SB-2/A

Registration No: 333-139677

UNITED STATES SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, DC 20549

AMENDMENT NO. 6 TO

FORM SB-2

REGISTRATION STATEMENT

UNDER THE

SECURITIES ACT OF 1933 

__________________

CARD ACTIVATION TECHNOLOGIES INC.

(Name of Small Business Issuer in Its Charter)

___________________

Delaware	6794	20-5769015
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

53 West Jackson Blvd., Suite 1618

Chicago, Illinois 60604-3749

(312) 972-1662

(Address and Telephone Number of Principal Executive Offices)

___________________

Copies of communications to:

JOSEPH I. EMAS

1224 WASHINGTON AVENUE

MIAMI BEACH, FLORIDA 33139

TELEPHONE NO.: (305) 531-1174

FACSIMILE NO.: (305) 531-1274

___________________

Approximate Date of Commencement of Proposed Sale to the Public: As soon as practicable after this registration statement becomes effective.

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

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

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

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o 

1

CALCULATION OF REGISTRATION FEE

Securities to be Registered	Amount to be Registered	Offering Price Per Share (1)	Aggregate Offering Price	Amount of Registration Fee
Common Stock, par value $0.0001 per share	44,431,613	$.25	$11,107,903	$1,188.55

(1) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 

2

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

Prospectus

Subject to Completion, dated April ___, 2007

CARD ACTIVATION TECHNOLOGIES INC.

44,431,613 Shares of Common Stock 

This prospectus relates to the sale of up to 44,431,613 shares of our common stock by the selling stockholders. The selling stockholders are those shareholders who received restricted stock in the spin-off of our company from MedCom USA, Incorporated. There is no minimum total number of shares which must be sold in this offering, no minimum price per share and no arrangements to place any of the proceeds of this offering in escrow. The offering will terminate upon the earlier of (i) the second anniversary of the date of this prospectus, (ii) the date on which all 44,431,613 shares have been sold, or (iii) the date on which the Company elects to terminate this offering. The shares will not be offered through an underwriter.

We will not receive any proceeds from the sale of our shares by the selling stockholders. We will pay the expenses of registering the shares registered in this prospectus.

There is currently no trading market for the Company’s securities. The prices which the selling shareholders may sell these shares will be determined by the prevailing market price for shares of our common stock or in negotiated transactions. The selling shareholders will sell at a price of $0.25 per share until your shares trade on the over-the-counter Bulletin Board, and thereafter they will sell at prevailing market prices or privately-negotiated prices

The shares included in this prospectus may be reoffered and resold directly by the selling security holders in accordance with one or more of the methods described in the plan of distribution, which begins on page 26 of this prospectus. We will not control or determine the price at which a selling security holder decides to sell its shares. Brokers or dealers effecting transactions in these shares should confirm that the shares are registered under applicable state law or that an exemption from registration is available.

INVESTING IN THE COMPANY’S COMMON STOCK INVOLVES SUBSTANTIAL RISKS, AND INVESTORS SHOULD NOT BUY THESE SHARES UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE “RISK FACTORS” BEGINNING ON PAGE 4. 

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. 

Card Activation Technologies Inc.

53 West Jackson Blvd., Suite 1618

Chicago, Illinois 60604-3749

(312) 972-1662

The date of this prospectus is                                                                             , 2007

3

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY	3
RISK FACTORS	4
FORWARD LOOKING STATEMENTS	11
THE SPIN OFF	11
DESCRIPTION OF BUSINESS	16
MANAGEMENT’S DISCUSSION AND ANALYSIS	18
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS	20
EXECUTIVE COMPENSATION	21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	22
AGREEMENTS WITH MEDCOM	22
DESCRIPTION OF SECURITIES	26
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	26
SELLING STOCKHOLDERS	26
PLAN OF DISTRIBUTION	32
USE OF PROCEEDS	32
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES	32
INDEPENDENT PUBLIC ACCOUNTANTS	33
FURTHER INFORMATION	33

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that which is contained in this prospectus. This prospectus may be used only where it is legal to sell these securities. The information in this prospectus may only be accurate on the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of securities. 

4

PROSPECTUS SUMMARY

This summary does not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire prospectus, including the section entitled “Risk Factors” beginning on page 4 and the financial statements in this prospectus, prior to making an investment decision.

About Card Activation Technologies Inc.

Card Activation Technologies Inc. (“Company”) is a Delaware corporation headquartered in Chicago, Illinois that owns proprietary patented payment transaction technology used for electronic activation of phone, gift and affinity cards.

The patent was transferred to the Company by MedCom USA, Incorporated (“MedCom”) on the formation of the Company and in exchange for 146,770,504 shares of Common Stock. On October 31, 2006, the MedCom board of directors declared a stock dividend to its shareholders of record at the end of business on December 15, 2006 of one share of Common Stock in the Company for every one share of common stock of MedCom owned by its shareholders, such stock being distributed on March 1, 2007. This was a dividend of 86,770,504 shares of our Common Stock. MedCom retained the balance of 60,000,000 shares of Common Stock. MedCom is a publicly traded Delaware corporation, headquartered in Scottsdale, Arizona, that provides innovative healthcare and financial transaction solutions for electronically processing HIPAA compliant transactions within the healthcare industry.  MedCom provides a terminal based service package and a compatible web portal add-on for physicians, clinics and hospitals and dentists that include the following services: real-time transactions including; patient eligibility, referrals, claims status and service authorizations, 100% paperless claims processing, patient easy pay, credit/debit cards, and check guarantee.

The Company is a development stage company that was incorporated in August 2006 in order to own their commercially develop the assigned patent which covers the payment transaction technology and process for taking a card with a magnetic strip or other data capture mechanism and activating the card by loading a determined monetary value onto the card for use at a later date for different types of transactions. This process is utilized for prepaid phone cards, gift cards, and affinity cards. As of the date of this prospectus, we have never entered into any patent license agreements.

As of the date of this prospectus, we have no significant revenues or operations. Our ability to obtain additional funding will determine our ability to continue as a going concern. We have one principal asset, our patented payment transaction technology assigned from MedCom, and one full time and one part-time employees. We do not expect to commence full scale operations or generate revenues until late 2007. Since incorporation, we have not made any significant purchases or sale of assets, nor have we been involved in any mergers, acquisitions or consolidations. We have filed three lawsuits to enforce our patented technology and we have sent license agreement requests to a number of companies regarding infringement resolutions available for patent violations made through the use of our patented payment transaction technology.

Summary of the Offering

The Company is currently authorized to issue 176,000,000 million shares, of which 175,000,000 shares are common stock, par value $0.001 per share (“Common Stock”), and 1,000,000 shares are preferred stock, par value $0.001 per share (“Preferred Stock”). As of December 15, 2006, 146,770,504 shares of Common Stock are issued and outstanding and no shares of Preferred Stock are issued and outstanding.

Pursuant to the offering described in this prospectus, the selling stockholders intend to sell up to 44,431,613 shares of Common Stock to investors (the “Offering”)., representing, if all shares offered were sold, 30.27% of our issued and outstanding shares of common stock.

The Company will not receive any proceeds from the Offering.

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RISK FACTORS

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risk factors set forth in this prospectus, as well as other information we include in this prospectus. Although every effort has been made to anticipate possible risks, unforeseen conditions and unexpected events may arise, and this list may not be all-inclusive. 

Risks Related to the Company’s Business

The report of independent Registered Public Accounting firm contains explanatory language that substantial doubt exists about our ability to continue as a going concern

The independent auditor’s report on our financial statements contains explanatory language that substantial doubt exists about our ability to continue as a going concern. The report states that we have not been able to generate sufficient cash flows from operations and have incurred net losses since inception and have been dependent on financing to support our business efforts. If we are unable to obtain sufficient financing in the near term or achieve profitability, then we would, in all likelihood, experience severe liquidity problems and may have to curtail our operations. If we curtail our operations, we may be placed into bankruptcy or undergo liquidation, resulting which will adversely affect the value of our common shares.

The Company may not be able to secure financing, which in turn could affect the Company’s ability to operate as a going concern.

As of March 31, 2007, the Company had an accumulated deficit of $110,054 and a working capital deficit of $110,054. The Company does not anticipate any revenues in the foreseeable future will incur losses from operations. The Company’s inability to obtain financing, if required, would have a material adverse effect on the value of its patent and its ability to develop its operations and implement its business plan, which will negatively affect the value of our common shares.

The Company has no operating history, which makes it impossible to evaluate its business and to predict any future operating results. 

To date, the Company has been primarily engaged in organizational activities, including obtaining various consulting agreements and other agreements to develop and license the patented technology. The Company has not generated any revenues to date and does not anticipate generating any revenues until such time as third party users of the patented technology enter into license agreements or the Company seeks to enforce its patents in court against third party users of the technology who will not sign licensing agreements. Accordingly, the Company has no operating history upon which an evaluation of its performance and the value of its patented technology. Any unfavorable changes in these or other factors could have a material adverse effect on our business, financial conditions and results of operation. 

The Company expects to incur losses for the foreseeable future and may never achieve profitability. 

The Company anticipates that it will incur operating losses for the foreseeable future. We may never generate revenues or achieve profitability and, if we ever achieve profitability, we may not be able to maintain profitability. If we are unable to achieve profitability, then we would, in all likelihood, experience severe liquidity problems and may have to curtail our operations, adversely impacting the value of the common stock. 

The Company has no experience in marketing and licensing its technology and, to be successful, the Company needs to retain qualified personnel to protect and license its technology

The Company is recently formed and, consequently, lacks the requisite experience to execute its licensing and marketing objectives. The Company has hired personnel with expertise in licensing and marketing. See “Directors, Executive Officers, Promoters and Control Persons” discussing management’s background and experience. The Company will also have to hire administrative personnel. There can be no assurances that the Company will be able to retain the qualified personnel necessary for the development of its business, which would have a material adverse effect on our business and financial condition.

6

The Company assigned no value to the technology underlying our business.

The Company holds one asset; the cost basis of the development of the patent infringement litigation. The Company owns the patent technology of the electronic activation of gift, Affinity, and phone cards the patent had a cost basis of $13,100 of legal costs related to the establishment of the patent. In first quarter 2007 of MedCom expended $0 cost toward the legal costs related to the patent. MedCom impaired the entire value of the patent cost because there were not yet any proven revenues related to the patent infringement litigation. As a result of the absence of a valuation, it will impair the ability to ascertain the value of the business, which would adversely affect the value of our common shares.

The Company depends on its patent and proprietary rights to develop and protect technologies and products, which rights may not offer sufficient protection from infringement by third parties. 

MedCom has represented to the Company that the assigned patent issued by the U.S. Patent Office for its patented payment transaction technology is a valid patent. However, there can be no assurances that the patent and the payment transaction technology will be enforceable or generate revenues for the Company.

The Company’s inability to protect its intellectual property through sufficient patent protection will adversely affect that Company’s ability to survive and other companies may be able to develop substantially similar technologies in competition with the Company. If those other companies enter the marketplace with their own similar products, the value of the Company’s patent will be substantially diminished.

The Company’s success will depend on its ability to obtain and enforce protection under United States and foreign patent laws and other intellectual property laws for the technology that the Company intends to market and license, to develop and preserve the confidentiality of trade secrets and to operate without infringing the proprietary rights of third parties.

The Company cannot assure you that our technology will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others. Consequently, such breach could have a negative effect on our financial performance and results of operations.

The Company’s inability or failure to collect any license fees for the technology will adversely affect the Company’s licensing of its technology, which will cause the Company to lose substantially all of its value. 

The Company’s inability or failure to collect any license fees will adversely affect the Company’s licensing of its technology. As those rights will be the Company’s primary asset, if the Company is unable to maintain those rights, the Company will lose substantially all of its value, which will negatively affect the value of our common shares

A decrease in the projected prices that the Company may charge for licensing its technology may adversely impact our business. 

The Company’s ability to commercialize its technology successfully will depend in part on the price the Company may charge for that technology. Significant uncertainty exists as to the pricing flexibility for the technology. There can be no assurance that the Company’s assumptions concerning licensing pricing will be achieved, which would have a material adverse effect on our business and financial condition and negatively affect the value of our common shares.

The Company has limited sales and marketing capability and may not be successful in selling or marketing its technology. 

The Company currently has no sales and marketing capability. The creation of infrastructure to commercialize its technology may a difficult, expensive and time-consuming process. The Company may not be able to establish sales capabilities or be successful in gaining market acceptance for its technology, which would have a material adverse effect on our business and financial condition.

Third parties may assert claims against the Company for infringement of patents and other intellectual property rights, which could harm our business. 

Parties not affiliated with the Company have obtained or may obtain United States or foreign patents or possess or may possess proprietary rights relating to the patented technology of the Company. Patents now in existence or hereafter issued to others may adversely affect the development or commercialization of the Company’s technology. Further, The Company’s technology may infringe patents owned by others. The Company could incur substantial costs in defending infringement suits brought against it or in asserting any infringement claims against others, which they may not have the funds or insurance to cover.

7

Litigation to enforce its patent against unauthorized users will be expensive and time consuming, and their outcome is uncertain. Any delay or other factor which negatively affects the Company’s ability to fund operations and develop revenues. 

Litigation to enforce the Company’s patented technology against unauthorized users can be a lengthy, time-consuming and expensive process and there can be no assurance of the results of such litigation. On October 19, 2006 the Company initiated lawsuits against McDonald’s Corporation and Walgreen Co. for infringing its payment transaction patent. On December 7, 2006 the Company initiated a lawsuit against Sears Holding Corporation for infringing its payment transaction patent. The Company has engaged counsel to work to solicit and obtain license agreements from companies that have been utilizing our patented payment transaction technology and to initial enforcement actions against those using the technology but whom have refused to enter into a licensing agreement for it. Counsel is continuing to contact other entities, including retailers and product suppliers, to provide them with a licensing agreement that will permit them to practice the patented technology. In addition, if we fail to provide adequate proprietary protection, our names, brand name reputation, revenues and potential profitability may be negatively affected.

Risks Related to the Spin Off

We have no operating history as an independent company upon which you can evaluate our performance and accordingly, our prospects must be considered in light of the risks that any newly independent company encounters.

Prior to the consummation of this distribution, we have operated as part of MedCom. Accordingly, we have no experience operating as an independent company and performing various corporate functions, including human resources, tax administration, legal (including compliance with the Sarbanes-Oxley Act of 2002 and with the periodic reporting obligations of the Securities Exchange Act of 1934), treasury administration, investor relations, internal audit, insurance, information technology and telecommunications services, as well as the accounting for many items such as equity compensation, income taxes, derivatives, intangible assets and pensions. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies in the early stages of independent business operations, particularly companies such as ours in highly competitive markets with complex supply chain operations.

We have no operating history as an independent company upon which you can evaluate our performance and accordingly, our prospects must be considered in light of the risks that any newly independent company encounters.

Prior to the consummation of this distribution, we have operated as part of MedCom. Accordingly, we have no experience operating as an independent company and performing various corporate functions, including human resources, tax administration, legal (including compliance with the Sarbanes-Oxley Act of 2002 and with the periodic reporting obligations of the Securities Exchange Act of 1934), treasury administration, investor relations, internal audit, insurance, information technology and telecommunications services, as well as the accounting for many items such as equity compensation, income taxes, derivatives, intangible assets and pensions. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies in the early stages of independent business operations, particularly companies such as ours in highly competitive markets with complex supply chain operations.

Our historical and pro forma financial information is not necessarily indicative of our results as a separate company and therefore may not be reliable as an indicator of our future financial results.

Our historical financial statements and Unaudited Pro Forma Combined and Consolidated Financial Statements have been created from MedCom’s financial statements using our historical results of operations and historical bases of assets and liabilities as part of MedCom. Accordingly, the historical financial information we have included in this information statement is not necessarily indicative of what our financial position, results of operations and cash flows would have been if we had been a separate, stand-alone entity during the periods presented.

The historical financial information is not necessarily indicative of what our results of operations, financial position and cash flows will be in the future and does not reflect many significant changes that will occur in our capital structure, funding and operations as a result of the spin off. While our historical results of operations include all costs of MedCom’s assigned technology business, our historical costs and expenses do not include all of the costs that would have been or will be incurred by us as an independent company. In addition, we have not made adjustments to our historical financial information to reflect changes, many of which are significant, that will occur in our cost structure, financing and operations as a result of the spin off. These changes include potentially increased costs associated with reduced economies of scale and purchasing power.

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Our effective income tax rate as reflected in our historical financial information also may not be indicative of our future effective income tax rate. Among other things, the rate may be materially impacted by:

• changes in the mix of our earnings from the various jurisdictions in which we operate;

• the tax characteristics of our earnings;

• the timing and amount of earnings of foreign subsidiaries that we repatriate to the United States, which may increase our tax expense and taxes paid; and

• the timing and results of any reviews of our income tax filing positions in the jurisdictions in which we transact business.

Substantial sales of our common stock following the distribution may have an adverse impact on the trading price of our common stock.

Some of the MedCom’s stockholders who receive our shares of common stock may decide that their investment objectives do not include ownership of our shares, and may sell their shares of common stock following the distribution. In particular, certain MedCom stockholders that are institutional investors have investment parameters that depend on their portfolio companies maintaining a minimum market capitalization that we may not achieve after the distribution. We cannot predict whether other stockholders will resell large numbers of our shares of common stock in the public market following the distribution or how quickly they may resell these shares. If our stockholders sell large numbers of our shares of common stock over a short period of time, or if investors anticipate large sales of our shares of common stock over a short period of time, this could adversely affect the trading price of our shares of common stock.

If we lose our key personnel or our key personnel devote substantial time to Medcom, our business and prospects may be adversely affected.

Our performance is dependent on the services of certain key employees, particularly William P. Williams, our President and Chief Executive Officer, and Michael Malet, our Executive Vice President. The loss of services of any of our key employee could have a material adverse effect on our business and financial condition. We may not be able to hire and retain other management if we lose the services of our key employees. In addition, our key employees are also employees of Medcom and may not be able to devote sufficient time to our business, could have a negative effect on our financial performance and results of operations.

Substantial sales of our common stock by Medcom may have an adverse impact on the trading price of our common stock. 

Since MedCom will hold 40.9% of our shares of common stock and may sell their shares of common stock. If our Medcom sells large numbers of our shares of common stock over a short period of time, or if investors anticipate large sales of our shares of common stock over a short period of time, this could adversely affect the trading price of our shares of common stock.

Possibility of Contingent Liability and a potential violations of the federal Securities Laws

The board of directors of MedCom USA, Incorporated (“MedCom”) determined to separate its card technology business segment from its other business segments by means of a spin off of a portion of our stock to MedCom’s shareholders. To accomplish the spin off, MedCom declared a stock dividend effective at the end of business on December 15, 2006 and distributed on March 1, 2007,  for a substantial portion of its equity interests in our company, consisting of 86,770,504 shares of our common stock, to MedCom’s stockholders on a pro rata basis. We filed a registration statement on Form SB-2 with the intent of complying with safe harbor provisions of Staff Legal Bulletin No. 4.  Although we intended to follow steps necessary for reliance on the safe harbor, we failed to follow the appropriate steps. There is a possibility that the recipients could theoretically attempt to rescind their receipt of securities and the Securities and Exchange Commission could find that Medcom made a distribution of securities in violation of Section 5. The management of the Company has filed both a revised SB-2 and a Form 10-SB to comply with the intent of Staff Legal Bulletin No. 4, if not the technical requirements, and will not commence seeking a market for our common stock until the registration statements have cleared all comments from the Securities and Exchange Commission. Further the Company failed to inform investors of the terms of the spin off through the distribution of an information statement prior to distributing the shares in the spin off.

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Risks Related to the Offering 

The Offering Price and other terms of this Offering have been arbitrarily determined. 

The offering price of the Common Stock in this Offering was arbitrarily determined. Such offering price otherwise has no relationship to the Company’s assets, its book value ($0.0001 per share as of the date of this prospectus) or any other established criterion of value, and may not be indicative of the fair market value of the Company’s Common Stock. In the event the Company creates a market for publicly trading its shares, the ultimate trading price of the Company’s Common Stock may be substantially higher or lower than the price that an investor will pay in this Offering.

The offering price of the Common Stock may not be indicative of future market prices, to the extent that such a public market ever develops. 

To the extent that a public market ever develops for our Common Stock, such market may not perceive the offering price as being representative of the fair value of the Company’s Common Stock, in which case investors may not be able to sell their Common Stock at or above the offering price, which will result in a loss of a portion or all of the investor’s investment. The Company anticipates that the market price, if a market ever develops, of its shares will fluctuate significantly in response to numerous factors, many of which are beyond the control of the Company, including, without limitation:

• the announcement of competing technology by the Company’s competitors;

• intellectual property developments;

• quarterly variations in the Company’s and its competitors’ results of operation;

• changes in earnings estimates or recommendations by securities analysts; and

• general market conditions and other factors, including factors wholly unrelated to the Company’s own operations or performance.

To the extent that the Company does create a market for publicly trading its Common Stock, the Company anticipates that, at least initially, its Common Stock may be quoted on the OTC Bulletin Board and the stock market and the securities of companies that are traded in this manner are prone to extreme price fluctuations, which could further substantially depress the value of the Common Stock. The price volatility of the Common Stock and the downward pressure on its price may be intensified to the extent that the trading volume of the Common Stock will be low.

There is not now nor may there ever be an active market for the Company’s Common Stock. 

There is currently no market at all for the Company’s Common Stock. Further, although the Company anticipates that its Common Stock will be quoted on the OTC Bulletin Board, the Company expects that trading on the exchange will be light or sporadic at best. At any given time, several days or weeks may elapse with no trading whatsoever of the Common Stock. The Company is providing no assurances of any kind or nature whatsoever that an active market for its Common Stock will ever develop. Investors who purchase shares in this Offering should understand that there may be no alternative exit strategy for them to recover or liquidate their investments in the Common Stock. Accordingly, investors must be prepared to bear the entire economic risk of an investment in the Common Stock for an indefinite period of time.

Additional uncertainty will be experienced with respect to the price of the Common Stock because the Company is a technology entity and the market price of the securities of technology companies is especially volatile.

If the Company’s operations do not develop and its revenues do not grow or grow more slowly than the Company anticipates, if operating or capital expenditures exceed the Company’s expectations and cannot be adjusted accordingly or if some other event adversely affects the Company, the market price of its Common Stock will decline.

Upon completion of this Offering, the Company will become subject to the reporting requirements of the United States securities laws, which will require additional expenditure of capital and other resources. 

Upon completion of this Offering, the Company will become a public reporting company and will be subject to the information and reporting requirements of the Securities Exchange Act of 1934 and other federal securities laws, including the Sarbanes-Oxley Act (“Sarbanes”). The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited reports to stockholders will cause the Company’s expenses to be substantially higher than they would otherwise be if the Company were privately-held or otherwise retained its status as a non-reporting public company. It will be costly and time-consuming for the Company to develop and implement internal controls and reporting procedures required by Sarbanes, and the Company will require additional staff and third-party assistance to develop and implement appropriate internal controls and procedures. If the Company fails to or is unable to comply with Sarbanes, it may not be able to obtain independent accountant certifications concerning internal controls at the time it is required by Sarbanes.

10

Even if the Company were to become an OTC Bulletin Board or “Pink Sheet” Company, it may not be able to attract the attention of major brokerage firms or securities analysts. 

Security analysts and major brokerage houses may not provide coverage of the Company, given that its anticipated OTC Bulletin Board or “Pink Sheet” status would provide little or no incentive to recommend the purchase of its Common Stock. The Company may also not be able to attract any brokerage houses to conduct secondary offerings and other capital raising transactions with respect to its securities. The Company’s business and ability to continue as a going concern would be adversely affected if it is unable to raise funds.

Our shares will be “Penny Stocks” which are subject to certain restrictions that could adversely affect the liquidity of an investment in us.

We intend to initially trade our common stock in the over-the-counter market. The stock price will likely be at less than $5.00 per share. Such shares are referred to as “penny stocks” within the definition of that term contained in Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended. These rules impose sales practices and disclosure requirements on certain broker-dealers who engage in certain transactions involving penny stocks. These additional sales practices and disclosure requirements could impede the sale of our securities, including securities purchased herein, in the secondary market. In general, penny stocks are low priced securities that do not have a very high trading volume. Consequently, the price of the stock is volatile and you may not be able to buy or sell the stock when you want. Accordingly, the liquidity for our securities may be adversely affected, with related adverse effects on the price of our securities.

Under the penny stock regulations, a broker-dealer selling penny stocks to anyone other than an established customer or “accredited investor” (generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. In addition, unless the broker-dealer or the transaction is otherwise exempt, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the Registered Representative and current quotations for the securities. A broker-dealer is additionally required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer’s account and information with respect to the limited market in penny stocks.

The Company has never paid dividends and has no plans to pay dividends at any time in the near or distant future. 

The Company has never paid dividends on its capital stock, and the Company does not anticipate paying any dividends for the foreseeable or distant future. The Company’s present business plan does not include, for the foreseeable future and beyond, any payments of dividends to stockholders. Stockholders’ sole strategy for any return on their investments will be the potential for the increase in the value of their stock and the possibility of liquidating their stock positions.

You will experience dilution if the Company obtains additional financing or Issues Options. 

If the Company obtains additional financing, that financing will have a dilutive effect on the holders of the Company’s securities.

The Company has adopted a stock option plan under which the Company’s officers, directors, consultants, and employees will be eligible to receive stock options exercisable for the Company’s securities at exercise prices that may be equal to or lower than the offering price in this offering. The Company has reserved 1,000,000 shares of Common Stock for issuance under this plan. Stock and stock option grants under such plans will further dilute the value of the Company’s securities and the investors’ equity position in the Company.

11

The Company will need to raise additional capital in order to achieve its long-term goals, but as yet it has not identified any sources for such capital. 

The Company is not selling any Common Stock in this Offering and will not receive any of the proceeds. Consequently, the Company will need to conduct public or private offerings at appropriate times in the future to raise money for its operations if income cannot be generated immediately from its licensing efforts.

Our corporate charter contains authorized, unissued “blank check” preferred stock which can be issued without stockholder approval with the effect of diluting then current stockholder interests and discouraging, delaying or preventing a change in control of the Company. 

Our certificate of incorporation authorizes the issuance of up to 1,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our board of directors. Accordingly, our board of directors is empowered, without stockholder approval, to issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. Furthermore, the issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control.

Any of the above-identified risks, even if borne out only partially and not fully, will adversely affect The Company’s business, its financial condition and its operating results. If any of the events we have identified occur, in whole or in part, the value of our Common Stock will likely decline, and an investor will lose all or part of the funds paid to acquire the Common Stock described in this prospectus with no opportunity to regain any portion of those funds in return. 

FORWARD LOOKING STATEMENTS

This prospectus includes forward-looking statements. You can identify these forward-looking statements when you see us using words such as “expect,” “anticipate,” “estimate,” “believe,” “intend,” “may,” “predict,” and other similar expressions. These forward looking statements cover, among other items:

• our future capital needs;

• our expectations about the value of the patented technology;

• our expectations about the market acceptance of the technology;

• our licensing, marketing and sales plans; and

• our expectations about our financial performance.

We have based these forward-looking statements largely on our current expectations. However, forward-looking statements are subject to a number of risks and uncertainties, certain of which are beyond our control. Actual results could differ materially from those anticipated as a result of the factors described under “Risk Factors.”

We do not undertake any obligation to publicly update or revise any forward-looking statements contained in this prospectus or incorporated by reference, whether as a result of new information, future events or otherwise. Because of these risks and uncertainties, the forward-looking statements and circumstances discussed in this prospectus might not transpire.

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THE SPIN OFF

Background

Our business has been a part of MedCom and our assets and liabilities consist of those that MedCom attributed to its card technology business. The board of directors of MedCom determined to separate its card technology business segment from its other business segments by means of a spin off of a portion of our stock to MedCom’s shareholders. To accomplish the spin off, MedCom declared a stock dividend effective at the end of business on December 15, 2006 and distributed on March 1, 2007, for a substantial portion of its equity interests in our company, consisting of 86,770,504 shares of our common stock, to MedCom’s stockholders on a pro rata basis. Following the spin off, MedCom continues to own 60,000,000 shares of our common stock. No vote of MedCom’s stockholders was required or being sought in connection with the spin off, and MedCom’s stockholders have no appraisal rights in connection with the spin off.

Reasons for the Spin Off

Among other things, the board of directors of MedCom considered the following potential benefits in making its determination to approve the spin off:

• Enabling investors to invest directly in our business. Because our company and MedCom’s other business segments operate in different industries, an equity investment in each company may appeal to investors with different goals, interests and concerns. Establishing separate equity securities will allow investors to make separate investment decisions with respect to our and MedCom’s respective businesses.

• Allowing us and MedCom to focus on our respective core businesses. MedCom is implementing a transformation plan in order to make MedCom and us more tightly focused companies—with MedCom focusing on its business of healthcare and financial transaction solutions for electronically processing HIPAA compliant transactions within the healthcare industry, and us focusing on the card technology business as an independent company. MedCom’s lines of business have financial and operational characteristics which are distinct from those of our business. The spin off will allow MedCom to adopt more focused strategies around its core businesses and will enable us to better focus on the growth and development of our business.

• Direct access to capital. Historically, our working capital requirements and capital for general corporate purposes, including acquisitions and capital expenditures, have been satisfied as part of the corporate wide cash management policies of MedCom. We expect to have better and more direct access to the capital markets after the spin off as our investors will not be forced to understand and make investment decisions with respect to MedCom’s other businesses that are fundamentally different from our business. MedCom also will benefit since its investors will not need to understand and make investment decisions with respect to our business. In addition, we and MedCom will have the option to use our own respective equity as acquisition or financing currency should the appropriate strategic opportunities arise.

• Alternative transactions considered.  Medcom considered various other options and alternative transactions such as operating the patent litigation within the companies present operations.  Medcom also considered selling the patents however the patents uncertainty of future benefits would not ascertaining a substantial valued until tested through the patent litigation.  After considering these options it was in the best interest of the shareholders to segregate the Medcom operations from the patent litigation to preserve the Medcom operating activity and protect that operating activity from possible counter claims while litigating these patent infringement cases.

Neither we nor MedCom can assure you that, following the spin off, any of these benefits will be realized to the extent anticipated or at all.

Manner of Effecting the Spin Off

At the close of business on December 15, 2006, the shareholders of MedCom were entitled to a dividend of one share of the company’s common stock for each share owned of MedCom common stock. The shares were distributed on March 1, 2007.

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MedCom instructed the stock transfer agent for it and the company to act as a distribution agent for the shares of the company distributed to our stockholders. The distribution agent has effected delivery of the shares of our common stock issuable in the spin off through the transfer agent’s book-entry registration system by mailing to each record holder a statement of holdings detailing the record holder’s ownership interest in our company and the method by which the record holder may access its account. Please note that if any stockholder of MedCom on the record date sold shares of MedCom common stock after the record date but on or before the distribution date, the seller of those shares, and not the buyer, will become entitled to receive the shares of our common stock issuable in respect of the shares sold. See “—Trading of MedCom Common Stock Between the Record Date and the Distribution Date” below for more information.  The spin off is a taxable event and the overall tax consequence to all the shareholders is approximately $14,700.  The stock had no value at the time of spin-off and the only tangible valuation to assign to the taxability of the stock received is par value.

Results of the Spin Off

Following the spin off, we became an independent public company owning and operating what had previously been MedCom’s card technology business. Immediately following the spin off, we have 146,770,504 shares of our common stock outstanding and approximately 620 holders of record of shares of our common stock, based upon the number of shares of MedCom common stock outstanding and the number of record holders of MedCom common stock on December 15, 2006.

The spin off will not affect the number of outstanding MedCom shares or any rights of MedCom stockholders, although it will affect the market value of the outstanding MedCom common stock.

Listing and Trading of Our Common Stock

As of the date of this prospectus, there is no public market for our common stock.

We will not commence seeking a market for our common stock until the registration statements have cleared all comments from the Securities and Exchange Commission.  Once we have cleared comments, management intends to request a market maker to file a Form 211 to be approved for trading on the NASDAQ Over the Counter OTC: BB.  The company is not permitted to file a form 211 with the OTCBB as only Market Makers may apply to the OTCBB for the issuer to get approval to quote the security on the Exchange.

There currently is no trading market for our common stock, although we expect that a market will develop on or shortly after the payment date for the distribution and the NASD authorization The Company has not applied for a listing on any exchanges including Pinksheets.com.  Shares registered in this prospectus may not be sold until it is declared effective. Neither we nor MedCom can assure you as to the trading price of our common stock or as to whether the combined trading prices of our common stock and MedCom’s common stock will be less than, equal to or greater than the trading prices of MedCom’s common stock prior to the spin off. See “Risk Factors—Risks Related to the Spin Off.” The trading price of our common stock is likely to fluctuate significantly, particularly until an orderly market develops.

The shares of our common stock distributed to MedCom’s stockholders will be freely transferable, except for shares received by individuals who are deemed affiliates or who received restricted shares as a result of holding MedCom restricted shares. Those receiving shares of our common stock who hold restricted stock of MedCom on the record date are the selling shareholders under this prospectus and will be able to use this prospectus to sell their shares. The selling shareholders will sell at a price of $0.25 per share until our shares trade on the over-the-counter bulletin board, and thereafter they will sell at prevailing market prices or privately-negotiated prices. The shares retained by MedCom are not being registered in this offering. Individuals who may be considered our affiliates after the spin off include individuals who control, are controlled by or are under common control with us, as those terms generally are interpreted for federal securities law purposes. This may include some or all of our executive officers and directors. In addition, individuals who are affiliates of MedCom on the distribution date may be deemed to be affiliates of ours. Individuals who are our affiliates will be permitted to sell their shares of common stock received in the spin off only pursuant to an effective registration statement under the Securities Act of 1933, of the “Securities Act,” an appropriate exemption from registration, or pursuant to Rule 144 once 90 days have expired since the date that the registration statement of which this prospectus is a part was declared effective. In general, under Rule 144, an affiliate who receives shares of our common stock in the distribution, for a period of at least one year is entitled to sell, within any three-month period, a number of shares that does not exceed the greater of:

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• 1% of the then-outstanding shares of common stock; and

• the average weekly trading volume of the common stock during the four calendar weeks preceding the date on which the notice of the sale is filed with the Securities and Exchange Commission.

Sales under Rule 144 are also subject to provisions relating to notice, manner of sale, volume limitations and the availability of current public information about us.

Trading of MedCom Common Stock Between the Record Date and Distribution Date

MedCom’s common stock continues to be quoted quotation on the OTC Bulletin Board. After December 15, 2006, shares of MedCom purchased will not include an entitlement to receive shares of our common stock distributed in the spin off, as the entitlement will remain with the original holder. Therefore, if you own shares of MedCom common stock on December 15, 2006 and thereafter sell those shares, you have or will receive the shares of our common stock in the spin off.

Reasons for Furnishing this Prospectus

This prospectus is being furnished solely to cover the possible offer and resale of the company’s common stock received by the MedCom stockholders who are affiliates in the Spin Off.  It is not and should not be construed as an inducement or encouragement to buy or sell any of our securities or any securities of MedCom. We believe that the information contained in this prospectus is accurate as of the date set forth on the cover. Changes to the information contained in this prospectus may occur after that date, and neither we nor MedCom undertake any obligation to update the information except in the normal course of our respective public disclosure obligations and practices.

DESCRIPTION OF BUSINESS 

Background and History 

MedCom has assigned its patent number 6,032,859 to the Company upon its formation. The MedCom Renewable card system patent was created by MedCom as part of its card building technology endeavors in the 1990’s. The patent covers the technology and process for taking a card with a magnetic strip or other data capture mechanism and activating the card by loading a determined monetary value onto the card for use at a later date for different types of transactions. This process can be utilized for prepaid phone cards, gift cards, affinity cards and value cards. New View Technologies, which was acquired by MedCom, developed the patent and all patents were assigned by New View Technologies to MedCom.

Description of the Industry

From the increased use of phone cards populated with value by retailers to the expansion of gift cards at major department stores and big box stores, to the creation of affinity cards by retailers building customer loyalty, and the sale of these cards in supermarkets, convenience stores, coffee shops and other outlets, the implementation of card activation for consumers has been expanding greatly throughout the United States. Many retailers every day are adding this product availability to its sales efforts.

The Company believes that debit styled cards, which include gift cards, infringe the patent when the gift card is activated, when the gift card is used for purchasing items or when value is added to the gift card by the method disclosed in the patent.  The method, in general terms, requires that the card be processed through a counter-top terminal, and therefore processing a step through a terminal other than a counter top terminal would not infringe the patent.  As part of the due diligence involved in this matter, the professionals studies specific examples of counter top processing systems and conducted research into the magnitude of transactions involving the use of debit styled cards, which include gift cards.

There are many different companies offering phone cards. There are a number of different service companies offering gift card processing and there are a variety of different companies offering processing services. It is our understanding, arising from reports by professionals engaged by the Company by our Chief Executive Officer, there has been infringement by utilizing those processes protected by the patent we own for activating these types of cards.

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The Retail industry has adopted the method of activating cards at the time of purchase in order to reduce theft and cost of holding cards with pre-loaded values included. The retailer benefits significantly because it receives revenue from the customer and provides an interest free float on those monies until the customer actually utilizes the card for purchasing. This creates a tremendous profit opportunity for the retailer which has resulted in their encouragement of consumers to acquire gift cards as a gift solution.

The retailer also benefits because a percentage of the cards are not fully utilized or used at all thereby providing a 100% profit to the retailer for the amount not used.

The retailer benefits thirdly from consumers who may not normally frequent the store, but do so because they have a gift card and then often increment the sale above the value of the gift card with additional purchases.

Lastly, the retailer accrues a benefit by reducing returns of merchandise from unsatisfied customers who received merchandise as gifts.

Overview

We are a technology licensing company who intends to license our technology to retailers, supermarkets, convenience stores and other service providers such as phone companies, the post office and military stores who wish to provide consumers with cards that can be encoded with monetary value for use for a subsequent purchase.

We intend to require, wherever our patents apply, reasonably appropriate annual royalty guarantees and advances from the retailer or service provider to enter into these licensing agreements, given the value added of our intellectual property.

By providing a licensing model, we expect to be able to convert many, if not all, of these providers to licensees for our patented system. With the multiples of number of outlets per chain, the revenue potential can be quite significant.

Marketing 

In developing our marketing approach, in November, 2006, we secured the services of the law firm of Orum and Roth LLC to begin the negotiations concerning the licensing of the proprietary patented technology of electronic activation of phone, gift cards, affinity cards and value cards with current users of our technology.

We intend to generate revenues primarily by charging licensing fees to the retailers who are utilizing our patented technology. We have identified hundreds of retail chains who the company believes are presently utilizing our patented technology in the sale of gift cards, phone cards, affinity cards and value cards.

Patents and Licenses

When a new product or process is developed, we may seek to preserve the economic benefit of the product or process by applying for a patent in each jurisdiction in which the product or process is likely to be exploited. Generally, for a patent to be granted, the product or process must be new and be inventively different from what has been previously patented or otherwise known anywhere in the world. Patents generally have a life span of 20 years from the date of application depending on the relevant jurisdiction, after which time any person is free to exploit the product or process covered by a patent. A person who is the owner of a patent has, within the jurisdiction in which the patent is granted, the exclusive right to exclude others from practicing the subject matter defined in the patent claims. The patent, 6,032,859 was granted on March 7, 2000. The patent has about another 11 year term, based on the September, 1997 application date. We have no patent license agreements with others and have not derived revenues from this patent while it was part of MedCom.

Competition

Competition in the technology industry is intense. The main competition is the entities that are using fully loaded cards with a predetermined value that are not activated. Also as technologies advances there is always a risk of new technology and more competition.  The overall market of the gift and affinity cards is very large and represents a large method of sales for companies.  The gift cards are sold at many companies to generate a way of generating a new revenue model for those companies that are selling our patent technology.

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The Company believes that debit styled cards, which include gift cards, infringe the patent when the gift card is activated, when the gift card is used for purchasing items or when value is added to the gift card by the method disclosed in the patent.  The method, in general terms, requires that the card be processed through a counter-top terminal, and therefore processing a step through a terminal other than a counter top terminal would not infringe the patent.  As part of the due diligence involved in this matter, the professionals studies specific examples of counter top processing systems and conducted research into the magnitude of transactions involving the use of debit styled cards, which include gift cards.

Employees 

As of December 15, 2006, we had two executive officers, Mr. Williams, President and CEO and Mr. Michael Malet our Executive Vice President. These gentlemen are employees of MedCom and do not receive any compensation from us at this time. All of our executive officers will be providing as much time as needed to the Company. We have no full or part-time employees. Presently our business activities are focused on the lawyers that are overseeing the patent legal work. The accounting costs will continue to be allocated between Medcom and ourselves.  The company has allocated nearly $95,054 of costs related to legal and accounting fees to process our SEC filings and costs to litigate our patent infringement technology.  Medcom paid approximately $55,000 in legal fees and $40,000 in accounting fees related to the filing of this SB2.  Upon securing a settlement for the company, the company will declare a salary for the existing officers of $5,000 per month and growing to $120,000 annually upon the settlement of future law suits.

Property 

The Company has office space in Chicago under a monthly oral agreement with no specific term. At present, we require little dedicated office space. We believe that our existing facilities are adequate for our current needs and that additional space will be available as needed.

Legal Proceedings 

As of December 15, 2006, we had initiated lawsuits against McDonald’s Corporation, Walgreen Co. and Sears Holding Corporation for infringing its payment transaction patent but no responses had been filed in those actions by the defendants. As of the date herein, there are no pending or threatened legal proceedings against the Company.

Card Activation, through its attorneys, has sent letters to over 120 potential infringers of the patent, placing the infringers on notice of the patent and seeking a license agreement under the patent.  Card Activation has sued six parties and to date Card Activation has settled a lawsuit with one infringer.  That infringer, McDonald Corporation, has taken a license under the patent.

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following discussion and analysis of our plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this prospectus. This discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those presented under the heading of “Risk Factors” and elsewhere in this prospectus.

Overview

Plan of Operations

We were incorporated in Delaware in August of 2006 as Card Activation Technologies, Inc.

Patent Technology

The Company has the ability to market and sell licensing opportunities for the card activation proprietary patented technology for activating phone cards and gift cards at retail stores and other distribution outlets. The patent covers the technology and process for taking a card with magnetic strip or other data capture mechanism and activating the card by downloading a determined monetary value onto the card for use at a later date for different types of transactions. This process can be utilized for prepaid phone cards, gift cards, and affinity cards. New View Technologies, which was acquired by MedCom, developed the patent and all patents have been assigned to MedCom.

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In October, 2006, MedCom transferred the patent technology to the company. Presently, the company has sent proposed license agreements to numerous companies and initiated three law suits against companies that have violated this patent and will continue to pursue the litigation against those companies that have violated the company’s patents. Once the company is successful in the pursuit of the patent violators and in its licensing program, we anticipate receiving the appropriate royalties from the use of our technology by third parties by allowing licensing arrangements to our technology and anticipated royalties for the use of our patent.

Results of Operations

We are a development stage company and have generated no revenues from the anticipated royalty income.

Liquidity and Capital Resources

The Company's operating requirements has been and will be funded primarily from its related party entity MedCom USA, Inc. The Company will use funds advanced Medcom. Currently, the Company costs are limited to professional fees and subject to a contingency fee from our patent litigation attorneys. We anticipate Medcom will continue to provide funds through a revolving line of credit of $250,000 which funds will be drawn down on an as needed basis until we begin to realize sufficient revenues from royalty payments. Once we begin receiving royalties, we expect the revenues of such royalties shall permit us to be self-funding. In addition, the Company is looking at expanding its market and looks for an acquisition that complements the Company and generates revenues, although no such prospective acquisition candidates have been ascertained.

Summary of Significant Accounting Policies

Use of Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. When preparing our financial statements, we make estimates and judgments that affect the reported amounts on our balance sheets and income statements, and our related disclosure about contingent assets and liabilities. We continually evaluate our estimates, including those related to revenue, allowance for doubtful accounts, reserves for income taxes, and litigation. We base our estimates on historical experience and on various other assumptions, which we believe to be reasonable in order to form the basis for making judgments about the carrying values of assets and liabilities that are not readily ascertained from other sources. Actual results may deviate from these estimates if alternative assumptions or condition are used.

Revenue Recognition

Revenue recognized the use of our patent technology by receiving royalties or licensing fees from the deployment of our technology. Revenue is recorded when sales are generated from third parties that have deployed our technology and generated sales from that technology.

Net Income (Loss) Per Share

The Company has presented basic and diluted net income (loss) per share pursuant to SFAS No. 128, “Earnings per Share,” and the Securities and Exchange Commission SAB No. 98. In accordance with SFAS No. 128, basic net income (loss) per share has been computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share includes the effect, if any, from the potential exercise or conversion of securities, such as stock options, which would result in the issuance of shares of common stock.

Basic and diluted loss per share is based on the net loss divided by the weighted average number of common shares outstanding during the period. No effect has been given to outstanding potential common shares such as options, warrants and convertible instruments in the diluted computation as their effect would be anti-dilutive.

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Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

Recent Accounting Pronouncements

Recent accounting pronouncements that the Company has adopted or will be required to adopt in the future are summarized below.

In May 2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154, "Accounting Changes and Error Corrections" (SFAS 154), which replaces Accounting Principles Board (APB) Opinion No. 20, "Accounting Changes," and SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements - An Amendment of APB Opinion No. 28." SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections, and it establishes retrospective application, or the latest practicable date, as the required method for reporting a change in accounting principle and the reporting of a correction of an error. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company will adopt SFAS 154 in the first quarter of fiscal year 2007 and does not expect it to have a material impact on its consolidated results of operations and financial condition.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157 provides guidance for using fair value to measure assets and liabilities. SFAS 157 addresses the requests from investors for expanded disclosure about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and will be adopted by the Company in the first quarter of fiscal year 2009. The Company is unable at this time to determine the effect that its adoption of SFAS 157 will have on its consolidated results of operations and financial condition.

In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The cumulative effects, if any, of applying FIN 48 will be recorded as an adjustment to retained earnings as of the beginning of the period of adoption. FIN 48 is effective for fiscal years beginning after December 15, 2006, and the Company is required to adopt it in the first quarter of fiscal year 2008. The Company is currently evaluating the effect that the adoption of FIN 48 will have on its consolidated results of operations and financial condition and is not currently in a position to determine such effects, if any.

In June 2006, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 06−3 (EITF 06-3), “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).” EITF 06−3 applies to any tax assessed by a governmental authority that is directly imposed on a revenue producing transaction between a seller and a customer. EITF 06−3 allows companies to present taxes either gross within revenue and expense or net. If taxes subject to this issue are significant, a company is required to disclose its accounting policy for presenting taxes and the amount of such taxes that are recognized on a gross basis. The Company currently presents such taxes net. EITF 06−3 is required to be adopted during the first quarter of fiscal year 2008. These taxes are currently not material to the Company’s consolidated financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 establishes an approach that requires quantification of financial statement errors based on the effects of each on a company's balance sheet and statement of operations and the related financial statement disclosures. Early application of the guidance in SAB 108 is encouraged in any report for an interim period of the first fiscal year ending after November 15, 2006, and will be adopted by the Company in the first quarter of fiscal year 2007. The Company does not expect the adoption of SAB 108 to have a material impact on its consolidated results of operations and financial condition.

FSP FAS 123(R)-5 was issued on October 10, 2006. The FSP provides that instruments that were originally issued as employee compensation and then modified, and that modification is made to the terms of the instrument solely to reflect an equity restructuring that occurs when the holders are no longer employees, then no change in the recognition or the measurement (due to a change in classification) of those instruments will result if both of the following conditions are met: (a). There is no increase in fair value of the award (or the ratio of intrinsic value to the exercise price of the award is preserved, that is, the holder is made whole), or the antidilution provision is not added to the terms of the award in contemplation of an equity restructuring; and (b). All holders of the same class of equity instruments (for example, stock options) are treated in the same manner. The provisions in this FSP shall be applied in the first reporting period beginning after the date the FSP is posted to the FASB website. The Company does not expect the adoption of FSP FAS 123(R)-5 to have a material impact on its consolidated results of operations and financial condition.

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Description of Properties

The company has its headquartered in rented office space adjacent to its patent counsel’s offices in Chicago, Illinois. The company does not have any other facilities at this time.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 

Set forth below is information regarding the Company’s current directors and executive officers. There are no family relationships between any of our directors or executive officers. The directors are elected annually by stockholders. The executive officers serve at the pleasure of the Board of Directors.

Name	Age	Title
William P. Williams	53	President and Chief Executive Officer, Director, Principle Accounting Officer
Michael Malet	59	Executive Vice President

William P. Williams, President and Chief Executive Officer, Principle Accounting Officer, Director 

William P. Williams has been the Chairman, Chief Executive Officer of the Company since inception and has held the same positions with MedCom since August 2001. He is also currently Chief Executive Officer and Chairman of the Board for American Nortel Communications, Inc., a publicly traded company located in Scottsdale, Arizona, which is in the business of long-distance telephone service domestically, as well as internationally. From 1983 to 1995, he was President and Chairman of the Board of Shelton Financial, Inc., a financial factoring firm headquartered in San Antonio, Texas. Mr. Williams has a Bachelor of Arts and a Master of Business Administration in Finance from Baylor University

Michael Malet, Executive Vice President

Mr. Malet has served as Executive Vice President of MedCom since 2001. From 1998 to 2001 he was the chief operating office of MedCom. From 1995 to 1997 he was President of New View Technologies Inc. which manufactured on-line phone card vending machines and produced software for point-of-sale terminals for the activation of debit transactions and phone card/gift card activation. New View Technologies was purchased by MedCom in 1998. From 1986 to 1994 he was President of Keyosk Corporation, a manufacturer of on-line intelligent vending machines.

William L. Bednarski resigned from the company as he pursued an opportunity as Chief Executive Officer of another company.

Audit Committee Financial Expert

The Company does not have an audit committee or a compensation committee of its board of directors. In addition, the Company’s board of directors has determined that the Company does not have an audit committee financial expert serving on the board. When the Company develops its operations, it will create an audit and a compensation committee and will seek an audit committee financial expert for its board and audit committee.

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EXECUTIVE COMPENSATION

Executive Compensation

At the present time, none of the company’s officers receive any compensation from the company. It is anticipated that once the company begins to generate revenues, the company’s Officers, will begin receiving compensation from the company, but the amount has yet to be determined. In addition, it is anticipated that the Company will provide the officers with normal and customary benefits, including health, vacation, expense reimbursement, and retirement plan contributions.

There is currently no arrangement with any of the officers to provide compensation for their executive services to the Company.

Non-Employee Director Compensation

The Company has no formal plan for Director Compensation, but anticipates that it will reimburse the reasonable and customary expenses of any future non-employee directors associated with their service on the board, including travel expenses and standard fees for attending board meetings. In addition, the Company has established the 2006 Stock Option Plan (the “Plan”) for employees, directors and consultants and reserved 1,000,000 shares for issuance under the Plan. At the date hereof, no options have been issued under this Plan.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT 

The following table lists stock ownership of our Common Stock as of June 22, 2007. The information includes beneficial ownership by (i) holders of more than 5% of our Common Stock, (ii) each of two directors and executive officers and (iii) all of our directors and executive officers as a group. Except as noted below, to our knowledge, each person named in the table has sole voting and investment power with respect to all shares of our Common Stock beneficially owned by them.

Name and Address of Owner	Title of Class	Number of Shares Owned (1)	Percentage of Class	Percentage of Class After Offering
William P. Williams 7975 N. Hayden Rd., Suite D333 Scottsdale, AZ 85258	Common Stock	6,979,833	4.8%	4.8%
William O. Bednarski 5820 Stoneridge Mall Road Suite 100 Pleasanton, CA 94588	Common Stock	670,838	0.5%	0.5%
Michael Malet 2102 Business Center Drive Suite G115 Irvine, CA 92612	Common Stock	792,001	0.5%	0.5%
All Officers and Directors As a Group (3 persons)	Common Stock	8,442,672	5.8%	5.8%
American Nortel Communications, Inc. 7975 N. Hayden Rd., Suite D333 Scottsdale, AZ 85258	Common Stock	21,505,469	14.6%	14.6%
MedCom USA, Incorporated 7975 N. Hayden Rd., Suite D333 Scottsdale, AZ 85258	Common Stock	60,000,000	40.9%	40.9%
(1) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

Securities Authorized for Issuance Under Equity Compensation Plans

The Company has adopted an employee stock option plan, which acts as an incentive stock option plan, under which the Company’s officers, directors, consultants, and employees will be eligible to receive, in relevant part, either securities or stock options exercisable for the Company’s securities at exercise prices that may be equal to or lower than the offering price. The Company has reserved 1,000,000 shares of Common Stock for issuance under this plan. No options have been issued under this plan.

21

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There have been no material transactions during the past two years between us and any officer, director or any stockholder owning greater than 5% of our outstanding shares, nor any of their immediate family members.

AGREEMENTS WITH MEDCOM

Following the spin off, our company and MedCom operate separately, each as independent public companies. In order to govern the relationship between our company and MedCom after the spin off and to provide mechanisms for an orderly transition, we and MedCom are entering into certain agreements which will facilitate the spin off, govern our relationship with MedCom after the spin off and provide for the allocation of tax and other liabilities and obligations. The following is a summary of the terms of the material agreements we are entering into with MedCom.

Separation Agreement

The separation agreement governs the contribution of MedCom’s card technology business to us, the subsequent distribution of shares of our common stock to MedCom stockholders and other matters related to MedCom’s relationship with us. Medcom transferred the assets to us in October 2006.

The Contribution

To effect the contribution, MedCom transferred all of the assets of the card technology business, including its patent to us as described in this prospectus. We have assumed and will agree to perform and fulfill all of the liabilities (including contingent liabilities) of the card technology business in accordance with their respective terms. MedCom has not and will not make any representation or warranty as to the assets or liabilities transferred or assumed as part of the contribution or sale or as to any consents which may be required in connection with the transfers. All assets were transferred on an “as is,” “where is” basis.

The parties agreed to use reasonable best efforts to obtain any required consents, substitutions or amendments required to novate or assign all rights and obligations under any contracts to be transferred in connection with the contribution. We will also use our reasonable best efforts to replace or terminate any guarantees, sureties, bonds, letters of credit or similar instruments made or posted by MedCom, if any, which relate to our business, and indemnify MedCom against any losses it may incur if we are unable to do so.

The Distribution

The separation agreement provides that on the payable date (March 1, 2007), MedCom will distribute one share of our common stock for every one share of its common stock to its stockholders of record as of the end of business on December 15, 2006. MedCom has retained a significant number of shares of our stock. In addition, twelve million shares of our common stock have been reserved, but not issued, to distribute our consultants and employees as consideration for their services in the spin off transaction and establishment of our business plan.

The separation agreement provides that we and MedCom will use our reasonable best efforts to consummate the distribution, including to use such efforts to file a registration statement and any subsequent amendments or supplements thereto with the SEC regarding our common stock and the company, take such actions as may be necessary under state blue-sky laws and prepare and mail to MedCom stockholders such other materials as MedCom determines necessary or desirable and required under law. In addition, the separation agreement provides that we will agree to prepare, file and use our reasonable best efforts to make effective an application for quotation on the OTC Bulletin Board once a market maker seeks to trade it.

Exchange of Information

We and MedCom agree to provide each other with information reasonably necessary to comply with reporting, disclosure or filing requirements of governmental authorities, for use in judicial, regulatory, administrative and other proceedings and to satisfy audit, accounting, claims, litigation or similar requests, business or legal related. We and MedCom also agree to certain record retention and production procedures and agree to cooperate in any litigation as described below. Each party has agreed to maintain at its own cost and expense adequate systems and controls for its business to the extent reasonably necessary to allow the other party to satisfy its reporting, accounting, audit and other obligations. Each party also agrees to provide to the other party all financial and other data and information that the requesting party determines necessary or advisable in order to prepare its financial statements and reports or filings. Each party agrees to use its reasonable best efforts to make available to the other party its current, former and future directors, officers, employees and other personnel or agents who may be used as witnesses and books, records and other documents which may reasonably be required in connection with legal, administrative or other proceedings.

22

Limitation on Damages

We and MedCom agree to waive, and neither we nor MedCom will be able to seek, consequential, special, indirect or incidental damages or punitive damages.

Dispute Resolution

If a dispute arises with MedCom under the separation agreement or any ancillary agreement, we have agreed to the following procedures:

• the dispute will be submitted to a steering committee of two members, one appointed by each of us and MedCom, the decision of such steering committee to be binding on us and MedCom; and

• if resolution through the steering committee fails, the parties can resort to final and binding arbitration unless the suit seeks injunctive relief or specific performance or if the suit involves the tax free treatment of the spin off.

Tax Sharing Agreement

In connection with the separation agreement, we have entered into a tax sharing agreement with MedCom. This agreement (1) governs the allocation of U.S. federal, state, local, and foreign tax liability between us and MedCom, (2) provides for certain restrictions and indemnities in connection with the tax treatment of the distribution, and (3) addresses certain other tax-related matters.

We are obligated to indemnify Medcom USA Incorporated for any tax liability arising from the dividend distribution of Medcom USA incorporated common stock to our shareholders, we may incur tax liability of approximately $6,000.

Allocation of Tax Liability

Prior to December 15, 2006, we were included in MedCom’s consolidated federal income tax returns and were included with MedCom in applicable combined or unitary state and local income tax returns.

• Under the tax sharing agreement, MedCom generally is be liable for all U.S. federal, state, local, and foreign income taxes attributable to us with respect to taxable periods ending on or before December 15, 2006. We are generally liable for all other taxes attributable to us post December 15, 2006.

• MedCom will prepare and file (1) the MedCom consolidated U.S. federal income tax return for all taxable periods, including the taxable periods in which we are included, (2) any MedCom combined, unitary or consolidated state income tax returns for all taxable periods, including the taxable periods in which we are included, (3) all other U.S. federal, state, and local income tax returns for MedCom and its affiliates (including us) with respect to taxable periods ending on or before December 15, 2006, (4) income tax returns for MedCom and its affiliates for post-December 14, 2006 tax periods and (5) certain other tax returns. We will generally prepare and file all other tax returns attributable to us, except that MedCom has the option to prepare and file any income tax return for us with respect to any taxable period beginning before the record date and ending after the record date if it provides us with written notice within 45 days after the end of that taxable period. The party responsible for the tax liability will generally control all decisions affecting audits and legal proceedings with respect to that return.

• Under the tax sharing agreement, we have agreed to indemnify MedCom (and MedCom has agreed to indemnify us) for any tax detriments arising from an inter-group adjustment, but only to the extent we (or MedCom) realize a corresponding tax benefit.

23

Restrictions and Indemnities in Connection with the Tax Treatment of the Distribution

In addition, we have agreed not to engage in certain of the actions described above, whether before or after the two-year period following the spin off, if it is pursuant to an arrangement negotiated (in whole or in part) prior to the first anniversary of the spin off.

This spin off does not qualify as a tax free exchange and will be fully taxable at the fair market value of the common stock distributed declared on December 15, 2006 and distributed on March 1, 2007.  We have retained tax counsel to give us an opinion on taxability of the stock distribution.  See Exhibit 5.2 Tax Opinion.

In connection with the separation agreement, we have entered into a tax sharing agreement with MedCom. This agreement (1) governs the allocation of U.S. federal, state, local, and foreign tax liability between us and MedCom, (2) provides for certain restrictions and indemnities in connection with the tax treatment of the distribution, and (3) addresses certain other tax-related matters.

Administrative Services Agreement

Under an administrative services agreement between the MedCom and us, we have agreed to share certain administrative functions and personnel until we can establish our own administrative operating systems and hire its own personnel.

DESCRIPTION OF SECURITIES

Description of Capital Stock

The Company has authorized a total of 176,000,000 shares, consisting of 175,000,000 shares of Common Stock, par value $0.001 per share, and 1,000,000 shares of Preferred Stock, par value $0.001 per share. As of December 15, 2006, the Company had 146,770,504 shares of Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding.

Common Stock 

Voting Rights 

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders.

Dividends 

Subject to preferences that may be applicable to any then-outstanding shares of Preferred Stock, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds. The Company and its predecessors have not declared any dividends in the past. Further, the Company does not presently contemplate that there will be any future payment of any dividends on Common Stock.

Preferred Stock 

Our board of directors has the authority to issue 1,000,000 shares of preferred stock in one or more series and to determine all of the rights, preferences, privileges and restrictions of the preferred stock. As of the date of this prospectus, the Company does not have any preferred stock issued or outstanding. If we issue any preferred stock in the future, it may have the effect of delaying or preventing a change in control without further action by our stockholders and may adversely affect the voting, dividend and other rights of the holders of our common stock. In addition, the issuance of preferred stock with voting and/or conversion rights may adversely affect the voting power of the holders of our common stock, including the loss of voting control to others.

Options 

The Company has established a 2006 Stock Option Plan (the “Plan”) for employees, directors and consultants and reserved 1,000,000 shares for issuance under the Plan. At the time of this Offering, no options have been issued under this Plan.

24

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no public trading market for our securities although we expect one to develop once the company’s shares are approved for quotation on the OTC Bulletin Board once a market maker seeks to trade it. As of December 15, 2006, 175,000,000 shares of our Common Stock were authorized for issuance and 146,770,504 shares of Common Stock were issued and outstanding. As of December 15, 2006, 1,000,000 shares of our Preferred Stock were authorized for issuance and no shares of Preferred Stock were issued and outstanding.

The Company has not paid any dividends on its capital stock and does not expect to pay dividends for the foreseeable future.

SELLING STOCKHOLDERS

The following table details the name of each selling stockholder, the number of shares owned by that selling stockholder and the number of shares that may be offered by each selling stockholder for sale under this prospectus. The selling stockholders may sell their shares of our Common Stock from time to time in one or more offerings under this prospectus. Because each selling stockholder may offer all, some or none of the shares it holds, and because, based upon information provided to us, there are currently no agreements, arrangements, or understandings with respect to the sale of any of the shares, no definitive estimate as to the number of shares that will be held by each selling stockholder after the Offering can be provided. The following table has been prepared on the assumption that all shares offered under this prospectus will be sold to parties unaffiliated with the selling stockholders. Neither selling stockholder nor any of their affiliates have held a position or office or had any other material relationship with us except for William Williams, our Chief Executive Officer, and, to our knowledge, no selling stockholder is a broker-dealer or an affiliate of a broker-dealer.

	Shares of Common Stock Owned Before the Offering		Shares of Common Stock Being Offered		Shares of Common Stock Owned Upon Completion of the Offering (1)		Percentage of Common Stock Outstanding Upon Completion of Offering (1)
A S Capital Partners, LLC Michael Coughhan		333		333		0		0
About Face Communications LLC		500		500		0		0
Adam Boucher		100,000		100,000		0		0
Alfred Ricciardi		200,000		200,000		0		0
Alice C Rittenhouse &		20,000		20,000		0		0
American Nortel Communications Inc Bill Williams		21,505,469		18,507,051		2,998,418		2
Andrea Lynn Koenig		10,000		10,000		0		0
Andrew Collins		22,223		22,223		0		0
Andrew J Barwicki		11,500		11,500		0		0
Anthony Pizzolo		2,400		2,400		0		0
Arlin D Lapp		10,000		10,000		0		0
Arnold Proskin &		2,889		2,889		0		0
Aspen Enterprises LLC Donald A Boselli Jr.		15,000		15,000		0		0
Bashar Masri		150		150		0		0
Bennett Brown		260,400		260,400		0		0
Bering Cape Limited		5,827		5,827		0		0
Bobby Gross		30		30		0		0
Boselli Marketing		1,250		1,250		0		0
Brenda Gonzalez		3,000		3,000		0		0
Bruce Schames		38		38		0		0
Bruce Weitzberg		100,000		100,000		0		0
Bruno Bieler		300		300		0		0
Bryan Elfers		17,100		17,100		0		0
Cactus & Co		215		215		0		0
Carl H Shaifer		12,000		2,000		10,000	Less than 1
Carol R Ginsberg (Roth Ira)		62,000		62,000		0		0
Carpenter Investment co Harold S. Carpenter		100,000		100,000		0		0
Chad Goslar &		2,000		2,000		0		0
Charles I Colby &		75,758		75,758		0		0
Charles I Colby & Ruth		20,500		20,500		0		0
Charles Schwab & Co in Cust		400,000		400,000		0		0
Charles Wafer		50,000		50,000		0		0
Chet Howard		2,655		2,655		0		0
Chris Viterbo		20,000		20,000		0		0
Christy Matsuoka		178		178		0		0
City Vac Mary H. Kratha		64,000		64,000		0		0
Clark Colby		1,750		1,750		0		0
Claudia O'Neil		1,000		1,000		0		0
Clayton Swartzentruber &		10,000		10,000		0		0
Constance W Price		25,000		25,000		0		0
Cooper Rose & English LLP		88		88		0		0
Craig Kinley		1,000		1,000		0		0
Culinary Specialty Produce Inc		1,789		1,789		0		0
Cynthia M Wyatt		35,000		35,000		0		0

25

	Shares of Common Stock Owned Before the Offering		Shares of Common Stock Being Offered		Shares of Common Stock Owned Upon Completion of the Offering (1)		Percentage of Common Stock Outstanding Upon Completion of Offering (1)
D Scott Landis		5,000		5,000		0		0
Damon C Suter		40,000		40,000		0		0
Daniel D Lowe		64,030		64,030		0		0
Dapeer Rosenblit & Litvac LLP William Litvac		260,456		260,456		0		0
David A Hecker &		484		484		0		0
David Donovan		31,684		31,684		0		0
David H Welch		5,891		5,891		0		0
David P Barnhill		2,500		2,500		0		0
David P Zart &		225		225		0		0
David S Keevins		1,250		1,250		0		0
Donald G Montgomery		15,000		15,000		0		0
Dean Scaffidi		25,000		25,000		0		0
Debbie Peterkin		40		40		0		0
Debi Cobb		950		950		0		0
Debra Morse		4,000		4,000		0		0
Debus & Kazan Ltd Defined Benefit Larry Debus		50,000		50,000		0		0
Denis Roberts &		118		118		0		0
Don Anthony Boselli Jr		445,714		445,714		0		0
Don Watkins		38		38		0		0
Donald E Jennings		24,000		24,000		0		0
Donald G Montgomery		15,000		15,000		0		0
Donald John Casey Family Trust Donald Casey		5,000		5,000		0		0
Douglas C Carroll		750		750		0		0
Dr Michael Valletta		30		30		0		0
Dwight Brooks &		20,000		20,000		0		0
Edward Keevins		1,250		1,250		0		0
Edward Seganti		2,760		2,760		0		0
Elaine Artt		5,000		5,000		0		0
Elizabeth E Mahoney		158		79		79	Less than 1%
Elkhorn Partners		100,000		100,000		0		0
Equity Growth Fund Trust		196,000		196,000		0		0
Eric Chin		206		206		0		0
Eva Williams		200,000		200,000		0		0
FCC as Custodian Fbo		150,000		150,000		0		0
FCC C/f Michael Pierce Ira		100,000		100,000		0		0
First Choice Money Resources Inc		4,000		4,000		0		0
Fohson Investments Pty Ltd		186		186		0		0
Frank A Agnone		71,429		71,429		0		0
Frank H Harvey		6,600		6,600		0		0
G Thomas Finnegan P/S Trust		25,000		25,000		0		0
Gary L Beckwith		30,000		30,000		0		0
Gary L Derscheid		25,000		25,000		0		0
Gary L Schaeffer		35,000		35,000		0		0
George Baron		70		70		0		0
George Borst		200		200		0		0
George H Levy		2,500		2,500		0		0
George Pursglove		5,000		5,000		0		0
George Wenglein &		70,000		70,000		0		0
Gerry Lynn Garland		60		60		0		0
Gloria E Shulman		10,000		10,000		0		0
Gregg Berger		1,372		1,372		0		0

26

	Shares of Common Stock Owned Before the Offering		Shares of Common Stock Being Offered		Shares of Common Stock Owned Upon Completion of the Offering (1)		Percentage of Common Stock Outstanding Upon Completion of Offering (1)
Gregory Mastroieni		50,000		50,000		0		0
Gretchen Menapace-pacheco		16,000		16,000		0		0
Grupo Barak Sa De cv		186		186		0		0
Guarantee & Trust Co T/f James Michael		93,875		93,875		0		0
H Gaylon Boyd		7,500		7,500		0		0
Hal Turkiewicz		1,464		1,464		0		0
Harold B Lewis		2,000		2,000		0		0
Heartland Systems co Harold S. Carpenter		1,590,408		1,590,408		0		0
Howard Arnett		69		69		0		0
J L Tarr		10,000		10,000		0		0
J Philip Boesel Jr		10,000		10,000		0		0
Jack Beaty Trustee		47		47		0		0
James Bowerman		30,000		30,000		0		0
James J Caprio		218		168		0		0
James J Mcloughlin		7,500		7,500		0		0
James M Schneider &		90,909		90,909		0		0
Janal LLLP Al Ghelfi		121,429		50,000		71,429	Less than 1%
Janet Wilma Hecker & David Arthur		200		200		0		0
Jeff Dunn		95,000		250,000		0		0
Jeffery S Lambert		25,000		25,000		0		0
Jeffrey Faelnar		900		900		0		0
Jeffrey Iverson		9,900		9,900		0		0
Jeffrey Nunez		5,827		5,827		0		0
Jennifer E Cohen		10,000		10,000		0		0
Jerome Niedfelt		20,000		20,000		0		0
Jerry V Flatt		146,667		146,667		0		0
Jim G Michaels		25,800		25,800		0		0
Joe Blankenship		30,000		30,000		0		0
Joe Rackley		50,000		50,000		0		0
John Baltey		47		47		0		0
John Boesel		162,500		162,500		0		0
John Boesel Ttee Fbo J B Diversified		93,750		93,750		0		0
John L Wyatt		25,000		25,000		0		0
John Labelle		20		20		0		0
John S Dehne		1,000		1,000		0		0
John W H Opkins		25,000		25,000		0		0
John W Lambert		25,000		25,000		0		0
Joseph A Feste		259,089		259,089		0		0
Joseph Leggio		1,445		1,445		0		0
Joseph Ozimek		1,445		1,445		0		0
Joseph P Ryan		95,000		95,000		0		0
Joseph Sciacca		2,400		2,400		0		0
Joseph W Bell jr		121,515		121,515		0		0
Jta Investments		2,500		2,500		0		0
Julie Signorille		56,892		56,892		0		0
Kathleen L Haruf		35,000		35,000		0		0
Keith Denner		1,659,074		1,659,074		0		0
Kenneth Henricksen		6,000		6,000		0		0
Kenneth Hersh		41,666		41,666		0		0
Kenneth Hiniker (Trustee)		5,000		5,000		0		0
Kenneth S August		506		506		0		0
Kenneth Stilger		11,500		11,500		0		0

27

	Shares of Common Stock Owned Before the Offering		Shares of Common Stock Being Offered		Shares of Common Stock Owned Upon Completion of the Offering (1)		Percentage of Common Stock Outstanding Upon Completion of Offering (1)
Kenneth Y Branagan Irrevocable Trust		142,857		142,857		0		0
Kent Barghols		150,000		150,000		0		0
Kft LLLP Robert H. Kite		44,500		44,500		0		0
L.h.l. Holdings Ltd		36,776		34,454		0		0
Lalit Bhatia		1,500		1,500		0		0
Larry Debus		25,000		25,000		0		0
Larry Debus & Larry Kazan Co Ttees Larry Debus		70,000		70,000		0		0
Larry Kazan		10,000		10,000		0		0
Larry Peery		1,000		1,000		0		0
Lawrence Kazan		15,000		15,000		0		0
Lenn Pritchard		10,000		10,000		0		0
Leon D Ladd & Susan J Lad Ttee		11,334		11,334		0		0
Loren L Turnipseed		12,500		12,500		0		0
Lynnette A O'dell		150,000		150,000		0		0
Manuel Cohen		158,500		158,500		0		0
Margaret Healy		80		80		0		0
Maria Hernandez		60		60		0		0
Marilyn Carpenter		33,334		33,334		0		0
Marion Minchuk		40,000		40,000		0		0
Mark Bennett		18,750		18,750		0		0
Mark Brunell		629,729		629,729		0		0
Mark Brunell Enterprises Mark Brunell		1,250		1,250		0		0
Mark Cohen		30,000		30,000		0		0
Marvin Berger		1,400		1,400		0		0
Mary Rebecca Lacy		25,000		25,000		0		0
Michael Albarran		10,000		10,000		0		0
Michael Allen Zapara &		543		543		0		0
Michael Archibald &		20,000		20,000		0		0
Michael Associates		350,000		350,000		0		0
Michael F Herman &		20,000		20,000		0		0
Michael Hughes		1,100		1,100		0		0
Michael L Olson		273,611		273,611		0		0
Michael N Malet		792,001		792,001		0		0
Michael W Donnelly		10		10		0		0
Michael Waldrop		6		6		0		0
Michael Williams		344,090		344,090		0		0
Millenium Surety Limited		16,000		16,000		0		0
Mitchell Mazur		32,666		32,666		0		0
Morse Financial Inc		20		20		0		0
Murray Y Alderfer		10,000		10,000		0		0
National Financial Communications Corp		9,083		9,083		0		0
Nicholas Calakos		30		30		0		0
Nicholas D McKay Sr Ttee FBO		20,000		20,000		0		0
Niko Sokol		1,230		150		0		0
Noel C Novarro		7,500		7,500		0		0
Norman Herd Jr		10,000		10,000		0		0
Octagon Defined Benefit Plan Donald D. Meyers		10,000		10,000		0		0
Patrick Alston		200		200		0		0
Patrick M Hartnett		692		692		0		0
Paul Stork		1,250		1,250		0		0
Paula Palermo &		10,000		10,000		0		0
Peter D Finch		100,000		100,000		0		0

28

	Shares of Common Stock Owned Before the Offering		Shares of Common Stock Being Offered		Shares of Common Stock Owned Upon Completion of the Offering (1)		Percentage of Common Stock Outstanding Upon Completion of Offering (1)
Peter Ventrano		139		139		0		0
Philip W Wyatt		324,000		324,000		0		0
Philip W Wyatt &		606,670		606,670		0		0
Powers Trust Investments Defined John M Powers		20,000		20,000		0		0
Randolph C Titzck		150,000		150,000		0		0
Randy Ford		4,000		4,000		0		0
Rayne Forecast Inc Todd Davis		325,000		325,000		0		0
Reid Johnson		220,000		220,000		0		0
Rich Options Co		4,000		4,000		0		0
Richard B Kelly		2,500		2,500		0		0
Richard B Osborne &		12,500		12,500		0		0
Richard D Koenig		10,000		10,000		0		0
Richard Emery		2,000		2,000		0		0
Richmark Capital Corp		6,000		6,000		0		0
Roamin Korp Inc. Robert H. Kite		20,000		20,000		0		0
Robert Brock		100,000		100,000		0		0
Robert H Kite		640,000		640,000		0		0
Rodney Fingleson		5,000		5,000		0		0
Ron Ressel		774		774		0		0
Ronald Pizzolo		2,400		2,400		0		0
Roy A Kite		52,000		52,000		0		0
Roy A Kite & Linda R Kite Cottees		70,000		70,000		0		0
Roy A Kite III		400,000		400,000		0		0
Russell Benda &		21,500		21,500		0		0
Russell P Benda		2,400		2,400		0		0
Ruth Colby Trust "A"		13,000		13,000		0		0
Sandpiper Synergies L.P. J.R. Moody		25,000		25,000		0		0
Sandra K Gralnek		1,000		1,000		0		0
Scott Bransdorf		48		48		0		0
Sean R Ryan		115,000		115,000		0		0
Sharon Johnson		1,250,000		1,250,000		0		0
Sherwood Forest Co		35,000		35,000		0		0
SMP Financial Consultants Inc		12,600		12,600		0		0
Southwest Ventures Larry Kohler		20,000		20,000		0		0
SRK LLC		159		159		0		0
Stephen Reese		32,000		32,000		0		0
TDTF Partnership James H. Feller		116,667		116,667		0		0
Teri Wenglein-Callender		10,000		10,000		0		0
Texas Capital Securities Inc		1,250		1,250		0		0
The CTK 2004 Trust		183,333		183,333		0		0
The Park Bench Trust Howard S. Berger		6,500		6,500		0		0
The Titzck Family Revocable Trust Clemins Titzck		500,000		500,000		0		0
Tho Hoc Trieu		760		760		0		0
Thomas Cacciolla		139		139		0		0
Thomas G Mangan		6,000		6,000		0		0
Thor Iverson		2,100		2,100		0		0
Trustees Thomas,Thomas,Armstrong &		5,000		5,000		0		0
Tyson Rackley		100,000		100,000		0		0
Vincent A Sentner		71		71		0		0
Wendy Bennett		1,500		1,500		0		0
Wendy E Wyatt		196,000		196,000		0		0
Wilcom Inc Bill Williams		4,383,333		4,383,333		0		0

29

	Shares of Common Stock Owned Before the Offering		Shares of Common Stock Being Offered		Shares of Common Stock Owned Upon Completion of the Offering (1)		Percentage of Common Stock Outstanding Upon Completion of Offering (1)
William Eickenberg		4,500		4,500		0		0
William J Felsenthal		252,000		252,000		0		0
William L Bednarski		500,000		500,000		0		0
William Litvak		79		79		0		0
William M Goatley Rev Trust		15,000		15,000		0		0
William McNary		388		388		0		0
William Williams		10,000		10,000		0		0
Williams Family Trust		2,586,500		2,586,500		0		0
Yaffa Fried		1,038		1,038		0		0

(1) Presumes the sale of all shares offered.

PLAN OF DISTRIBUTION

The Common Stock offered by this prospectus is being offered by the selling stockholders. The Common Stock may be sold or distributed from time to time by the selling stockholders directly to one or more investors or through brokers, dealers or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The sale of the Common Stock offered by this prospectus may be effected in one or more of the following methods:

• ordinary brokers’ transactions,

• through brokers, dealers, or underwriters who may act solely as agents,

• “at the market” into an existing market for the Common Stock,

• in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents,

• in privately negotiated transactions, and

• any combination of the foregoing.

In order to comply with the securities laws of certain states, if applicable, the Common Stock may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the Common Stock may not be sold unless the shares have been registered or qualified for sale in the state or an exemption from the registration or qualification requirement is available and complied with.

The selling stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended, in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the Common Stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act of 1933, as amended.

We will pay all of the expenses incident to the registration, offering, and sale of the Common Stock to the public other than commissions or discounts of underwriters, broker-dealers or agents.

While they are engaged in a distribution of the Common Stock included in this prospectus the selling stockholders are required to comply with Regulation M promulgated under the Securities Exchange Act of 1934, as amended. With certain exceptions, Regulation M precludes the selling stockholders, any affiliated purchasers and any broker-dealer or other person who participates in the distribution, from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the Common Stock offered by this prospectus.

30

USE OF PROCEEDS

This prospectus relates to shares of our Common Stock that may be offered and sold from time to time by selling stockholders. We will receive no proceeds from their sale of shares of Common Stock in this Offering.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

The Company’s charter and bylaws provide that directors and officers shall be indemnified by the Company to the fullest extent authorized by the General Corporation Law of the State of Delaware, against all expenses and liabilities reasonably incurred in connection with services for the Company or on its behalf.

Insofar as indemnification for liabilities arising under the Securities Act might be permitted to directors, officers or persons controlling our Company under the provisions described above, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

INDEPENDENT PUBLIC ACCOUNTANTS

The audited financial statements of our Company for the period August 29, 2006 through September 30, 2006 have been audited by S E Clark & Company P.C., independent public accountants. The report of S E Clark & Company P.C., which appears elsewhere herein, includes an explanatory paragraph as to the ability of our Company to continue as a going concern. The financial statements of our Company are included in reliance upon such report and upon the authority of such firm as an expert in auditing and accounting.

FURTHER INFORMATION

We will become subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and file reports, proxy statements and other information with the Securities and Exchange Commission. These reports, proxy statements and other information may be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at 100 F. Street, N.E., Room 1580, Washington, D.C. 20549 and at the Securities and Exchange Commission’s regional offices. You can obtain copies of these materials from the Public Reference Section of the Securities and Exchange Commission upon payment of fees prescribed by the Securities and Exchange Commission. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission’s Web site contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. The address of that site is http://www.sec.gov.

31

CARD ACTIVATION TECHNOLOGIES, INC.

Development Stage Company

TABLE OF CONTENTS

	Page
CONDENSED FINANCIAL STATEMENTS:
Condensed Balance Sheet at March  31, 2007	F-2
Condensed Statements of Operations for the three and six months  ended March  31, 2007	F-3
and for the period from August 29, 2006 (inception) to March 31, 2007
Condensed Statements of Stockholders’ Equity for the six months ended March  31, 2007	F-4
and for the period from August 29, 2006 (inception) to March 31, 2007
Condensed Statements of Cash Flows for the six months ended March 31, 2007	F-5
and for the period from August 29, 2006 (inception) to March 31, 2007
NOTES TO CONDENSED FINANCIAL STATEMENTS	F-6

F-1

CARD ACTIVATION TECHNOLOGIES INC.

CONDENSED BALANCE SHEET

Development Stage Company

	Unaudited
	March 31, 2007
ASSETS
CURRENT ASSETS
Cash	$	-
Total current assets		-
TOTAL ASSETS	$	-
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable	$	32,735
Accrued Liabilities		-
Total current liabilities		32,735
Loans Payable - Affiliate		62,641
Total liabilities		95,377
STOCKHOLDERS' DEFICIT:
Preferred stock, $.0001 par value, 1,000,000 shares authorized  0 issued and outstanding		-
Common stock, $.0001 par value, 175,000,000 shares authorized  146,770,504 outstanding		14,677
		-
Paid in capital		-
Accumulated deficit		(110,054	)
Total stockholders' deficit		(95,377	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	-

The accompanying notes are an integral part of these financial statements

F-2

CARD ACTIVATION TECHNOLOGIES INC.

CONDENSED STATEMENT OF OPERATIONS

Development Stage Company

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2007

AND FOR THE PERIOD FROM AUGUST 29, 2006 (INCEPTION) TO MARCH 31, 2007

	Three Months			Six Months			For the Period from August 29, 2006 (inception) to March 31, 2007
Revenue		-			-			-
Total		-			-			-
OPERATING EXPENSES:
General and Administrative		15,000			94,296			110,054
Total operating expenses		15,000			94,296			110,054
OPERATING LOSS		(15,000	)		(94,296	)		(110,054	)
OTHER (INCOME) AND EXPENSES
Total other expense		-			-			-
LOSS BEFORE INCOME TAXES		(15,000	)		(94,296	)		(110,054	)
INCOME TAX (BENEFIT) PROVISION		-			-			-
NET LOSS	$	(15,000	)	$	(94,296	)	$	(110,054	)
NET LOSS PER SHARE:
Basic:		(0.00	)		(0.01	)
Diluted:		(0.00	)		(0.01	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		14,677,504			14,677,504
Diluted		14,677,504			14,677,504

The accompanying notes are an integral part of these financial statements

F-3

CARD ACTIVATION TECHNOLOGIES INC.

Development Stage Company

CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT FOR

FOR SIX MONTHS ENDED MARCH 31, 2007

AND FOR THE PERIOD FROM AUGUST 29, 2006 (INCEPTION) TO MARCH 31, 2007

	Common Stock				Preferred Stock				Treasury		Accumulated
	Shares		Amount		Shares		Amount		Stock		Deficit			Total
							$	-	$	-					-
Stock Issued August 29, 2006		-		-											-
September 30, 2006 Accumulated Deficit												(15,758	)		(15,758	)
September 30, 2006		-		-		-		-		-		(15,758	)		(15,758	)
Stock issued in Spin off		146,770,504		14,677											14,677
March 31, 2007 Accumulated Deficit												(94,296	)		(94,296	)
March 31, 2007		146,770,504		14,677		-		-		-		(110,054	)		(95,377	)

The accompanying notes are an integral part of these financial statements

F-4

CARD ACTIVATION TECHNOLOGIES INC.

CONDENSED STATEMENT OF CASH FLOWS

Development Stage Company

FOR THE SIX MONTHS ENDED MARCH 31, 2007

AND FOR THE PERIOD FROM AUGUST 29, 2006 (INCEPTION) TO MARCH 31, 2007

CASH FLOWS FROM OPERATING ACTIVITIES:	Six Months			For the Period from August 29, 2006 (inception) to March 31, 2007
Net (loss)	$	(94,296	)	$	(110,054	)
Adjustments to reconcile net income to net cash
(used in) operating activities:
Common Stock Issued in Spin off		14,677			14,677
Changes in assets and liabilities:
Accounts payable		32,736			48,494
Net cash  (used in) operating activities		(46,883	)		(46,883	)
CASH FLOWS FROM INVESTING ACTIVITIES:
		-			-
Net cash from investing activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES:
		-			-
Loans from Affiliates		46,883			46,883
Net cash provided by financing activities		46,883			46,883
INCREASE IN CASH		-			-
CASH, BEGINNING OF YEAR		-			-
CASH, END OF YEAR		-			-

The accompanying notes are an integral part of these financial statements

F-5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BACKGROUND

Card Activation Technologies, Inc. (“CAT or The Company”) was incorporated in the state of Delaware on August 29, 2006. The Company is a development stage company and is a wholly owned subsidiary of MedCom USA, Incorporated (EMED.OB). The company received, through a spin off, the ownership of a patent of MedCom USA Incorporated. The company has not begun the process of operating this business and is still in the process of reviewing the impact of the patent infringement costs, and future cash flow from successful litigation. The Company was incorporated for the sole purpose of financing and litigation patent infringements related to the unauthorized use of electronic activation of phone, gift and infinity cards. CAT is incorporated in Delaware with the focus on the licensing of the proprietary patented technology of electronic activation of phone, gift and affinity cards.

The MedCom Management intends to spin off Card Activation Technology, Inc. into a separately traded company. Under the current plan, shareholders will receive one share in the new entity for each share of MedCom they own on the record date. The MedCom Renewable card system patent was created by MedCom as part of its card building technology endeavors in the 1990's. The patent covers the technology and process for taking a card with a magnetic strip or other data capture mechanism and activating the card by downloading a determined monetary value onto the card for use at a later date for different types of transactions. This process can be utilized for prepaid phone cards, gift cards, and affinity cards. New View Technologies, which was acquired by MedCom in December 1996, developed the patent and all patents were assigned by New View Technologies to MedCom.

Our fiscal year end is September 30, 2006.

NOTE 2 - INTERIM FINANCIAL STATEMENTS

The interim financial statements presented herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The interim financial statements, notes and accounting policies included in the Company's on Form l0-SB for the year ended September 30, 2006 as filed with the SEC. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of financial position as of March 31, 2007 and the related operating results and cash flows for the interim period presented have been made. The results of operations, for the period presented are not necessarily indicative of the results to be expected for the year.

F-6

CARD ACTIVATION TECHNOLOGIES, INC.

Development Stage Company

AUDITED FINANCIAL STATEMENTS

For the Period Ended September 30, 2006

With Report of Registered Public Accountants

F-7

CARD ACTIVATION TECHNOLOGIES, INC.

Development Stage Company

TABLE OF CONTENTS

	Page
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM:	F-9
S E Clark & Company P.C.
CONSOLIDATED FINANCIAL STATEMENTS:
Balance Sheet at September 30, 2006	F-10
Statements of Operations for the period ended September 30, 2006	F-11
Statements of Stockholders’ Equity for the period ended September 30, 2006	F-12
Statements of Cash Flows for the period ended September 30, 2006	F-13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-14

F-8

S.E.Clark & Company, P.C.

Registered Firm: Public Company Accounting Oversight Board

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Card Activation Technologies, Inc.

Scottsdale, Arizona

We have audited the accompanying balance sheet of Card Activation Technologies, Inc. (the "Company"), as of September 30, 2006 and the related statements of operations, changes in stockholders’ equity, and cash flows for the current and accumulated period then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board, generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 Card Activation Technologies, Inc. (the "Company"), as of September 30, 2006 and the results of its operations and its cash flows for the current and accumulated periods then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the accumulation of losses and shortage of capital raise substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

/s/ S.E.Clark & Company, P.C.

Tucson, Arizona

December 15, 2006

744 N. Country Club Road, Tucson, AZ 85716 (520) 323-7774, Fax (520) 323-8174, seclarkcpa@aol.com

F-9

CARD ACTIVATION TECHNOLOGIES INC.

BALANCE SHEET

Development Stage Company

	September30,
	2006
ASSETS
CURRENT ASSETS:
Cash	$	—
Total current assets		—
TOTAL ASSETS	$	—
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	—
Accrued Liabilities		—
Total current liabilities		—
Loans Payable—Affiliate		15,758
		15,758
STOCKHOLDERS’ DEFICIT:
Common stock, $.0001par value, 175,000,000shares authorized 0 issued and outstanding		—
Preferred shares, $.001par value, 1,000,000shares authorized 0 issued and outstanding		—
Paid in capital		—
Accumulated deficit		(15,758	)
Total stockholders’ deficit		(15,758	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	—

See accompanying notes to financial statements

F-10

CARD ACTIVATION TECHNOLOGIES INC.

STATEMENT OF OPERATIONS

Development Stage Company

FOR THE CURRENT AND ACCUMULATED

PERIOD ENDED SEPTEMBER30, 2006

	2006
REVENUES:
Revenue	$	—
Total		—
OPERATING EXPENSES:
General and Administrative		15,758
Selling and Marketing		—
Depreciation and amortization		—
Total operating expenses		15,758
OPERATING LOSS		(15,758	)
OTHER (INCOME) AND EXPENSES
Interest Expense		—
Total other expense		—
LOSS BEFORE INCOME TAXES		(15,758	)
INCOME TAX (BENEFIT) PROVISION		—
NET LOSS PER SHARE	$	(15,758	)
NET LOSS PER SHARE
Basic:	$	—
Diluted:	$	—
WEIGHTED AVERAGE COMMON SHARESOUTSTANDING
Basic:		—
Diluted:		—

See accompanying notes to financial statements

F-11

CARD ACTIVATION TECHNOLOGIES INC.

STATEMENT OF CASH FLOWS

Development Stage Company

FOR THE CURRENT AND ACCUMULATED

PERIOD ENDED SEPTEMBER30, 2006

	2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(15,758	)
Adjustments to reconcile net income to net cash (used in) operating activities:
Depreciation and amortization		—
Change in assets and liabilities:
Accrued Liabilities		—
Accounts payable		—
Net cash (used in) operating activities		(15,758	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (used in) provided by investing activities		—
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Common Stock		—
Loans from Affiliates		15,578
Net cash provided by financing activities		15,578
INCREASE IN CASH		—
CASH, BEGINNING OF YEAR		—
CASH, END OF YEAR	$	—

See accompanying notes to financial statements

F-12

CARD ACTIVATION TECHNOLOGIES INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

Development Stage Company

FOR THE CURRENT AND ACCUMULATED

PERIOD ENDED SEPTEMBER30, 2006

	Common Stock				Paid-in		Accumulated
	Shares		Amount		Capital		Deficit			Total
					$	—					—
											—
Accumulated Deficit					$	—	$	(15,758	)	$	(15,758	)
Balance at September30, 2006		—		—	$	—	$	(15,758	)	$	(15,758	)

See accompanying notes to financial statements

F-13

CARD ACTIVATION TECHNOLOGIES, INC.

Development Stage Company

NOTES TO FINANCIAL STATEMENTS

FOR THE PERIOD ENDING SEPTEMBER 30, 2006

1. DESCRIPTION OF BUSINESS

Card Activation Technologies, Inc. (“CAT or The Company”) was incorporated in the state of Delaware on August 29, 2006. The Company is a development stage company and is a wholly owned subsidiary of MedCom USA, Incorporated (EMED.OB). The company received, through a spin off, the ownership of a patent of MedCom USA Incorporated. The company has not begun the process of operating this business and is still in the process of reviewing the impact of the patent infringement costs, and future cash flow from successful litigation. The Company was incorporated for the sole purpose of financing and litigation patent infringements related to the unauthorized use of electronic activation of phone, gift and infinity cards. CAT is incorporated in Delaware with the focus on the licensing of the proprietary patented technology of electronic activation of phone, gift and affinity cards

The MedCom Management intends to spin off Card Activation Technology, Inc. into a separately traded company. Under the current plan, shareholders will receive one share in the new entity for each share of MedCom they own on the record date. The MedCom Renewable card system patent was created by MedCom as part of its card building technology endeavors in the 1990's. The patent covers the technology and process for taking a card with a magnetic strip or other data capture mechanism and activating the card by downloading a determined monetary value onto the card for use at a later date for different types of transactions. This process can be utilized for prepaid phone cards, gift cards, and affinity cards. New View Technologies, which was acquired by MedCom in December 1996, developed the patent and all patents were assigned by New View Technologies to MedCom.

2. BASIS OF PRESENTATION

The accompanying financial statements represent the financial position and results of operations of the Company and includes the accounts and results of operations of the Company. The accompanying financial statements include only the subsidiary Company for the period ended September 30, 2006.

3. GOING CONCERN ISSUES

Management cannot provide any assurances that they will be able to secure sufficient funds to satisfy the cash requirements for the next 12 months. The inability to secure additional funds would have a material adverse effect on the Company.

These financial statements are presented on the basis that the Company will continue as a going concern. Other than the previously disclosed impairments, no adjustments have been made to these financial statements to give effect to valuation adjustments that may be necessary in the event the Company is not able to continue as a going concern. The effect of those adjustments, if any, could be substantial.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). A summary of the Company's significant accounting policies follows:

(a) Nature of Business

The Company was incorporated in Delaware on August 29, 2006 and is a development stage company. The company is in the process of determining the expected cash flow from the patent infringement litigation.

F-14

(b) Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

The primary management estimates included in these financial statements are the impairment reserves applied to various long-lived assets and the fair value of its stock tendered in various non-monetary transactions.

(c) Property and Equipment

Property and equipment will be recorded at cost less impairment and accumulated depreciation. Depreciation will be recorded using the straight-line method.

Management periodically assesses its ability to recover the cost of its long-lived assets in accordance with the provisions of SFAS 144. Costs deemed not recoverable are charged to operations and the asset cost reduced by the estimated impairment.

(d) Cash and Cash Equivalents

Cash includes all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Cash balances are insured by the F.D.I.C. up to $100,000 per institution.

(e) Fair Value of Financial Instruments

The financial instruments disclosed elsewhere in these notes are deemed to be representative of their fair values, as the interest rates approximate market rates giving consideration to their respective risks. The Company has applied certain assumptions in estimating these fair values. The use of different assumptions or methodologies may have a material effect on the estimates of fair values.

(f) Income Taxes

The Company provides for income taxes based on the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which, among other things, requires that recognition of deferred income taxes be measured by the provisions of enacted tax laws in effect at the date of financial statements.

(g) Net Loss Per Share

Net Loss Per Share is calculated using the weighted average number of shares of common stock outstanding during the year. The Company has adopted the provisions of SFAS No. 128 Earnings Per Share.

(h) Stock-Based Compensation

Statements of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, (“SFAS 123”) established accounting and disclosure requirements using a fair-value based method of accounting for stock-based employee compensation. In accordance with SFAS 123, the Company has elected to continue accounting for stock based compensation using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."

The Company accounts for stock awards issued to nonemployees in accordance with the provisions of SFAS 123 and Emerging Issues Task Force (“EITF”) Issue No. 96-18 Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services. Under SFAS 123 and EITF 96-18, stock awards to nonemployees are accounted for at their fair value as determined under Black-Scholes option pricing model.

F-15

(i) Intangible Assets

The Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 142, Goodwill and Other Intangible Assets, effective July 1, 2002. As a result, the Company discontinued amortization of goodwill, and instead annually evaluates the carrying value of goodwill for impairment, in accordance with the provisions of SFAS No. 142. The Company holds one asset the cost basis of the development of the patent infringement litigation. The Company owns the patent technology of the electronic activation of gift, Affinity, and phone cards the patent had a cost basis of $13,100 of legal costs related to the establishment of the patent. MedCom impaired the entire value of the patent cost because there were not yet any proven revenues related to the patent infringement litigation.

Research and Development costs are expensed as incurred.

Impairment of Long-Lived Assets is assessed by the Company for impairment whenever there is an indication that the carrying amount of the asset may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows generated by those assets to the assets’ net carrying value. The amount of impairment loss, if any, is measured as the difference between the net book value of the assets and the estimated fair value of the related assets.

5. SHARE CAPITAL

On August 29, 2006, the Company authorized 175,000,000 shares of common stock, at $.0001 par value and no shares were issued to its shareholders. The company authorized 1,000,000 of preferred shares at a par value of .001 and no shares were issued to its shareholders as of September 30, 2006.

6. INCOME TAXES

The Company recognizes deferred income taxes for the differences between financial accounting and tax bases of assets and liabilities. CAT is a wholly owned subsidiary of MedCom and will be spun off as a taxable exchange and as the there will a proportionate distribution of stock based on the shareholders of record at a particular date to be determined.  Medcom will retain 40.9% of the stock distribution whereas this does not qualify as a tax free exchange.  The overall tax consequence to all the shareholders is approximately $14,700.  The stock had no value at the time of spin-off and the only tangible valuation to assign to the taxability of the stock received is par value.   

7. COMMITMENTS AND CONTINGENCIES

The Company has entered into various consulting agreements with outside consultants. However, certain of these agreements included additional compensation on the basis of performance. The consulting agreement are with key shareholders that are instrumental to the success of the company and its development of it product.

8. RELATED PARTY TRANSACTIONS

Card Activation is managed by its key officer and director William P. Williams as of September 30, 2006. The company appointed William Bednarski as the Company’s Chief Operating Officer. Mr. Williams is the single largest shareholder, sole officer, and director of MedCom.

9. NET LOSS PER SHARE

Restricted shares and warrants are not included in the computation of the weighted average number of shares outstanding during the periods. There are no restricted shares or warrants issued in the Capital of Card Activation. The net loss per common share is calculated by dividing the consolidated loss by the weighted average number of shares outstanding during the periods.

10. SUBSEQUENT EVENTS

The company’s management consisted of William P. Williams CEO and William Bednarski COO. The company received a patented technology that litigation of patent infringement will ensue. The Company has sent out notice of patent infringement to three very large abuses and unauthorized use of the company’s patent technology. The company is related to MedCom and the key officer and Directors will be the key to success to this development stage company.

Pursuant to the above the following action has been taken:

On October 13, 2006 a patent infringement suit was filed against McDonald’s Corporation and Walgreen Co, et al, in the Federal District Court for the Northern District of Illinois.

F-16

On November 28, 2006 a patent infringement suit was filed against Sears Holding Corporation, also in the Federal District Court for the Northern District of Illinois.

The intellectual property attorneys are pursuing these cases on a contingent fee basis, whereby they will receive approximately 35% of amounts recovered, if successful.

Spin Off

On October 31, 2006, the MedCom board of directors declared a stock dividend to its shareholders of record at the end of business on December 15, 2006 of one share of Common Stock in the Company for every one share of common stock of MedCom owned by its shareholders. This was a dividend of 86,770,504 shares of our Common Stock. MedCom retained the balance of 60,000,000 shares of Common Stock.

Following the spin off, CAT and MedCom will operate separately, each as independent public companies. In order to govern the relationship between our company and MedCom after the spin off and to provide mechanisms for an orderly transition, we and MedCom are entering into certain agreements which will facilitate the spin off, govern our relationship with MedCom after the spin off and provide for the allocation of tax and other liabilities and obligations.

The following is a summary of the terms of the material agreements we are entering into with MedCom.

Separation Agreement

The separation agreement governs the contribution of MedCom’s card technology business to us, the subsequent distribution of shares of our common stock to MedCom stockholders and other matters related to MedCom’s relationship with us.

Tax Sharing Agreement

In connection with the separation agreement, we have entered into a tax sharing agreement with MedCom. This agreement (1) governs the allocation of U.S. federal, state, local, and foreign tax liability between us and MedCom, (2) provides for certain restrictions and indemnities in connection with the tax treatment of the distribution, and (3) addresses certain other tax-related matters.

Administrative Services Agreement

Under an administrative services agreement between the MedCom and us, we have agreed to share certain administrative functions and personnel until we can establish our own administrative operating systems and hire its own personnel.

Stock Option Plan

On October 31, 2006, the Company adopted an employee stock option plan, which acts as an incentive stock option plan, under which the Company’s officers, directors, consultants, and employees will be eligible to receive, in relevant part, either securities or stock options exercisable for the Company’s securities at exercise prices that may be equal to or lower than the offering price. The Company has reserved 1,000,000 shares of Common Stock for issuance under this plan. No options have been issued under this plan.

* * * * * *

F-17

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS 

ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS 

Section 145 of the General Corporation Law of the State Delaware allows a corporation to indemnify any officer, director, employee or agent who is a party or is threatened to be made a party to a litigation by reason of the fact that he or she is or was an officer, director, employee or agent of the corporation, or is or was serving at the request of the corporation as an officer, director, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such director or officer if:

• the person acted in good faith and in a manner the 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 the person’s conduct was unlawful.

Our Certificate of Incorporation provides for the indemnification of our officers and directors to the maximum extent permitted by Delaware law, and also provides that:

No director of the Corporation shall have any personal liability to the Corporation or to any of its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that this provision eliminating such personal liability of a director shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under §174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

The Company’s bylaws provide that directors and officers shall be indemnified by the Company to the fullest extent authorized by the Delaware General Corporation Law, against all expenses and liabilities reasonably incurred in connection with services for the Company or on its behalf.

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

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 

The following table sets forth the fees and expenses the Company expects to incur in connection with the distribution of the securities being registered. The selling stockholders will not be responsible for any such fees. With the exception of the SEC registration fee, all amounts are estimates.

52

NATURE OF EXPENSE AMOUNT
SEC Registration fee	$	1,188.55
Accounting Fee and Expenses		5,000.00
Audit Fee and Expenses		10,000.00
Legal Fees and Expenses		25,000.00
Printing Expense		8,000.00
Transfer Agent		2,000.00
Miscellaneous		3,811.45
TOTAL	$	55,000.00

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES 

None.

ITEM 27. EXHIBITS 

Exhibit
No.	Description
3.1	Certificate of Incorporation of Card Activation Technologies Inc., filed with the Secretary of State of Delaware August 29, 2006
3.2	Bylaws of Card Activation Technologies Inc.
5.1	Opinion of Joseph I. Emas, Attorney at Law
5.2	Tax Opinion of David Kozak, Esq. of Mohr Hackett, Pederson, Blakely, and Randolph, P.C.
10.1	The Company 2006 Stock Option Plan
10.2	Separation Agreement with MedCom
10.3	Tax Sharing Agreement with MedCom
10.4	Administrative Services Agreement with MedCom
10.5	Revolving Line of Credit with Medcom USA Incorporated
23.1	Consent of Joseph Emas, Attorney at Law (see 5.1 opinion)
23.2	Consent of Independent Registered Public Accounting Firm of S E Clark & Company P.C.

53

ITEM 28. UNDERTAKINGS 

The Company hereby undertakes that it will:

(1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to:

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

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

(iii) Include any additional or changed material information on the plan of distribution.

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

(3) Deregister any of the securities that remain unsold at the end of the offering.

54

SIGNATURES 

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Scottsdale, State of Arizona on June 22, 2007.

Card Activation Technologies Inc.
By:	/s/ William P. Williams
	Chief Financial Officer

POWER OF ATTORNEY 

Each person whose signature to this registration statement appears below hereby constitutes and appoints William P. Williams as his true and lawful attorney-in-fact and agent, with full power of substitution, to sign on his behalf individually and in the capacity stated below and to perform any acts necessary to be done in order to file all amendments to this registration statement and any and all instruments or documents filed as part of or in connection with this registration statement or the amendments thereto and each of the undersigned does hereby ratify and confirm all that said attorney-in-fact and agent, or his substitutes, shall do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated:

Signature	Title	Date
/s/ William P. Williams	President, Chief Executive Officer, Chief Financial Officer, Principle Accounting Officer, and Sole Director	June 22, 2007
William P. Williams

55

EX-3.1

                                                                     EXHIBIT 3.1

                                                        State of Delaware
                                                       Secretary of State
                                                    Division of Corporations
                                                  Delivered 03:56 PM 08/29/2006
                                                     FILED 03:56 pm 08/29/06
                                                  SRV 060804065 - 4211899 FILE


                          CERTIFICATE OF INCORPORATION
                                       OF
                        CARD ACTIVATION TECHNOLOGIES INC.

     FIRST:  The  name  of  the corporation is Card Activation Technologies Inc.
(the  "Corporation").

     SECOND:  The  registered office of the Corporation in the State of Delaware
is  located  at  300 Martin Luther King Blvd., Suite 200, Wilmington, New Castle
County,  Delaware  19801  and  its  registered  agent  is  DCG  Services,  LLC.

     THIRD:  The  purpose  of  the Corporation and the nature and objects of the
business  to be transacted, promoted, and carried on are to engage in any lawful
act  or  activity  for  which  corporations  may  be organized under the General
Corporation  Law  of  Delaware  ("DGCL").

     FOURTH:  The  total  number  of shares of stock which the Corporation shall
have authority to issue is one hundred seventy-five million (175,000,000) shares
of  Common  Stock  with  a  par  value  of $0.0001 per share (hereinafter called
"Common Stock") and one million (1,000,000) shares of Preferred Stock with a par
value  of  $0.001  (hereinafter  called  "Preferred  Stock").

     FIFTH:  The  number  of directors constituting the entire Board shall be as
set  forth  in  or  determined  pursuant  to  the  By-laws  of  the Corporation.

     SIXTH:  No director of the Corporation shall have any personal liability to
the Corporation or to any of its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this provision eliminating
such personal liability of a director shall not eliminate or limit the liability
of  a  director  (i)  for  any  breach  of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which  involve intentional misconduct or a knowing violation of law, (iii) under
174  of the DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit.  If the DGCL is amended to authorize corporate action
further  eliminating  or  limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest  extent  permitted  by  the  DGCL  as  so  amended.

     SEVENTH:  The name and address of the incorporator is Judith T. Kaiser, 300
Martin  Luther  King  Blvd.,  Suite  200,  Wilmington,  Delaware  19801.

     EIGHTH:  All  of the powers of this Corporation, insofar as the same may be
lawfully  vested by this Certificate of Incorporation in the Board of Directors,
are  hereby  conferred  upon  the  Board  of  Directors of this Corporation.  In
furtherance  and  not  in  limitation of that power the Board of Directors shall
have the power to make, adopt, alter, amend and repeal from time to time by-laws
of  this  Corporation, subject to the right of the shareholders entitled to vote
with respect thereto to adopt, alter, amend and repeal by-laws made by the Board
of  Directors.



     NINTH:  The  election  of  directors  need  not  be  by  written  ballot.

     TENTH:  The  Corporation  reserves  the  right  to amend, alter, change, or
repeal  any  provision  contained  in  this  certificate of incorporation in the
manner  now or hereafter prescribed by law and all rights conferred on officers,
directors,  and  stockholders  herein  are  granted subject to this reservation.

     THE  UNDERSIGNED  INCORPORATOR,  for  the  purpose of forming a corporation
under  the  laws  of  the  State  of  Delaware,  does make, file and record this
Certificate  of  Incorporation,  and  does  hereby declare that the facts herein
stated  are  true  and  I  have accordingly set my hand this 27th day of August,
2006.


                                        /s/ Judith T. Kaiser
                                        --------------------
                                        Judith T. Kaiser
                                        Incorporator


                                        2

EX-3.2

                                                                     EXHIBIT 3.2

                                   BY-LAWS OF
                        CARD ACTIVATION TECHNOLOGIES INC.

                                    ARTICLE I
                            MEETINGS OF STOCKHOLDERS

     Section 1.  Annual Meeting.  The annual meeting of the stockholders of Card
     ---------   --------------
Activation  Technologies Inc. (the "Corporation") shall be held on such date and
at  such  time as the Board of Directors may designate.  At such annual meeting,
the  stockholders entitled to vote shall elect directors and transact such other
business  as  may  be  properly  brought  before  the  meeting.

     Section  2.  Special Meetings.  Special meetings of the stockholders may be
     ----------   ----------------
called  at  any  time  by  the  Board of Directors or the President and shall be
called  by  the President or Secretary at the request in writing of stockholders
of  record  owning  at  least twenty percent (20%) of the shares of stock of the
Corporation  outstanding  and  entitled  to  vote.

     Section 3.  Notice of Meetings.  Written notice of the place (if any), date
     ---------   ------------------
and  time of the holding of each annual and special meeting of the stockholders,
the  means  of  remote  communications,  if any, by which stockholders and proxy
holders  may be deemed to be present in person and vote at such meeting, and, in
the  case  of a special meeting, the purpose or purposes thereof, shall be given
to  each stockholder entitled to vote at such meeting, unless otherwise required
under  the  General  Corporation  Law of Delaware ("Delaware General Corporation
Law"),  not  less  than  ten  nor  more  than sixty days before the date of such
meeting.  If  mailed,  such notice shall be deemed to be given when deposited in
the  United  States  mail, postage prepaid, directed to such stockholder at such
stockholder's  address  as  it appears on the records of the Corporation, unless
such  stockholder  shall  have  filed  with  the  Secretary of the Corporation a
written  request  that  notices  to  such  stockholder  be  mailed to some other
address,  in  which  case it shall be directed to such stockholder at such other
address.

     Whenever  notice  is  required  to  be  given  under  the  Delaware General
Corporation  Law,  the  Certificate of Incorporation or these By-Laws, a written
waiver  signed  by  the  person  entitled  to  notice, or a waiver by electronic
transmission  by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.  Attendance of a person at
a  meeting  shall constitute a waiver of notice of such meeting, except when the
person  attends  a meeting for the express purpose of objecting at the beginning
of  the  meeting,  to the transaction of any business because the meeting is not
lawfully  called  or  convened.

     When  a  meeting  is  adjourned  to  another  time or place, notice of such
adjourned meeting need not be given if the time, place, if any, thereof, and the
means  of remote communications, if any, by which stockholders and proxy holders
may  be  deemed  to  be present in person and vote at such adjourned meeting are
announced  at  the  meeting at which the adjournment is taken.  At the adjourned
meeting,  the  Corporation  may  transact  any  business  which  might have been
transacted  at the original meeting.  If the adjournment is for more than thirty
days,  or  if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record  entitled  to  vote  at  the  meeting.



     Section 4.  Place of Meetings.  Meetings of the stockholders may be held at
     ---------   -----------------
such  place,  either  within  or  without the State of Delaware, as the Board of
Directors  or  the  officer  calling  the same may specify in the notice of such
meeting.  If,  pursuant  to  the  preceding  sentence, the Board of Directors is
authorized  to  determine  the  place  of  the  meeting,  it  may,  in  its sole
discretion,  determine  that the meeting shall not be held at any place, but may
instead  be  held  solely  by  means  of  remote  communication.

     Section  5.  Quorum.  Except  as otherwise provided by the Delaware General
     ----------   ------
Corporation  Law  or in the Certificate of Incorporation, at all meetings of the
stockholders the holders of one-third (1/3) of the issued and outstanding shares
entitled  to  vote shall be present in person or by proxy to constitute a quorum
for  the  transaction  of  any  business, except that where a separate vote by a
class  or  series  or  classes  or series is required, a quorum shall consist of
holders of one-third (1/3) of the issued and outstanding shares of such class or
series or classes or series entitled to vote.  In the event of lack of a quorum,
the  holders  of  a  majority  of  the  shares present in person or by proxy and
entitled  to vote, or if no stockholder entitled to vote is present, any officer
of  the  Corporation, may adjourn the meeting.  At any such adjourned meeting at
which  a  quorum may be present, any business may be transacted which might have
been  transacted  at  the  meeting  as  originally  called.

     Section  6.  Organization.  At  each  meeting  of  the  stockholders,  the
     ----------   ------------
President,  or  in  his  absence  or  inability to act, any person chosen by the
stockholders  at  such  meeting,  shall  act  as  chairman  of the meeting.  The
Secretary,  or  in  his absence or inability to act, any person appointed by the
chairman  of  the  meeting,  shall  act as secretary of the meeting and keep the
minutes  thereof.

     Section  7.  Order  of  Business.  The order of business at all meetings of
     ----------   -------------------
the  stockholders  shall  be  as  determined  by  the  chairman  of the meeting.

     Section  8.  Voting.
     ----------   ------

     (a)  Except  as  otherwise provided by the Certificate of Incorporation,
          at  each  meeting  of  the  stockholders,  each  holder  of  shares
          entitled  to  vote at such meeting shall, as to all matters in respect
          of  which  such  shares have voting rights, be entitled to one vote in
          person  or by proxy for each share held of record by such stockholder.
          Except  as otherwise provided by the Delaware General Corporation Law,
          the  Certificate  of  Incorporation  or these By-Laws, at a meeting of
          stockholders  at  which a quorum is present, in all matters other than
          the  election  of  directors,  the affirmative vote of the majority of
          shares  present  in person or by proxy at such meeting of stockholders
          and  entitled  to  vote  on the subject matter shall be the act of the
          stockholders.

     (b)  Unless  required  by  the  Delaware  General  Corporation  Law  or the
          Certificate  of  Incorporation  or  determined  by the chairman of the
          meeting  to  be  advisable,  the  vote  on any question need not be by
          written  ballot.  On a vote by written ballot, each ballot shall state
          the  number  of shares voted and either (i) be a writing signed by the
          stockholder  voting,  or by such stockholder's proxy, if there be such
          proxy or (ii) if authorized by the Board of Directors, be submitted by
          electronic  transmission,  provided  that  any  such  electronic
          transmission  either  sets forth or is submitted with information from
          which  it  can  be  determined  that  the  electronic transmission was
          authorized  by  the  stockholder  or  proxy  holder.


                                        2

     Section 9.  Proxies.
     ---------   -------

     (a)  Each stockholder  entitled  to  vote  at  any  meeting of stockholders
          or  to  express  consent  or  dissent  to  corporate action in writing
          without  a  meeting may authorize another person or persons to act for
          such  stockholder  by proxy, but no such proxy shall be voted or acted
          upon  after three years from its date, unless the proxy provides for a
          longer period. A duly executed proxy shall be irrevocable if it states
          that it is irrevocable and if, and only as long as, it is coupled with
          an  interest  sufficient  in  law to support an irrevocable power. Any
          such  proxy  shall be delivered to the secretary of such meeting at or
          prior  to  the  time  designated  in  the  order  of  business  for so
          delivering  such  proxies.

     (b)  Without  limiting  the  manner  in  which  a stockholder may authorize
          another  person  or  persons to act for such stockholder as proxy, the
          following  shall  constitute  a valid means by which a stockholder may
          grant  such  authority:

                    (1)  A stockholder may execute a writing authorizing another
               person or persons to act for such stockholder as proxy. Execution
               may  be  accomplished  by  the  stockholder or such stockholder's
               authorized  officer,  director,  employee  or  agent signing such
               writing  or causing such person's signature to be affixed to such
               writing by any reasonable means including, but not limited to, by
               facsimile  signature.

                    (2) A stockholder may authorize another person on persons to
               act  for such stockholder as proxy by transmitting or authorizing
               the  transmission  of  a  telegram,  cablegram, or other means of
               electronic  transmission  to the person who will be the holder of
               the  proxy or to a proxy solicitation firm, proxy support service
               organization or like agent duly authorized by the person who will
               be the holder of the proxy to receive such transmission, provided
               that  any  such  telegram, cablegram or other means of electronic
               transmission  must  either  set  forth  or  be  submitted  with
               information  from  which  it can be determined that the telegram,
               cablegram or other electronic transmissions was authorized by the
               stockholder.  If it is determined that such telegrams, cablegrams
               or  other  electronic transmissions are valid, the inspectors or,
               if  there  are  no  inspectors,  such  other  persons making that
               determination  shall  specify  the  information  upon  which they
               relied.

     (c)  Any copy,  facsimile  telecommunications  or  other  reliable
          reproduction  of  the  writing  or  transmission  created  pursuant to
          subsection  (b)  above  may  be  substituted  or  used  in lieu of the
          original  writing  or  transmission for any and all purposes for which
          the original writing or transmission could be used, provided that such
          copy,  facsimile  telecommunication  or  other reproduction shall be a
          complete  reproduction of the entire original writing or transmission.

     Section  10.  Fixing  Date  for  Determination  of  Stockholders of Record.
     -----------   ------------------------------------------------------------

     (a)  In order  that  the  Corporation  may  determine  the  stockholders
          having  voting  power  who are entitled to notice of or to vote at any
          meeting  of  the stockholders or any adjournment thereof, the Board of
          Directors may fix a record date, which shall not precede the date upon
          which the resolution fixing the record date is adopted by the Board of
          Directors  and  which  record date shall, unless otherwise required by
          law,  not be more than sixty nor less than ten days before the date of
          such  meeting.  If  no  record  date  is


                                        3

          fixed  by  the  Board  of  Directors,  the record date for determining
          stockholders  having  voting power who are entitled to notice of or to
          vote at a meeting of stockholders shall be at the close of business on
          the day next preceding the day on which notice is given, or, if notice
          is  waived, at the close of business on the day next preceding the day
          on  which  the  meeting  is  held.  A determination of stockholders of
          record  entitled  to notice of or to vote at a meeting of stockholders
          shall apply to any adjournment of the meeting; provided, however, that
          the  Board  of  Directors  may fix a new record date for the adjourned
          meeting.

     (b)  In order  that  the  Corporation  may  determine  the  stockholders
          having voting power who are entitled to consent to corporate action in
          writing  without  a  meeting,  the Board of Directors may fix a record
          date,  which  record  date  shall  not precede the date upon which the
          resolution  fixing  the  record  date  is  adopted  by  the  Board  of
          Directors,  and  which  date shall not be more than ten days after the
          date  upon  which  the resolution fixing the record date is adopted by
          the  Board of Directors. If no record date has been fixed by the Board
          of  Directors,  the  record  date  for determining stockholders having
          voting  power  who  are  entitled  to  consent  to corporate action in
          writing  without  a  meeting,  when  no  prior  action by the Board of
          Directors  is  required by the Delaware General Corporation Law, shall
          be  the first date on which a signed written consent setting forth the
          action  taken  or  proposed  action  to  be  taken is delivered to the
          Corporation  by  delivery  to  its  registered  office in the State of
          Delaware,  its  principal place of business, or an officer or agent of
          the  Corporation  having  custody  of the book in which proceedings of
          meetings  of  stockholders  are  recorded.  Delivery  made  to  the
          Corporation's  registered  office  shall be by hand or by certified or
          registered  mail, return receipt requested. If no record date has been
          fixed  by  the  Board  of  Directors  and prior action by the Board of
          Directors  is  required  by  the Delaware General Corporation Law, the
          record  date  for determining stockholders having voting power who are
          entitled  to  consent to corporate action in writing without a meeting
          shall  be  at  the  close of business on the day on which the Board of
          Directors  adopts  the  resolution  taking  such  prior  action.

     (c)  Subject  to  the  Certificate  of  Incorporation,  in  order  that the
          Corporation may determine the stockholders entitled to receive payment
          of  any  dividend  or other distribution or allotment of any rights or
          the  stockholders  entitled  to  exercise any rights in respect of any
          change,  conversion  or  exchange  of  stock or for the purpose of any
          other  lawful  action,  the  Board of Directors may fix a record date,
          which record date shall not precede the date upon which the resolution
          fixing  the record date is adopted, and which record date shall not be
          more than sixty days prior to such action. If no record date is fixed,
          the  record  date  for  determining stockholders having rights for any
          such purpose shall be at the close of business on the day on which the
          Board  of  Directors  adopts  the  resolution  relating  thereto.

     Section 11.  List of Stockholders.  The officer who has charge of the stock
     ----------   --------------------
ledger of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the  meeting,  arranged  in  alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Electronic  mail  addresses  or other electronic contact information need not be
included  on  such  list.  Such  list  shall  be  open to the examination of any
stockholder,  for  any  purpose germane to the meeting, for a period of at least
ten  days  prior  to  the  meeting:  (i)  on  a reasonably accessible electronic
network,  provided  that the information required to gain access to such list is
provided with the notice of the meeting, or (ii) during ordinary business hours,
at  the  principal  place of business of the Corporation.  In the event that the
list  is  made available on an electronic network, reasonable steps may be taken
to  ensure  that  such  information  is  available  only  to stockholders of the
Corporation.  If  the  meeting  is to be held at a place, then the list shall be
produced  and  kept  at  the time and place of the meeting during the whole time
thereof,  and  may  be  inspected  by  any  stockholder  who is present.  If the


                                        4

meeting  is  to  be  held solely by means of remote communication, then the list
shall  also  be open to the examination of any stockholder during the whole time
of  the  meeting  on  a  reasonably  accessible  electronic  network,  and  the
information  required  to  access such list shall be provided with the notice of
the  meeting.


                                        5

     Section  12.  Action  by  Written  Consent.
     -----------   ----------------------------

     (a)  Any action  which  is  required  to  be  or may be taken at any annual
          or  special  meeting  of  the  stockholders of the Corporation, may be
          taken  without  a  meeting,  without  prior notice to stockholders and
          without  a  vote  if  consents in writing, setting forth the action so
          taken, shall be signed by the holders of outstanding stock entitled to
          vote  on such matter, having not less than the minimum number of votes
          that  would be necessary to authorize or take such action at a meeting
          at  which  all shares entitled to vote thereon were present and voted,
          and  shall  be  delivered  to  the  Corporation  by  delivery  to  its
          registered  office  in  the  State of Delaware, its principal place of
          business,  or an officer or agent of the Corporation having custody of
          the  book  in  which  proceedings  of  meetings  of  stockholders  are
          recorded.  Delivery  made to the Corporation's registered office shall
          be  by  hand  or  by  certified  or  registered  mail,  return receipt
          requested.

     (b)  Every written  consent  shall  bear  the  date  of  signature  of each
          stockholder  who  signs  the  consent  and no written consent shall be
          effective  to  take  the  corporate action referred to therein unless,
          within  sixty  days  of  the  earliest  dated consent delivered in the
          manner  required  by  subsection (a) above to the Corporation, written
          consents  signed  by a sufficient number of holders to take action are
          delivered  to  the Corporation by delivery to its registered office in
          the  State of Delaware, its principal place of business, or an officer
          or  agent  of  the  Corporation  having  custody  of the book in which
          proceedings of meetings of stockholders are recorded. Delivery made to
          the  Corporation's  registered office shall be by hand or by certified
          or  registered  mail,  return  receipt  requested.

     (c)  A telegram,  cablegram  or  other  electronic  transmission consenting
          to  an  action  to  be taken and transmitted by a stockholder or proxy
          holder,  or by a person or persons authorized to act for a stockholder
          or  proxy  holder, shall be deemed to be written, signed and dated for
          the  purposes  of  this  Section,  provided  that  any  such telegram,
          cablegram  or other electronic transmission sets forth or is delivered
          with information from which the Corporation can determine (a) that the
          telegram,  cablegram  or other electronic transmission was transmitted
          by  the  stockholder  or  proxy  holder  or  by  a  person  or persons
          authorized to act for the stockholder or proxy holder and (b) the date
          on  which  such  stockholder  or  proxy holder or authorized person or
          persons  transmitted  such  telegram,  cablegram  or  electronic
          transmission. The date on which such telegram, cablegram or electronic
          transmission  is  transmitted  shall be deemed to be the date on which
          such  consent  was  signed. No consent given by telegram, cablegram or
          other  electronic  transmission shall be deemed to have been delivered
          until  such  consent  is reproduced in paper form and until such paper
          form  shall  be  delivered  to  the  Corporation  by  delivery  to its
          registered  office  in  the  State of Delaware, its principal place of
          business  or  an officer or agent of the Corporation having custody of
          the  book  in  which  proceedings  of  meetings  of  stockholders  are
          recorded.  Delivery  made to the Corporation's registered office shall
          be  made  by  hand  or by certified or registered mail, return receipt
          requested.  Notwithstanding  the  foregoing  limitations  on delivery,
          consents given by telegram, cablegram or other electronic transmission
          may  be  otherwise delivered to the principal place of business of the
          Corporation  or  to  an  officer  or  agent  of the Corporation having
          custody  of  the book in which proceedings of meetings of stockholders
          are  recorded  if,  to  the  extent  and  in  the  manner  provided by
          resolution  of  the  Board  of  Directors  of  the  Corporation.


                                        6

     (d)  Any copy,  facsimile  or  other  reliable  reproduction  of  a consent
          in  writing may be substituted or used in lieu of the original writing
          for any and all purposes for which the original writing could be used,
          provided  that  such  copy, facsimile or other reproduction shall be a
          complete  reproduction  of  the  entire  original  writing.

     Section  13.  Notice  of  Action  by  Consent.  The  Corporation shall give
     -----------   -------------------------------
prompt  notice  of the taking of corporate action without a meeting by less than
unanimous  written consent to stockholders who have not consented in writing and
who,  if  the  action  had  been taken at a meeting, would have been entitled to
notice of the meeting if the record date for such meeting had been the date that
written  consents  signed  by  a  sufficient  number of stockholders to take the
action  were  delivered  to the Corporation in the manner provided in Article I,
Section  12(b)  of  these  By-Laws.

                                   ARTICLE II
                               BOARD OF DIRECTORS

     Section  1.  General  Powers.  Except  as  may be otherwise provided by the
     ----------   ---------------
Delaware  General  Corporation  Law  or  the  Certificate  of Incorporation, the
business  and  affairs  of  the  Corporation  shall  be  managed by or under the
direction  of  the  Board  of  Directors.

     Section  2.  Number,  Election  and  Term  of  Office.
     ----------   ----------------------------------------

     (a)  The Board  of  Directors  shall  consist  of  one or more members, the
          number  thereof  to  be  determined  from time to time by the Board of
          Directors.

     (b)  Unless  directors  are  elected  by  written  consent  in  lieu  of an
          annual  meeting  as  permitted  by  this Section, an annual meeting of
          stockholders  shall  be  held for the election of directors. Directors
          shall  be elected by a plurality of the votes of the shares present in
          person or by proxy at the meeting and entitled to vote on the election
          of  directors.  Stockholders  entitled  to  vote  may,  unless  the
          Certificate  of  Incorporation  otherwise  provides,  act  by  written
          consent  to  elect directors; provided, however, that, if such consent
          is  less than unanimous, such action by written consent may be in lieu
          of holding an annual meeting only if all of the directorships to which
          directors  could be elected at an annual meeting held at the effective
          time  of  such  action  are  vacant  and  are  filled  by such action.

     (c)  Each director  shall  hold  office  until  such  director's  successor
          shall  have  been  duly elected and qualified or until such director's
          earlier  death,  removal  or  resignation.

     Section  3.  Resignations.  Any director may resign at any time upon notice
     ----------   ------------
given  in writing or by electronic transmission to the Corporation, addressed to
the  Board of Directors or the President or the Secretary.  Any such resignation
shall  take  effect  at the time specified therein or, if the time when it shall
become  effective  shall not be specified therein, immediately upon its receipt;
and,  unless  otherwise  specified  therein,  the acceptance of such resignation
shall  not  be  necessary  to  make  it  effective.

     Section  4.  Removal  of  Directors.  Any  director  or the entire Board of
     ----------   ----------------------
Directors  may  be  removed,  either  with or without cause, at any time, by the
affirmative  vote of the holders of a majority of the shares entitled to vote at
an  election  of  directors.


                                        7

     Section 5.  Vacancies.
     ---------   ---------

     (a)  Vacancies  and  newly  created  directorships  resulting  from  any
          increase  in  the  authorized  number  of directors may be filled by a
          majority of the directors then in office, although less than a quorum,
          or  by  a  sole  remaining director, and the directors so chosen shall
          hold  office until the next annual election and until their successors
          are  duly  elected  and  qualified, unless sooner displaced. If at any
          time,  by  reason of death or resignation or other cause, there are no
          directors  in  office,  then  any  officer  or  any  stockholder or an
          executor,  administrator,  trustee  or  guardian  of a stockholder, or
          other  fiduciary  entrusted with like responsibility for the person or
          estate of a stockholder, may call a special meeting of stockholders in
          accordance  with  these By-Laws, or may apply to the Court of Chancery
          for a decree summarily ordering an election as provided in Section 211
          of  the  Delaware  General Corporation Law. If, at the time of filling
          any  vacancy  or any newly created directorship, the directors then in
          office  shall  constitute  less than a majority of the whole Board (as
          constituted  immediately  prior  to  any  such increase), the Court of
          Chancery  may,  upon  application  of  any stockholder or stockholders
          holding  at least ten percent of the total number of the shares at the
          time  outstanding  having  the  right  to  vote  for  such  directors,
          summarily  order  an election to be held to fill any such vacancies or
          newly created directorships, or to replace the directors chosen by the
          directors  then  in  office  as  aforesaid,  which  election  shall be
          governed by Section 211 of the Delaware General Corporation Law as far
          as  applicable.

     (b)  Unless  otherwise  provided  in  the  Certificate  of Incorporation or
          these  By-Laws, when one or more directors shall resign from the Board
          of  Directors, effective at a future date, a majority of the directors
          then  in  office, including those who have so resigned, shall have the
          power  to  fill  such  vacancy  or vacancies, the vote thereon to take
          effect  when  such resignation or resignations shall become effective,
          and  each  director  so  chosen  shall hold office as provided in this
          section  in  the  filling  of  other  vacancies.

     Section  6.  Place  of  Meeting.  Meetings of the Board of Directors may be
     ----------   ------------------
held  at  such  place,  within or without the State of Delaware, as the Board of
Directors  may  from  time  to  time  determine.

     Section  7.  First  Meeting.  The  Board  of  Directors  shall meet for the
     ----------   --------------
purpose  of  organization,  the election of the officers of the Corporation, and
the  transaction  of  other  business, immediately after and at the same general
place  as  the  annual meeting of the stockholders.  Notice of such meeting need
not  be  given.

     Section  8.  Regular  Meetings.  Regular meetings of the Board of Directors
     ----------   -----------------
shall  be held at such time and at such place as the Board of Directors may from
time to time determine.  If any day fixed for a regular meeting shall be a legal
holiday  at  the  place  where the meeting is to be held, then the meeting which
would  otherwise  be held on that day shall be held at the same hour on the next
succeeding  business  day.  If so determined, notices of regular meetings of the
Board  of  Directors  need  not  be  given  except  as otherwise required by the
Delaware  General  Corporation  Law  or  these  By-Laws.

     Section  9.  Special  Meetings.  Special meetings of the Board of Directors
     ----------   -----------------
may  be  called by one or more directors of the Corporation or by the President.

     Section  10.  Notice  of  Meetings.  Notice  of each special meeting of the
     -----------   --------------------
Board  of  Directors  (and  of  each  regular  meeting for which notice shall be
required)  shall  be  given  by  the  Secretary  as hereinafter provided in this
Section  10,  in which notice shall be stated the time and place of the meeting.
Notice  of  each  such  meeting  shall  be  delivered  to  each  director either
personally  or  by  telephone, telegraph cable or wireless, at least twenty-four
hours  before  the  time  at  which such meeting is to be held or by first-class
mail,  postage  prepaid,  addressed  to  such


                                        8

director  at  such  director's  residence,  or usual place of business, at least
three  days  before  the day on which such meeting is to be held.  Notice of any
such meeting need not be given to any director who shall, either before or after
the  meeting,  submit a signed waiver of notice or who shall attend such meeting
without  protesting, prior to or at its commencement, the lack of notice to him.
Except  as  otherwise  specifically required by the Delaware General Corporation
Law  or  the  Certificate  of Incorporation, a notice or waiver of notice of any
regular  or  special  meeting  need  not  state  the  purpose  of  such meeting.

     Section  11.  Quorum;  Voting.  A majority of the entire Board of Directors
     -----------   ---------------
shall  be present in person at any meeting of the Board of Directors in order to
constitute a quorum for the transaction of business at such meeting, and, except
as  otherwise  expressly  required  by the Delaware General Corporation Law, the
Certificate  of  Incorporation  or  these By-Laws, the vote of a majority of the
directors  present  at any meeting at which a quorum is present shall be the act
of  the Board of Directors.  In the event of lack of a quorum, a majority of the
directors  present  thereat,  or  if  no director be present, the Secretary, may
adjourn  such  meeting  to  another  time  and  place  without notice other than
announcement  at  the  meeting.  At  any  adjourned meeting at which a quorum is
present,  any business may be transacted which might have been transacted at the
meeting  as  originally  called.

     Section  12.  Organization.  At each meeting of the Board of Directors, the
     -----------   ------------
President,  or,  in such person's absence or inability to act, a director chosen
by  a majority of the directors present shall act as chairman of the meeting and
preside  thereat.  The  Secretary  (or, in such person's absence or inability to
act  any person appointed by the chairman) shall act as secretary of the meeting
and  keep  the  minutes  thereof.

     Section 13.  Presence at Meeting.  Members of the Board of Directors or any
     ----------   -------------------
committee  or  subcommittee designated by the Board of Directors may participate
in a meeting of such Board of Directors or committee or subcommittee by means of
conference  telephone  or  other  communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting  pursuant  to  this  Section  shall constitute presence in person at the
meeting.

     Section  14.  Interested  Directors;  Quorum.  No  contract  or transaction
     -----------   ------------------------------
between the Corporation and one or more of its directors or officers, or between
the  Corporation  and  any other corporation, partnership, association, or other
organization  in which one or more of its directors or officers are directors or
officers,  or  have  a  financial interest, shall be void or voidable solely for
this  reason,  or  solely  because  the  director  or  officer  is present at or
participates  in  the  meeting  of  the  Board  of  Directors  or  committee  or
subcommittee  thereof  which  authorizes  the contract or transaction, or solely
because any such director's or officer's votes are counted for such purpose, if:
(l)  the  material  facts  as  to  the  director's  or officer's relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board  of Directors or the committee or subcommittee, and the Board of Directors
or  committee  or  subcommittee  in  good  faith  authorizes  the  contract  or
transaction  by  the  affirmative  votes  of  a  majority  of  the disinterested
directors, even though the disinterested directors be less than a quorum; or (2)
the  material  facts  as to the director's or officer's relationship or interest
and  as  to  the  contract  or  transaction  are  disclosed  or are known to the
stockholders  entitled  to  vote  thereon,  and  the  contract or transaction is
specifically  approved  in  good  faith  by vote of the stockholders; or (3) the
contract  or  transaction  is  fair  as  to the Corporation as of the time it is
authorized,  approved  or  ratified,  by  the Board of Directors, a committee or
subcommittee  thereof,  or the stockholders.  Common or interested directors may
be  counted in determining the presence of a quorum at a meeting of the Board of
Directors  or  of  a  committee  or  subcommittee  thereof  which authorizes the
contract  or  transaction.


                                        9

     Section 15.  Action Without Meeting  Any action required or permitted to be
     ----------   ----------------------
taken  at  any  meeting  of  the  Board  of  Directors  or  of  any committee or
subcommittee  thereof may be taken without a meeting if all members of the Board
of  Directors  or committee or subcommittee, as the case may be, consent thereto
in  writing  or  by  electronic  transmission,  and  the  writing or writings or
electronic  transmission  or  transmissions  are  filed  with  the  minutes  of
proceedings  of  the Board of Directors, committee or subcommittee.  Such filing
shall  be in paper form if the minutes are maintained in paper form and shall be
in  electronic  form  if  the  minutes  are  maintained  in  electronic  form.

     Section  16.  Compensation.  The Board of Directors shall have authority to
     -----------   ------------
fix the compensation, including fees and reimbursement of expenses, of directors
for  services  to  the  Corporation, provided no such payment shall preclude any
director  from  serving  the  Corporation  in  any  other capacity and receiving
compensation  therefore.

                                   ARTICLE III
                                   COMMITTEES

     Section  1.  Committees.  The  Board of Directors may designate one or more
     ----------   ----------
committees,  each  committee  to  consist of one or more of the directors of the
Corporation.  The  Board  of  Directors  may  designate one or more directors as
alternate  members  of any committee, who may replace any absent or disqualified
member at any meeting of the committee.  In the absence or disqualification of a
member  of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not such member or members constitute a
quorum,  may unanimously appoint another member of the Board of Directors to act
at  the  meeting  in  place  of any such absent or disqualified member. Any such
committee,  to  the  extent  permitted  by law and to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and  authority  of  the Board of Directors in the management of the business and
affairs  of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall have the
power  or  authority  in  reference  to  the following matter:  (i) approving or
adopting,  or  recommending  to the stockholders, any action or matter expressly
required by the Delaware General Corporation Law to be submitted to stockholders
for  approval  or  (ii)  adopting,  amending  or  repealing  these  By-Laws.

     Section  2.  Subcommittees.  Any  committee  may  create  one  or  more
     ----------   -------------
subcommittees,  each  subcommittee  to  consist  of  one  or more members of the
committee, and delegate to a subcommittee any or all of the powers and authority
of  the  committee.

     Section  3.  Committee  and  Subcommittee  Rules.  Unless  the  Board  of
     ----------   -----------------------------------
Directors  otherwise  provides, each committee or subcommittee designated by the
Board  of  Directors  may  make,  alter  and repeal rules for the conduct of its
business.  In  the  absence  of  such rules each committee or subcommittee shall
conduct  its  business in the same manner as the Board of Directors conducts its
business  pursuant  to  Article  II  of  these  By-Laws.


                                       10

                                   ARTICLE IV
                                    OFFICERS

     Section  1.  Election; Term of Office. The Board of Directors shall elect a
     ----------   ------------------------
President,  Secretary  and Treasurer.  Each such officer shall hold office until
the  first  meeting  of  the  Board of Directors following the annual meeting of
stockholders  next  succeeding such officer's election, and until such officer's
successor  is elected and qualified or until such officer's earlier resignation,
removal or death.  The Board of Directors may also elect such other officers and
agents  (including,  but  not  limited  to,  a  Chairman of the Board and a Vice
Chairman  of  the  Board  (elected  from  one  of its members), one or more Vice
Presidents,  Assistant  Vice  Presidents,  Assistant  Secretaries  and Assistant
Treasurers),  who  shall serve at the pleasure of the Board of Directors and who
shall  have  such  authority  and shall perform such duties as from time to time
shall  be  prescribed  by  the  Board of Directors or by elected officers of the
Corporation.  Any  number  of  offices  may  be  held  by  the  same  person.

     Section 2.  Resignations.  Any officer of the Corporation may resign at any
     ---------   ------------
time  upon  delivery  of  a  written notice to the Corporation, addressed to the
Board  of Directors, the President or the Secretary.  Any such resignation shall
take  effect  at the time specified therein or, if the time when it shall become
effective  shall  not  be  specified  therein, immediately upon its receipt; and
unless otherwise specified therein, the acceptance of such resignation shall not
be  necessary  to  make  it  effective.

     Section 3.  Removal.  Any officer of the Corporation may be removed, either
     ---------   -------
with  or  without  cause, at any time, by the vote of the majority of the entire
Board  of  Directors,  but  such  removal  shall  be  without  prejudice  to the
contractual  rights,  if  any,  of  the  person  so  removed.

     Section  4.  Vacancies.  A  vacancy  in  any  office,  whether arising from
     ----------   ---------
death,  resignation, removal or any other cause, may be filled for the unexpired
portion of the term by the Board of Directors at any regular or special meeting.

     Section 5.  Officers' Bonds or Other Security.  If required by the Board of
     ---------   ---------------------------------
Directors,  any  officer  of the Corporation shall give a bond or other security
for  the faithful performance of his duties, in such amount and with such surety
or  sureties  as  the  Board  of  Directors  may  require.

     Section  6.  President.  The President shall be the chief executive officer
     ----------   ---------
of  the  Corporation  and shall preside at all meetings of the stockholders.  In
the  absence  of the Chairman of the Board or the Vice Chairman of the Board, if
any,  the President shall preside at the meetings of the Directors.  Such person
shall  have  authority  and  perform  such  duties  in  the  management  of  the
Corporation  as  set  forth  in  these By-Laws and as from time to time shall be
prescribed  by the Board of Directors and, to the extent not so prescribed, such
person  shall  have  such authority and perform such duties in the management of
the  Corporation,  subject  to the control of the Board, as generally pertain to
the  office  of  President.

     Section   7.  Secretary.  The  Secretary  shall:
     -----------   ---------

     (a)  Keep or  cause  to  be  kept  in  one  or more books provided for that
          purpose,  the  minutes  of the meetings of the Board of Directors, the
          committees  or  subcommittee  of  the  Board  of  Directors  and  the
          stockholders;

     (b)  See that  all  notices  are  duly  given  in  accordance  with  the
          provisions  of  the Certificate of Incorporation, these By-Laws and as
          required  by  law;


                                       11

     (c)  Be custodian  of  the  records  and  the  seal  of the Corporation and
          affix and attest the seal to all stock certificates of the Corporation
          (unless  the  seal  of the Corporation on such certificates shall be a
          facsimile,  as  hereinafter provided) and affix and attest the seal to
          all  other documents to be executed on behalf of the Corporation under
          its  seal;

     (d)  See that  the  books,  reports,  statements,  certificates  and  other
          documents  and  records  required  by  law  to  be  kept and filed are
          properly  kept  and  filed;  and

     (e)  In general,  have  such  powers  and  duties  as  generally pertain to
          the  office of Secretary and such other powers and duties as set forth
          in the By-Laws and as from time to time may be assigned to such person
          by  the  Board  of  Directors  or  the  President.

     Section  8.  Treasurer.  The Treasurer shall be the chief financial officer
     ----------   ---------
of  the  Corporation  and  shall  exercise general supervision over the receipt,
custody,  and  disbursements of Corporate funds.  The Treasurer shall sign, make
and  indorse  in  the  name of the Corporation, all checks, drafts, warrants and
orders  for  the  payment of money, and pay out and dispose of same and receipts
for  such,  and, in general, have such powers and duties as generally pertain to
the  office of Treasurer.  Such person shall have such further powers and duties
as  may  be  assigned  to  such person from time to time by the President or the
Board  of  Directors.

                                    ARTICLE V
                                 INDEMNIFICATION

     Section 1.   Right to Indemnification.  The Corporation shall indemnify and
     ----------   ------------------------
hold harmless, to the fullest extent permitted by applicable law as it presently
exists  or  may  hereafter  be  amended,  any  person  who  was or is made or is
threatened  to  be  made a party or is otherwise involved in any action, suit or
proceeding,  whether  civil,  criminal,  administrative  or  investigative  (a
"proceeding")  by  reason of the fact that he or she, or a person for whom he or
she  is  the  legal  representative,  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 corporation or of a
partnership,  joint  venture,  trust,  enterprise or nonprofit entity, including
service  with  respect to employee benefit plans, against all liability and loss
suffered  and  expenses  (including attorneys' fees) reasonable incurred by such
person.  The  Corporation  shall be required to indemnify a person in connection
with  a  proceeding  (or  part  thereof)  initiated  by  such person only if the
proceeding  (or  part  thereof)  was authorized by the Board of Directors of the
Corporation.

     Section  2.   Prepayment  of  Expenses.  The  Corporation  shall  pay  the
     -----------   ------------------------
expenses  (including  attorneys'  fees)  incurred in defending any proceeding in
advance  of  its  final  disposition,  provided,  however,  that  the payment of
expenses  incurred  by a director or officer in advance of the final disposition
of  the  proceeding  shall  be  made  only upon receipt of an undertaking by the
director  or  officer  to  repay all amounts advanced if it should be ultimately
determined  that the director or officer is not entitled to be indemnified under
this  Article  or  otherwise.

     Section  3.  Claims.  If a claim for indemnification or payment of expenses
     -----------  ------
under  this  Article is not paid in full within sixty days after a written claim
therefore  has  been  received by the Corporation, the claimant may file suit to
recover  the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim.  In any such
action  the  Corporation  shall  have the burden of proving the claimant was not
entitled  to  the  requested  indemnification  or  payment  of  expenses  under
applicable  law.

     Section  4.  Non-Exclusivity of Rights.  The rights conferred on any person
     -----------  -------------------------
by  this  Article V shall not be exclusive of any other rights which such person
may  have  or  hereafter


                                       12

acquire  under any statute, provision of the certificate of incorporation, these
by-laws,  agreement,  vote  of  stockholders  or  disinterested  directors  or
otherwise.

     Section  5.  Other  Indemnification.  The Corporation's obligation, if any,
     -----------  ----------------------
to  indemnify  any  person  who  was or is serving at its request as a director,
officer,  employee  or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by any amount such person
may  collect  as indemnification from such other corporation, partnership, joint
venture,  trust,  enterprise  or  nonprofit  enterprise.

     Section  6.  Amendment  or  Repeal.  Any  repeal  or  modification  of  the
     -----------  ---------------------
foregoing  provisions  of  this  Article shall not adversely affect any right or
protection  hereunder  of any person in respect of any act or omission occurring
prior  to  the  time  of  such  repeal  or  modification.

                                   ARTICLE VI
                                      STOCK

     Section  1.  Certificates.  Every holder of stock shall be entitled to have
     ----------   ------------
a  certificate  signed  by or in the name of the Corporation by the President or
any  Vice  President,  and  by  the  Secretary or an Assistant Secretary, of the
Corporation,  certifying  the  number  of  shares  owned  by  such person in the
Corporation.  Any  of  or  all  the  signatures  on  the  certificate  may  be a
facsimile.  In  case any officer, transfer agent, or registrar who has signed or
whose  facsimile  signature has been placed upon a certificate shall have ceased
to  be  such  officer,  transfer  agent, or registrar before such certificate is
issued,  it  may  be  issued  by the Corporation with the same effect as if such
person  were  such  officer,  transfer agent, or registrar at the date of issue.

     Section  2.  Lost,  Stolen or Destroyed Stock Certificates; Issuance of New
     ----------   --------------------------------------------------------------
Certificates.  The Corporation may issue a new certificate of stock in the place
- ------------
of  any  certificate theretofore issued by it, alleged to have been lost, stolen
or  destroyed,  and the Corporation may require the owner of the lost, stolen or
destroyed  certificate,  or  such  person's  legal  representative,  to give the
Corporation a bond sufficient to indemnify it against any claim that may be made
against  it  on  account  of  the alleged loss, theft or destruction of any such
certificate  or  the  issuance  of  such  new  certificate.


                                       13

                                   ARTICLE VII
                                  MISCELLANEOUS

     Section 1.  Fiscal Year.  The fiscal year of the Corporation shall begin on
     ---------   -----------
the  first  day  of  January of each year and end on the last day of December of
each  year.

     Section  2.  Seal.  The  corporate seal shall be in the form adopted by the
     ----------   ----
Board  of Directors.  Said seal may be used by causing it or a facsimile thereof
to  be impressed or affixed or reproduced or otherwise.  The seal may be affixed
by any officer of the Corporation to any instrument executed by authority of the
Corporation,  and  the  seal when so affixed may be attested by the signature of
any  officer  of  the  Corporation.

     Section  3.  Waiver  of  Notice  of  Meetings  of  Stockholders, Directors,
     ----------   --------------------------------------------------------------
Committees and Subcommittees.  Any written waiver of notice signed by the person
- ----------------------------
entitled  to  notice,  or  a  waiver  by  electronic  transmission by the person
entitled  to  notice,  whether before or after the time stated therein, shall be
deemed  equivalent  to  notice.  Attendance  of  a  person  at  a  meeting shall
constitute  a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting at the beginning of the meeting, to
the  transaction  of  any business because the meeting is not lawfully called or
convened.  Neither  the  business  to  be transacted at, nor the purpose, of any
regular  or  special  meeting  of  the  stockholders, directors, or members of a
committee  or  subcommittee of directors need be specified in any written waiver
of  notice  or  any  waiver  by  electronic  transmission.

     Section  4.  Form of Records.  Any records maintained by the Corporation in
     ----------   ---------------
the  regular  course  of  its  business,  including  its  stock ledger, books of
account,  and  minute  books, may be kept on, or be in the form of, punch cards,
magnetic  tape,  photographs, microphotographs, or any other information storage
device,  provided that the records so kept can be converted into clearly legible
form  within a reasonable time.  The Corporation shall so convert any records so
kept  upon  the  request  of  any  person  entitled  to  inspect  the  same.

     Section  5.  Amendments.  The  Board  of  Directors shall have the power to
     ----------   ----------
adopt,  amend or repeal these By-Laws.  These By-Laws may be adopted, amended or
repealed  by  action of the stockholders entitled to vote at any regular meeting
of  the  stockholders or at any special meeting of the stockholders if notice of
such  proposed  adoption, amendment or repeal be contained in the notice of such
special  meeting.


                                       14

EX-5.1

Exhibit 5.1

OPINION AS TO LEGALITY

JOSEPH I. EMAS

ATTORNEY AT LAW

1224 Washington Avenue

Miami Beach, Florida 33139

(305) 531-1174

Facsimile: (305) 531-1274

Email: jiemas@bellsouth.net

April 9, 2007

United States Securities and Exchange Commission

100 F Street

Washington, D.C. 20549

Re: Card Activation Technologies, Inc. 

Ladies and Gentlemen:

As counsel for the Company, I have examined the Company’s certificate of incorporation, by-laws, and such other corporate records, documents and proceedings and such questions of laws I have deemed relevant for the purpose of this opinion, including but not limited to, Nevada law including the statutory provisions, all applicable provisions of the Nevada Constitution and reported judicial decisions interpreting those laws. In my examination, I have assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals, and conformity with the originals of all documents submitted to me as copies thereof. In addition, I have made such other examinations of law and fact, as I have deemed relevant in order to form a basis for the opinion hereinafter expressed.

I have also, as counsel for the Company, examined the registration statement (the “Registration Statement") of the Company on Form SB-2/A, covering the registration under the Securities Act of 1933, as amended, of up to 44,431,613 shares (the “Registered Shares”) by existing shareholders of the Company of the Company’s common stock (the “Common Stock”).

My review has also included the form of prospectus for the issuance of such securities (the "Prospectus") filed with the Registration Statement.

On the basis of such examination, I am of the opinion that:

1. The Company is a corporation duly authorized and validly existing and in good standing under the laws of the State of Delaware, with corporate power to conduct its business as described in the Registration Statement.

2. The Company has an authorized capitalization of 175,000,000 shares of Common Stock, $0.001 par value and 1,000,000 shares of Preferred Stock, $0.001 par value.

3. I am of the opinion that all of the Registered Shares are validly issued, fully paid and non-assessable pursuant to the corporate law of the State of Delaware.

This opinion includes my opinion on Delaware law including the Delaware Constitution, all applicable provisions of Delaware statutes, and reported judicial decisions interpreting those laws.

I hereby consent to the use of my name in the Registration Statement and Prospectus and I also consent to the filing of this opinion as an exhibit thereto.

Very truly yours,

/s/ Joseph I.Emas

JOSEPH I. EMAS, ESQUIRE

EX-5.2

LAW OFFICES

MOHR, HACKETT, PEDERSON, BLAKLEY & RANDOLPH, P.C.

ROBERT C. HACKETT ARTHUR W. PEDERSON THOMAS K. CHENAL M. MAUREEN ANDERS AZIM Q. HAMEED THOMAS M. QUIGLEY DANIEL P. BEEKS DANIEL J. KILEY DAVID M. KOZAK DEANIE J. REH WALID A. ZARIFI ADRIENNE M. FAITH           OF COUNSEL: DOUGLAS R. CHANDLER DAVID W. DOW MICHELE M. FEENEY SUITE 1100 2800 NORTH CENTRAL AVENUE PHOENIX, ARIZONA  85004-1043 PHONE: (602) 240-3000 FACSIMILE:  (602) 240-6600   SUITE 155 7047 EAST GREENWAY PARKWAY SCOTTSDALE, ARIZONA  85254-8110 PHONE:  (480) 624-2710 FACSIMILE:  (480) 624-2029     www.MohrHackett.com       PLEASE REPLY TO PHOENIX OFFICE DKozak@mhplaw.com GORDON A. MOHR JOHN M. RANDOLPH PETER N. SPILLER GREGORY W. FALLS THOMAS C. AXELSEN MICHAEL W. WRIGHT CAROLYN R. MATTHEWS NATHANIEL B. ROSE MATTHEW J. KELLY DAVID W. GARBARINO JAMEY G. ANDERSON           _________ WILLIAM C. BLAKLEY (1946-1987) _________

May 30, 2007

MedCom USA, Incorporated

7975 N. Hayden Rd., Suite D333

Scottsdale, AZ 85258

Re: Distribution of Card Activation Technologies, Inc. Shares to MedCom USA, Incorporated Shareholders

Ladies and Gentlemen:

We have acted as special and limited tax counsel to MedCom USA, Incorporated, a Delaware corporation (“MedCom”), in connection with the distribution by MedCom of 86,770,504 shares of $0.00001 par value common stock of Card Activation Technologies, Inc., a Delaware corporation (“CAT”) to MedCom shareholders.  We do not represent either MedCom or CAT for all purposes or with respect to all matters in which they or each of them are or may be involved.  We have not represented either MedCom or CAT in connection with their original formations, organizations or operations.  This opinion is provided at the request of and with permission from MedCom and CAT.

1.           Historical Background.  MedCom created CAT by filing a Certificate of Incorporation for CAT with the State of Delaware, Secretary of State, Division of Corporations, on August 29, 2006.  In connection with its formation, CAT issued 144,770,504 shares of its $0.00001 par value common stock to MedCom in exchange for MedCom assigning to CAT U.S. Patent Number 6,032,859 (the “Patent”) as MedCom’s capital contribution in and for consideration of the 144,770,504 shares.  Effective for shareholders of record of MedCom as of December 15, 2006, MedCom declared a dividend of 86,770,504 shares of CAT stock be distributed March 1, 2007.

2.           Documents Reviewed.  For purposes of the opinions expressed in this letter, we have examined copies of what have been represented to us as being executed originals of the following documents:

2.1  MedCom's Certificate of Incorporation and Certificates of Amendment or Amendments thereto dated September 19, 1991, July 21, 1993, February 28, 1994, October 31, 1994, June 9, 1995, February 16, 1998, October 14, 1999, and June 27, 2000.

1

2.2 MedCom’s Bylaws.

2.3 CAT’s Certificate of Incorporation.

2.4 CAT’s Bylaws.

2.5 The August 31, 2006 Assignment of the Patent.

2.6 The October 31, 2006 Separation Agreement between MedCom and CAT.

2.7 The October 31, 2006 Tax Sharing Agreement between MedCom and CAT.

2.8 The October 31, 2006 Administrative Services Agreement between MedCom and CAT.

In reaching our opinion we have relied upon statements and representations made to us by authorized representatives of MedCom and authorized representatives of CAT, consisting of those facts set forth in the Historical Background in paragraph 1 above.  We have further made such inquiries and investigations of law as we have deemed necessary or appropriate for the purpose of rendering this opinion.  We have made no other independent factual investigation or inquiry.  Capitalized terms used and not otherwise defined in this letter will have the meanings ascribed to them in the underlying document or documents.

3.           Opinion.  Based upon our examination of the above documents and the facts set forth above, and subject to the assumptions, exceptions and qualifications set forth below, it is our opinion that:

3.1           The distribution by MedCom of approximately fifty-nine percent (59%) of the issued and outstanding shares of CAT common stock to MedCom’s shareholders of record as of December 15, 2006, does not meet the requirements of Section 355(a)(D) of the Internal Revenue Code of 1986, as amended, (the “Code”) for a non-taxable treatment by all parties to that distribution.

4.           Assumptions, Exceptions and Qualifications.

4.1           In rendering the opinions set forth above, we have, with your consent and without any independent investigation or inquiry, assumed:

4.1.1                      All documents and public filings thereof have been duly and validly authorized, executed, delivered and accepted by each party thereto.

4.1.2                      The genuineness of signatures not witnessed or that each of the above documents have been executed by the persons designated on the document to sign, the authenticity of any documents submitted as originals, and the conformity of all documents submitted to us only as copies to the original documents.

4.1.3                      The necessary legal capacity of all natural persons executing the documents.

4.1.4                      Each of the documents constitutes the binding and valid obligation of each party thereto and is enforceable against such parties in accordance with its terms.

4.1.5                      All parties to the documents have the requisite corporate or organizational power and authority to enter into the documents and to perform their obligations and be responsible for their liabilities thereunder.

2

4.1.6                    The documents accurately and completely describe and contain the parties’ mutual intent, understanding and business purposes, and there are no oral or written statements, agreements, understandings or negotiations, nor any usage of trade or course of prior dealing among the parties, that directly or indirectly modify, define, amend, supplement or vary, or purport to do so, any of the terms of the documents or any of the parties’ rights or obligations thereunder, by waiver or otherwise.

4.2           The opinions set forth above are subject to the following exceptions and qualifications:

4.2.1                      We do not purport to express any opinion concerning any law other than Federal tax law including, but not limited to, the Code, currently applicable United States Treasury Department Regulations promulgated or proposed under the Code; current published administrative positions of the Internal Revenue Service contained in Revenue Rulings, current published Revenue Procedures, and judicial decisions applicable thereto.

4.2.2                      The opinion in this letter is limited in all respects to Federal tax law now in effect, which is subject to change prospectively and retroactively, to the matters set forth herein and as of the date hereof, and we assume no obligation to revise or supplement these opinions should any such law be changed by legislative action, judicial decision or otherwise.  The undersigned do not undertake to make any continuing analyses of the facts or law.

4.2.3                      An opinion of counsel is predicated upon all of the facts and conditions set forth in the opinion and is based upon counsel’s analysis of the applicable law as described and limited above.  It is neither a guarantee of the current status of the law, nor should it be accepted as a guarantee that a court of law or an administrative agency will concur in the opinion.

4.2.4                      This opinion of counsel is the opinion of the undersigned based solely upon the facts set forth above and the specific documents referred to herein.  We have relied on the presumption of regularity and continuity to the extent necessary to enable us to provide our opinion.  To the extent that any facts contained in said documents or in this opinion prove not to be true, it is entirely possible that the conclusion of this opinion might be different.

4.2.5                      The opinions expressed in this letter are being provided for MedCom’s benefit and the benefit of its successors and assigns in connection with the share distribution described herein, and may not be used or relied upon, nor may copies hereof be delivered to, any other person or entity without our express written consent, except for copies delivered as required by any applicable regulatory authority.

Very truly yours,

MOHR, HACKETT, PEDERSON,

BLAKLEY & RANDOLPH, P,C,

/s/ David M. Kozak

By David M. Kozak

3

EX-10.1

                                                                    EXHIBIT 10.1

                        CARD ACTIVATION TECHNOLOGIES INC.
                                STOCK OPTION PLAN

     1.   DEFINITIONS.  For purposes of this CARD ACTIVATION TECHNOLOGIES INC.
STOCK  OPTION  PLAN,  certain  terms  used  herein  are  defined  as  follows:

          1.1     "BOARD"  shall  mean  the  Board  of  Directors of the Company
charged  with  responsibility  of administering the Plan, interpreting the Plan,
and  evaluating  the  performance  of persons performing or requested to perform
services  on  behalf  of  the Company and awarding stock options to such persons
deemed  deserving  of  receiving  additional  compensation  for  their  effort.

          1.2     "CONSULTANTS"  shall  mean  independent contractors and others
not employed by the Company who perform services to advance the interests of the
Company.

          1.3     "DIRECTORS"  shall  mean the Board of Directors of the Company
as  elected  from  time  to  time.

          1.4     "EMPLOYEES"  shall  mean persons in the employ of the Company,
its  parent  or  any  subsidiary,  as officers, department heads, administrative
personnel,  counsel,  and  other  key  employees  of  the  Company.

          1.5     "EXPIRATION  DATE" shall mean the date, specified in an Option
Agreement,  after  which the option can no longer be exercised. This date can be
no  later than ten (10) years after the option is granted. Options granted under
the  Plan can also become unexercisable by forfeiture or termination or lapse in
accordance  with  provisions  of  the  Plan  and/or  Option  Agreement.

          1.6     "INCENTIVE  STOCK  OPTION" shall mean options granted pursuant
to  this  Plan to Employees intended to qualify for tax treatment under Internal
Revenue  Code  Section  422  and  identified in the Stock Option Agreement as an
Incentive  Stock  Option.

          1.7     "NON-STATUTORY  STOCK  OPTION"  shall  mean  options  granted
pursuant  to  this  Plan  to  Employees,  Consultants  and  Directors performing
services  on  behalf of the Company and identified in the Stock Option Agreement
as  a  Non-Statutory  Stock  Option.

          1.8     "OPTION  AGREEMENT"  shall mean the agreement, which describes
and defines the terms and conditions of the option granted and condition for its
exercise,  entered into from time to time between the Company and persons chosen
by  the  Board  to  receive  Stock Options under this Plan. The Option Agreement
shall  be  in  substantially  the  form  of  Exhibit  "1"  hereto.

     2.   PURPOSE. The purpose of this CARD ACTIVATION TECHNOLOGIES INC. STOCK
OPTION  PLAN  (the  "Plan")  is  to  further  the  interests  of CARD ACTIVATION
TECHNOLOGIES INC. (hereinafter called "the Company") by providing incentives for
officers,  department  heads,  administrative  personnel, counsel, and other key
employees of the Company as well as consultants and directors of the Company who
may  be  designated  for  participation  in  the  Plan


                                        1

and  to provide additional means of attracting and retaining competent personnel
in  responsible  positions.

     3.   ADMINISTRATION.  The  Plan  shall  be  administered  by the Board of
Directors of the Company (or a Committee of the Board of Directors appointed for
that  purpose).  Subject  to  the provisions of the Plan and applicable law, the
Board  is  authorized  to interpret the Plan and to prescribe, amend and rescind
rules  and  regulations  regulating  to  the  Plan  and  to  any options granted
thereunder  and  to make all other determinations necessary or advisable for the
administration  of  the  Plan.

     4.   PARTICIPANTS AND ALLOTMENTS. The Board shall determine and designate
from time to time those Employees of the Company to whom Incentive Stock Options
are  to  be  granted,  and  those  Consultants,  Directors  of  the Company, and
Employees  of  Company to whom Non-Statutory Options are granted and who thereby
become participants in the Plan. The Board shall allot to such participants (the
"Optionees")  options to purchase shares in such amounts as the Board shall from
time  to  time  determine;  PROVIDED  that  the  aggregate  fair  market  value
(determined  as  of  the  time  the option to purchase shares is granted) of the
shares  for  which  any  Employee of the Company may first exercise an Incentive
Stock Option in any calendar year (under this Plan and all other Incentive Stock
Option plans of the Company and/or its parent and subsidiary corporations) shall
not  exceed  $100,000.  No  member  of the Board shall have any right to vote or
decide  upon  any matter relating solely to himself or a member of his immediate
family  or  solely  to any of his rights or benefits (or rights or benefits of a
member  of his immediate family) under the Plan. Participation in the Plan shall
not  confer  any right of continuation of service as an employee of the Company.

     5.   SHARES SUBJECT TO THE PLAN. Under this Plan, the Board may from time
to  time grant options to participants entitling the holders thereof to purchase
shares  of the Company's authorized and unissued Common Stock up to an aggregate
of 1,000,000 shares. Of this aggregate total, 500,000 shares shall be designated
for offers of Incentive Stock Options to Employees and 500,000 for Non-Statutory
Options  for Consultants, Directors, and Employees of the Company. if any option
granted  under  the  Plan  shall terminate or expire unexercised, in whole or in
part,  the  shares so released from option may be made the subject of additional
options  granted  under  the  Plan of the same type as the terminated or expired
option.  The  Company  shall reserve and keep available such number of shares of
stock  as will satisfy the requirements of all outstanding options granted under
the  Plan. if there is any change in the Company's shares of Common Stock, as by
stock  splits,  reverse  stock  splits, stock dividends or recapitalization, the
number  of shares available for option and the shares subject to option shall be
appropriately  adjusted  by  the  Board.

     6.   OPTION  AGREEMENT.  In  making  any determination as to Optionees to
whom  options  shall  be granted and as to the number of shares to be covered by
such  options,  the  Board  shall take into account the duties of the respective
Optionees  who  are  Employees  of  the  Company,  the  present  and  potential
contributions  of  Optionees  to  the  success  of  the  Company,  the period of
Optionee's  service  benefitted the Company, and such other factors as the Board
shall  deem  relevant  in connection with accomplishing the purpose of the Plan.
Each option, whether an Incentive Stock Option or otherwise, shall be subject to
all  terms  and provisions of this Plan and as set forth in the Option Agreement
between  the  Company  and the Optionee receiving the same. The option may be in
such form, not inconsistent with the terms of this Plan, as shall be approved by
the  Board,


                                        2

including,  but  not  limited  to,  the  following  terms  and  conditions:

          (a)     Options  granted  under  the  Plan  shall  be  exercisable for
periods  not  exceeding  ten  (10)  years  from  the  date  of the grant, unless
terminated  sooner  in  accordance  with  this  Plan  or  the  Option Agreement.

          (b)     Option  Price.  The  option  price or prices shall be the fair
market  value  of  issued  and outstanding shares of stock of the Company at the
date  the option is granted. For the purposes hereof, fair market value shall be
determined  in  good  faith  based  upon  facts  and  circumstances.

     7.   OPTION  PERIOD.  The  term  of this Plan and the period during which
options  may be granted hereunder shall be ten (10) years from the date the Plan
is  approved  by the Board or Shareholders of the Company, whichever is earlier.
No option granted pursuant to the Plan shall be exercisable after the expiration
of  ten  (10) years from the date the option is first granted. No option granted
pursuant  to the Plan to a person then owning more than ten percent (10%) of the
voting  power  of  the  Company's  voting  stock  shall be exercisable after the
expiration  of five (5) years from the date the option is first granted. For the
purposes  of  the  preceding  sentence  (a)  the Optionee shall be considered as
owning the stock owned directly or indirectly by or for himself, the stock which
the  Optionee  may  purchase  under  outstanding  options  and  the stock owned,
directly or indirectly, by or for his brothers and sisters (whether of the whole
or  half  blood), spouse, ancestors, and lineal descendants, and (b) stock owned
directly  or  indirectly, by or for a corporation, partnership, estate, or trust
shall  be  considered as being owned proportionately by or for its shareholders,
partners,  or  beneficiaries. The expiration date stated in the Option Agreement
is  hereinafter  called  the  Expiration  Date.

     8.   CONDITIONS  OF  INCENTIVE  STOCK  OPTION.  Incentive  Stock  Options
granted  pursuant  to  this  Plan  shall be subject to the following conditions:

          (a)     if the employment of the Optionee by the Company is terminated
for any reason other than his death, all unexercised options shall terminate, be
forfeited  and  shall  lapse  immediately.

          (b)     if the Optionee dies while employed by the Company then within
six  months after the date of the Optionee's death, subject to the provisions of
Sections  6(a) and 7 above and the Option Agreement, the option may be exercised
by his estate or by any person who has acquired the Optionee's right to exercise
the option by bequest or inheritance to the extent the option was exercisable as
of  the  date  of  his  death. Upon the expiration of such six-month period, all
unexercised  options  shall  terminate,  be  forfeited  and  shall  lapse.

          (c)     Except as otherwise provided in Section 8(b) above, the option
and  all  rights granted hereunder shall not be transferred by the Optionee, and
may not be assigned, pledged or hypothecated in any way and shall not be subject
to execution, attachment or similar process. Upon any attempt by the Optionee to
transfer  the  option, or to assign, pledge, hypothecate or otherwise dispose of
such  option  or  of  any  rights  granted hereunder, contrary to the provisions
hereof,  or  upon the levy of any attachment or similar process upon such option
or  such  rights,  such  option  and  such


                                        3

rights  shall immediately become null and void. The option shall be exercisable,
during  the  lifetime  of  the  Optionee,  only  by  the  Optionee.

     9.   CONDITIONS  OF  NON-STATUTORY  OPTION.  Non-Statutory  Stock Options
granted  pursuant  to  this  Plan  shall be subject to the following conditions:

          (a)     If  the Optionee terminates his employment with the company or
ceases  to  perform  services  for  the  benefit of the Company as a Director or
Consultant  performing  services  for  the Company for any reason other than his
death,  all  unexercised  options shall terminate, be forfeited, and shall lapse
immediately.

          (b)     If  the  Optionee  dies  while  employed  by  the  Company  or
performing  services  for the benefit of the Company as a Director or Consultant
then  within  six  (6) months after the date of the Optionee's death, subject to
the provisions of Sections 6(a) and 7 above and the Option Agreement, the option
may  be exercised by his estate or by any person who has acquired the Optionee's
right  to exercise the option by bequest or inheritance to the extent the option
was  exercisable  as  of  the  date  of  his  death. Upon the expiration of such
six-month  period,  all  unexercised  options shall terminate, be forfeited, and
shall  lapse.

          (c)     Except as otherwise provided in Section 9(b) above, the option
and  all  rights granted hereunder shall not be transferred by the Optionee, and
may not be assigned, pledged or hypothecated in any way and shall not be subject
to execution, attachment or similar process. Upon any attempt by the Optionee to
transfer  the  option, or to assign, pledge, hypothecate or otherwise dispose of
such  option  or  of  any  rights  granted hereunder, contrary to the provisions
hereof,  or  upon the levy of any attachment or similar process upon such option
or  such  rights,  such option and such rights shall immediately become null and
void. The option shall be exercisable, during the lifetime of the Optionee, only
by  the  Optionee.

     10.  EXERCISE  OF  OPTIONS.

          (a)     To  exercise  the  option, the Optionee or his successor shall
give  written  notice  to  the  Company's  Treasurer  at the Company's principal
office,  accompanied  by  full  payment  of  the  shares  being purchased and an
Investment  Letter  stating that the shares are purchased for investment and not
with  a  view  to  distribution  in  form  and substance as shown in Exhibit "2"
hereto.  However, this Letter shall not be required if the shares subject to the
option are registered with the Securities and Exchange Commission. If the option
is  exercised by the successor of the Optionee, following his death, proof shall
be  submitted,  satisfactory  to  the  Board,  of  the right of the successor to
exercise  the  option.

          (b)     Shares  of  stock  issued pursuant to this Plan which have not
been  registered  with  the  Securities  and  Exchange Commission shall bear the
following  legend:

     The  securities  represented  by  this stock certificate have not been
     registered  under the Securities Act of 1933 (the "Act") or applicable
     state  securities  law  (the  "State  Acts"),  and  shall not be sold,
     pledged,  hypothecated,  donated  or otherwise transferred (whether or
     not  for  consideration) by the holder except upon the issuance to the
     Corporation  of  a  favorable


                                        4

     opinion  of  its  counsel  and/or the submission to the Corporation of
     such  other  evidence  as  may  be  satisfactory  to  counsel  for the
     Corporation,  to  the  effect  that  any such transfer shall not be in
     violation  of  the  Act  and  the  State  Acts.

          (c)     The  Company  shall not be required to transfer or deliver any
certificate  or  certificates  for  shares  purchased  upon any exercise of such
option: (i) until after compliance with all then applicable requirements of law;
and  (ii)  prior to admission of such shares to listing on any stock exchange on
which the stock may then be listed. In no event shall the Company be required to
issue  fractional  shares  to  the  Optionee.

     11.  REGISTRATION.  If  the Company shall be advised by its counsel that
shares  of  stock  deliverable upon any exercise of an option are required to be
registered  under  the  Securities Act of 1933, or that the consent of any other
authority  is  required  for  the  issuance  of  same,  the  Company  may effect
registration  or  obtain  consent,  and delivery of shares by the Company may be
deferred  until  registration  is  effected  or  consent  obtained.

     12.  ISSUANCE  OF STOCK. No stock shall be issued until full payment for
such  stock  has  been  made. The Optionee shall have no rights as a shareholder
with  respect  to  optioned  shares  until  the  date of the issuance of a stock
certificate  to  him  for such shares. No adjustment shall be made for dividends
(ordinary  or  extraordinary,  whether in cash, securities or other property) or
distributions  or  other  rights  for which the record date is prior to the date
such  certificate  is  issued,  except  as provided in Sections 5 and 13 hereof.

     13.  CORPORATE  REORGANIZATION.  If  there  shall  be  any  capital
reorganization  or  consolidation  or  merger  of  the  Company  with  another
corporation  or  corporations,  or  any  sale of all or substantially all of the
Company's  properties  and  assets to any other corporation or corporations, the
Company shall take such action as may be necessary to enable Optionee to receive
upon  any  subsequent exercise of their respective options, in whole or in part,
in  lieu  of shares of common stock, securities or other assets as were issuable
or  payable  upon  such reorganization, consolidation, merger or sale in respect
of,  or  m  exchange  for  such  shares  of  common  stock.

     14.  AMENDMENTS  AND  TERMINATION.  The  Board  of  Directors may amend,
suspend,  discontinue or terminate the Plan, but no such action may, without the
consent  of  the  Optionee  alter  or  impair  his option, except as provided in
Section  11.

     This  Plan  has  been  duly  adopted  by  the  Board  of  Directors of CARD
ACTIVATION  TECHNOLOGIES  INC.  on  this  31st  day  of  October,  2006.

                                        CARD ACTIVATION TECHNOLOGIES INC.

[CORPORATE  SEAL]

                                        By: /s/ William P. Williams
                                            --------------------------------
                                                Chief  Executive  Officer

ATTEST:

/s/ William P. Williams
- -----------------------------------
Corporate  Secretary


                                        5

                                   EXHIBIT "1"

                        CARD ACTIVATION TECHNOLOGIES INC.
                             STOCK OPTION AGREEMENT

     THIS AGREEMENT is made this         day of                  , 20   , by and
                                 -------        -----------------    ---
between  CARD ACTVIATION TECHNOLOGIES INC. (hereinafter called the "Company"), a
Nevada  corporation,  and,  (hereinafter  called  the  "Optionee").

                                   WITNESSETH:

WHEREAS,  the  Board of Directors of the Company has adopted a Stock Option Plan
(the  "Plan");  and

WHEREAS,  the  Compensation  Board  of  the  Company  ("the Board") considers it
desirable  and  in  the  Company's  best interests that the Optionee be given an
opportunity to purchase shares of its Common Stock in furtherance of the Plan to
provide  incentive  for  the  Optionee  to
                                           -------------------------------------
or  remain  in  the  employ  of  the  Company  and to promote the success of the
Company.

NOW,  THEREFORE,  in  consideration  of  the  premises, it is agreed as follows:

     1.   Grant  of  Option.  The  Company  hereby  grants to the Optionee the
right,  privilege  and  option to purchase                            (       )
                                           --------------------------  -------
shares,  of  the  Common  Stock  of  the  Company,  at  a  purchase  price  of
                                                 Dollars ($          ) per share
- ------------------------------------------------           ----------
in  the manner and subject to the conditions hereinafter provided. Such purchase
price  is  not  less than the fair market value of the shares of Common Stock of
the  Company  at  the  time  this  option  is  granted. This [  ] is [  ] is not
intended  to  be  an  Incentive  Stock  Option.

     2.   Period  of  Exercise  of  Option.

          (a)     The  option  will  be  exercisable  for a period of
                                                                      ---------
(     )  years  from the date of the grant. The options granted hereunder may be
 -----
exercised  with  respect  to  no  more  than  the  following  cumulative amounts
(including  any  such  options  previously  exercised):

     Beginning  January  1,  20                             %
                               ----                   ------
     Beginning  January  1,  20                             %
                               ----                   ------
     Beginning  January  1,  20                             %
                               ----                   ------
     Beginning  January  1,  20                             %
                               ----                   ------
     Beginning  January  1,  20                             %
                               ----                   ------
     Beginning  January  1,  20                             %
                               ----                   ------

If  any Options are not exercised by the end of a period of         (    ) years
                                                           --------- ----
from  the  date  of  the  grant,  they  will  lapse.


                                        1

[__]   If  the option is intended to be an Incentive Stock Option, the Agreement
       includes  the  following:

          (b)     If the employment of the Optionee by the Company is terminated
for  any  reason  other  than  his death, all unexercised portions of the option
shall  terminate,  be  forfeited  and  shall  lapse  immediately.

          (c)     If  the  Optionee  dies  while  employed  by the Company, then
within  six  months  after  the  date  of  the  Optionee's death, subject to the
provisions  of subparagraph (a) above, the option may be exercised by his estate
or by any person who has acquired the Optionee's right to exercise the option by
bequest  or  inheritance to the extent the option was exercisable as of the date
of  his  death.  Upon  the  expiration of such six-month period, all unexercised
options  shall  terminate,  be  forfeited  and  shall  lapse.

[__]    If  the  option  is  intended  to  be  a Non-Statutory Stock Option, the
        Agreement  includes  the  following.

          (b)     If  the Optionee ceases to preform services for the benefit of
Company  as  a  Director or Consultant or terimnates employment with the Company
for  any  reason  other  than  his death, all unexercised portions of the option
shall  terminate,  be  forfeited  and  shall  lapse  immediately.

          (c)     If the Optionee dies while preforming services for the benefit
of  the  Company  as  a Director or Consultant or terminates employment with the
Company,  then within six months after the date of the Optionee's death, subject
to  the provisions of subparagraph (a) above, the option may be exercised by his
estate  or  by  any person who has acquired the Optionee's right to exercise the
option  by bequest or inheritance to the extent the option was exercisable as of
the  date  of  his  death.  Upon  the  expiration  of such six-month period, all
unexercised  options  shall  terminate,  be  forfeited  and  shall  lapse.

     3.   Method  of  Exercise.  In order to exercise the option, the Optionee
must  give  written  notice  to  the  Secretary  of the Company at its corporate
offices.  Said  notice shall be accompanied by full payment for the shares being
purchased;  an  Investment  Letter  containing the statement that the shares are
purchased for investment and not with a view to distribution, in the form of the
letter attached hereto and marked Exhibit "A". If the option is exercised by the
successor  of the Optionee following his death, proof shall also be submitted of
the  right  of  the  successor  to  exercise  the option. Shares of stock issued
pursuant  to  the  option  shall  bear  the  following  legend:

     The  securities  represented  by  this stock certificate have not been
     registered under the Securities Act of 1933 (the "Actt') or applicable
     state  securities  laws  (the  "State  Acts"),  and shall not be sold,
     pledged,  hypothecated,  donated, or otherwise transferred (whether or
     not  for  consideration) by the holder except upon the issuance to the
     Corporation of a favorable opinion of its counsel and/or submission to
     the  Corporation  of  such  other  evidence  as may be satisfactory to
     counsel  for  the  Corporation,  to  the effect that any such transfer
     shall  not  be  in  violation  of  the  Act  and  the  State  Acts.


                                        2

and  shall  be  subject  to  appropriate stop transfer instructions. The Company
shall not be required to transfer or deliver any certificate or certificates for
shares  purchased  upon  any  such  exercise  of  said  option:  (a) until after
compliance  with  all  then  applicable  requirements  of  law; and (b) prior to
admission of such shares to listing on any stock exchange on which the stock may
then  be  listed.  In no event shall the Company be required to issue fractional
shares  to  the  Optionee.

     4.   Limitation  upon  Exercise.  The  option  is not transferable by the
Optionee  otherwise  than by will or the laws of descent and distribution and is
exercisable,  during  the  lifetime  of  the  Optionee,  only  by  the Optionee.

     5.   Stock  Adjustment. In the event of any change in Common Stock of the
Company  by  reason of a stock split, stock dividend, recapitalization, exchange
of  shares  or  other transaction, the number of shares remaining subject to the
option  and  the  option  price per share shall be appropriately adjusted by the
Board.

     6.   Corporation  Reorganization.  If  there  shall  be  any  capital
reorganization  or  consolidation  or  merger  of  the  Company  with  another
corporation  or  corporations,  or  any  sale  of all or substantially an of the
Company's  properties  and  assets to any other corporation or corporations, the
Company  shall  take  such  action as may be necessary to enable the Optionee to
receive  upon  any  subsequent  exercise of such option, in whole or in part, in
lieu  of  shares of Common Stock, securities or other assets as were issuable or
payable  upon  such reorganization, consolidation, merger or sale in respect of,
or  in  exchange  for  such  shares  of  Common  Stock.

     7.     Rights  of  Shareholder.  Neither  the  Optionee,  his  legal
representative,  nor  other  persons entitled to exercise the option shall be or
have  any  rights  of  a  shareholder  in  the  Company in respect of the shares
issuable  upon  exercise  of  the  option  granted  hereunder,  unless and until
certificates  representing such shares shall have been delivered pursuant to the
terms  hereof.

     8.   Stock  Reserved.  The  Company shall at all times during the term of
this  Agreement  reserve  and keep available such number of shares of its Common
Stock as will be sufficient to satisfy the terms of this Agreement and shall pay
any  original  issue  taxes  on  the  exercise  of  this  option.

     9.   Binding  Effect.  This  Agreement shall be binding upon and inure to
the  benefit  of  any  successor  or  successors  of  the  Company.


                                        3

     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
executed  the  day  and  year  first  above  written.

                                   CARD ACTIVATION TECHNOLOGIES INC.

[CORPORATE  SEAL]

                                   By:
                                      -------------------------------------
ATTEST:                                     Chief  Executive  Officer


- -------------------------
Corporate  Secretary

WITNESS:

                                   By:

- -------------------------             -------------------------------------


                                        4

EX-10.2

                                                                    EXHIBIT 10.2

                              SEPARATION AGREEMENT

     This Separation Agreement (this "Agreement"), dated as of October 31, 2006,
by  and between MedCom USA, Incorporated, a Delaware corporation ("MEDCOM") Card
Activation  Technologies  Inc.,  a  Delaware corporation ("CAT") which as of the
date  of  this  agreement  is  a  wholly  owned  subsidiary  of  MedCom.

                                    RECITALS

     Whereas, MedCom desires to separate its several businesses comprised of its
healthcare  and  financial  transaction  solutions  business and its proprietary
patented  payment  transaction  technology, both of which have been continuously
engaged  in  their respective businesses for substantially more than five years,
into  independent  companies;  and

     Whereas,  such  separation will allow the separate companies focus on their
separate  business  models  and  markets,  allow  management  to  focus on their
respective  businesses and enhance access to financing by allowing banks and the
financial  community  to  focus  separately  on  the  respective businesses; and

     Whereas, MedCom intends to Spin-off through a distribution of CAT shares to
the  shareholder's  of  MedCom on a date certain, subject to certain conditions;
and

     Whereas,  the  distribution  of  the CAT shares is intended to be a taxable
event  as  Medcom  will  retain 40% of the CAT Stock, this dristibution will not
meet  the  80%  control  requirement  of  Section  355  and,

     Whereas,  MedCom and CAT have determined that it is necessary and desirable
to set forth certain agreements that will govern certain matters relating to the
Distribution.

     Therefore,  in  consideration  of  the  mutual  agreements,  provisions and
covenants  contained  in  this  agreement,  the  parties to it agree as follows:

                                    AGREEMENT

The  parties,  intending  to  be  legally  bound,  agree  as  follows:

                                    ARTICLE I
                                   DEFINITIONS

     For  purposes  of  this  Agreement,  the  following terms have the meanings
specified  or  referred  to  in  this  Article  I:

     1.1     "ADMINISTRATIVE  SERVICES  AGREEMENT"  means  the  Administrative
Services  Agreement  dated  the  date of this agreement and entered into between
MedCom  and  CAT.


- --------------------------------------------------------------------------------
Separation Agreement                                                Page 1 of 11



     1.2     "AFFILIATE"  means  the  term  "affiliate" as defined in Regulation
12b-2  under  the  Exchange  Act.

     1.3     "ANCILLARY  AGREEMENTS"  means   the  Tax  Sharing  Agreement,  the
Administrative  Services  Agreement and any other agreement entered into between
the parties to this agreement on or prior to the Distribution Date, the terms of
which  are  to  be  effective  after  the  Distribution  Date.

     1.4     "CODE"  means  the  Internal  Revenue  Code  of  1986,  as amended.

     1.5     "COMMISSION"  means  the  Securities  and  Exchange  Commission.

     1.6     "DISTRIBUTION" means the distribution to the MedCom shareholders of
certain  shares  of  CAT  common stock owned by MedCom on the Distribution Date.

     1.7     "DISTRIBUTION  DATE"  means  the  close  of  business  on  the date
determined  by  the MedCom Board as of which the Distribution shall be effected.

     1.8     "ERISA"  means the Employee Retirement Income Security Act of 1974,
as  amended,  or  any  successor  legislation.

     1.9     "EXCHANGE  ACT"  means  the  Securities  Exchange  Act  of 1934, as
amended.

     1.10    "INSURANCE PROCEEDS" means those monies (i) received by an  insured
from an insurance carrier, or (ii) paid by an insurance carrier on behalf of the
insured,  in  either  case  net of any applicable premium adjustments (including
reserves),  retrospectively  rated premium adjustments, deductibles, retentions,
or  costs  paid  by  such  insured.

     1.11    "IRS"  means  the  Internal  Revenue  Service.

     1.12    "MEDCOM  BOARD"  means  the  board  of  directors  of  MedCom.

     1.13    "MEDCOM  STOCK"  means  the  common  stock  of  MedCom.

     1.14    "CAT  COMMON  STOCK"  means  the  common  stock  of  CAT.

     1.15    "LIABILITIES"  means  any  and  all  debts,  losses,  liabilities,
claims,  damages,  obligations,  payments,  costs  and  expenses,  absolute  or
contingent,  mature  or  not  mature,  liquidated  or  unliquidated,  accrued or
unaccrued,  known  or  unknown,  whenever arising (unless otherwise specified in
this  agreement),  including all attorney's fees, costs and expenses relating to
them,  and  including,  without  limitation,  those  debts, losses, liabilities,
claims,  damages,  obligations,  payments, costs and expenses, arising under any
law, rule, regulation, action, threatened action, order or consent decree of any
governmental  entity  or  any  award  of  any  arbitrator of any kind, and those
arising  under  any  contract,  commitment  or  undertaking.

     1.16    "OTC-BB" means the National Association of Securities Dealers Over
the  Counter  Bulletin  Board  quotation  system.


- --------------------------------------------------------------------------------
Separation Agreement                                                Page 2 of 11



     1.17    "RECORD  DATE"  means  the  close  of  business  on the  date to be
determined  by  the  MedCom  Board  as  the  record  date  for the Distribution.

     1.18    "TAX SHARING AGREEMENT" means the tax sharing agreement, dated the
date  of  this  agreement,  entered  into  between  MedCom  and  CAT.

                                   ARTICLE II
                                THE DISTRIBUTION

     2.01    THE  DISTRIBUTION.

             (a)    MedCom  and  CAT  agree  that  effective  at  the  close  of
     business  on  December  15,  2006,  MedCom's  shareholders will be entitled
     to  one  share of CAT common stock for every one share of MedCom stock held
     at  that  time. The payables date for the actual distribution of the shares
     will  be  determined  by  the  Board  of MedCom and shall be based upon the
     filing  of  the  CAT  registration  statement  under  Form  SB-2.

             (b)    On the payable date, MedCom will  deliver  to  the  transfer
     agent  for  CAT  instructions  for  the  stock  transfer  agent to act as a
     distribution  agent  for  the shares of CAT to be distributed to the MedCom
     stockholders.  The distribution agent will effect delivery of the shares of
     the  CAT common stock issuable in the spin off through the transfer agent's
     book-entry registration system by mailing to each record holder a statement
     of holdings detailing the record holder's ownership interest in CAT and the
     method  by  which  the  record  holder  may  access  its  account.  SB-2.

             (c)    Following  the  payable  date,  MedCom shall retain
     60,000,000  shares  of  common  stock  of  CAT.

     2.02    COOPERATION  PRIOR TO THE DISTRIBUTION.  MedCom and CAT shall  take
all  such action as may be necessary or appropriate under the securities or blue
sky  laws  of  states  or  other political subdivisions of the United States, in
connection  with  the  transactions  contemplated  by  this  agreement  and  the
Ancillary  Agreements.

     2.03    CONDITIONS TO DISTRIBUTION. This agreement and the consummation  of
each  of  the  transactions  provided  for in this agreement shall be subject to
approval of the MedCom Board. The MedCom Board shall in its discretion establish
the  Record  Date,  the  Distribution Date and payables date and all appropriate
procedures  in  connection  with  the  Distribution,  but  in no event shall the
Distribution  Date  occur  prior  to  such  time  as  all  of the following have
occurred:  (i) the MedCom Board has formally approved the Distribution; and (ii)
the  transactions contemplated by Article III shall have been consummated in all
material  respects;  provided that the satisfaction of such conditions shall not
create any obligation on the part of MedCom or any other party to this agreement
to effect the Distribution or in any way limit MedCom's power of termination set
forth  in  Section  6.08  or alter the consequences of any such termination from
those  specified  in  such  Section.


- --------------------------------------------------------------------------------
Separation Agreement                                                Page 3 of 11



     2.04    CERTAIN  POST-DISTRIBUTION  TRANSACTIONS.

             (a)    CAT shall comply  with  each  representation  and  statement
     made,  or  to  be  made,  to  any  taxing  authority in connection with any
     ruling  obtained,  or to be obtained, by MedCom and/or CAT, from any taxing
     authority  with respect to the transactions contemplated by this agreement.

             (b)     MedCom  shall  from  time to time  after  the  Distribution
     Date,  and  without  additional  consideration,  execute  such  deeds,
     assignments  and  other  instruments  of  conveyance as may be necessary or
     advisable  to  transfer  or confirm legal, record ownership of assets (both
     real  and  personal)  used  by  CAT  in  its  businesses  to  or  in  CAT.

             (c)     MedCom  and  CAT  may  from  time to time find it desirable
     to  combine  and/or  coordinate  the  purchase  of  various  types  of
     insurance  from  third  party  insurers.  Should  MedCom  and CAT desire to
     combine  and/or  coordinate  the purchase of insurance, it shall be done in
     such  a way that is beneficial to both parties and would require each party
     to  hold  each other harmless from any and all Liabilities of whatever type
     that  might  arise  out  of  the  respective  party's  operations.

             (d)     CAT with MedCom's  cooperation shall also prepare  and file
     with  the  Commission,  an  SB-2  registration  statement  and  a  Form  8,
     which  shall include such information as is necessary to cause the SB-2 and
     the  Form  8  to  become  effective  under  the  Exchange  Act  as  soon as
     practicable.

                                   ARTICLE III
                    TRANSACTIONS RELATING TO THE DISTRIBUTION

     3.01    ALLOCATION  OF  LIABILITIES  BETWEEN  MEDCOM  AND  CAT.

             (a)     As of the Distribution Date, or as soon as possible after,
     CAT  will  become  the  obligor  or  guarantor,  as  applicable,  of    the
     Liabilities  associated  with  the  businesses  being  conducted by CAT and
     identified  in  Exhibit  A  to  this  agreement,  replacing  MedCom in such
     capacity.  CAT shall assume liability for all of the Liabilities identified
     in  Exhibit  A,  and  indemnifies MedCom and holds MedCom harmless from all
     Liabilities  resulting  from them pursuant to the provisions of Article IV.

             (b)     All  intercompany  account balances  between MedCom and CAT
     for  transactions  occurring  prior  to  the  Distribution  Date  shall  be
     settled  by  a  payment  in cash on or shortly after the Distribution Date.

     3.02    SATISFACTION OF ANY CLAIMS AGAINST MEDCOM.  CAT agrees that, except
as  provided  in the tax sharing agreement, the making of the reconciliation and
assumptions  described  in  Section  3.01  by  the  parties shall be in complete
satisfaction  of  any claim which a party might otherwise have against the other
as  parent  or  shareholder  by reason of dividends or tax benefits paid or made
available  between  them  at  any  time  prior  to  the  Distribution.

     3.03    ANCILLARY  AGREEMENTS.  On  or prior to the date of this agreement,
MedCom and CAT shall execute and deliver each Ancillary Agreement to which it is
a  party.


- --------------------------------------------------------------------------------
Separation Agreement                                                Page 4 of 11



     3.04    COMPENSATION  SHARES.  CAT shall reserve for issuance an additional
12,000,000  shares  of  CAT  common  stock  for employees of and consultants for
MedCom  as  consideration  and  compensation  for their efforts in effecting the
transaction  covered  by  this Agreement. Such shares shall be restricted shares
but  shall  be  covered  by  the  CAT registration statement being filed for the
restricted  shares  issued  under  this  Agreement to the MedCom stockholders if
issued  prior  to  the  effective  date  thereof.

     3.05    THE  CAT BOARD. CAT and MedCom shall take all actions which  may be
required  to  elect  or otherwise appoint, on or prior to the Distribution Date,
William  P.  Williams  as  the  sole  director  of  CAT.

                                   ARTICLE IV
                                 INDEMNIFICATION

     4.01    INDEMNIFICATION  BY  MEDCOM.  Except as  otherwise set forth in the
tax  sharing agreement, MedCom shall indemnify, defend and hold harmless CAT and
its  respective  directors,  officers  and  employees  and  each  of  the heirs,
executors,  administrators,  personal representatives, successors and assigns of
any  of  the  foregoing  (the  "CAT  indemnitees")  from and against any and all
Liabilities  of  the  CAT  indemnitees  arising  out of or due to the failure or
alleged  failure of MedCom or any of its Affiliates to pay, perform or otherwise
discharge  in  due  course  any  item  set  forth  in  this  Agreement.

     4.02    INDEMNIFICATION  BY CAT.  Except  as otherwise set forth in the tax
sharing  agreement, CAT shall indemnify, defend and hold harmless MedCom and its
respective  directors,  officers and employees and each of the heirs, executors,
administrators,  personal  representatives, successors and assigns of any of the
foregoing (the "MedCom indemnitees") from and against any and all Liabilities of
the  MedCom  indemnitees arising out of or due to the failure or alleged failure
of  CAT  or  any of its Affiliates to pay, perform or otherwise discharge in due
course  any  item  set  forth  in  this  Agreement.

     4.03    LIMITATIONS  ON  INDEMNIFICATION OBLIGATIONS.  The amount which any
party  (an "indemnifying party") is or may be required to pay to any other party
(an  "indemnitee")  pursuant  to  Section  4.01 or Section 4.02 shall be reduced
(including,  without  limitation,  retroactively)  by  any Insurance Proceeds or
other  amounts  actually recovered by or on behalf of such indemnitee and actual
cash reserves held by or for the benefit of such indemnitee, in reduction of the
related  liability. If an indemnitee shall have received the payment required by
this  agreement from an indemnifying party in respect of any liability and shall
subsequently  actually receive Insurance Proceeds or other amounts in respect of
such  liability, then such indemnitee shall pay to such indemnifying party a sum
equal  to  the  amount  of  such  Insurance  Proceeds  or other amounts actually
received  (up  to  but not in excess of the amount of any indemnity payment made
under  this  Agreement).  An insurer who would otherwise be obligated to pay any
claim shall not be relieved of the responsibility with respect to it, or, solely
by  virtue  of  the  indemnification  provisions  of  this  Agreement,  have any
subrogation  rights with respect to it, it being expressly understood and agreed
that  no  insurer  or  any  other  third party shall be entitled to a "windfall"
(i.e.,  a  benefit  they  would not be entitled to receive in the absence of the
indemnification  provisions  appearing  in  this  agreement)  by  virtue  of the
indemnification  provisions  of  this  Agreement.


- --------------------------------------------------------------------------------
Separation Agreement                                                Page 5 of 11



     4.04    PROCEDURE  FOR  INDEMNIFICATION.

             (a)     If an indemnitee shall receive notice or otherwise learn of
     the  assertion by a person (including, without limitation, any governmental
     entity)  who  is  not  a party to this agreement or to any of the Ancillary
     Agreements  of  any  claim or of the commencement by any such person of any
     action  (a "third party claim") with respect to which an indemnifying party
     may  be  obligated  to  provide indemnification pursuant to this agreement,
     such  indemnitee  shall  give  such indemnifying party written notice of it
     promptly after becoming aware of such third party claim; the failure of any
     indemnitee  to  give  notice  as  provided  in  this Section 4.04 shall not
     relieve  the  related  indemnifying  party  of  its  obligations under this
     Article IV, except to the extent that such indemnifying party is prejudiced
     by  such failure to give notice. Such notice shall describe the third party
     claim in reasonable detail and, if ascertainable, shall indicate the amount
     (estimated if necessary) of the liability that has been or may be sustained
     by  such  indemnitee.

             (b)     An indemnifying party  may elect to defend  or to  seek  to
     settle  or compromise, at such indemnifying party's own expense and by such
     indemnifying  party's own counsel, any third party claim. Within 30 days of
     the receipt of notice from an Indemnitee in accordance with Section 4.04(a)
     (or  sooner,  if  the  nature  of  such third party claim requires it), the
     indemnifying  party shall notify the related indemnitee if the indemnifying
     party  elects  not  to defend or to seek to settle or compromise such third
     party  claim,  which election may be made only in the event of a good faith
     assertion  by  the  indemnifying  party  that  a  claim was inappropriately
     tendered  under  Section  4.01 or 4.02. Unless an indemnifying party elects
     not  to  assume  the  defense of or to seek to settle or compromise a third
     party claim, such indemnifying party shall not be liable to such indemnitee
     under this article IV for any legal or other expenses subsequently incurred
     by  such  Indemnitee in connection with the defense of it; provided that if
     the  defendants  in  any such claim include both the indemnifying party and
     one  or  more  indemnitees,  and  in any indemnitee's reasonable judgment a
     conflict  of  interest  between  one  or  more of such indemnitees and such
     indemnifying  party exists in respect of such claim, such indemnitees shall
     have the right to employ separate counsel to represent such indemnitees and
     in  that  event  the  reasonable fees and expenses of such separate counsel
     (but  not  more  than  one  separate counsel reasonably satisfactory to the
     indemnifying  party) shall be paid by such indemnifying party; and provided
     further  that  the  indemnifying party shall not be entitled to settle such
     action  or  claim  on  behalf  of  the indemnitee without the prior written
     consent  of  the  indemnitee,  which  consent  shall  not  unreasonably  be
     withheld.  For the purposes of this agreement, such consent shall be deemed
     to be reasonably withheld only if such settlement would, in addition to the
     payment  of  money,  impose  an  unreasonable  and  material  burden on the
     indemnitee,  including without limitation a consent judgment or injunction.
     If  an  indemnifying  party  elects not to defend, or elects not to seek to
     settle  or  compromise,  a third party claim, such indemnitee may defend or
     seek  to  compromise  or  settle  such  third  party  claim.

             (c)     If an  indemnifying p arty chooses to defend  or to seek to
     compromise  or settle any third party claim, the related indemnitee, at its
     own  expense, shall make available to such indemnifying party any personnel
     or  any  books,  records  or other documents within its control or which it
     otherwise  has  the  ability  to  make  available  that  are  necessary  or
     appropriate  for


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Separation Agreement                                                Page 6 of 11



     such  defense,  settlement  or compromise, and shall otherwise cooperate in
     the  defense,  settlement  or  compromise  of  such  third  party  claims.

             (d)     Notwithstanding  anything  else  in  this  Section  4.04 to
     the  contrary, neither an indemnifying party nor an indemnitee shall settle
     or  compromise  any  third party claim unless such settlement or compromise
     contemplates  as an unconditional term of it the giving by such claimant or
     plaintiff  to  the indemnitee or the indemnifying party, respectively, of a
     written  release from all liability with respect to such third party claim.

              (e)     Any claim  on account of a liability which does not result
     from  a  third party claim shall be asserted by written notice given by the
     indemnitee to the related indemnifying party. Such indemnifying party shall
     have  a  period of 30 days after the receipt of such notice within which to
     respond  in  writing  to  it.  If  such indemnifying party does not respond
     within  such 30 day period, such indemnifying party shall be deemed to have
     rejected  responsibility  to  make payment. If such indemnifying party does
     respond  in  writing  within  such  30 day period and rejects such claim in
     whole  or in part, or in the event a claim is deemed to have been rejected,
     such  indemnitee  shall be free to pursue such remedies as may be available
     to  such  party  under  applicable  law.

             (f)     In  addition  to  any adjustments  required  pursuant  to
     Section  4.03, if the amount of any liability shall, at any time subsequent
     to  the  payment  required  by  this  agreement,  be  reduced  by recovery,
     settlement  or  otherwise,  the amount of such reduction, less any expenses
     incurred  in  connection  with  them,  shall  promptly  be  repaid  by  the
     indemnitee  to  the  indemnifying  party.

             (g)     Upon  the  written  demand  of  an  indemnitee,  an
     indemnifying  party shall reimburse or advance funds to such indemnitee for
     all  Liabilities reasonably incurred by it in connection with investigating
     or  defending  any  third  party claim in advance of its final disposition;
     provided  that  such  reimbursement  need be made only upon delivery to the
     indemnifying  party  of  an  undertaking  by  such  indemnitee to repay all
     amounts so reimbursed or advanced if it shall ultimately be determined that
     such Indemnitee is not entitled to indemnification under this Article IV or
     otherwise.

             (h)     In  the  event  of  payment  by  an  indemnifying  party to
     any  indemnitee in connection with any third party claim, such indemnifying
     party  shall  be  subrogated  to  and  shall  stand  in  the  place of such
     indemnitee  as  to  any  events  or  circumstances in respect of which such
     indemnitee  may  have any right or claim relating to such third party claim
     against  any  claimant  or  plaintiff  asserting  such third party claim or
     against  any  other  person.  Such  indemnitee  shall  cooperate  with such
     indemnifying  party  in a reasonable manner, and at the cost and expense of
     such  indemnifying party, in prosecuting, in its name or in the name of the
     indemnitee,  any  subrogated  right  or  claim.

     4.05    REMEDIES  CUMULATIVE.  The  remedies  provided  in  this Article IV
shall  be  cumulative  and shall not preclude assertion by any indemnitee of any
other  rights  or  the  seeking  of  any  and  all  other  remedies  against any
indemnifying  party;  provided  that  all  remedies  sought  or  asserted  by an


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Separation Agreement                                                Page 7 of 11



Indemnitee  against  an  indemnifying party with respect to a liability shall be
limited  by  and  be  subject  to  the  provisions  of  this  Article  IV.

     4.06    SURVIVAL  OF INDEMNITIES. The obligations  of each of (i) MedCom on
the  one  hand,  and  (ii)  CAT, on the other hand, under this Article IV, shall
survive  the  sale  or  other  transfer by it of any assets or businesses or the
assignment  by  it  of  any  Liabilities,  with respect to any loss of the other
related  to  such  assets,  businesses  or  Liabilities.

                                    ARTICLE V
                              ACCESS TO INFORMATION

     5.01    ACCESS  TO  INFORMATION.  From  and  after  the  distribution date,
MedCom  shall  afford  to  CAT and its authorized accountants, counsel and other
designated representatives reasonable access (including using reasonable efforts
to  give  access  to  persons  or  firms possessing information) and duplicating
rights  during  normal  business  hours  to  all  records,  books,  contracts,
instruments,  computer  data  and  other  data  and  information  (collectively,
"information") within MedCom's possession or under MedCom's direction or control
relating  to CAT or MedCom insofar as such access is reasonably required by CAT.
Similarly,  CAT  shall  afford to MedCom and its authorized accountants, counsel
and  other  designated  representatives  reasonable  access  (including  using
reasonable  efforts  to  give access to persons or firms possessing information)
and  duplicating rights during normal business hours to information within CAT's
possession or under CAT's direction or control relating to MedCom or CAT insofar
as  such  access  is reasonably required by MedCom. Information may be requested
under  this  article  V  for,  without  limitation,  audit,  accounting, claims,
litigation  and  tax  purposes, as well as for purposes of fulfilling disclosure
and  reporting  obligations  and  for  performing  this  agreement the Ancillary
Agreements  and  the  transactions  contemplated  hereby  and thereby. Except as
otherwise provided herein, MedCom and CAT shall retain and keep confidential all
information  relating  to  the  other  party.  The  confidentiality  obligation
contained  in  this  agreement  shall  not apply to information which (i) is not
confidential  at the time it is obtained by the party, (ii) becomes available to
the  party,  through  no  fault of that party's employees, agents, successors or
assigns under this agreement, from a third party source having no requirement of
confidentiality  to  the  other  party  to  this agreement, (iii) falls into the
public domain through no fault of the party, or (iv) is required to be disclosed
by  law  or  to  a  governmental  agency.

     5.02    RETENTION  OF  RECORDS.  Except  as otherwise agreed to in writing,
each  of  MedCom  and CAT shall retain for a period of at least seven years, all
information  relating  to the other;  provided that after the expiration of such
period,  such information shall not be destroyed or otherwise disposed of at any
time,  except  as  otherwise  provided in the Administrative Services Agreement.

     5.03    PRODUCTION  OF  WITNESSES.  At  all  times  from  and  after  the
Distribution  Date,  each of MedCom and CAT shall use reasonable efforts to make
available  to the other upon written request, its officers, directors, employees
and  agents  as  witnesses  to  the  extent  that such persons may reasonably be
required  in  connection  with any legal, administrative or other proceedings in
which  the  requesting  party  may  from  time  to  time  be  involved.


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Separation Agreement                                                Page 8 of 11



                                   ARTICLE VI
                                  MISCELLANEOUS

     6.01    COMPLETE  AGREEMENT;  CONSTRUCTION.  This  agreement, including any
schedules  and  exhibits  and  the Ancillary Agreements and other agreements and
documents  referred to herein, shall constitute the entire agreement between the
parties  with  respect  to  the  subject  matter  hereof and shall supersede all
previous  negotiations,  commitments  and  writings with respect to such subject
matter.  Notwithstanding any other provisions in this agreement to the contrary,
in  the  event  and  to  the  extent  that there shall be a conflict between the
provisions  of this agreement and the provisions of the tax sharing agreement or
the  Administrative  Services  Agreement,  the  provisions  of  the  tax sharing
agreement  or  the  Administrative  Services  Agreement  shall  control.

     6.02    SURVIVAL  OF  AGREEMENTS. Except  as otherwise contemplated by this
agreement,  all  covenants  and  agreements  of  the  parties  contained in this
agreement  shall  survive  the  Distribution  Date.

     6.03    EXPENSES.  Except  as otherwise  set forth in this agreement or any
Ancillary  Agreement,  all  costs and expenses arising prior to the distribution
date  (whether  or  not then payable) in connection with the consummation of the
transactions contemplated by this agreement other than (i) the fees and expenses
of  any  counsel,  (ii)  costs  incurred  in  connection  with  any  financing
arrangements  entered into by CAT, and (iii) fees of the National Association of
Securities  Dealers,  Inc.  incurred  with  respect  to  the  authorization  for
quotation  of  the  CAT corporate stock, all of which shall be paid by MedCom to
the  extent  that  appropriate  documentation concerning such costs and expenses
shall  be  provided  to  MedCom.  Such costs and expenses shall include, without
limitation,  printing  costs  and  other  expenses  related  to the preparation,
printing  and  Distribution  of  any  registration  statement  and  prospectus.

     6.04    GOVERNING  LAW.  This  agreement shall be governed by and construed
in  accordance  with  the  laws  of the State of Delaware, without regard to the
principles  of  conflicts  of  laws  of  it.

     6.05    NOTICES.  All  notices and  other communications hereunder shall be
in  writing  and shall be delivered by hand or mailed by registered or certified
mail (return receipt requested) to the parties at the following addresses (or at
such other addresses for a party as shall be specified by like notice) and shall
be  deemed  given  on  the  date  on  which  such  notice  is  received:

         To  MedCom:      7975 North Hayden Road, Suite D-333
                          Scottsdale,  AZ  85258

         To  CAT:         33 West Jackson  Blvd., Suite 1618
                          Chicago, IL 60604-3749

     6.06    AMENDMENTS.  This  agreement  may not be modified or amended except
by  an  agreement  in  writing  signed  by  both  parties  hereto.


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Separation Agreement                                                Page 9 of 11



     6.07    SUCCESSORS  AND  ASSIGNS.  This agreement and all of the provisions
hereof  shall  be binding upon and inure to the benefit of the parties and their
respective  successors  and  permitted  assigns.

     6.08    TERMINATION.  This  agreement  may  be  terminated  and  the
Distribution  abandoned at any time prior to the distribution date by and in the
sole  discretion  of the MedCom Board  without the approval of CAT, or of MedCom
shareholders.  In  the  event  of  such  termination,  no  party  shall have any
liability  of  any  kind  to  any  other  party except that expenses incurred in
connection  with  the transactions contemplated hereby shall be paid as provided
in  Section  6.04.

     6.09    NO THIRD-PARTY BENEFICIARIES.  Except for the provisions of Article
IV  relating  to  indemnitees,  this  agreement is solely for the benefit of the
parties  to it and their respective Affiliates and shall not be deemed to confer
upon  third  parties  any remedy, claim, reimbursement, claim of action or other
right  in  excess  of  those  existing  without  reference  to  this  agreement.

     6.10    TITLES  AND  HEADINGS.  Titles  and  headings  to sections  in this
agreement  are  inserted  for  the  convenience  of  reference  only and are not
intended  to  be  part  of  or  to  affect the meaning or interpretation of this
agreement.

     6.12    LEGAL  ENFORCEABILITY.  Any  provision  of this agreement  which is
prohibited  or  unenforceable  shall  be  ineffective  to  the  extent  of  such
prohibition or unenforceability without invalidating the remaining provisions of
it.  Any  such  prohibition  or  unenforceability shall not invalidate or render
unenforceable  such  provision  or  remedies otherwise available to any party to
this  agreement. Without prejudice to any rights or remedies otherwise available
to  any  party to this agreement, each party to this agreement acknowledges that
damages  would  be  inadequate  remedy  for any breach of the provisions of this
agreement  and  agrees  that the obligations of the parties under this agreement
shall  be  specifically  enforceable.

     6.13    DISPUTES.  If  a  dispute  arises between the parties under this or
any Ancillary Agreement, the parties agree that the dispute will be submitted to
a  steering  committee  of  two  members,  one  appointed  by each of party, the
decision  of  such  steering  committee  to  be  binding on both parties, and if
resolution  through  the  steering  committee fails, the parties shall resort to
final  and  binding  arbitration  (unless  a  lawsuit seeks injunctive relief or
specific  performance  or  if the lawsuit involves the tax free treatment of the
spin  off).  In  the  event that any dispute is to be decided by arbitration, an
arbitrator  shall  be  selected  under  the  Rules  of  the American Arbitration
Association.  Any  arbitration  shall be conducted in accordance with said rules
then  in  effect  and  shall be binding on the parties hereto and enforceable in
accordance  therewith.  The parties agree to waive, and not seek, consequential,
special,  indirect  or  incidental  damages  or  punitive  damages.


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Separation Agreement                                               Page 10 of 11



     In  witness,  the parties have caused this agreement to be duly executed as
of  the  day  and  year  first  written  above.

"MEDCOM"                                MEDCOM USA, INCORPORATED,
                                        a Delaware corporation


                                    By: /s/ William P. Williams
                                        ----------------------------------------
                                        William P. Williams, CEO

"CAT"                                   CARD ACTIVATION TECHNOLOGIES INC.,
                                        a Delaware corporation


                                    By: /s/ Michael Malet
                                        ----------------------------------------
                                        Michael Malet, Executive Vice President


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Separation Agreement                                               Page 11 of 11

EX-10.3

                                                                    EXHIBIT 10.3

                              TAX SHARING AGREEMENT

     This tax sharing agreement (the "AGREEMENT"), dated as of October 31, 2006,
by  and  between MedCom USA, Incorporated, a Delaware corporation ("MEDCOM") and
Card  Activation  Technologies  Inc., a Delaware corporation ("CAT") which as of
the  date  of  this  agreement  is  a  wholly  owned  subsidiary  of  MedCom.

                                    RECITALS:

     MedCom  desires  to  separate  its  businesses  into independent companies.
MedCom  intends  to  spin-off (the "SPIN-OFF") to its shareholders a substantial
portion  of  the  outstanding  capital stock of CAT at the date and time of such
Spin-off  (the  "SPIN-OFF  DATE").

     The  parties  recognize  that  it  will be necessary or advisable to define
their  respective  rights  and  responsibilities pertaining to federal and state
income  tax  (the  term  "state  income  tax" includes all state franchise taxes
measured  by  net  income)  liabilities.

     Therefore,  in  consideration  of  the  mutual covenants and subject to the
terms  and conditions contained in this agreement, the parties agree as follows:

     1.   LIABILITIES  ATTRIBUTABLE  TO  PRE-SPIN-OFF  PERIODS.

          (a)     RETURNS.  MedCom,  on a consolidated basis with CAT has timely
     filed  (or  has  obtained  or  will  obtain  valid  extensions  of time for
     filing  and  will  file) all federal and state income tax returns which are
     required  to  be  filed  for periods up to and including the Spin-off Date.

          (b)     TAX  LIABILITIES.  Reasonable  estimates  of federal and state
     income  taxes  of  CAT  for  all  pre-Spin-off periods (and taxes deemed to
     be  attributable  to pre-Spin-off periods, pursuant to Section 3) have been
     or  will  be  reflected  in the pre-Spin-off financial statements of CAT in
     accordance  with MedCom's tax allocation and settlements policy, subject to
     adjustments  to  be  made upon filing the final MedCom consolidated federal
     income  tax  return  in  which  CAT  are  included.

          (c)     TAX  CARRYFORWARDS.  The  parties  agree that none of MedCom's
     accrued  consolidated  federal  net  operating  loss, investment tax credit
     and  other  federal  tax  carryforwards  ("CARRYFORWARDS"),  if  any,  are
     attributable  to  CAT's  operations  and  no  portion  of  the same will be
     allocated  to  CAT.

          (d)     SETTLEMENT  OF  TAX  LIABILITY.  Prior to, or concurrent with,
     the  Spin-off,  CAT  will  settle  with  MedCom,  its  current  income  tax
     liability  and  intercompany  tax  note  accounts (as determined in Section
     1(b), before the return adjustments noted in such section). Such settlement
     shall be effected by payments and/or adjustments to shareholder's equity of
     CAT,  as  mutually  agreed  by  the  parties.


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Tax Sharing Agreement                                                Page 1 of 6



          (e)     POST-SPIN-OFF  ADJUSTMENT TO PRE-SPIN-OFF LIABILITIES. Subject
     to  Section  1(f),  MedCom  and  CAT  agree  that  tax  deficiencies  of
     (including  applicable  penalties  and  interest),  or  refunds  due,  CAT
     attributable  to  any  period  ending  on  or before the Spin-off Date, and
     whether  the  result  of  audits, discovery of errors or otherwise, will be
     paid  or  retained  by MedCom, except to the extent that: (i) an additional
     tax  liability results in an adjustment that will provide CAT a tax benefit
     in  future  periods (e.g., an adjustment to tax depreciation that increases
     the  tax  basis  of  assets  of  CAT  and  that  will provide increased tax
     deductions  to  CAT) or has been accrued on the financial statements of CAT
     prior  to  the  Spin-off,  (ii)  an  additional  tax  benefit results in an
     adjustment  that  will  provide  CAT  a tax liability in future periods, or
     (iii)  the  payment or retention by MedCom would result in either MedCom or
     CAT  incurring  or  receiving a double liability or benefit attributable to
     the  same  item.

          (f)     PAYMENT  OF  POST-SPIN-OFF  ADJUSTMENTS  TO  PRE-SPIN-OFF
     LIABILITIES.  Post-Spin-off  adjustments  to  pre-Spin-off  liabilities,
     under Sections 1(b), 1(c), 1(e)(i), 1(e)(ii), 1(e)(iii) and 2(c), shall not
     become  payable, whether by MedCom to CAT or CAT to MedCom, until such time
     as  the  net aggregate amount of all then existing claims owed by one party
     to the other exceeds the sum of $2,500 at which time all such amounts shall
     become  payable.  In  the  event that net aggregate adjustments owed by one
     party to the other never exceeds $2,500, no amounts shall become payable by
     that  party.

          Payment of amounts payable by MedCom shall be paid within 30 days upon
     receipt  of  a  full  accounting  of  such  amounts  from  CAT.  Payment of
     amounts  payable  by  CAT shall be paid within 30 days of the date on which
     CAT receives a benefit attributable to the adjustments. Notwithstanding the
     foregoing,  all  amounts  shall  be paid no later than three years from the
     extended  due  date  of  the  final  pre-Spin-off return. In the event that
     amounts become payable after this date, payment will become due and be paid
     within 30 days of receipt of notification, which notification shall include
     a  full  accounting.

          Once the net aggregate amount exceeds $2,500 and payment has been made
     by  one  party  to  the  other,  any  subsequent  adjustment  (including
     adjustments  to  amounts  already  paid) shall become due within 30 days of
     receipt  of  notification,  which  notification  shall  include  a  full
     accounting.  MedCom,  or  CAT, as applicable, shall provide the other party
     with an annual accounting of all of such adjustments, regardless of whether
     or  not  the  amounts  have  become  payable or a payment is required. This
     subparagraph  does  not preclude CAT from adjusting their post-Spin-off tax
     returns  to  reflect  the  sum  of  the  adjustments  prior  to  payment.

          (g)     ADMINISTRATION.  After the Spin-off, MedCom, and its officers,
     employees,  representatives  or  agents,  shall  not  sign  or  execute any
     waivers,  extensions  or  other agreements relating to any federal or state
     statute of limitation for any tax period ending on or prior to the Spin-off
     Date,  and  MedCom shall provide the necessary powers of attorney to enable
     CAT  to  sign  tax  returns, claims for refund, protests of assessments and
     statute of limitation agreements with respect to periods ending on or prior
     to  the  Spin-off  Date.


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Tax Sharing Agreement                                                Page 2 of 6



          CAT  shall  be  entitled  to  participate  in  the  resolution  of any
     pre-Spin-off  audit  dispute  which  affects  post-Spin-off  tax returns of
     CAT, provided however, that MedCom shall be entitled to determine the final
     resolution.  The party receiving notification from a taxing authority shall
     promptly notify the other party in the event any such audit dispute arises.

          2.     LIABILITIES  ATTRIBUTABLE  TO  POST-SPIN-OFF  PERIODS.

          (a)      RETURNS.  CAT  shall  be responsible for preparing and filing
     any  and  all  income  tax  returns  on  behalf  of  itself for tax periods
     ending  after  the  Spin-off  Date.

          (b)     TAX  LIABILITIES.  CAT shall be responsible for the payment of
     all  liabilities  and  entitled  to  receive  all  refunds  of  federal and
     state income taxes for periods beginning and ending after the Spin-off Date
     attributable  to  the  post-Spin-off  operations  of  itself  (including
     liabilities  deemed  attributable  to  post-Spin-off  periods,  pursuant to
     Section  3).

          (c)     TAX  CARRYBACKS.  Any  carryback  of  federal or state tax net
     operating  losses  or  tax  credits  of  CAT  from  periods beginning after
     the  Spin-off  Date  (including  carrybacks  deemed  attributable  to
     post-Spin-off periods, pursuant to Section 3) to periods ending on or prior
     to  the Spin-off Date will be paid by MedCom to CAT, but only to the extent
     that  those losses or credits offset taxable income or tax liability of CAT
     in  the  carryback period as permitted by law or regulation and result in a
     cash refund to MedCom. The time for the payment of tax carrybacks by MedCom
     to  CAT,  and  resulting  from  application of this paragraph (c), shall be
     determined  in  accordance  with  Section  1(f).

          (d)     ADMINISTRATION.  MedCom  shall  allow CAT reasonable access to
     properties  and  records  so  as  to  enable  CAT  to  fully  perform  its
     obligations  under  this  agreement.

     3.     LIABILITIES  ATTRIBUTABLE  TO  PERIODS  WHICH  STRADDLE THE SPIN-OFF
DATE.  In the event that an income tax return is required to be filed by CAT for
a  period that straddles the Spin-off Date, the resulting liability, loss and/or
credit  carryback  deemed  attributable  to  the  preSpin-off  period  shall  be
determined  on a proforma basis. The difference between such proforma amount and
the  amount  actually  determined  upon  filing the applicable income tax return
shall  be  deemed  to  be  attributable  to  the  postSpin-off  period.

     4.     THIRTY  DAY  RULE.  MedCom,  at  its  sole  discretion, may elect to
disregard  certain  tax  periods  of  30  days  or  less as provided in Treasury
Regulation  1.1502-76(b)(5).  In  such  case  the Spin-off Date, as used in this
agreement,  shall  be  adjusted  for  the  period  so  disregarded.

     5.     RESTRICTIONS ON CERTAIN ACTIONS.  CAT hereby agrees to be liable for
taxes incurred by Medcom that arise as a result of CAT taking or failing to take
certain actions that result in the distribution failing to meet the requirements
of  a tax-free distribution under Sections 355 and 368(a)(1)(D) of the Code. CAT
agrees  that  it  will  not  take any actions that would result in any tax being
imposed  on  the  spin off. More specifically, for the two-year period following
the  spin  off,  CAT  have  agreed  not  to:


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Tax Sharing Agreement                                                Page 3 of 6



     (a)  Sell or  otherwise  issue  to  any  person,  or  redeem  or  otherwise
          acquire  from  any  person,  any  of  its equity securities; provided,
          however  that CAT may (1) sell or otherwise issue equity securities or
          repurchase equity securities in certain circumstances permitted by the
          IRS  guidelines,  and  (2)  sell  or otherwise issue equity securities
          provided  that  such  issuance,  individually  or when aggregated with
          other issuances and any transactions occurring in the four-year period
          beginning on the date which is two years before the distribution date,
          and  with  any  other transaction which is part of a plan or series of
          related  transactions  (within  the  meaning  of Section 355(e) of the
          Code)  that  includes  the  spin off (other than sales or issuances of
          equity  securities  described  in clause (1) above), results in one or
          more  persons  acquiring,  directly or indirectly (as determined under
          Section  355(e)  of  the  Code,  taking  into  account  applicable
          constructive  ownership  rules),  stock  representing a 35% or greater
          interest,  by  vote  or  value,  in  CAT.

     (b)  Sell, transfer,  or  otherwise  dispose  of  CAT  assets  that, in the
          aggregate, constitute more than 50% of its gross assets, excluding any
          sales  conducted  in  the  ordinary  course  of  our  business.

     (c)  Voluntarily  dissolve  or  liquidate  or  engage in any merger (except
          for  certain  cash  acquisition  mergers),  consolidation,  or  other
          reorganization,  except  for  certain  mergers and liquidations of its
          wholly  owned  subsidiaries  to  the  extent not inconsistent with the
          tax-free  status  of  the  spin  off.

     (d)  Take any  action  (including,  but  not  limited  to,  the  sale  or
          disposition  of  any  stock,  securities, or other assets), or fail to
          take  any  action  that would cause Medcom to recognize gain under any
          gain  recognition  agreement  to  which  Medcom  is  a  party.

     (e)  Amend its  certificate  of  incorporation  (or  any  other
          organizational  document),  or  take  any  action,  whether  through a
          stockholder vote or otherwise, affecting the relative voting rights of
          its  separate classes of stock (including, without limitation, through
          the conversion of one class of stock into another class of stock), but
          only to the extent such amendment, action or conversion, if treated as
          an issuance of equity securities, would otherwise be prohibited by the
          tax  sharing  agreement.

     (f)  Solicit  any  person  to  make  a  tender  offer  for,  or  otherwise
          acquire  or sell, its equity securities, participate in or support any
          unsolicited  tender  offer  for,  or  other  acquisition, issuance, or
          disposition  of, our equity securities, or approve or otherwise permit
          any  proposed business combination or merger or any transaction which,
          individually  or when aggregated with any other transactions occurring
          within  the  four-year period beginning on the date which is two years
          before  the distribution date, and with any other transaction which is
          part  of  a plan or series of related transactions (within the meaning
          of  Section 355(e) of the Code) that includes the spin off (other than
          certain  issuances  of equity securities permitted by IRS guidelines),
          results  in  one or more persons acquiring, directly or indirectly (as
          determined  under  Section  355(e)  of  the  Code, taking into account
          applicable  constructive ownership rules), stock representing a 35% or
          greater  interest,  by  vote  or  value,  in  CAT.


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Tax Sharing Agreement                                                Page 4 of 6



     In  addition,  CAT agrees not to engage in certain of the actions described
above, whether before or after the two-year period following the spin off, if it
is  pursuant  to  an  arrangement  negotiated (in whole or in part) prior to the
first  anniversary  of  the  spin  off.

     6.     AMENDMENTS. This agreement may not be amended or revised except by a
written  instrument  signed  by  both  parties  to  this  agreement.

     7.     WAIVERS.  The  failure of any party to this agreement at any time to
require strict performance by the other party of any provision of this agreement
shall  not  waive  or  diminish  such  party's  right  to  later  demand  strict
performance  of  that  or  any  other  provision  of  this  agreement.

     8.     GOVERNING  LAW. This agreement shall be governed by and construed in
accordance  with  the  laws  of  the  State  of  Delaware.

     9.     NOTICES.  All  notices  and other communications shall be in writing
and shall be delivered by hand or mailed by registered or certified mail (return
receipt  requested)  to  the  parties  at the following addresses (or such other
addresses for a party as shall be specified by like notices) and shall be deemed
given  on  the  date  of  which  such  notice  is  received.

            To  MedCom:     7975  North  Hayden  Road,  Suite  D-333
                            Scottsdale,  AZ  85258

            To  CAT:        33  West  Jackson  Blvd.,  Suite  1618
                            Chicago,  IL  60604-3749

     10.    SUCCESSORS  AND  ASSIGNS.  This  agreement  and  the obligations and
rights incident to it shall inure to the benefit of the successors and permitted
assigns  of  the  parties  to  this  agreement.

     11.    RELATIONSHIP  OF PARTIES. Nothing  contained in this agreement shall
be  deemed  to  constitute  the  appointment of either party as the agent of the
other.

                                  * * * * * * *


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Tax Sharing Agreement                                                Page 5 of 6



     In  witness,  the parties to this agreement have executed this agreement as
of  the  date  first  above  written.

"MEDCOM"                                MEDCOM USA, INCORPORATED,
                                        a Delaware corporation


                                    By: /s/ William P. Williams
                                        ----------------------------------------
                                        William P. Williams, CEO

"CAT"                                   CARD ACTIVATION TECHNOLOGIES INC.,
                                        a Delaware corporation


                                    By: /s/ Michael Malet
                                        ----------------------------------------
                                        Michael Malet, Executive Vice President


- --------------------------------------------------------------------------------
Tax Sharing Agreement                                                Page 6 of 6

EX-10.4

                                                                    EXHIBIT 10.4

                        ADMINISTRATIVE SERVICES AGREEMENT

     This  Administrative  Services  Agreement  (the  "AGREEMENT"),  dated as of
October  31,  2006,  by  and  between  MedCom  USA,  Incorporated,  a  Delaware
corporation  ("MEDCOM")  and  Card  Activation  Technologies  Inc.,  a  Delaware
corporation  ("CAT")  which  as  of the date of this agreement is a wholly owned
subsidiary  of  MedCom.

                                    RECITALS:

     MedCom  desires  to  separate  its  businesses  into independent companies.
MedCom  intends  to  spin-off  (the "SPIN-OFF") to certain of its shareholders a
substantial portion of the outstanding capital stock of CAT at the date and time
of  such  Spin-off  (the  "SPIN-OFF  DATE").

     The  parties  recognize  that it will be necessary or advisable for each of
them  to  provide  certain  administrative and other services to the other on an
interim basis in order to facilitate their respective transitions into separate,
publicly  owned  companies.

     Therefore,  in  consideration  of  the  mutual covenants and subject to the
terms  and  conditions  contained  herein,  the  parties  agree  as  follows:

     1.   PERFORMANCE  OF  SERVICES.

          (a)  To  the  extent  necessary personnel  and facilities are employed
     by  and  available  to  MedCom  and  CAT,  each  of  them  agrees, from and
     after  the  Spin-off  date  and  for  a transition period of up to one year
     following  the  Spin-off date, to provide the other on an "as needed" basis
     with  the  following  services:

               (1)  Tax  consultation and assistance with tax return preparation
          and  audits.  Any  taxes  due  shall  be  paid in accordance with that
          Tax  Sharing  Agreement  of  even  date  herewith between the parties;

               (2)  Assistance  with  the  preparation  of  (i) periodic filings
          under  the  Securities  Exchange  Act  of  1934  or  with the National
          Association of Securities Dealers, Inc., (ii) reports to stockholders,
          and  (iii)  other  external  financial  reports;

               (3)  Design  and  implementation  of  internal  audit procedures;

               (4)  Coordination  of  independent  audits  by  nonaffiliated
          auditors;

               (5)  Consultation  on  cash  management,  financing  and  other
          treasury  matters;

               (6)  Insurance  and  risk  management  services  involving
          administration,  placement  of  insurance,  and  broker  selection for
          past  and  future  insurance  and  risk  management  programs;  and


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Administrative Services Agreement                                    Page 1 of 5



               (7)  Such  other  services as may be mutually agreed upon between
          the  parties.

          (b)     Each  party shall use its respective best efforts in providing
     the  above  services  and,  except  for  gross  negligence  or  willful
     misconduct,  shall  not  be  responsible  for the accuracy, completeness or
     timeliness  of any advice or service or any return, report, filing or other
     document  which  it  provides,  prepares  or  assists  in  preparing.
     Notwithstanding  the foregoing, neither party shall be obligated to provide
     the above services if that party determines in its reasonable judgment that
     providing  such  services  would unreasonably interfere with the conduct of
     its  own  business  activities. The parties shall cooperate in planning the
     scope  and  timing  of  services  to be provided by each of them under this
     agreement  so  as  to  lessen  or  eliminate  any  such  interference.

     2.     REIMBURSEMENT.  The  parties  agree  to  reimburse  each  other  for
services  rendered  in  accordance with an hourly fee schedule to be agreed upon
from  time to time by the parties. The hourly fee schedule may provide different
rates  for  different categories of personnel. In addition, each party agrees to
reimburse  the  other  for  all out-of-pocket expenses incurred by the providing
party  in  connection  with  performing  such  services. The parties shall, on a
periodic basis to be agreed upon, but not less frequently than quarterly, submit
to and exchange with each other their respective statements of fees and expenses
for  payment,  accompanied  by  such  supporting  detail as the recipient of the
statement  may  reasonably  request.  Only  the amount owed to one party for any
period  in  excess  of the amount owed by that party for the same period need be
paid.  Payment  shall  be  due  30  days  after  date  of  the  statement.

     3.     STAFFING  PLANS.  Nothing contained in this Agreement shall preclude
either  party from obtaining the above services from other providers. During the
term of this Agreement, each party shall use reasonable efforts to hire or train
personnel  and, in its discretion, establish consulting relationships with third
parties, so that each party will, with the passage of time, increasingly be able
to  perform  or  have performed all of the above services for itself. Each party
shall keep the other generally informed of its plans in this regard in order for
the  other  party to make any appropriate adjustments in its staffing and hiring
plans.

     4.     DELIVERY  OF  RECORDS.  As soon as is practicable after the Spin-off
date, each party shall deliver to the other the originals of all certificates of
incorporation,  bylaws,  licenses,  certificates,  board  of  directors' meeting
minutes,  stock  certificates  of  their  respective  subsidiaries and all other
corporate records, documents and instruments of a permanent nature pertaining to
the  other  party  which  either  of  them  may  have in their possession in the
condition  and  order in which they then exist. Each party shall be permitted to
retain  copies  of  such  documents.

     5.     ACCESS TO PROPERTIES AND RECORDS. Each party will provide the other,
and  each  of  their  respective officers, employees, representatives and agents
full  access, during normal business hours, to any and all premises, properties,
books,  records,  data  and  other  information  relating  to  their  respective
businesses,  as  well  as  to  their  respective  employees, representatives and
agents,  to  acquire  information  for:


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Administrative Services Agreement                                    Page 2 of 5



          (a)     The  formulation  and  completion  of:  (a) any tax returns or
     other  forms  or  reports  required  to  be  filed by either party with any
     governmental  agency;  (b)  any  amended  tax  returns  or requests for tax
     refunds;  and  (c)  any  tax  audits  or  investigations;

          (b)     The  preparation  and  completion  of any financial statements
     which  require  the  inclusion  of  the  other  party's  financial
     information;

          (c)     All  insurance  and  bond  matters;

          (d)     The  defense  or  prosecution  of  any  claims,  lawsuits  or
     proceedings,  if  any,  in  which  either  party  as a separate corporation
     has  liability  or  rights,  contingent  or  otherwise;  and

          (e)     Such other purposes as may be required, provided such purposes
     shall  be  attributable  to  the  corporate  relationship  that  formerly
     existed  between  MedCom  and  CAT, or for purposes related to the services
     provided  pursuant  to  this  Agreement or any other agreement entered into
     between  MedCom  and  CAT  in  connection  with  the  Spin-off.

     6.   RECORDS  RETENTION. Each  party  shall retain all books, records, data
and other information relating to its business and operations for the longer of:

          (a)     Seven  years;

          (b)     The  time that party normally keeps its records based upon its
     past  custom  and  practice;  or

          (c)     The  time  necessary to resolve any tax issue, claim, lawsuit,
     action  or  proceeding  that  is  pending  at  the  time such records would
     otherwise  be  destroyed,  taking  into  account any statutes of limitation
     which  may  have  been  waived.

Each  party shall annually provide the other with a list, prepared in reasonable
detail,  of books, records, data and other information scheduled for destruction
in  the  ordinary  course, provided that it shall not be necessary to include on
the  list  any records which would clearly have no relevance to the other party.
At  the  recipient's  request,  the  other  party  shall  retain  any records so
designated  for an additional 12 months, at which time such records may again be
listed  as  scheduled  for  destruction.

     7.     AMENDMENTS. This Agreement may not be amended or revised except by a
written  instrument  signed  by  both  parties  to  this  Agreement.

     8.     WAIVERS.  The  failure of any party to this Agreement at any time to
require strict performance by the other party to this Agreement of any provision
of this Agreement shall not waive or diminish such party's right to later demand
strict  performance  of  that  or  any  other  provision  of  this  Agreement.


- --------------------------------------------------------------------------------
Administrative Services Agreement                                    Page 3 of 5



     9.     GOVERNING  LAW. This Agreement shall be governed by and construed in
accordance  with  the  laws  of  the  State  of  Delaware.

     10.    NOTICES.  All  notices and  other communications shall be in writing
and shall be delivered by hand or mailed by registered or certified mail (return
receipt  requested)  to  the  parties  at the following addresses (or such other
addresses for a party as shall be specified by like notices) and shall be deemed
given  on  the  date  on  which  such  notice  is  received:

        To  MedCom:     7975  North  Hayden  Road,  Suite  D-333
                        Scottsdale,  AZ  85258

        To  CAT:        33  West  Jackson  Blvd.,  Suite  1618
                        Chicago,  IL  60604-3749

     11.    NO  THIRD  PARTY  BENEFICIARIES.  This  Agreement  is solely for the
benefit  of  the parties to it and their respective affiliates and should not be
deemed  to  confer upon third parties any remedy, claim, reimbursement, cause of
action  or  other  right  in  excess of those existing without reference to this
Agreement.

     12.    SUCCESSORS  AND  ASSIGNS.  This  Agreement  and  the obligations and
rights  incident  hereto  shall  inure  to  the  benefit  of  the successors and
permitted  assigns  of  the  parties  to  this  Agreement.

     13.    RELATIONSHIP  OF PARTIES.  Nothing contained in this Agreement shall
be  deemed  to  constitute  the  appointment of either party as the agent of the
other.

                                  * * * * * * *


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Administrative Services Agreement                                    Page 4 of 5



     In  witness,  the parties have executed this agreement as of the date first
above  written.

"MEDCOM"                                MEDCOM USA, INCORPORATED,
                                        a Delaware corporation


                                    By: /s/ William P. Williams
                                        ----------------------------------------
                                        William P. Williams, CEO

"CAT"                                   CARD ACTIVATION TECHNOLOGIES INC.,
                                        a Delaware corporation


                                    By: /s/ Michael Malet
                                        ----------------------------------------
                                        Michael Malet, Executive Vice President


- --------------------------------------------------------------------------------
Administrative Services Agreement                                    Page 5 of 5

EX-10.5

10.5 Revolving Line of Credit with Medcom USA Incorporated.

EX-23.1

                                                                    EXHIBIT 23.1


                         CONSENT OF INDEPENDENT AUDITORS


We have issued our report dated              , 2006, accompanying the financial
                                -------------
statements of Card Activation Technologies Inc. on form SB-2 for the year ended
September 30, 2006.  We hereby consent to the incorporation by reference of said
report on the Registration Statement of Card Activation Technologies Inc. on
Form SB-2 to be filed with the U.S. Securities and Exchange Commission.


Signed,


/s/ SE Clark & Company, P.C.
December 22, 2006

EX-23.2

S.E.Clark & Company, P.C.

Registered Firm: Public Company Accounting Oversight Board

EXHIBIT 23.2

Consent of Independent Auditors

We have issued our report dated December 15, 2006, accompanying the financial statements of Card Activation Technologies Inc. for the period ended September 30, 2006. We hereby consent to the incorporation by reference of said report in the Registration Statement of Card Activation Technologies Inc. on Form SB-2 to be filed with the U.S. Securities and Exchange Commission.

/s/ S.E.Clark & Company, P.C.

March 21, 2007

Tucson, Arizona