Forward-Looking Statements

This report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in this report, our annual report on Form 10-KSB and other filings we make from time to time with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made. We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

Overview

We incorporated in the State of Utah on June 29, 1983 under the name Teal Eye, Inc. In 1984, we merged with Terzon Corporation and changed our name to Terzon Corporation. On September 7, 1984, we changed our name to Candy Stripers Candy Corporation and engaged in the business of manufacturing and selling candy and gift items to hospital gift shops across the country. In 1986, we ceased the candy manufacturing operations and filed for Chapter 11 Bankruptcy protection. After emerging from Bankruptcy in 1993, we remained dormant until January 1998, when we changed our name to Piedmont, Inc. On May 12, 2003, we changed our name from Piedmont, Inc. to US Biodefense, Inc.

On August 7, 2006, we completed the acquisition of Emergency Disaster Systems, Inc., a California corporation incorporated on July 19, 2006. Emergency Disaster Systems was engaged in the business of disaster mitigation and emergency preparedness. We purchased a 100% interest in Emergency Disaster Systems for an aggregate of $25,000 in cash. On September 24, 2007, we distributed all of the shares of Emergency Disaster Systems stock to our stockholders on a pro rata basis and thus exited that business.

Effective January 10, 2008, we experienced a change in control as the result of a series of transactions. Effective on that date, we executed an employment agreement with Scott Gallagher pursuant to which he became our Chairman of the board of directors and Chief Executive Officer. Simultaneously, our former Chairman, David Chin, resigned as an officer and director of our Company leaving Mr. Gallagher as our sole director. Also effective as of that date, Mr. Gallagher and a company controlled by him, 221 Fund, LLC, acquired 95.6% of our common stock. As a result of these transactions Mr. Gallagher assumed control of our Company.

On April 4, 2008, we acquired 100% of the shares of Elysium Internet, Inc., a direct navigation Internet media company in exchange for stock and a note to FTS Group, Inc. Our Chairman and Chief Executive Officer, Scott Gallagher, is also the Chairman and Chief Executive Officer of FTS Group, Inc.

Results of Operations

Revenue

For the three months ended May 31, 2008, we reported total revenue of $10,388, compared to revenue of $12,500 for the same period ended May 31, 2007. For the six months ended May 31, 2008, we reported total revenue of $10,388 compared to revenue of $25,000 for the same period ended May 31, 2007. The decrease in revenue for the year over year period was due to the change of business direction experienced on April 4, 2008 and related to the fact that we generated sales for roughly half of the quarter ended May 31, 2008. During the quarter ended May 31, 2008, we acquired the assets of Elysium Internet, Inc., a direct navigation Internet Media Company. Our new management decided to change the focus of the business to the Internet media space and to begin acquiring and developing Internet domain related assets and businesses.

Expenses

Total expenses for the three months ended May 31, 2008 were $259,963 compared to expenses of $438,556, for the period ended May 31, 2007. Total expenses for the six months ended May 31, 2008 were $644,817 compared to expenses of $445,512 for the same period ended May 31, 2007. Expenses are related to the development of new web properties and web sites as well as increased sales and marketing efforts. Year over year comparisons are difficult to quantify due to the change in business direction. We expect expenses to continue to increase as we acquire additional domain names, build out new web sites and increase our sales and marketing efforts.

For the three months ended May 31, 2008, general and administrative expenses were $259,963, compared to $438,556 for the three months ended May 31, 2007. For the six months ended May 31, 2008, general and administrative expenses were $644,817, compared to $445,512 for the same period ended May 31, 2007. The increase in general and administrative expenses is related to increased costs surrounding our recent business change, management change and our spin-off of Emergency Distribution Systems.

We expect to continue to incur increased expenditures in the foreseeable future related to the development and future expansion of our new business operations. Over the next 12-month period we expect overall operating expenses to increase as we pursue business opportunities in the Internet domain and related Internet media space.

Losses

Our net loss for the three months ended May 31, 2008 was $249,575, compared to a loss of $522,784 for the same period ended May 31, 2007. Our net loss for the six months ended May 31, 2008 was $683,521, compared to a loss of $598,882 for the same period ended May 31, 2007. We expect to continue to post losses for the remainder of 2008 as we seek to increase development of our newly acquired assets. We believe that as we develop or acquire Internet domain and media related assets and businesses we can meet our goal of becoming profitable in the next 12 to 24 months. However, due to funding needs, market uncertainties and a variety of other factors that are out of our control, we cannot guarantee the accuracy of our expectations and when or if we will ever become a profitable business.

Liquidity and Capital Resources

As of May 31, 2008, we had total assets of $930,098 consisting of $20,739 in cash, $6,042 in accounts receivable, $38,195 in deferred finance charges, $169,500 in notes receivable from related parties and $695,622 in our domain portfolio. As of May 31, 2008, we had total liabilities of $2,303,648 consisting of $1,500,000 of notes payable-Affiliate, $249,284 in note due to related parties, $218,193 in loans from Affiliate, $82,075 capital lease obligation and $170,000 as a settlement reserve.

We have limited cash on hand and will require additional capital to support strategic acquisitions and to fund our current expansion plans. We may be unable to continue operations for the next 12 months if we are unable to generate revenues or obtain capital infusions by issuing equity or debt securities in exchange for cash. There can be no assurance that we will be able to secure additional funds in the future to stay in business. Our principal accountants have expressed substantial doubt about our ability to continue as a going concern because we have limited operations.

Our management anticipates the need to hire additional full or part-time employees over the next 12 months as we continue to increase our operations. At this time we believe that our operations are currently on a small scale that is manageable by our current staff. While we believe that the addition of employees is required over the next 12 months, we have retained two independent consultants and contractors to perform development related activities and market Internet related products and services we are currently developing.