8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported):
January 26, 2006 (January 20, 2006)

TRIBEWORKS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-28675	94-337095
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

111 Via Quito
Newport Beach, California 92663
(Address of Principal Executive Offices) (Zip Code)

(949) 723-0075
(Registrant’s telephone number, including area code)

243 Front Street
San Francisco, California 94111
(Registrant’s Name or Former Address, if Changed Since Last Report)

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

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

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

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

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

TABLE OF CONTENTS

	Item 2.01: Completion Of Acquisition Of Assets
	ITEM 1. DESCRIPTION OF BUSINESS
	ITEM 2. MANAGEMENT’S PLAN OF OPERATION
	ITEM 3. DESCRIPTION OF PROPERTY
	ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
	ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
	ITEM 6. EXECUTIVE COMPENSATION
	ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 8. DESCRIPTION OF SECURITIES
	Item 5.02: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
	Item 9.01: Financial Statements and Exhibits
SIGNATURES
Share Transfer Agreement

Item 2.01: Completion Of Acquisition Of Assets

The acquisition of substantially all of the issued and outstanding capital stock of TakeCareofIT Holdings Limited, a Malta corporation, along with its wholly owned subsidiaries in Malta, New Zealand and the USA collectively doing business as Atlas Technology Group (“Atlas”) was completed on January 20, 2006 by Tribeworks, Inc. (the “Company” or “Tribeworks”). The Company acquired 9,999 shares of the capital stock of TakeCareofIT Holdings Limited from TakeCareofIT Limited, a Gibraltar company. The remaining one (1) share of Atlas is held by Peter B. Jacobson, the Company’s Chief Executive Officer, in accordance with Malta law requiring Malta corporations to have at least two (2) shareholders.

ITEM 1. DESCRIPTION OF BUSINESS

General Information about Atlas

Atlas has its headquarters in Malta with a subsidiary office in Wellington, New Zealand and a data center in Seattle, Washington. Atlas currently has 11 employees and 3 working directors.

Business Overview

Atlas Technology Group™ is an Information Technology (IT) outsourcing support company for custom software applications worldwide.

Atlas Technology Group is in the business of providing custom, outsourced, application software support services to its customers. These will range from supporting specialized networks and single applications to providing the entire IT infrastructure management for customers who want to outsource everything and focus on their core business. In partnership with other IT development consultancies, a fully outsourced IT capability can be provided, with hard performance metrics and predictable costs.

Atlas Technology Group is leveraging the recent advances in software, monitoring systems, and communications, to build a new, leading edge, global support infrastructure, providing 24X7 software support to large and medium sized companies. Atlas’ new, patent-pending, application on-boarding and monitoring processes should allow for dramatic cost savings over existing legacy IT service providers.

Enterprise Description

Atlas intends that its services offerings will be worldwide, with the majority of the targeted customers having multinational operations. It is intended to be a highly distributable venture, able to place people in the best possible locations, yet offering a seamless service offering across geographies.

The initial support centers are based in Malta, with the second support center in New Zealand, creating a “follow-the-sun”, 24 hour coverage. As business grows, third and fourth locations are projected to increase capacity, as needed. State-of-the-art VoIP, Call Tracking and Monitoring technology provide each employee with the leverage needed to maximize support delivery to the fullest possible extent.

Atlas also intends to establish two central data center locations to run the required infrastructure. All of these servers will be in a secure, fully redundant configuration, and have on-demand high bandwidth available, as well as onsite backup and hands-on support services.

Service Description

Atlas supplies customized IT application support services, defined in a Service Level Agreement (SLA), which usually consist of some combination of the following Tiers, delivered with customer-specific objective metrics:

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     Tier 1 — Customer Support

The first Tier is the interface into the ongoing support process for the customer. They receive requests for support (called incidents) from the customers, in a number of different escalation methods.

The Tier 1 operators process the queue of inbound requests, opening incidents in the Call Tracking System (CTS), then attempting to resolve them with the customer. They do this by leveraging the Knowledgebase System (KB), which contains information about the application or infrastructure being supported. To keep Tier 1 incidents to a minimum, the knowledgebase is also available and searchable by the customers. If Tier 1 cannot resolve the problem, it escalates to the Tier 2 queue. When the problem is resolved, Tier 1 confirms with the customer and closes the incidents.

As many problems are the result of user error, it is expected that Tier 1 should resolve between 70-80% of all incidents depending on the application.

     Tier 2 — Application/Infrastructure Support

Tier 2 Support is responsible for fixing support incidents that result from system or infrastructure problems (as opposed to user issues). The toolset required is more extensive than Tier 1. The incidents resolved by Tier 2 are either escalations from Tier 1 or incidents automatically created by proactive monitoring systems.

Tier 2 are highly-motivated, interrupt-driven IT support professionals. Atlas’ ability to attract and retain these resources, train them, and leverage them seamlessly across the customer base is key to its success.

     Tier 3 — Problem Management and enhancements

Problem Management is the service of analyzing incident trends, and addressing the core problems causing them, leading to incident reductions and cost savings. Atlas hopes to succeed by providing world-class IT application support services that ensure the customer receives the best possible return on their support investment. Atlas can also, either directly or through its partners, supply application development and enhancement services at customer’s request.

Service Process

In order for Atlas to accept an application, and take responsibility for SLA delivery, an application must pass through our patent-pending On-Boarding™ process. On-Boarding is an initial systems project conducted by certified On-Boarding partners, with participation by Atlas, to document the application, load the knowledgebase, instrument the application with our ProAct™ monitoring tools, train and recruit any needed specific application support professionals, and negotiate the required SLAs.

This process means Atlas can adapt its services to provide a truly outsourced application support, tailored to very specific customer needs, while leveraging the economies of scale and state of the art technologies across its entire customer base.

Industry Analysis

The worldwide Information Technology (IT) market is approximately a one trillion dollar market ($980 billion, Gartner Group, Inc. (http://www3.gartner.com/Init)), including hardware, software, and communications.

Companies worldwide continue to pour money into the necessary technology that underpins their daily operations. The contracting economy has forced many businesses to cut costs wherever possible, accelerating the trend towards outsourcing some or all IT functions.

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Giants such as IBM, EDS and Hewlett Packard have taken advantage of this opportunity with their traditional strengths in outsourcing, which includes installing, managing, and servicing entire networks, and in fact it is their IT services that have spurred the vast majority of their growth over the past five years.

Forrester Research, Inc., forecasts that the market for IT services in the public sector (government agencies and school districts) will reach $15 billion by 2008, up from $10 billion in 2004. Companies such as Science Applications International Corporation (SAIC), Computer Sciences and CACI International) stand to benefit from not only an increased exposure, but also from planned budget increases for homeland security and technology infrastructure improvements.

The Gartner Group projects that the worldwide outsourcing market to experience substantial growth over the next five years. The US market is projected to grow 7% annually, Canada 4%, and European firms’ spending will increase by a modest average of 2.9%, with large differences between countries: Nordic firms plan to increase their spend by 7.5%, while German and Austrian firms will decrease it by 2.2%. According to studies done by Forrester Research, Inc., (http://www.forrester.com) only a few technology areas will generate solid enterprise demand. These include PC hardware purchasing, VPN and VoIP solutions, Security, and a renewed interest in data warehousing technologies. Regarding outsourcing, almost 30% of firms will consider BI software and more than one-third will look at automating their back-office processes. Application development outsourcing will also show positive signs of strong spending, according to Forrester. In addition, Forrester projects that the US helpdesk outsourcing market will grow from $9.6 Billion annually in 2003 to $13.1 billion annually by 2008.

The trend toward outsourcing is large, and the latest trend toward outsourcing application support is dramatic. EDS Corp., who founded IT outsourcing over 30 years ago, project Tier 2 Application and Business outsourcing to represent a $220 billion market by 2006 with additional growth averaging 10% annually. A 2004 study by Forrester Research states: “Outsourcing continues to accelerate in Europe, with the level of deal activity rivalling that in the US. The UK still stands out as Europe’s dominant market, but outsourcing has gained ground in Germany, Spain, and France. However, large and global deals in these countries remain limited, and BPO is making only patchy progress. Offshore is now part of the market landscape, but project-based application development work still dominates offshore contract activity.” According to The META Group (http://www.metagroup.com) “Application Outsourcing: Application outsourcing services (legacy, packaged, e-commerce, etc.) will remain highly customized through 2004/05. Circa 2006/07, common building blocks will emerge and application services will become a horizontal (functional building blocks) rather than vertical (industry) specialization. During 2006-09, vendors will attempt to differentiate application services by integrating applications into business process transformation and business process outsourcing.”

There is substantial push towards service delivery, fueled by Microsoft’s .NET push, and other industry leaders’ efforts. Distributed systems have become more sophisticated, and the push towards outsourcing the hardware and networks into external data center facilities, has now been surpassed by outsourcing activities further up the IT value chain, with developments going to India and entire IT functions being externalized, allowing business to take advantage of greater economies of scale to reduce IT costs, and a renewed focus on core business. The META Group claims that this is the single biggest growth area in IT for the next 5-7 years.

Competition Analysis

Currently, there are a large number of traditional consultancies endeavoring to compete in this space, including IBM Global Services, HP, EDS, and Accenture as well as a number of smaller independents.

The industry is broken down into three segments; first are the hardware manufacturers that provide additional IT services; second, are the large pure-play IT service providers targeting fortune 500 companies, and third are smaller independent companies that generally specialize in specific local markets.

The largest firms in terms of 2003 revenue are IBM with total sales of $89.1 billion, of which almost one half, or $42.6 billion represents services, and of this amount $17.1 billion is outsourcing services. Outsourcing is IBM’s fastest growing business segment and is growing at 17% annually, or almost double the rate of the overall company.

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HP is the second largest in terms of revenue, with $73.6 billion in total revenues, of which $12.3 billion is services including IT outsourcing, and which is growing at an annual rate of 22%. HP is currently very interested in a new service offering, based on ITIL standards, for custom application support. It is expected that they will release this new service offering to market by Q3 2005. This offering is expected to be a reasonably close fit to the custom support Atlas intends to offer.

The pure-play IT service providers, with 90% or more of their revenues coming from IT support services, include EDS, with $21.5 billion in revenue, Computer Sciences Corporation with $15.6 billion, Accenture with $13.7 billion, and Bearingpoint with $3.1 billion in 2003 revenues. All of these companies are experiencing annual revenue gains of 15%-32%.

The improvement of infrastructure has meant the introduction of the third group to the competitive picture, notably in India, where Wipro and Infosys are beginning to provide support services and call centers. Many hosting providers are also trying to offer ASP services as an add-on. There are other more regional players, such as Wavex (http://www.wavex.co.uk) and Motive (http://www.motive.com) that are also targeting the SME market.

In addition, we believe that the single biggest competitive factor is entrenched in-house support groups. In fact, we believe that we will be competing with in-house support groups rather than external competitors in over 90% of competitive cases.

ITEM 2. MANAGEMENT’S PLAN OF OPERATION

Marketing Plan

The marketing of Atlas Technology Group™, will involve a two-step plan, incorporating three elements, in three distinct worldwide regions. The first part of the plan will be the branding of the name, which will be positioned as solid, reliable, and successful. Market studies indicate that while pricing and costs is a primary motivator in firms looking at outsourcing, price is not the determining factor. The brand identity of Atlas will be established with very high-end printed, collateral material, and backed by a similar scale internet presence, with active demonstrations, and process flow. The initial website is in place (http://www.Atlastg com) and sales brochures have been printed. This process will be complemented with an active press Release strategy and follow through with industry press contacts, highlighting, and associating with high-profile, ‘known’ firms that have become customers. Limited, yet high-end, targeted advertising in industry specific publications, will also be an available option, but will be used dependent upon the size and speed of ramp-up of initial customers.

The second step will be the partner development plan. This will involve identifying, and directly contacting regional partners and resellers. This process has already began, and will include contracting with established IT service providers who currently do not offer custom support services, but can generate business directly, together with ‘pull-through’ business of mutual customers. We will establish value through the On-Boarding certification process for these partners, while providing them with proprietary and powerful On-Boarding tools. Through adding additional service offering to their existing offerings, we will attempt to leverage the partners’ current sales forces and customers’ bases.

The three elements will include: The On-Boarding partner development plan; direct sales channels; and Product alliances. Sales and marketing efforts of Atlas Technology Group™ will also be geographically 24X7 with sales offices and knowledgeable, local personnel based out of EMEA, North America, and APAC. Service level agreements (SLA’s) will be marketed directly through three channels: (1) On-Boarding Partners — established IT consulting/integration firms who will be trained and certified by Atlas Technology Group™ in the skills and methodology required to successfully bring applications and infrastructure to the required level of stability to be able to negotiate custom SLA’s; (2) Direct Sales Channels — established IT consulting/integration firms seeking to add support services under reseller agreements; and (3) Product Alliances — support services to hardware and software development companies seeking to concentrate on their core competencies of product development, and not high level support.

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Three regional sales and marketing offices will be established, in North America, Europe, and Asia. The purpose of these regional offices is three-fold. First is directly contacting and selling potential On-Boarding partners, direct sales channels, and product manufacturers. Secondly will be to direct regional marketing based on the specific elements and needs of each market. The third element is to have a local ‘face’ for customers to interact with and build personal, business relationships with.

As sales ramp-up and business grows, sales and service levels will be gauged for the optimum new customers’ growth levels. It is expected that following year one, the regional sales teams will be further broken down into vertical market sales groups, again focused around On-Boarding partner development, direct sales channels, and product manufacturer Alliances.

ITEM 3. DESCRIPTION OF PROPERTY

Atlas has a six (6) year office lease covering approximately 471 square meters located at Level 4, No. 9, Empire Street, Gzira GZR04, Malta expiring on August 14, 2010 at a base annual rent of Lm16,000 (approx US$45,000)

Atlas also has a four year office lease of the second floor of 139-141 Featherston Street in Wellington, New Zealand expiring on July 31, 2009. The office comprises approximately 300 sq meters with a base annual rental of NZ$55,500 per annum (approx US$39,000) plus a 12.5% Goods and Services Tax (“GST”) which is claimable against GST revenue tax or refundable.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Owner	Shares
Peter Jacobson (held in trust for Tribeworks, Inc.)	1 of 10,000 issued and outstanding
TakeCareofIT, Ltd., Gibraltar	9,999 of 10,000 issued and outstanding

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Set forth below is the name, age, positions and years of service of the executive officers and directors of Atlas as of the date of the acquisition.

Name	Age		Position	Years
B.S.P. “Paddy” Marra		59	Director		1
Michael T. Murphy		37	Director		1
Anthony Tonna		50	Director		1

Byran S P (Paddy) Marra, 59 — Director

Paddy Marra has over 30 years of corporate finance experience, including, recently with FreshXtend Technologies Corp. (Canada) (CEO and now Deputy Chairman), CFO of the Brierley Investments Limited group (New Zealand), and Chairman and CEO, Chamundi Power Corporation Ltd (India). Mr. Marra has Degrees in both Accounting and Finance (BCA) and in Economics and Economic History (BA) from Victoria University of Wellington, New Zealand. He is also a Fellow of the Institute of Chartered Accountants of New Zealand and is a former member of the Financial Reporting Standards Board in New Zealand and numerous other Boards and Directorships of publicly traded companies.

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Michael T. Murphy, 37 — Director

Mr. Murphy is currently the Senior Director leading the Business Group IT organization at Microsoft. This provides all the product development efforts at Microsoft globally with IT support, and has the largest internal IT application support at Microsoft. This group is distributed, and Mr. Murphy currently manages, resources in the USA, Ireland, India and the Far East.

Anthony Tonna, 50 — Director

Anthony Tonna is Managing Director and majority shareholder in the Anthony Tonna group of companies in Malta. The pride of the group is Pincott Security Ltd which has been in the security field for 33 years. Mr. Tonna is also involved in developing property in Malta and Tonna Marine, which was established in 1987. Tonna Marine was the first company to open the market for the importation of large marine vessels manufactured in the USA to Malta.

FAMILY RELATIONSHIPS
None

CERTAIN LEGAL PROCEEDINGS

No director, nominee for director, or executive officer of the Company has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.

ITEM 6. EXECUTIVE COMPENSATION

Other than reimbursement of expenses, none of the current directors or executive officers of Atlas have received any compensation for their efforts with regard to Atlas during the past 12 months.

EMPLOYMENT AGREEMENTS

Atlas does not have any employment agreements with any officer or director of Atlas at present, but it intends to enter into employment agreements with its officers and directors during the second quarter of 2006.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None

ITEM 8. DESCRIPTION OF SECURITIES

There are no fixed rights to dividends on the capital stock. Dividends maybe paid in cash, stock, or otherwise as determined by the Board of Directors from funds lawfully available for such distributions. The stockholders do not have any pre-emptive rights. All shares of capital stock when issued shall be fully paid and shall be non-assessable.

Atlas has authorized 10,000 shares of capital stock at a par value of One (1) Euro each.

Item 5.02: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

(a)	Not applicable
(b)	Not applicable
(c)	Not applicable

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(d) Effective as of January 20, 2006, the Company’s Chief Financial Officer, B.S.P. Marra was appointed by the directors of the Company to serve as an additional member of the Company’s Board of Directors.

Item 9.01: Financial Statements and Exhibits

(a)	Financial Statements of the Business Acquired. The audited financial statements of Atlas required by this Item 9.01 will be completed and filed by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date of this Current Report on Form 8-K.
(b)	Pro Forma Financial Information. The Company expects that the pro forma financial statements required by this Item 9.01 will be completed and filed by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date of this Current Report on Form 8-K.
(c)	Not applicable
(d)	Exhibits.

Exhibit No.	Description
2.01	Share Transfer Agreement dated January 20, 2006 by and between the Company and TakeCareofIT Limited

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

SIGNATURES

		TRIBEWORKS, INC.
Date:	January 26, 2006	/s/ Peter B. Jacobson
		PETER B. JACOBSON,
		Chief Executive Officer

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EX-2.01

Share Transfer Agreement

between

TAKECAREOFIT LIMITED

and

TRIBEWORKS INC.

in respect of

TAKECAREOFIT HOLDINGS LIMITED

(GRECH VELLA TORTELL & HYZLER LOGO)

An Agreement entered into this nineteenth (19^th) day of January of the year two thousand and six (2006).

BETWEEN

Of the first part TakecareofIT Limited, a company incorporated under the laws of Gibraltar registered with number 94496 and having its registered office at 12/13, Block 5, Watergardens, Gibraltar, duly represented hereon by Doctor of Laws Michael Grech, as duly authorised in virtue of the annexed power of attorney, marked Document ‘A’ (hereinafter referred to as the Vendor).

AND

Of the second part Tribeworks Inc., a company incorporated under the laws of the state of Delaware, United States of America, with company registration number 3142589 and with a registered address situate at 243 Front Street, San Francisco, California 94111, USA, duly represented herein by Byran Somervell Patrick Marra in accordance with the annexed resolution of the said company’s Board of Directors dated sixteenth (16^th) January two thousand and six (2006), marked Document ‘B’, (hereinafter referred to as the Purchaser);

WHEREAS

A)	The Vendor holds the entire shareholding (save for one ordinary share) of TakecareofIT Holdings Limited, a company incorporated under the laws of Malta with partnership number C. 34540 and with a registered address situate at 192, Old Bakery Street, Valletta, Malta, (hereinafter referred to as the Company).
B)	The Company has at the date hereof an authorised and issued share capital of ten thousand Euros (Euro 10,000) divided into ten thousand (10,000) ordinary shares of one Euro (Euro 1) each, fully paid up which are subscribed to and allotted as follows.

TakecareofIT Limited	9,999 Ordinary Shares (hereinafter the “TakecareofIT Shares”)
Peter Jacobson (held in trust for the beneficial owner)	1 Ordinary Share (hereinafter the “PJ Share”)

(the said 9,999 TakecareofIT Limited Ordinary Shares are hereinafter referred to as “the Transfer Shares”)

C) The Vendor is desirous of transferring its entire shareholding in the Company to the Purchaser which is desirous of acquiring the Transfer Shares.

D) The parties are desirous of regulating their relationship subject to the terms and conditions of this agreement.

NOW THEREFORE IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:

1.1	TRANSFER OF THE SHARES TO THE PURCHASER The Vendor hereby sells and transfers to the Purchaser which accepts purchases and acquires nine thousand nine hundred and ninety nine (9,999) ordinary shares of one Euro (Euro 1) each nominal value fully paid up, in the Company.
1.2	The sale and transfer of the TakecareofIT Shares is being made and accepted for the mutually agreed price of twenty nine thousand nine hundred and ninety seven Euros (Euro 29,997), that is to say for the price of three Euros (Euro 3) per share, which price is being paid hereon by Purchaser to the Vendor which tenders due receipt in terms of law.

2.   OTHER CONDITIONS

2.1	The Shares are being transferred free and unencumbered and subject to the Memorandum and Articles of Association of the Company and by their transfer entitle the Purchaser to all subsidiary companies owned by the Company.
2.2	The Purchaser shall hold the Shares under and subject to the same terms and conditions as they were held by the Vendor and all dividends and other rights arising therefrom shall from the date hereof vest in their entirety in the Purchaser.
2.3	The Parties agree and declare that there are no agency or similar fees payable in respect of this Agreement.
2.4	Duty on Documents in respect of the transfer and sale of the Shares shall be borne by the Purchaser whilst Capital Gains if at all shall be at the charge of the Vendor.

3.	WARRANTIES
	The Vendor warrants in favour of the Purchaser which accepts that as of the date of this Agreement:
3.1	General Matters
3.1.1	That the execution of this agreement is permitted by the Memorandum and Articles of Association of the Vendor and this agreement has been duly authorized, executed and delivered on behalf of the Vendor and constitutes the legal, valid and binding obligation on the Vendor and is enforceable in accordance with the terms hereof; and
3.1.2	That no approval of any third party is required for the Vendor’s execution, delivery and performance of this agreement that has not been obtained prior to the execution hereof.
3.2	Corporate Matters
3.2.1	That the Shares transferred by the Vendor (save for one ordinary share) represent one hundred per cent (100%) of the issued and allotted share capital of the Company.
3.2.2	That the shares transferred by the Vendor are free and clear of all pledges, encumbrances, charges, restrictions, or known claims of any kind, nature, or description and that on conclusion of this transaction the said Shares shall be beneficially held by the Purchaser.
3.2.3	That there are no agreements or arrangement in force which grant to any person the right to call for the issue, allotment or transfer of any of the share capital of the Company.
3.2.4	That the statutory books of the Company have been properly kept, are up to date and contain an accurate and complete record of the matters they record.
3.2.5	That all returns, resolutions and documents required by law to be filed with the Malta Financial Services Authority in respect of the Company have been duly filed.
3.2.6	That the Company has no claims of whatsoever nature against any third party.
3.2.7	That all licences, permits and approvals required by the Company for its operation in terms of Maltese law are up to date and in proper order.

3.3	Accounting and Taxation
3.3.1	That the Audited Balance Sheet and Profit and Loss Account of the Company for the financial period ending thirty-first (31st) December 2005 (hereinafter referred to as “the Audited Accounts” which are being attached to this agreement and marked document ‘C’), (the said date hereinafter referred to as “the Accounts Dates”) are true and accurate in all respects and correctly set out the Company’s assets and liabilities and its financial status.
3.3.2	That as of the Accounts Dates the Audited Accounts make full provision or reserve for all taxation which is liable to be or could be assessed on the Company, or for which it may be accountable in respect of the period ended as at that date. The Company is under no liability to pay any tax, penalty or interest in connection with any claim for tax. Should the Company have any contingent liability in respect of tax in dispute up to the date of this share transfer, such is to be borne by the Vendor.
3.3.3	That all returns, computations and payments which should be, or should have been made by the Company for any taxation purposes have been made within the required period and are up to date, correct and on a proper basis and none of them is the subject of any dispute with the Inland Revenue Department or other taxation authorities.
3.3.4	That the Company has deducted, accounted for and paid all amounts which it has been obliged to deduct and pay in respect of taxation and, in particular has properly operated the FSS system, by deducting tax as required by law, from all payments made, or treated as made, to its employees, dependents or former employees, and accounted to the Inland Revenue for all tax so deducted and for all tax chargeable on benefits provided for its employees, dependents or former employees.
3.3.5	That the Company has deducted, accounted for and paid to the Inland Revenue Department, all amounts which it has been obliged to deduct in respect of national insurance contributions of its employees and dependents.
3.3.6	That the Company has duly complied in all respects with the Value Added Tax and has made correct and up-to-date records, invoices and other documents appropriate for such legislation. The Company is not in arrears with any payments or returns thereunder or liable to any payment or penalty.
3.3.7	That the Company has good and indefeasible title to all of its properties, inventory, interests in properties, and assets, both real and personal, which are reflected in the Audited Balance Sheet or acquired after that date

	(except properties, interest in properties, and assets sold or otherwise disposed of since such date in the ordinary course of business), free and clear of all, pledges, charges, or encumbrances.
3.3.8	That the Company owns, free and clear of any claims, encumbrances, royalty interests, or other restrictions or limitations of any nature whatsoever, any and all products they are currently manufacturing, including the underlying technology and data, and all procedures, techniques, marketing plans, business plans, methods of management, or other information utilized in connection with its business and that no third party has any right to, and the Company has not received any notice of infringement of or conflict with asserted rights of others with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, if the subject of an unfavorable decision, ruling or finding, would have a materially adverse affect on the business, operations, financial condition, income or business prospects of the Company or any material portion of their properties, assets, or rights.
3.4	Liabilities
	That save for what is disclosed in the Audited Accounts, the Company has no existing or contingent liabilities nor entered into any capital or extraordinary commercial commitments of any kind.
3.5	Litigation
	That there are no claims, actions or proceedings of any kind pending or threatened against the Company or any of its directors.
3.6	Employees
3.6.1	That all wages, salaries, fees, or other remuneration to any employee of the Company that shall have already fallen due have been paid up to date.
3.6.2	That the Company is not bound by or subject to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, agreement or arrangement; (iii) collective bargaining agreement; or (iv) agreement with any present or former officer or director of the Company.

3.63	That there is no pending or, to the Company’s knowledge, threatened labour dispute neither involving the Company and any group of its employees nor has the Company experienced any significant labour interruptions since its incorporation.
3.6.4	That the Company is not bound by or subject to any arrangement with any labour union and that no employees of the Company are represented by any labour union or covered by any collective bargaining agreement nor, to the Company’s knowledge, is any campaign to establish such representation in progress. The Company has no knowledge of any significant issues or problems in connection with the relationship with its employees.
3.7	Material Transactions with Affiliates
3.7.1	That save for that set forth in the annexed schedule, marked Document ‘D’, there are no other material contracts, agreements, or arrangements between the Company and any predecessor and any person who was at the time of such contract, agreement, or arrangement an officer, director, or person owning of record, or known by the Company to own beneficially, five percent (5%) or more of the issued and allotted share capital of the Company and which is to be performed in whole or in part after the date hereof. In all of such transactions, the amount paid or received, whether in cash, in services, or in kind, is, had been during the full term thereof, and is required to be during the unexpired portion of the term thereof, no less favourable to the Company than terms available from otherwise unrelated parties in arm’s length transactions.
3.7.2	That save for that set forth in the annexed schedule, marked Document ‘D’, or otherwise disclosed herein, no officer, director, or five percent (5%) shareholder of the Company has had any interest, direct or indirect, in any material transaction with the Company and there are no commitments by the Company, whether written or oral, to lend any funds to, borrow any money from, or enter into any other material transaction with, any such affiliated person.
3.8	General
3.8.1	That since the Accounts Dates the Company has carried on business in a normal way and has not entered into any long term abnormal contracts or undertakings but only contracts and undertakings as are usual and necessary in the ordinary course of its business.
3.8.2	That the directors of the Company, though being appointees of the Vendor, are remaining in office following the signing of this Agreement.

3.8.3	That the Vendor declares that it entertains no claims of whatsoever nature against the Company.
4.	INDEMNITY
	The Vendor undertakes to indemnify the Purchaser which accepts in the event of any or all of the warranties referred to in clause three (3) hereof resulting to be fully or in part unfounded. PROVIDED that liability of the Vendor under such warranties shall be limited by time so that no claims shall be effective unless notice in writing is given to the Vendor by the Purchaser within five (5) years from today with full details of the claim accompanying such notice.
	For the purposes of better clarity, it is agreed that the Vendor shall remain fully liable and shall hold harmless and indemnify the Purchaser and the Company, (as the case may be) in respect of any obligations or liabilities of the Company that may arise at any time following the transfer of the Shares to the Purchaser, which relate to any period prior to the date of this agreement.
5.	OBLIGATION OF THE PURCHASER
5.1	The Purchaser warrants that this agreement is entered into and has been duly executed and delivered on behalf of the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser enforceable in accordance with the terms hereof, and
5.2	That no approval of any third party is required for the Purchaser’s execution, delivery and performance of this agreement that has not been obtained prior to the execution and delivery hereof, and
5.3	That Byran Somervell Patrick Marra has, with the unanimous consent of all the existing directors of the Purchaser, been appointed a director of the Purchaser, as evidenced by the attached resolution, marked Document ’E’, and
5.4	That the Purchaser has procured adequate insurance coverage with reputable insurers for the directors and officers of the Purchaser.
6.	CONFIDENTIALITY
	Each party hereto agrees with the other party that, unless and until the transaction contemplated by this agreement has been concluded, it and its

representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director, or employee, or from any books or records or from personal inspection, or such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; and (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this agreement.

7.      ENTIRE AGREEMENT

The present agreement, which supersedes any previous agreements whether in writing or verbally, embodies the entire agreement between the parties hereto in relation to the subject matter hereof, and no amendments or modifications thereof shall be valid unless made in writing and signed by all the parties hereto.

8.      ARBITRATION

8.1

This Agreement and all disputes relating to the performance or interpretation of any term of this Agreement shall be construed under and governed by the laws of Malta as applicable to contracts to be performed entirely within that jurisdiction.

8.2

The Parties hereto shall make every effort to settle amicably any dispute or difference which may arise between them out of or in connection with this Agreement. If no such settlement is reached within two (2) months from the date on which the difference or dispute shall have arisen, or earlier if either party so demands in writing, the difference or dispute shall be settled by an arbitration board in accordance with the UNCITRAL Arbitration Rules as at present in force.

(i)	The appointing authority shall be the Malta Arbitration Centre;
(ii)	The number of arbitrators shall be three, whereby each Party shall appoint one (1) arbitrator and the two (2) arbitrators thus appointed shall appoint the third arbitrator;
(iii)	The place of arbitration shall be Malta;
(iv)	The language to be used in the arbitral proceedings shall be English.

	In reaching a decision, the arbitration board shall be bound by the terms and provisions of this Agreement.
	The decision and award of the arbitration board shall be final and binding on the Parties and shall be enforceable in any jurisdiction in accordance with the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Parties hereby undertake to abide by the arbitration award.
8.3	The expenses of arbitration, including the compensation to the arbitrator or arbitrators, as the case may be, shall be borne by the Party at fault in accordance with the award, except that each Party shall bear the compensation and expenses of its own counsel, witnesses and employees.
8.4	Except as otherwise herein provided, the procedure before the arbitrator or arbitrators, as the case may be, will not affect the performance of this Agreement, and each Party hereto will continue to honour its contractual obligations.
9.	NOTICES
9.1	All notices and other communications required under this Agreement shall be in writing and shall be deemed to have been duly served:
—	when delivered, if hand delivered by messenger during normal business hours of the recipient;
—	when sent, if transmitted by facsimile transmission (receipt confirmed) during normal business hours of the recipient;
—	or on the second working day following posting, if posted by registered post postage pre-paid,
	in each case addressed as follows:

— to the Vendor at:	GVTH Advocates 192, Old Bakery Street Valletta Attn: Dr. Michael Grech Facsimile: (356) 2122 8888
— to the Purchaser at:	Tribeworks, Inc. C/- 111 Via Quito Newport Beach, CA 92663 Attn: Peter B. Jacobson, CEO Facsimile: (949) 723-0970

or to such other addresses as the Parties may notify in writing from time to time.

IN WITNESS WHEREOF, the parties have executed this instrument on the date first written above.

/s/ Michael Grech

DR. MICHAEL GRECH

for and on behalf of

TAKECAREOFIT LIMITED

/s/ Byran Somervell Patrick Marra

BYRAN SOMERVELL PATRICK MARRA

for and on behalf of

TRIBEWORKS INC.

(GRECH VELLA TORTELL & HYZLER LOGO)

10th January 2006.

The Directors,

Tribeworks Inc.,

243 Front Street,

San Francisco, CA 94111,

U.S.A.

Dear Sirs,

Re: SHAREHOLDING IN TAKECAREOFIT HOLDINGS LIMITED C 34540 (the “COMPANY”)

I confirm that the one (1) Ordinary share with a nominal value of one Euro (Euro 1) in the Company currently held by Mr. Peter Jacobson of 511, 36th Street, Newport Beach, California 92063, United States of America, Passport Number 075520466 is held by him in order for the Company to be compliant with the provisions of Article 68 of the Maltese Companies Act (Cap 386 of the Laws of Malta) which provides that the equity of a limited liability company must be subscribed to by at least two persons.

Kind regards.

Yours faithfully,

/s/ Michael Grech

Michael Grech

192, Old Bakery Street, Valletta VLT 08, Malta.

Tel: (+356) 2122 8888, Fax: (+356) 2122 8808, E-mail: info@gvthlaw.com, Website: www.gvthlaw.com

[ILLEGIBLE]

An Agreement entered into this nineteenth (19th) day of January two thousand and six (2006).

BETWEEN

Of the first part TakecareofIT Limited, a company incorporated under the laws of Gibraltar registered with number 94496 and having its registered office at 12/13, Block 5, Watergardens, Gibraltar, duly represented hereon by Doctor of Laws Michael Grech, as duly authorised in virtue of the annexed power of attorney, marked Document ‘A’ (hereinafter referred to as the Vendor).

AND

Of the second part Tribeworks Inc., a company incorporated under the laws of the state of Delaware, United States of America, with company registration number 3142589 and with a registered address situate at 243 Front Street, San Francisco, California 94111, USA, duly represented hereon by Byran Somervell Marra in accordance with the annexed resolution of the said company’s Board of Directors dated sixteenth (16th) January two thousand and six (2006), marked Document ‘B’, (hereinafter referred to as the Purchaser);

In virtue of which the VENDOR sells and transfers to the PURCHASER which accepts, purchases and acquires nine thousand nine hundred and ninety-nine (9,999) Ordinary Shares of one Euro (Euro 1) each fully paid up (hereinafter referred to as the SHARES) in Takecareofit Holdings Limited, a company incorporated under the laws of Malta C. 34540 (hereinafter referred to as the COMPANY) under the following terms and conditions:

1.	For the agreed price of twenty nine thousand nine hundred and ninety-seven Euro (Euro 29,997) payable hereon by the PURCHASER to the VENDOR which tenders due receipt.
2.	The SHARES are being transferred with all their rights and subject to the Memorandum and Articles of Association of the COMPANY.
3.	It is agreed that the PURCHASER will hold the SHARES under the same terms and conditions as they were held by the VENDOR and all dividends and other rights arising therefrom shall vest in their entirety in the PURCHASER.
4.	The SHARES are being transferred with all their rights and subject to the memorandum and Articles of Association of the COMPANY.

/s/ DR. MICHAEL GRECH	/s/ BYRAN SOMERVELL
DR. MICHAEL GRECH	BYRAN SOMERVELL MARRA
for and on behalf of TAKECAREOFIT LIMITED	for and on behalf of TRIBEWORKS INC.

(MFSA LOGO)

Registry of Companies

MFSA

Notabile Road

Attard BKR 14, MALTA.

Unit Tel: (+356) 2144 1155

Unit Fax: (+356) 2144 1195

E-mail: registry@mfsa.com.mt

Website: www.mfsa.com.mt

Our Ref: C 34540

17th January 2006

TO WHOM IT MAY CONCERN

This is to certify that TAKECAREOFIT HOLDINGS LIMITED of 192, Old Bakery Street, Valletta, Malta was registered under the Laws of Malta on the 7th September 2004 and is still so registered.

According to our records the present shareholders of the company are:

Name	Number of Shares
TAKECAREOFIT LIMITED	9,999 Ordinary Shares of EUR 1 each
Peter Jacobsen	1 Ordinary Share of Eur 1

The present directors of the company are:

Bryan Somervell Patrick Marra

Michael Todd Murphy

Anthony Tonna

The present secretary of the company is:

Peter Jacobson

This information is provided on the basis of the documents registered in respect of the company.

/s/ Susan Deguara

Susan Deguara

f/Registrar of Companies

Exhibit “A”

(SEAL) JAMES JOHN NEISH
GIBRALTAR
NOTARY PUBLIC

THIS POWER OF ATTORNEY is made on 12^th January two thousand and six (2006) by TAKECAREOFIT LIMITED a company incorporated under the laws of Gibraltar registered with number 94496 and having its registered office at 12/13, Block 5, Watergardens, Gibraltar (the “Principal”).

1.	APPOINTMENT AND POWERS
	The Principal hereby appoints Doctor of Laws Michael Grech of 192, Old Bakery Street, Valletta, Malta as its attorney (the “Attorney”) and in the Principal’s name or otherwise and on its behalf:

(a)

to consider, settle, approve, sign, execute, deliver and/or issue any agreements, documents, certificates and instruments (in each case, whether as a deed or not) (the “Documents”) which the Attorney in his absolute discretion considers desirable to procure the sale by TakecareofIT Limited of its entire shareholding in Takecareofit Holdings Limited, a company incorporated under the laws of Malta registered with number C. 34540 (the “Company”) and subject to such amendments or variations as the Attorney may agree; and

(b)

to take any steps or do any thing which the Attorney in his absolute discretion considers desirable in connection with the implementation of the transaction or the implementation and/or execution of the Documents.

2.	RATIFICATION
	The Principal undertakes to ratify and confirm whatever the Attorney does or purports to do in good faith in the exercise of any power conferred by this power of attorney.
3.	VALIDITY
	The Principal declares that a person who deals with the Attorney in good faith may accept a written statement signed by that Attorney to the effect that this power of attorney has not been revoked as conclusive evidence of that fact.
4.	INDEMNITY
	The Principal undertakes to indemnify the Attorney fully against all claims, losses, costs, expenses, damages or liability which he sustains or incurs as a result of any action taken in good faith pursuant to this power of attorney (including any cost incurred in enforcing this indemnity).
5.	JURISDICTION
	This power of attorney (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this power of attorney or its formation or any act performed or claimed to be performed under it) shall be governed by and construed in accordance with Maltese law.

JAMES JOHN NEISH
GIBRALTAR
NOTARY PUBLIC

This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it, and will cease to be valid one month from this date.

Executed as a deed by
TAKECAREOFIT LIMITED	Director
noting by a director
and a director/secretary
	Director/Secretary

(SEAL)

JAMES JOHN NEISH
GIBRALTAR
NOTARY PUBLIC
PROTOCOL —11514—

TO ALL TO WHOM THESE PRESENTS SHALL COME
 

I, JAMES JOHN NEISH of Burns House, 19 Town Range, Gibraltar, Notary Public, duly authorised, admitted and sworn and practising within Gibraltar, DO HEREBY CERTIFY that I was present at Burns House, 19 Town Range, Gibraltar in this city on the 12^th day of January Two thousand and six and did see the Common Seal of TakecareofIT LIMITED the Company named in the Power of Attorney hereunto annexed duly affixed to the said Power of Attorney and that the signatures of Mark Olivero and Michael Fabre for O & D Nominees Limited, Director and O & D Secretaries Limited, Secretary respectively, are in the respective and proper handwriting of “MARK OLIVERO” and “MICHAEL FABRE” whose signatures are known to me.

IN FAITH AND TESTIMONY
whereof I the said Notary have hereunto subscribed my name and affixed my Seal of Office at Burns House, 19 Town Range, Gibraltar this 12^th day of January, Two thousand and six.

(SEAL)

     

Exhibit “B”

UNANIMOUS CONSENT
OF
THE BOARD OF DIRECTORS
OF
TRIBEWORKS, INC.

Effective as of January 16, 2006

     The undersigned, being all of the members of the board of directors (the “Board”) of Tribeworks, Inc., a Delaware corporation (the “Company”), acting pursuant to Section 141(f) of the Delaware General Corporation Law, as amended (the “DGCL”), hereby consent to and adopt the following resolutions, with such resolutions to have the same force and effect as if the resolutions had been adopted at a meeting duly noticed and called, at which a quorum of the board of directors was present and voting, and otherwise duly held for the purpose of acting upon proposals to adopt such resolutions:

     WHEREAS, the Board of the Company deems and declares it desirable for, and in the best interests of, the Company to purchase Nine Thousand Nine Hundred Ninety-Nine (9,999) of the Ten Thousand (10,000) issued and outstanding shares of stock of TAKECAREOFIT, (HOLDINGS) LTD., a Malta corporation d/b/a ATLAS TECHNOLOGY GROUP (“Atlas”) in accordance with the proposed terms and conditions of that certain Purchase Agreement dated January 16, 2006 by and between the Company and Atlas (the “Purchase”);

     NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby approves the Purchase and approves and adopts in all respects the form, terms and conditions of, and the transactions contemplated by, that certain Purchase Agreement proposed to be entered into by and between the Company and Atlas, in the form presented to and reviewed by the Board of Directors (the “Agreement”);

     RESOLVED FURTHER, that B.S.P. Marra, Chief Financial Officer of the Company be and hereby is authorized, empowered and directed, by and on behalf of the Company, to execute, deliver and perform the Agreement in substantially the form thereof delivered to the Board of Directors, with such changes thereto Mr. Marra shall approve (his execution thereof to be conclusive evidence of such approval);

     RESOLVED FURTHER, that the officers of the Company be and hereby are authorized, empowered and directed to do all other things and acts, to execute and deliver all other instruments, documents and certificates and to pay all costs, fees and taxes as may be, in their sole judgment, necessary, proper or advisable in order to carry out and comply with the purposes and intent of the foregoing resolutions; and that all of the acts and deeds of the officers of the Company which are consistent with the purposes and intent of such resolutions be and hereby are, in all respects, approved, confirmed and adopted as the acts and deeds of the Company.

FURTHER ACTS

     RESOLVED, that the officers of the Company, and each of them, be and they hereby are authorized, empowered and directed to take or cause to be taken all such further action and to sign, execute, acknowledge, certify, deliver, accept, record and file all such further instructions in the name and on behalf of the Company as they may deem necessary, desirable or advisable in order to carry out the intent of and to accomplish the purposes of the foregoing resolutions.

1

     This document may be executed in counterparts, each of which shall be an original, but all of which, taken together, shall constitute one and the same instrument.

[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

2

     IN WITNESS WHEREOF, the undersigned, being all of the members of the Board of Directors of Tribeworks, Inc. have executed this unanimous written consent as of the date first set forth hereinabove.

/s/ Peter B. Jacobson  

PETER B. JACOBSON, Director 

/s/ Gordon Blankstein  

W. GORDON BLANKSTEIN, Director 

/s/ Robert Altinger  

ROBERT ALTINGER, Director 

/s/ Robert C. Gardner  

ROBERT C. GARDNER, Director 

3

Exhibit “C”

TAKECAREOFIT HOLDINGS LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

2005

TAKECAREOFIT HOLDINGS LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

2005

Contents

	Pages
Report of the Directors		1
Statement of Directors’ Responsibilities		2
Report of the Auditors		3
Profit and Loss Account		4
Balance Sheet		5
Statement of Changes in Equity		6
Cash Flow Statement		7
Notes to the Accounts		8 – 15

1

TAKECAREOFIT HOLDINGS LIMITED

REPORT OF THE DIRECTORS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

Board of Directors:	Mr. Byran Somervell Patrick Marra (appointed on 3 October 2005)
	Mr. Michael Todd Murphy (appointed on 11 August 2005)
	Mr. Anthony Tonna (appointed on 22 September 2005)
	Mr. Robert Edwin Altinger (resigned on 20 April 2005)
	Mr. David Hayes (appointed on 20 April 2005 and resigned on 30 August 2005)
	Mr. Peter Jacobson (appointed on 20 April 2005 and resigned on 28 June 2005)
Company Secretary:	Mr. Peter Jacobson
Registered Office:	192, Old Bakery Street,
	Valletta.
	Malta.

The Directors present herewith their annual report together with the audited financial statements of TAKECAREOFIT Holdings Limited and the Group for the period from 7 September 2004, this being the date of incorporation, to 31 December 2005.

Principal Activities
TAKECAREOFIT Holdings Limited is the holding company of a group set-up for providing I.T. outsourcing support services for custom software applications worldwide. Details of the companies in the Group are set out in Note 15 to the Accounts.

Review of Business
The group is in the process of setting-up the operating infrastructure in order to be able to commence trading in the coming year. The group is also involved in the internal development of I.T. Support software which is specifically designed for the purpose of its trading activities.

Post Balance Sheet Event
On 20 January 2006, the company’s shareholder, namely TAKECAREOFIT Limited, Gibraltar, sold its shareholding to Tribeworks, Inc., a company incorporated under the laws of the State of Delaware, United States of America.

Directors
The members who served on the Board of Directors from the date of incorporation up to the date of this report are listed above. In accordance with the company’s Articles of Association, the directors at date of this report are to remain in office.

Auditors
Messrs. Baker Tilly Sant have expressed their willingness to continue in office.

By Order of the Board

/s/ Bryan Somervell Patrick Marra   Mr. Byran Somervell Patrick Marra
Director /s/ Anthony Tonna   Mr. Anthony Tonna
Director

20 January 2006

2

TAKECAREOFIT HOLDINGS LIMITED

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

Directors’ Responsibilities

The Companies Act, 1995 requires the Directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company as at the end of the financial period and of the profit or loss of the Company for that period.

In preparing the financial statements, the Directors are required to:

• adopt the going concern basis unless it is inappropriate to presume that the Company will continue in business;

• select suitable accounting policies and apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• account for income and charges relating to the accounting period on the accruals basis;

• value separately the components of asset and liability items;

• report comparative figures corresponding to those of the preceding accounting period.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements have been properly prepared in accordance with the Companies Act, 1995.

The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors, through oversight of management, are responsible to ensure that the Company establishes and maintains internal controls to provide reasonable assurance with regard to the reliability of the financial reporting, effectiveness and efficiency of operations and compliance with applicable laws and regulations.

Management is responsible, with oversight from the Directors, to establish a control environment and maintain policies and procedures to assist in achieving the objective of ensuring, as far as possible, the orderly and efficient conduct of the Company’s business. This responsibility includes establishing and maintaining controls pertaining to the Company’s objective of preparing financial statements as required by the Companies Act, and managing risks that may give rise to material misstatements in those financial statements. In determining which controls to implement to prevent and detect fraud, management considers the risks that the financial statements may be materially misstated as a result of fraud.

These financial statements, which have been compiled in US Dollars and have been prepared for information purposes only, are derived from the statutory financial statements, the presentation currency of which is Euro.

Signed on behalf the Board of Directors on 20 January 2006 by:

/s/ Bryan Somervell Patrick Marra	/s/ Anthony Tonna
Mr. Byran Somervell Patrick Marra Director	Mr. Anthony Tonna Director

3

	Certified Public Accountants
	Assurance, Accounting & Advisory Services
	5, Rosa Marina Apts
	216, Marina Seafront
	Pieta MSD 08 — Malta
	Tel: (356) 2123 1898, 2124 1729
	Fax: (356) 2124 2144
	Email: info@bakertillysant.com
	www.bakertillysant.com

REPORT OF THE AUDITORS

TO THE MEMBERS OF
TAKECAREOFIT HOLDINGS LIMITED

We have audited the accounts set out on pages 4 to 15 which have been prepared under the historical cost convention and the accounting policies set out on pages 8 to 10.

As described on page 2, these accounts are the responsibility of the company’s directors. Our responsibility is to express an opinion on these accounts based on our audit. We are also required to form an opinion, and report where we are not satisfied, whether we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit, and whether in our opinion, proper accounting records have been kept by the company so far as appears from our examination thereof, and whether the accounts are in agreement therewith.

We conducted our audit in accordance with the International Standards on Auditing. These standards require that we plan and perform the audit to obtain reasonable assurance whether the accounts are free of material misstatements. An audit includes the examination, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and any significant estimates made by the directors, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion on the accounts.

In our opinion, the accounts give a true and fair view of the company’s state of affairs as at 31 December 2005 and of its results and cash flows for the period then ended, and have been properly prepared in accordance with the Companies Act, 1995.

Without qualifying our opinion, we wish to point out that the separate financial statements of the US and New Zealand subsidiaries referred to in Note 15 to the financial statements, have not been audited, but were reviewed by us. Furthermore, without qualifying our opinion, we draw attention to the note sub-titled “Supplementary Information and Reporting Currency” within the note for “Significant Accounting Policies”, which note refers to the fact that these financial statements have been prepared for supplementary information purposes only.

This copy of the audit report has been signed by
Donald Sant (Partner) for and on behalf of
Baker Tilly Sant
Certified Public Accountants	20 January 2006

Partners: Donald Sant Dip Bus. Mgr., F.I.A., C.P.A.
Robert C. Vella F.I.A., C.P.A.
VAT Reg. No. MT 12577403

4

TAKECAREOFIT HOLDINGS LIMITED

PROFIT AND LOSS ACCOUNT
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

		Group			Holding Co.
	Note	USD			USD
Revenue	2		—			—
Selling and Promotional Overheads			(104,039	)		—
Administrative Overheads			(269,282	)		(40,119	)
Sundry Operating Expenses			(1,346	)		(3,828	)
Operating Loss before Financing Costs	3		(374,667	)		(43,947	)
Net Financing Costs	5		(23,715	)		(23,715	)
Loss Attributable to the Members of the Holding Company			(398,382	)		(67,662	)

5

TAKECAREOFIT HOLDINGS LIMITED

BALANCE SHEET
AT 31 DECEMBER 2005

		Group			Holding Co.
	Note	USD			USD
Assets
Intangible Assets	7		492,286			325,121
Tangible Assets	8		243,991			148,025
Financial Assets	9		—			70,611
Total Non-Current Assets			736,277			543,757
Non-Trade Receivables	10		22,596			—
Cash at Bank			93,272			396
Total Current Assets			115,868			396
Total Assets			852,145			544,153
Equity
Called Up Issued Share Capital	11		11,880			11,880
Profit and Loss Account			(398,382	)		(67,662	)
Exchange Translation Reserve			(946	)		—
Total Equity			(387,448	)		(55,782	)
Liabilities
Interest Bearing Loan	12		1,073,744			584,311
Other Loan	13		11,758			11,758
Total Non-Current Liabilities			1,085,502			596,069
Trade and Other Payables	14		154,091			3,866
Total Current Liabilities			154,091			3,866
Total Liabilities			1,239,593			599,935
Total Equity and Liabilities			852,145			544,153

The financial statements on pages 4 to 14 were authorised for issue by the Board of Directors on 20 January 2006 and were signed on its behalf by:

/s/ Bryan Somervell Patrick Marra   Mr. Byran Somervell Patrick Marra
Director /s/ Anthony Tonna   Mr. Anthony Tonna
Director

6

TAKECAREOFIT HOLDINGS LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

Group

				Called Up		Profit			Exchange
				Issued Share		and Loss			Translation
	Total			Capital		Account			Reserve
	USD			USD		USD			USD
Issuance of Share Capital		11,880			11,880		—			—
Loss for the Period		(398,382	)		—		(398,382	)		—
Movement for the Period		(946	)		—		—			(946	)
At 31 December 2005		(387,448	)		11,880		(398,382	)		(946	)

Holding Company

				Called Up		Profit			Exchange
				Issued Share		and Loss			Translation
	Total			Capital		Account			Reserve
	USD			USD		USD			USD
Issuance of Share Capital		11,880			11,880		—			—
Loss for the Period		(67,662	)		—		(67,662	)		—
At 31 December 2005		(55,782	)		11,880		(67,662	)		—

7

TAKECAREOFIT HOLDINGS LIMITED

CASH FLOW STATEMENT
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

	Group			Holding Co.
	USD			USD
Cash Flows from Operating Activities
Net Loss for the Period		(398,382	)		(67,662	)
Adjustment for:
Exchange Translation Provision		(946	)		—
Interest Income		(62	)		(62	)
Interest Expense		23,777			23,777
Operating Loss before Working Capital Changes		(375,613	)		(43,947	)
Movement in Receivables		(22,596	)		—
Movement in Payables		154,091			3,866
Cash Lost from Operations		(244,118	)		(40,081	)
Interest Paid		(23,777	)		(23,777	)
Net Cash used in Operating Activities		(267,895	)		(63,858	)
Cash Flows used in Investing Activities
Payments for Intangible Assets		(492,286	)		(325,121	)
Payments for Tangible Assets		(243,991	)		(148,025	)
Payments for Financial Assets		—			(11,910	)
Movements on Subsidiary Companies Loan Accounts		—			(58,701	)
Interest Received		62			62
Net Cash used in Investing Activities		(736,215	)		(543,695	)
Cash Flows from Financing Activities
Issuance of Share Capital		11,880			11,880
Movement on Third Party/Company Accounts		1,085,502			596,069
Net Cash from Financing Activities		1,097,382			607,949
Net Movement in Cash and Cash Equivalents		93,272			396

8

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

1.	Significant Accounting Policies
	TAKECAREOFIT Holdings Limited is a limited liability company domiciled and incorporated in Malta.
	Supplementary Information and Reporting Currency
	The holding company’s functional currency is Maltese Liri (MTL), however, the statutory financial statements have been presented in terms of Euros (the presentation currency), as required by Art. 187 of the Companies Act, 1995, which stipulates that a company must draw up its annual accounts in the same currency as that of its share capital.
	These financial statements have been compiled in US Dollars as supplementary information only. The exchange rate applied for this purpose was EUR/USD: 1.188.
	Statement of Compliance
	These financial statements have been prepared and presented in accordance with the provisions of the Companies Act, 1995 which requires adherence to International Financial Reporting Standards and their interpretation by the International Accounting Standards Board.
	The Companies Act specifies that in the event that any one of its provisions is in conflict or not compatible with International Financial Reporting Standards, or its application is incompatible with the obligation for the financial statements to give a true and fair view, that provision shall be departed from in order to give a true and fair view.
	Basis of Consolidation
	The consolidated profit and loss account and balance sheet include the accounts of the parent company and all its operating subsidiaries made up to the end of the financial year. The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss account from the date of their acquisition up to the date of their disposal. Inter-group sales and profits are eliminated fully on consolidation.
	Basis of Preparation
	The financial statements are presented in Euro. They are prepared on the historical cost basis. The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements.
	Foreign Currencies
	Transactions denominated in foreign currencies are translated at the rates of exchange ruling on the dates of the transactions. Monetary assets and liabilities expressed in foreign currencies are translated at the rates of exchange prevailing at balance sheet date. Translation differences are dealt with through the profit and loss account.
	Research and Development
	Expenditure on research activities is expensed when incurred.
	Expenditure on development activities is capitalised within Intangible Assets to the extent that the product or process is technically and commercially feasible, and the company has sufficient resources to complete development. The capitalised expenditure comprises the cost of materials, direct labour and overheads. Other development expenditure is recognised in the Profit and Loss Account as an expense when incurred.

9

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

1.	Accounting Policies (Contd.)
	Intangible Assets
	Intangible assets are stated at cost net of accumulated amortisation and impairment losses. Amortisation is charged to the profit and loss account on a straight-line basis over the estimated useful life of the intangible asset with effect from the date that they are brought into use. The principal annual amortisation rate applied for this purpose is:

I.T. Development Costs 33.33 %

Tangible Assets

Tangible assets are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated to write down the cost of all tangible assets over their expected useful economic lives on the straight-line method with effect from the date that they are brought into use. The principal annual rates used for this purpose, are:-

Office Furniture and Equipment	20.00	%
EDP Equipment and Software	33.33	%

Financial Assets

Investments in subsidiaries are shown in the balance sheet of the Company at cost less impairment losses.

Income from such investments is accounted for when received. The profit or loss on disposal of the investments is charged or credited to the profit and loss account.

Loans Receivable

Loans advanced by the company to its subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future, are treated as an extension to the Company’s net investment in those subsidiaries and included as part of the carrying amount of investments in subsidiaries, within Financial Assets.

Loans receivable are subject to review for impairment.

Loans with No Fixed Maturity Date

Loans receivable which do not have a fixed maturity date, but which are repayable after more than twelve months from balance sheet date, are measured at the fair value of the consideration given less impairment losses, and are included within non-current assets.

Loans payable which do not have a fixed maturity date, but which are repayable after more than twelve months from balance sheet date, are measured at the fair value of the consideration received and are included within non-current liabilities.

Loans receivable and payable with no fixed maturity date are included within current assets and current liabilities respectively.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash and bank balances.

10

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

1.	Accounting Policies (Contd.)
	Impairment
	The carrying amounts of the Company’s assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit is greater than the recoverable amount. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount of the asset. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised.
	Trade and Other Payables
	Trade and other payables are stated at cost.
	Revenue
	Revenue is recognised in the profit and loss account as it accrues unless collectibility is in doubt.
	Expenses
	Employee Benefits
	The Company contributes towards the State pension in accordance with local legislation. Related costs are recognised as an expense in the income statement as incurred except to the extent that they are capitalised in respect of the internal development of intangible assets.
	Net Financing Costs
	Net financing costs comprise interest payable on borrowings calculated on the effective interest rate method, interest receivable on funds invested and dividend income that are recognised in the income statement.
	Interest income is recognised in the income statement as it accrues, using the effective interest rate method. Dividend income is recognised in the income statement on the date of the Company’s right to receive payment is established.
	Deferred Taxation
	Provision for deferred taxation is made in respect of the amount by which payment, recovery or relief of tax is deferred to future accounting periods by virtue of the operation of temporary differences arising from the different accounting and taxation treatments of certain assets and liabilities.
	Deferred taxation is provided for, where material, using the comprehensive tax allocation system and the liability method. A deferred tax assets is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, and/or sufficient taxable temporary differences are available. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
2.	Revenue
	The Company and the Group did not generate any revenue during the accounting period.

11

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

3.	Loss for the Period
	The loss for the period is stated after charging:-

	Group		Holding Co.
	USD		USD
Auditors’ Remuneration		5,535		3,459

4.	Employee Information
	The average weekly number of persons employed by the group and the holding company during the period was 7. Staff costs for the period comprised:-

	Group		Holding Co.
	USD		USD
Wages and Salaries		24,727		—
Social Security Costs		3,338		—
Other Benefits		2,160		—
		30,225		—

These costs have been capitalised within Intangible Assets as part of I.T. Development costs.

5. Net Financing Costs

	Group			Holding Co.
	USD			USD
Interest Income		(62	)		(62	)
Financial Income		(62	)		(62	)
Loan Interest		23,777			23,777
Financial Expenses		23,777			23,777
Net Financing Costs		23,715			23,715

6.	Taxation
	No charge for current taxation has been made in these accounts on the basis of the tax losses available to the company and the group. These losses give rise to a deferred tax asset which, however, has not been recognised in these accounts because the probability that future taxable profits will be available for set-off against the deferred tax asset is not assured.

12

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

7. Intangible Assets

(a)

	Group		Holding Co.
	USD		USD
Cost:
I.T. Development Costs		492,286		325,121
At 31 December 2005		492,286		325,121

(b)	No amortisation has been provided on the said asset as it was not yet in use at balance sheet date.
(c)	While the directors have not entered into any formal capital commitments at this stage, they believe that they will require approximately USD 2 million in additional funding to complete the software development requirements.

8. Tangible Assets

(a)

	Group		Holding Co.
	USD		USD
Cost:
Office Furniture and Equip		37,271		—
EDP Equipment and Software		206,720		148,025
At 31 December 2005		243,991		148,025

(b) No depreciation has been provided on the assets as these were not yet in use at balance sheet date.

9. Financial Assets

(a)

	Group		Holding Co.
	USD		USD
Investments in Subsidiaries
Equity Investments		—		11,910
Loans Receivable from Subsidiaries
Without Fixed Maturity (Note b)		—		58,701
Total Financial Assets		—		70,611

(b) These balances are unsecured, interest free and have no fixed date for repayment.

13

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

10. Non-Trade Receivables

	Group		Holding Co.
	USD		USD
Indirect Taxes		22,596		—

11. Called Up Issued Share Capital

	Group		Holding Co.
	USD		USD
Authorised
50,000 Ordinary Shares of Euro 1 each		59,400		59,400
Issued and Fully Paid Up
10,000 Ordinary Shares of Euro 1 each		11,880		11,880

12. Interest Bearing Loan

(a)

	Group			Holding Co.
	USD			USD
Non-Current Liabilities
Loan from Third Party Company (Note b)		1,101,131			599,214
Exchange Translation Provision		(27,387	)		(14,903	)
		1,073,744			584,311

(b) This balance is unsecured, bears interest at 6% per annum and has no fixed date for repayment.

13. Other Loan

(a)

	Group		Holding Co.
	USD		USD
Non-Current Liabilities
Loan from Third Party (Note b)		11,758		11,758

(b) This balance is unsecured, interest free and has no fixed date for repayment.

14

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

14. Trade and Other Payables

	Group		Holding Co.
	USD		USD
Trade Creditors		121,020		406
Accruals		33,071		3,460
		154,091		3,866

15.	Investment in Group Companies
	The following information relates to those subsidiaries, which, in the opinion of the Directors, principally affected the results or assets of the group.

Significant Subsidiaries	Incorporated in	Nature of Business	% Holding
TAKECAREOFIT Limited	Malta	I.T. Support Services		100	%
TAKECAREOFIT (US) Inc.	U.S.A.	Database Management		100	%
TAKECAREOFIT (NZ) Limited	New Zealand	I.T. Support Services		100	%

16.	Related Party Transactions
	During the period, the holding company advanced loans to its subsidiaries amounting to USD 787,900. These loans are unsecured, interest free and have no fixed date for repayment.

17.	Operating Commitments
	At balance sheet date there were operating commitments as follows:

	Group		Holding Co.
	USD		USD
Operating Leases — Monthly Commitment		10,252		4,550

18.	Post Balance Sheet Event
	On 20 January 2006, the company’s shareholder, namely TAKECAREOFIT Limited, Gibraltar, sold its shareholding to Tribeworks, Inc., a company incorporated under the laws of the State of Delaware, United States of America.

15

TAKECAREOFIT HOLDINGS LIMITED

NOTES TO THE ACCOUNTS
FOR THE PERIOD 7 SEPTEMBER 2004 TO 31 DECEMBER 2005

19.	Financial Instruments
	Financial assets comprise cash at bank and non-trade receivables. Financial liabilities include creditors and other borrowings, where applicable. At Balance Sheet date the company had no unrecognised financial instruments.
	Risk Management Policies

a)	Cash is placed with reputable banks.
b)	Liquidity risk is limited as the company has sufficient funding resources and also has the ability to raise finance to meet its obligations as and when these arise.
c)	Interest rate risk is limited since interest rates are stable.

	Fair Values The fair values of financial assets and liabilities were not materially different from their carrying amounts.
20.	Ultimate Holding Company
	The Company is a wholly owned subsidiary TAKECAREOFIT Limited whose registered office is situated at 12/13, Block 5, Watergardens, Gibraltar. On 20 January 2006, TAKECAREOFIT Limited, Gibraltar, transferred its equity interest to Tribeworks, Inc. a company incorporated under the laws of the State of Delaware, United States of America.
21.	Presentation and Functional Currencies
	The holding company’s functional currency is Maltese Liri (MTL), however, the financial statements are presented in terms of Euros, as required by Art. 187 of the Companies Act, 1995, which stipulates that a company must draw up its annual accounts in the same currency as that of its share capital.
22.	General
	The holding company was incorporated on 7 September 2004.

Exhibit “D”

Material Contracts

1) Material Contracts with Affiliates

Other than as set out in the body or the Agreement and in the normal course of business on normal trading terms, there are no other material contracts, agreements, or arrangements between the Company and any predecessor and any person who was at the time of such contract, agreement, or arrangement an officer, director, or person owning of record, or known by the Company to own beneficially, five percent (5%) or more of the issued and allotted share capital of the Company and which is to be performed in whole or in part after the date the Agreement.

2) Other Material Contracts

Other material contract entered into by the Company or its subsidiaries are:

a) TakeCareofIT Limited, a wholly owned subsidiary based in Malta has a six (6) year office lease covering approximately 471 square meters located at Level 4, No. 9, Empire Street, Gzira GZR04, Malta expiring on August 14, 2010 at a base annual rent of Lm16,000 (approx US$45,000) with annual rent increases as set out in the lease.

b) TakeCareofIT (NZ) Limited, a wholly owned subsidiary based in New Zealand has a four (4) year office lease of the second floor of 139-141 Featherston Street in Wellington, New Zealand, expiring on July 31, 2009. The office comprises approximately 300 sq meters with a base annual rental of NZ$55,500 per annum (approx US$39,000) plus a 12.5% Goods and Services Tax (“GST”) which is claimable against GST revenue tax or refundable.

Exhibit “E”

UNANIMOUS CONSENT
OF
THE BOARD OF DIRECTORS
OF
TRIBEWORKS, INC.

December 5, 2005

     The undersigned, being all of the members of the board of directors of Tribeworks, Inc., a Delaware corporation (the “Company”), acting pursuant to Section 141(f) of the Delaware General Corporation Law, hereby consent to and adopt the following resolutions, with such resolutions to have the same force and effect as if the resolutions had been adopted at a meeting duly noticed and called, at which a quorum of the board of directors was present and voting, and otherwise duly held for the purpose of acting upon proposals to adopt such resolutions:

APPOINTMENT OF NEW DIRECTOR

     WHEREAS, the Company’s board of directors (the “Board”) deems it to be in the best interests of the Company to expand the size of the Board to five (5) members; and

     WHEREAS, Article III of the Company’s Bylaws and Section 141(b) of the Delaware General Corporation Law grant the Board the authority to determine the size of the Board and to appoint members thereto;

     NOW, THEREFORE, BE IT RESOLVED, that the Board is hereby expanded to be comprised of five (5) members.

     RESOLVED FURTHER, that Mr. B.S.P. Marra is hereby appointed as a director of the Company, to serve until the next annual general meeting of the Company’s shareholders or until the election and qualification of his successor.

FURTHER ACTS

     RESOLVED, that the officers of the Company, and each of them, be and they hereby are authorized, empowered and directed to take or cause to be taken all such further action and to sign, execute, acknowledge, certify, deliver, accept, record and file all such further instructions in the name and on behalf of the Company as they may deem necessary, desirable or advisable in order to carry out the intent of and to accomplish the purposes of the foregoing resolutions.

     This document may be executed in counterparts, each of which shall be an original, but all of which, taken together, shall constitute one and the same instrument.

1

     IN WITNESS WHEREOF, the undersigned, being all of the members of the Board of Directors of Tribeworks, Inc. have executed this unanimous written consent on the date set forth hereinabove.

/s/ Peter B. Jacobson PETER B. JACOBSON, Director

/s/ Robert Altinger ROBERT ALTINGER, Director

/s/ Robert Gardner ROBERT GARDNER, Director

/s/ W. Gordon Blankstein W. GORDON BLANKSTEIN, Director

2