta testing in 2005, the SWMX Marketplace generated volume of over $1.0
million during the first quarter, $3.1 million during the second quarter and
$4.6 million during the third quarter of 2006. Through September 2006, more than
150,000 transactions were effected through the SWMX Marketplace. As of September
30, 2006, we had more than 1,400 registered stations and more than 125
advertisers in the SWMX Marketplace. With the growth in registered stations and
advertisers, both the number of ad spot placements (transaction volume) and the
total monetary value of the transactions executed (dollar volume) of radio and
television time sold on the SWMX Marketplace have increased.

As our marketplace has become more active, we have had increasing
success in attracting new participants. Broadcasters currently include 15 of
Arbitron's top 15 broadcasters, including ABC Radio Networks, CBS Radio, Citadel
Broadcasting Corporation, ClearChannel Communications, Cox Radio, Cumulus,
Emmis, Entercom and Salem Communications. Advertising agencies include
Zenith/Optimedia (subsidiary of Publicis), Mindshare (subsidiary of WPP) Three
Wire, Mercury Media (Subsidiary of Interpublic Group), Halogen/Starcom MediaVest
and Havas (Subsidiary of Euro RSCG). In addition to these agencies, the exchange
serves the in-house advertising departments of a number of corporate
advertisers, including Dole, Duane Reade, Earthlink-Halogen, EZ Pass, Johnson
and Johnson, Nestle, New York Mets, Novartis, People PC Online, Perdue and
Romano's Macaroni Grille-OMD.

COMPETITION

A number of other companies provide products or services to the media
market that address various aspects of the needs addressed by the SWMX
Marketplace. In addition, there are potential competitors who currently provide
products and services that could be adapted to address these needs. We expect
that a number of potential competitors with significant resources are or will be
working to adapt their platforms to facilitate the purchase and sale of media
advertising.

COMPETITORS. While we believe no current offerings compare with our
full range of capabilities, across each medium, a number of companies have
designed products and services that address various aspects of the media
advertising transactions process. Our primary competition includes:

o dMarc, which was purchased by Google, Inc. in January 2006, is a
static, hardware-based, radio-centric broadcast management
platform currently designed exclusively for automated liquidation
of unsold inventory. Currently, dMarc is generating profit from a
limited segment of the market its system is capable of exploiting.
However, it has the potential to develop market advantages through
access to the full human and capital resources of Google. The
system delivers broader station management functionality, but is
not an open market exchange. Station managers have limited control
over what is sold, at what time or at what price, and advertisers
have limited targeting functionality and no ability to track spot
placement.

o Bid4Spots, which uses a reverse-auction model to allow radio
stations to bid for advertiser budget each Thursday for the
following week's broadcast schedule. The lowest accepted CPM wins
the order. Purchase and sale transactions can be accomplished
through this system, but only on a weekly basis.

o Scatter.TV (now known as SpotTV.Com), which recently launched
itself as an online television media buying and selling platform.
Scatter.TV offers to instantly transmit pending media buys to its
registered stations (broadcast and cable) that are posted by
agency buyers or direct retailers.

o Spot Runner, which serves as an automated ad agency that offers
templates for commercials and provides a web-based system for
advertisers to customize and schedule the placement of the
commercials on local television stations in their area.

Some of these competitors are more established, enjoy greater market
recognition and have significantly greater financial, technical and marketing
resources than we do. Moreover, the Internet-based media advertising market is
experiencing rapid changes that are affecting the competitive landscape. These
changes may result in a greater number of competitors with significantly larger
resources than ours. We expect competition to intensify in the future as current
competitors enhance their service offerings and new competitors penetrate the
market. Existing or future competitors may develop or offer services and
products that provide significant performance, price or other advantages over
those we offer.

EBAY AND THE ANA INITIATIVE. On May 9, 2006, ADVERTISING AGE reported
that the Association of National Advertisers, or ANA, would begin to implement
an initiative that has been discussed for several years. This initiative calls
for supporting the development of an online system to purchase television
advertisements. At the ANA conference in May 2006, a group of retailers, led by
Wal-Mart, Microsoft, Hewlett Packard, Masterfoods, Philips and Lexus, called for
advertisers to commit $50 million to a test of the proposed system. At the
conference, eBay offered to implement a proposed system involving the addition
of a "media marketplace" system that would allow advertisers to purchase time
posted by advertisers on eBay and suggested that the proposed system could
involve either a forward or reverse auction system.

We do not believe that an auction model can best serve the needs of the
overwhelming majority of advertisers. However, we do believe that the
involvement of the ANA with a formal initiative indicates that there is now
broad recognition among advertisers that the use of online platforms has the
potential to substantially benefit their companies.

COMPETITIVE ADVANTAGE. We believe that our principal competitive
advantage is our ability to facilitate more efficient and cost effective
transactions in the media market and our resulting appeal to both broadcasters
and advertisers. The SWMX Marketplace has been designed to include support from
analytical and logistical aids that help users better manage the media buying
and selling process. As a result, users can complete a transaction from
inception through execution, verification and evaluation through the SWMX
Marketplace's integrated process.

The logistical support component of the SWMX Marketplace platform can
enable our participants to reduce the time and costs associated with
implementing and managing the buying and selling process. It also allows for
greater accountability in verifying and tracking transactions so that their
effectiveness can be better assessed. We believe that allowing participants in
our system to execute, track and evaluate media transactions more efficiently
and cost effectively will permit advertisers to receive a better return on their
media investment dollars and will ultimately broaden the market for
broadcasters.

We also believe individual relationships with advertisers and
broadcasters are still an important component of any advertising transaction.
SWMX seeks to foster interaction while coupling increased automation to allow
advertisers and broadcasters to both maximize time and increase volume.

As our system is designed to facilitate transactions through an
exchange, it provides advantages to both broadcasters and advertisers. We
believe that the ability to provide advantages to each party has been an
important reason that the SWMX Marketplace has grown as quickly as it has. Our
flexibility within the marketplace has enabled us to develop new features and
components to address the needs of our customers.

Our future success will depend in part on our ability to develop and
market new or enhanced services that address changes in technology, industry
standards and client requirements and gain commercial acceptance. Any delay or
failure to develop new services or to adapt our services to technological change
and market requirements could have a material adverse effect on our competitive
position.

INTELLECTUAL PROPERTY

Our intellectual property rights are important to our business. We rely
on a combination of copyright, trademark and design laws, trade secrets,
confidentiality procedures and contractual provisions to protect our
intellectual property. We currently have no issued patents. We require
employees, independent contractors and, whenever possible, vendors to enter into
confidentiality agreements upon the commencement of their relationships with us.
These agreements generally provide that any confidential or proprietary
information developed by us or on our behalf be kept confidential. These
agreements also provide that any confidential or proprietary information
disclosed to third parties in the course of our business be kept confidential by
such third parties. However, our clients usually own the intellectual property
in the software we develop for them.

We filed a U.S. provisional patent application in August 2005. We have
the option of submitting one or more U.S. patent applications based upon our
various applications, and having as our priority date, the filing date of the
provisional patent application. The terms of any patents claiming priority to
this PCT patent application will extend 20 years from the priority date. We may
file additional applications with respect to certain proprietary technology we
have developed. We cannot, however, be certain that the patents sought will be
granted, and we cannot be certain that the patent filings will be sufficient to
prevent misappropriation of our technology or other intellectual property.

We regard our trade name, trademarks, service marks and domain names as
important to our success. We rely on the law to protect our proprietary rights
to them, and we have taken steps to enhance our rights by filing trademark
applications where appropriate. We have registered U.S. trademarks for the marks
SoftWave Media and for the SWMX logo. Trademark applications for the Campaign
Manager and Media Manager are pending in the United States.

While we believe our technology has value, we do not believe that at
present our patent and trademark filings afford us a significant competitive
advantage.

Third parties may assert infringement claims against us or claim that
we have violated their intellectual property rights. We are obligated under some
client contracts to indemnify our clients if claims are made against us alleging
that we infringe on the proprietary rights of third parties. These claims,
regardless of merit or ultimate outcome, could result in significant legal and
other costs, harm to our reputation and a distraction to management. In

particular, growth in the number of business method and software patents issued
to others may greatly limit the solutions we are able to offer our clients.

PROPERTY AND EQUIPMENT

Our principal executive offices are located in leased premises of
approximately 23,700 square feet of space in Irvington, New York. The lease
commenced on September 1, 2006 and expires on August 31, 2011. We believe the
new space will be adequate for our immediate needs and to satisfy any additional
needs we may have as a result of planned expansion through the second quarter of
2007. Additional space may be required as we further expands our activities, but
we do not anticipate that our future additional facilities will involve
particular specifications or unusual requirements.

Our network operating and development center is located at our offices
in Irvington, New York, with platform redundancy, load balancing and backup
provided offsite by Level 3 Communications, Inc., a third party vendor, at
another location in New York. We also anticipate outsourcing additional platform
co-location facilities through Level 3 Communications, Inc. for facilities
located in Texas and California. Our operating center infrastructure principally
uses IBM application, web, and database servers supporting global traffic
managers, load balancers and application security managers that operate the
platform using routing and switch equipment provided principally by Cisco
Systems and Hewlett Packard. The center's equipment, all of which is owned by
us, also includes power redundancy and distribution equipment. As we introduce
our television platform and expand our operations, we will purchase additional
pieces of the above-described hardware for continued development of our
technology.

EMPLOYEES

We currently have 46 employees, all of whom are full-time employees. We
also currently engage the services of a number of individual and corporate
consultants. We believe our relations with our employees are good. None of our
employees are represented by members of any labor union and we are not a party
to any collective bargaining agreement.

CORPORATE INFORMATION

Our corporate headquarters are located at 1 Bridge Street, Irvington,
NY 10533. Our general telephone number is (914) 406-8400, and our fax number is
(914) 406-8468.

LEGAL PROCEEDINGS

In August 2006 an affiliated company commenced legal action in the
southern district of New York against JEC Nutrition, LLC and Kelly Lockwood for
breach of contract and lack of payment of amounts owed to both the affiliated
company and SoftWave Media Exchange, Inc. The amount owed to SoftWave Media
Exchange, Inc. is $1,232,000.

In August 2006, Charles Omphalius, the former President of SoftWave
Media Exchange, Inc., commenced an arbitration proceeding, pending before the
American Arbitration Association, alleging that he is due compensation and
benefits in connection with his termination pursuant to his employment agreement
with the Company. As the arbitration is in the very early stages, the Company is
unable to predict the outcome, however, the Company believes it has a
meritorious defense to these claims and intends to vigorously defend itself.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The following table sets forth information regarding the members of our
board of directors and our executive officers and other significant employees.
All of our officers and directors were appointed on July 26, 2006, the closing
date of the Merger. All of our directors hold office until the next annual
meeting of stockholders and their successors are duly elected and qualify.
Executive officers serve at the request of the board of directors.

NAME AGE POSITION
Joshua Wexler.................... 39 Chief Executive Officer, Treasurer and Director

Stavros Aloizos.................. 44 Chief Technology Officer and Director

Bill Figenshu.................... 56 Chief Operating Officer

James Caci....................... 42 Chief Financial Officer

Michael Caprio................... 31 Executive Vice President and Secretary

Gary Lee (1)(3).................. 57 Non-Executive Chairman and Director

Rick Boyko (1)(2)(3)............. 57 Director

Bruce L. Lev (2)(3).............. 62 Director

Jerry Shereshewsky (1)(2)........ 60 Director

Charles Omphalius................ 34 Director

-----------------
(1) Member of the compensation committee.
(2) Member of the audit committee.
(3) Member of the corporate governance and nominations committee.

JOSHUA WEXLER is chief executive officer, director and treasurer of
SWMX as of July 26, 2006 and has served in the same positions for SoftWave Media
Exchange, Inc. since its inception in January 2006. Prior to co-founding SWMX,
Mr. Wexler was chief executive officer of Zysys Solutions, Inc., an information
technology and software development firm he co-founded in August 2002 to serve
organizations across a broad spectrum of industries. His responsibilities at
Zysys included management of client relationships, business development and
directing execution of client initiatives. Zysys developed the SWMX platform,
and Mr. Wexler continued to serve as its chief executive officer until December
2005. In 1991, he co-founded Hypnotic Hats Ltd., a boutique apparel and
accessories company, and served as its vice president until 1997. From 1997
until August 2003, Mr. Wexler was a vice president of NW Direct, Inc., a design
and development firm.

STAVROS ALOIZOS is chief technology officer, director and chief
architect of SWMX as of July 26, 2006 and has served in the same positions for
SoftWave Media Exchange, Inc. since its inception in January 2006. In August
2005, Messrs. Aloizos and Wexler formed Alowex, LLC to pursue the development of
the SWMX Marketplace. Prior to that, Mr. Aloizos headed the technology
development of the SWMX Marketplace as a consultant for Zysys. Mr. Aloizos was a
consultant to Zysys and other companies from 1996 through 2005 developing web
site and operations management architecture and applications for the design of
digital media and to improve communication and business process efficiency
between design teams and production facilities.

BILL FIGENSHU is chief operating officer of SWMX as of July 26, 2006
and has served in the same position for SoftWave Media Exchange, Inc. since
February 2006. Prior to joining SWMX, Mr. Figenshu was president and chief
executive officer of FigMedia1, LLC, a consulting firm he founded in 2005 to
serve companies and individuals within the broadcast industry and institutional
financial analysts. From 2003 to 2005, he served as western region president for
Citadel Broadcasting Corporation where he was charged with re-organizing the
firm's Western operations, including the management and performance of over 70
stations. From 2001 to 2003, Mr. Figenshu was named one of the Top 40 Most
Influential People in Radio by Radio Ink magazine. From 1999 to 2003, he served
as senior vice president at CBS/Infinity Broadcasting where he was responsible
for oversight and management of 112 major market radio stations. From 1997 to
1999, Mr. Figenshu was senior vice president at Chancellor Media Corporation
where he was charged with managing the transition and integration of operations
following the organization's sale to Clear Channel Communications. From 1986 to
1997, Mr. Figenshu served as president of Viacom Radio, where he helped build
the company from its inception and helped create significant radio franchises,
including WLTW (Lite FM) in New York City. From 1986 to 1997, Mr. Figenshu
served on the board of the National Association of Broadcasters (NAB) and from
1987 to 1997 he also served on the board of the Radio Advertising Bureau (RAB).

JAMES CACI is chief financial officer of SWMX as of July 26, 2006 and
has served in the same position for SoftWave Media Exchange, Inc. since May
2006. Prior to joining SWMX, Mr. Caci served from 2002 to 2006 as chief
financial officer and vice president of finance for Global Consultants, Inc., an
information technology consulting and services firm. From 2000 to 2002, Mr. Caci
served as chief financial officer and vice president of finance for Viecore,
Inc., an IT services firm. From 1994 to 2000, Mr. Caci was chief financial
officer and vice president of finance, treasurer and secretary for Datatec
Systems, Inc., then a publicly traded IT services firm. Prior to joining Datatec
Systems, Inc., Mr. Caci was a manager with Arthur Andersen, LLP where he worked
for eight years. Mr. Caci is a registered CPA, and has a B.S., cum laude, from
Montclair State University.

MICHAEL CAPRIO is executive vice resident and secretary of SWMX as of
July 26, 2006 and has served in the same positions for SoftWave Media Exchange,
Inc. since its inception in January 2006. In addition, he served as a director
of SoftWave Media Exchange, Inc. from January 2006 until April 2006. Prior to
co-founding SWMX, Mr. Caprio was co-founder and executive vice president of
IMPS. Co-founded by Messrs. Caprio Omphalius in September 2003, IMPS
commissioned the development of the SWMX Marketplace. From 2002 until September
2003, Mr. Caprio served as media marketing consultant with CBS Radio's new
business development team, the Infinity Promotions Group, New York. Form 1998 to
2002, Mr. Caprio served as an account executive at ABC/Disney Radio. Prior to
serving at ABC, Mr. Caprio held positions in the marketing department for the
New York Football Giants and served in public relations for the New York
Knickerbockers. Mr. Caprio holds a B.A. in political science from Ramapo
College.

GARY LEE is non-executive chairman and director of SWMX as of July 26,
2006. Prior to the Merger, Gary Lee served in the same positions for SoftWave
Media Exchange, Inc. having joined its board of directors in April 2006 and
having been elected non-executive chairman in June 2006. Mr. Lee has been chief
operating officer of Ogilvy & Mather North America since January 2000 and in the
office of the chairman since January 2006. Mr. Lee has also served as Chief
Financial Officer of Y&R Worldwide and taught accounting at the University of
Toronto. He sits on a number of committees of the American Association of
Advertising Agencies.

RICK BOYKO joined our board of directors on July 26, 2006, having
previously served on the board of directors of SoftWave Media Exchange Inc. from
April 2006 until the Merger. Mr. Boyko currently serves as the managing director
of the VCU Adcenter, a graduate program in advertising at Virginia Commonwealth
University. Prior to that, Mr. Boyko served as co-president and chief creative
officer of Ogilvy & Mather, New York, from 1997 through 2003. In 1998, Mr. Boyko
assumed the additional responsibility of chief creative officer of the North
American region. Mr. Boyko joined Ogilvy & Mather Worldwide, Inc. in 1989 and
held various executive creative positions.

JERRY SHERESHEWSKY joined our board of directors on July 26, 2006,
having previously served on the board of directors of SoftWave Media Exchange
Inc. from April 2006 until the Merger. Mr. Shereshewsky has served as ambassador
plenipotentiary to Madison Avenue for Yahoo! Inc. since 1998. He previously
served as senior vice president with Yoyodyne from 1995 to 1998. From 1990 to
1995, Mr. Shereshewsky served as vice president for marketing and special
products at Bertelsmann Music Group. Prior to joining Bertelsmann Music Group,
he served as a senior vice president with Young & Rubicam from 1969 to 1990. He
also sits on the advisory board of the Adcenter at Virginia Commonwealth
University.

BRUCE L. LEV joined our board of directors on July 26, 2006, having
previously served on the board of directors of SoftWave Media Exchange Inc. from
April 2006 until the Merger. Mr. Lev is a managing director of Loeb Partners
Corp., an investment firm in New York, New York. Previously, he served as vice
chairman and director of USCO Logistics from 2000 to 2003 and as executive vice
president of corporate and legal affairs of Micro Warehouse Inc., a computer
products retailer that was then publicly traded, from 1995 to 2000. Mr. Lev sits
on the Board of Directors of AirDat, LLC, Flagler Construction Co, LLC,
Pittsfield Plastics Inc, and Ultramercial, LLC, all of which are privately held.

CHARLES OMPHALIUS is director of SWMX as of July 26, 2006. Mr.
Omphalius served as President of SoftWave Media Exchange, Inc., the wholly owned
subsidiary of SWMX, from January 2006 until August 8, 2006. Prior to co-founding
SWMX, Mr. Omphalius co-founded Integrated Marketing and Promotional Solutions
Inc. ("IMPS"), an advertising media buying agency, in 2003, and served as its
chief operating officer from inception through 2006. From 2001 until 2003, Mr.
Omphalius served as senior account manager at CBS Viacom. Prior to 2001, he
served as an account executive at ABC/Disney Radio. Mr. Omphalius holds a B.A.
of Communications from the State University of New York at New Paltz. Mr.
Omphalius served in the U.S. Army from 1991 to 1993.

There are no family relationships among our directors and executive
officers.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following summary compensation table sets forth, for the years
indicated, all cash compensation paid, distributed or accrued for services,
including salary and bonus amounts, rendered in all capacities by our chief
executive officer and all other executive officers who received or are entitled
to receive remuneration in excess of $100,000 during the stated periods.

Annual Compensation
-------------------------------
Other Annual
Fiscal Salary Bonus Compensation
Name and Principal Position Year ($) ($) ($)
--------------------------- ---- --- --- ---
William Iversen 2005 $0 -- --
President and Chief Financial
Officer, Director

OPTION GRANTS IN LAST FISCAL YEAR

We did not grant any stock options to the executive officers during our
first fiscal year which ended October 31, 2005. Options for the purchase of
2,370,000 shares of common stock were issued by SoftWave to directors and
executive officers, of which 400,000 are currently exercisable. We assumed
SoftWave's obligations with respect to all of these options in connection with
the Merger.

During the year ended October 31, 2005, none of our executive officers
exercised any stock options.

DIRECTORS' COMPENSATION

CASH COMPENSATION

Each non-employee member of our board of directors receives $15,000 per
year, $1,000 for attending each additional meeting besides our four regularly
schedules meetings and $500 for each additional telephonic meeting attended.
Non-employee directors that serve on committees of the board of directors, other
than the audit committee, receive an additional $1,500 per year, with the
chairperson receiving $2,500 per year. With respect to the audit committee, our
non-employee chairperson receives an annual payment of $6,000, and each
non-employee audit committee member receives $2,000 per year.

STOCK COMPENSATION

Each non-employee member of our board of directors received a grant
upon joining the board of directors of SoftWave of options to purchase 150,000
shares of common stock at an exercise price of $0.50, 75,000 of which vest six
months after their grant and the remainder of which vest on the one year
anniversary of the grant. In addition, the non-executive chairman of our board
of directors received from SoftWave an award of 25,000 shares of common stock
and options to purchase 125,000 shares of common stock at an exercise price of
$0.50, of which 50,000 vested immediately and 75,000 vest in one year. All of
such options were assumed by us in the merger and became exercisable for shares
of our common stock.

EMPLOYMENT AGREEMENTS

Through our wholly-owned subsidiary, SoftWave, we have employment
agreements with Joshua Wexler, our chief executive officer; Stavros Aloizos, our
chief technology officer; and Michael Caprio, our executive vice president that
are substantially similar and provide for an initial term of three years
expiring on January 19, 2009 at annual base salaries of $300,000. In addition,
the executives are entitled to participate in

any annual bonus plan or equity based incentive programs we maintain. If we
terminate the employment of any of these executives for cause (as defined in the
employment agreements) or the executive resigns without good reason (as defined
in the employment agreements), our obligations are limited generally to paying
the executive his base salary only through the termination date. If we terminate
the executive's employment without cause or the executive resigns with good
reason, we are generally obligated to continue to pay the executive's
compensation for the remainder of the term.

The employment agreement with Bill Figenshu, our chief operating
officer, provides for an initial term of two years expiring on January 31, 2008.
In addition to his annual salary of $240,000, Mr. Figenshu is entitled to such
vacation time, sick leave, perquisites of office, fringe benefits, incentive,
retirement, profit-sharing, life, medical, disability and other benefit plans
and programs and other terms and conditions of employment as we generally
provide to our executives having rank and seniority comparable to the chief
operating officer. If we terminate his employment for cause (as defined in such
employment agreement), our obligations are limited generally to paying Mr.
Figenshu his base salary only through the termination date. If we terminate Mr.
Figenshu's employment without cause, we are generally obligated to continue to
pay Mr. Figenshu's compensation for a period of six months.

The employment agreement with James Caci, our chief financial officer,
provides for an initial term of two years expiring on May 1, 2008. In addition
to his annual salary of $240,000, Mr. Caci is entitled to such vacation time,
sick leave, perquisites of office, fringe benefits, incentive, retirement,
profit-sharing, life, medical, disability and other benefit plans and programs
and other terms and conditions of employment as we generally provide to our
executives having rank and seniority comparable to the chief financial officer.
If we terminate his employment for cause (as defined in such employment
agreement), our obligations are limited generally to paying Mr. Caci his base
salary only through the termination date. If we terminate Mr. Caci's employment
without cause, we are generally obligated to continue to pay Mr. Caci's
compensation for a period of three months.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Our certificate of incorporation, as amended, and bylaws provide that
we will indemnify our directors, officers, employees and agents to the fullest
extent and in the manner permitted by the provisions of the Delaware General
Compliance Law, or DGCL, as amended from time to time, subject to any
permissible expansion or limitation of such indemnification, as may be set forth
in any stockholders' or directors' resolution or by contract.

Section 145 of the DGCL provides, in general, that a corporation
incorporated under the laws of the State of Delaware, such as us, may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than a
derivative action by or in the right of the corporation) by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. In the case of a
derivative action, a Delaware corporation may indemnify any such person against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification will be made in respect of any claim, issue or matter as to
which such person will have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery of the State of Delaware or
any other court in which such action was brought determines such person is
fairly and reasonably entitled to indemnity for such expenses.

Any repeal or modification of these provisions approved by our
stockholders shall be prospective only, and shall not adversely affect any
limitation on the liability of our directors or officers existing as of the time
of such repeal or modification.

We are also permitted to apply for insurance on behalf of any director,
officer, employee or other agent for liability arising out of his actions,
whether or not the DGCL would permit indemnification.

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

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information known to us with
respect to the beneficial ownership of our common stock as of October 31, 2006,
by (1) all persons who are beneficial owners of 5% or more of our voting
securities stock, (2) each director, (3) each executive officer, and (4) all
directors and executive officers as a group. The information regarding
beneficial ownership of our common stock has been presented in accordance with
the rules of the Commission. Under these rules, a person may be deemed to
beneficially own any shares of our common stock as to which such person,
directly or indirectly, has or shares voting power or investment power, and to
beneficially own any shares of the our common stock as to which such person has
the right to acquire voting or investment power within 60 days through the
exercise of any stock option or other right. The percentage of beneficial
ownership as to any person as of a particular date is calculated by dividing (a)
(i) the number of shares beneficially owned by such person plus (ii) the number
of shares as to which such person has the right to acquire voting or investment
power within 60 days by (b) the total number of shares outstanding as of such
date, plus any shares that such person has the right to acquire from us within
60 days. Including those shares in the tables does not, however, constitute an
admission that the named stockholder is a direct or indirect beneficial owner of
those shares. Unless otherwise indicated, each person or entity named in the
table has sole voting power and investment power (or shares that power with that
person's spouse) with respect to all shares of capital stock listed as owned by
that person or entity.

Common Stock Beneficially Owned

Name Shares Percentage
---- ------ ----------
5% STOCKHOLDERS
John I. Keay, Jr 21,706,825(2) 10.5%

EXECUTIVE OFFICERS AND DIRECTORS
Joshua Wexler 34,296,667(3) 16.7
Stavros Aloizos 35,231,667(4) 17.1
Charles Omphalius 17,106,824(5) 8.3
Bill Figenshu 200,000(6) *
James Caci 0 0
Michael Caprio 21,346,824(7) 10.4
Gary Lee 75,000(8) *
Rick Boyko 0 0
Bruce L. Lev 0 0
Jerry Shereshewsky 0 0
All directors and officers as a group (10
persons) 108,256,982(9) 52.5%

---------------
* Less than 1%.

(1) Unless otherwise indicated, the address of each stockholder, director, and
executive officer listed above is SWMX, Inc., One Bridge Street, Irvington,
New York 10533.

(2) Includes (a) 17,866,825 shares owned directly by John I. Keay, Jr., (b)
1,920,000 shares owned by Keay Family LLC and (c) 1,920,000 shares owned by
Suzanne Keay, Mr. Keay's wife. Mr. Keay disclaims beneficial ownership of
the shares owned by Suzanne Keay.

(3) Includes (a) 22,080,000 shares owned directly by Joshua Wexler, (b)
7,000,000 shares owned by Wex Holdings LLC, (c) 5,000,000 shares owned by
Christine Wexler, Mr. Wexler's wife and (d) 216,667 shares owned by Alowex,
LLC. Mr. Wexler is the Manager of Wex Holdings LLC and owns 50% of its
membership interests. The Alowex, LLC shares represent Mr. Wexler's
proportional interest in shares owned by Alowex, LLC. Mr. Wexler disclaims
beneficial ownership of the shares owned by Christine Wexler.

(4) Includes (a) 25,000,000 shares owned directly by Stavros Aloizos, (b)
15,000 shares owned by Aloizos AAU Fund, LLC, (c) 5,000,000 shares owned by
Aloizos Family LLC, (d) 5,000,000 shares owned by Doreen Aloizos, Mr.
Aloizos' wife and (e) 216,667 shares owned by Alowex, LLC. Mr. Aloizos is
the manager of the Aloizos Family LLC and owns 50% of its membership
interests. Mr. Aloizos also is the manager and sole member of the Aloizos
AAU Fund LLC. The Alowex, LLC shares represent Mr. Aloizos's proportional
interest in shares owned by Alowex, LLC. Mr. Aloizos disclaims beneficial
ownership of the shares owned by Doreen Aloizos.

(5) Includes (a) 12,330,824 shares owned directly by Charles Omphalius and (b)
4,776,000 shares owned by Omphalius Family LLC. Mr. Omphalius is the
manager of the Omphalius Family LLC and its sole member.

(6) Consists of 200,000 shares of common stock issuable upon exercise of
options.

(7) Includes (a) 15,586,824 shares owned directly by Michael Caprio and (b)
5,760,000 shares owned by 84 Limited LLC of which Mr. Caprio is the sole
member.

(8) Consists of (a) 25,000 shares of common stock and (b) 50,000 shares of
common stock issuable upon exercise of options held by Mr. Lee.

(9) Includes 250,000 shares of common stock issuable upon exercise of options.

DESCRIPTION OF CAPITAL STOCK

The following summary of certain provisions of our common stock is not
complete. A full understanding requires a review of our certificate of
incorporation, as amended, and bylaws that are included as exhibits to the
registration statement of which this prospectus forms a part, and the provisions
of applicable law.

COMMON STOCK

Our authorized capital stock consists of 250,000,000 shares of common
stock. As of October 31, 2006 there were 205,925,000 shares of common stock
outstanding which were held of record by approximately 398 shareholders.

VOTING

Each holder of common stock is entitled to one vote for each share on
all matters to be voted upon by the holders of common stock. The holders of
shares of our common stock vote together as a single class. The holders of our
common stock do not have cumulative voting rights, which means that the holders
of more than 50% of the outstanding shares, voting for the election of
directors, can elect all of the directors to be elected, if they so choose, and,
in that event, the holders of the remaining shares will not be able to elect any
of our directors.

RIGHTS AND PREFERENCES

The holders of common stock: (1) have equal ratable rights to dividends
from funds legally available if and when declared by our board of directors; (2)
are entitled to share ratably in all of our assets available for distribution to
the holders of common stock upon liquidation, dissolution or winding up of our
affairs; and (3) do not have preemptive, subscription or conversion rights, and
there are no redemption or sinking fund provisions or rights.

DELAWARE ANTI-TAKEOVER LAW AND PROVISIONS OF OUR CERTIFICATE OF INCORPORATION
AND BYLAWS

Our certificate of incorporation, as amended, and bylaws include
provisions that are intended to enhance the likelihood of continuity and
stability in our board of directors and in its policies. These provisions might
have the effect of delaying or preventing a change in control of us and may make
more difficult the removal of incumbent management even if such transactions
could be beneficial to the interests of stockholders. These provisions include:

LIMITATION OF DIRECTOR LIABILITY. As permitted by the DGCL, our
certificate of incorporation, as amended, includes a provision that permits the
elimination of personal liability of our directors for monetary damages for
breach of fiduciary duty as a director, except for liability for:

o any breach of the director's duty of loyalty to us or our
stockholders;

o acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

o unlawful payments of dividends or unlawful stock repurchases or
redemptions, as provided under Section 174 of the DGCL; or

o any transaction from which the director derived an improper
personal benefit.

Such limitation of liability may not apply to liabilities arising under
the federal securities laws and does not affect the availability of equitable
remedies such as injunctive relief or rescission. In addition and in accordance
with the DGCL, we are permitted to secure insurance on behalf of any officer,
director, employee or other agent for any liability arising out of his or her
actions in such capacity, regardless of whether indemnification would be
permitted under the DGCL. We currently maintain, and intend to continue to
maintain, liability insurance for our directors and officers.

RIGHT TO FIX THE SIZE OF OUR BOARD OF DIRECTORS. Pursuant to our
certificate of incorporation, as amended, subject to specific rights of
preferred stockholders, our board of directors has exclusive authority to fix
the number of directors constituting our board.

ACTION BY STOCKHOLDERS. A stockholder or group of stockholders will be
unable to require the call of a special meeting of stockholders unless they own
at least a majority of our outstanding voting stock.

DELAWARE ANTI-TAKEOVER LAW. We are subject to the provisions of Section
203 of the DGCL, which applies to "business combinations" such as a merger,
asset or stock sale or other transaction that result in financial benefit to an
"interested stockholder". An "interested stockholder" is a person who, together
with affiliates and associates, owns, or within three years prior, did own, 15%
or more of a corporation's outstanding voting stock. Section 203 generally
prohibits a publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years

following the time that the stockholder became an interested stockholder,
unless:

o prior to entering into the business combination,, the board of
directors of the corporation approved either the business
combination or the transaction that resulted in the stockholder
becoming an interested stockholder;

o upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares
outstanding, those shares owned by persons who are directors and
also officers, and employee stock plans in which employee
participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a
tender or exchange offer; or

o on or subsequent to that time, the business combination is
approved by the board of directors and authorized at an annual or
special meeting of stockholders, and not by written consent, by
the affirmative vote of at least two-thirds of the outstanding
voting stock that is not owned by the interested stockholder.

o This provision may have the effect of delaying, deterring or
preventing a change in control over us without further actions by
our stockholders.

LISTING

Our common stock is admitted for trading on the OTCBB under the symbol
"SWMX.OB."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is Continental
Stock Transfer & Trust Company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On August 23, 2005, Soft Wave Media, LLC, the predecessor to SoftWave
and us, entered into an Agreement of Sale with Alowex, an entity that is
wholly-owned by Joshua Wexler and Stavros Aloizos, two of our directors and
executive officers, pursuant to which Alowex sold to Soft Wave Media, LLC the
software and any intellectual property related to the Remnant Radio platform,
which is the predecessor to the SWMX Radio platform in exchange for a promissory
note in the original principal amount of $1,242,000. The note provided for
interest at a rate of 4% per annum, with monthly payments of principal and
interest commencing on September 1, 2005. However, no amounts were paid during
2005, and the note was restructured on January 19, 2006, at which time the
original promissory note was exchanged for a new note issued by us to Alowex in
the amount of $1.4 million. The new note provided for monthly payments of
interest at the rate of 7% per annum commencing February 19, 2006 and monthly
principal and interest payments of $33,524 commencing February 19, 2007 until
January 19, 2011 on which date all outstanding principal and accrued interest
becomes due and payable. As a result of the closing of our July 2006 private
placement, the note became payable as it provided that if we received gross
proceeds from the sale of equity securities in any single or a series of related
transactions in which the amount raised equaled or exceeded $10.0 million, the
entire note, including accrued interest, became due and payable. This note was
repaid on July 27, 2006.

On January 19, 2006, in consideration for services provided to us by
Alowex and Remnant Media, LLC, an entity that is controlled by Michael Caprio,
John I. Keay, Jr. and Charles Omphalius, our executive officer, an employee who
owns more than 10% of our common stock and a former employee who owns more than
10% of our common stock, and the contributions that each had made to our growth
and development, our software and our website, we agreed to pay each party $1.3
million. These obligations were paid as part of our July 2006 private placement
through the conversion of such obligations into 866,668 shares of our common
stock.

During the period ended December 31, 2005, Soft Wave Media, LLC, our
predecessor, received consulting services as well as web hosting services for
which we paid $650,000 from companies owned by Joshua Wexler and Stavros
Aloizos, our executive officers and directors who each own more than 10% of our
common stock.

On January 19, 2006, we entered into an advisory agreement with Vista
Development, LLC for a term of one year pursuant to which we agreed to pay Vista
Development, LLC a monthly fee of $15,000 plus expenses. Vista Development, LLC
and its owner, Robert A. Berman, are stockholders.

On May 15, 2006, we entered into a line of credit letter agreement with
Soft Wave Funding, LLC pursuant to which it made available to us a line of
credit in the amount of $1,500,000. Principal outstanding under this line of
credit accrued interest at a rate of 8% per annum. The outstanding balance of
$1.2 million as of July 26, 2006 became payable as a result of the closing of
our July 2006 private placement. On July 27, 2006, we repaid the amounts
outstanding under this credit facility. The members of Soft Wave Funding, LLC,
Robert A. Berman and Scott A. Kaniewski, are stockholders.

LEGAL MATTERS

The validity of the shares of common stock offered under this
prospectus will be passed upon for us by Olshan Grundman Frome Rosenzweig &
Wolosky LLP, New York, New York, a member of which owns shares of our common
stock.

EXPERTS

The financial statements of SWMX, Inc. (formerly Softwave Media, LLC)
at December 31, 2005 and for the period from inception (August 23, 2005) to
December 31, 2005 included in this registration statement have been audited by
Amper, Politziner & Mattia, P.C., an independent registered public accounting
firm, as set forth in their report, appearing elsewhere herein and are included
in reliance upon such report given on the authority of such firm as experts in
accounting and auditing.

CHANGES IN ACCOUNTANT

Effective as of July 26, 2006, we dismissed Morgan & Company as our
independent registered public accounting firm. Morgan & Company had previously
been engaged as the principal accountant to audit our financial statements. The
reason for the dismissal of Morgan & Company is that, following the consummation
of the Merger on July 26, 2006, (i) the former stockholders of SoftWave owned a
majority of the outstanding shares of our common stock and (ii) our primary
business unit became the business previously conducted by SoftWave. The
independent registered public accountant of SoftWave was the firm of Amper
Politziner & Mattia, P.C. We believe that it is in our best interest to have
Amper Politziner & Mattia, P.C. continue to work with our business, and we
therefore retained Amper Politziner & Mattia, P.C. as our new independent
registered public accounting firm, effective as of July 26, 2006.

The decision to change accountants was approved by our board of
directors on July 26, 2006. From inception through July 26, 2006, there were no
disagreements with Morgan & Company on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure which,
if not resolved to the satisfaction of Morgan & Company, would have caused it to
make reference to the matter in connection with its reports.

As of July 26, 2006, Amper Politziner & Mattia, P.C. was engaged as our
new independent registered public accountants. The appointment of Amper
Politziner & Mattia, P.C. was approved by our board of directors. From April 15,
2005 (inception) through July 26, 2006, we did not consult Amper Politziner &
Mattia, P.C. regarding either: (i) the application of accounting principles to a
specific completed or contemplated transaction, or the type of audit opinion
that might be rendered on our financial statements; or (ii) any matter that was
the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation
S-B.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports and other information
with the Commission. You may read and copy any document that we file at the
Public Reference Room of the Securities and Exchange Commission at 100 F Street,
N.E., Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Commission at 1-800-SEC-0330. In addition,
the Commission maintains an Internet site at http://www.sec.gov from which
interested persons can access the reports and other information that we
electronically file with the Commission.

You may obtain a copy of these filings at no cost, by writing or
telephoning us at the following:

SWMX, Inc.
Attention: Investor Relations
1 Bridge Street
Irvington, New York 10533
Tel: (914) 406-8400
www.swmx.com

INDEX TO FINANCIAL STATEMENTS

PAGE
AUDITED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm.............................................................. F-2
Balance Sheet at December 31, 2005................................................................................... F-3
Statement of Operations for the period from inception (August 23, 2005) to December 31, 2005......................... F-4
Statement of Changes in Stockholders' Deficit for the period from inception (August 23, 2005) to December 31, 2005... F-5
Statement of Cash Flows for the period from inception (August 23, 2005) to December 31, 2005......................... F-6
Notes to Financial Statements........................................................................................ F-7-14

UNAUDITED FINANCIAL STATEMENTS
Balance Sheets at September 30, 2006 (unaudited) and December 31, 2005................................................F-14
Statements of Operations for the three and nine months ended September 30, 2006 (unaudited) ..........................F-15
Statements of Cash Flows for the nine months ended September 30, 2006 (unaudited) ....................................F-16
Statement of Changes in Stockholders' Deficit for the nine months ended September 30, 2006 (unaudited)................F-17
Notes to Financial Statements.........................................................................................F-18-26

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
SWMX, Inc. (formerly Soft Wave Media, LLC)

We have audited the accompanying balance sheet of SWMX, Inc. (formerly Soft Wave
Media, LLC (the Company)) as of December 31, 2005 and the related statements of
operations, changes in stockholders' deficit and cash flows for the period from
inception (August 23, 2005) to December 31, 2005. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion of these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
as established by the Auditing Standards Board (United States) and in accordance
with the auditing standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SWMX, Inc. (formerly Soft Wave
Media, LLC) as of December 31, 2005, and the results of its operations and its
cash flows for the period from inception (August 23, 2005) to December 31, 2005
in conformity with accepted 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 1 to the
financial statements, the Company has incurred a significant net loss since its
inception and has a working capital deficiency of $4,264,697 as of December 31,
2005, which raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding this matter are also described in Note 1.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

/s/ Amper, Politziner & Mattia P.C.
-----------------------------------
Amper, Politziner & Mattia P.C.

June 9, 2006
New York, New York

F-2

SWMX, INC. (FORMERLY SOFT WAVE MEDIA, LLC)
BALANCE SHEET
DECEMBER 31, 2005

ASSETS

CURRENT ASSETS
Cash $ 79,820
Accounts receivable, net 306,262
-----------

TOTAL CURRENT ASSETS 386,082
-----------

Property and equipment, net of accumulated depreciation 1,055,111
-----------

TOTAL ASSETS $ 1,441,193
===========

LIABILITIES AND MEMBERS' DEFICIT

CURRENT LIABILITIES
Accounts payable $ 287,710
Accrued expenses 107,497
Note payable to related parties 1,193,111
Due to related parties 2,862,461
Advances from investors 200,000
-----------

TOTAL CURRENT LIABILITIES 4,650,779

COMMITMENTS AND CONTINGENCIES

Stockholders' Deficit
Common stock, 160,000,000 shares at $.01 par value
(note 1) 1,600,000
Additional paid in capital (1,600,000)
Accumulated deficit (3,209,586)
------------

TOTAL STOCKHOLDERS' DEFICIT (3,209,586)
-----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,441,193
===========

See notes to financial statements.

F-3

SWMX, INC. (FORMERLY SOFT WAVE MEDIA, LLC)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (AUGUST 23, 2005) TO DECEMBER 31, 2005

Net revenues $ 190,453
-----------

Cost and Expenses:
Cost of revenues 214,184
Selling, general and administrative expenses 3,167,283
-----------

Total Cost and expenses 3,381,467
-----------

Operating loss (3,191,014)

Interest expense, net 18,572
-----------

Net Loss $(3,209,586)
===========

Net loss per common share $ (0.02)

Weighted average number of shares outstanding 160,000,000

See notes to financial statements.

F-4

SWMX, INC. (FORMERLY SOFT WAVE MEDIA, LLC)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM INCEPTION (AUGUST 23, 2005) TO DECEMBER 31, 2005

Common Stock Additional
------------------------ Paid-in Accumulated
Shares Amount Capital Deficit Total
------------ ----------- ------------- ------------- -------------
Balance, August 23, 2005 160,000,000 $1,600,000 $(1,600,000) $ - $ -

Net loss (3,209,586) (3,209,586)

------------ ----------- ------------- ------------- -------------
Balance, December 31, 2005 160,000,000 $1,600,000 $(1,600,000) $(3,209,586) $(3,209,586)
============ =========== ============= ============= =============

See notes to financial statements.

F-5

SWMX, INC. (FORMERLY SOFT WAVE MEDIA, LLC)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (AUGUST 23, 2005) TO DECEMBER 31, 2005

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,209,586)
Adjustments to reconcile net loss to net cash
used in operating activities:

Depreciation and amortization 131,889
Amortization of debt discount 6,111
Changes in operating assets and liabilities:
Accounts receivable (306,262)
Accounts payable 287,710
Accrued expenses 107,497
Due to related parties 2,862,461
-----------

Net Cash Used in Operating Activities (120,180)
-----------

CASH FLOWS FROM FINANCING ACTIVITIES
Advances from investors 200,000
-----------
Net Cash Provided by Financing Activities 200,000
-----------

Net increase in cash 79,820

Cash at beginning of period --
-----------

CASH AT END OF PERIOD $ 79,820
===========

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITY:
The Company acquired software in exchange for a note payable
of $1,187,000, net of discount, from a related party. See note 4.

See notes to financial statements.

F-6

NOTE -1- SUMMARY OF BUSINESS AND BASIS FOR PRESENTATION

BUSINESS DESCRIPTION

SWMX, Inc. (formerly Soft Wave Media, LLC (the "Company")) operates the
SWMX Marketplace, an electronic open marketplace for the purchase, sale,
management and distribution of advertising media time. The SWMX Marketplace
enables advertisers and broadcasters to execute sophisticated media transactions
on one platform, in one process, in real-time.

BASIS OF PRESENTATION

Soft Wave Media, LLC is a limited liability company formed in the State
of New York on August 23, 2005. In conjunction with the formation of Soft Wave
Media, LLC, Zysys Solutions, LLC and Integrated Marketing and Promotional
Solutions, Inc. ("IMPS") contributed certain intangible assets, including but
not limited to the domain name, website content and intellectual property
related to the website www.remnantradio.com and the associated web-based radio
advertising business operated by IMPS, to Alowex, LLC ("Alowex") and Remnant
Media, LLC, respectively, which in turn contributed these intangible assets to
Soft Wave Media, LLC. These intangible assets were assigned no value. In
addition, on August 23, 2005, Soft Wave Media, LLC entered into an Agreement of
Sale with Alowex whereby Alowex agreed to sell to Soft Wave Media, LLC the
software and any intellectual property related to the software for the Remnant
Radio Software Platform, which is the predecessor to the Soft Wave Radio
Software Platform.

Zysys Solutions, LLC, IMPS, Alowex and Remnant Media LLC are affiliated
with the cofounders and management of Soft Wave Media, LLC.

On January 19, 2006, Soft Wave Media, Inc., a newly formed corporation
incorporated in the State of Delaware in January 2006, entered into a
contribution agreement with Soft Wave Media, LLC and its members, Alowex and
Remnant Media, LLC, whereby Soft Wave Media, LLC (the "Predecessor") contributed
all of its assets and all of its liabilities to Soft Wave Media, Inc. with the
members of Soft Wave Media LLC receiving all of the issued stock of Soft Wave
Media, Inc. in an equal proportion to their ownership in Soft Wave Media, LLC.
These assets included but were not limited to software, intellectual property,
domain name and website content. This transaction effectively merged the
Predecessor into Soft Wave Media, Inc. and did not result in any change in
ownership or control. As such the assets and liabilities of Soft Wave Media,
Inc., as of the contribution date, are reflected at the carryover basis of the
Predecessor. In March 2006, Soft Wave Media, Inc. changed its name to SoftWave
Media Exchange, Inc. See also Note 8 for further discussion.

On July 26, 2006 Edgemont Resources, Inc. created a wholly-owned
subsidiary, SWMX Acquisition, Inc., to acquire and merge with and into SoftWave
Media Exchange, Inc., pursuant to a merger agreement. Upon conclusion of the
merger, Edgemont Resources, Inc. changed its name to SWMX, Inc. and the
subsidiary changed its name to SoftWave Media Exchange, Inc.

The merger of a private operating company, SoftWave Media Exchange,
Inc. into a non-operating public shell corporation, Edgemont Resources, Inc.,
with nominal assets or liabilities resulted in the shareholders of SoftWave
Media Exchange, Inc. having actual operating control of the merged company after
the transaction. The transaction is considered to be a capital transaction in
substance, rather than a business combination. That is, the transaction is the
equivalent to the issuance of stock by the private company for the net monetary
assets of the shell company, accompanied by a recapitalization. Accordingly, the
outstanding shares of SoftWave Media Exchange, Inc. have been restated in the
accompanying balance sheets and statement of changes in stockholders' deficit to
give effect to the merger. Pursuant to the merger agreement the common stock
exchange ratio was one to one. The restated shares have been used in the
computation of loss per share.

F-7

NOTE -1- SUMMARY OF BUSINESS AND BASIS FOR PRESENTATION (CONTINUED)

All information presented reflects the recapitalization of SWMX, Inc.
and the operations of SoftWave Media Exchange, Inc. and not Edgemont Resources,
Inc. Any references to predecessor companies are predecessors to SoftWave Media
Exchange, Inc. and not Edgemont Resources, Inc.

LIQUIDITY

The Company has incurred a substantial net loss since its inception and
has a working capital deficiency of $4,264,697 as of December 31, 2005, which
raise substantial doubt about its ability to continue as a going concern. Such
loss resulted from the Company's lack of significant revenue and costs incurred
in the establishment of its infrastructure. The Company expects to continue to
incur significant operating expenses in order to execute its current business
plan. While the Company believes that it has access to sources of working
capital that are sufficient to fund its operations for the year ending December
31, 2006, including approximately $1.5 million available from a revolving credit
facility obtained on January 19, 2006 from a related party, there can be no
assurances that sufficient funds will be available. The Company also believes
that additional capital requirements associated with its development can be met
by raising debt or equity when needed, though there can be no assurances that
the Company will be able to raise any such capital or upon what terms. The
accompanying financial statements do not include any adjustments that might
result from this uncertainty.

NOTE -2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. The Company's most significant estimates
and assumptions made in the preparation of the financial statements relate to
revenue recognition and allowance for doubtful accounts. Actual results could
differ from those estimates.

CASH

The Company may maintain significant cash balances with financial
institutions, which are not covered by the Federal Deposit Insurance
Corporation. No such balances existed as of December 31, 2005. The Company has
not incurred any losses in such accounts and believes it is not exposed to any
significant credit risk on cash.

ACCOUNTS RECEIVABLE

Accounts receivable are reported at the amount outstanding, net of any
allowances for amounts that the Company believes are not collectible. At
December 31, 2005, no allowance was deemed required.

F-8

NOTE -2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CAPITALIZED SOFTWARE

In accordance with Statement of Position 98-1, ACCOUNTING FOR THE COSTS
OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE ("SOP 98-1"),
certain direct development costs associated with internal-use software are
capitalized. These costs include external direct costs of service and payroll
costs for employees devoting time to software projects principally related to
software coding, designing system interfaces and installation and testing of the
software. These costs are recorded as fixed assets and are amortized over a
period not to exceed three years beginning when the asset is substantially ready
for use. Costs incurred during the preliminary project stage, as well as
maintenance and training costs are expensed as incurred. Through December 31,
2005, the Company has only capitalized the cost of the software purchased from
Alowex, based on the criteria of SOP 98-1.

Capitalized software is stated at cost less accumulated amortization.
The Company provides for amortization on capitalized software by applying the
straight-line method over a 3 year life.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company periodically reviews the carrying value of its long-lived
assets in relation to historical results, as well as its best estimate of future
trends, events and overall business climate. If such reviews indicate that the
carrying value of any of its assets may not be fully recoverable, the Company
estimates the future cash flows (undiscounted and without interest charges)
generated by the assets and recognize an impairment loss if those estimated
future cash flows are insufficient to recover the carrying value of the assets.

REVENUE RECOGNITION AND PRESENTATION

The Company recognizes revenue when all of the following criteria have
been met: persuasive evidence of an arrangement exists; services have been
rendered; the price to the customer is fixed and determinable and collectibility
from the customer is reasonably assured. In most instances, these criteria are
met when the customer's advertisement is aired, and it is at this point that the
Company recognizes revenue. In compliance with Emerging Issues Task Force
("EITF") Issue No. 99-19, REPORTING REVENUE GROSS AS A PRINCIPAL VERSUS NET AS
AN AGENT, the Company assesses whether the Company or the third party
broadcaster is the primary obligor. In addition, the Company gives appropriate
consideration to other key indicators such as latitude in establishing price,
discretion in broadcaster selection and who has credit risk. Considering that
the Company operates broadly as a network exchange along with the industry
practice to generally record revenue on a net versus gross basis, the Company
believes that there must be strong evidence in place to overcome the presumption
of net revenue accounting. Accordingly, to date the Company has recorded revenue
net of pass-through charges, based on the Company's assessment of the key
indicators. Should the Company enter into transactions where the key indicators
suggest they are acting as a principal, then the Company will record the gross
amount billed as revenue.

For the period from inception (August 23, 2005) to December 31, 2005,
approximately 35% and 25% of the Company's net revenues came from two customers,
respectively.
F-9

NOTE -2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

COST OF REVENUES

Cost of revenues consists of the expenses associated with the operation
of the Company's data centers including amortization, labor and bandwidth costs.
Cost of revenues also include expenses related to the amortization of
capitalized software development costs, acquired technologies as well as other
software development costs that are expensed in accordance with SOP 98-1.

INCOME TAXES

At December 31, 2005, the Company was organized as a limited liability
company for federal and state tax purposes. As a result, the taxable income was
not subject to federal corporate taxes, but rather proportionately included in
taxable income of the individual members of the limited liability company.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board ("FASB")
issued Statement on Financial Accounting Standard No. 153 ("SFAS 153"),
EXCHANGES OF NONMONETARY ASSETS, AN AMENDMENT OF ACCOUNTING PRINCIPLES BOARD
("APB") OPINION NO. 29.

SFAS 153 eliminates the exception from fair value measurement for
nonmonetary exchanges of similar productive assets in paragraph 21 (b) of APB
Opinion No. 29, "Accounting for Nonmonetary Transactions", and replaces it with
an exception for exchanges that do not have commercial substance. SFAS 153
specifies that a nonmonetary exchange has commercial substance if the future
cash flows of the entity are expected to change significantly as a result of the
exchange. SFAS 153 is effective for the fiscal periods beginning after June 15,
2005 and the Company has adopted this Statement in the first quarter of 2006.
The Company currently does not anticipate that the effects of the statement will
materially affect its financial position or results of operations upon adoption.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections - A Replacement of APB Opinion No. 20 and FASB Statement No. 3
("SFAS No. 154"). SFAS No. 154 requires the retrospective application to prior
periods' financial statements of changes in accounting principle, unless it is
impractical to determine either the period-specific effects or cumulative effect
of the accounting change. SFAS No. 154 also requires that a change in
depreciation, amortization, or depletion method for long-lived non-financial
assets be accounted for as a change in accounting estimate affected by a change
in accounting principle. SFAS No. 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005.
The Company will adopt this provision, as applicable, during fiscal year 2006.

F-10

NOTE -3- CAPITALIZED SOFTWARE

Capitalized Software at December 31, 2005 consists of:

Software $ 1,187,000

Less - Accumulated amortization (131,889)
-----------

$ 1,055,111
===========

Amortization expense was approximately $131,889 for the period from
inception (August 23, 2005) to December 31, 2005, this amount is reflected as
cost of revenues. The entire gross software amount above was acquired from
Alowex, LLC, a related party. See note 4 for further discussion.

NOTE -4- NOTE PAYABLE TO RELATED PARTY

On August 23, 2005, the Predecessor entered into an Agreement of Sale
with Alowex, an entity that is wholly-owned by two shareholders and founders of
the Predecessor whereby Alowex agreed to sell to the Predecessor the software
and any intellectual property related to the Remnant Radio Software Platform,
which is the predecessor to the SoftWave Radio Platform. As consideration, the
Predecessor issued to Alowex a promissory note ("Original Alowex Promissory
Note") in the original amount of $1,242,000, representing an amount agreed to by
the co-founders as fair value. The note provided for interest at a rate of 4%
per annum, with monthly payments of principal and interest commencing on
September 1, 2005 through August 31, 2008 and is subject to a security agreement
consisting of substantially all of the assets of the Company. However, no
amounts were paid during 2005, and the Original Alowex Promissory Note was
canceled with a new note entered into on January 19, 2006, as noted below.

As the Original Alowex Promissory Note was issued at a below market
interest rate, the Company imputed interest at a market rate on the Original
Alowex Promissory Note presented in the accompanying balance sheet net of a
remaining discount of $48,889.

For the period from inception (August 23, 2005) to December 31, 2005,
the Company recognized $ 18,572 of interest expense, including the amortization
of the debt discount on the Original Alowex Promissory Note. $12,461 of this
amount which is payable, was not paid as of December 31, 2005 and is included in
the amount due to related parties on the accompanying balance sheet.

On January 19, 2006, SoftWave Media Exchange, Inc., canceled the
Original Alowex Promissory Note and issued to Alowex a new promissory note in
the amount of $1.4 million ("Alowex, LLC Promissory Note"). The Alowex, LLC
Promissory Note provides for monthly payments of interest at the rate of 7% per
annum commencing February 19, 2006 and monthly principal and interest payments
of $33,524 commencing February 19, 2007 until January 19, 2011 on which date all
outstanding principal and accrued interest shall be due and payable. This
agreement is subject to a security agreement consisting of substantially all
assets of the Company. In the event the Company receives proceeds from the sale
of equity securities in any single or a series of related transactions in which
the amount raised equals or exceeds $10 million, the entire note, including
accrued interest, is due and payable. In connection with entering into the
Alowex, LLC Promissory Note and canceling the Original Alowex Promissory Note,
the Company wrote off the remaining debt discount, the Original Alowex
Promissory Note and the accrued interest payable resulting in an interest
expense charge of approximately $195,000 in 2006 related to this transaction.

F-11

NOTE -4- NOTE PAYABLE TO RELATED PARTY (CONTINUED)

The Original Alowex Promissory Note is classified as a current
liability in the accompanying balance sheet as it is currently the intention of
the Company to satisfy the Alowex LLC Promissory Note within the year.

NOTE -5- REVOLVING CREDIT FACILITY

On January 19, 2006 and as subsequently amended on May 15, 2006,
SoftWave Media Exchange, Inc., entered into a credit facility with Soft Wave
Funding, LLC, an entity owned by two shareholders of SoftWave Media Exchange,
Inc. While the credit facility provides for a $1.5 million revolving loan that
matures on the earlier of September 1, 2006 or the date the SoftWave Media
Exchange, Inc. receives proceeds from the sale of equity securities in any
single or a series of related transactions in which the amount raised equals or
exceeds the then outstanding amount under the credit facility, the Company has
no assurances that these funds will be available. Loans under the credit
facility bear interest at the rate of 8.0% per annum and are secured, on a
subordinated basis to the Alowex, LLC Promissory Note, by substantially all of
the SoftWave Media Exchange, Inc. assets.

NOTE -6- ALOWEX AND REMNANT LETTER AGREEMENTS

On January 19, 2006, in consideration for services provided by Alowex
and Remnant Media, LLC to the Predecessor and the contributions that each had
made to the development of the Company, its software and its website, SoftWave
Media Exchange, Inc., agreed to pay each party $1.3 million.

If SoftWave Media Exchange, Inc. receives proceeds from the sale of
equity securities in any single or a series of related transactions in which the
amount raised equals or exceeds $10 million, under the terms of these letter
agreements all amounts are due and payable, otherwise these amounts are due on
demand at an interest rate of 6%. As of December 31, 2005, the Company has
recorded a liability and expense of $2.6 million. The liability is included as
due to related parties in the accompanying balance sheet.

NOTE -7- OPERATING LEASES

The Company's executive, administrative and operating offices, and
network operations center are located in approximately 4,400 square feet of
leased office space located in Irvington, New York. Currently this space is
leased by related parties IMPS and Zysys Solutions, LLC with the rent being
charged to the Company as a fee. See Note 9.

In May 2006, SoftWave Media Exchange, Inc., entered into a lease to
secure approximately 24,000 square feet of space in the same office complex. The
lease has a five year term, at an initial rate of approximately $617,000 per
year with a price escalation clause of 3.5% per year. In addition, the Company
has entered into certain agreements with third parties to provide redundancy of
the Company's computer network operations, with prices to be determined based on
square footage needed, which has yet to be determined.

F-12

NOTE -8- STOCKHOLDERS' DEFICIT

As of December 31, 2005, the membership interests in Soft Wave Media,
LLC were held as follows:

Alowex, LLC 50%
Remnant Media, LLC 50%

On January 19, 2006, SoftWave Media Exchange, Inc. entered into a
contribution agreement with the Predecessor, whereby the Predecessor contributed
all of its assets and all of its liabilities to SoftWave Media Exchange, Inc. in
exchange for 160 million shares of common stock of SoftWave Media Exchange,
Inc., which were subsequently distributed equally to the Company's members,
Alowex and Remnant Media, LLC which each received 80 million shares of common
stock of SoftWave Media Exchange, Inc. This transaction effectively merged the
Predecessor into SoftWave Media Exchange, Inc. and did not result in any change
in ownership or control.

Subsequently on January 19, 2006, SoftWave Media Exchange, Inc. sold 40
million shares of common stock to new investors for $2,000,000, or $1,982,000
net of expenses. The stockholders also entered a registration rights agreement
which provides for, as defined, the right of first referral and incidental
registration rights if SoftWave Media Exchange, Inc. proposes to file a
registration statement under the Securities Act.

In December 2005, these investors advanced $200,000 toward the purchase
of these shares which is reflected as a liability in the accompanying balance
sheet. Concurrent with this investment the Company agreed to pay to Alowex and
Remnant Media a total of $400,000 for past consulting services included in
selling, general and administrative expenses in the accompanying statement of
operation. Of this amount $150,000 was paid prior to December 31, 2005, with the
balance reflected as due to related parties, in the accompanying balance sheet.
The ownership structure of the Company after this transaction is as follows:

F-13

NOTE -8- STCOKHOLDERS' DEFICIT (CONTINUED)

Shareholders # of Common Shares
------------ ------------------

Alowex, LLC 80,000,000
Remnant Media, LLC 80,000,000
New investors 40,000,000
-----------

Total shares outstanding 200,000,000
===========

On January 31, 2006, each of Alowex and Remnant Media distributed its
shares to its respective members.

On April 20, 2006, certain shareholders of the Company collectively
sold 2,078,479 shares of common stock of SoftWave Media Exchange, Inc. in a
private placement to 65 purchasers at a price of $1.50 per share.

NOTE -9- RELATED PARTY TRANSACTIONS

Amounts owed to Related Parties as of December 31, 2005:

Alowex Note payable........(see Note 4) $1,193,111

Letter agreements:.........(see Note 6)
Alowex LLC 1,300,000
Remnant Media LLC 1,300,000
Services provided - Alowex LLC 137,467
Remnant Media LLC 125,000
----------

Due to related parties $2,862,461
==========

During the period ended December 31, 2005 the Company received
consulting services, web hosting services and rent charges totaling $650,000
from companies owned by shareholders of the company; such amounts have been
included in Selling general and administrative expenses in the accompany
statement of operations. The Company has also included $2.6 million in Selling,
general and administrative expense representing the amounts owed to Alowex, LLC
and Remnant Media LLC under the letter agreements with each of these related
parties. See note 6.

*************************

F-14

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SWMX, INC.
CONSOLIDATED BALANCE SHEETS

September 30, 2006 December 31, 2005
(Unaudited) (A)
------------------ -----------------
ASSETS

CURRENT ASSETS
Cash $ 1,969,202 $ 79,820
Restricted cash 70,000 --
Accounts receivable, net 3,006,980 306,262
Prepaid expense and other current assets 194,532 --
Note receivable related party 200,000 --
------------ ------------
TOTAL CURRENT ASSETS 5,440,714 386,082

Property and equipment, net of accumulated depreciation and
amortization 1,650,902 1,055,111
Security deposit 151,893 --
------------ ------------
TOTAL ASSETS $ 7,243,509 $ 1,441,193
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable $ 2,086,744 $ 287,710
Accrued expenses 717,559 107,497
Notes payable to related parties -- 1,193,111
Due to related parties -- 2,862,461
Advances from investors -- 200,000
------------ ------------
TOTAL CURRENT LIABILITIES 2,804,303 4,650,779
============ ============
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)

Common Stock, 205,925,000 and 160,000,000 shares, respectively,
at a par value of $.01 per share (see note 1) 2,059,250 1,600,000
Additional paid in capital 12,037,962 (1,600,000)
Accumulated deficit (9,658,006) (3,209,586)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 4,439,206 (3,209,586)
============ ============

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 7,243,509 $ 1,441,193
============ ============

(A) Represents Predecessor Company, Soft Wave Media LLC (see Note 1), derived from the audited financial statements.

See notes to financial statements

F-15

SWMX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006
AND THE PERIOD FROM INCEPTION (AUGUST 23, 2005) TO SEPTEMBER 30, 2005
(UNAUDITED)

Three months Nine months Period from
ended ended inception
September 30, September 30, (8/23/05) to
2006 2006 9/30/05 (A)
------------- ------------- -------------

Net Revenues $ 632,579 $ 1,546,059 $ 49,387

Costs and expenses:

Cost of revenues 336,850 785,131 34,500
Selling, general and administrative expenses (including
stock-based compensation expense of $306,000 and $642,000) 3,117,341 6,973,536 21,273
------------- ------------- -------------

Total costs and expenses 3,454,191 7,758,667 55,773
------------- ------------- -------------

Operating loss (2,821,612) (6,212,608) (6,386)

Interest expense, net 1,434 235,812 1,528
------------- ------------- -------------

Net loss $ (2,823,046) $ (6,448,420) $ (7,914)
============= ============= =============

Net loss per common share - basic and diluted $ (0.01) $ (0.03) $ 0.00

Weighted average number of shares outstanding -
basic and diluted 204,250,543 198,790,625 160,000,000

(A) Represents Predecessor Company, Soft Wave Media LLC (see Note 1)

See notes to financial statements

F-16

SWMX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
AND THE PERIOD FROM INCEPTION (AUGUST 23, 2005) TO SEPTEMBER 30, 2005
(UNAUDITED)

Nine months ended Period from inception
September 30, 2006 (8/23/05) to 9/30/05
------------------ --------------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ 6,448,420 $ (7,914)
Adjustments to reconcile net loss to net cash
used in operating activities:

Depreciation and amortization 378,813 32,972
Provision for doubtful accounts 1,282,000 --
Stock-based compensation 642,000 --
Amortization and write-off of debt discount 48,889 --
Changes in operating assets and liabilities:
Accounts receivable (3,982,718) (308,622)
Prepaid expenses and other current assets (194,532) --
Security deposit (151,893) --
Accounts payable 1,799,034 337,508
Accrued expenses 610,062 66,324
Due to related parties (262,461)
------------ ------------
Net Cash (Used in) Provided by Operating Activities (6,279,226) 120,268
------------ ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (974,604) --
Note receivable from related party (500,000) --
Repayment of note receivable from related party 300,000
Restricted cash (70,000) --
------------ ------------
Net Cash used in Investing Activities (1,244,604) --
------------ ------------

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, net of expenses 10,655,212 --
Increase in notes payable to related parties 158,000 --
Repayment of notes payable to related parties (1,400,000)
Borrowings under revolving credit facility 1,500,000 --
Repayments under revolving credit facility (1,500,000) --
------------ ------------
Net Cash Provided by Financing Activities 9,413,212 --
------------ ------------

Net increase in cash 1,889,382 120,268

Cash at beginning of period 79,820 --
------------ ------------

Cash at end of period $ 1,969,202 $ 120,268
============ ============

SUPPLEMENTAL INFORMATION
Cash interest paid $ 31,677 $ --

Non-cash transactions -
In January 2006 the Company issued common stock of $200,000 for cash received in the prior period which was
reflected as a liability in the December 31, 2005 balance sheet.

In July 2006 the Company issued 866,667 shares of common stock in satisfaction of $2.6 million due to related
parties at market price.(see note 7).

In August 2005 the Company acquired software in exchange for a note payable of
$1,187,000, net of discount, from a related party. (see note 5)

See notes to financial statements

F-17

SWMX, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
(UNAUDITED)

Common Stock Additional
---------------------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
------------ ------------- ------------- ------------- -------------

Balance, January 1, 2006 160,000,000 $ 1,600,000 $ (1,600,000) $ (3,209,586) $ (3,209,586)

Issuance of Common Stock,
January 2006 40,000,000 400,000 1,582,000 1,982,000

Issuance of Common Stock,
July 2006 4,000,000 40,000 11,433,212 11,473,212

Reverse merger (note 1) 1,900,000 19,000 (19,000) --

Issuance of Common Stock - Board member 25,000 250 37,250 37,500

Stock-based compensation expense 604,500 604,500

Net loss (6,448,420) (6,448,420)

----------- ------------ ------------ ------------ ------------
Balance, September 30, 2006 205,925,000 $ 2,059,250 $ 12,037,962 $ (9,658,006) $ 4,439,206
=========== ============ ============ ============ ============

See notes to financial statements

F-18

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -1- SUMMARY OF BUSINESS AND BASIS FOR PRESENTATION

BUSINESS DESCRIPTION

SWMX, Inc. ("SWMX" or the "Company") operates the SWMX Marketplace, an
electronic open marketplace for the purchase, sale, management and
distribution of advertising media time. The SWMX Marketplace enables
advertisers and broadcasters to execute sophisticated media
transactions on one platform, in one process, in real-time.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts
of SWMX, Inc. and its wholly-owned subsidiary SoftWave Media Exchange,
Inc. Intercompany balances and transactions have been eliminated.

HISTORY

On July 26, 2006 Edgemont Resources, Inc. created a wholly-owned
subsidiary, SWMX Acquisition, Inc., to acquire and merge with and into
SoftWave Media Exchange, Inc., pursuant to a merger agreement. Upon
conclusion of the merger, Edgemont Resources, Inc. changed its name to
SWMX, Inc. and the subsidiary changed its name to SoftWave Media
Exchange, Inc.

The merger of a private operating company, SoftWave Media Exchange,
Inc. into a non-operating public shell corporation, Edgemont Resources,
Inc., with nominal assets or liabilities resulted in the shareholders
of SoftWave Media Exchange, Inc. having actual operating control of the
merged company after the transaction. The transaction is considered to
be a capital transaction in substance, rather than a business
combination. That is, the transaction is the equivalent to the issuance
of stock by the private company for the net monetary assets of the
shell company, accompanied by a recapitalization. Accordingly, the
outstanding shares of SoftWave Media Exchange, Inc. have been restated
in the accompanying balance sheets and statement of changes in
stockholders' equity (deficit) to give effect to the merger. Pursuant
to the merger agreement the common stock exchange ratio was one to one.
The restated shares have been used in the computation of loss per
share. The merger resulted in SoftWave Media Exchange, Inc. issuing
1,900,000 shares of common stock to Edgemont Resources, Inc. for net
assets of no value and the payment of $400,000 to the shareholders of
Edgemont Resources, Inc. which is included in Selling, General and
Administrative expenses in the accompanying statements of operations.

All information presented reflects the recapitalization of SWMX, Inc.
and the operations of SoftWave Media Exchange, Inc. and not Edgemont
Resources, Inc. Any references to predecessor companies are
predecessors to SoftWave Media Exchange, Inc. and not Edgemont
Resources, Inc. The "Company" shall refer to SWMX, Inc. and or SoftWave
Media Exchange, Inc.

On January 19, 2006, SoftWave Media Exchange, Inc. entered into a
contribution agreement with Soft Wave Media, LLC and its members,
Alowex, LLC ("Alowex") and Remnant Media, LLC, whereby Soft Wave Media,
LLC (the "Predecessor") contributed all of its assets and all of its
liabilities to SoftWave Media Exchange, Inc. These assets included but
were not limited to software, intellectual property, domain name and
website content. This transaction effectively merged the Predecessor
into SoftWave Media Exchange, Inc. and did not result in any change in
ownership or control. As such the assets and liabilities of SoftWave
Media Exchange, Inc., as of the contribution date, are reflected at the
carryover basis of the Predecessor.

F-19

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LIQUIDITY

The Company has incurred substantial losses from inception through
September 30, 2006, which raise substantial doubt about its ability to
continue as a going concern. Such losses resulted from the Company's
lack of significant revenue and costs incurred in the establishment of
its infrastructure. The Company expects to continue to incur
significant operating expenses in order to execute its current business
plan. In July 2006, the Company executed a private placement offering
of common stock (see note 8) and believes that it has access to sources
of working capital that are sufficient to fund its operations for the
year ending December 31, 2006, however, there can be no assurances that
sufficient funds will be available. The Company also believes that
additional capital requirements associated with its development can be
met by raising debt or equity when needed, though there can be no
assurances that the Company will be able to raise any such capital or
upon what terms. The accompanying financial statements do not include
any adjustments that might result from this uncertainty.

NOTE -2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying consolidated balance sheet as of September 30, 2006,
the consolidated statements of operations for the three and nine months
ended September 30, 2006, the consolidated statement of cash flows and
the consolidated statement of changes in stockholders' equity (deficit)
for the nine months ended September 30, 2006 and for the period from
inception (August 23, 2005) to September 30, 2005 are unaudited. These
unaudited interim financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America. In the opinion of management, the unaudited interim financial
statements include all adjustments of a normal recurring nature
necessary for the fair presentation of our financial position as of
September 30, 2006, our results of operations for the three and nine
months ended September 30, 2006 and for the period from inception
(August 23, 2005) to September 30, 2005 and our cash flows for the nine
months ended September 30, 2006 and for the period from inception
(August 23, 2005) to September 30, 2005. The results of operations for
the three and nine months ended September 30, 2006 are not necessarily
indicative of the results to be expected for the year ending December
31, 2006.

These unaudited interim financial statements should be read in
conjunction with the December 31, 2005 audited financial statements and
the related notes of the Predecessor.

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
The Company's most significant estimates and assumptions made in the
preparation of the financial statements relate to revenue recognition
and allowance for doubtful accounts. Actual results could differ from
those estimates.

RESTRICTED CASH

The Company's restricted cash balance of $70,000 at September 30, 2006
consists of a certificate of deposit that serves as collateral for the
Company's merchant credit card account. The term of the certificate of
deposit is one year and expires on August 9, 2007.

F-20

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTS RECEIVABLE

Accounts receivable are recorded at the gross amount billed and
reported at the amount outstanding, net of any allowances for amounts
that the Company believes are not collectible. As of September 30,
2006, the Company has an allowance for doubtful accounts of $1,282,000,
of which $1,182,000 is related to one customer that accounted for 17%
of the Company's revenues for the nine months ended September 30, 2006.
In determining to establish a reserve for this one customer the Company
evaluated the willingness and the ability of this customer to satisfy
its obligations. Information came to light in September 2006, that the
Company believed raised substantial doubt about the collectibility of
this receivable and accordingly established a reserve for the balance
owed by this customer. The Company is vigorously pursuing all legal
avenues available to it in an effort to collect on this receivable. At
December 31, 2005, no allowance was deemed required.

CAPITALIZED SOFTWARE

In accordance with Statement of Position 98-1, Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use ("SOP
98-1"), certain direct development costs associated with internal-use
software are capitalized. These costs include external direct costs of
service and payroll costs for employees devoting time to software
projects principally related to software coding, designing system
interfaces and installation and testing of the software. These costs
are recorded as fixed assets and are amortized over a period not to
exceed three years beginning when the asset is substantially ready for
use. Costs incurred during the preliminary project stage, as well as
maintenance and training costs are expensed as incurred. Through
September 30, 2006, the Company has not capitalized any cost other than
the cost of the software purchased from Alowex, a related party, based
on the criteria of SOP 98-1 (see note 5).

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost less accumulated depreciation.
The Company provides for depreciation and amortization on property and
equipment used by applying the straight-line method over the following
estimated useful lives:

Estimated
Assets Useful Lives
------ ------------

Capitalized software 3 years
Computer equipment and software 1-3 years
Furniture and fixtures 3 years
Leasehold improvements Shorter of 5 years or life of lease

REVENUE RECOGNITION AND PRESENTATION

The Company recognizes revenue when all of the following criteria have
been met: persuasive evidence of an arrangement exists; services have
been rendered; the price to the customer is fixed and determinable and
collectibility from the customer is reasonably assured. In most
instances, these criteria are met when the customer's advertisement is
aired, and it is at this point that the Company recognizes revenue. In
compliance with Emerging Issues Task Force ("EITF") Issue No. 99-19,
Reporting Revenue Gross as a Principal versus Net as an Agent, the
Company assesses whether the Company or the third party broadcaster is
the primary obligor. In addition, the Company gives appropriate
consideration to other key indicators such as latitude in establishing
price, discretion in broadcaster selection and who has credit risk.
Considering that the Company operates broadly as a network exchange
along with the industry practice to generally record revenue on a net
versus gross basis, the Company believes that there must be strong
evidence in place to overcome the presumption of net revenue
accounting. Accordingly, to date the Company has recorded revenue net
of pass-through charges, based on the Company's assessment of the key
indicators. Should the Company enter into transactions where the key
indicators suggest they are acting as a principal, then the Company
will record the gross amount billed as revenue.

For the nine months ended September 30, 2006, approximately 24%, 17%
and 11% of the Company's revenues came from three customers,
respectively. These same three customers accounted for 53% and 43% of
accounts receivable as of September 30, 2006 and December 31, 2005,
respectively. See note 2 Accounts Receivable for further discussion.

F-21

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

COST OF REVENUES

Cost of revenues consists of the expenses associated with the operation
of the Company's data centers including depreciation, labor and
bandwidth costs. Cost of revenues also include expenses related to the
amortization of capitalized software development costs, acquired
technologies as well as other software development costs that are
expensed in accordance with SOP 98-1.

INCOME TAXES

The Company applies the asset and liability approach to financial
accounting and reporting for income taxes. Deferred income tax assets
and liabilities are computed for differences between the financial
statement and tax bases of assets and liabilities that will result in
future taxable or deductible amounts, based on enacted tax laws and
rates for the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be realized.

The Company has incurred losses since its formation at the time of the
contribution agreement; such losses create a deferred tax asset. The
Company has established a valuation reserve equal to this asset.

STOCK - BASED COMPENSATION

In December 2004, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 123
(revised), "Share-Based Payment" ("SFAS 123(R)"). SFAS 123(R)
eliminates the alternative to use the intrinsic value method of
accounting, which generally resulted in no compensation expense
recorded in the financial statements related to the issuance of equity
awards to employees. SFAS 123(R) requires that the cost resulting from
all share based payment transactions be recognized in the financial
statements.

SFAS 123(R) establishes fair value as the measurement objective in
accounting for share based payment arrangements and requires all
companies to apply a fair value based measurement method in accounting
for generally all share based payment transactions with employees. The
Company adopted SFAS No. 123(R) in connection with its issuance of
stock options during the quarter ended March 31, 2006 (no options were
issued by the Predecessor prior to this quarter).

During the nine months ended September 30, 2006, the Company issued
options to purchase 2,370,000 shares of common stock at various
exercise prices. There were no options granted in the three months
ended September 30, 2006. In accordance with SFAS 123(R) the Company
recorded an expense relating to these options of $306,000 and $642,000
for the three and nine months ended September 30, 2006. The
compensation expense is being recognized over the vesting period of the
options ranging from 6 months to 3 years.

The Company used the Black-Scholes option-pricing model to estimate the
fair value of these stock-based awards with the following
weighted-average assumptions for the indicated periods:

Risk-free interest rate 4.50%

Expected lives 4 years

Expected dividends $ --

Volatility 35%

F-22

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the Company's stock option activity:

Weighted Average
Shares Exercise Price Option Price Range
---------- ---------------- ------------------
Balance at December 31, 2005 -- -- --
Granted 2,370,000 $ 0.61 $0.05-$1.50
Exercised -- -- --
Forfeited -- -- --
--------- -------- -----------
Balance at September 30, 2006 2,370,000 $ 0.61 $0.05-$1.50
========= ======== ===========

The following table summarizes information about the Company's stock
options outstanding at September 30, 2006:

Options Outstanding Options Exercisable
---------------------------------------------------------------------- --------------------------------
Number Weighted Weighted Number Weighted
Range of Exercise Outstanding Average Average Exercisable as Average
Prices at 9/30/06 Remaining Life Exercise Price of 9/30/06 Exercise Price
----------------- ---------- -------------- -------------- ---------- --------------
$0.05 600,000 4.58 $0.05 200,000 $0.05
$0.50 725,000 4.88 $0.50 50,000 $0.50
$1.00 1,010,000 6.84 $1.00 150,000 $1.00
$1.50 35,000 4.84 $1.50 -- --

On July 26, 2006, the Company's Board of Directors adopted the 2006
Stock Option Plan (the "Plan"). 630,000 shares of the Company's common
stock has been reserved for issuance under the Plan. As of September
30, 2006, no stock options have been granted under this Plan.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements". This Statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value measurements. This
Statement applies under other accounting pronouncements that require or
permit fair value measurements, the FASB having previously concluded in
those accounting pronouncements that fair value is the relevant
measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the
application of this Statement will change current practice. This
Statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those
fiscal years. The Company is currently evaluating the impact of this
Statement on its financial statements.

In July 2006, the FASB issued Financial Interpretation No. 48 (FIN 48)
("Accounting for Uncertainty in Income Taxes, as Interpretation of FASB
Statement No. 109"). This Interpretation clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial
statements in accordance with FASB Statement No. 109, "Accounting for
Income Taxes". FIN 48 prescribes a recognition and measurement
threshold attributable for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax
return. FIN 48 also provides guidance on recognition, classification,
interest and penalties, accounting in interim periods, disclosures and
transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company is currently evaluating the impact of
this Interpretation on its financial statements.

NOTE -3- LOSS PER SHARE

Net loss per share has been presented pursuant to SFAS No. 128,
"Earnings per Share". Basic net loss per share is computed by dividing
reported net loss available to common shareholders by the weighted
average shares outstanding for the period. Diluted net loss per share
is computed by dividing reported net loss available to common
shareholders by weighted average shares outstanding for the period,
adjusted for the dilutive effects of common stock equivalents, which
consist of stock options, using the treasury stock method.

F-23

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ALL STOCK OPTIONS HAVE BEEN EXCLUDED FROM THE COMPUTATION OF EARNINGS PER SHARE
DUE TO THEIR ANTI-DILUTIVE EFFECT. THE WEIGHTED AVERAGE NUMBER OF SUCH SHARES IS
1,885,000 AND 1,235,855 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006,
RESPECTIVELY.NOTE -4- PROPERTY AND EQUIPMENT

September December
Property and equipment consists of: 30, 2006 31, 2005

Capitalized Software $ 1,187,000 $ 1,187,000
Computer Equipment and software 811,516 --
Furniture and fixtures 71,604 --
Leasehold improvements 91,484 --
=========== ===========
$ 2,161,604 $ 1,187,000

Less - Accumulated depreciation and amortization (510,702) (131,889)
----------- -----------

$ 1,650,902 $ 1,055,111

Depreciation and amortization expense was approximately $156,015 and
$378,813 for the three and nine months ended September 30, 2006.

NOTE -5- NOTE PAYABLE TO RELATED PARTY

On August 23, 2005, the Predecessor entered into an Agreement of Sale
with Alowex, an entity that is wholly-owned by two shareholders and
founders of the Predecessor whereby Alowex agreed to sell to the
Predecessor the software and any intellectual property related to the
Remnant Radio Software Platform, which is the predecessor to the
SoftWave Radio Software Platform. As consideration, the Predecessor
issued to Alowex a promissory note ("Original Alowex Promissory Note")
in the original amount of $1,242,000, representing an amount agreed to
by the co-founders as fair value. The note provided for interest at a
rate of 4% per annum, with monthly payments of principal and interest
commencing on September 1, 2005 through August 31, 2008 and is subject
to a security agreement consisting of substantially all of the assets
of the Company. However, no amounts were paid during 2005 or 2006, and
the Original Alowex Promissory Note was canceled with a new note
entered into on January 19, 2006, as noted below.

As the Original Alowex Promissory Note was issued at a below market
interest rate, the Company imputed interest at a market rate resulting
in a debt discount of approximately $55,000.

On January 19, 2006, SoftWave Media Exchange, Inc. canceled the
Original Alowex Promissory Note and issued to Alowex a new promissory
note in the amount of $1.4 million ("Alowex, LLC Promissory Note"). The
Alowex, LLC Promissory Note provides for monthly payments of interest
at the rate of 7% per annum commencing February 19, 2006 and monthly
principal and interest payments of $33,524 commencing February 19, 2007
until January 19, 2011 on which date all outstanding principal and
accrued interest shall be due and payable. This agreement is subject to
a security agreement consisting of substantially all assets of the
Company. In the event the Company receives proceeds from the sale of
equity securities in any single or a series of related transactions in
which the amount raised equals or exceeds $10 million, the entire note,
including accrued interest, is due and payable. In connection with
entering into the Alowex, LLC Promissory Note and canceling the
Original Alowex Promissory Note, the Company wrote off the remaining
debt discount, the Original Alowex Promissory Note and the accrued
interest payable resulting in an interest expense charge of
approximately $195,000 in 2006 related to this transaction. The Alowex
LLC Promissory Note is classified as a current liability in the
accompanying December 31, 2005 balance sheet as it was the intention of
the Company to satisfy this within the year.

F-24

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the private placement transaction that was completed
on July 26, 2006 (see note 9), this liability, $1,400,000, was repaid
in full.

NOTE -6- REVOLVING CREDIT FACILITY

On January 19, 2006 and subsequently amended on May 15, 2006, SoftWave
Media Exchange, Inc. entered into a credit facility with Soft Wave
Funding, LLC, an entity owned by two shareholders of the Company. While
the credit facility provides for a $1.5 million revolving loan that
matures on the earlier of September 1, 2006 or the date the Company
receives proceeds from the sale of equity securities in any single or a
series of related transactions in which the amount raised equals or
exceeds the then outstanding amount under the credit facility, the
Company has no assurance that these funds will be available. Loans
under the credit facility bear interest at the rate of 8.0% per annum
and are secured, on a subordinated basis to the Alowex, LLC Promissory
Note, by substantially all of the Company's assets.

In connection with the private placement transaction that was completed
on July 26, 2006 (see note 9), the then outstanding amount owed under
this credit facility, $1,500,000, was repaid and the revolving credit
facility expired in accordance with its terms and has not been renewed.

NOTE -7- ALOWEX AND REMNANT LETTER AGREEMENTS

On January 19, 2006, in consideration for services provided by Alowex
and Remnant Media, LLC to the Predecessor and the contributions that
each had made to the development of the Predecessor, its software and
its website, the Company agreed to pay each party $1.3 million. If the
Company receives proceeds from the sale of equity securities in any
single or a series of related transactions in which the amount raised
equals or exceeds $10 million, under the terms of these letter
agreements all amounts are due and payable, otherwise these amounts are
due on demand at an interest rate of 6%. As of December 31, 2005, the
Company recorded a liability and expense of $2.6 million. The liability
is included as due to related parties in the accompanying December 31,
2005 balance sheet.

In connection with the private placement transaction that was completed
on July 26, 2006 (see note 9), this liability of $2.6 million was
converted into equity for an aggregate 866,667 shares of the Company's
common stock, based on current market value.

NOTE -8- COMMITMENTS AND CONTINGENCIES

In May 2006 the Company entered into a lease to secure approximately
24,000 square feet of office space. The lease has a five year term, at
an initial rate of $617,000 per year, with stated escalations which
approximate 3.5% per year thereafter. Included in accrued expenses as
of September 30, 2006 is deferred rent of approximately $54,000.

In August 2006, the Company terminated the employment of one its
officers. This former officer has commenced an arbitration proceeding,
pending before the American Arbitration Association, alleging that he
is due compensation and benefits in connection with his termination
pursuant to his employment agreement with the Company. As the
arbitration is in the very early stages, the Company is unable to
predict the outcome, however, the Company believes it has a meritorious
defense to these claims and intends to vigorously defend itself.

NOTE -9- STOCKHOLDERS' EQUITY (DEFICIT)

On January 19, 2006, SoftWave Media Exchange, Inc. entered into a
contribution agreement with the Predecessor, whereby the Predecessor
contributed all of its assets and all of its liabilities to SoftWave
Media Exchange, Inc. in exchange for 160 million shares of common stock
of SoftWave Media Exchange, Inc., which were subsequently distributed
equally to the Company's members, Alowex and Remnant Media, LLC which
each received 80 million shares of common stock of SoftWave Media
Exchange, Inc. This transaction effectively merged the Predecessor into
SoftWave Media Exchange, Inc. and did not result in any change in
ownership or control.

F-25

SWMX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Subsequently on January 19, 2006, SoftWave Media Exchange, Inc. sold 40
million shares of common stock to new investors for $2,000,000, or
$1,982,000 net of expenses. The stockholders also entered into a
registration rights agreement which provides for, as defined, the right
of first referral and incidental registration rights if SoftWave Media
Exchange, Inc. proposes to file a registration statement under the
Securities Act.

In December 2005, these investors advanced $200,000 toward the purchase
of these shares. Concurrent with this investment the Company agreed to
pay to Alowex and Remnant Media, LLC a total of $400,000 for past
services. Of this amount $150,000 was paid prior to December 31, 2005,
with the balance paid in January 2006. The ownership structure of the
Company after this transaction is as follows:

Shareholders # of Common Shares
-------------------------------------- ----------------------
Alowex, LLC 80,000,000
Remnant Media, LLC 80,000,000
New investors 40,000,000
-----------

Total shares outstanding 200,000,000
===========

On January 31, 2006, each of Alowex and Remnant Media, LLC distributed
its shares to its respective members.

On April 20, 2006, certain shareholders of the Company collectively
sold 2,078,479 shares of common stock of SoftWave Media Exchange, Inc.
in a private placement to 65 purchasers at a price of $1.50 per share.

On July 26, 2006, the Company completed a private placement pursuant to
which it sold 4.0 million shares of common stock for gross proceeds of
$12.0 million, including through the conversion of the $2.6 million
owed to Alowex and Remnant Media, LLC (as discussed further in Note 7).
In addition, the Company used $1.4 million of the net proceeds to repay
a loan due to Alowex (see Note 5) and $1.5 million to repay the balance
outstanding at that time under the `revolving credit facility (see Note
6).

In June 2006, the Company issued 25,000 shares of common stock to its
chairman of the board, as compensation for his accepting the position
as chairman. The Company recorded a stock-based compensation charge of
$37,500 based on the market price on the date of issuance.

NOTE -10- RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, 2006 the Company
received consulting services, web hosting services and rent charges
totaling $87,500 and $380,500 from companies owned by shareholders of
the company; $7,500 and $121,500 of these amounts have been included in
cost of revenues and $60,000 and $209,000 have been included in
selling, general and administrative expenses in the accompanying
statements of operations. In July 2006 the Company loaned an affiliated
company $500,000 pursuant to a note bearing interest at a rate of 8%
per annum. As of September 30, 2006, $200,000 remains outstanding from
this affiliated company. No interest income has been recorded to date
pursuant to this loan.

F-26