acq14c01282011.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14C INFORMATION STATEMENT

Pursuant to Section 14(c) of the

Securities Exchange Act of 1934

Check the appropriate box:

[X] Preliminary Information Statement

[ ] Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(21))

[ ] Definitive Information Statement

ACQUIRED SALES CORP.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

[X]	Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.

(1)	Title of each class of securities to which transaction applies:

(2)	Aggregate number of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing is calculated and state how it was determined.):

2,175,564 common stock shares to be issued at a $0.10 per share market value equals $217,556 times one-fiftieth of one percent or .0002 totals $43.51)

(4)	Proposed maximum aggregate value of transaction:

(5)	Total Fee Paid: $44

[ ]	Fee paid previously with preliminary materials.

[ ]	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

ACQUIRED SALES CORP.

31 N. Suffolk Lane, Lake Forest, Illinois 60045

Telephone: (847) 404-1964

NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT

To the stockholders of Acquired Sales Corp.:

This information statement is furnished to the stockholders of Acquired Sales Corp., a Nevada corporation (sometimes “Acquired Sales”, the “Corporation”, “Company”, “we”, “us” or “our”) in connection with the approval by our board of directors and holders of a majority of our common stock to do the following:

1.	Amend the Corporation's Articles of Incorporation with the Nevada Secretary of State to increase the Corporation’s authorized shares of common stock, from par value $0.001 per share to par value $0.001 per share, and from 50,000,000 shares to 100,000,000 shares.

2.	Execute a 1-for-20 reverse stock split of the shares of our common stock to take effect on a date not later than December 31, 2011 so that stockholders will receive one share of our common stock for each twenty shares now held.

3.	Change of the Corporation’s fiscal year from September 30 to a December 31 year end.

Approve the acquisition of Cogility Software Corporation, a Delaware corporation (“Cogility”), through a to be formed wholly-owned subsidiary of the Corporation via a "reverse merger" pursuant to which Cogility would be merged with and into a wholly-owned single purpose merger subsidiary of the Corporation, with Cogility being the survivor of the Merger and a wholly-owned subsidiary of the Corporation.

5.	Approve a post acquisition option plan for the officers, directors and employees of the Corporation.

Elect Gerard M. Jacobs, Joshua A. Bloom, M.D., Roger S. Greene, James S. Jacobs, M.D., Michael D. McCaffrey, Richard E. Morrissy, and Vincent J. Mesolella to our board of directors to serve for a period of one year or until their successors are duly elected and qualified and in connection with the same, ratify the Board of Directors intention to amend, pursuant to Article 8.06, the Corporation's By-Laws to increase the size of the Corporation's Board of Directors from seven to ten, and to appoint Matthew Ghourdjian, and two additional persons designated by Matthew Ghourdjian and acceptable to the Corporation's Chairman and Chief Executive Officer, as new members of the Corporation's Board of Directors to fill the three vacancies on the Corporation's Board of Directors.

The foregoing changes will be implemented simultaneously and, where applicable, in one amendment to our Articles of Incorporation. Stockholders of record at the close of business on November 23, 2010 (the “Record Date”) are entitled to notice of this stockholder action by written consent. Stockholders representing a majority of our issued and outstanding shares of common stock have already consented to the action to be taken by written consent to be effective as of 20 days after the mailing of this information statement and after the requisite filings are made with the State of Nevada.

ACQUIRED SALES IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED TO NOT SEND A PROXY. Because the written consent of the holders of a majority of our voting power satisfies all applicable stockholder voting requirements, we are not asking for a proxy: please do not send us one.

Only stockholders of record at the close of business on November 23, 2010 (the “Record Date”) shall be given a copy of the Information Statement. The date on which this Information Statement will be sent to stockholders will be on or about [February ___, 2011.]

The accompanying information statement is for information purposes only. Please read it carefully.

By Order of the Board of Directors

/s/ Gerard M. Jacobs

Chief Executive Officer

This information statement is being furnished to all holders of the common stock of Acquired Sales in connection with the proposed action by Written Consent to authorize the board of directors to carry out the process to facilitate the reorganization of the Company in connection with the acquisition of Cogility.

INFORMATION STATEMENT

This information statement is being furnished to all holders of the common stock of Acquired Sales, in connection with resolutions of the Board of Directors and the written consent of the holders of in excess of 50% of the voting rights of the shareholders of Acquired Sales. The Board of Directors, as approved by the written consent of the holders of in excess of 50% of the voting rights of the shareholders of Acquired Sales as of the Record Date, provides public notice of the approval and authorization to carry out activities in connection with (i) amending the Corporation's Articles of Incorporation with the Nevada Secretary of State to increase the Corporation’s authorized shares of common stock from 50,000,000 shares to 100,000,000 shares (the “Capitalization Increase”) and change the par value to $0.001 per share; (ii) effectuating a 1-for-20 reverse stock split of the shares of our common stock to take effect on a date not later than December 31, 2011 so that stockholders will receive one share of our common stock for each twenty shares now held (the “Reverse Split”); (iii) changing the Corporation’s fiscal year from September 30 to a December 31 year end; (iv) acquisition of Cogility Software Corporation, a Delaware corporation, through a to be formed wholly-owned subsidiary of the Corporation via a "reverse merger" pursuant to which Cogility would be merged with and into a wholly-owned single purpose merger subsidiary of the Corporation, with Cogility being the survivor of the Merger and a wholly-owned subsidiary of the Corporation; (v) effectuating a post acquisition option plan for the officers, directors and employees of the Corporation; and, (vi) re-electing the Corporation’s board of directors (collectively, the “Corporate Actions”).

The capitalization increase will be effectuated pursuant to Certificate of Amendment (the “Amendment”) to our Articles of Incorporation in the form as annexed hereto as Appendix A.

The Company will pay all costs associated with the distribution of the definitive Information Statement.

The Board of Directors of the Company (the “Board”), and a majority of the Company's stockholders at the Board’s recommendation, have already approved of the Corporate Actions described above by written consent in lieu of meeting pursuant to Chapter 78 of the Nevada Revised Statutes of the State of Nevada (the “NRS”). Therefore, we are not seeking approval for the Amendment or any related capitalization change, or other Corporate Actions from any of the Company's remaining stockholders, and the Company's remaining stockholders will not be given an opportunity to vote on the Amendment or Corporate Actions. All necessary Board approvals have been obtained as of November 17, 2010 with all stockholder approvals effective as of November 23, 2010, and this Information Statement is being furnished solely for the purpose of providing advance notice to the Company's stockholders of the Amendment as required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Nevada law.

Date, Time And Place Information

Under Section 14(c) of the Exchange Act and Rule 14c-2 promulgated thereunder, the Capitalization Increase and Reverse Split cannot be effectuated until 20 days after the date that a Definitive Information Statement is sent to the Company's stockholders. This Preliminary Information Statement was filed with the Securities and Exchange Commission on January 28, 2011. It is anticipated that a Definitive Information Statement will be mailed ten days thereafter, on or about February 7, 2011 (the “Mailing Date”) to the stockholders of the Company as of the close of business on November 23, 2010 (the “Record Date”). The Company expects to file the Amendment so as to effectuate both the Capitalization Increase and

Reverse Split with the Nevada Secretary of State, approximately 20 days after the Mailing Date. The effective date of the Amendment and related Capitalization and Reverse Split therefore, is expected to be on or after [February ___, 2011].

Dissenter’s Right of Appraisal

Pursuant to the NRS, our stockholders are not entitled to dissenters' rights of appraisal with respect to the Capitalization Increase or Reverse Split as effectuated by the Amendment and the Company will not independently provide shareholders with any such right.

Voting Securities and Principal Holders Thereof

There will be no changes to any of the rights or privileges associated with our Common Stock. The following summarizes the rights of holders of our Common Stock before and after the filing of the Amendment relating to the capitalization change:

●	Each holder of shares of Common Stock is entitled to one vote per share on all matters to be voted on by our stockholders generally, including the election of directors;

●	There are no cumulative voting rights;

●	The holders of our Common stock are entitled to dividends and other distributions as may be declared from time to time by the Board out of funds legally available for that purpose, if any, subject to any dividend rights of the preferred stock, if any;

●

Upon our liquidation, dissolution or winding up, the holders of shares of Common Stock will be entitled to share ratably in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities and the payment of the liquidation preference of any outstanding preferred stock; and

●	The holders of Common Stock have no preemptive or other subscription rights to purchase shares of our stock, and are not entitled to the benefits of any redemption or sinking fund provisions.

We have not declared or paid cash dividends or made distributions in the past, and we do not anticipate paying cash dividends or making distributions in the foreseeable future. We currently intend to retain and reinvest future earnings, if any, in order to finance our operations.

Outstanding Shares And Voting Rights

Currently, our only class of securities entitled to vote on the matters to be acted upon is common stock, of which the total amount presently outstanding is 5,832,482 shares, each share being entitled to one vote. The record date for determination of the security holders entitled to vote or give consent is November 23, 2010. The consent of the holders of a majority of the shares entitled to vote upon the matter is required for approval of the actions. The board of directors and Stockholders owning 3,591,206 which constitute a majority of 61.5% of the outstanding voting securities of Acquired Sales Corp. have unanimously adopted, ratified and approved resolutions to effect the actions listed above. No other votes are required or necessary. We anticipate effecting the reverse split, acquisition and all other actions set out herein within two months of the date that this information statement is filed.

Our Board adopted resolutions approving and authorizing the Amendment containing both the Capitalization Increase and related Reverse Split by unanimous written consent in lieu of a meeting and selected and fixed November 23, 2010 as the Record Date for determining the stockholders entitled to give written consent and/or to receive this Information Statement. Effective as of November 23, 2010, a majority of the stockholders of the Company took action by written consent and approved an amendment to the Company’s Articles of Incorporation with respect to the Reverse Split and Amendment.

As of the Record Date, the Company has authorized capital stock of 60,000,000 shares, of which 50,000,000 are shares of Common Stock and 10,000,000 are shares of preferred stock with 5,832,482 of Common Stock and no shares of preferred stock are outstanding on such date.

The following 11 shareholders, being beneficial owners of an aggregate of 3,591,206 shares of Common Stock constituting approximately 61.5% of our 5,832,482 shares of outstanding authorized Common Stock, voted in favor of the Amendment effecting the Reverse Split, Capitalization Increase and other Corporate Actions described above:

Name	Number of Shares
Leonard Dee Hall	600,000
Janet Brandler Custodian Christian Brandler	162,354
Kevin L. Cannon	200,000
Jennifer Christensen	200,000
Dan Carter	262,355
Jason Carter	200,000
Brian Williams	200,000
Kathy Carter	200,000
Ardeth Celano	200,000
Kiel Christensen	200,000
Roberti Jacobs Family Trust u/a/d 11-11-99 (1)	1,166,497
Total	3,591,206

(1) The Roberti Jacobs Family Trust irrevocably conveyed all of its voting power to Gerard M. Jacobs pursuant to a 2007 shareholder agreement, Mr. Jacobs is one of the grantors of the trust corpus, Mr. Jacobs’ mother in law Joan B. Roberti is the trustee, and Mr. Jacobs’ children are the beneficiaries. The trust is irrevocable.

Each share of Common Stock entitles its holder to one vote on each matter submitted to the stockholders.

Pursuant to Chapter 78 of the NRS, the approval of a majority of the Company's voting power is required in order to effectuate the Amendment and Corporate Actions. Chapter 78 of the NRS eliminates the need to hold a special meeting of the Company's stockholders to approve the Corporate Actions, including the Amendment and related capitalization change by providing that, unless the Company's Articles of Incorporation or Bylaws state otherwise, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent is signed by stockholders holding at least a majority of the Company's voting power in favor of such action. Neither the Articles of Incorporation nor the Bylaws of the Company state otherwise and a majority of the Corporation’s common stock have voted in favor of the Amendment and other Corporate Actions.

The Amendment would enable the Company, without further stockholder approval, to issue shares from time to time as may be required for proper business purposes, such as raising additional capital for ongoing operations, business and asset acquisitions, stock splits and dividends, present and future employee benefit programs and other corporate purposes.

Directors and Executive Officers

Our articles of incorporation and bylaws authorize a board of directors comprised of a number of not less than one. Our stockholders have re-elected the entire board of directors.

Set forth below for each person who has been elected director, based on information supplied by him, are his name, age as of the date of the Information Statement, any presently held positions with us, his principal occupation now and for the past five years, other directorships in public companies and his tenure of service with us as a director. Each shall hold office until their successors are elected and qualify. The information has been provided by the nominees without independent verification by our management.

Nominees For Election As Directors


Name	Age	Position

Gerard M. Jacobs	55	Chairman, chief executive officer, president, secretary, treasurer

Joshua A. Bloom, M.D.	54	Director

Roger S. Greene	55	Director

James S. Jacobs, MD	57	Director

Michael D. McCaffrey	64	Director

Richard E. Morrissy	56	Director

Vincent J. Mesolella	61	Director

Matthew Ghourdjian	55	Intended Director

Gerard M. Jacobs, , age 55, has served as chairman of our board of directors, chief executive officer, president, secretary, treasurer since July 2007. Mr. Jacobs has been a private investor since 2006. In 2001, Gerard M. Jacobs took control of CGI Holding Corporation, and served as its CEO and member of its board of directors until 2006. Under Gerard M. Jacobs' guidance, CGI Holding Corporation changed its name to Think Partnership Inc., made 15 acquisitions primarily of businesses involved in online marketing and advertising, and succeeded in having its common stock listed on the American Stock Exchange. The company is now known as Inuvo Inc. (NYSE:AMEX: INUV). Previously, in 1995, Mr. Jacobs took control of General Parametrics Corporation, and served as its CEO and member of its board of directors until 1999. Under Mr. Jacobs' guidance, General Parametrics changed its name to Metal Management Inc., made 37 acquisitions primarily of businesses involved in scrap metal recycling, and succeeded in building one of the largest scrap metal recycling companies in the world. The company is now part of Sims Metal Management Ltd. (NYSE: SMS). Mr. Jacobs is currently a director of Patient Home Monitoring Corp. (TSXV: PHM). Gerard M. Jacobs received a law degree from the University of Chicago Law School, which he attended as a Weymouth Kirkland Law Scholar, in 1978; and an A.B from Harvard College, in 1976, where he was elected to Phi Beta Kappa. Gerard M. Jacobs’ brother James S. Jacobs, M.D. is also a member of our board of directors.

Joshua A. Bloom, M.D., age 54, has been a member of our board of directors since July 2007. He has been a practicing physician in Kenosha Wisconsin since completion of his training in 1988. He is board Certified in Internal Medicine, Pulmonary Diseases and in Critical Care Medicine. He has been employed by United Hospital System (formerly known as Kenosha Hospital and Medical Center) in the Clinical Practice Division from 1995 to present. He had been in private practice at the same address from 1988 to 1995. Dr. Bloom has served on the board of directors of Kenosha Health Services Corporation since 1993 and the board of Hospice Alliance, Inc since 1994 and Medical Director there since 1998. He has also served on the board of the Beth Israel Sinai Congregation since 1998 where he served as the President from 2004 until 2010. Dr. Bloom received a medical degree from the University of Illinois in 1982 and completed his residency in internal medicine in 1985 and fellowship in Respiratory & Critical Care Medicine in 1988; both at the University of Illinois. He received an MS in Organic Chemistry from the University of Chicago in 1978 and a BS in Chemistry from Yale College in 1977.

Roger S. Greene, age 55, has been a member of our board of directors since July 2007. He is the Managing Director and co-founder of Stanmore Capital Partners, LLC, a merchant banking firm that focuses upon the acquisition of small cash flow positive private companies, primarily in the health care services business. He is also owner and CEO of Marquette Advisors, Inc., a firm that provides consulting in the same areas. Projects have included a roll up of sleep diagnostic centers, acquisitions of companies in the blood plasma collection business and specialty medical education field. Mr. Greene is currently a director of Patient Home Monitoring Corp. (TSXV: PHM). Previously, he has worked with Brazos Fund and Lone Star Fund as general counsel. For Lone Star, Mr. Greene was responsible for negotiation and structuring of asset acquisitions from foreign entities. Prior to that time, he also worked on resolution and management of the assets of American Savings and Loan Association after the acquisition of American Savings Bank by the Robert M. Bass Group. Mr. Greene has also acted as a principal in real estate and operating company acquisitions. Mr. Greene resides in California.

James S. Jacobs, M.D., age 57, has been a member of our board of directors since July 2007. He is a Physician in the Department of Radiation Oncology, at St. Joseph Hospital in Denver, Colorado. He was previously the Resident Physician in Radiation Oncology at Rush Medical Center in Chicago, Illinois. Dr. Jacobs did an internal medicine internship and residency at the University of Colorado Medical Center in Denver, Colorado. Dr. Jacobs received a BA in Neuroscience from Amherst College in Amherst, Massachusetts in 1976.

Michael D. McCaffrey, age 64, has been a member of our board of directors since July 2007. He is an attorney practicing in Irvine, California and specializing in commercial and business litigation. Mr. McCaffrey has tried more than 100 jury and non-jury trials, representing numerous large companies, institutional lenders, real estate developers, contractors and various public and private corporations, partnerships and sole proprietorships. He has had sole or primary responsibility for defense and prosecution of significant matters including real property secured transactions; real estate syndication/fraud; partnership disputes/accounting/dissolution actions; corporate control; insurance (policyholders’ interests and insurers’ interests); employment litigation; prosecution, defense and expert witness on professional liability claims involving attorneys and accountants; construction, including prosecution and defense of major defect cases; and various business tort cases. Mr. McCaffrey received his Juris Doctor in 1974 from the University of Denver College of Law where he was a member of the University of Denver Law Review (qualified by class rank, top 5%) and received a B.S. in Engineering from UCLA in 1968.

Richard E. Morrissy, age 56, has been a member of our board of directors since July 2007. He is the Senior Research Specialist and project coordinator in the Pharmaceutical Sciences, School of Pharmacy, University of Illinois at Chicago. His duties include serving as project coordinator on four clinical trial research projects funded by the National Institutes of Health’s National Cancer Institute. The School of Pharmacy projects have involved multiple research projects utilizing Lycopene in restoring DNA damage in men’s prostates. The project at UIC’s internationally acclaimed Occupational Therapy School involved the setup and running of focus groups with impaired individuals to create a movement and activity computer survey for the World Health Organization. During his tenure, Mr. Morrissy has managed clinical research trials including the submission of institutional review board documents and grant proposals, recruitment of subjects and data management and storage. He has also designed and led focus groups, designed and critiqued research surveys, edited manuscripts and scientific journals. He received a B.A. in History from Western Illinois University in 1976.

Vincent J. Mesolella, age 61, has been a member of our board of directors since October 2009. He has served for the last fifteen years as the Chairman of the Narragansett Bay Commission, Providence, Rhode Island, one of the largest wastewater treatment utilities in the U.S. Mr. Mesolella also served for over twenty years as a member of the Rhode Island House of Representatives, including serving as the Majority Whip. Mr. Mesolella is the founder and Chief Executive Officer of REI, Inc., a diversified real estate investment firm. Mr. Mesolella has served on the board of directors of Think Partnership Inc., an American Stock Exchange company. Mr. Mesolella has raised a great deal of money for charities including the Make-A-Wish Foundation. Mr. Mesolella resides in Rhode Island.

Anticipated Subsequent Board Appointment As Directors

Matthew Ghourdjian, age 55, chief executive officer of Cogility Software Corporation, founded Cogility, then called Ceira Software, Inc., in 2002. Previously, Matthew Ghourdjian was a founder of CoderCard, Digital Convergence, and Ceira Technologies Inc. Matthew Ghourdjian is a former partner at KPMG Consulting and Arthur Andersen.

Mr. Ghourdjian is intended to be involved with our board of directors in the selection of two additional board appointees.

Compensation of Directors and Officers

For information as to compensation of directors and officers, please refer to our Form 10-K Annual Report for the twelve month period ended September 30, 2010.

Our board of directors adopted resolutions and a majority of our stockholders have approved the creation of a stock option plan covering some of the options to be issued in connection with the acquisition of Cogility.

Reasons for the option plan

The option plan is being implemented in connection with the acquisition of Cogility and to is to secure for the Corporation and its shareholders the benefits of incentives that are inherent in share ownership by the directors, officers, employees of, or consultants to, the Corporation or its subsidiaries, or to employees of management companies providing services to the Corporation. In the judgment of the Corporation’s Board of Directors, these persons are largely responsible for the Corporation’s future growth and success. The granting of incentive stock options is intended to align the interests of these persons with that of the Corporation.

[New Plan Benefits table follows on next page]

NEW PLAN BENEFITS Plan Name
Name and Position	Dollar Value ($) (1)	Number of Units (2)
Gerard M. Jacobs , CEO /Chairman	2,153,396	1,076,698(3)
Gerard M. Jacobs , CEO /Chairman	200,000	100,000(4)
Vincent J. Mesolella, Director	50,000	25,000(4)
Vincent J. Mesolella, Director	10,000	5,000(3)
Roger S. Greene, Director	50,000	25,000(4)
Roger S. Greene, Director	10,000	5,000(3)
Richard E. Morrissy, Director	10,000	5,000(3)
Joshua A. Bloom, Director	10,000	5,000(3)
Michael D. McCaffrey, Director	10,000	5,000(3)
Existing Cogility option holders	994,340	497,170(5)
New Cogility options	3,000,000	1,500,000(6)
Executive Group	2,353,396	1,176,698
Non-Executive Director Group	150,000	75,000
Non-Executive Officer Employee Group	496,604	248,302(7)

(1)	Dollar Value is assumed to be $2.00 (based on the last reported $0.10 stock ask price as of January 27, 2011 times 20 to reflect the proposed 1-for-20 reverse split) and does not consider the exercise price.

(2)	Number of units and exercise prices reflect post reverse 1-for-20 reserve split numbers.

(3)	These options are exercisable at $2.00 per share.

(4)	These options are exercisable at par value, $0.001 per share.

(5)	These options are exercisable at between $1.06 and $5.00 per share.

(6)	These options are exercisable at $5.00 per share.

(7)	Additional options may be issued to existing and new Cogility employees, consultants and potentially directors and officers in to be determined amounts.

Modification or Exchange of Securities

Our board of directors adopted resolutions and a majority of our stockholders approved such resolutions providing for a recapitalization pursuant to which the issued and outstanding shares of our common stock are to be reverse split, or consolidated, on a 1-for-20 basis, so that stockholders will own one share of common stock for each 20 shares of common stock now held by the stockholder. The reverse split shall be effected on a date not later than December 31, 2011. No fractional shares will be issued in connection with such recapitalization and fractional shares will be rounded down to the nearest whole number. Under the recapitalization, the 5,832,482 issued and outstanding shares of our common stock will be reverse split resulting in 291,624 shares of common stock being issued and outstanding after the recapitalization.

Reasons For The Reverse Split

Our management believes that the reverse split is in the best interest of the company by reducing the perceived depressive effect of a large number of shares may have on the public market for our common stock. In addition, the reverse split, along with increasing our authorized shares of common stock to

100,000,000 will make available a substantial number of additional authorized, but unissued shares of common stock which will provide increased flexibility in structuring possible future financing, in taking advantage of future business opportunities such as acquisitions, and in meeting corporate needs as they arise, all without the delay and expense of calling a meeting of our stockholders to authorize an increase in authorized capital.

Furthermore, it is ultimately our goal to have our securities listed on the NASDAQ or on a national stock exchange. Our management believes that such listings can more readily be accomplished with a higher stock price and, since the reverse split will reduce the number of outstanding shares of our common stock, it should have the effect of increasing the price of our common stock in the over-the-counter-market.

The rights of existing stockholders will not be altered and no stockholder will be eliminated as a result of the reverse split. Fractional shares will not be issued and will be rounded down to the nearest whole share, not to be reduced below one share. It is possible that stockholders holding less than 100 shares of our common stock may have larger commissions charged to sell such shares and may even result in a larger commission than the value of the shares being sold.

Certificate Transfer

In order to effectuate the reverse split, each stockholder will be entitled to submit his or her old stock certificate (any certificate issued prior to the effective date of the reverse split), to our transfer agent, Colonial Stock Transfer Co., Inc., 66 Exchange Place, Salt Lake City, Utah 84111, and be issued in exchange therefore, one new certificate representing one share for each twenty shares reflected in the old certificates, rounded down to the nearest share.

The terms of the additional shares of Common Stock will be identical to those of the currently outstanding shares of Common Stock. However, because holders of our Common Stock have no preemptive rights to purchase or subscribe for any unissued stock, the issuance of additional shares will reduce the current stockholders' percentage ownership interest in the total outstanding shares of Common Stock.

Financial and Other Information

Management's Discussion and Analysis of Financial Condition and Results of Operations of Cogility.

As used in this section entitled “Financial and Other Information”, references to the “Company,” “Cogility,” “we,” “our” or “us” refer to Cogility Software Corporation, unless the context otherwise indicates.

At September 30, 2010, Cogility’s current liabilities exceeded our current assets by $646,861 and Cogility had a capital deficiency of $552,796; accordingly, Cogility was insolvent at September 30, 2010. The Company completed its last government contractual arrangement in September of 2010 and since that time has not generated any significant new revenue. Cogility’s lack of revenue subsequent to September 30, 2010 has caused it to continue to be insolvent. Cogility currently has operating liabilities that it cannot pay and without an infusion of cash it is unlikely that the Company will be able to continue as a going concern. There can be no assurance whatsoever that Cogility will be able to overcome its current financial problems, and bankruptcy is a distinct possibility unless additional capital is raised promptly.

This Management’s Discussion and Analysis or Plan of Operations (“MD&A”) section discusses our results of operations, liquidity and financial condition, contractual relationships and certain factors that may affect our future results. You should read this MD&A in conjunction with our financial statements and accompanying notes included for Cogility Software Corporation.

Forward-Looking Statements

This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors discussed elsewhere in this report, including the “Risk Factors” included herein.

Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include the “Risk Factors” included herein, such as those relating to our present condition of insolvency with risk of bankruptcy, failure of our marketing and sales activities to obtain new paying contracts, vigorous competition in the software industry, dependence on existing management, leverage and debt that cannot be served at current income levels, budgetary constraints affecting the U.S. defense and intelligence communities, negative domestic and global economic conditions, and other Risk Factors.

Cogility Software Corporation is incorporated under the laws of the State of Delaware. Cogility has developed software technology that is solving mission-critical problems facing the US defense and intelligence communities and many corporations today: how to quickly access and analyze the avalanche of data being generated by disparate sources and stored in many different databases. Cogility provides Model Driven Complex Event Processing software technology for the U.S. defense and intelligence communities and private sector corporations with complex information management requirements. Cogility's website can be reviewed at www.cogility.com.

Cogility’s software technology is so uniquely capable, that during the past two years -- without any advertising or promotional campaigns -- Cogility has gained significant traction within the U.S. defense and intelligence communities, as evidenced by its most recent contract with the Joint IED Defeat Organization (JIEDDO), which leads U.S. Department of Defense actions to rapidly provide Counter Improvised Explosive Device capabilities to U.S. troops.

Notwithstanding such capabilities and such traction, Cogility’s lack of revenue subsequent to September 30, 2010 has caused it to continue to be insolvent. Cogility currently has operating liabilities that it cannot pay and without an infusion of cash it is unlikely that the Company will be able to continue as a going concern. There can be no assurance whatsoever that Cogility will be able to overcome its current financial problems, and bankruptcy is a distinct possibility unless additional capital is raised promptly.

Liquidity and Capital Resources

Cogility borrowed $200,000 from the Roberti Jacobs Family Trust u/a/d 11-11-99, an entity related to Gerard M. Jacobs, an officer of the Corporation. The note bears interest at 5% per annum and is due December 31, 2013. Current liabilities at September 30, 2010 included $652,666 of accounts payable, $134,029 of accrued liabilities and $363,070 of notes payable. Included in notes payable at September 30, 2010 was a note payable in the amount of $318,000 that the Company borrowed from Minh Le, an individual. The note bears interest at 5.75% per annum and is due October 15, 2012. The Company also owed $45,070 on non-interest bearing notes payable to CashCall, a finance company that are due upon demand. Subsequent to September 30, 2010, the Company borrowed an additional $60,000 from the finance company under the same terms and conditions.

Shareholders’ deficit decreased from $1,766,701 at December 31, 2009 to $552,796 at September 30, 2010. The decrease was primarily due to the Company earning $1,127,202 of net income during the nine month period. The decrease in shareholders’ deficit was accompanied by a decrease in net liabilities in

excess of assets by $1,213,905 during the nine months ended September 30, 2010. Net liabilities in excess of assets have increased subsequent to September 30, 2010 and will likely increase in the near future.

Comparison of September 30, 2010 and 2009

The Company was profitable for the nine months ended September 30, 2010 manly due to the reversal of the $1,815,300 liability, Billings in excess of costs on uncompleted contracts during that period. As a result, the Company did not generate cash, but instead, used cash in its operating activities during the nine months ended September 30, 2010. Billings on contracts were collected throughout the contract terms; however, gross profit was not recognized until such time that the contracts were completed. During the nine months ended September 30, 2010, the Company also used $332,452 of cash to decrease accounts payable. As a result of these and other changes in current assets and liabilities, the Company used $200,144 of cash in its operating activities during the nine months ended September 30, 2010, as compared to $155,979 of cash used in operating activities during that same period ended September 30, 2009.

During the nine months ended September 30, 2010, the Company advanced and loaned $72,006 to employees and purchased $38,494 of property and equipment, which resulted in the Company using $110,500 of cash in investing activities. This is compared to $88,907 of cash used in investing activities during the nine months ended September 30, 2009.

During the nine months ended September 30, 2010, the Company made $433,445 of principal payments on notes payable to related parties and made $107,285 of principal payments in notes payable, which resulted in the Company using $540,730 of cash in its financing activities. This is compared to $186,302 of cash used in financing activities during the nine months ended September 30, 2009.

During the nine months ended September 30, 2010, cash decreased by $851,374 leaving the Company with $29,634 in cash at September 30, 2010. This is compared to a $431,188 decrease in cash during the nine months ended September 30, 2009.

Although the Company realized net income for the nine months ended September 30, 2010, there can be no assurance whatsoever that the Company will not suffer losses in the future. While the Company is currently pursuing new contracts from both the U.S. defense and intelligence communities and from commercial customers, there can be no assurance whatsoever that such effort will be successful or will result in revenues to Cogility on any particular timetable or in any particular amounts. The Company has a history of losses as evidenced by the accumulated deficit at September 30, 2010 of $3,507,764.

Comparison of December 31, 2009 and 2008

At December 31, 2009, the Company had current liabilities in excess of current assets of $1,852,663, an accumulated deficit of $(4,634,966) and a shareholders’ deficit of $(1,766,701). At December 31, 2008, the Company had current liabilities in excess of current assets of $1,170,493, an accumulated deficit of $3,865,634 and a shareholders’ deficit of $(1,126,675).

At December 31, 2009, the Company had $881,008 of cash and $505,299 of accounts receivable as a source of cash to pay $371,279 of trade accounts payable, $121,164 of accrued liabilities and $935,959 of notes payable. Therefore liabilities that would require cash payments exceeded cash and accounts receivable by $42,395 at December 31, 2009.

During the year ended December 31, 2009, accounts receivable increased $460,000 compared to a decrease of $227,211 during the year ended December 31, 2008. During 2009, accounts payable increased $249,709 compared to a decrease of $128,603 during 2008 and billings in excess of costs on uncompleted contracts increased $1,182,148 during 2009 and increased $633,152 during 2008. The net cash provided by these changes in current assets and liabilities, along with noncash expenses from services contributed by a shareholder of $112,500 and $200,000 during the years ended December 31, 2009 and 2008, respectively, and expenses paid by an increase in notes payable to a related party of $51,375 and $1,020,792 during the years ended December 31, 2009 and 2008, respectively, offset losses during the years ended December 31, 2009 and 2008 of $(769,332) and $(1,417,664), respectively, to generate cash from operating activities of $552,971 and $514,635 during the years ended December 31, 2009 and 2008, respectively.

During the year ended December 31, 2009 the Company used cash in investing activities of $113,108 primarily from $38,291 advanced and loaned to employees and from purchases of property and equipment of $67,267. During the year ended December 31, 2008, the Company used $51,051 in investing activities.

During the year ended December 31, 2009 the Company received $425,285 of proceeds from borrowing under notes payable, $75,000 of proceeds from borrowing under notes payable to a related party, paid $25,000 in redemption of common stock and paid principal payments of $435,328 on notes payable to a related party. As a result, the Company generated net cash from its financing activities of $39,957 during the year ended December 31, 2009. During the year ended December 31, 2008, the Company used $226,165 of cash in its financing activities primarily to make principal payments on notes payable to a related party.

The Company realized a net loss for the year ended December 31, 2009 and there is no assurance that the Company will not suffer losses in the future. The Company’s 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. Management has signed a letter of intent to merge Cogility into a wholly-owned subsidiary of Acquired Sales Corp. on terms and conditions described in the letter of intent. In conjunction with this merger the Company currently is in negotiations to raise capital through a private placement. There can be no assurance whatsoever that the Company will be able to raise capital through a private placement on acceptable terms, if at all.

Results of Operations

The Company enters into contractual arrangements with end-users of its products to sell software licenses, hardware, consulting services and maintenance services, either separately or in various combinations thereof. For each arrangement, revenue is recognized when persuasive evidence of an arrangement exists, the fees to be paid by the customer are fixed or determinable, collection of the fees is probable, and delivery of the product or services has occurred. See additional revenue recognition disclosure under “Critical Accounting Policies.”

Cost of revenue consists primarily of the cost of hardware and software and the cost of services provided to customers.

Selling, general and administrative expenses primarily consist of professional fees, salaries and related costs for accounting, administration, finance, human resources, information systems and legal personnel.

Comparison of the Nine Months Ended September 30, 2010 and 2009

Revenue – Software licensing and hardware sales were $501,334 for the nine months ended September 30, 2010, compared to $1,100,000 for the nine months ended September 30, 2009, representing a decrease of $598,666, or 54.4%, due to a large, one-time software licensing sale in the nine months ended September 30,2009.

Revenue from consulting services was $4,239,586 for the nine months ended September 30, 2010, compared to $2,581,931 for the nine months ended September 30, 2009, representing an increase of $1,657,655, or 64.2%. The increase in consulting services revenue was primarily due to the completion of a large contract accounted for under the completed contract method.

Cost of Revenue – Our cost of software licensing and hardware sales was $510,427 for the nine months ended September 30, 2010, compared to $275,930 for the nine months ended September 30, 2009,

representing an increase of $234,497, or 85.0%. The increase in our cost of software licensing and hardware sales was due to an increase in the cost of hardware sold and a decrease in the cost of software sold. Software sales have a higher gross profit margin while hardware sales have a lower gross profit margin. The cost of hardware in some instances is passed through to the customer at cost or very close to cost.

Our cost of consulting, maintenance and support services for the nine months ended September 30, 2010 was $1,982,407 compared to $2,810,705 for the nine months ended September 30, 2009, a decrease of $828,298, or 29.5%. The decrease in cost of services resulted in an increase in profitability on contracts entered into and completed for the nine months ended September 30, 2010.

The changes and percent changes with respect to our revenues and our cost of revenue for the nine months ended September 30, 2010 and 2009 are summarized as follows:

	For the Nine Months
	Ended September 30,
	2010		2009		Change			Percent Change
REVENUE
Software licensing and hardware sales	$	501,334	$	1,100,000	$	(598,666	)		-54.4	%
Consulting Services		4,239,586		2,581,931		1,657,655			64.2	%
Maintenance and support services		83,750		60,000		23,750			39.6	%
Total Revenue	$	4,824,670	$	3,741,931	$	1,082,739			28.9	%

COST OF REVENUE
Hardware and software sales		510,427		275,930		234,497			85.0	%
Cost of Services		1,982,407		2,810,705		(828,298	)		-29.5	%
Total Cost of Revenue	$	2,492,834	$	3,086,635	$	(593,801	)		-19.2	%

Although the preceding table summarizes the net changes and percent changes with respect to our revenues and our cost of revenue for the nine months ended September 30, 2010 and 2009, the trends contained therein are limited and should not be viewed as a definitive indication of our future results. The Company completed its last government contractual arrangement in September of 2010 and since that time has not generated any significant new revenue.

Selling, General and Administrative Expense – Selling, general and administrative expense, including non-cash compensation expense, was $1,148,334 for the nine months ended September 30, 2010, compared to $963,484 for the nine months ended September 30, 2009, representing an increase of $184,850, or 19.2%. The increase in our selling, general and administrative expense related to the increase in rental expense as well as the write-off of certain uncollectible accounts and employee loans that took place during the nine months ended September 30, 2010.

Net Income (Loss) – We realized net income of $1,127,202 for the nine months ended September 30, 2010, compared to a net loss of $397,028 during the nine months ended September 30, 2009. The $1,524,230 increase in net income was primarily related to the increase in contract profitably realized in the nine months ended September 30, 2010. We may incur losses in the future as existing contracts close and new contracts may not be entered into.

Comparison of the Year Ended December 31, 2009 and 2008

Revenue – Software licensing and hardware sales were $1,100,000 for the year ended December 31, 2009, compared to $211,321 for the year ended December 31, 2008, representing an increase of $888,679, or 420.5%, due to a large, one-time software licensing sale in the year ended December 31,2009.

Revenue from consulting services was $2,598,431 for the year ended December 31, 2009, compared to $765,016 for the year ended December 31, 2008, representing an increase of $1,833,415, or 239.7%. The increase in consulting services revenue was due to the Company’s recognition of revenue relating to its entry into government markets.

Revenue from hosting, maintenance and support services was $77,500 for the year ended December 31, 2009, compared to $160,139 for the year ended December 31, 2008, representing a decrease of $82,639, or 51.6%, due to an allocation of the Company resources away from hosting services to governmental contract consulting services.

Cost of Revenue – Our cost of software licensing and hardware sales was $312,470 for the year ended December 31,2009, compared to zero for the year ended December 31, 2008.The cost of hardware is in some instances passed through to the customer at cost or very close to cost.

Our cost of services for consulting and hosting, maintenance and support services revenue was $2,829,189 for the year ended December 31,2009, compared to $1,399,270 for the year ended December 31,2008, representing an increase of $1,429,919, or 102.2.0%. The increase in cost of consulting and hosting, maintenance and support services relates to an increase in revenue on contracts entered into and completed for year ended December 31, 2009.

	For the Year
	December 31,
	2009		2008		Change			Percent Change
REVENUE
Software licensing and hardware sales	$	1,100,000	$	211,321	$	888,679			420.5	%
Consulting Services		2,598,431		765,016		1,833,415			239.7	%
Hosting, Maintenance and support services		77,500		160,139		(82,639	)		-51.6	%
Total Revenue	$	3,775,931	$	1,136,476	$	2,639,455			232.2	%

COST OF REVENUE
Hardware and software sales		312,470		-		312,470			100.0	%
Cost of Services		2,829,189		1,399,270		1,429,919			102.2	%
Total Cost of Revenue	$	3,141,659	$	1,399,270	$	1,742,389			124.5	%

Although the preceding table summarizes the net changes and percent changes with respect to our revenues and our cost of revenue for the year ended December 31, 2009 and 2008, the trends contained therein are limited and should not be viewed as a definitive indication of our future results.

Selling, General and Administrative Expense – Selling, general and administrative expense, including non-cash compensation expense, was $1,284,645 for the year ended December 31,2009, compared to $1,138,278 for the year ended December 31,2008, representing an increase of $146,367, or 12.8%, which was due to an increase in revenue for that same period.

Net Loss -- The Company realized a net loss of $769,332 for the year ended December 31, 2009, compared to a net loss of $1,417,664 during the year ended December 31, 2008. The $648,332 decrease in net loss, or 45.7%, was primarily related to the increase in revenue and gross profit relating to government contracts realized in the year ended December 31, 2009. We may incur losses in the future as existing contracts close and new contracts may not be entered into. While the Company is currently pursuing new contracts from both the U.S. defense and intelligence communities and from commercial customers, there can be no assurance whatsoever that such efforts will be successful, nor that such efforts will result in revenues to Cogility on any particular timetable or in any particular amounts.

Critical Accounting Policies

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and

assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Significant estimates include share-based compensation forfeiture rates and the potential outcome of future tax consequences of events that have been recognized for financial reporting purposes. Actual results and outcomes may differ from management’s estimates and assumptions.

Accounts Receivable - Accounts receivable are stated at the amount billed to customers, net an allowance for doubtful accounts. The Company evaluates the collectability of the amount receivable from each customer and provides an allowance for those amounts estimated to be uncertain of collection. Accounts determined to be uncollectible are written off against the allowance for doubtful accounts.

Property and Equipment – Property and equipment are recorded at cost less accumulated depreciation. Maintenance, repairs, and minor replacements are charged to expense as incurred. When depreciable assets are retired, sold, traded in or otherwise disposed, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in operations. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, which are three to five years. Depreciation expense for the years ended December 31, 2009 and 2008 was $32,673, and $24,897, respectively.

Software Development Costs – The Company charges all software development costs to research and development until technological feasibility has been established. Technological feasibility has been established when a detail program design has been completed or a working model has been obtained. After technological feasibility has been established, additional costs to complete the software and updates are capitalized. After technological feasibility has been established, maintenance costs are expensed as incurred. Research and development costs were insignificant during the years ended December 31, 2009 and 2008.

Revenue Recognition – The Company enters into contractual arrangements with end-users of its products to sell software licenses, hardware, consulting services and maintenance services, either separately or in various combinations thereof. For each arrangement, revenue is recognized when persuasive evidence of an arrangement exists, the fees to be paid by the customer are fixed or determinable, collection of the fees is probable, and delivery of the product or services has occurred. When the Company is the primary obligor or bears the risk of loss, revenue and costs are recorded on a gross basis. When the Company receives a fixed transactional fee, revenue is recorded under the net method based on the net amount retained.

In contractual arrangements where services are essential to the functionality of the software or hardware, or payment of the license fees are dependent upon the performance of the related services, revenue for the software license, hardware and consulting fees are recognized on the completed-contract method when the contract is substantially completed and all related deliverables have been provided to and accepted by the customer. This method is used because the Company is unable to accurately estimate total cost of individual contracts until the contracts are substantially complete. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Claims for additional compensation are recognized during the period such claims are resolved and collected.

Costs of software, hardware and costs incurred in performing the contract services are deferred until the related revenue is recognized. Contract costs include all purchased software and hardware, subcontract and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, equipment, and travel costs as well as depreciation on equipment used in performance of the contractual arrangements. Depreciation on administrative assets and selling, general and administrative costs are charged to expense as incurred.

Costs in excess of amounts billed are classified as current assets under the caption Costs in excess of billings on uncompleted contracts. Billings in excess of costs are classified as current liabilities under the caption Billings in excess of costs on uncompleted contracts. Contract retentions are included in accounts receivables.

Software Licensing and Hardware Sales: When software licensing and/or hardware functionality are not dependent upon performance of services, the amount of revenue under the arrangement is allocated to the deliverable elements based on prices the Company sells the separate elements, if objectively determinable. If so determinable, the amounts allocated to the software licensing are recognized as revenue at the time of shipment of the software to the customer. Such sales occur when the Company resells third-party software and hardware systems and related peripherals as part of an end-to-end solution to its customers. The Company considers delivery to occur when the product is shipped and title and risk of loss have passed to the customer.

Consulting Services: Consulting services are comprised of consulting, implementation, software installation, data conversion, building interfaces to allow the software to operate in integrated environments, training and applications. Consulting services are sold on a fixed-fee and a time-and-materials basis, with payment normally due upon achievement of specific milestones. Consulting services revenue is recognized under the completed-contract method as described above.

Hosting: During the year ended December 31, 2008, the Company provided remote management, monitoring, data processing, updating or administrative support of applications software, servers, operating systems and other automation tools to customers. Revenue was comprised of recurring fees for licensing access to and the use of the Company’s application software as a service, on a subscription or on-demand basis over a contractual term. Related recurring fees were recognized as the services were provided. Related one-time set up fees were recognized on a straight-line basis over the longer of the contractual term or the expected life of the relationship.

Maintenance and Support Services: Maintenance and support services consist primarily of fees for providing unspecified software upgrades on a when-and-if-available basis and technical support over a specified term, which is typically twelve months. Maintenance revenues are recognized ratably over the term of the related agreement.

Concentration of Credit Risk and Significant Customers – At December 31, 2009, cash in banks exceeded federally insured limits by $685,605. At December 31, 2009 and 2008, accounts receivables from two customers accounted for 91% and 99%, respectively, of total accounts receivable. In 2009, revenues from one customer totaled 95% of total revenue. Loss of this customer would have a material adverse impact on the Company’s operations. In 2008, revenue from three customers was 91% of total revenue, with each exceeding 10% of total revenue.

Income Taxes – Provisions for income taxes are based on taxes payable or refundable for the current year and deferred income taxes. Deferred income taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements and on tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance is provided against deferred income tax assets when it is not more likely than not that the deferred income tax assets will be realized.

Basic and Diluted Loss Per Share –The computation of basic loss per share is determined by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing net loss by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options are determined by the treasury stock method.

Common stock equivalents outstanding at December 31, 2009 and 2008 consisted of employee stock options for the purchase of 2,635,000 shares and 2,070,000 shares that were excluded from the computation of diluted loss per share for the years ended December 31, 2009 and 2008, respectively, because their effects would have been anti-dilutive.

Share-Based Compensation Plan – Stock-based compensation to employees and consultants is recognized as a cost of the services received in exchange for an award of equity instruments and is measured based on the grant date fair value of the award or the fair value of the consideration received, whichever is more reliably measureable. Compensation expense is recognized over the period during which service is required to be provided in exchange for the award (the vesting period).

Recently Enacted Accounting Standards – In 2009, the Financial Accounting Standards Board established the FASB Accounting Standards Codification (the “Codification”) as the source of accounting principles generally accepted in the United States of America (“GAAP”) through the integration of then current accounting standards from several sources into a single source. The Codification did not affect the content or application of GAAP that was in effect and had no material impact on the accompanying financial statements.

In October 2009, the FASB changed its guidance relating to revenue recognition beginning July 1, 2010 for arrangements that include software elements. Tangible products that have software components that are essential to the functionality of the tangible product will no longer be within the scope of current software revenue recognition guidance and software-enabled products will instead be subject to other relevant revenue recognition guidance. Additionally, revenue arrangements with multiple deliverables were changed. When vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. The adoption of these amendments is not expected to have a material impact on the Company’s financial statements since the Company currently recognizes revenue from these types of arrangements under the completed-contract method.

In February 2010, the FASB adopted guidance relating to disclosure of subsequent events, which was effective upon issuance. As a result, the Company is required to evaluate subsequent events through the date that the financial statements are issued. The adoption of this guidance did not have a material impact on the Company’s financial statements.

Contractual Cash Obligations and Commercial Commitments

The Company leases three facilities under operating leases for a combined monthly rental of $11,476 per month. The leases expire at various times throughout 2011. The Company leases office space in San Jose, California. The original lease expired on November 30, 2010. The Company moved to smaller space in the same facility and rent was reduced from $4,903 per month to $3,826 per month. The lease expires November 30, 2011. The Company leases space in Alexandria, Virginia for a monthly rental of $3,400. The lease expires March 31, 2011. The Company leases temporary housing space in Alexandria, Virginia for a monthly rental $4,250. On January 15, 2011 the Company exercised an early lease termination clause. The lease expires April 15, 2011.

At September 30, 2010, the Company is obligated to pay $363,070 of notes payable. A note payable to an individual of $318,000 bears interest at 5.75% and is due October 15, 2012. Non-interest bearing notes payable to a finance company of $45,070 was increased by $60,000 subsequent to September 30, 2010 and is due on demand. On December 14, 2010, the Company issued a promissory note to an entity related to an officer of the Company in the amount of $200,000 to finance working capital needs. The note bears interest at 5% per annum, is due December 31, 2013. Interest payments are due quarterly starting March 2011.

Off Balance Sheet Arrangements – We have no off-balance sheet arrangements.

Financial Statements

ACQUIRED SALES CORP.

INDEX TO FINANCIAL STATEMENTS

PRO FORMA FINANCIAL INFORMATION	Page

Unaudited Pro Forma Condensed Consolidated Financial Information	F-2

Unaudited Pro Forma Condensed Consolidated Balance Sheet, September 30, 2010	F-3

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Nine Months Ended September 30, 2010	F-4

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2009	F-5

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information	F-6

COGILITY SOFTWARE CORPORATION

Condensed Balance Sheet, September 30, 2010 (Unaudited)	F-9

Condensed Statements of Operations for the Nine Months Ended September 30, 2010 and 2009 (Unaudited)	F-10

Condensed Statement of Shareholders’ Deficit for the Nine Months Ended September 30, 2010 (Unaudited)	F-11

Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009 (Unaudited)	F-12

Notes to Condensed Financial Statements (Unaudited)	F-13

Report of Independent Registered Public Accounting Firm	F-17

Balance Sheets, December 31, 2009 and 2008	F-18

Statements of Operations for the Years Ended December 31, 2009 and 2008	F-19

Statements of Shareholders’ Deficit for the Years Ended December 31, 2008 and 2009	F-20

Statements of Cash Flows for the Years Ended December 31, 2009 and 2008	F-21

Notes to Financial Statements	F-22

F-1

ACQUIRED SALES CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On November 4, 2010, Acquired Sales Corp. (“Acquired Sales”) entered into an agreement with Cogility Software Corporation (“Cogility”) wherein Acquired Sales, through a to-be-formed, wholly-owned subsidiary, is to acquire Cogility in a stock-for-stock merger (the “transaction” or the “merger”). Cogility is a developer of Model-Driven Complex Event Processing software technology for the U.S. defense and intelligence communities and private sector corporations which have complex information management requirements. Closing of the transaction is subject to a number of conditions, including the completion of a 1-for-20 reverse split of Acquired Sales' common stock, completion of mutually acceptable due diligence, delivery of audited financial statements, execution of definitive merger documents, obtaining necessary third party approvals, and completion of all necessary securities filings.

The following unaudited pro forma condensed consolidated balance sheet has been prepared to present the effects on the financial position of the Company as though the merger had occurred on September 30, 2010. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2010 and for the year ended December 31, 2009 have been prepared to present the effects of the merger as though it had occurred at the beginning of each of those periods.

Cogility and/or Acquired Sales intend to issue convertible debt, debt with detachable warrants or options, or other financial instruments prior to closing the merger; therefore, if such financial instruments are issued, the terms of a definitive agreement would likely change. The accompanying unaudited pro forma consolidated financial information is therefore based on estimates and assumptions which are preliminary and subject to change. The unaudited pro forma consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of the combined results of operations to be expected in any future period or the results that actually would have been realized had the entities been combined during these periods.

F-2

ACQUIRED SALES CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2010

				Acquired			Pro Forma				Pro Forma
	Cogility			Sales			Adjustments				Consolidated
ASSETS
Current Assets
Cash	$	29,634		$	-		$	-			$	29,634
Accounts receivable		837,751			-							837,751
Prepaid expenses		3,727			-							3,727
Total Current Assets		871,112			-			-				871,112
Property and Equipment		81,480			-							81,480
Deposits		12,585			-							12,585
Total Assets	$	965,177		$	-		$	-			$	965,177

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Trade accounts payable	$	652,666		$	14,435		$	(200,000	)	D	$	467,101
Accrued liabilities		134,029			-							134,029
Unearned revenue		82,298			-							82,298
Notes payable		363,070			-							363,070
Notes payable to related parties		-			24,000							24,000
Accrued compensation to officers		285,910			-			(285,910	)	E		-
Total Current Liabilities		1,517,973			38,435			(485,910	)			1,070,498
Long-Term Note Payable to Shareholder		-			-			200,000		D		200,000
Shareholders' Deficit
Preferred stock, $0.001 par value; 10,000,000 shares
authorized, no shares outstanding		-			-							-
Common Stock, $0.001 par value 100,000,000 shares
authorized; 2,467,188 shares outstanding, pro forma		11,530			5,833			(9,354	)	A
								(5,541	)	B		2,467
Additional paid-in capital		2,943,438			145,967			9,354		A
								(184,694	)	B
								3,299,543		C
								285,910		E		6,499,519
Deficit accumulated prior to the development stage		-			(69,151	)		69,151		B		-
Deficit accumulated during the development stage		-			(121,084	)		121,084		B		-
Accumulated deficit		(3,507,764	)		-			(3,299,543	)	C		(6,807,307	)
Total Shareholders' Deficit		(552,796	)		(38,435	)		285,910				(305,321	)
Total Liabilities and Shareholders' Deficit	$	965,177		$	-		$	-			$	965,177

See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.

F-3

ACQUIRED SALES CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

			Acquired			Pro Forma				Pro Forma
	Cogility		Sales			Adjustments				Consolidated
Revenue
Software licensing and hardware sales	$	501,334	$	-						$	501,334
Consulting Services		4,239,586		-							4,239,586
Maintenance and support services		83,750		-							83,750
Total Revenue		4,824,670		-							4,824,670
Cost of Revenue
Hardware and software costs		510,427		-							510,427
Cost of services		1,982,407		-							1,982,407
Total Cost of Revenue		2,492,834		-							2,492,834
Gross Profit		2,331,836		-							2,331,836
Selling, General and Administrative
Expense		1,148,334		18,847		$	1,418,844		C		2,586,025
Income (Loss) from Operations		1,183,502		(18,847	)		(1,418,844	)			(254,189	)
Interest Expense		55,500		1,666							57,166
Income (Loss) before Income Taxes		1,128,002		(20,513	)		(1,418,844	)			(311,355	)
Provision for Income Taxes		800		-							800
Net Income (Loss)	$	1,127,202	$	(20,513	)	$	(1,418,844	)		$	(312,155	)

Basic and Diluted Earnings (Loss)
per Share	$	0.10								$	(0.13	)

See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.

F-4

ACQUIRED SALES CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2009

				Acquired			Pro Forma				Pro Forma
	Cogility			Sales			Adjustments				Consolidated
Revenue
Software licensing and hardware sales	$	1,100,000		$	-						$	1,100,000
Consulting Services		2,598,431			-							2,598,431
Maintenance and support services		77,500			-							77,500
Total Revenue		3,775,931			-							3,775,931
Cost of Revenue
Hardware and software costs		312,470			-							312,470
Cost of services		2,829,189			-							2,829,189
Total Cost of Revenue		3,141,659			-							3,141,659
Gross Profit		634,272			-							634,272
Selling, General and Administrative
Expense		1,284,645			10,932		$	1,885,453		C		3,181,030
Income (Loss) from Operations		(650,373	)		(10,932	)		(1,885,453	)			(2,546,758	)
Interest Expense		49,972			1,074							51,046
Income (Loss) before Income Taxes		(700,345	)		(12,006	)		(1,885,453	)			(2,597,804	)
Provision for Income Taxes		68,987			-							68,987
Net Income (Loss)	$	(769,332	)	$	(12,006	)	$	(1,885,453	)		$	(2,666,791	)

Basic and Diluted Earnings (Loss)
per Share	$	(0.07	)								$	(1.08	)

See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.

F-5

ACQUIRED SALES CORP AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Prior to the merger of Cogility into a newly-formed subsidiary of Acquired Sales, Acquired Sales has been a non-operating public shell corporation with nominal assets. The shareholders and management of Cogility will gain operating control of the combined company after the transaction. Accordingly, Cogility is, under current accounting guidance, considered the accounting acquirer and the results of its operations will be the historical results of operations of the combined company, restated for the effects of restructured capital structure discussed herein.

The transactions required to accomplish the merger are recognized as follows: (1) the recapitalization of Cogility by recognizing the Acquired Sales common shares issued in exchange for the Cogility shares in a manner equivalent to a 1-for-5.3 reverse stock split, (2) the Acquired Sales common shares that remain outstanding, on a 1-for-20 reverse split basis, recognized as the issuance of common shares by Cogility for the net liabilities of Acquired Sales at their fair values, and (3) the issuance of stock options to the members of management of the combined company recognized as compensation expense based on the fair value of the stock options. All references hereafter are to Acquired Sales post-split common shares unless stated otherwise. The specific transactions and their effects on the unaudited pro forma condensed consolidated financial statements are as follows:

A – Cogility shareholders owning the outstanding 11,530,493 Cogility common shares receive 2,175,564 Acquired Sales common shares, or one Acquired Sales common share for each 5.3 Cogility common shares outstanding. The historical Cogility financial statements are restated on a retroactive basis for all periods presented for the effects of this reverse stock split.

B – Acquired Sales reverse splits its common shares outstanding on a 1-for-20 basis, which results in the 5,832,482 Acquired Sales pre-split common shares currently outstanding becoming 291,624 Acquired Sales common shares. There are also outstanding Acquired Sales stock options enabling the holders to acquired 175,000 pre-split common shares at $0.10 per shares that are reduced to stock options to acquire 8,750 Acquired Sales common shares at $2.00 per share. For financial reporting purposes, the 291,624 common shares and the 8,750 stock options that remain outstanding are effectively issued in exchange for the assumption of $38,435 of liabilities of Acquired Sales and are recorded at the fair value of the liabilities of $38,435. The related stock options expired unexercised on December 31, 2010 and their expiration has no effect on the pro forma consolidated financial statements.

C – Prior to the merger, Cogility had stock options outstanding that permit the holders thereof to purchase 2,635,000 Cogility common shares at prices ranging from $0.20 to $1.40 per share. In the merger transaction, the Cogility option holders exchange these stock options for 497,170 Acquired Sales stock options exercisable at prices ranging from $1.06 to $5.00 per share. The exchange of these stock options is considered to be part of the recapitalization of Cogility and is not a modification of the stock options. The terms of the original Cogility stock options require that the stock options become fully vested upon the occurrence of the merger; therefore, the remaining $4,754 of compensation relating to these stock options is recognized during the nine months ended September 30, 2010 in the accompanying pro forma consolidated financial statements.

On November 4, 2010, Acquired Sales granted stock options to the members of management of the combined company to purchase 1,101,698 post-split Acquired Sales common shares at $2.00 per share and to purchase 150,000 Acquired Sales common shares at $0.001 per share. Of these stock options, 630,000 will vest upon completion of the merger and 621,698 will not vest and cannot be exercised unless and until a private placement offering by Cogility or Acquired Sales of $500,000 or

F-6

ACQUIRED SALES CORP AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

greater in debt or equity has been successfully completed. For purposes of the pro forma financial statements, it is presumed that all of these stock options are vested at the date the merger is completed.

Cogility and Acquired Sales have authorized the grant, at the closing of the merger, of Acquired Sales stock options for the purchase of 1,500,000 Acquired Sales common shares at $5.00 per share. At that date, 750,000 of the stock options will be granted and the remaining 750,000 stock options are to be granted within twelve months of the closing of the merger. For purposes of these pro forma financial statements, all 1,500,000 stock options are presumed to have been granted at the beginning of each period presented.

The fair value of each option award is estimated on the date of grant or presumed date of grant using the Black-Scholes option pricing model, using the following assumptions. Expected volatilities are based on the historical volatility of an appropriate industry sector index, comparable companies in the index and other factors. The expected term of each option is based on the midpoint between the date the option vests and the contractual term of the option. The risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related option. Forfeitures due to employee termination are estimated based on historical experience rates. The weighted-average grant date or presumed grant date fair value of the 2,751,698 stock options granted in connection with the merger was $3,299,543 and was based on the following assumptions: 84% weighted-average volatility; 0% expected dividend yield; 5.06 year expected term; and 2.35% risk-free interest rate. Compensation expense charged against pro forma operations during the year ended December 31, 2009 and during the nine months ended September 30, 2010 was $1,885,453 and $1,418,844, respectively.

D – On December 14, 2010, Cogility issued a promissory note to an entity related to an officer of Cogility in the amount of $200,000 to finance working capital needs. The note bears interest at 5% per annum, is due December 31, 2013. Interest payments are due quarterly starting in March 2011. Cogility has agreed to modify the terms of the promissory note to be equivalent to the terms of any financial instruments issued in a future private placement offering. There is no assurance that such a private placement offering will occur or that the terms of the promissory note will be modified.

E – On September 22, 2010, the majority shareholder of Cogility signed an agreement that in the event of the merger, $285,910 of accrued compensation payable would be forgiven. The accompanying pro forma financial statements recognize this transaction as the conversion of the $285,910 of accrued compensation to officers to additional paid-in capital without the issuance of additional common shares.

Pro Forma Loss per Share – Pro forma basic loss per common share is computed by dividing pro forma net loss by the weighted-average number of common shares assumed to be outstanding during the period. Diluted loss per common share is computed by dividing net loss by the weighted-average number of common shares and dilutive common share equivalents assumed to be outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options are determined by the treasury stock method.

The Cogility common shares outstanding have been restated to reflect the 2,175,564 common shares that the Cogility shareholders will receive in the merger. For purposes of computing basic and diluted loss per share those common shares are considered to have been outstanding during the entire nine months ended September 30, 2010 and the year ended December 31, 2009. The 291,624 Acquired Sales common shares

F-7

ACQUIRED SALES CORP AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

that remain outstanding are considered to have been issued on January 1, 2009 for purposes of computing basic loss per share. Pro forma basic and diluted loss per common share were computed as follows:

	For the Nine				For the Year
	Months Ended				Ended
	September 30,				December 31,
	2010				2009
Pro forma net loss		$	(312,155	)		$	(2,666,791	)
Weighted-average common shares outstanding			2,467,188				2,467,188
Pro forma basic and diluted loss per share		$	(0.13	)		$	(1.08	)

Stock options to acquire 3,257,618 Acquired Sales common shares were excluded from the calculation of pro forma diluted loss per share for both the nine months ended September 30, 2010 and for the year ended December 31, 2009, as their effects would have been anti-dilutive.

F-8

COGILITY SOFTWARE CORPORATION

CONDENSED BALANCE SHEET

SEPTEMBER 30, 2010

(UNAUDITED)


ASSETS
Current Assets
Cash	$	29,634
Accounts receivable, no allowance for doubtful accounts		837,751
Prepaid expenses		3,727
Total Current Assets		871,112
Property and Equipment, net of accumulated depreciation of $2,149,636		81,480
Deposits		12,585
Total Assets	$	965,177

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Trade accounts payable	$	652,666
Accrued liabilities		134,029
Unearned revenue		82,298
Notes payable		363,070
Accrued compensation to officers		285,910
Total Current Liabilities		1,517,973
Shareholders' Deficit
Common Stock, $0.01 par value; 30,000,000 shares authorized;
11,530,493 shares outstanding		11,530
Additional paid-in capital		2,943,438
Accumulated deficit		(3,507,764	)
Total Shareholders' Deficit		(552,796	)
Total Liabilities and Shareholders' Deficit	$	965,177

See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.

F-9

COGILITY SOFTWARE CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the Nine Months Ended September 30,	2010		2009
Revenue
Software licensing and hardware sales	$	501,334	$	1,100,000
Consulting services		4,239,586		2,581,931
Maintenance and support services		83,750		60,000
Total Revenue		4,824,670		3,741,931
Cost of Revenue
Hardware and software costs		510,427		275,930
Cost of services		1,982,407		2,810,705
Total Cost of Revenue		2,492,834		3,086,635
Gross Profit		2,331,836		655,296
Selling, General and Administrative Expense		1,148,334		963,484
Income (Loss) from Operations		1,183,502		(308,188	)
Interest Expense		55,500		37,500
Income (Loss) before Income Taxes		1,128,002		(345,688	)
Provision for Income Taxes		800		51,340
Net Income (Loss)	$	1,127,202	$	(397,028	)

Basic and Diluted Earnings (Loss) per Share	$	0.10	$	(0.03	)

Basic and Diluted Weighted-Average Shares Outstanding		11,530,493		11,530,493

See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.

F-10

COGILITY SOFTWARE CORPORATION

CONDENSED STATEMENT OF SHAREHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

(UNAUDITED)

					Additional					Total
	Common Stock				Paid-in		Accumulated			Shareholders'
	Shares		Amount		Capital		Deficit			Deficit
Balance, December 31, 2009		11,530,493	$	11,530	$	2,856,735	$	(4,634,966	)	$	(1,766,701	)
Services contributed by shareholder,
no additional shares issued		-		-		75,000		-			75,000
Share-based compensation		-		-		11,703		-			11,703
Net income		-		-		-		1,127,202			1,127,202
Balance, September 30, 2010		11,530,493	$	11,530	$	2,943,438	$	(3,507,764	)	$	(552,796	)

See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.

F-11

COGILITY SOFTWARE CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Nine Months Ended September 30,	2010			2009
Cash Flows from Operating Activities
Net income (loss)	$	1,127,202		$	(397,028	)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Services contributed by shareholder, no additional shares issued		75,000			84,375
Share-based compensation		11,703			11,550
Expenses paid by increase in notes payable to related party		37,784			49,972
Depreciation		30,391			20,904
Compensation from forgiveness of receivables from employees		129,283			-
Changes in operating assets and liabilities:
Accounts receivable		(332,452	)		14,480
Prepaid expenses		6,228			(9,621	)
Accounts payable		281,387			628,429
Accrued liabilities		12,865			69,112
Billings in excess of costs on uncompleted contracts		(1,815,300	)		(633,152	)
Unearned revenue		19,798			5,000
Accrued compensation to officers		215,967			-
Net Cash Used in Operating Activities		(200,144	)		(155,979	)
Cash Flows from Investing Activities
Increase in deposits		-			(7,550	)
Advances and loans to employees		(72,006	)		(37,026	)
Purchase of property and equipment		(38,494	)		(44,331	)
Net Cash Used in Investing Activities		(110,500	)		(88,907	)
Cash Flow from Financing Activities
Payments for redemption of common shares		-			(25,000	)
Proceeds from borrowing under notes payable		-			112,812
Proceeds from borrowing under notes payable to related party		-			75,000
Principal payments on notes payable to related party		(433,445	)		(416,259	)
Principal payments on notes payable		(107,285	)		-
Increase in checks written in excess of cash in bank		-			67,145
Net Cash Used in Financing Activities		(540,730	)		(186,302	)
Net Decrease in Cash		(851,374	)		(431,188	)
Cash at Beginning of Period		881,008			431,188
Cash at End of Period	$	29,634		$	-
Supplemental Cash Flow Information
Cash paid for interest	$	-		$	-
Cash paid for income taxes		-			-

See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information.

F-12

COGILITY SOFTWARE CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Condensed Financial Statements – The accompanying financial statements of Cogility Software Corporation (the “Company”) are condensed and, therefore, do not include all disclosures normally required by generally accepted accounting principles. These statements should be read in conjunction with the Company's annual financial statements for the fiscal year ended December 31, 2009. In particular, the Company's organization, nature of operations and significant accounting principles were presented in Note 1 to those financial. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed financial statements and consist of only normal recurring adjustments. The results of operations for the nine months ended September 30, 2010 are not necessarily indicative of the results of operations that may occur for the full year ending December 31, 2010.

Earnings (Loss) Per Common Share - Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options are determined by the treasury stock method. Common share equivalents outstanding at both September 30, 2010 and 2009 consisted of employee stock options for the purchase of 2,635,000 common shares. These common share equivalents were excluded from the computation of diluted earnings (loss) per share for the nine months ended September 30, 2010 and 2009 because their effects would have been anti-dilutive.

Recently Enacted Accounting Standards – In February 2010, the FASB adopted guidance relating to disclosure of subsequent events, which was effective upon issuance. As a result, the Company is required to evaluate subsequent events through the date that the financial statements are issued. The adoption of this guidance did not have a material impact on the Company’s financial statements.

In April 2010, the FASB updated its guidance clarifying when it is appropriate to use the milestone method for revenue recognition. The guidance is effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive under the new guidance. The Company is currently evaluating the impact of this new guidance.

NOTE 2 - RISKS AND UNCERTAINTIES

At September 30, 2010, the Company had an accumulated deficit of $3,507,764 resulting from losses incurred during years prior to 2010. In addition, the Company had negative working capital of $646,860 and a shareholders’ deficit of $552,796 at September 30, 2010. In order for the Company to succeed, it will need to obtain and execute profitable contracts in the future.

NOTE 3 – EARNINGS AND COSTS ON UNCOMPLETED CONTRACTS

At December 31, 2009, the Company was in the process of providing software licenses, hardware and services to customers under two contracts. Revenue and costs on the uncompleted contracts were deferred at December 31, 2009 and were recognized upon completion of the contracts. The Company recognized

F-13

COGILITY SOFTWARE CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

$4,437,426 of revenue from these contracts during the nine months ended September 30, 2010. There were no uncompleted contracts at September 30, 2010 or 2009.

NOTE 4 – NOTES PAYABLE

During the year ended December 31, 2009, the Company borrowed $300,000 from an individual. The note was non-interest bearing if paid by the maturity date of February 15, 2010 or accrued interest at 12% per annum if not paid in full by the maturity date. On October 15, 2010, the Company renegotiated the note and $18,000 of accrued interest was added to the principal balance. The new note bears interest at 5.75% per annum and is due October 15, 2012. The note allows the lender to demand payment earlier than the maturity date in the event certain defined capital transactions take place. During the nine months ended September 30, 2010, the Company borrowed $100,000 from and repaid $225,285 to a finance company for working capital needs. Notes payable at September 30, 2010 were as follows:


5.75% Note payable to an individual; unsecured;
due October 15, 2012	$	318,000
Non-interest bearing notes payable to a finance company;
unsecured; due on demand		45,070
Total notes payable	$	363,070

NOTE 5 – RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2010, the Company advanced $72,006 to employees of the Company. That amount, along with $57,277 advanced to employees prior to 2010, was forgiven and recognized as compensation expense during the nine months ended September 30, 2010.

On September 14 and 16, 2010, the Company agreed to pay two executive officers $168,967 and $47,000, respectively, in one-time commissions, with payment deferred until 30 days after the closing of a private placement of common stock or debt convertible into common stock totaling at least $2,000,000. As of September 30, 2010, $285,910 of accrued compensation to officers consisted of the compensation to these officers and $69,943 payable to the majority shareholder and chief executive officer of the Company; the details of which are as follows:


10% Note payable
Balance, beginning of period	$	130,604
Interest accrued		37,784
Payments made		(168,388	)
Balance, end of period		-
Accrued consulting fees
Balance, beginning of period		335,000
Payments made		(265,057	)
Balance, end of period		69,943
Net accrued consulting fees payable	$	69,943

F-14

COGILITY SOFTWARE CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

The net accrued consulting fees payable to the majority shareholder are non-interest bearing and are due on demand. On September 22, 2010, the majority shareholder signed an agreement that in the event of a potential merger with a specified third party, the loans between the shareholder and the Company would be netted and any remaining amount payable or receivable would be forgiven. In addition, the shareholder agreed to make no claims for amounts due the shareholder under the consulting arrangement and such amounts would be written off if the potential merger is completed.

NOTE 6 – INCOME TAXES

The provision for income taxes of $800 and $51,340 for the nine months ended September 30, 2010 and 2009, respectively, consisted of current tax. At September 30, 2010, the Company’s estimated net operating loss carry forwards totaled $2,707,311 that will begin to expire in 2023 if not used by that date. A reconciliation of the amount of income tax computed using the U.S. federal statutory income tax rate to the provision for income taxes for the nine months ended September 30, 2010 and 2009 was as follows:


For the Nine Months Ended September 30,	2010			2009
Tax (benefit) at statutory rate (35%)	$	394,521		$	(120,991	)
State tax, net of federal benefit		51,808			(15,729	)
Non-deductible expenses		40,863			48,172
Change in valuation allowance		(486,392	)		139,888
Provision for income taxes	$	800		$	51,340

The tax effects of temporary differences and carry forwards that gave rise to the net deferred income tax asset as of September 30, 2010 were as follows:


Operating loss and alternative minimum credits carry forwards	$	1,107,868
Stock-based compensation		15,946
Accrued liabilities		109,240
Depreciation		(10,222	)
Less: Valuation allowance		(1,222,832	)
Net deferred income tax asset	$	-

NOTE 7 - SHAREHOLDERS’ EQUITY

During the nine months ended September 30, 2010, the chief executive officer and majority shareholder of the Company provided services to the Company, which services were determined by the board of directors to have a fair value of $187,500. The Company paid the executive officer $112,500 and has recognized a capital contribution of $75,000 during the nine months ended September 30, 2010 for the services provided by the executive officer in excess of the amounts paid.

Compensation expense charged against operations from stock options awarded prior to 2010 under the Company’s employee stock option plan was $11,703 and $11,550 during the nine months ended September 30, 2010 and 2009, respectively, and was included in selling, general and administrative expense. There was no income tax benefit recognized. As of September 30, 2010, there was $4,754 of

F-15

COGILITY SOFTWARE CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

total unrecognized compensation expense related to stock options granted under the plan. That cost is expected to be recognized over a weighted-average period of 0.9 years.

NOTE 8 – SUBSEQUENT EVENTS

On October 1, 2010, the Company signed an agreement for the purchase of 49% of the common stock of Cortez Systems (Cortez) for $526, a recently formed company in the business of providing software project applications and related services to government and non-government clients. Pursuant to the agreement, the Company agreed to advance Cortez $5,000 each month during the period from October 2010 through March 2011, for a total of $30,000 for working capital needs.

On November 4, 2010, Cogility entered into letter of intent with Acquired Sales Corp. whereby, if consummated, would result in Cogility merging with and into a wholly-owned subsidiary of Acquired Sales Corp. Cogility intends to issue convertible debt, debt with detachable warrants or options, or other financial instruments prior to the merger; therefore, if such financial instruments are issued, the terms of a definitive agreement with Acquired Sales Corp. would likely change. Based on the current financial structure of Cogility, the terms of the letter of intent would require Acquired Sales Corp. to effect a 1-for-20 reverse stock split, to issue 2,175,564 post-split common shares to the Cogility common shareholders and to issue stock options to existing Cogility stock option holders to purchase 497,170 post-split common shares at exercise prices ranging from $1.06 to $5.00 per share. The stock options would vest upon the completion of a private placement of at least $500,000.

On December 14, 2010, the Company issued a promissory note to an entity related to an officer of the Company in the amount of $200,000 to finance working capital needs. The note bears interest at 5% per annum, is due December 31, 2013 and is unsecured. Interest payments are due quarterly starting in March 2011.

F-16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and the Shareholders

Cogility Software Corporation

We have audited the accompanying balance sheets of Cogility Software Corporation as of December 31, 2009 and 2008, and the related statements of operations, shareholders' deficit, and cash flows for the years 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 audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 Cogility Software Corporation as of December 31, 2009 and 2008, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

HANSEN, BARNETT & MAXWELL, P.C.

Salt Lake City, Utah

December 23, 2010

F-17

COGILITY SOFTWARE CORPORATION
BALANCE SHEETS

	December 31,
	2009			2008
ASSETS
Current Assets
Cash and cash equivalents	$	881,008		$	431,188
Accounts receivable, net of allowance for doubtful accounts
of $3,450 and $0, respectively		505,299			45,299
Receivable from employees		57,277			18,986
Prepaid expenses		9,955			1,518
Total Current Assets		1,453,539			496,991
Property and Equipment, net of accumulated depreciation of
$2,149,636 and $2,116,963, respectively		73,377			38,783
Deposits		12,585			5,035
Total Assets	$	1,539,501		$	540,809

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Trade accounts payable	$	371,279		$	121,570
Accrued liabilities		121,164			23,136
Billings in excess of costs on uncompleted contracts		1,815,300			633,152
Unearned revenue		62,500			44,999
Notes payable		470,355			45,070
Notes payable to related party		465,604			774,557
Payable for share redemption		-			25,000
Total Current Liabilities		3,306,202			1,667,484
Shareholders' Deficit
Common stock, $0.01 par value; 30,000,000 shares authorized;
11,530,493 shares outstanding		11,530			11,530
Additional paid-in capital		2,856,735			2,727,429
Accumulated deficit		(4,634,966	)		(3,865,634	)
Total Shareholders' Deficit		(1,766,701	)		(1,126,675	)
Total Liabilities and Shareholders' Deficit	$	1,539,501		$	540,809

The accompanying notes are an integral part of these financial statements.

F-18

COGILITY SOFTWARE CORPORATION

STATEMENTS OF OPERATIONS


	For the Years Ended
	December 31,
	2009			2008
Revenue
Software licensing and hardware sales	$	1,100,000		$	211,321
Consulting services		2,598,431			765,016
Hosting services		-			75,000
Maintenance and support services		77,500			85,139
Total Revenue		3,775,931			1,136,476
Cost of Revenue
Hardware and software costs		312,470			-
Cost of services		2,829,189			1,399,270
Total Cost of Revenue		3,141,659			1,399,270
Gross Profit (Loss)		634,272			(262,794	)
Selling, General and Administrative Expense		1,284,645			1,138,278
Loss from Operations		(650,373	)		(1,401,072	)
Interest expense		49,972			15,792
Loss Before Income Taxes		(700,345	)		(1,416,864	)
Provision for Income Taxes		68,987			800
Net Loss	$	(769,332	)	$	(1,417,664	)

Basic and Diluted Loss per Share	$	(0.07	)	$	(0.12	)

Basic and Diluted Weighted-Average Shares Outstanding		11,530,493			12,070,076

The accompanying notes are an integral part of these financial statements.

F-19

COGILITY SOFTWARE CORPORATION

STATEMENTS OF SHAREHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2009

			Additional		Total
	Common Stock		Paid-in	Accumulated	Shareholders'
	Shares	Amount	Capital	Deficit	Deficit
Balance, December 31, 2007	12,455,493	$ 12,455	$ 2,564,695	$(2,447,970)	$ 129,180
Shares redeemed for cash and payable	(925,000)	(925)	(49,075)	-	(50,000)
Services contributed by shareholder,
no additional shares issued	-	-	200,000	-	200,000
Share-based compensation	-	-	11,809	-	11,809
Net loss	-	-	-	(1,417,664)	(1,417,664)
Balance, December 31, 2008	11,530,493	11,530	2,727,429	(3,865,634)	(1,126,675)
Services contributed by shareholder,
no additional shares issued	-	-	112,500	-	112,500
Share-based compensation	-	-	16,806	-	16,806
Net income	-	-	-	(769,332)	(769,332)
Balance, December 31, 2009	11,530,493	$ 11,530	$ 2,856,735	$(4,634,966)	$ (1,766,701)

The accompanying notes are an integral part of these financial statements.

F-20

COGILITY SOFTWARE CORPORATION

STATEMENTS OF CASH FLOWS

	For the Years Ended
	December 31,
	2009			2008
Cash Flows from Operating Activities
Net loss	$	(769,332	)	$	(1,417,664	)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Services contributed by shareholder, no additional shares issued		112,500			200,000
Share-based compensation		16,806			11,809
Expenses paid by increase in notes payable to related party		51,375			1,020,792
Depreciation		32,673			24,897
Changes in operating assets and liabilities:
Accounts receivable		(460,000	)		227,211
Prepaid expenses		(8,437	)		(1,518	)
Accounts payable		249,709			(128,603	)
Accrued liabilities		98,028			18,336
Customer deposits		-			(70,200	)
Billings in excess of costs on uncompleted contracts		1,182,148			633,152
Unearned revenue		17,501			(3,577	)
Net Cash Provided by Operating Activities		522,971			514,635
Cash Flows from Investing Activities
Increase in deposits		(7,550	)		(5,035	)
Advances and loans to employees		(38,291	)		(15,223	)
Purchase of property and equipment		(67,267	)		(30,793	)
Net Cash Flows Used in Investing Activities		(113,108	)		(51,051	)
Cash Flow from Financing Activities
Payments for redemption of common shares		(25,000	)		(25,000	)
Proceeds from borrowing under notes payable		425,285			45,070
Proceeds from borrowing under notes payable to related party		75,000			-
Principal payments on notes payable to related party		(435,328	)		(246,235	)
Net Cash Provided by (Used in) Financing Activities		39,957			(226,165	)
Net Increase in Cash		449,820			237,419
Cash at Beginning of Year		431,188			193,769
Cash at End of Year	$	881,008		$	431,188
Supplemental Cash Flow Information
Cash paid for interest	$	-		$	-
Cash paid for income taxes		800			-

The accompanying notes are an integral part of these financial statements.

F-21

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations – Cogility Software Corporation (Cogility or the Company) is incorporated under the laws of the State of Delaware. Cogility has developed software technology that is used to quickly access and analyze data generated by disparate sources and stored in many different databases. Specifically, Cogility provides Model Driven Complex Event Processing software technology for the defense and intelligence branches of the U.S. federal government and private corporations with complex information management requirements.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Significant estimates include share-based compensation forfeiture rates and the potential outcome of future tax consequences of events that have been recognized for financial reporting purposes. Actual results and outcomes may differ from management’s estimates and assumptions.

F-22

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

individual contracts until the contracts are substantially complete. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Claims for additional compensation are recognized during the period such claims are resolved and collected.

F-23

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

F-24

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 2 - RISKS AND UNCERTAINTIES

The Company has a history of recurring losses which has resulted in an accumulated deficit of $1,766,701 at December 31, 2009. During the years ended December 31, 2009 and 2008, the Company suffered losses of $769,332 and $1,417,664, respectively. At December 31, 2009, the Company had negative working capital of $1,852,664 and a stockholders’ deficit of $1,766,701. In order for the Company to succeed, it will need to profitably complete contracts in process at December 31, 2009 as well as future contracts.

NOTE 3 – UNCOMPLETED CONTRACTS

At December 31, 2009, the Company was in the process of providing software licenses, hardware and services to customers under two contracts. The first contract was in the amount of $1,042,552 to provide software and installation services. This contract was completed during the second quarter of 2010. The second contract was in the amount of $3,394,874 to provide hardware and services, which contract was also completed during the second quarter of 2010. Under the terms of these contracts, the Company billed the customers upon the completion of specified milestones. Through December 31, 2009, the Company had billed $264,337 and $1,893,870, respectively, for the software licenses, hardware and services provided under these contracts. Revenue and costs on the uncompleted contracts were deferred at December 31, 2009 and were recognized upon completion of the contracts. Contract billings in excess of contract costs on uncompleted contracts at December 31, 2009 and 2008 were as follows:

	December 31,
	2009			2008
Billings on uncompleted contracts	$	(2,158,207	)	$	(1,000,000	)
Less: Costs incurred on uncompleted contracts		342,907			366,848
Billings in excess of costs on uncompleted contracts	$	(1,815,300	)	$	(633,152	)

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31 2009 and 2008:

	December 31,
	2009			2008
Computer equipment	$	148,770		$	85,747
Computer software		2,070,000			2,070,000
Leasehold improvements		2,019			-
Funiture and fixtures		2,224			-
Total property and equipment		2,223,013			2,155,747
Less: accumulated depreciation		(2,149,636	)		(2,116,964	)
Property and equipment, net	$	73,377		$	38,783

F-25

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 5 – RELATED PARTY TRANSACTIONS

During the years ended December 31, 2008 and 2009, the Company advanced $57,277 to certain employees, of which $27,277 were short-term, unsecured advances. The remaining $30,000 was advanced under the terms of a promissory note agreement. The note was unsecured, bore interest at 6% per annum and was due May 5, 2010. The agreement provided that should the employee remain employed by the Company the entire term of the note, the note would be forgiven on its maturity date. During 2010, the Company forgave repayment of all of these advances and the note. The debt forgiveness was recognized as compensation expense on the dates the advances and the note were forgiven.

During the year ended December 31, 2008, the majority shareholder of the Company advanced $685,792 to the Company through payment of expenses in behalf of the Company. During the year ended December 31, 2009, the shareholder made $75,000 of cash advances to the Company. The loans were made under the terms of unsecured promissory note agreements bearing interest at 10% per annum and due on demand. During 2008, the majority shareholder provided $335,000 of consulting services to the Company. The details of the transactions with the majority shareholder under the terms of the notes payable to the majority shareholder are as follows:

	December 31,
	2009			2008
10% Note payable
Balance, beginning of year	$	439,557		$	-
Cash advanced to the Company		75,000			-
Payments made in behalf of the Company		1,403			685,792
Interest accrued		49,972			-
Payments made		(435,328	)		(246,235	)
Balance, end of year		130,604			439,557
Accrued consulting fees
Balance, beginning of year		335,000			-
Consulting fees incurred		-			335,000
Balance, end of year		335,000			335,000
Notes payable to related party	$	465,604		$	774,557

On September 22, 2010, the majority shareholder signed an agreement that, in the event of a potential merger with a specified third party, the loans from the shareholder would be forgiven. The shareholder further agreed to make no claims for amounts due to the shareholder under the consulting arrangement and such amounts would also be written off if the potential merger is completed. If the notes payable to the majority shareholder are forgiven, the amount forgiven will be recognized on that date as a conversion of the liability to shareholders’ equity.

NOTE 6 – NOTES PAYABLE

During the year ended December 31, 2009, the Company borrowed $300,000 from an individual. The note was non-interest bearing if paid by the maturity date of February 15, 2010 or accrued interest at 12% per annum if not paid in full by the maturity date. On October 15, 2010, the Company renegotiated the note and $18,000 of accrued interest was added to the original principal balance. The new note bears interest at 5.75% per annum and is due on October 15, 2012. The note allows the lender to demand payment earlier than the maturity date in the event certain defined capital transactions take place.

F-26

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

The Company has borrowed cash from a lending company to finance working capital needs. The loans are unsecured, non-interest bearing and due on demand. At December 31, 2009 and 2008 the balance owed the lending company was $170,355 and $45,070, respectively. Notes payable are summarized as follows:

	December 31,
	2009		2008
Non-interesting bearing note payable to an individual; unsecured;
due February 15, 2010; in default; 12% default interest rate	$	300,000	$	-
Non-interest bearing notes payable to a lending company;
unsecured; due on demand		170,355		45,070
Total notes payable	$	470,355	$	45,070

NOTE 7 – COMMON SHARES

In 2003, the Company issued 12,455,493 common shares, valued at $2,577,150, or approximately $0.21 per share, as payment for services related to computer software development and maintenance. The common shares and the services provided were valued based on the amount charged by the service provider.

In 2008, the Company redeemed 925,000 common shares from a shareholder for $50,000, or approximately $0.05 per share, which was estimated by management to be the fair value of the common shares at that time of the transaction. There were no unstated rights received or given as part of the transaction.

During 2008 and 2009, the chief executive officer and majority shareholder of the Company provided services to the Company, which services were determined by the board of directors to have a fair value of $250,000 each year. The Company paid the executive officer $50,000 and $137,500 during the years ended December 31, 2008 and 2009, respectively. The Company has recognized a capital contributions of $200,000 and $112,500 during the years ended December 31, 2008 and 2009, respectively, for the services provided by the executive officer in excess of the amounts paid.

NOTE 8– EMPLOYEE STOCK OPTIONS PLAN

In 2003, the board of directors and the shareholders approved and adopted a non-qualified employee stock option plan (the Plan). The Plan permits the grant of share options to the Company’s employees for up to 6,000,000 common shares. The Company believes that such awards better align the interests of its employees with those of its shareholders. Options awarded are generally granted with an exercise price equal to the fair value of the Company’s common shares at the date of grant. Options generally vest from immediately to over a three-year period.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions note in the following table. The Black-Scholes option pricing model incorporates ranges of assumptions for inputs. Expected volatilities are based on the historical volatility of an appropriate industry sector index, comparable companies in the index and other factors. The Company estimates expected life of each option based on the midpoint between the date the option vests and the contractual term of the option. The risk-free interest rate represents the U.S. Treasury bill rate for the expected life of the related option. Forfeitures due to employee termination are estimated based on historical experience rates. The following table presents the assumptions used in valuing the options granted during the years ended December 31, 2009 and 2008:

F-27

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

	2009			2008
Weighted-average volatility		76.06	%		71.66	%
Expected dividends		-			-
Expected term (years)		6.50			6.50
Risk-free interest rate		2.82	%		3.37	%

Following is a summary of option activity under the Plan as of December 31, 2008 and 2009, and changes during the years then ended:

					Weighted-
			Weighted -		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Instrinsic
Options	Shares		Price		Term (Years)		Value
Granted during 2008		2,070,000	$	0.32
Outstanding, December 31, 2008		2,070,000		0.32
Granted during 2009		565,000		0.67
Outstanding, December 31, 2009		2,635,000	$	0.40		8.7	$	-
Exercisable, December 31, 2009		1,155,500	$	0.33		8.9	$	-

The weighted-average grant-date fair value of options granted during the years ended December 31, 2009 and 2008 was $0.01 and $0.02 per share, respectively. Compensation expense charged against operations for these stock-based awards during the years ended December 31, 2009 and 2008 was $16,806 and $11,809, respectively, and was included in selling, general and administrative expense. There was no income tax benefit recognized. As of December 31, 2009, there was $16,458 of total unrecognized compensation expense related to stock options granted under the Plan. That cost is expected to be recognized over a weighted-average period of 1.3 years.

NOTE 9–INCOME TAXES

During the year ended December 31, 2009, the Company incurred U.S. federal alternative minimum tax and incurred state tax due to the regulatory suspension of the use of net operating loss carry forwards in California. The components of the provision for income taxes for the years ended December 31, 2009 and 2008 were as follows:

	2009		2008
Current
Federal	$	13,078	$	800
State and local		55,909		-
Provision for income taxes	$	68,987	$	800

At December 31, 2009, the Company has net operating loss carry forwards of $2,362,270 that will begin to expire in 2023 if not used by that date. A reconciliation of the amount of tax computed using the U.S. federal statutory income tax rate to the provision for income taxes is as follows:

F-28

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

	For the Years Ended
	December 31,
	2009			2008
Tax benefit at statutory rate (35%)	$	(245,121	)	$	(495,902	)
State tax benefit, net of federal tax		(23,493	)		(63,947	)
Non-deductible expenses		64,230			86,065
Benefit of operating loss carry forwards		(216,901	)		-
Federal alternative minimun tax paid		13,078			-
Change in valuation allowance		477,194			474,584
Provision for income taxes	$	68,987		$	800

The tax effects of temporary differences and carry forwards that gave rise to the net deferred income tax asset as of December 31, 2009 and 2008 were as follows:

	December 31,
	2009			2008
Operating loss and alternative minimum credits carry forwards	$	971,440		$	1,173,436
Stock-based compensation		11,317			4,670
Billings in excess of costs on uncompleted contracts		717,951			250,411
Accrued liabilities		18,738			6,935
Miscellaneous		-			11,776
Depreciation		(10,222	)		(3,522	)
Less: Valuation allowance		(1,709,224	)		(1,443,706	)
Net deferred income tax asset	$	-		$	-

NOTE 10 - COMMITMENTS AND CONTINGENCIES

The Company leases three facilities. The Company entered into a 12 month lease agreement for office space in California for a monthly rental of $4,903. Future lease payments through the lease expiration of November 30, 2010 are $53,928. The Company entered into a 12 month lease agreement for office space in Virginia for a monthly rental of $3,400 per month. Future lease payments through the lease expiration of September 30, 2010 are $30,600. The Company entered into a 12 month lease agreement for temporary housing space in Virginia for a monthly rental of $4,150 per month. Future lease payments through the lease expiration of June 15, 2010 are $25,000. On June 30, 2010, the Company extended the lease for an additional 12 months to June 14, 2011 at a monthly rental of $4,250. The total annual lease commitment for the next five is as follows:

Years Ending December 31:
2010	$	135,028
2011		21,250
Total minimum lease payments	$	156,278

Rent expense for the years ended December 31, 2009 and 2008 was $100,097 and $5,791, respectively.

F-29

COGILITY SOFTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 11- SUBSEQUENT EVENTS

On October 1, 2010, the Company signed an agreement for the purchase of 49% of the common stock of Cortez Systems (Cortez) for $526, a recently formed company in the business of providing software project applications and related services to government and non-government clients. Pursuant to the agreement, the Company agreed to advance Cortez $5,000 each month during the period October 2010 through March 2011, for a total of $30,000 for working capital needs.

On November 4, 2010, Cogility entered into letter of intent with Acquired Sales Corp. whereby, if consummated, would result in Cogility merging with and into a wholly-owned subsidiary of Acquired Sales Corp. Cogility intends to issue convertible debt, debt with detachable warrants or options, or other financial instruments; therefore, if such financial instruments are issued, the terms of a definitive agreement with Acquired Sales Corp. would likely change. Based on the current financial structure of Cogility, the terms of the letter of intent would require Acquired Sales Corp. to effect a 1-for-20 reverse stock split, to issue 2,175,564 post-split common shares to the Cogility common shareholders and to issue stock options to existing Cogility stock option holders to purchase 497,170 post-split common shares at exercise prices ranging from $1.06 to $5.00 per share. The stock options would vest upon the completion of a private placement of at least $500,000.

On September 14, 2010, the Company signed a letter forgiving repayment of $42,783 in loans to a Company executive. The Company also signed a letter agreeing to pay that executive $168,967 in one-time commissions, with payment deferred until 30 days after the closing of a private placement of common stock or debt convertible into common stock in the total amount of at least $2,000,000. On September 16, 2010, the Company signed a letter forgiving repayment of $53,000 in loans to a Company executive. The Company also signed a letter agreeing to pay that executive $47,000 in additional salary, with payment deferred until 30 days after the closing by Cogility of a private placement of common stock or debt convertible into common stock in the total amount of at least $2,000,000. On September 29, 2010, Cogility signed letters forgiving repayment of loans to three Company executives and officers in the amount of $5,000 each. The forgiveness of debt will be recognized as compensation expense on the dates forgiven.

F-30

Mergers, Consolidations, Acquisitions and Similar Matters.

Our board of directors adopted resolutions and a majority of our stockholders have elected to acquire Cogility Software Corporation, a Delaware corporation ("Cogility"), through a to be formed wholly-owned subsidiary of the Corporation via a "reverse merger" (the "Merger"), pursuant to which Cogility would be merged with and into a wholly-owned single purpose merger subsidiary of the Corporation, with Cogility being the survivor of the Merger and a wholly-owned subsidiary of the Corporation. Cogility is a developer of Model-Driven Complex Event Processing software technology for the U.S. defense and intelligence communities and private sector corporations which have complex information management requirements (www.cogility.com). The approximate terms of the Merger, as negotiated and approved by the independent members of the Corporation's Board of Directors, would be as follows:

(i) the 11,530,493 outstanding shares of common stock of Cogility ("Cogility Stock") would be exchanged for an aggregate of 2,175,564 post 1 for 20 reverse split shares of the Corporation's common stock, par value $0.001 per share ("Acquired Sales Stock"), which would result in Cogility's current stockholders owning approximately 88.2% of the Acquired Sales Stock outstanding following the closing of the Merger (excluding any shares of Acquired Sales Stock that might be issued prior to the closing of the Merger in any capital raise or pursuant to the exercise of outstanding options); and

(ii) the outstanding options to purchase 2,635,000 shares of Cogility Stock with exercise prices between $0.20 - $1.40 per share of Cogility Stock would be exchanged for options to purchase an aggregate of 497,170 shares of Acquired Sales Stock with exercise prices that are 5.3 times higher than their respective exercise prices prior to the Merger but in no event exceeding $5.00 per share of Acquired Sales Stock; and

(iii) the outstanding options to purchase 2,500,000 shares of Cogility Stock with an exercise price of $0.377358 per share of Cogility Stock held by the Corporation's Chairman and Chief Executive Officer would be exchanged for options to purchase an aggregate of 471,698 shares of Acquired Sales Stock with an exercise price of $2.00 per share of Acquired Sales Stock; and

(iv) the outstanding options to purchase 795,000 shares of Cogility Stock with an exercise price of $0.000001 per share of Cogility Stock held by the Corporation's Chairman and Chief Executive Officer and by two of the Corporation's directors would be exchanged for options to purchase an aggregate of 150,000 shares of Acquired Sales Stock with an exercise price of $0.001 per share of Acquired Sales Stock; and

(v) the outstanding Cogility management bonus plan would be eliminated, replaced by the issuance of options to purchase an aggregate of 1,500,000 shares of Acquired Sales Stock with an exercise price of $5.00 per share of Acquired Sales Stock, with half of such options to be allocated as of the closing date of the Merger, and the other half of such options to be allocated prior to the first anniversary of the Merger, with the vesting of such options being contingent upon the grantees thereof serving continuously as an employee, director or consultant of or to Cogility from the closing date of the Merger (or from the date of hire) until the third anniversary of the Merger, upon Cogility having earnings before interest, taxes, depreciation and amortization ("EBITDA") of $1 million or more in each of four consecutive full calendar quarters during the first twelve full calendar quarters following the closing of the Merger, and upon such grantees signing a comprehensive waiver and settlement of all claims of any nature against the Corporation, Cogility, and their respective directors, officers, stockholders, agents and representatives; and

(vi) options to purchase an aggregate of 630,000 shares of Acquired Sales Stock with an exercise price of $2.00 per share of Acquired Sales Stock would be issued to the Corporation's Chairman and Chief Executive Officer and to five of the Corporation's directors.

Acquired Sales History And Organization

We were organized under the laws of the State of Nevada on January 2, 1986. In August 2001, we ceased all of our prior operations and remained dormant from then until May 27, 2004 when we began our current development stage activities. We have had no material operations in the past three years.

For the past several years, we have been seeking and investigating businesses with the intention of acquiring one or more businesses if warranted. We believe that Cogility warrants acquisition. The sole director and the holders of over 90% of the shares of stock of Cogility have already approved of the acquisition pursuant to the terms set out herein.

Name and Address of Beneficial Owner	Number of Common stock Beneficially Owned (1)	Percentage of Class (1)
Leonard D. Hall 1029 E. 380 North Cir American Fork, Utah, 84003	600,000	10.2%
Gerard M. Jacobs (2) 31 N. Suffolk Lane Lake Forest, Illinois 60045 Roberti Jacobs Family Trust u/a/d 11-11-99 (3) 31 N. Suffolk Lane Lake Forest, Illinois 60045 All Officers and Directors as a group (1 person) (1)	4,066,497 1,166,497 4,066,497	69.7% 20.0% 69.7%

NAME OF STOCKHOLDER:

SIGNATURE:

NUMBER OF SHARES OWNED:

DATE:

Gerard M. Jacobs	55	Chairman
Joshua A. Bloom, M.D.	54	Director
Roger S. Greene	55	Director
James S. Jacobs, MD	56	Director
Michael D. McCaffrey	64	Director
Richard E. Morrissy	56	Director
Vincent J. Mesolella	61	Director