Multi Media Tutorial Services Inc - Annual Report (Small Business Issuers) (10KSB)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB

(Mark One)

|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended: FEBRUARY 29, 2008 OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ________ to ________

Commission File No. 0-25758

MULTI-MEDIA TUTORIAL SERVICES, INC.
(Name of small business issuer in its charter)

 DELAWARE 73-1293914
 -------- ----------
 (State or other jurisdiction of (I.R.S. Employer
 incorporation or organization) Identification No.)

1214 EAST 15TH STREET, BROOKLYN, NEW YORK 11230
----------------------------------------- -----
 (Address of principal executive offices) (Zip Code)

Issuer's telephone number: 718 951-2350

Copies to:
The Sourlis Law Firm
Virginia K. Sourlis, Esq.
The Galleria
2 Bridge Avenue
Red Bank, New Jersey 07701
(732) 530-9007
www.SourlisLaw.com

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par
value $0.0001 per share

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No |X|

State issuer's revenues for most recent fiscal year: $657,498

State the number shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: The number of shares outstanding of the issuer's Common Stock as of June 12, 2008 was 53,929,092 shares.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act):

The aggregate market value of the Common Stock totaling 50,429,092 shares held by non-affiliates, based on the approximate average of the bid and asked prices of $.02 per share as of June 12, 2008 was $1,008,581.

DOCUMENTS INCORPORATED BY REFERENCE:

None

TABLE OF CONTENTS

 PART I
 ------

Item 1. Description of Business 3

Item 2. Description of Property 8

Item 3. Legal Proceedings 8

Item 4. Submission of Matters to a Vote of Security Holders 9

 PART II
 -------

Item 5. Market for Common Equity and Related Stockholder Matters 9

Item 6. Management's Discussion and Analysis or Plan of Operation 12

Item 7. Financial Statements 20

Item 8. Changes in and Disagreements with Accountants on Accounting
 and Financial Disclosure 20

Item 8AT. Controls and Procedures 21

Item 8B. Other Information 22

 PART III
 --------

Item 9. Directors, Executive Officers, Promoters and Control Persons
 and Corporate Governance; Compliance with Section 16(a) of
 the Exchange Act 23

Item 10. Executive Compensation 24

Item 11. Security Ownership of Certain Beneficial Owners and Management
 and Related Stockholder Matters 27

Item 12. Certain Relationships and Related Transactions and Director
 Independence 28

Item 13. Exhibits and Reports on Form 8-K 28

Item 14. Principal Accountant Fees and Services 29

Signatures 30


 2

FORWARD-LOOKING STATEMENTS

Certain statements made in this Annual Report on Form 10-KSB are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of MULTI-MEDIA TUTORIAL SERVICES, INC., a Delaware corporation (the "Company") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing, involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

GENERAL:

Multi-Media Tutorial Services, Inc., a Delaware corporation formed in 1994, (the "Company"), produces, acquires and distributes a variety of products to educational institutions and consumers using direct marketing through Internet advertising. The Company's principal product to date has been proprietary tutorial education programs on videotape, DVD and CD Rom for use by adults and children in homes, workplaces, schools, libraries and other locales. This principal product line, which is marketed under the brand Math Made Easy(TM), consists of a series of over 100 videotapes, DVD's, CD ROMs and supplemental materials on mathematics. The Math Made Easy(TM) line uses colorful computer graphics and real life vignettes and is the most complete line of mathematics DVD's available.

The Company has developed a website, TutorialChannel.com which incorporates various on-line products and services, among them interactive test taking practice, streaming video featuring the Math Made Easy courseware and online tutoring. The Tutorial Channel enables parents to obtain personalized live on-line tutoring for their children in the comfort of their home at prices significantly lower than traditional tutoring. The Company employs tutors who have graduated in mathematics and science and performed at the top of their class. The Company plans on promoting its online services through its website and internet advertising. The Company has redesigned its tutorialchannel.com website and expanded its tutoring service to science subjects in addition to mathematics.

The Company currently offers online tutoring services to its customers and has acquired several hundred paid subscriptions. The average current subscription price for these customers is $60 per month which includes the Company's on line testing service and a limited number of tutoring sessions.

The Company has developed an online test preparation division. This entails online preparation for the standardized tests such as SAT, PSAT and ACT. The Company expects to begin marketing this service in the upcoming fall season.

The Company generates leads through Internet advertising. The Company utilizes its own inbound and outbound telephone sales force to convert these leads into sales. Payment is made by credit card or direct debit to a checking account. The product is then shipped to the customer. The Company's products have been purchased by over 325,000 customers over the last ten years. In addition, the Company has recently begun to point a portion of its advertising directly to the tutorialchannel.com site.

The Company's objective is to become the premiere resource for parent and students across the country for their tutorial and remedial home study programs. The Company recently launched a new website, Mathmadeeasy.net, for purchases of its Math Made Easy DVD series, whereas our website, Mathmadeeasy.com, offers a combined program of review courseware and tutorial services. The Company's tutorialchannel.com website offers both monthly subscriptions for tutorial services as well as hourly tutoring packages in math and science. In addition, the website includes a test taking module where members can access a plethora of problems and worked out solutions in all areas of mathematics. The Company experiences a steady stream of both visitors to its website as well as sales conducted through the website.

Need for Additional Financing to Fund Operations

The Company has suffered recurring losses and has an accumulated deficit of $22,025,837 and a working capital deficiency of $6,324,526 at February 29, 2008. In order to sustain its operations and grow its business in this competitive market, the Company needs to obtain additional financing. The Company is actively seeking sources of additional financing in order to meet its debt repayment obligations and to maintain and potentially expand its current operations. To date, the Company has not successfully attained additional financing and there can be no reassurances that the Company will be able to do so in the future. If the Company is unsuccessful in attaining additional financing, the Company may be required to severely curtail or cease operations. See "Management's Discussion and Analysis or Plan of Operation" and "Risk Factors".

During the year ended February 29, 2008, the Company and its subsidiary, The Math Channel, received a notice of assessment from the New York Sate Department of Labor in the amount of approximately $15,000. the DOL claiming a predecessor/successor relationship between the Company and The Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that The Math Channel currently is obligated to pay based on certain compensation for each employee. the Company has retained counsel to investigate and seek a resolution in this matter. the accompanying financial statements do not reflect this potential liability pending counsel's attempt to resolve this matter.

PRODUCTS

The Company's products consist of an extensive line of "Math Made Easy" and "Reading Made Easy" DVD's and ancillary material for direct sale to consumers via direct marketing primarily through internet advertising. See "Sales Marketing & Distribution."

CURRENT PRODUCTS AND SERVICES

The Company's Math Made Easy line covers all levels of math from pre-school through elementary school as well as high school and college level. These products are intended to provide a comprehensive review of the subject matter in a condensed and efficient format. Typically, an entire year's course is condensed into less than five hours of programming consisting of videotape or DVD lesson reviews, accompanied by computer graphics and exercises. The average math consumer order consists of a set of five educational videotapes or DVD's at a price of $200. Sets of five videotapes are sold to schools at a price of $279, and the Company has also entered into non-exclusive agreements with various companies to distribute tapes of reading and literacy educational products as part of its Reading Made Easy(TM) series. The products include reading readiness, letter identification, grammar, and reading comprehension which cover topics from preschool through junior high school. The various titles include DVD's and workbooks. The Company purchases these products at discounted rates from the respective manufacturers or distributors and then distributes them through the Company's direct marketing division. The average reading consumer order consists of five videotapes or DVD's at a price of $200 for each order.

The Company provides its customers with monthly tutoring subscriptions ranging in price from $39.95 to $139.95. Additionally, the Company offers hourly tutoring packages ranging from $45 to $65 per hour.

PRODUCT DEVELOPMENT

The Company produces many of its own math DVD products and supplemental workbooks developed by the Company's educational coordinators. The Company employed Dr. Meryle Kohn, chairperson of the mathematics and science departments at New York Institute of Technology, as its curriculum coordinator in the production of many of its programs. The Company currently employs a staff of educational writers and software developers who are currently preparing content for the Company's subsidiary, Tutorialchannel.com. The Company plans on producing additional titles in the mathematics field.

Many of the Company's DVD's include colorful computer graphics and real life vignettes, certain of which are scripted by professional writers. The curriculum writers seek to augment comprehension of the materials by numerous examples, which are solved on a step by step basis. The curriculum invites interaction by requesting the viewer to pause and to solve designated problems before restarting the videotape to view the step by step solution.

Over the last year, the Company has made significant improvement in its delivery system of online tutoring. The Company has introduced an automated scheduling system on its tutorialchannel.com website. Students can easily schedule convenient times for tutoring which is available day, evening and weekends. The Company has also added an audio component which allows students to communicate verbally with their tutor using the online application and simple headsets.

The Company has developed its own technology for the delivery of group online sessions. This new technology enables the instructor to lecture to the group online and invite verbal participation by electronically recognizing one student at a time. This technology will facilitate the Company's current efforts to market group test prep classes.

PRODUCT ACQUISITION

In addition to developing its own math products, the Company purchases products from third parties.

THE MARKET

GENERALLY. Education is second only to health care in annual expenditures in the U.S. representing almost ten percent of GNP, $400 to $600 billion. Fully 40 percent of students encounter some difficulty at various times mastering mathematics and science. The loss of individualized instruction in many school districts places an additional burden on the home, requiring supplemental education products that are both informative and challenging.

Much of the activity in the for-profit education industry lies in post-secondary education and in niches around the margins of traditional pre-collegiate education. Those niches include tutoring, test preparation, college counseling, electronic learning and the education of at-risk children.

The Company's Math Made Easy and TutorialChannel.com website lie at the intersection of the consumer market for educational and developmental products for children, and the increasing acceptance of Internet-based commerce. Traditional retailers of educational products, including mass market retailers, typically lack a focus on education, do not evaluate the products they offer and may not understand the development needs of individual children.

In addition, these retailers often have a narrow product selection due to physical space limitations, have high facilities and staffing costs, offer limited service, and lack merchandising flexibility and shopping convenience. Because of the limitations of the traditional retail distribution channel, the Internet has the potential to become a key resource utilized by parents to pick from a broad range of educational products and services to meet children's needs.

Education has boomed as a for-profit industry in the past few years for the following reasons:

In the last five years we have seen one report after another decrying the condition of public education.

Parents are more willing than ever to spend money to supplement their children's schooling and give them a leg-up in the college admissions process. That trend has particularly benefited tutoring and test-prep companies.

EDUCATION AND THE INTERNET. As a result of a number of societal trends, including constraints on school budgets and the increasing use of standardized tests, many parents are taking a more active role in their children's education. In their efforts to help their children learn, improve their children's standardized test scores and make learning fun, parents are increasingly purchasing educational books, toys and games, and software over the Internet.

Parents are faced with the challenge of finding quality educational products and selecting the right products for their children. With thousands of educational products to choose from and few reliable sources of information, finding the appropriate products for a specific child's needs and goals can be overwhelming and confusing. Parents seek a resource for comprehensive and trusted educational content and product information to help them make informed purchase decisions. The Company's management vision is to develop a broad array of focused tutorial programs offered by sale and subscription over the Internet and to be identified as the premier source in this category.

SUPPLEMENTAL EDUCATION AT HOME. The Company believes that parents are increasingly concerned about the quality of their children's education and are seeking to supplement the existing curricula. In particular, they are seeking to use computers and DVD players now found in most homes for educational purposes. In addition, the Company believes that adults going back to school to prepare for career moves or promotions are an ever growing potential market for its educational DVD's. The Company has found that its primary customers are parents with children in the educational system. The Company's efforts to date have resulted in a database of more than 550,000 names, of which 325,000 ordered product, and approximately 250,000 names of potential customers.

HOME SCHOOLING AT THE MARKET. As the home schooling phenomenon continues to grow, the Company plans to direct its on-line teaching and tutorial services to meet the needs of these students. Often, home schoolers need supplemental review and tutorial services. The Company can satisfy the needs of these home schoolers through its online tutorial subscriptions which combine on-line live tutoring with its online test banks and practice exercises. The Company plans on initiating a focused internet advertising campaign targeted at home school parents.

SAT PREPARATION. The Company plans on initiating a focused advertising campaign utilizing search engine advertising and an internet public relations campaign to galvanize business for its on-line SAT Prep division. The Company expects the SAT prep to become a significant growth area in its total portfolio of tutorial services. The Company believes that its online tutorial services make it an attractive source for schools and college sales. In each of the fiscal years ended February 29, 2008 and 2007, consumer videotape and DVD sales and school videotape and DVD sales constituted approximately 95%, and 5%, respectively, of total educational sales.

SALES, MARKETING AND DISTRIBUTION

The Company sells its programs on DVD to schools and consumers. The Company maintains an in house sales force and is able to convert generally 10% of its leads into customers. As the Company continues to expand its sales force it will seek out new Internet advertising opportunities to increase its volume of leads.

The Company conducts an active outbound sales program to its past customers in which it provides previous customers the follow-up course and tutoring at a discounted price.

The Company maintains active relationships with several school and library distributors who order a wide array of the Company's programs. Additionally, the Company deals directly with a significant number of school districts who order the Company's programs from time to time.

Credit cards are the preferred method of payment. Customer credit cards are either billed in full or in partial monthly payments. Schools are invoiced for their purchases. The Company also offers consumers who do not wish to use their credit card another means of payment; an automatic check debit, in which the customer is shipped the merchandise after the customer submits to the Company their bank name and checking account routing number.

PERSONNEL AND TRAINING

The Company believes that the quality of its employees is a key factor in its effort to develop a profitable sales business. All salespeople receive a detailed review of each product they will be selling. In addition, the Company trains its salespeople in the art of converting an inquiry into a sale. A salesperson is in training for approximately five days, prior to working on a full-time basis. Furthermore, the Company continually monitors sales conversations to assure quality and customer satisfaction. Compensation is based on a combination of salary and commission. See "Employees" and "Risk Factors."

RETURNS, GUARANTY AND WARRANTY POLICIES

The Company offers its customers a 30 day money back guarantee during which period they may return the merchandise for an exchange or full credit. The Company believes that a money back guaranty policy is essential to the success of its sales efforts. In addition, management of the Company has implemented policies and procedures intended to minimize the number of returned products. These policies and procedures include increasing the appeal of the Company's products by designing more attractive packaging, and enclosing with its shipments full color catalogues and parent guides. In addition, the customer service department, which must be contacted before merchandise is returned, has been trained to specifically reduce returns.

SEASONALITY

The Company's educational sales business is highly seasonal. Demand falls off significantly during summer and mid-winter school vacation periods. This seasonality greatly affects the Company's advertising campaigns, which must be timed to coincide with the annual periods when demand is traditionally high.

ADVERTISING AVAILABILITY

In the Internet arena, as more advertisers compete for web customers, advertising prices may significantly increase, reducing the Company's profitability.

PROPRIETARY RIGHTS

The Company currently has trademarks for the following: MATH MADE EASY, PASSPORT
TO MATH SUCCESS and REAL LIFE MATH.

COMPETITION

The Company's educational DVD offerings compete with a variety of software related tutorials of well established companies, who market their materials in computer software related stores. These companies typically provide a significant advertising budget to support their retail sales programs. In addition, the Company's self help tutorial programs compete with local and national privately owned learning centers such as Sylvan Learning Corp, Kumon, Huntington Learning as well as Kaplan's educational testing centers. These companies allocate many millions of dollars to support the branding of these centers. Almost all of these competitors have greater financial resources, greater public and industry recognition and broader marketing capabilities than our Company. The market is also characterized by numerous small companies, with whose products the Company may be unfamiliar, and which may be competitive with the Company's products. The Company's products also compete with other methods of education such as private tutors and televised programs. With respect to the Company's new marketing through Internet advertising, the Company recognizes that the Internet currently hosts many other educational and children related sites that include competitive educational software. This could diminish demand for the Company's products.

As the Company expands its entry into the online tutoring marketplace, it faces growing competition from well funded companies such as Tutor.com and Tutor Vista and a host of smaller companies. The Company distinguishes itself from most of its competitors in that it relies exclusively on American tutors who are fluent and articulate English speakers.

GOVERNMENT REGULATION

In response to the concerns of consumer advocacy groups and as a result of the practices of a number of unscrupulous telemarketing companies, the Federal Trade Commission and the Federal Communications Commission have promulgated rules regulating the telemarketing industry. The Company is not directly affected by the new government regulations restricting unsolicited calls to consumers who place themselves on a "do not call" list since the Company does not initiate any cold calls to consumers who have not made a prior inquiry to the Company. Nevertheless, the pervasive negative opinion on telesales calls could adversely affect the Company's sales campaigns.

EMPLOYEES

As of May 15, 2008, the Company had twenty five (25) employees, of whom two were executive officers, twelve were tutors, eight were engaged in sales, and three were in marketing, support and administration. The Company has made significant reductions in personnel in order to reduce overhead expenses. The Company routinely retains outside consultants to augment its computer, telephone and telemarketing expertise. The Company also relies on several outside consultants for expertise in hardware, software and curriculum development. The Company believes that its relationship with its employees is generally satisfactory.

PROPERTY

AVAILABLE INFORMATION

We are subject to the information reporting requirements of the Exchange Act, and, accordingly, are required to file periodic reports, including quarterly and annual reports and other information with the Securities and Exchange Commission. Such reports and other information may be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically. The address of the website is http://www.sec.gov.

ITEM 2. DESCRIPTION OF PROPERTY.

ITEM 3. LEGAL PROCEEDINGS.

During the year ended February 29, 2008, the Company and its subsidiary, the Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. The DOL claiming a predecessor/successor relationship between the Company and The Math Channel, wherein the company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that The Math Channel currently is obligated to pay based on certain compensation for each employee. the Company has retained counsel to investigate and seek a resolution in this matter. the accompanying financial statements do not reflect this potential liability pending counsel's attempt to resolve this matter.

The Company had made a settlement with one of its creditors that had begun litigation on January 6, 2000 in Superior Court, Judicial District of Stanford/Norwalk, whereby it has settled a $235,000 claim for $190,000 with a 29-month payout schedule. The Company has paid approximately $30,000 in honor of this settlement; however, since the creditor has not honored the terms of the settlement agreement to activate and to provide upgrades of its software, the Company has discontinued its schedule of payments. The creditor sued the Company in the state of Connecticut but the court ruled that the creditor could not proceed with the suit in the State of Connecticut. This case has not been reopened by the creditor.

In August, 2004 the Company settled with its largest creditor to whom it owed approximately $600,000. The case was originally brought in New York in 2001. The creditor has settled for $150,000 with a four year payout schedule. The Company is currently conforming to the schedule. The original judgment that the creditor held against the Company was withdrawn. However, the creditor has a stipulated judgment whereby in the event that the Company defaults on its payments the creditor can obtain a judgment for the remaining balance plus a penalty of $150,000.

The Company is subject to a claim for federal payroll and unemployment taxes for approximately, $400,000, and $100,000, respectively, which the Company is disputing. With regard to the federal payroll taxes, the Company has received notice of a levy in the amount of $83,448.33 against certain of the Company's assets. It has also received notice from the Federal Government and the Department of Labor of various liens with regard to the above arrears. The Company has filed a 941c adjustment which should eliminate all or at least a substantial portion of these tax arrears. It is doing so under advice of legal counsel who specializes in payroll tax issues. There is no assurance that the Company will be successful in resolving this dispute and having these liens removed.

On February 2, 2000, the Company converted an account payable of $135,500 due to its former accountants, Holtz Rubenstein & Co., LLP, into a one-year Series B Note, in the principal amount of $135,500, bearing interest at the rate of 10% per annum. As of February 2001, this note has expired and Holtz Rubinstein & Co has received a judgment for $120,000. The complaint by Holtz Rubenstein was entered April, 2001 in Supreme Court, Suffolk County.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES.

OUR COMMON STOCK

The Company's Common Stock and Warrants are listed for trading on the NASD Electronic Bulletin Board under the symbols MMTS and MMTSW, respectively.

The following table sets forth the high and low sales price for the Company's Common Stock in each quarter of the fiscal years ended February 28, 2007 and 2008 and the initial quarter of the fiscal year ending February 28, 2009.

---------------------- -------------- -------------- ------------ --------------
 PERIOD LOW BID HIGH BID LOW ASK HIGH ASK
---------------------- -------------- -------------- ------------ --------------
YEAR ENDED 2/28/09
---------------------- -------------- -------------- ------------ --------------
 First Quarter $0.015 $0.03 $0.02 $0.04
---------------------- -------------- -------------- ------------ --------------

---------------------- -------------- -------------- ------------ --------------
YEAR ENDED 2/29/08
---------------------- -------------- -------------- ------------ --------------
 Fourth Quarter $0.021 $0.06 $0.03 $0.072
---------------------- -------------- -------------- ------------ --------------
 Third Quarter $0.051 $0.10 $0.065 $0.11
---------------------- -------------- -------------- ------------ --------------
 Second Quarter $0.0415 $0.12 $0.06 $0.134
---------------------- -------------- -------------- ------------ --------------
 First Quarter $0.12 $0.075 $0.13 $0.08
---------------------- -------------- -------------- ------------ --------------

---------------------- -------------- -------------- ------------ --------------
YEAR ENDED 2/28/07
---------------------- -------------- -------------- ------------ --------------
 Fourth Quarter $0.111 $0.03 $0.12 $0.04
---------------------- -------------- -------------- ------------ --------------
 Third Quarter $0.06 $0.041 $0.079 $0.044
---------------------- -------------- -------------- ------------ --------------
 Second Quarter $0.112 $0.04 $0.13 $0.045
---------------------- -------------- -------------- ------------ --------------
 First Quarter $0.069 $0.02 $0.08 .021
---------------------- -------------- -------------- ------------ --------------

The closing bid and asked sales prices of the Common Stock, as traded in the over-the-counter market, on June 3, 2008 were approximately $.03 and $.03, respectively. These prices are based upon quotations between dealers, without adjustments for retail mark-ups, mark-downs or commissions, and therefore may not represent actual transactions.

HOLDERS

As of the close of business on June 12 2008, there were approximately 125 holders of the Company's Common Stock.

DIVIDEND POLICY

The Company has not paid a cash dividend on its Common Stock since its inception and, by reason of its present financial status and its contemplated financial requirements, does not anticipate paying any cash dividends in the foreseeable future. It is anticipated that earnings, if any, which may be generated from operations will be used to finance the operations of the Company.

TRANSFER AGENT

Our transfer agent is Integrity Stock Transfer 3027 East Sunset Road Suite 103 Las Vegas, NV 89120.

RECENT SALES OF UNREGISTERED SECURITIES

FOR THE YEAR ENDED FEBRUARY 29, 2008:

In addition, the Company recognized a beneficial conversion of $12,500 related to the Series E having an immediate conversion provision that was below market on the date of conversion. The Series E debt is convertible at $.50 per share, or 50% of the average closing bid during the five (5) trading days prior to the note holder giving notice of conversion, but not lower than $.10 per share. This Series E note, including accrued interest, was due and payable in March 2010. On the date of conversion from a demand note to a Series E note, the note holder converted the $50,000 Series E principal into 500,000 shares of common stock valued at $0.10 per share or $50,000.

For the year ended February 29, 2008, the Company converted Series E notes payable of $50,000 plus accrued interest of $5,833 for a total of $55,883 into 558,330 shares of common stock at a per share price of $.10. The stock price was $.11 on the date of conversion; the balance of $5,583 was charged to interest expense.

For the year ended February 29, 2008, the Company converted $15,000 notes payable directly to 150,000 shares of common stock at a per share price of $.10.

On August 27, 2007, the Company issued 100,000 shares of common stock for a consulting services agreement valued at $7,000, on an average per share price of $.07. For the year ended February 29, 2008,, a total of $7,000 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

On June 19, 2007, the Company issued 2,000,000 shares of common stock for a two
(2) year consulting services agreement valued at $220,000, on an average per share price of $.11. For the year ended February 29, 2008,, a total of $82,500 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

In March, April and June 2007, the Company issued an additional $650,000 of Series E notes payable. Issued with this debt were 3,250,000 shares of the Company's common stock valued at $315,000, at an average per share price of $.097.

In March 2007, the Company entered into a one year advertising and marketing consulting agreement. Under the terms of this agreement the Company is required to issue 100,000 shares of common stock each month commencing in March 2007. A total of 1,000,000 shares of common stock are to be to be issued under this agreement. For the year ended February 29, 2008, the Company issued 1,000,000 shares of common stock. These shares were valued at market on their dates of issue. The Company has recorded $81,000, on an average per share price of $.081, for the issuance of these common shares as a consulting expense included in selling, general and administrative expenses.

In May 2007, the Company entered into an investor relations consulting agreement. This agreement has a one year term, and requires the issuance of 750,000 shares of common stock upon commencement. These shares have a market value of $57,000 on an average per share price of $.076, and have been recorded as a deferred compensation expense, netted against additional paid in capital. As services commence under this agreement, a pro-rata share of the deferred compensation is expensed. For the year ended February 29, 2008, a total of $47,500 has been expensed for this consulting agreement and included in selling, general and administrative expenses.

In March 2007, the Company entered into a financial consulting agreement. This agreement has a one year term, and requires the issuance of 500,000 shares of common stock. Services under this agreement were set to commence in June 2007. These shares have a market value of $40,000, and have been recorded as a deferred compensation expense, netted against additional paid in capital. For the year ended February 29, 2008, the Company has recorded $40,000, as a consulting expense included in selling, general and administrative expenses.

During the nine months ended November 30, 2007, the Company expensed the remaining deferred compensation cost of $7,500 related to a consulting agreement entered into in June 2006 and paid for in common stock, which concluded in August 2007.

On March 15, 2007, Company issued 350,000 shares of common stock for financial related services valued at market for a total of $31,500. For the year ended February 29, 2008, the Company has recorded $31,500, as a consulting expense included in selling, general and administrative expenses.

FOR THE YEAR ENDED FEBRUARY 28, 2007:

In April 2006, the Company issued 250,000 shares of common stock at a market price of $0.05 per share, for payment of previously accrued legal fees of $12,500.

In April 2006, the Company issued 400,000 shares of common stock upon the exercise of options for $0.01 per share. The Company is awaiting proceeds from this option exercise. The Company has recorded this stock issuance as a stock subscription receivable of $4,000.

In May 2006 the Company entered into a one year consulting agreement commencing on June 1, 2006. In lieu of cash payment under this agreement, the Company issued 500,000 shares of common stock on June 1, 2006. These shares were issued at the market price of $0.06 per share, for a total value of $30,000. The Company recorded deferred compensation for the entire issuance to be earned over the one year consulting period. During the year ended February 28, 2007, the Company expensed $22,500, of this deferred compensation.

During July and August 2006 the Company issued 1,600,000 shares of common stock for consulting services. These shares were issued at market prices ranging from $0.04 to $0.05 per share. The value of these shares, recorded as a non-cash compensation expense, was $74,000.

During December 2006 the Company issued 136,250 shares of common stock for consulting services. These shares were issued at a market price of $0.05 per share. The value of these shares, recorded as a non-cash compensation expense, was $6,813

In December 2006 the Company issued 125,000 shares of common stock, to a holder of a note payable, to obtain a one year extension on the due date of the note to December 31, 2007. These shares were valued at market for $6,250 and are recorded as a non-cash financing charge.

In addition to the issuance of common stock, the Company granted the note holder a warrant to purchase 25,000 shares of common stock at $0.10 per share. This warrant granted on December 31, 2006, is exercisable upon issuance and has a five year life. The Company has valued this warrant under a Black-Scholes option-pricing model. The total value assigned to these warrants was $5,600 recorded as financing costs. The following assumptions were used in the Black-Scholes calculation: dividend yield of 0%, expected volatility of 274%, risk-free interest rate of 4.70%, and an expected life of five years.

During the year ended February 28, 2007, the Company granted a warrant to a business consultant for services rendered. A total of 100,000 shares of common stock at an exercise price of $0.02 per were granted with this warrant. This warrant has a life of five years from the date of grant. This warrant was valued at $4,990 and recorded as a non-cash financing charge. The warrant was valued using the Black-Scholes valuation model with the following assumptions: dividend yield of 0%, expected volatility of 252%, risk-free interest rate of 4.95%, and an expected life of five years.

On April 10, 2006, the Company issued a 10% unsecured convertible promissory note in the amount of $50,000, referred to as "Series E" notes. Issued with the debt, were 250,000 shares of the Company's common stock value at $5,275, which the Company recorded as a discount on debt that is being amortized and expensed as interest over the life of the debt, or until such time as the debt is converted. During the year ended February 28, 2007 the Company amortized $1,613, of this debt discount.

During the year ended February 28, 2007, a total of $50,000 Series C - notes payable including accrued interest of $17,000, converted into 670,000 shares of the Company's common stock at $0.10 per share, the minimum conversion price per the note payable.

In February 2007, a total of $75,000 of demand notes payable redeemed their note principal for Series E notes. Under the terms of the Series E note, the note holder upon issuance of Series E receives 5 shares of common stock for each $1 of debt, for a total of 375,000 share of common stock. These shares have been valued at $29,950, and have been recorded as discount on debt, that was to have been amortized and expensed as interest over the life of the debt, or until such time as the debt was converted. Upon issuance of these Series E notes, the note holder converted all $75,000 principal of Series E into 750,000 shares of common stock, at the minimum conversion price of $0.10 per share or $75,000. The $29,950 discount on debt was fully expensed as interest upon conversion of the Series E to common stock.

These transactions were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act").

None of the above issuances involved underwriters, underwriting discounts. We relied upon the exemption from the registration requirements of the Securities Act afforded the Company under Section 4(2) promulgated thereunder. We believed these exemptions were available because:

o We are not a blank check company;
o Total sales did not exceed $1,000,000;
o Our officers or directors made all sales of our common stock to the above persons;
o Sales were not made by general solicitation or advertising;
o Sales were made to persons with pre-existing relationships to the Company, our officers or directors; and
o Sales were made to investors who were either accredited investors or who represented that they were sophisticated enough to evaluate the risks of the investment.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

THIS REPORT, INCLUDING THE DISCLOSURES BELOW, CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES. WHEN USED HEREIN, THE TERMS "ANTICIPATES," "EXPECTS," "ESTIMATES," "BELIEVES"AND SIMILAR EXPRESSIONS, AS THEY RELATE TO THE COMPANY OR ITS MANAGEMENT, ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH MATERIAL DIFFERENCES INCLUDE THE FACTORS DISCLOSED IN THE "RISK FACTORS" SECTION OF THIS ANNUAL REPORT ON FORM 10-KSB, WHICH READERS OF THIS REPORT SHOULD CONSIDER CAREFULLY.

The Company has developed a website, TutorialChannel.com which incorporates various on-line products and services, among them interactive test taking practice, streaming video featuring the Math Made Easy tutorials and online tutoring. The Tutorial Channel enables parents to obtain personalized live on-line tutoring for their children in the comfort of their home at prices significantly lower than traditional tutoring. The Company employs tutors who generally have graduated in mathematics and science and performed at the top of their class. The Company plans on promoting its online services through its website and internet advertising. The Company has redesigned its tutorialchannel.com website and plans to expand its tutoring service to science subjects in addition to mathematics.

The Company currently offers online tutoring services to its customers and has acquired several hundred paid subscriptions. The average current subscription price for these customers is $60 per month which includes the Company's online testing service and a limited number of tutoring sessions.

During the year ended F29, 2008, the Company and its subsidiary, The Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. the DOL is claiming a predecessor/successor relationship between the Company and The Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that The Math Channel currently is obligated to pay based on certain compensation for each employee. the Company has retained counsel to investigate and seek a resolution in this matter. the accompanying financial statements do not reflect this potential liability pending counsel's attempt to resolve this matter.

NEED FOR ADDITIONAL FINANCING TO FUND OPERATIONS

The Company has suffered recurring losses and has an accumulated deficit of $22,025,837 and a working capital deficiency of $6,324,526 at February 29, 2008. In order to sustain its operations and grow its business in this competitive market, the Company needs to obtain additional financing. The Company is actively seeking sources of additional financing in order to meet its debt repayment obligations and to maintain and potentially expand its current operations. To date, the Company has not successfully attained sufficient additional financing and there can be no reassurances that the Company will be able to do so in the future. If the Company is unsuccessful in attaining additional financing, the Company may be required to severely curtail or cease operations. See "Management's Discussion and Analysis or Plan of Operation" and "Risk Factors."

PRODUCTS

The Company's products consist of an extensive line of "Math Made Easy(TM)" and "Reading Made Easy(TM)" DVD's and ancillary material for direct sale to consumers via direct marketing primarily through internet advertising. See "Sales Marketing & Distribution."

CURRENT PRODUCTS AND SERVICES

PRODUCT DEVELOPMENT

The Company produces many of its own math DVD products and supplemental workbooks developed by the Company's educational coordinators. The Company employed Dr. Meryle Kohn, chairperson of the mathematics and science departments at New York Institute of Technology, as its curriculum coordinator in the production of many of its programs. The Company currently employs, on an as needed basis, a staff of educational writers and software developers who are currently preparing content for the Company's subsidiary, Tutorialchannel.com. The Company plans on producing additional titles in the mathematics field.

The Company has developed its own technology platform for the delivery of group online sessions. This new platform enables the instructor to lecture to the group online and invite verbal participation by electronically recognizing one student at a time. This technology will facilitate the Company's current efforts to market group test prep classes.

PRODUCT ACQUISITION

In addition to developing its own math products, the Company purchases products from third parties.

RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED FEBRUARY 29, 2008, AND FEBRUARY
28, 2007.

Net sales for the fiscal year ended February 29, 2008 decreased by $129,590 or 16.46%, to $657,498 from $787,088 in the fiscal year ended February 28, 2007. A more competitive environment on web advertising resulted in fewer advertising opportunities, thereby decreasing sales.

Gross profit decreased by $132,205, or 18.97%, to $564,749 in 2008, from $696,954 in 2007.

Selling, General and Administrative expenses increased by $458,834, or 36.93%, to $1,701,415 in 2008 from $1,242,581 for 2007. Of these expenses, $669,237 pertained to stock based compensation.

Loss from operations increased by $591,039, or 108.32%, to $1,136,666 in 2008 from $545,627 in 2007. The decrease in sales and higher general and administrative expenses resulted in higher loss from operations.

Interest expense increased by $163,906, or 59.03%, to $441,578 in 2008 from $277,672 in 2007. During 2008, a total $441,578 of the interest expense relates to: (i) issuance of 125,000 shares of common stock for an extension on a note payable owed by the Company, valued at market for $6,250, (ii) issuance of 250,000 shares of common stock in connection with the issuance of a $50,000 note payable valued at market for $5,275, recorded as a discount on debt, of which $1,613 has been amortized and accounted for as interest expense,(iii) issuance of 375,000 shares of common stock in connection with the issuance of a $75,000 note payable valued at market for $29,950, (iv) issuance of warrants to purchase 125,000 shares of common stock at $0.10 per share, valued under the Black-Scholes valuation model at $5,600. These warrants have a five year life from the date of grant.

During 2007 a total of $277,672 of the interest expense relates to: (i)issuance of 125,000 shares of common stock for an extension of a due date on a note payable granted to the Company, valued at market for $3,750, (ii) issuance of five-year warrants to purchase 125,000 shares of common stock at $0.10 per share issued in connection with the previous loan extension, and valued under the Black-Scholes valuation model at $3,700, (iii) grant of five year warrants to financial consultants to purchase 600,000 shares of common stock at an exercise price of $0.10 per share and valued at $21,900 using the Black-Scholes option pricing model.

Net losses increased by $708,771, or 86.09%, to $1,532,070 in 2008 from to $823,299 in 2007. The decrease in sales and higher general and administrative expenses resulted in a higher net loss in 2008.

LIQUIDITY AND CAPITAL RESOURCES

At February 29, 2008, there was a book overdraft of $20,162, compared to a book overdraft at February 28, 2007 of $16,113.

Net cash used in operating activities in 2008 was $489,259 as compared to cash used in operating activities in the amount of $165,669 in 2007. This is primarily the result of the operating loss.

Net cash used in investing activities in 2008 was $44,340, compared to net cash used of $26,444 in 2007.

Net cash provided from financing activities in 2008 was $533,599, compared to $189,459 in 2007. The primary increase in cash from financing activities was the proceeds from increased loans in 2008 versus 2007.

During the year ended February 29, 2008, the Company issued 5,837,860 shares of common stock for financial consulting and legal services valued at $0.03 to $0.11 per share; 3,716,725 shares of common stock issued with debt valued at $0.06 to $0.12 per share, accounted for as a debt discount to be amortized over the life of the loan; 1,391,780 shares of common stock valued at $0.07 to $0.12 per share for conversion of outstanding convertible debt; 200,000 shares of common stock issued upon the exercise of a stock option at $0.01 per share.

During the year ended February 28, 2007, the Company issued 2,236,250_shares of common stock for financial consulting and legal services valued between $.04_to $.06_ per share; 125,000 shares of common stock valued at $0.05 per share accounted for as interest, to extend a note payable; 250,000 shares of common stock valued at $0.05 per share to liquidate certain trade payables; 250,000 shares of common stock issued with debt valued at $0.0211 per share, accounted for as a debt discount to be amortized over the life of the loan; 375,000 shares of common stock issued with debt valued at $0.0799 per share, accounted for as a debt discount to be amortized over the life of the loan; 400,000 shares of common stock issued upon the exercise of a stock option at $0.01 per share; 1,420,000 shares of common stock valued at $0.10 per share for conversion of outstanding convertible debt.

During the year ended February 28, 2007, the Company issued five year warrants to a consultant to purchase a total of 100,000 shares of common stock at $0.02 per share, valued at $4,990 using the Black-Scholes valuation model. Additionally the Company issued warrants to purchase 125,000 shares of common stock at $0.10 per share in consideration for the extension of a one year term on an outstanding note payable. These warrants were valued at $5,600 using the Black-Scholes valuation model.

The Company continues to meet its working capital requirements through debt and equity funding from outside sources and internally generated funds. In addition, the Company may have increased capital requirements as it seeks to expand its product lines and customized telemarketing services. In order to meet its current and future cash requirements, the Company is in discussions to negotiate additional debt and equity financing. There can be no assurance that any financing will be successful or that the Company will be able to fund internally its working capital requirements or meet its debt repayment obligations. In the event that the Company is unable to secure additional financing, it may be obligated to significantly reduce its operations and seek to sell assets, which would have a material adverse affect on the Company's prospects and financial results.

The Company's annual report from its independent public accountants includes an explanatory paragraph describing the uncertainty as to the ability of the Company's operations to continue as a going concern. The Company incurred net losses of approximately $1,532,070 and $823,299 during the years ended February 29, 2008 and February 28, 2007, respectively. In addition, the Company had an accumulated deficit of approximately $22,025,837 and a working capital deficit of approximately $6,324,526 as of February 29, 2008. The Internal Revenue Service has placed a tax lien on substantially all of the Company's assets as the Company is in arrears on payment of payroll taxes, accrued prior to February 28, 2004, of approximately $631,000. Management recognizes that the Company must generate additional resources and the eventual achievement of sustained profitable operations. Management's plans include obtaining additional capital through debt/equity financing and the extension of existing debt. Management is also contemplating the implementation of additional products. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company's operations have not been materially affected by the impact of inflation.

OFF-BALANCE SHEET ARRANGEMENTS.

None

RISK FACTORS

The Company's business involves a high degree of risk. Shareholders and investors should carefully consider the following risk factors and the other information included in this Report.

WE HAVE A HISTORY OF OPERATING LOSSES.

The Company has experienced significant losses from operations since inception. It experienced losses of approximately $1,532,070 and $823,299 for the fiscal years ended February 29, 2008 and February 28, 2007, respectively. As of February 29, 2008, the Company had a working capital deficit of approximately $6,324,526 and an accumulated deficit of approximately $22,025,837. The Company's working capital requirements have been met primarily from loans and private sales of securities provided by management and other investors, but there can be no assurance the Company will be able to obtain such funds in the future. As of February 29, 2008, the Company had outstanding loans and advances aggregating approximately $2,784,774, of which $1,326,390 may be converted into equity. Notes payable totaling $2,134,774 are either due on demand or past due. Notes payable totaling $650,000 are due during the fiscal year ended February 28, 2011. There can be no assurance the Company will be able to convert the debt to equity, or generate the funds from operations or further financings to repay these obligations. Currently, the Company's sales volume is not sufficient to repay this indebtedness. In addition, the Company's operating expenses are anticipated to increase significantly in the future if the Company is able to implement its expanded marketing strategy. Although the Company is seeking additional funds to allow it to repay its current debt, expand its customized sales operations and develop its e-commerce business plan, there can be no assurance that the Company will not continue to experience such losses or will ever generate revenues at levels sufficient to support profitable operations. The Company has received a report from their independent public accountants, which includes an explanatory paragraph describing the uncertainty as to the ability of the Company to continue as a going concern. See "Management's Discussion and Analysis or Plan of Operation" and "Consolidated Financial Statements."

Need for Additional financing to Fund Operations

The Company has suffered recurring losses and has an accumulated deficit of $22,025,837 and a working capital deficiency of $6,324,526 at February 29, 2008. In order to sustain its operations and grow its business in this competitive market, the Company needs to obtain additional financing. The Company is actively seeking sources of additional financing in order to meet its debt repayment obligations and to maintain and potentially expand its current operations. To date, the Company has not successfully attained additional financing and there can be no reassurances that the Company will be able to do so in the future. If the Company is unsuccessful in attaining additional financing, the Company may be required to severely reduce or cease operations. See "Management's Discussion and Analysis or Plan of Operation" and "Risk Factors;

The New York State Department entered an assessment.

During the year ended February 29, 2008, the Company and its subsidiary, the Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. The DOL is claiming a predecessor/successor relationship between the Company and the Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that the Math Channel currently is obligated to pay based on certain compensation for each employee. The Company has retained Counsel to investigate and seek a resolution in this matter. The accompanying financial statements do not reflect this potential liability pending Counsel's attempt to resolve this matter.

WE MAY BE FORCED TO CEASE OPERATION IF WE DO NOT OBTAIN ADDITIONAL FINANCING..

The Company has limited resources and has not been able to finance its activities with the proceeds from operations and there can be no assurance it will be able to do so in the future. The Company is actively seeking sources of additional financing in order to meet its debt repayment obligations and to maintain and potentially expand its current operations. If the Company is unsuccessful in obtaining additional financing, the Company may be forced to cease operations. Even if the Company is able to obtain funding, there can be no assurance that a sufficient level of sales will be attained to fund such operations or that unbudgeted costs will not be incurred. Future events, including the problems, delays expenses and difficulties frequently encountered by similarly situated companies, as well as changes in economic, regulatory or competitive conditions, may lead to cost increases that could make the net proceeds of any new funding and cash flow from operations insufficient to fund the Company's capital requirements. There can be no assurances that the Company will be able to obtain such additional funding from management or other investors on terms acceptable to the Company, if at all. Additional financings may result in dilution for then current stockholders. See "Management's Discussion and Analysis or Plan of Operation."

ANY FUTURE ISSUANCES OF STOCK WILL CAUSE DILUTION TO OUR CURRENT STOCKHOLDERS.

The Company currently has outstanding options, warrants and other rights to acquire an aggregate of approximately 20,349,348 shares of Common Stock and as of June 3, 2008, the price of the Company's current stock as quoted on the NASD Electronic Bulletin Board was approximately $.03 per share. Any future issuances may substantially dilute the holdings of the Company's current stockholders. Furthermore, such issuances could result in a change of control of the Company. See "Need for Additional Financing."

INCREASED CONSUMER RETURNS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR REVENUE.

The Company typically experiences returns of 25% from customers which is standard for the industry. Increased consumer returns due to the perceived inferiority or ineffectiveness of our products could have a material adverse effect on our revenues and cause our business to fail.

WE COMPETE WITH OTHER INTERNET AND OTHER MEDIA ADVERTISERS WHO HAVE GREAT RESOURCES THAN US.

Over the past few years the Company has shifted its advertising dollars from radio and TV to Internet and has thereby eliminated its dependence on the seasonal swings in advertising inventory which fluctuates widely for TV and radio. The Company plans to expand its media campaign to radio and TV advertising and be subject once again to these fluctuations. In the Internet arena, as more advertisers compete for web customers, advertising prices may significantly increase, reducing the Company's profitability.

OUR PRODUCTS ARE DISCRETIONARY ITEMS AND DEMAND MAY DECREASE DUE TO DOWNTURNS IN THE ECONOMY.

Our products are discretionary consumer goods. Downturns in the economic climate, whether actual or perceived, may decrease people's discretionary income or desire to spend such income and decrease consumer demand and the performance of the Company's own advertising campaign on behalf of its own products.

WE ARE HIGHLY DEPENDENT ON OUR MATH MADE EASY(TM) PRODUCT LINE.

In the fiscal year ended February 29, 2008, most of the Company's educational sales were from the Math Made Easy(TM) product line and its online tutoring services. The Company is currently selling its math programs in both videotape, DVD, and CD Rom formats. Many of the educational product companies have reconfigured their videotape based programs into interactive computer software. The Company has plans to do this as well but may lack the financing to successfully complete this project.

Although the Company is continually seeking to introduce additional product lines there can be no assurance that these new product lines will generate significant sales. In the event that the popularity of the Math Made Easy(TM) product line decreases or faces increased competition, the Company's sales would be adversely affected and if not replaced by substantially increased sales from other products, the Company could be forced to cease operations.

CONSUMERS MIGHT BE RELUCTANT TO MAKE PURCHASES OVER THE PHONE WITH THEIR CREDIT CARDS.

Credit card frauds perpetrated by disreputable telemarketing operations have adversely affected the willingness of the consumers to make use of their credit cards by telephone. This may adversely affect the Company's ability to secure credit card orders.

WE, LIKE MOST SALES DRIVEN BUSINESSES, HAVE A HIGH SALES FORCE TURNOVER RATE.

Recruiting, training and retaining qualified salespeople are essential for the Company. There is a high turnover rate among salespeople as a result of the frustration of the sales process, the high pressure atmosphere, and the reliance on commissions as a major component of salaries. The training of salespeople involves learning a complex product line and special sales techniques. In addition, it is essential that the Company utilize the optimal number of salespeople for its level of advertisements and the number of clients it is servicing. Too many advertisements may overwhelm the salespeople while too few advertisements may lead to a drop in the commissions, which will cause the salespeople to leave the Company. Furthermore, the ability of the Company to convert leads into sales is largely dependent on the expertise of its salespeople. There can be no assurance that the Company will be able to continue to recruit and retain a qualified team of salespeople.

WE ARE IN A COMPETITIVE INDUSTRY.

WE ARE HIGHLY DEPENDENT ON OUR MANAGEMENT TEAM.

The Company's business is significantly dependent upon the personal efforts and continued availability of Barry Reichman, its Chief Executive Officer. The loss or unavailability to the Company of Mr. Reichman could have a Material adverse effect upon the Company's business operations and prospects. To the extent that the services of Mr. Reichman are unavailable to the Company for any reason, the Company would be required to procure other personnel to manage and operate the Company. There can be no assurance that the Company would be able to locate or employ such personnel on acceptable terms, if at all.

OUR TELEPHONE SALES TEAM COULD FACE THE PUBLIC'S UNFAVORABLE ASSOCIATION WITH UNSOLICITED TELEMARKETERS.

WE WERE DELISTED FROM THE NASDAQ SMALL-CAP MARKET FOR FAILURE TO MEET MAINTENANCE CRITERIA AND OUR COMMON STOCK IS SUBJECT TO THE PENNY STOCK RULES.

On April 17, 1997, the National Association of Securities Dealers, Inc. Automated Quotation System Stock Market ("NASDAQ") delisted the Company's Common Stock and Warrants from trading on the NASDAQ Small-Cap Market because the minimum bid price of the Company's Common Stock had been below the requirement of $1.00 per share. In order to regain a listing for the Company's securities on the NASDAQ Small-Cap Market, the Company's Common Stock must have a minimum bid price of $4.00 per share and at least three market makers for the trading securities. In addition, the Company must either have $4,000,000 in net tangible assets, a market capitalization of at least $50,000,000, or net income of at least $750,000 in its most recently completed fiscal year or in two of the three last completed fiscal years, and the Company must have at least 1,000,000 publicly traded shares not held by affiliates of the Company ("public float"), with a market value of at least $5,000,000, and at least 300 stockholders of record. There can be no assurances that the Company will be able to meet the requirements for re-listing on the NASDAQ Small Cap Market.

If the Company's securities are again listed on the NASDAQ Small-Cap Market, in order to maintain such listing the Company must continue to be registered under
Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act"). In addition, NASDAQ has proposed increasing the requirements for maintaining a NASDAQ Small-Cap listing to require either: (1) net tangible assets of at least $2,000,000, (2) a market capitalization of $35,000,000 or (3) net income in at least two of the last three years of $500,000, and at least 300 holders of record, a minimum bid price of $1.00 per share, at least two market makers and a public float of at least 500,000 shares with a market value of at least $1,000,000. There can be no assurance that the Company would be able to meet the requirements for maintaining a listing on the NASDAQ Small-Cap Market.

Failure to regain or to maintain NASDAQ Small-Cap Market listing will probably depress the market value of the Common Stock and purchasers likely would find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, the Common Stock.

In addition, if the Company cannot obtain a NASDAQ Small-Cap Market listing for its securities, and no other exclusion from the definition of a "penny stock" under the Exchange Act is available, then the Company's stock will continue to be subject to additional federal and state regulatory requirements. Rule 15g-9 under the Exchange Act, among other things requires that broker/dealers satisfy sales practice requirements, including making individualized written suitability determinations and receiving any purchaser's written consent prior to any transaction. The Company's securities could also be deemed penny stocks under the Securities Enforcement and Penny Stock Reform Act of 1990, which requires additional disclosure in connection with trades in the Company's securities, including the delivery of a disclosure schedule explaining the nature and risks of the penny stock market. Such requirements can severely limit the liquidity of the Company's securities and the ability of purchasers to sell their securities in the secondary market.

THERE IS A LIMITED PUBLIC TRADING MARKET FOR THE COMPANY'S SECURITIES.

There is only a limited public trading market for the Company's securities and no assurances can be given that a liquid market will develop or, if developed, that it will continue to be maintained. There can be no assurance that a more active trading market will develop or, if developed, that it will be maintained. In addition, there can be no assurance that the Company will obtain re-listing of its securities on NASDAQ.

LIMITATION OF USE OF NET OPERATING LOSS CARRY FORWARDS.

As of February 29, 2008, the Company had federal net operating loss carry forwards of approximately $22,025,837 portions of which expire yearly through 2027 (subject to certain limitations). This balance gives effect to annual limitations on the utilization of the loss carry forwards caused by "ownership changes" as defined in Section 382 of the Internal Revenue Code. If there is any additional ownership change, there can be no assurance as to the specific amount of net operating loss carry forwards available in any post-change year since the calculation is based upon a fact-dependent formula. See "Management's Discussion and Analysis or Plan of Operation--Liquidity and Capital Resources."

ISSUANCE OF PREFERRED STOCK; POTENTIAL ANTI-TAKEOVER EFFECT.

Certain provisions of Delaware law and the Company's certificate of incorporation and by-laws could make more difficult a merger, tender offer or proxy contest involving the Company, even if such events could be beneficial to the interests of the stockholders. The Board of Directors has the authority to issue up to 1,000,000 shares of Preferred Stock in one or more series and to fix the number of shares constituting any such series, the voting powers, designation, preferences and relative participation, optional or other special rights and qualifications, limitations or restrictions thereof, including the dividend rights and dividend rate, terms of redemption (including sinking fund provisions), redemption price or prices, conversion rights and liquidation preferences of the shares constituting any series, without any further vote or action by the stockholders. The issuance of preferred stock by the Board of Directors could adversely affect the rights of the holders of Common Stock. For example, such issuance could result in a class of securities outstanding that would have preferences with respect to voting rights and dividends and in liquidation over the Common Stock, and could (upon conversion or otherwise) enjoy all of the rights pertinent to Common Stock. The authority possessed by the Board of Directors to issue preferred stock could potentially be used to discourage attempts by others to obtain control of the Company through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult to achieve or more costly. Such provisions could limit the price that certain investors might be willing to pay in the future for shares of the Company's Common Stock or preferred stock.

ITEM 7. FINANCIAL STATEMENTS.

The Company's audited financial statements for the years ended February 29, 2008 and February 28, 2007 and the notes thereto follow the signature page of this Annual Report on Form 10-KSB. The financial statements are included herein commencing on page F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None

ITEM 8A(T). CONTROLS AND PROCEDURES

CEO and CFO Certifications

As of the end of the year covered by this annual report, the Company carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer ("the Certifying Officers"), an evaluation of the effectiveness of our "disclosure controls and procedures." The certifications of the CEO and the CFO required by Rules 13a-14(a) and 15d-14(c) of the Securities Exchange Act of 1934, as amended (the "Certifications") are filed as exhibits to this report.

This section of this report contains information concerning the evaluation of our "disclosure controls and procedures" (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) ("Disclosure Controls") and changes to internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) ("Internal Controls") referred to in the Certifications and should be read in conjunction with the Certifications for a more complete understanding of the topics presented.

Evaluation of Disclosure Controls

The Company maintains controls and procedures designed to ensure that they are able to collect the information that is required to be disclosed in the reports they file with the Securities and Exchange Commission (the "SEC") and to process, summarize and disclose this information within the time period specified in the rules of the SEC. The Company Chief Executive and Chief Financial Officer are responsible for establishing, maintaining and enhancing these procedures. The office is also responsible, as required by the rules established by the SEC, for the evaluation of the effectiveness of these procedures.

Based on management's evaluation (with participation of our principal executive officer and principal financial officer), as of the end of the period covered by this report, the principal executive officer and principal financial officer concluded that a deficiency was identified in the Company's internal controls over financial reporting which constituted a "material weakness." Accordingly, management concluded that the Company's disclosure controls and procedures were not effective.

The material weakness was the result of an insufficient number of personnel having adequate knowledge, experience and training to provide effective, and timely, oversight and review over the Company's financial close and reporting process.

Limitations on the Effectiveness of Controls

The Company's management does not expect that their disclosure controls or their internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Changes in Internal Controls

The Company maintains a system of internal controls designed to provide reasonable assurance that transactions are executed in accordance with management's general or specific authorization; transactions are recorded as necessary to permit preparation of financial statements in conformity with Generally Accepted Accounting Principles ("GAAP").

It is the responsibility of Company's management to establish and maintain adequate internal control over financial reporting. The material weakness identified relates to an insufficient number of personnel having adequate knowledge, experience and training to provide effective oversight and review over our financial close and reporting process. This is the result of limited financial resources. These control deficiencies in the aggregate did not result in any misstatements in the interim and fiscal year end consolidated financial statements. Management is in the process of remedying the material weakness described above.

Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company's management, including the Company's principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, the Company's Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures are effective, to provide reasonable assurance that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission's rules and forms. There have been no changes to the Company's internal controls over financial reporting that occurred during our last fiscal quarter of the year ended February 29, 2008, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Although management did not conduct an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, it has concluded that notwithstanding the foregoing, the Company's internal controls over financial reporting are effective, and no material weaknesses in financial reporting have been discovered upon our year-end evaluation. As noted in this Annual Report, we have limited resources available. As we obtain additional funding and employ additional personnel, we will implement programs to ensure the proper segregation of duties and reporting channels.

This Form 10-KSB does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

ITEM 8B. OTHER INFORMATION.

None

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE

GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

OFFICERS AND DIRECTORS

The officers and directors of the Company, as of June 3, 2008, are as follows:

------------------ ---------- --------------------------------------------------
NAME AGE POSITION
------------------ ---------- --------------------------------------------------
Barry Reichman 57 Chief Executive Officer, Chief Financial Officer
 and Director
------------------ ---------- --------------------------------------------------
Anne Reichman 54 Director
------------------ ---------- --------------------------------------------------

BIOGRAPHIES AND FAMILY RELATIONSHIPS

BARRY REICHMAN has been Chief Executive Officer and a Director of the Company since August 1994, and Chief Financial Officer since September, 1999. From 1985 until 1994, he was Secretary and a Director of Video Tutorial Service, a wholly owned subsidiary of Multi-Media Tutorial Services, Inc. Mr. Reichman holds a B.A. in Economics from Yeshiva University and an M.B.A. from Baruch College. He is the husband of Anne Reichman, a Director of the Company.

ANNE REICHMAN has been a Director of the Company since October 1994. Ms. Reichman was elected Secretary of the Company in March 1995. From 1985 until 1994, she developed and oversaw the computer and order fulfillment system for Video Tutorial Service and supervised internal accounting. Ms. Reichman was also an assistant producer in a number of Video Tutorial Service mathematics videotape productions and authored several math workbooks. Ms. Reichman holds a B.A. in Mathematics from Yeshiva University. Ms. Reichman is the wife of Barry Reichman, President and a Director of the Company.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Exchange Act requires the Company's officers and directors, and persons who own more than ten percent of a registered class of the Company's equity securities pursuant to section 12, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten-percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on review of the copies of such forms furnished to the Company, or written representations that no Forms 5 were required, the Company believes that during the fiscal year ended February 29, 2008, no reports were required to be filed under Section 16 (a) of the Exchange Act by any of the Company's executive officers, directors or 10% beneficial owners because the Company does not have a class of stock which is registered under Section 12 of the Exchange Act.

CODE OF ETHICS

We have adopted a Code of Ethics and Code of Business Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions in that our officers and directors serves in all the above capacities. The Code of Ethics and Code of Business Conduct are attached to this annual statement as Exhibits 14.1 and 14.2 respectively.

AUDIT, NOMINATING AND COMPENSATION COMMITTEES

Our Board of Directors does not have standing audit, nominating or compensation committees, and our Board of Directors performs the functions that would otherwise be delegated to such committees. Currently, our Board of Directors believes that the cost of establishing such committees, including the costs necessary to recruit and retain qualified independent directors to serve on our Board of Directors and such committees and the legal costs to properly form and document the authority, policies and procedures of such committees are not justified under our current circumstances.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth information regarding the compensation paid to our "named executive officers" as defined in Rule 402(a)(2) under Regulation S-B. Compensation accrued during one year and paid in another is recorded under the year of accrual.

The following table sets forth certain information concerning compensation of certain of the Company's executive officers (the "Named Executives"), including the Company's Chief Executive Officer and all executive officers whose total annual salary and bonus exceeded $100,000, for the years ended February 29, 2008 and February 28, 2007:

 SUMMARY COMPENSATION TABLE

------------------ ------- ---------- -------- --------- -------------- --------------- -------------- --------------- -----------
 Nonqualified
 Non-Equity Deferred
 Name and Stock Option Incentive Plan Compensation All Other
 Principal Salary Bonus Awards Awards Compensation Earnings Compensation Total
 Position Year ($) ($) ($) ($) ($) ($) ($) ($)
 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
------------------ ------- ---------- -------- --------- -------------- --------------- -------------- --------------- -----------
Barry Reichman (1) 2008 $100,000 0 0 $200,000(2) 0 0 0 $300,000

------------------ ------- ---------- -------- --------- -------------- --------------- -------------- --------------- -----------
 2007 $100,000 0 0 $35,000(3) 0 0 0 $135,000
------------------ ------- ---------- -------- --------- -------------- --------------- -------------- --------------- -----------

(1) Mr. Reichman has served as Chief Executive Officer since July 31, 1999.

(2) Reflects four option awards as follows: On 3/29/07 500,000 options at an exercise price of $.10, on 8/27/07 250,000 options exercisable at $.07, on 11/30/07 250,000 options exercisable at $.05, and on 2/28/08 4,000,000 options exercisable at $.03. The options were fully vested on the date of grant and terminate on the tenth anniversary of the date of grant.

(3) Reflects three option awards each for 250,000 shares of common stock granted on August 14, 2006, November 30, 2006 and December 1, 2006 at an exercise price of $.06, $.04 and $.04 respectively. The options were fully vested on the date of grant and terminate on the tenth anniversary of the date of the grant.

EMPLOYMENT AGREEMENTS

On January 1, 2005 The Company has entered into five year employment agreements with Barry Reichman, Anne Reichman and Harold Reichman pursuant to which they are paid annual base salaries of $100,000, $75,000 and $50,000 respectively. Harold Reichman has waived his annual salary of $50,000 until such time that the Company is profitable. Unpaid salaries for the other executives are accounted for in accrued expenses. These employment agreements require the issuance of options to these employees at the market price.

STOCK OPTION PLAN

The Company's 1995 Stock Option Plan (the "Stock Option Plan") provides for the granting of options to purchase not more than an aggregate of 350,000 shares of Common Stock, subject to adjustment under certain circumstances. Such options may be Incentive Stock Options ("ISO") within the meaning of the Internal Revenue Code of 1986, as amended, or Non-Qualified Stock Options ("NQSO"). The Stock Option Plan expired on March 31, 2004. The Company has granted 279,953 options under the Stock Option Plan.

The Stock Option Plan is administered by the Board of Directors or by a stock option committee (the "Committee") which may be appointed by the Board of Directors. To date the Board has not appointed a Committee. The Committee has full power and authority to interpret the provisions, and supervise the administration, of the Stock Option Plan. The Committee determines, subject to the provisions of the Stock Option Plan, to whom options are granted, the number of shares of Common Stock subject to each option, whether an option shall be an ISO or a NQSO and the period during which each option may be exercised. In addition, the Committee determines the exercise price of each option, subject to the limitations provided in the Stock Option Plan, including that (i) for a NQSO the exercise price per share may not be less than 85% of the fair market value per share of Common Stock on the date of grant and (ii) for an ISO the exercise price per share may not be less than the fair market value per share of Common Stock on the date of grant (110% of such fair market value if the grantee owns stock possessing more than 10% of the combined voting power of all classes of the Company's stock). In determining persons to whom options will be granted and the number of shares of Common Stock to be covered by each option, the Committee considers various factors including each eligible person's position and responsibilities, service and accomplishments, anticipated length of future service and other relevant factors. Options may be granted under the Stock Option Plan to all officers, directors and employees of the Company and, in addition, NQSO may be granted to other parties who perform services for the Company. No options may be granted under the Stock Option Plan, after March 31, 2004. The Stock Option Plan may be amended from time to time by the Board of Directors of the Company. The Board of Directors may not, however, without stockholder approval, amend the Stock Option Plan to increase the number of shares of Common Stock which may be issued under the Stock Option Plan (except upon changes in capitalization as specified in the Stock Option Plan), decrease the minimum exercise price provided in the plan or change the class of persons eligible to participate in the plan.

During the year ended February 28, 2006, the Company established the 2006 Incentive Compensation Plan ("2006 Plan"). Underlying the 2006 Plan a total of 3,600,000 shares are available to be granted. As of February 29, 2008, 2,686,250 shares were granted under this plan. The 2006 Plan is effective from June 13, 2006 through June 13, 2011.

 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
 Option Awards Stock Awards
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
 Name Number of Number of Equity Option Option Number Market Equity Equity
 Securities Securities Incentive Exercise Exercise of Shares Valued Incentive Incentive
 Underlying Underlying Plan Awards: Price ($) Date of Units of Shares Plan Plan
 Unexercised Unexercised Number of of Stock or Units Awards: Awards:
 Options Options Securities That Have That Have Number of Market or
 (#) (#) Underlying Not Vested Not Vested Unearned Payout
 Exercisable Unexercisable Unexercised (#) ($) Shares, Value of
 Options Units or Unearned
 (#) Other Shares,
 Rights Units or
 That Have Other Rights
 Not Vested That Have
 (#) Not Vested
 ($)
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 104,967 $.30 May, 27
 2008
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 120,000 .12 Dec 1,
 2009
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 1,000,000 .10 Sept 1,
 2009
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 600,000 .10 May 9,
 2015
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 400,000 .10 May 9,
 2015
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 1,000,000 .07 Jan 2,
 2012
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 2,000,000 .06 Dec 2,
 2012
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 250,000 .06 Aug 4,
 2016
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 250,000 .04 Nov 30,
 2016
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 250,000 .04 Dec 1,
 2016
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 500,000 .10 Mar 29,
 2017
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 250,000 .07 Aug 27,
 2017
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 250,000 .05 Nov 30,
 2017
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------
Barry Reichman 4,000,000 .03 Feb 28,
 2018
--------------- -------------------------------------------- ---------- ---------- ----------------------------------- -------------

INDEMNITY

The Articles of Incorporation provide for indemnification to the full extent permitted by the laws of the State of Delaware for each person who becomes a party to any civil or criminal action or proceeding by reason of the fact that he, or his testator, or intestate, is or was a director or officer of the corporation or served any other corporation of any type or kind, domestic or foreign in any capacity at the request of the corporation.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act 1993"), as amended, may be permitted to directors or officers pursuant to the foregoing provisions, we are informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, as expressed in the Act 1933 and is, therefore, unenforceable.

DIRECTOR COMPENSATION

We do not currently pay any cash fees to our directors, but we pay directors' expenses in attending board meetings. During the year ended February 29, 2008, no director expenses were reimbursed.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth information as of June 12, 2008 with respect to the beneficial ownership of the issuer's common stock by (i) each person known by the issuer to be the beneficial owner of more than 5% of the outstanding common stock which is the only class of stock of the issuer, (ii) each director of the Company's board of directors, (iii) each "named executive officer" as defined in Item 402(a)(2) of Regulation S-B promulgated under the Securities Act and (iv) the directors and executive officers of the issuer, as a group, without naming them.

NAME AND ADDRESS SHARES HELD PERCENTAGE (1)
---------------- ----------- --------------

Barry Reichman (2) 18,999,967 27.4%

Anne Reichman (2) 18,999,967 27.4%

Mike Lee (3) 4,268,645 7.9%

Richard Kraniak (4) 4,783,505 8.7%

All Officers and Directors
 As a Group (2) 18,999,967 27.4%

* Less than 1%

(1) Based on 53,929,092 shares of Common Stock outstanding as of June 12, 2008. Pursuant to the rules of the Commission, shares of Common Stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table.

(2) Mr. and Mrs. Reichman are husband and wife. Mr. Reichman is an officer and director of the Company. Mrs. Reichman is a director of the Company; includes options to purchase up to 10,974,967 shares granted to Mr. Reichman, options to purchase up to 4,525,000 shares granted to Mrs. Reichman, and 3,500,000 shares owned by Mr. Reichman. Please refer to the outstanding equity awards table above.

(3) The address for Michael Lee is 14 Woodbridge Rd, Hingham, MA 02043, includes warrants to purchase 300,000 shares of common stock granted to Mr. Lee.

(4) The address for Richard Kraniak is 3260 Wellington Court West Bloomfield, MI 48324, includes warrants to purchase 300,000 shares of common stock granted to Mr. Kraniak and notes convertible into 1,000,000 shares of common stock.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

------------------------------- ---------------------------- ---------------------------- ----------------------------
 Number of securities
 remaining available for
 Number of securities to be Weighted average exercise future issuance under
 issued upon the exercise price of outstanding equity compensation plans
 of outstanding options, options, warrants and (excluding securities
 warrants and rights rights reflected in column (a))
 (a) (b) (c)
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders 2,686,250 N/A 913,750
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders -- -- --
------------------------------- ---------------------------- ---------------------------- ----------------------------

Total 2,686,250 N/A 913,750
------------------------------- ---------------------------- ---------------------------- ----------------------------

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

No transactions have occurred since the beginning of the Company's last fiscal year or are proposed with respect to which a director, executive officer, security holder owning of record or beneficially more than 5 % of any class of the Company's securities or any member of the immediate families of the foregoing persons had or will have a direct or indirect material interest.

DIRECTOR INDEPENDENCE

None of the Company's members of the board of directors are deemed to be independent.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(A) The following exhibits required by Item 601 of Regulation S-B are filed with this Registration Statement.

EXHIBIT # DESCRIPTION
--------- -----------

3.1 Certificate of Incorporation, as amended (1)
3.2 By-Laws (1)
4.1 Form of Warrant Agreement entered into between Registrant
 and American Stock Transfer & Trust Company (1)
4.2 Specimens of Registrant's Stock, Redeemable Warrant and Unit
 Certificate (1)
10.1 1995 Stock Option Plan (1)
10.2 2006 Incentive Compensation Plan (2)
14.1 MMTS Code of Ethics
14,2 MMTS Code of Business Conduct
21.1 List of Subsidiaries (2)
23.1 Consent of Conner & Associates, PC, independent registered
 public accounting firm
31.1 Certification of Barry Reichman pursuant to 18 U.S.C.
 Section 1350, as adopted to section 302 of the
 Sarbanes-Oxley Act of 2002
32.1 Certification of Barry Reichman pursuant to 18 U.S.C.
 Section 1350, as adopted to section 906 of the
 Sarbanes-Oxley Act of 2002

(1) Incorporated by reference from the Company's Registration Statement on Form SB-2 (File No. 33-88494) effective April 13, 1995.

(2) Incorporated by reference from the Company's Form S-8 (File No:
333-135694) filed with the Commission on July 11, 2006.

(B) Reports on Form 8-K. None

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company's board of directors reviews and approves audit and permissible non-audit services performed by its independent accountants, as well as the fees charged for such services. In its review of non-audit service fees and its appointment of Conner & Associates, PC as the Company's independent accountants, the board of directors considered whether the provision of such services is compatible with maintaining independence. All of the services provided and fees charged by Conner & Associates, PC in 2008 and Sherb & Co, LLP in 2007 were approved by the board of directors.

AUDIT FEES

The aggregate fees billed for professional services for the audit of the annual financial statements of the Company and the reviews of the financial statements included in the Company's annual reports on Form 10-KSB for Fiscal Years ended February 29, 2008 and 2007 were $29,250 and $25,500 respectively, net of expenses.

AUDIT-RELATED FEES

There were no other fees billed by during the last two fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of the Company's financial statements and not reported under "Audit Fees" above.

TAX FEES

There were no tax fees billed during the last two fiscal years for products and services provided.

ALL OTHER FEES

There were no other fees billed during the last two fiscal years for products and services provided.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MULTI-MEDIA TUTORIAL SERVICES, INC.

Date: June 12, 2008 By: /s/ Barry Reichman
 ----------------------------------------
 Barry Reichman, Chief Executive Officer,
 Chief Financial Officer and Director
 (Principal Executive Officer, Principal
 Accounting and Financial Officer)

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: June 12, 2008 /s/ Barry Reichman
 ----------------------------------------
 Barry Reichman, Chief Executive Officer,
 Chief Financial Officer and Director
 (Principal Executive Officer, Principal
 Accounting and Financial Officer)


Date: June 12, 2008 /s/ Anne Reichman
 ----------------------------------------
 Anne Reichman, Director

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors Multi-Media Tutorial Services, Inc.

We have audited the accompanying consolidated balance sheets of Multi-Media Tutorial Services, Inc. and the related consolidated statements of operations, stockholders' deficit and cash flows for the years ended February 29, 2008 and February 28, 2007. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Multi-Media Tutorial Services, Inc. as of February 29, 2008, the results of their operations and their cash flows for the years ended February 29, 2008 and February 28, 2007 in conformity with accounting principles generally accepted in the United States of America,

The accompanying financial statements have been prepared assuming the Multi-Media Tutorial Services, Inc will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred an accumulated deficit of approximately $22,025,837. The Company incurred a net loss for the period ended February 29, 2008 of approximately $1,532,070 and had negative working capital at February 29, 2008 of approximately $6,324,526 The Internal Revenue Service has imposed a federal tax lien on substantially all of the Company's assets as the Company is in arrears on payments of payroll taxes of approximately $500,000. These factors, among others, raise substantial doubts about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ CONNER & ASSOCIATES, PC
NEWTOWN, PENNSYLVANIA
11 JUNE 2008

F-1

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------------------------

 ASSETS

 February 29, February 28,
 2008 2007
 ------------- -------------
Current assets:
---------------

Cash $ - $ -
Accounts receivable, less allowance for doubtful
 accounts of $12,023 and $20,800 as of
February 29, 2008 and February 28, 2007 108,315 62,835
Inventories 827 7,401
Prepaid expenses 114,206 53,325
 ------------- -------------
Total current assets 223,348 123,561
 ------------- -------------

Furniture & equipment, net 14,007 10,902
Intangible assets, net 66,120 53,481
Other assets 26,736 8,745
 ------------- -------------
Total assets $ 330,211 $ 196,689
 ============= =============

 LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
-------------------

Book overdraft $ 20,162 $ 16,113
Accounts payable and accrued expenses 4,392,938 4,127,838
Notes payable 2,134,774 2,337,225
 ------------- -------------
Total current liabilities 6,547,874 6,481,176
 ------------- -------------

Long-term debt
--------------
Notes payable, net of discount of $216,977 and $3,662 433,023 46,338
 ------------- -------------

Commitments and contingencies

Stockholders' deficit
---------------------
Preferred stock, Series A, $0.01 par value; 1,000,000
 shares authorized; no shares issued and outstanding - -
Preferred stock, Series B, $0.01 par value; 50 shares
 authorized; no shares issued and outstanding - -
Common stock, $0.0001 par value; 100,000,000 shares
 authorized; 52,973,282 and 41,826,917 shares issued
 and outstanding as of February 29, 2008 and
 February 28, 2007, respectively. 5,297 4,183

Stock subscription receivable (6,000) (4,000)

Additional paid-in capital 15,375,854 14,162,759
Accumulated deficit (22,025,837) (20,493,767)
 ------------- -------------
Total stockholders' deficit (6,650,686) (6,330,825)
 ------------- -------------
Total liabilities and stockholders' deficit $ 330,211 $ 196,689
 ============= =============


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

 F-2

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------------------------------

 For the Year Ended
 --------------------------------
 February 29, February 28,
 2008 2007
 -------------- --------------

Net sales $ 657,498 $ 787,088

Cost of sales 92,749 90,134
 -------------- --------------

Gross profit 564,749 696,954

Selling, general and administrative expenses 1,701,415 1,242,581
 -------------- --------------

Loss from operations (1,136,666) (545,627)
 -------------- --------------

OTHER INCOME (EXPENSE)

Cancellation of Debt 46,174 -

Interest Expense (441,578) (277,672)
 -------------- --------------
Total other expense (395,404) (277,672)
 -------------- --------------


NET LOSS $ (1,532,070) $ (823,299)
 ============== ==============


BASIC AND DILUTED LOSS PER SHARE $ (0.03) $ (0.02)
 ============== ==============


WEIGHTED-AVERAGE SHARES OUTSTANDING 49,679,966 38,846,831
 ============== ==============


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

 F-3

MULTI-MEDIA TUTORIAL SERVICES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
---------------------------------------------------------------------------------------------------------------------------------
 Common Stock Stock Additional
 --------------------------- Subscription Paid-In Accumulated
 Shares Amount Receivable Capital Deficit Total
 ------------- ------------ ------------ ------------- ------------- -------------
Balance, February 28, 2006 36,770,667 $ 3,678 $ - $ 13,766,575 $(19,670,468) $ (5,900,215)
Common Stock issued for:

Interest 125,000 12 6,238 6,250

Services 2,236,250 224 103,090 103,314

Payment of accounts payable 250,000 25 12,475 12,500


Exercise of stock option 400,000 40 (4,000) 3,960 -


Series E debt financing 625,000 62 35,163 35,225

Conversion of debt 1,420,000 142 141,858 142,000

Warrants to purchase stock issued for:

Extension of loan payable 5,600 5,600

Services 4,990 4,990

Employee stock options 82,810 82,810

Net Loss (823,299) (823,299)
 ------------- ------------ ------------ ------------- ------------- -------------
Balance, February 28, 2007
 41,826,917 $ 4,183 $ (4,000) $ 14,162,759 $(20,493,767) $ (6,330,825)
 ============= ============ ============ ============= ============= =============
Common Stock issued for:

Services 5,837,860 584 389,343 389,927

Series E debt financing 3,716,725 372 361,634 362,006

Conversion of debt 1,391,780 139 143,276 143,415

Beneficial conversion feature with debt - 12,500 12,500

Employee stock options - 304,362 304,362

Exercise of stock options 200,000 20 (2,000) 1,980 -

Net Loss (1,532,070) (1,532,070)
 ------------- ------------ ------------ ------------- ------------- -------------
Balance, February 29, 2008 52,973,282 $ 5,297 $ (6,000) $ 15,375,854 $(22,025,837) $ (6,650,686)
 ============= ============ ============ ============= ============= =============


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

 F-4

MULTI-MEDIA TUTORIAL SERVICES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------------------------

 For the Year Ended
 --------------------------------
 February 29, February 28,
 2008 2007
 -------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss $ (1,532,070) $ (823,299)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities
Depreciation and amortization 31,194 36,230
Forgiveness of debt (46,174) -
Amortization of prepaid contract for service 43,748 40,103
Amortization of deferred compensation 165,125 22,500
Amortization of discount on debt 186,668 31,563
Stock based compensation 304,362 82,811
Common stock issued for:
Extension for loan repayment 7,500 6,250
Services 196,802 80,813
Warrants to purchase common stock granted for:
Extension of loan payable due date 5,600
Services 4,990

Changes in Operating assets and Liabilities:
Accounts receivable (45,480) 60,209
Inventories 6,574 24
Prepaid expenses and other assets (125,220) 5,070
Other Assets (5,745)
Accounts Payable and accrued expenses 317,712 287,212
 -
 -------------- --------------
Net cash used in operating activities (489,259) (165,669)
 -------------- --------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture and equipment (8,565) -
Increase in intangibles (38,375) (26,444)
Security deposit on new facility 2,600 -
 -------------- --------------
Net cash used in investing activities (44,340) (26,444)
 -------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable 650,000 174,346
Repayment of note payable (120,451) (1,000)
Cash deficit 4,050 16,113
 -------------- --------------
Net cash provided by financing activities 533,599 189,459
 -------------- --------------

Net increase (decrease) in cash - (2,654)

CASH, BEGINNING OF YEAR - 2,654
 -------------- --------------

CASH, END OF YEAR $ - $ -
 ============== ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

INTEREST PAID $ - $ -
 ============== ==============
INCOME TAXES PAID $ - $ -
 ============== ==============

NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued:
Settlement of accounts payable and accrued expenses $ - $ 12,500
 ============== ==============
With issuance of debt $ 354,505 $ 5,275
 ============== ==============
Exercise of option / stock subscription receivable $ 2,000 $ 4,000
 ============== ==============
Deferred compensation paid in common stock $ 317,000 $ 30,000
 ============== ==============
Services -
 ============== ==============
Conversion of debt to common stock $ 132,000 $ 142,000
 ============== ==============
Debt issued for Consulting services $ - $ 87,500
 ============== ==============


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

 F-5

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED FEBRUARY 29, 2008 AND FEBRUARY 28, 2007

NOTE 1 - DESCRIPTION OF BUSINESS

Multi-Media Tutorial Services, Inc., ("MMTS") a Delaware corporation, is engaged in the production and sales of educational videocassettes, CD's and DVD's through its wholly-owned subsidiaries Video Tutorial Services, Inc. ("VTS") and Math Channel, Inc. ("Math Channel"). VTS, a New York State corporation was established in 1985. Math Channel, a New York State corporation was established in December 2005 to provide tutorial one-on-one on line educational services. Henceforth VTS, Math Channel or MMTS are to be referred to as the "Company", unless reference is made to the respective company. The Company sells its educational products and services on the Internet via the Company's website, Mathmadeeasy.com and through its own inbound and outbound sales force.

NOTE 2 - GOING CONCERN; INTERNAL REVENUE SERVICE FEDERAL TAX LIEN

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and has an accumulated deficit of $22,025,837 and a working capital deficiency of $6,324,526 at February 29, 2008. Also, the Internal Revenue Service has placed a federal tax lien on substantially all of the Company's assets as the Company is in arrears on payment of payroll taxes, accrued prior to February 28, 2004 of approximately $500,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with respect to these matters include restructuring its existing debt, settling its existing debt by issuing shares of its common stock and raising additional capital through future issuance of stock and or debentures. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of MMTS and its wholly-owned subsidiaries, Video Tutorial Services, Inc. ("VTS") and Math Channel, Inc. ("Math Channel"). All significant intercompany transactions and balances have been eliminated in consolidation. Action Telesales and Communications, Inc. is an affiliated company of the Company which handles the billing process for MMTS and VTS. All intercompany transactions have been eliminated.

ESTIMATES

In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company classifies highly liquid temporary investments with an original maturity of nine months or less when purchased as cash equivalents.

CONCENTRATION OF CREDIT RISK

The Company maintains cash in bank deposit accounts which, at times, exceed federally insured limits. Historically, the Company has not experienced any losses on these accounts.

F-5

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued payroll and other expenses, the carrying amounts approximate fair value due to their short maturities. The amount shown for notes payable also approximates fair value because the current interest rates offered to the Company for debt of similar maturities are substantially the same.

STOCK BASED COMPENSATION

Effective March 1, 2006, the Company began recording compensation expense associated with stock-based awards and other forms of equity compensation in accordance with Statement of Financial Accounting Standards No. 123-R, Share-Based Payment, ("SFAS 123R") as interpreted by SEC Staff Accounting Bulletin No. 107. The Company adopted the modified prospective transition method provided for under SFAS 123R and consequently has not retroactively adjusted results from prior periods. Under this transition method, compensation cost associated with stock-based awards recognized in the first nine months of fiscal year 2007 included 1) nine months amortization related to the remaining unvested portion of stock-based awards granted prior to December 15, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123R; and 2) would include nine months amortization related to stock-based awards granted subsequent to March 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. In addition, the Company records expense over the vesting period in connection with stock options granted. The compensation expense for stock-based awards includes an estimate for forfeitures and is recognized over the expected term of the award on a straight line basis.

Prior to March 1, 2006, the Company accounted for stock-based awards using the intrinsic value method of accounting in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"). Under the intrinsic value method of accounting, no compensation expense was recognized in the Company's consolidated statements of operations when the exercise price of the Company's employee stock option grant equaled the market price of the underlying common stock on the date of grant and the measurement date of the option grant is certain. Under SFAS 123R, the Company measures the intrinsic value of the options at the end of each reporting period until the options are exercised, cancelled or expire unexercised.

Compensation expense in any given period is calculated as the difference between total earned compensation at the end of the period, less total earned compensation at the beginning of the period. Compensation earned is calculated on a straight line basis over the requisite service period for any given option award.

When the stock options are granted, the fair value of each option grant is estimated on the date of grant using the Black-Scholes valuation model and the assumptions noted in the following table. The assumptions in the table below are weighted based on all options granted in the respective period.

 For the year ended:
 February 29, February 28,
 2008 2007
 -------------- --------------

Risk free interest rate 4.61% 4.70%
Expected life 10 years 10 years
Dividend rate 0% 0%
Expected volatility 271% 267%

FOR THE YEAR ENDED FEBRUARY 29, 2008:

As of February 29, 2008, the Company granted a total of 9,975,000 options to purchase the common stock of the Company at a weighted average price per common share of $.044.

F-6

During the year ended February 29, 2008, the Company granted options to purchase 5,825,000 shares of the Company's common stock. These options were valued at a weighted average price of $.041 under the Black-Scholes valuation model. These options are exercisable upon grant, and accordingly their entire value of $241,250 has been expensed as a general and administrative expense for the year ended February 29, 2008. These options expire ten years from the date of grant.

As of February 29, 2008, there is approximately $39,531 of total unrecognized compensation costs related to unvested stock options. These compensation costs are expected to be recognized over a weighted average period of 2.5 years.

FOR THE YEAR ENDED FEBRUARY 28, 2007:

During the year ended February 28, 2007 the Company granted options to purchase 2,450,000 shares of the Company's common stock. These options were valued at a weighted average price of $.041 under the Black-Scholes valuation model. These options are exercisable upon grant, and accordingly their entire value of $64,500 has been expensed as a general and administrative expense for the year ended February 28, 2007. These options expire ten years from the date of grant.

The Company recorded $82,811 of compensation expense, net of related tax effects, relative to stock options for the year ended February 28, 2007, in accordance with SFAS 123R.

As of February 28, 2007, there is approximately $57,840 of total unrecognized compensation costs related to granted stock options that are unvested. These costs are expected to be recognized over a weighted average period of 3.75 years.

During the year ended February 28, 2007, the Company extended the exercise period of options for 1,000,000 shares of the Company's common stock that originally had a five year life and had expired in January 2007. These options were extended for five additional years until January 2012. The original exercise price of $0.07 per share has not been amended. These options were granted to the Company's CEO and President. These options, with their extended exercise period, were valued with the use of the Black-Scholes valuation model at $0.0448 per share, or $44,800. These options are exercisable upon grant, and accordingly their entire value has been expensed as a general and administrative expense for the year ended February 28, 2007.

For the years ended February 29, 2008 and February 28, 2007, the Company recorded $304,362 and $81,812 of compensation expense, net of related tax effects, relative to stock options in accordance with SFAS 123R.

For the years ended February 29, 2008 and February 28, 2007, net loss per common share, basic and diluted, for SFAS 123r expense is approximately ($0.01) and zero, respectively.

NOTE 4 - NOTES PAYABLE

NOTES PAYABLE, Current

As of February 29, 2008, the Company maintained the following notes payable, current:

a) 10% notes, unsecured, payable on demand. These advances accrue
 interest based on an annualized rate of 10% per annum. During the
 year ended February 29, 20008 the Company repaid $81,700 of these
 demand notes payable. $ 502,981
----------------------------------------------------------------------------------------------------------------------

b) On April 10, 2006, the Company issued demand notes totaling $87,500
 for consulting services to be performed by the note holders over a
 twenty-four month period, subsequent to the issuance of these notes
 payable. These notes accrue interest at 10% per annum. In lieu of
 cash payment the Company may redeem these notes, and any accrued
 interest, with the issuance of Series E unsecured convertible
 promissory notes ("Series E"). The Company has recorded the issuance
 of these notes payable for consulting services as a prepaid expense
 of $87,500 that is being expensed over the twenty four month period
 of the consulting agreement. During the year ended February 29, 2008,
 the Company expensed $43,750, of this deferred compensation.

 F-7

In February 2007, a total of $75,000 of these demand notes redeemed
their note principal (accrued interest paid subsequent to February 28,
2007) for Series E notes. Under the terms of the Series E note, the
note holder upon issuance of Series E receives 5 shares of common stock
for each $1 of debt, for a total of 375,000 share of common stock.
These shares have been valued at $29,950, and have been recorded as a
discount on debt, that was to have been amortized and expensed as
interest over the life of the debt, or until such time as the debt was
converted. The Series E debt is convertible at $.50 per share, or 50
percent of the average closing bid during the five trading days prior
to the note holder giving notice of conversion, but not lower than $.10
per share. This note, including accrued interest, was due and payable
in February 2010. In February 2007, these demand note holders, upon
conversion into these Series E notes, converted all $75,000 Series E
principal into 750,000 shares of common stock valued at $0.10 per share
or $75,000. The $29,950 discount on debt was fully expensed as interest
upon conversion of the Series E into common stock.

In March 2007, one of these notes payable for $50,000 redeemed their
note principal for a Series E note. Under the terms of the Series E
note, the note holder upon issuance of Series E received 5 shares of
common stock for each $1 of debt, for a total of 250,000 share of
common stock. These shares have been valued at $31,250, and have been
recorded as a discount on debt, that was to have been amortized and
expensed as interest over the life of the debt, or until such time as
the debt was converted. In addition, the Company recognized a
beneficial conversion of $12,500 related to the Series E. As Series E
are immediately convertible to common stock, this Series E was issued
and convertible at a rate below market on the date of issuance of the
Series E. The Series E debt is convertible at $.50 per share, or 50
percent of the average closing bid during the five trading days prior
to the note holder giving notice of conversion, but not lower than $.10
per share. This Series E note, including accrued interest, was due and
payable in March 2010. On the date of conversion from a demand note to
a Series E note, the note holder converted the $50,000 Series E
principal into 500,000 shares of common stock valued at $0.10 per share
or $50,000. The $31,250 discount on debt, plus the $12,500 beneficial
conversion feature, was fully amortized, and recorded as an interest
expense
upon conversion of the Series E into common stock. 71,607
----------------------------------------------------------------------------------------------------------------------

c) 8% notes, unsecured, payable on demand. These advances accrue
interest based on an annualized rate of 8% per annum. 765,100
----------------------------------------------------------------------------------------------------------------------

F-8

d) Non-interest bearing notes, unsecured, payable on demand. 201,676
----------------------------------------------------------------------------------------------------------------------

e) 17% convertible unsecured notes payable on demand; the notes are
 convertible into common stock at a price of $1.2656 per share or an
 alternate conversion of 75% of the closing bid for the first five
 trading days prior to conversion. The alternate conversion price
 cannot be lower than $0.55 per share, or more than $3.55 per share. 260,776
----------------------------------------------------------------------------------------------------------------------

f) 10% convertible unsecured notes, payable on demand. The notes are
 convertible into common stock at a price of the lesser of $.50 or 50%
 of the average closing bid during the five trading days prior to
 notice of conversion, but not lower than $.10 per share. 284,401
----------------------------------------------------------------------------------------------------------------------
g) 10% convertible notes payable variously in 2006; the notes are
 convertible into common stock at the lesser of $.50 or 50% of the
 average of the closing bid price in the over the counter market during
 the five business days ending on the day before the holder gives notice
 of conversion, but not lower than $.10 per share.

 During the year ended February 28, 2007, a total of $50,000 of these
 notes payable including accrued interest of $17,000, converted into

 670,000 shares of the Company's common stock at $0.10 per share. 25,630
----------------------------------------------------------------------------------------------------------------------

h) 8% notes, unsecured, payable on demand. These advances accrue
 interest based on an annualized rate of 8% per annum. 22,603
----------------------------------------------------------------------------------------------------------------------

 TOTAL NOTES PAYABLE, CURRENT $ 2,134,774
 --------------------------------------------------------------------------------------------=================

NOTES PAYABLE, long-term

 As of February 29, 2008, the Company maintained the following notes
payable, long-term:

 During the year ended February 29, 2008, the Company issued $650,000 of
 Series E notes payable. Issued with this debt were 3,250,000 shares of the
 Company's common stock value at $315,000, which the Company recorded as a
 discount on debt that is being amortized and expensed as interest over the
 life of the debt, or until such time as the debt is converted. During the
 year ended February 29, 2008, the Company amortized $143,546($315,000 minus
 $243,227), of this debt discount. These Series E notes payable have a three
 (3) year life from the date of issuance. The debt is convertible at $.50
 per share or 50% of the average closing bid during the five (5) trading
 days prior to the note holder giving notice of conversion, but not lower
 than $.10 per share. $ 650,000

 Less: unamortized portion of debt discount (216,977)
 -----------------
 Total notes payable, long-term $ 433,023
 =================

 F-9

AS OF FEBRUARY 28, 2007:

10% notes, unsecured, payable on demand. These advances accrue interest based on
an annualized rate of 10% per annum. During the year ended February 28, 2006 the
Company was loaned $37,500 under these terms. $ 572,313

During the year ended February 28, 2007, the Company issued at various times,
demand notes totaling $124,346 for cash. These notes accrue interest at 10% per
annum. In lieu of cash payment the Company may redeem these notes, and any
accrued interest, with the issuance of Series E unsecured convertible promissory
notes.

On April 10, 2006, the Company issued demand notes totaling $87,500 for
consulting services to be performed by the note holders over a twenty-four month
period, subsequent to the issuance of these notes payable. These notes accrue
interest at 10% per annum. In lieu of cash payment the Company may redeem these
notes, and any accrued interest, with the issuance of Series E unsecured
convertible promissory notes ("Series E"). The Company has recorded the issuance
of these notes payable for consulting services as a prepaid expense of $87,500
that is being expensed over the twenty four month period of the consulting
agreement. During the year ended February 28, 2007, the Company expensed
$40,104, of this deferred compensation.

In February 2007, a total of $75,000 of these demand notes redeemed their note
principal (accrued interest paid subsequent to February 28, 2007) for Series E
notes. Under the terms of the Series E note, the note holder upon issuance of
Series E receives 5 shares of common stock for each $1 of debt, for a total of
375,000 share of common stock. These shares have been valued at $29,950, and
have been recorded as a discount on debt, that was to have been amortized and
expensed as interest over the life of the debt, or until such time as the debt
was converted. The Series E debt is convertible at $.50 per share, or 50 percent
of the average closing bid during the five trading days prior to the note holder
giving notice of conversion, but not lower than $.10 per share. This note,
including accrued interest, was due and payable in February 2010. In February
2007, these demand note holders, upon conversion into these Series E notes,
converted all $75,000 Series E principal into 750,000 shares of common stock
valued at $0.10 per share or $75,000. The $29,950 discount on debt was fully
expensed as interest upon conversion of the Series E into common stock. 136,846

8% notes, unsecured, payable on demand. These advances accrue interest based on
an annualized rate of 8% per annum. 750,000

Non-interest bearing notes, unsecured, payable on demand. During the year
ended February 28, 2007, the Company repaid $1,000 of these notes. 201,676

17% convertible unsecured notes payable on demand; the notes are convertible
into common stock at a price of $1.2656 per share or an alternate conversion of
75% of the closing bid for the first five trading days prior to conversion. The
alternate conversion price cannot be lower than $0.55 per share, or more than
$3.55 per share. 250,000

10% convertible unsecured notes, payable on demand. The notes are convertible
into common stock at a price of the lesser of $.50 or 50% of the average closing
bid during the five trading days prior to notice of conversion, but not lower
than $.10 per share. 401,390

 F-10

10% convertible notes payable variously in 2006; the notes are convertible into
common stock at the lesser of $.50 or 50% of the average of the closing bid
price in the over the counter market during the five business days ending on the
day before the holder gives notice of conversion, but not lower than $.10 per
share.

During the year ended February 28, 2007, a total of $50,000 of these notes
payable including accrued interest of $17,000, converted into 670,000 shares of
the Company's common stock at $0.10 per share. 25,000
 -----------------
 $ 2,337,225
 =================

Certain of the above notes payable are from stockholders of the Company.

LONG-TERM NOTE PAYABLE:

As of February 28, 2007 the Company was obligated for the following long-term
notes payable:

On April 10, 2006, the Company issued a 10% unsecured convertible $50,000
promissory note in the amount of $50,000, referred to as "Series E" notes.
Issued with the debt, were 250,000 shares of the Company's common stock value at
$5,275, which the Company recorded as a discount on debt that is being amortized
and expensed as interest over the life of the debt, or until such time as the
debt is converted. During the year ended February 28, 2007 the Company amortized
$1,613, of this debt discount. The debt is convertible at $.50 per share or 50
percent of the average closing bid during the five trading days prior to the
note holder giving notice of conversion, but not lower than $.10 per share. This
note, including accrued interest, is due and payable on or before April 10,
2009, and is classified as long term debt.
 -----------------
Less: Unamortized portion of Debt Discount 50,000
 (3,662)
 -----------------
 $ 46,338
 =================

NOTE 5 - COMMON STOCK

FOR THE YEAR ENDED FEBRUARY 29, 2008:

For the year ended February 29, 2008, as related to the conversion of a $67,000 demand note payable plus accrued interest of $605 into a Series E note payable the Company issued 1,025,175 share of common stock. These common shares have been valued at $99,005, and have been recorded as a discount on debt, that was to have been amortized and expensed as interest over the life of the debt, or until such time as the debt was converted. In addition, the Company recognized a beneficial conversion of $12,500 related to the Series E having an immediate conversion provision that was below market on the date of conversion. The Series E debt is convertible at $.50 per share, or 50% of the average closing bid during the five (5) trading days prior to the note holder giving notice of conversion, but not lower than $.10 per share. This Series E note, including accrued interest, was due and payable in March 2010. On the date of conversion from a demand note to a Series E note, the note holder converted the $50,000 Series E principal into 500,000 shares of common stock valued at $0.10 per share or $50,000.

F-11

For the year ended February 29, 2008, the Company converted $15,000 notes payable directly to 150,000 shares of common stock at a per share price of $.10.

On August 27, 2007, the Company issued 100,000 shares of common stock for a consulting services agreement valued at $7,000, on an average per share price of $.07. For the year ended February 29, 2008, a total of $7,000 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

On June 19, 2007, the Company issued 2,000,000 shares of common stock for a two
(2) year consulting services agreement valued at $220,000, on an average per share price of $.11. For the year ended February 29, 2008, a total of $82,500 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

FOR THE YEAR ENDED FEBRUARY 28, 2007:

In April 2006, the Company issued 250,000 shares of common stock at a market price of $0.05 per share, for payment of previously accrued legal fees of $12,500.

F-12

NOTE 6 - CANCELLATION OF DEBT

In June 2007, the Company settled an outstanding debt with a creditor for less than the amount owed. This total forgiveness of debt was included in the financial statements, in other income and expenses for the nine months ended November 30, 2007. The debt originally for $63,674 was settled for 17,500; the difference of $46,174 was forgiven. The settlement amount was paid in July 2007.

F-13

NOTE 7 - COMMITMENTS AND CONTINGENCIES

COMMITMENTS:

CONSULTING AGREEMENTS:

On August 27, 2007, the Company issued 100,000 shares of common stock for a consulting services agreement valued at $7,000, on an average per share price of $.07. For the nine months ended November 30, 2007, a total of $7,000 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

On June 19, 2007, the Company issued 2,000,000 shares of common stock for a two
(2) year consulting services agreement valued at $220,000, on an average per share price of $.11. For the nine months ended November 30, 2007, a total of $55,000 has been expensed for these consulting agreements and included in selling, general and administrative expenses.

In March 2007, the Company entered into a one year advertising and marketing consulting agreement. Under the terms of this agreement the Company is required to issue 100,000 shares of common stock each month commencing in March 2007. A total of 1,000,000 shares of common stock are to be to be issued under this agreement. During the nine months ended November 30, 2007 the Company issued 800,000 shares of common stock. These shares were valued at market on their dates of issue. The Company has recorded $74,000, on an average per share price of $.0925, for the issuance of these common shares as a consulting expense included in selling, general and administrative expenses.

In May 2007, the Company entered into an investor relations consulting agreement. This agreement has a one year term, and requires the issuance of 750,000 shares of common stock upon commencement. These shares have a market value of $57,000 on an average per share price of $.076, and have been recorded as a deferred compensation expense, netted against additional paid in capital. As services commence under this agreement, a pro-rata share of the deferred compensation is expensed. For the nine months ended November 30, 2007, a total of $33,250 has been expensed for this consulting agreement and included in selling, general and administrative expenses.

In March 2007, the Company entered into a financial consulting agreement. This agreement has a one year term, and requires the issuance of 500,000 shares of common stock. Services under this agreement are set to commence in June 2007. These shares have a market value of $40,000, and have been recorded as a deferred compensation expense, netted against additional paid in capital. For the nine months ended November 30, 2007, the Company has recorded $20,000, as a consulting expense included in selling, general and administrative expenses.

CONTINGENCIES:

The Company is subject to litigation in the normal course of business, and claims arise from time to time. Presently the Company is not aware of any pending or threatened litigation and has not provided a reserve or an accrual for any such contingencies.

The Company has a significant amount of debt and notes payable that have been recorded. In certain instances, the Company has been involved, and be involved in the future, in litigation due to non-payment of debt and notes payable.

During the year ended February 29, 2008, the Company and its subsidiary, the Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. The DOL is claiming a predecessor/successor relationship between the Company and the Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that the Math Channel currently is obligated to pay based on certain compensation for each employee. The Company has retained Counsel to investigate and seek a resolution in this matter. The accompanying financial statements do not reflect this potential liability pending Counsel's attempt to resolve this matter.

F-14

NOTE 8 - CHANGE IN AUDITORS AS REPORTED ON FORM 8-K

As previously reported on a Current Report on Form 8-K filed by the Company on October 1, 2007 with the Securities and Exchange Commission, on October 1, 2007, the Company terminated Sherb & Co., LLP ("Sherb"), as their independent registered certified public accountants. Sherb had been the Company's auditors since the year ended February 28, 2004. The Company has hired Conner & Associates, PC, to become auditors commencing for the year ended February 29, 2008. The reports of Sherb & Co., LLP, on the Company's financial statements as of and for the fiscal years ended February 28, 2007, 2006, 2005 and 2004, did not contain any adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to audit scope or accounting principles. During the fiscal years audited, and through October 1, 2007, there were no disagreements with Sherb on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to Sherb's satisfaction, would have caused Sherb to make reference to the subject matter in connection with periods; and there were no reportable events as defined in Item 304(a)(1)(iv) of Regulation S-B. During the years audited by Sherb, their audit reports contained an additional paragraph with regards to the Company continuing as a going concern. The Company's Board of Directors has chosen Conner & Associates, PC, as its new independent auditors and has authorized the termination of audit services by Sherb. The Company provided Sherb with a copy of the foregoing disclosures and requested Sherb to furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements.

NOTE 9 - PROPERTY

The Company leases an approximate 1,400 square foot facility at 1214 East 15th Street, Brooklyn, New York, which houses its telemarketing and other staff. This lease, which currently calls for monthly rent of $2,500, expired in February, 2006. The Company is currently leasing this facility on a month-to-month basis. In November 2005, the Company opened a new sales facility in Lakewood, NJ where it employs approximately six individuals. This lease, which currently calls for monthly rent of $1,300, expired in November 2007. The Company is currently leasing this facility on a month-to-month basis.

NOTE 10 - SUBSEQUENT EVENTS

In March 2008, the Company issued 800,000 shares of common stock for services, total value of $24,000. In May 2008, the Company issued 155,810 shares of common stock for services, total value of $4,675 In March 2008, the Company issued a $10,000 promissory note at 10% interest convertible at $.10. In May, 2008 the Company issued a $25,000 promissory note at 10% interest convertible at $.01.

F-15

 EXHIBIT INDEX

EXHIBIT # DESCRIPTION
--------- -----------

21.0 List of Subsidiaries.
23.1 Consent of Conner & Associates, PC, independent
 registered public accounting firm.
31.1 Certification of Barry Reichman pursuant to 18 U.S.C.
 Section 1350, as adopted to section 302 of the
 Sarbanes-Oxley Act of 2002.
32.1 Certification of Barry Reichman pursuant to 18 U.S.C.
 Section 1350, as adopted to section 906 of the
 Sarbanes-Oxley Act of 2002.

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