WEBDIGS INC (Form: 10-12B, Received: 06/20/2008 14:46:55)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

PURSUANT TO SECTION 12(b) OR 12(g) OF THE

SECURITIES EXCHANGE ACT OF 1934

Webdigs, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		11-3820796 (I.R.S. Employer Identification No.)
3433 Broadway Street NE, Suite 501 Minneapolis, Minnesota (Address of principal executive offices)		55413 (Zip code)
	(612) 767-3854 (Registrant’s telephone number, including area code)

Securities to be registered pursuant to Section 12(g) of the Act: None.

Securities to be registered pursuant to Section 12(b) of the Act: Common stock, $0.001 par value per share.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 if the Exchange Act:

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	x

ITEM 1. DESCRIPTION OF BUSINESS

Overview of our Business and its History

WebDigs, Inc. (the “Company,” “Webdigs,” “we” or “us”) combines the power of the web, along with proprietary technology and trained real estate agents and mortgage brokers, to deliver a real estate buying and selling experience at a price that we expect to be significantly lower than that of the traditional “full-commission” real estate broker model. We believe that the full-commission real estate brokerage model has become expensive in relation to the value it offers consumers. For instance, the average home in the Twin Cities metropolitan area (Minnesota) sells for nearly $300,000 and the average brokerage commission on residential real estate transactions is 6%, producing an average broker’s commission of approximately $18,000. Often, the only value perceived by the consumer in hiring a real estate agent is obtaining a listing on the Multiple Listing Service, or “MLS.” Most of the other functions a traditional real estate agent customarily performs can be easily performed by the consumer. According to the National Association of Realtors, in 77% of the nationwide residential real estate transactions in 2005, the buyer itself found the home on the internet by using the very same MLS search capabilities that are available to traditional real estate agents.

Webdigs offers unique, innovative and proprietary home search, purchase and sale capabilities through the internet. Consumers can use our website to search the MLS in new, enjoyable and effective ways that we believe are not presently available on other real estate search, purchase and sale sites. We have built our site from the ground up, utilizing the MLS as a database and interfacing with it using our custom-built, proprietary, data-mining software. As with all internet- and software-related businesses, we expect to continue to evaluate and upgrade the interface and performance of our website and related software.

We have been operating since July 2007 in the Twin-Cities (Minneapolis-St. Paul) metropolitan area and since November 2007 in south Florida. Currently, we believe that market expansion opportunities exist in St. Louis, Dallas-Fort Worth, Las Vegas, Denver, Detroit, Boston, New York City, Atlanta, Philadelphia, Phoenix, Austin and Chicago, and in portions of Canada. Nevertheless, we currently have no firm plans or commitments to commence operations in those other markets.

Through our wholly owned subsidiary, Marquest Financial, Inc., we also offer seamlessly integrated mortgage brokerage services to our customers. Although the mortgage brokerage business is a separate operation, its close alignment with Webdigs enables us to make the administration of the entire home-buying process less time consuming than that ordinarily involved with traditional full-fee real estate and mortgage brokers.

Background and Industry Trends

We believe that the real estate market is undergoing a dramatic change not dissimilar to that previously experienced by traditional stock brokerages. Of course, the most critical aspect driving this change is the advent of the internet as a tool for searching for and researching real estate, eliminating the commitments of time and expense involved with visiting multiple properties in person. The changes in the industry are evident from National Association of Realtor statistics. According to that association, the percentage of home buyers using the internet to search for homes increased from 41% in 2001 to 80% in 2006. In addition, home sellers can use the internet to check home valuations, track the housing market and research comparable sales information. According to the California Association of Realtors, the percentage of California home sellers using the internet in the sale process increased from 9% in 2002 to 62% in 2006.

In general, the internet enables transactions to be performed far more efficiently than in the past, and facilitates automated business processes where information is electronically conveyed and stored, and documents electronically signed and reviewed. All of these developments increase efficiency and serve to reduce the amount of time it takes to process a real estate transaction. Despite increased efficiencies in processing transactions, the traditional model for real estate agents and their compensation has changed little.

In light of the foregoing and especially in the current real estate market and economy, we believe that consumers are looking for ways to cut unnecessary and unjustifiable costs from their real estate transactions. In our view, consumers have specifically begun targeting for change the traditional model under which real estate agents are compensated. In fact, statistics from the National Association of Realtors indicate that over 70% of home buyers or sellers would not re-hire their prior real estate agent. Some particular factors that we believe are contributing to consumer dissatisfaction include:

Commission fees charged by traditional real estate agents, expressed in absolute dollars, have risen in the past years . Traditional commissions vary from market to market, but generally range from 5-6% of the total sales price of the home. Although the average total commission expressed as a percentage of the property being transacted has slowly declined in recent years, the gross dollar amount of the average per-transaction commission has increased as home prices have risen.

The traditional agent incentive structure creates conflicting priorities between agents and their clients . Traditionally, real estate agents are paid commissions based on the sales price of the subject property. They do not receive a salary and they do not receive their commissions unless a transaction closes. As a result, their economic interests are not fully aligned with the consumer, as they only receive compensation when and if a property is sold. As a result, it is reasonable to assume that traditional agents place great emphasis on closing transactions and may often encourage their clients to accept offers even when it may be in a selling client’s best interest to hold out for a better price.

In sum, we believe that the advent of the internet and increased participation by both home sellers and buyers, increased efficiencies in effecting business transactions in general and real estate transactions in particular, rising commissions expressed in terms of absolute dollars, historical tensions and conflicts in the priorities of traditional real estate agents, and a presently stagnant economy and real estate market, are all conspiring to foment consumer dissatisfaction with the traditional model of residential real estate brokerage.

Our Business Model, Products and Services

General

We are a full-service real estate brokerage primarily for residential home buyers and sellers. We utilize the internet, proprietary technology and efficient business processes to deliver significant savings to our home sellers and rewards to our home buyers. Our overall goal is to deliver services that are high-tech coupled with high-touch. We believe that an emphasis on client service, when and as needed or requested by our clients, will separate us from other discount brokerage models; and our efficiency and cost savings will differentiate us from traditional brokerage models.

Through subsidiary entities, we offer all services normally associated with a typical residential real estate transaction, including mortgage and insurance brokerage services. Our mortgage brokerage services are offered through our wholly owned subsidiary Marquest Financial, Inc.

Currently, we market to potential customers principally through the internet, print advertising, television, radio, billboards, a variety of other media and word of mouth. Business with and on behalf of customers is transacted in person and through the internet. We currently have market presence (and offer(s) our services) in the Minneapolis-St. Paul metropolitan area of Minnesota, and in southwest Florida.

Services for Home Buyers

We provide home buyers with a broad range of services. Through our website at www.webdigs.com , home buyers can search our database of MLS listings, schedule home visits, make offers and monitor the offer and counteroffer process. Our licensed real estate agents, working from our offices, assist buyers by preparing offers, counteroffers and other real estate documents, negotiating purchase contracts and preparing for closings.

On our website, home buyers can view open house schedules and schedule home showings. When our buyer is ready to make a purchase offer, he or she submits the terms of the offer through our website or directly to our Agent. Our agent calls the buyer to discuss the offer and prepares the offer documents. Our agent presents the buyer’s offer to the listing agent and a series of negotiations and counteroffers often ensues. Our agents support the buyer at each step of this negotiating process, until the purchase contract is signed. Our software tracks the offer history for the property.

Normally, after a contract is accepted our licensed agents work closely with the buyer through the contingency period, when the buyer has a home inspection and arranges home financing. After a closing, we pay our clients by check within 14 days. Our payments, characterized as rebates of sales commissions, are generally two-thirds of the commission we receive from a transaction.

Our home buying clients have:

submitted to us more than 1,000 requests for us to schedule a personal visit of a property

submitted to us more than 200 requests to prepare purchase offers

had over 40 accepted offers to purchase properties, and

closed over 35 purchases of properties.

Services for Home Sellers

We provide our home sellers with Northstar MLS listings for a flat fee of $3,000 at closing. The Northstar MLS contains listings from Minnesota, portions of western Wisconsin, northern Iowa, and eastern North and South Dakota. Our listings also appear on Realtor.com and 14 other national home-listing websites.

In addition to providing home sellers with a home listing, Webdigs arranges for OBEO virtual home tours of our sellers’ homes so that the resulting virtual tour may become a part of the listing on our website. To assist with the pricing of a seller’s home, we provide a comparative market analysis to the seller and individual consultation on pricing strategies. Finally, we also provide a range of individual strategies for readying a seller’s home for sale, including appropriately staging the home. All of these sell-side services are furthered by our marketing and advertising campaign designed to drive traffic to our website.

Our home selling clients have listed over 25 homes with us since April 1, 2008.

Additional Services

We also provide services that are complementary to real estate transactions in general, such as mortgage brokerage services and services relating to title, property and casualty insurance, including homeowner’s insurance.

Our Strategy

Our long-term goal is to become the leader in comprehensive online real estate brokerage services for buyers and sellers of residential real estate in the United States and Canada. Initially, however, we are focused on achieving profitability in our current market locations (the Minneapolis-St. Paul metropolitan area and southern Florida) to demonstrate the viability of our business model. To achieve these objectives, we are pursuing the following broad strategy:

Invest in our website interface and technology . We believe our website interface and technology platform will provide us with a competitive advantage. Our goal is to make the interface more easy to use, more intuitive, more enjoyable and distinguishable from the other websites and internet tools that buyers and sellers of homes are accustomed to. We believe that continuing to update and enhance our website and technology will be a key element in increasing traffic and use of our services.

Focus on branding and creating market awareness . We have spent considerable attention to building our brand and market awareness with an advertising campaign that uses a mix of media, including the internet, television, print, radio, direct-mail, outdoor signage and various moveable signage (e.g., branded public buses in the Twin Cities metropolitan area). We expect to continue this branding effort on a selective and thoughtful basis, with a view towards achieving maximum return for our marketing and advertising dollars and efforts.

Develop an efficient transaction-processing and back-office operation . We believe that one important factor in our overall profitability, especially given our discounted commissions and flat-fee model, will be our ability to process high transaction volumes efficiently. Traditional full-fee real estate brokerages typically do not have the volume, expertise or need to have efficient and low-cost administrative operations. Accordingly, we intend to structure our administrative model to reach outside traditional real estate and utilize transaction processes and computer systems more commonly found in high-volume industries such as banking and insurance.

Attain profitability in our current markets . There are a number of internet-based real estate brokers presently attempting to capitalize on market, demographic, trade/industry and economic changes. To our knowledge, none of these businesses have reached sustained profitability needed to validate the discounted internet-based real estate brokerage model. Therefore, we believe that an initial critical strategic goal is for Webdigs to attain overall profitability across its two current markets in the Minneapolis-St. Paul metropolitan area and southern Florida. We believe that profitability—especially sustained profitability—will buoy consumer confidence in our services and lead to further successes.

If we can attain profitability, we believe that our business model, being predicated on greater efficiency and volume than the traditional model but with an emphasis on expertise and extensive client service, will facilitate our expansion into additional markets and the growth of our business. As indicated above and elsewhere in this document, however, we are primarily focused on attaining profitability in our current market locations.

Industry Segments

We currently operate in two primary operating segments: (1) online real estate brokerage, and (2) mortgage brokerage. In our online real estate brokerage business, we believe we provide customers an experience comparable to a full-service broker with a lower cost. For our customers selling homes, we offer a flat fee structure for listing services (and related services). For our customers buying homes, we offer a graduated fee structure by issuing rebates for two-thirds of our broker commissions for the related transaction. In our mortgage brokerage business, we assist customers in refinancing their existing home mortgages and in financing new home purchases.

Competition

The residential real estate market is highly fragmented, and we have numerous competitors, many of which have greater name recognition, longer operating histories, larger client bases, and significantly greater financial, technical and marketing resources than we do. We anticipate that the most critical competitive factors in our business and industry include price, service and the ease of using website tools.

Some of our competitors in the residential real estate brokerage market are traditional brokerage firms, including large national brokerage firms or franchisors, such as Prudential Financial, Inc., RE/MAX International Inc. and Realogy Corporation. Realogy owns the Century 21, Coldwell Banker and ERA franchise brands. Realogy also owns NRT Incorporated, which itself owns and operates brokerages that are typically affiliated with one of the franchise brands owned by Realogy. We compete with these traditional brokers primarily on price, service and the ease of use of our website interface. Although our commissions are generally lower than these traditional brokers, consumers may be attracted to traditional brokers because they offer or are perceived to offer higher levels of individual attention and service.

We also compete with non-traditional real estate brokerage firms including ZipRealty, Inc., iNest Realty, Inc. (a subsidiary of IAC/Interactive Corp) and Redfin Corporation, each of whom pays cash rebates to clients and relies to a large extent on the efficiencies of the internet. We believe that these competitors generally have greater financial resources than we do, and also have a longer operating history in the realm of online discount real estate brokerage. Here too, we compete with these non-traditional brokers primarily on price, service and on the ease of use of our website interface. Our commissions are generally equal to or lower than these non-traditional brokers. For example, ZipRealty and Redfin respectively rebate approximately 20% and 66% of their commission to home buyers. We generally rebate two-thirds of our commission to home buyers. iNest rebates 1% of the home sale price to buyers.

In addition, we compete with discount real estate listing services, such as ForSaleByOwner.com and BuyOwner.com. We compete with these discount service providers primarily on level of service. Although we offer traditional services to our clients at a discounted price, highly self-motivated consumers may be attracted to these discount listing services because they are cheaper than our services. For example, we currently believe that a consumer can obtain an MLS listing through ForSaleByOwner.com for anywhere from $90 per month to a $900 flat fee.

We compete or may in the future compete with various online services, including Move, Inc., Zillow.com, HouseValues, Inc., HomeGain.com, Yahoo!, Inc., Google Inc. and Trulia, Inc., that also look to attract and monetize home buyers and sellers using the internet. For instance, Move, Inc. operates the www.realtor.com website. Move, Inc. is affiliated with National Association of Realtors, the National Association of Home Builders, the Manufactured Housing Institute and hundreds of MLSs, which may provide Move, Inc. with preferred access to listing information and other competitive advantages. We compete with these service providers primarily on the basis of service and the ease of use of our website interface. We do not provide home valuation data, and some other sites (such as Realtor.com) have more listings and more data about the community. Many of these currently limited competitors and future competitors have significantly more resources than we do.

Finally, we expect to face significant competition in the home mortgage brokerage industry. Wholesale Access, an industry research and consulting firm, reports that in 2004 there were 53,000 mortgage brokerages operating in the United States with the ten largest accounting for 37.3% of total loan originations. In addition to other mortgage brokerage firms, our mortgage brokerage business competes with consumer finance companies and commercial banks. In this market, we expect to compete primarily on the basis of price and service. Although we believe we offer competitive mortgage interest rates, consumers may be attracted to other mortgage brokers or lenders because they offer or are perceived to offer a higher level of service.

Environmental Regulation

We are not subject to environmental regulations that have a material effect upon our capital expenditures or otherwise.

Other Regulation

The Company is subject to governmental regulation by federal, state and local regulatory authorities with respect to our real estate brokerage and mortgage lending operations.

Federal Regulation . Federal laws and regulations govern the real estate brokerage business. These include the Real Estate Settlement Procedures Act of 1974, or RESPA, and federal fair housing laws. RESPA requires disclosures to home buyers and sellers of settlement costs and restricts the payment of kickback or referral fees for settlement services. RESPA does not prohibit referral fees paid by one real estate broker to another broker. Federal fair housing laws generally make it illegal to discriminate against protected classes of individuals in housing or brokerage services. Other federal regulations protect the privacy rights of consumers and affect our opportunities to solicit new clients. Like real estate brokerage, mortgage brokerage is subject to RESPA and federal fair housing laws. Mortgage brokerage is also regulated by other federal laws such as the Truth in Lending Act, Regulation Z and the Equal Credit Opportunity Act. The provision of title insurance is also highly regulated.

State Regulation . Real estate licensing laws vary from state to state, but generally all individuals and entities acting as real estate brokers or salespersons must be licensed in the state in which they conduct business. A person licensed as a broker may either work independently or may work for another broker in the role of an associate broker, conducting business on behalf of the sponsoring broker. A person licensed as a salesperson must be affiliated with a broker in order to engage in licensed real estate brokerage activities. Generally, a corporation engaged in the real estate brokerage business must obtain a corporate real estate broker license. In order to obtain this license, most jurisdictions require that an officer of the corporation be licensed individually as a real estate broker in that jurisdiction. If applicable, this officer-broker is responsible for supervising the licensees and the corporation’s real estate brokerage activities within the state.

Real estate licensees, whether they are brokers, salespersons, individuals or entities, must follow the state’s real estate licensing laws and regulations. These laws and regulations generally prescribe minimum duties and obligations of these licensees to their clients and the public, as well as standards for the conduct of business, including contract and disclosure requirements, record keeping requirements, requirements for local offices, trust fund handling, agency representation, advertising regulations and fair housing requirements. Although payment of rebates or credits to real estate purchasers of the type we offer are permitted in most states, some states either do not permit these rebates or credits or do not permit them in the form that we currently provide them. In each of Minnesota and Florida (i.e., the states where we currently have operations), we have designated one of our employees as the individually licensed lead broker and we hold a corporate real estate broker’s license where required by law. In addition to state laws regarding real estate brokerage, we must comply with state laws regarding mortgage brokerage, including laws that regulate the timing and content of disclosures.

Local Regulation . Local regulations also govern the conduct of our business. Local regulations generally require additional disclosures by the parties to a real estate transaction or their agents, or the receipt of reports or certifications, often from the local governmental authority, prior to the closing or settlement of a real estate transaction.

Trade Regulation . In addition to governmental regulations, we are subject to rules and regulations established by private real estate trade organizations, including, among others, local MLSs, the National Association of Realtors, and state and local associations of realtors. The rules and regulations of the various MLSs to which we belong vary, and specify, among other things, how we as a broker member can use MLS listing data, including the use and display of such data on our website.

The United States Department of Justice recently agreed to settle claims it had brought against the National Association of Realtors relating to the ability to access MLS listings. The settlement decree addresses two areas of particular concern to non-traditional real estate brokerage firms such as Webdigs. First, the decree prohibits "selective opt-outs," which enable a broker involved in a MLS to selectively prohibit certain MLS participants from displaying that broker's MLS listings on the participants' website. Second, the decree prohibits "blanket opt-outs," which enable a broker involved in a MLS to prohibit all other MLS participants from displaying that broker's MLS listings, even though traditional real estate brokerage firms could easily display or otherwise convey these same listings in other manners. Presently, we are optimistic that the settlement will prohibit conduct that is unfair and potential harmful to our business.

The National Association of Realtors, as well as the state and local associations of realtors, also have codes of ethics, rules and regulations governing the actions of members in dealings with other members, clients and the public. We are required to comply with these codes of ethics, rules and regulations by virtue of our membership in these organizations.

Intellectual Property

Our success depends significantly upon our ability to protect our core technology and intellectual property. To accomplish this, we rely on a combination of intellectual property rights, including trade secrets, copyrights and trademarks, as well as customary contractual protections.

We presently possess the following intellectual property rights:

domain name rights to www.webdigs.com

domain name rights to www.homeequityadvisorsllc.com

domain name rights to www.creditgarage.com

domain name rights to www.marquestfin.com

certain patents in process (applications for which have not yet been filed) relating to proprietary software

trademark and trade name for “Webdigs”; and

trademark for: “The New Way to do Real Estate”

We do not have any issued patents, nor do we have any registered copyrights.

Our ability to enforce our intellectual-property rights is subject to general litigation risks. Typically, when a party seeks to enforce its intellectual-property rights, it is often subjected to claims that the intellectual-property right is invalid, or is licensed to the party against whom the claim is being asserted. We cannot be certain that our intellectual-property rights will not be infringed upon, that others will not develop products in violation of our intellectual-property rights, or that others may assert, rightly or wrongly, that our intellectual-property rights are invalid or unenforceable. In instances where we will rely on trade secrets for the protection of our confidential and proprietary business information, we cannot be certain that we would have adequate remedies for any such breach or that our trade secrets will not otherwise become discovered or independently developed by competitors. In general, defending intellectual-property rights is expensive and consumes considerable time and attention of management. Our involvement in intellectual-property litigation would likely have a materially adverse effect on our business, even if we were ultimately successful in defending our intellectual-property rights.

Employees

The Company (including its subsidiaries) currently has 19 employees, all of whom are full time.

Corporate Structure and Information

Webdigs, Inc. operates through direct and indirect subsidiaries. The principal operating subsidiary is Webdigs, LLC, a Minnesota limited liability company. WebDigs, LLC was originally organized as a limited liability company in May 2007, under the laws of the State of Minnesota. In October 2007, Webdigs, LLC engaged in a merger transaction with Select Video, Inc., a Delaware corporation. Following the merger transaction, Select Video, Inc. changed its name to Webdigs, Inc. (which we refer to throughout this document as the “Company”). Webdigs, LLC continues to exist as a wholly owned operating subsidiary of the Company.

Webdigs, LLC itself owns 100% of the ownership interests of (i) Marquest Financial, Inc., a Minnesota corporation and mortgage broker, (ii) Home Equity Advisors, LLC, a Minnesota limited liability and mortgage broker, and (iii) Credit Garage, LLC, a Minnesota limited liability company and consumer credit counseling company. We believe that these separate business lines are all complementary, and the operations of such businesses are currently reflected in our financial statements included in Item 13 below.

Our principal offices are located at 3433 Broadway Street NE, Suite 501, Minneapolis, Minnesota 55413, and our telephone number at that office is (888) 932-3447. Our website address is www.webdigs.com . The information contained on our website or that can be accessed through our website does not constitute part of this document.

Risk Factors

Investment in our common stock involves a high degree of risk and should be regarded as speculative. As a result, you should only consider an investment in Webdigs if you can reasonably afford to lose your entire investment.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of risks. Before deciding to invest in our common stock, you should carefully consider each of the following risk factors and all of the other information set forth in this document. The following risks could materially harm our business, financial condition or future results. If any such risks materialize, the value of our common stock could decline, and you could lose all or part of your investment.

We are a newly organized start-up company with little history of operations and we expect to incur losses for the foreseeable future.

We began operations in July 2007 and to date have not generated meaningful revenues. As a newly organized start-up company, we are subject to all of the risks associated with a new business enterprise. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stages of development, especially in challenging and competitive industries such as residential real estate and mortgage brokerage and particularly in light of present economic conditions.

We do not have an operating history which would provide you with information about our past or future operations. We anticipate incurring losses that will result from costs incurred in organizing our company, research and development, site development, protecting our technology, raising capital and market research. We anticipate incurring operating losses for the foreseeable future. Moreover, we may not be able to generate material revenues in the future, and it is possible that any revenues that we generate will be either insufficient for us to achieve profitability or even continue operations.

We will likely require additional financing in the future, but we are uncertain whether such financing will be available to us.

We will likely require significant additional capital to continue and expand our operations. To date, our revenues from operations have not generated cash flow sufficient to finance our operations and growth. As a result, we have periodically since our inception sought financing and we will likely continue to require additional financing in the foreseeable future. This is particularly true if actual demand for our services exceeds our current expectations (which would likely force us to incur additional expenses to meet such demands) or if our anticipated expenditures exceed our current expectations.

Additional financing could be sought from a number of sources, including but not limited to additional sales of equity or debt securities, or loans from banks, other financial institutions or our affiliates. If additional funds are raised by the issuance of our equity securities, such as through the issuance of stock, convertible securities, or the issuance and exercise of warrants, then the ownership interest of our existing stockholders will be diluted. If additional funds are raised by the issuance of debt or other equity instruments, we may become subject to certain operational limitations (e.g., negative operating covenants), and such securities may have rights senior to those of the existing holders of common stock.

If adequate funds are not available on acceptable terms, we may be unable to fund the operation or expansion of our business. As a result, we would likely be forced to dramatically alter or cease operations.

We critically rely on our executive management, and the loss of certain members of management would materially and negatively affect us.

Our success materially depends upon the efforts of our management and other key personnel, including but not limited to Robert A. Buntz, Jr., our Chief Executive Officer. If we lose the services of Mr. Buntz or any other executive managers or significant employees, our business would be materially and adversely affected. We have entered into a formal services and non-competition agreement with Mr. Buntz in the form of a Member Services Agreement between Mr. Buntz and our wholly owned operating subsidiary, Webdigs, LLC. Nevertheless, agreements do not ensure the continued availability to us of Mr. Buntz or any other manager or employee. Furthermore, we do not have “key person” life insurance insuring the life of Mr. Buntz, and we do not presently intend to purchase such insurance.

Our future success also depends upon our ability to attract and retain highly qualified management personnel and other employees. Any difficulties in obtaining, retaining and training qualified employees could have a material adverse effect on our results of operation or financial condition. The process of identifying such personnel with the combination of skills and attributes required to carry out our strategy is often lengthy. Any difficulties in obtaining and retaining qualified managers and employees could have a material adverse effect on our results of operation or financial condition.

We may be unable to obtain market acceptance of our services.

The market for residential real estate sales is well-established. However, the market for online residential real estate sales is relatively new, developing and uncertain. As is typical in the case of a new and rapidly evolving industry, demand and market acceptance for products and services are subject to tremendous uncertainty. Our future growth and financial performance will almost entirely depend upon consumers’ acceptance of our “WebDigs solution” to purchase and sell homes via the internet. In this regard, the failure of purchasers and sellers of residential property to accept online purchases and sales of homes in general, and our online services in particular, or the inability of our services to satisfy consumer expectations, would have a material adverse effect on our business, and could cause us to cease operations.

Our officers and directors, together with certain affiliates, possess controlling voting power with respect to our common stock, which could limit your influence on corporate matters.

Our officers and directors collectively possess beneficial ownership of 7,798,231 shares representing approximately 35.3% of our common stock. In addition, certain other significant stockholders identified on the beneficial ownership table in this filing (see Item 4, “Security Ownership of Certain Beneficial Owners and Management”) hold beneficial ownership of 5,154,194 shares representing an additional 23.6% of our common stock. As a result, our directors and officers, together with significant stockholders, will have the ability to greatly influence, if not outrightly control, our management and affairs through the election and removal of our directors, and all other matters requiring stockholder approval, including the future merger, consolidation or sale of all or substantially all of our assets.

This concentrated control could discourage others from initiating any potential merger, takeover or other change-of-control transaction that may otherwise be beneficial to our stockholders. Furthermore, this concentrated control will limit the practical effect of your participation in our corporate matters, through stockholder votes and otherwise. As a result, the return on your investment in our common stock through the sale of your shares or our business could be adversely affected.

We rely on third parties for key aspects of the process of providing services to our customers, and any failure or interruption in the services provided by these third parties could harm our ability to operate our business and damage our reputation.

We rely on third-party vendors, including data center and bandwidth providers. Any disruption in the network access or co-location services provided by these third-party providers or any failure of these third-party providers to handle current or higher volumes of use could significantly harm our business. Any financial or other difficulties our providers face may have negative effects on our business, the nature and extent of which we cannot predict. We exercise little or no control over all of these third-party vendors, which increases our vulnerability to problems with the services they provide.

In addition, we license technology and related databases from third parties to facilitate aspects of our data center and connectivity operations, including, among other things, internet traffic-management services. Any errors, failures, interruptions or delays experienced in connection with these third-party technologies and information services could materially and negatively impact our relationship with our customers and adversely affect our brand and our business. It is possible that such errors, failures, interruptions or delays could even expose us to liabilities to our customers or other third parties.

Interruption or failure of our information technology and communications systems would impair our ability to effectively provide our services, which could in turn damage our reputation and harm our business.

Our ability to provide our services critically depends on the continuing operation of our information technology and communications systems. Any damage to or failure of our systems would likely result in interruptions in our service to customers and the closings of real estate transactions from which we principally derive revenue. Accordingly, interruptions in our service would likely reduce our revenues and profits, and our brand could be damaged, perhaps irreparably, if people believe our system and services are unreliable.

To our knowledge, our systems are vulnerable to damage or interruption from terrorist or malicious attacks, floods, tornados, fires, power loss, telecommunications failures, computer viruses and other attempts to harm our systems, and similar types of events. Our data centers are subject to break-ins, sabotage and intentional acts of vandalism, and to other potential disruptions. Some of our systems are not fully redundant (i.e., backed up), and our disaster recovery planning cannot account for all eventualities. The occurrence of a natural disaster, or a decision to close a facility we are using without adequate notice for financial reasons or other unanticipated problems at our data centers, could result in lengthy interruptions in our service. Any unscheduled interruption in our service would likely place a burden on our entire organization and result in an immediate loss of revenue. The steps we have taken to increase the reliability and redundancy of our systems are expensive, reduce our operating margin and even then may not be successful in reducing the frequency or duration of unscheduled downtime.

We will continue to depend on intellectual property rights to protect our proprietary technologies, although we may not be able to successfully protect these rights.

We rely on our proprietary technology to enhance some of our service offerings. To protect this technology, we employ and rely on trademark, trade secret, and copyright law in addition to contractual restrictions and protections. We intend to apply for patent protection on our future technology developments to the extent we believe such protection is available and economically warranted. Nevertheless, even if we determine to file applications for patent protection in the United States or in other countries, we may not in the end receive letters patent. Furthermore, even if we do obtain the rights to an issued patent, such patent may not provide us with a competitive advantage.

While we have begun the process of preparing o file a patent application for some of our proprietary software, to date we have not yet filed any applications for patent protection. Despite our efforts to date, it is entirely independently develop technology that is similar to our technology, or offer or sell products or services that utilize our technology. The development by others of technology that is similar to our technology, or the sale of products or services that incorporate our technology, would likely harm our competitive position and have a material adverse effect on our business.

Even in cases where we may apply for patent protection and receive a patent that affords us a competitive advantage, we may have to resort to litigation to protect and enforce our patent rights, or to protect our trade secrets or know-how (or other intellectual property rights), or to determine their scope, validity, or enforceability. Enforcing or defending intellectual property rights or proprietary technology is generally extremely expensive, would likely cause a significant diversion of our resources, and ultimately may not prove successful. In addition, we may not have the financial, personnel or other resources to effectively enforce or defend our intellectual property rights, if at all.

Finally, we may determine, or a legal proceeding may result in a determination, that our intellectual property infringes the intellectual property rights of others. If our technology infringes the intellectual property rights of others, we may be subject to lawsuits and incur significant liabilities.

Our certificate of incorporation grants our Board of Directors, without any action or approval by our stockholders, the power to issue additional shares of capital stock, including the power to designate additional classes of common and preferred stock.

Our authorized capital consists of 250,000,000 shares of capital stock. Pursuant to authority granted by our certificate of incorporation and applicable state law, our Board of Directors, without any action or approval by our stockholders, may designate and issue shares in such classes or series (including other classes or series of preferred stock) as it deems appropriate and establish the rights, preferences and privileges of such shares, including dividends, liquidation and voting rights. The rights of holders of other classes or series of capital stock, including preferred stock, that may be issued could be superior to the rights of the shares of common stock offered hereby. The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights appurtenant to the shares of our common stock. Finally, any issuances of additional capital stock (common or preferred) will dilute the percentage of ownership interest of our stockholders and may dilute the per-share book value of the Company.

There is no public market for our common stock, which will be subject to significant restrictions on future transfer.

Currently, there is no public market for any of our common stock and no public market will develop as a result of the filing of this registration statement on Form 10. To date, we have not registered or qualified the offer or sale, or resale, of our common shares under federal or state securities laws and, if you buy any such shares, you may not resell them unless (i) such sale is registered or qualified under federal and state securities laws or (ii) exemptions from federal and state registration and qualification are available.

We have no obligation to register or qualify the offer, sale or resale of our shares of common stock under either federal or state law. As a result, any investor in our common stock must be prepared to bear the economic risk of investing in our common shares for an indefinite period of time.

We are required to comply with governmental regulations, which will increase our costs and could prohibit us from conducting business in certain jurisdictions.

We are subject to governmental regulation by federal, state and local regulatory authorities with respect to our real estate brokerage and mortgage lending operations. As is standard in the residential real estate brokerage industry, our real estate agents must be licensed. In some states, our proposed business activities are prohibited and we may not operate in those states. Eight states have “minimum service laws” that require realtors to provide a level of service that online real estate businesses typically do not provide. Eleven states prohibit rebates of real estate commissions. Governmental bodies may change the regulatory framework within which we intend to operate, without providing any recourse for adverse effects that the change may have on our business.

We can give no assurance that we will be able to comply with existing laws and regulations, that additional regulations that harm our business will not be adopted, or that we will continue to maintain our licenses, approvals or authorizations. Our failure to comply with applicable laws and regulations, or the adoption of new laws and regulations restricting our intended operations, could have a material adverse effect on our business and could cause us to cease operations.

The efforts of the National Association of Realtors or other organizations could prevent us from operating our business, and could lead to the imposition of significant restrictions on our operations.

The online residential real estate sales model generally, and the Webdigs business model specifically, is based on the assertion that full-commission real estate brokers and agents do not provide an acceptable level of value to consumers and that consumers are willing to engage in online home search activities via the internet if they can reduce the dollar amount of commissions paid on home sales and purchases. This model is a direct and significant threat to traditional residential real estate brokers and agents.

In response to previous and ongoing efforts by discount online real estate companies, the National Association of Realtors, which represents real estate brokerages, has issued rules that attempt to block access of online real estate companies to the Multiple Listing System (MLS) and may adopt additional rules intended to reduce or eliminate competition from online discount real estate businesses such as WebDigs. Our business is dependent upon the ability to access the MLS to be competitive. We can give no assurance that the National Association of Realtors will not be successful in preventing our access to the MLS, or that it or another organization will not be successful in adopting rules or imposing other restrictions on online real estate businesses such as WebDigs. Such adoption or imposition of regulations or restrictions would have a material adverse effect on our business.

Competition in the traditional and online residential real estate industry is intense.

The residential real estate industry is highly competitive. We believe that important competitive factors in this industry include (but are not limited to) price, service, and ease of use. We presently face competition from numerous companies engaged in traditional residential real estate brokerage services and several online residential real estate sales companies, and we expect online competition to increase in the future from existing and new competitors. Most of our current and potential competitors have substantially greater financial, marketing and technical resources than us, as well as significant operating histories. Accordingly, we may not be able to compete successfully against new or existing competitors. Furthermore, competition may reduce the prices we are able to charge for our services, thereby potentially lowering revenues and margins, which would likely have a material adverse effect on our results of operation and financial condition.

The online residential real estate industry is subject to significant and rapid technological change.

The online residential real estate industry is subject to rapid innovation and technological change, shifting customer preferences, new service introductions and competition from traditional real estate brokerage firms. Competitors in this market have frequently taken different strategic approaches and have launched substantially different products or services in order to exploit the same perceived market opportunity. Although we believe that we are offering a unique solution, there can be no assurance that our services will be competitive technologically or otherwise, or that any other services developed by us will be competitive.

Our ability to compete in this industry will depend upon, among other things, broad acceptance of our services and on our ability to continually improve current and future services we may develop to meet changing customer requirements. There can be no assurance that we will successfully identify new service or product opportunities and develop and bring to the market new and enhanced solutions in a timely manner, that such products or services will be commercially successful, that we will benefit from such development, or that products and services developed by others will not render our products and services noncompetitive or obsolete. If we are unable to penetrate markets in a timely manner in response to changing market conditions or customer requirements, or if new or enhanced products or services do not achieve a significant degree of market acceptance, our business would be materially and adversely affected.

We may be impacted by general economic conditions and economic conditions within the United States residential real estate market.

The residential real estate market has experienced vast fluctuations in recent times. In some years, real estate home sales are brisk, while in other years the residential real estate market has been stagnant. Our ability to attract home sellers and buyers to use our website will, in part, depend upon consumers’ willingness in general to buy or sell a home. When consumers sense that the overall economy is not doing well, they are less likely to make an expensive purchase such as a home. If consumer sentiment about the economy wanes, then activity in the home sales market will also likely diminish. If real estate transactions in general decline, that will likely result in a corresponding reduction in our business and our revenues.

The growth and expansion of our business could have a negative effect on our Company.

We believe that in order to be successful, we must grow and expand our operations. To grow, we believe we must expand, train and manage our employee base, particularly our marketing, management and skilled technical personnel, within a short time period. Rapid growth will also require an increase in the level of responsibility for both existing and new management and will require us to implement and improve operational, financial and management information procedures and controls. We compete with many companies in seeking to attract qualified personnel. We can give no assurance that the management skills and systems currently in place will be adequate, we will be able to effectively manage any significant growth we experience, or we will be able to hire or assimilate new personnel necessary to pursue our growth strategy. Our inability to adequately manage growth could have a material adverse effect on us.

Important Note : The foregoing risks are likely not a complete list of all risks that do or may affect the results of operation, financial condition or business prospects of Webdigs. In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. In reviewing this document, potential investors should keep in mind other possible risks that could be important. In sum, investors are urged to make their own evaluation of Webdigs.

ITEM 2. FINANCIAL INFORMATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the financial statements and related notes that appear at the end of this registration statement. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Risk Factors” elsewhere in this filing.

General

We are a web-based real estate company that offers innovative services to home buyers and sellers. We share with each buyer two-thirds of the broker commissions we receive from the seller or listing broker. This gives buyers a large financial incentive to use our services, while we earn meaningful net revenue per transaction. Our primary market targets are those home buyers who are willing and able to independently perform their initial home search on the internet. As part of our website interface and personal service, we also offer home buyers tools to manage their purchase transactions from initial search to the closing of their purchase. Currently, we also offer and generate revenue from our related buy-side services, including mortgage brokerage, title and credit counseling.

We provide our home sellers with Northstar MLS listings for a flat fee of $3,000 at closing (which averages to about 2.7% of the home sale price). The Northstar MLS contains listings from Minnesota, portions of western Wisconsin, northern Iowa, and eastern North and South Dakota. Our listings also appear on Realtor.com and 14 other national home-listing websites. In addition to providing home sellers with a home listing, Webdigs arranges for OBEO virtual home tours of our sellers’ homes so that the resulting virtual tour may become a part of the listing on our website. To assist with the pricing of a seller’s home, we provide a comparative market analysis to the seller and individual consultation on pricing strategies. Finally, we also provide a range of individual strategies for preparing a seller’s home for sale, including appropriately staging the home. All of these sell-side services are furthered by our marketing and advertising campaign designed to drive traffic to our website.

We currently offer our services in two states—Minnesota and Florida. When we represent buyers, we share with them two-thirds of our buyer broker commission, which we receive from the seller or listing broker. Since inception (May 1, 2007), our closed buy-side transaction gross revenue has exceeded $140,000, from which we have earned average gross commissions of over $7,000 per transaction. From this, on average, we have paid buyers over $3,900 per transaction and earned net revenue per transaction of approximately $3,100. The amount of the commission we receive on a transaction depends on the price of the home and percentage commission offered to the buyer’s broker by the seller or listing broker. When choosing a percentage commission to offer to buyer brokers, a seller or listing broker may consider factors such as the general state of the local housing market, how long the home has been on the market and how much the seller or listing broker values the services of buyer’s brokers. As of October 31, 2007, we had received, on average, a gross buyer’s broker commission equal to 2.7% percent of the home sale price before rebates to our customers.

Currently, our revenues consist primarily of (i) mortgage broker business commissions received and loan fees earned at the time a mortgage transaction closes; (ii) online real estate brokerage commissions received, as agents in residential real estate transactions, at the time a real estate transaction closes. We record revenues as gross revenue. Consumer rebates and third-party agent commissions paid to buyer’s brokers (in those instances where we represent the seller of a home) are treated as offsetting reductions to gross revenue. Our net revenues are principally driven by the number of transactions we close and the average net revenue per transaction. Average net revenue per transaction is a function of (1) the home purchase price and percentage commission we receive on each transaction and (2) the fee income received from mortgage loan origination.

Due to the highly publicized distress of the subprime mortgage lending industry, all banks have tightened restrictions on new borrowers. This has noticeably affected our mortgage brokerage business even though we have not engaged in any subprime mortgage lending. Nevertheless, we are currently in the process of obtaining our license as an FHA approved mortgage broker. We believe that adding this lending option will at least offset any lost transactions resulting from the nationwide subprime lending crisis. Primarily, this belief is based on our tracking of Webdigs buyers, which has indicated that a large percentage would qualify for FHA lending. We expect to have approval to engage in FHA lending by September 2008.

We have also made some recent changes to further enhance our competitive positioning. In March 2008, we consolidated the previously separate mortgage brokerage operations of Home Equity Advisors, LLC and Marquest Financial, Inc., into one operating unit. The savings resulting from this consolidation of operations is expected to help us better leverage our overhead costs. Our mortgage operations are now headquartered in our Bloomington, Minnesota offices and supported with a satellite office in Naples, Florida.

Results of Operation

The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10 registration statement.

From Inception (May 1, 2007) to October 31, 2007 :

Selected financial information about our operations by segment for the period from inception (May 1, 2007) to October 31, 2007 is as follows:

	Online Real Estate Brokerage			Retail Mortgage Brokerage			Corporate and Other			Total
Net revenues	$	6,400		$	93,454		$	-		$	99,854
Operating loss		(305,220	)		(70,267	)		(227,229	)		(602,716	)
Depreciation and amortization		11,486			3,425			1,492			16,403
Assets		412,030			187,372			157,892			757,294
Capital expenditures and website development costs		413,516			-			17,386			430,902

Consolidated gross revenues from inception (May 1, 2007) to October 31, 2007 totaled $105,675. After deducting customer rebates and third-party agent commissions, we finished our first six months (i.e., the fiscal year ended October 31, 2007) with $99,854 in net revenues. These gross revenues resulted for the closing of 21 real estate transactions during the period. The real estate brokerage commissions earned on buy-side real estate transactions represented approximately 5% of our total revenues and gross fee revenue for mortgage origination represented 95% of the consolidated gross revenues. We did not have any sell-side real estate transactions during this period.

From inception (May 1, 2007) through October 31, 2007, our total selling-related expenses were $385,955, and our total general and administrative expenses were $316,615. Selling-related expenses consist of salaries and wages of $149,703, advertising and promotion of $156,082, website maintenance of $39,333, computer supplies of $13,247, and other selling expenses of $27,590. General and administrative expenses consist of salaries and wages of $202,369, professional fees of $61,733, amortization and depreciation of $16,403, rent of $9,073 and other general and administrative expenses of $27,037.

To date, we have spent considerable attention to building our brand and market awareness with an advertising campaign that uses a mix of media, including the internet, television, print, radio, direct-mail, outdoor signage and various moveable signage (e.g., branded public buses in the Minneapolis/St. Paul metropolitan area). These efforts generally commenced in September 2007. The costs of these marketing campaigns, along with the startup expenses associated with developing our state-of-the-art website and organizing our business operation, resulted in an operating loss of $602,716 from inception (May 1, 2007) to October 31, 2007. Our accumulated deficit as of October 31, 2007 was $602,716.

Six-month period from November 1, 2007 to April 30, 2008 :

Selected financial information about our operations by segment for the six-month period ended April 30, 2008 is as follows:

	Online Real Estate Brokerage			Retail Mortgage Brokerage			Corporate and Other			Total
Net revenues	$	65,333		$	434,028		$	-		$	499,361
Operating loss		(845,088	)		(79,902	)		(262,527	)		(1,187,517	)
Interest expense		-			4,512			42			4,554
Depreciation and amortization		73,392			39,775			-			113,167
Assets		371,130			194,318			114,338			679,786
Capital Expenditures		15,938			2,278			-			18,216

Consolidated gross revenues for the six months ended April 30, 2008 totaled $565,964. After deducting customer rebates and third party agent commissions, we finished the first six months of our current fiscal year (i.e. the fiscal year ending October 31, 2008) with $499,361 in net revenues. These results represent 400% sequential growth over the preceding six-month period ended October 31, 2007. In the six-month period ending April 30, 2008, combined real estate services (the revenue we earned from representing home buyers and home sellers) represented approximately 23% of total gross revenues. Gross fee income for mortgage origination during the same six-month period decreased to 77% of total revenues as compared to 95% of total revenues during the prior six months from inception (May 1, 2007) to October 31, 2007. Based on current trends, we presently anticipate that approximately 35% of our total revenues for the fiscal year ending October 31, 2008 will be derived from real estate brokerage services, with the remaining 65% being derived from mortgage brokerage services.

Over the six-month period ended April 30, 2008, our most significant cash outlays continued to be directed to those efforts and areas that are intended to generate long-term growth for our shareholders. For the six-month period ended April 30, 2008, our total selling-related expenses were $1,345,720, and general and administrative expenses totaled $341,158. Selling expense consists of salaries and wages of $351,079; advertising and promotion of $351,086; website maintenance and IT support of $274,525; amortization of $97,580 and other selling expenses of $271,450. General and administrative expenses consist of salaries, wages and stock compensation of $109,774; contract labor of $27,747; professional fees of $105,183; rent of $61,201; depreciation of $15,586 and other administrative expenses of $21,667. This compares to total selling-related expenses of $385,955, and general and administrative expenses of $316,615, in the prior six-month period ended October 31, 2007.

For the six months ended April 30, 2008, we closed 21 real estate service transactions resulting in net revenues (after deducting customer rebates) of $65,333. Mortgage origination revenues were $434,028 for the same six-month period. As a sign of progress, in May 2008 we closed 13 real estate transactions, representing a new monthly record, and more than twice the total of the next highest month since inception in May 2007. For the six-month period from November 1, 2007 to April 30, 2008, primarily as a result of continued brand building and investment in enhancing the experience our customers have with our state-of-the-art real estate website, we incurred a net loss of $1,192,071.

Assets and Employees; Research and Development

Our primary assets are cash and intellectual-property rights, which are the foundation for our services. At this time, we do not anticipate purchasing or selling any significant equipment or other assets in the near term. Neither do we anticipate any imminent or significant changes in the number of our employees. We may, however, increase the number of independent contractor real estate agents upon whom we rely to provide personal services in the event that we expand into other markets or our business in our current markets significantly increases.

We expect that we will invest time, effort and expense in the continued refinement of our website and user interface. Currently, we expect to spend approximately $400,000 in such improvement activities over the course of fiscal 2008.

Liquidity and Capital Resources; Anticipated Financing Needs

From inception (May 1, 2007) to October 31, 2007, we incurred net operating losses aggregating $602,716 to fund technology development, marketing and advertising, business development and other activities as discussed above. We funded these operations primarily through cash of $485,500 received from sales of membership interests in Webdigs, LLC prior to the merger transaction on October 24, 2007, and $75,000 received from common stock sales subsequent to the merger transaction.

We used $56,881 of cash in operating from inception (May 1, 2007) to October 31, 2007. Cash used in operations included a net loss of $602,716, which was offset by $195,373 of non-cash expenses for depreciation, amortization and share-based compensation. Changes in operating assets and liabilities also offsetting the loss were increases in accounts payable of $318,355 and accrued expenses of $34,656, respectively. Cash flows used in investing activities included payments for website development of $413,516. Cash flows from financing activities included issuance of common stock for $553,937 and an increase in due to officer of $17,601. The due to officer amount was for business expenses paid on behalf of the Company which were reimbersed to the officer during the six months ended April 30, 2008.

We had $113,280 of cash and cash equivalents as of October 31, 2007. From October 31, 2007 through January 31, 2008 (the end of our first fiscal quarter), we raised $269,000 through the sale of our common stock in a private placement offering. From February 1, 2008 through April 30, 2008 (the end of our second fiscal quarter), we raised an additional $557,500 through the sale of our common stock as part of the same private placement offering. We also raised $15,000 through the sale of our common stock subsequent to April 30, 2008. Therefore, since the end of fiscal 2007 through June 17, 2008, we raised an aggregate of $841,500 in gross proceeds from the sale of our common stock. In consideration of such proceeds, we issued a total of 3,366,000 shares of common stock. We had $114,338 of cash and cash equivalents as of April 30, 2008.

We used $785,263 of cash in operating activities during the six months ended April 30, 2008. Cash used in operations included a net loss of $1,192,071, which included $196,887 of non-cash expenses for depreciation, amortization, loss on disposal of fixed assets and share-based compensation. Changes in operating assets and liabilities contributing to the use of use of cash primarily included decreases in accrued expenses and commissions and fees of $18,356 and $23,258, respectively, while an increase in accounts payable of $244,929 partially mitigated the use of cash from operations. Cash flows used in investing activities included payments for computer equipment of $18,216. Cash flows from financing activities included issuance of common stock for $826,500 and a decrease in due to officer of $17,601.

For the issuances of common stock in the private placement offering, we relied on the exemption from federal registration under Section 4(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder. We relied on this exemption and the safe harbor thereunder based on the fact that there are and will continue to be a limited number of investors, all of whom will be “accredited investors” under Rule 501 of the Securities Act of 1933 and all of whom have and will have knowledge and experience in financial and business matters such that the investors were capable of evaluating the risks of the investment. The securities offered and sold in these transactions were not (and, with respect to the aforementioned anticipated future sales, will not be) registered under the Securities Act of 1933 and therefore may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The disclosure about the private placement offering contained in this information statement is not an offer to sell or a solicitation of an offer to buy any securities of the Company.

Over the course of the next several months, we expect to continue seeking additional financing. The amount of financing we seek may be significant, and may range from $5 million to $6 million. Assuming that we successfully obtain additional financing, in such amount, over the next several months, our management believes that such financing will be sufficient to finance our operations through October 31, 2009. Thereafter, our management believes that we may require additional capital to continue operations in our present markets or expand into other markets. If, however, we are unable to obtain any of such additional financing, we believe we will have cash sufficient to finance our operations through August 31, 2008.

Additional financing may not be available on terms favorable to us, especially in light of current debt and equity markets. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of common stock, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other types of (typically preferred) equity instruments, then we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of our common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance products or respond to competitive pressures.

During the period from inception (May 1, 2007) to October 31, 2007 and from November 1, 2007 to April 30, 2008, we awarded certain key employees shares of restricted common stock as a form of compensation. The total value of all restricted stock awarded (utilizing the principles of SFAS 123R, discussed below under the caption “Critical Accounting Policies”) was $463,360. Using the vesting schedule applicable to each individual grant of restricted stock, compensation expense recorded for the period from inception (May 1, 2007) to October 31, 2007 and from November 1, 2007 to April 30, 2008, totaled $93,970 and $83,453, respectively. During the period ended October 31, 2007, 3,992 shares of restricted stock were forfeited. The remaining unvested shares awarded, having a total valuation at grant date of $281,945, have been recorded as unearned compensation as of April 30, 2008. As these remaining shares vest, they will be accounted for as additional compensation expense.

Effective as of May 7, 2008, we granted options to three non-employee directors as a means of inducing them to join the Board of Directors, giving each of them the right to purchase up to 200,000 shares of common stock at the per-share price of $0.25. These options may be exercised, to the extent vested, at any time prior to October 24, 2012. Rights to purchase one-half of the shares issuable under the options vested immediately upon issuance, with the remaining rights scheduled to vest in two equal annual installments on each of October 24, 2008 and 2009. Under SFAS No. 123R, for stock-based awards granted after January 1, 2006, we recognize compensation expense based on estimated grant date fair value using the Black-Scholes option-pricing model. Black-Scholes is used to determine the fair value for options issued to both employees and non-employees. The estimated fair value of these stock option grants was $107,000, and will be recorded as stock compensation expense over the vesting period starting on May 7, 2008. We expect to take a third quarter charge of $53,695 as director’s compensation expense for 300,000 vested options awarded to our outside directors.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. We evaluate these estimates on an on-going basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We consider the following accounting policies to be those most important to the portrayal of our results of operations and financial condition:

Revenue Recognition . Our online real estate brokerage business recognizes revenue at the closing of a real estate transaction. Commissions and rebates due to third party real estate agents or consumers are accrued at the time of closing and treated as an offset to gross revenues. Our mortgage brokerage business recognizes commissions received and loan fees earned at the time a mortgage loan closes.

Income Taxes . Subsequent to the reverse merger on October 24, 2007, we account for income taxes in accordance with SFAS No. 109, as clarified by FIN No. 48, which requires an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the consolidated financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

FIN No. 48 requires the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. See Note 9 to the consolidated financial statements included elsewhere in the Form 10 for additional information regarding income taxes.

Share-Based Compensation . The Company accounts for stock incentive plans under the recognition and measurement provisions of FASB Statement No. 123(R), Share-Based Payments , which requires the measurement and recognition of compensation expense for all stock-based awards based on estimated fair values, net of estimated forfeitures. Share-based compensation expense recognized for the period from inception (May 1, 2007) to October 31, 2007 under Statement 123(R) includes compensation cost for restricted awards.

Intangible Assets. We have two types of intangible assets:

Website Development

The primary interface with the customer in our online real estate broker operation is the Webdigs.com website. Certain costs incurred in development of this website have been capitalized according to provision in Emerging Issues Task Force Issue No. 00-2, Accounting for Website Development Costs (EITF 00-2), and AICPA Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use . These capitalized costs totaled $413,516 from inception (May 1, 2007) to October 31, 2007. Amortization is on a straight-line based over the estimated useful life of the website of 3 years.

Customer Lists

As part of our acquisitions of HEA and Marquest (See Note 2 to our financial statements for the period from date of inception (May 1, 2007) to October 31, 2007 included elsewhere in this Form 10), we recorded the fair value of pre-existing customer relationships of these two entities. The fair value estimated for each customer list was $27,404 for HEA and $130,859 for Marquest, for a total of $158,263. The fair values of these relationships will be amortized on a straight-line basis (which approximates the anticipated revenue stream) over their estimated useful lives based on an estimated revenue period ranging from 2 to 3 years.

Seasonality of Business

The residential real estate market has traditionally experienced seasonality, with a peak in the spring and summer seasons and a decrease in activity during the fall and winter seasons. We expect revenues in each quarter to be significantly affected by activity during the prior quarter, given the time lag between contract execution and closing.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3. PROPERTIES

We lease approximately 3,000 square feet of space at 3433 Broadway Street NE, Suite 501, Minneapolis, Minnesota 55413, on a month-to-month basis and at a per-month cost of approximately $3,500.

Marquest Financial, Inc., our wholly owned subsidiary that offers mortgage brokerage services, also leases two office properties. The first property, an office suite of approximately 3,000 square feet located at 3800 American Blvd W, Suite 1400, Bloomington, Minnesota 55431, houses Marquest Financial’s main sales and administrative offices. The lease for this property has a term that expires in August 2009. Marquest Financial leases the property for approximately $5,550 per month. The second property is approximately 1,500 square feet of office space located at 5621 Strand Blvd. Naples, Florida. Maquest Financial leases this space, which is used as its Florida sales office, at a per-month cost of approximately $1,774. The lease for this property expires in May 2009.

ITEM 4.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

To our knowledge, the table below identifies the beneficial ownership of:

each Company director

each executive officer of the Company

all executive officers and directors of the Company as a group, and

each other beneficial holder (or group of holders) of five percent or more of our common stock

Each person or entity included in the table below has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, except as indicated by footnote and subject to community property laws where applicable. Percentage ownership is based on 21,808,840 shares of common stock outstanding as of June 12, 2008.

Name	Shares Beneficially Owned ⁽¹⁾		Percentage of Outstanding Shares
Robert A. Buntz, Jr. ⁽²⁾		4,545,710		20.8	%
Thomas Meckey ⁽³⁾		1,304,598		5.9	%
Robert L. Lumpkins ⁽⁴⁾		403,843		1.8	%
Steven Sjoblad ⁽⁵⁾		100,000		*
Christopher Larson ⁽⁶⁾		100,000		*
Edward Wicker ⁽⁷⁾		1,344,598		6.2	%
All current executive officers and directors as a group (six persons) ⁽⁸⁾		7,798,749		35.3	%
Jesse Olson ⁽⁹⁾		1,304,598		5.9	%
Larry Olson ⁽⁹⁾		1,304,598		5.9	%
Ed Graca ⁽⁹⁾		1,304,598		5.9	%
Amit Sela 13564 Westernesse Road Minnetonka, MN 55305		1,240,400		5.6	%

* Less than 1%

(1)

Beneficial ownership is determined in accordance with the applicable rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants (or similar purchase rights) held by that person that are presently exercisable, or will become exercisable within 60 days hereafter, are deemed outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Unless otherwise indicated, the business address of each of the following persons is 3433 Broadway Street NE, Suite 501, Minneapolis, Minnesota 55413.

(2)	Mr. Buntz is a director of the Company and the Company’s Chief Executive Officer and President.

(3)

Mr. Meckey is a director of the Company, and also serves as Vice President of Operations. 1,030,400 shares held by Mr. Meckey are contractually restricted pursuant to the Company’s Restricted Stock Plan and the terms and conditions of a Member Services Agreement by and between Mr. Meckey and Webdigs, LLC, dated as of October 22, 2007. Restrictions lapse thereunder based on certain service-based conditions set forth in the Member Services Agreement. Of the restricted shares, 386,400 shares are eligible to vest on July 15, 2008 and the remaining shares are eligible to vest on July 15, 2009.

(4)	Mr. Lumpkins is a non-employee director of the Company. Of those shares set forth on the table, 100,000 shares are issuable upon exercise of vested options to purchase common stock. In addition, 203,843 outstanding common shares are held jointly with Mr. Lumpkins’ spouse.

(5)	Mr. Sjoblad is a non-employee director of the Company. Of those shares set forth on the table, 100,000 shares are issuable upon exercise of vested options to purchase common stock.

(6)	Mr. Larson is a non-employee director of the Company. All 100,000 shares are issuable upon exercise of vested options to purchase common stock.

(7)

Mr. Wicker is the Company’s Chief Financial Officer. 1,030,400 shares held by Mr. Wicker are contractually restricted pursuant to the Company’s Restricted Stock Plan and the terms and conditions of a Member Services Agreement by and between Mr. Wicker and Webdigs, LLC, dated as of October 22, 2007. Restrictions lapse thereunder based on certain service-based conditions set forth in the Member Services Agreement. Of the restricted shares, 386,400 shares are eligible to vest on July 15, 2008 and the remaining shares are eligible to vest on July 15, 2009.

(8)	Includes Messrs. Buntz, Meckey, Lumpkins, Sjoblad, Larson and Wicker.

(9)

1,030,400 shares held by the stockholder are contractually restricted pursuant to the Company’s Restricted Stock Plan and the terms and conditions of a Member Services Agreement by and between the stockholder and Webdigs, LLC. Restrictions lapse thereunder based on certain service-based conditions set forth in the Member Services Agreement. Of the restricted shares, 386,400 shares are eligible to vest on July 15, 2008 and the remaining shares are eligible to vest on July 15, 2009.

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS

Directors, Executive Officers and Other Key Employees

Our Board of Directors and management team includes:

Name	Age	Position(s)	Independent Director
Robert A. Buntz, Jr.	56	Director (Chairman), Chief Executive Officer and President	No
Robert L. Lumpkins	64	Director	Yes
Steven Sjoblad	58	Director	Yes
Christopher Larson	36	Director	Yes
Thomas Meckey	32	Director, Vice President of Operations	No
Edward Wicker	48	Chief Financial Officer	N/A

Biographies for the members of our Board of Directors and our management team are set forth below:

Robert A. Buntz, Jr. , has served as a director of the Company, including Webdigs, LLC, since inception in April 2007. Mr. Buntz has been an entrepreneur for more than 30 years and a real estate broker for more than 25. In 1981, Mr. Buntz developed the award-winning Bluefin Bay on Lake Superior, Tofte, Minnesota, and operated that resort until 2007. Among other achievements, Mr. Buntz’s development company donated the land, time and funding to help create the North Shore Commercial Fishing Museum, and Mr. Buntz created and developed one of the first rural affordable housing projects, Tofte Homestead. From 1984 through 2006, and while he was simultaneously operating Bluefin Bay, Mr. Buntz was the owner and operator of Tofte Land Co., Inc., a real estate holding and brokerage firm. He now has more than 25 years of hospitality experience as an owner-operator of destination properties.

Mr. Buntz has served on the board of directors of the Explore Minnesota Tourism Council and the (Minnesota) Governor’s Tourism Advisory Committee for more than 15 years. Currently, Mr. Buntz is a board member and past-chair of the board of the American Museum of Asmat Art. Mr. Buntz received the (Minnesota) Governor’s Entrepreneurship Award from Governor Rudy Perpich and the Outstanding Individual in Tourism Award from Governor Jesse Ventura. He is a graduate of Grinnell College.

Robert L. Lumpkins was appointed as a director of the Company on October 25, 2007. Mr. Lumpkins is currently the Chairman of the Board of The Mosaic Company, a NYSE-listed crop nutrition business with revenues of $7 billion. Mr. Lumpkins retired in the fall of 2006 as an executive and board member of Cargill Incorporated, a global commodity trading and processing company with over $70 billion in revenues and 150,000 employees. He served in a variety of financial and general management assignments during his 38 years with Cargill, including Chief Financial Officer (1989-2005) and Vice Chairman (1995-2006). He also serves as a director of Ecolab Inc., and as the chairman of Black River Asset Management LLC (a $10 billion fixed-income-oriented asset management company). He is a trustee of Howard University in Washington, D.C. Mr. Lumpkins is a graduate of the University of Notre Dame and the Stanford Graduate School of Business.

Steven Sjoblad was appointed as a director of the Company on October 25, 2007. Steve Sjoblad has more than 35 years of corporate strategy and marketing expertise. Mr. Sjoblad spent 19 years building Fallon McElligott, one of the world’s preeminent advertising agencies, where he guided global strategy and marketing programs for industry leaders and has worked in virtually every consumer and business-to-business category (1981-1999). From 2001 through 2003, Mr. Sjoblad ran Global Consumer Services for Fair Isaac Corporation (NYSE: FIC), originated the myFICO.com business and ran the Fair Isaac Marketing Services business, transforming it into a “precision marketing unit.” Additionally, he was a member of the Fair Isaac Executive Committee and held the position of Chief Marketing Officer. From 2003 through 2006, Mr. Sjoblad worked as an independent business consultant. Since 2006, Mr. Sjoblad has served as the Chairman and Chief Executive Officer of Captira Analytical, a software, data and analytics firm serving the criminal justice vertical market based in Albany, NY. Mr. Sjoblad is also Chairman of uBid.com (UBHI.OB), an online retailer, a board member of Schwan’s Foods, a $3.6 billion international food concern, and a founder and board member of Fluxion, LLC, a marketing automation concern.

Christopher Larson was appointed as a director of the Company on October 25, 2007. Mr. Larson is a co-founder and has served as Chief Financial Officer of Cash Systems Inc. (AMEX: CKN), a provider of cash access service to the casino industry, from June 1999 to January 2005. In January 2005, Mr. Larson was promoted to Chief Operating Officer of Cash Systems. Mr. Larson has served as a director of Cash Systems since that company went public in October 2001. Mr. Larson is presently also the Chief Executive Officer and President, and director of URON Inc. Mr. Larson is a certified public accountant.

Thomas Meckey was appointed as a director of the Company on October 24, 2007. Mr. Meckey also currently serves as the Vice President of Operations and was a co-founder of Webdigs, LLC. Mr. Meckey has five years of experience in residential real estate and finance. Mr. Meckey’s real estate and finance career includes his founding of Home Equity Advisors, LLC in 2006, serving as a realtor with Re/Max Results from 2004 to 2007, and serving as a loan officer with Wealth Spring Mortgage from 2004 to 2006. Prior to that, Mr. Meckey worked as a software consultant to Ben Nevis, Inc. (2002-2003), an account executive at Adytum Software Co. (2000-2002), and as a consultant with JD Edwards ERP Business Unit, which is a division of Ernst & Young, LLP (1998-2000). Mr. Meckey is a graduate of the University of Pittsburgh and holds a degree in Information Sciences.

Edward Wicker has served as the Chief Financial Officer of the Company, including Webdigs, LLC, since September 2007. Mr. Wicker provides a combination of large and small company finance executive experience. Most recently, Mr. Wicker has served as CFO of several start-up companies in the Twin Cities, including Tailor Building Systems (2005-2007), Michelina’s Inc. (2002), and Wireless Ronin Technologies (2001-2002). Mr. Wicker also founded KMR Designs in 2002, which was a niche supplier of ultra high performance custom winter accessories supplying people who worked and played outdoors for long periods at below-zero temperatures. Prior to these positions, Mr. Wicker had a long career at personal care products maker Coty, Inc., where he served in several senior finance executive positions. His final ten years with Coty were spent in Europe, where he served as VP of Finance at Spanish and UK subsidiaries, as well as controller of Coty’s global operations division. Prior to Europe, Mr. Wicker served as finance director of Coty’s then sister company—Reckitt Benckiser US Consumer Products Division. Prior to working at Reckitt, he began his career at Ecolab, where he worked in internal audit and financial analyst positions. Mr. Wicker holds undergraduate and MBA degrees from the University of Minnesota’s Carlson school of management. Mr. Wicker is a CPA.

ITEM 6. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the cash and non-cash compensation for each of the last two fiscal years awarded to or earned by (i) our Chief Executive Officer during the period from inception (May 1, 2007) to October 31, 2007; and (ii) our four most highly-compensated executive officers (other than the Chief Executive Officer) who served in such capacity at October 31, 2007 and who received in excess of $100,000 in salary and bonus during the fiscal year ended October 31, 2007 (collectively, the “named executive officers”).

Name and Principal Position	Year		Salary ($)			Bonus ($)		Stock Awards ($)			All Other Compensation ($)		Total ($)
Robert A. Buntz, Jr., Chief Executive Officer and President ⁽¹⁾		2007	$	100,000	⁽²⁾	$	0	$	0		$	0	$	100,000
Daniel J. Shrader, Chief Executive Officer ⁽³⁾		2007		0			0		90,000	⁽⁴⁾		0		90,000

(1)	Mr. Buntz become our President and Chief Executive Officer on October 24, 2007. Mr. Buntz is also the Chairman of our Board of Directors.

(2)	$ 85,000 of this amount was paid in the form of stock in lieu of cash compensation.

(3)	Mr. Shrader was the Chief Executive Officer of Select Video, Inc. prior to the October 24, 2007 merger transaction with Webdigs, LLC.

(4)	Amounts listed reflects the estimated fair value of a stock award of 900,000 shares of Select Video based on contemporaneous sales of common stock of Select Video prior to the October 24, 2007 merger transaction with Webdigs, LLC.

Employment Agreements with Executives and Key Personnel

We do not currently have an employment agreement with Mr. Buntz. Nevertheless, our wholly owned operating subsidiary, Webdigs, LLC, is party to a Members Services Agreement with Mr. Buntz. In that agreement, Mr. Buntz has agreed not to compete against Webdigs for a period of one year following any termination of service, regardless of the reason for such termination, and has also agreed to customary confidentiality and invention-assignment provisions. The Member Services Agreement with Mr. Buntz provides that Mr. Buntz be paid an annual salary of $120,000 for the year ending October 31, 2008.

We have also entered into Member Services Agreements with Mr. Edward Wicker, our Chief Financial Officer, and Mr. Thomas Meckey, our Vice President of Operations, through our wholly owned operating subsidiary, Webdigs, LLC. In the Member Services Agreements with Messrs. Wicker and Meckey, we have agreed to pay each of them an annual salary of $60,000, and each of Messrs. Wicker and Meckey have agreed not to compete against Webdigs for a period of one year following any termination of service, regardless of the reason for such termination, and have also agreed to customary confidentiality and invention-assignment provisions.

Outstanding Equity Awards at Fiscal Year End

As of October 31, 2007, we had no options, warrants, unvested stock awards or equity incentive plan awards issued and outstanding in the name of any of the named executive officers.

Director Compensation

Our non-employee directors have elected to forego any compensation for participating in Board of Directors and committee meetings telephonically until such time as we become profitable over the course of an entire fiscal year, at which time the Board of Directors may reconsider the structure of its director compensation. In general, director compensation will be subject to review and adjustment from time to time at the discretion of our Board of Directors.

In May 2008, we granted options to three non-employee directors in connection with inducing them to join, and as a means of inducing them to remain on, our Board of Directors. The options we granted give each of them the right to purchase up to 200,000 shares of common stock at the per-share price of $0.25. These options may be exercised, to the extent vested, at any time prior to October 24, 2012. Rights to purchase one-half of the shares issuable under the options vested immediately upon issuance, with the remaining rights vesting in two equal annual installments on each of October 24, 2008 and 2009.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; DIRECTOR INDEPENDENCE

Transactions with Related Persons

None.

Director Independence

The Board of Directors is comprised of a majority of “independent” directors as defined in Rule 4200(a)(15) of the NASDAQ Stock Market. The independent directors are identified by name in the chart that appears in the “Management and Board of Directors” section of this filing.

Our Board of Directors has an Audit Committee consisting solely of members who are independent as defined in Rule 4200(a)(15) of the Marketplace Rules of the NASDAQ Stock Market. In addition, each member of the Audit Committee is independent as defined in Exchange Act Rule 10A-3, a non-employee director under the rules of the SEC, and an outside director under the rules of the Internal Revenue Service. The Board of Directors does not have a standing nominating or compensation committee (or other committees differently designed and performing similar functions.) Instead, our entire Board of Directors performs the functions traditionally discharged by nominating and compensation committees.

ITEM 8. LEGAL PROCEEDINGS

We are not currently a party to any material litigation and are not aware of any threatened litigation that would have a material effect on our business.

ITEM 9.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is not, and has never been publicly traded. As such, there is currently no market for our common stock. We anticipate that one or more registered broker-dealers may apply to have our common stock listed on the OTC Bulletin Board following the effective date of this registration statement. Nevertheless, the process of applying for quotation on the OTC Bulletin Board is undertaken and controlled by one or more market-makers (broker-dealers who agree to make a market for our common stock) and is largely outside of our control. Accordingly, we cannot be certain that our common stock will be listed on the OTC Bulletin Board or that, even if listed at some time in the future, an active market will ever develop.

As of the date of this filing, we had outstanding options for the purchase of up to 600,000 shares of our common stock, but no other outstanding securities convertible into or excercisable for any shares of our common (or other capital) stock. As of the date of this filing, there are approximately 264,077 shares of common stock that may potentially be sold without restriction and limitation. The Company has not, as of the date of this filing, agreed to register the resale of any common shares by securityholders.

Holders

As of the date of this filing, we had approximately 200 holders of record of our common stock.

Dividends

We have not paid any dividends on our common stock and do not anticipate paying any such dividends in the near future. Instead, we intend to use any earnings for future acquisitions and expanding our business. Nevertheless, at this time there are not any restrictions on our ability to pay dividends on our common stock.

Securities Authorized for Issuance Under Equity Compensation Plans

On October 31, 2007, we had no equity compensation plans (including individual compensation arrangements) outstanding. Nevertheless, we granted options to three non-employee directors in May 2008. The options we granted give each of them the right to purchase up to 200,000 shares of common stock at the per-share price of $0.25. These options may be exercised, to the extent vested, at any time prior to October 24, 2012. Rights to purchase one-half of the shares issuable under the options vested immediately upon issuance, with the remaining rights vesting in two equal annual installments on each of October 24, 2008 and 2009.

Presently, we are not required by applicable state law or the listing standards of any self-regulatory agency (e.g., the OTC Bulletin Board, NASD, AMEX or NYSE) to obtain the approval of our securityholders prior to issuing any such compensatory options, warrants or other rights to purchase our securities.

Potential Anti-Takeover Effects

Certain provisions set forth in our Amended and Restated Certificate of Incorporation, as amended, in our bylaws and in Delaware law, which are summarized below, may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders.

Blank Check Preferred Stock . Our Certificate of Incorporation and bylaws contain provisions that permit us to issue, without any further vote or action by the stockholders, up to 125,000,000 shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting powers, if any, of the shares of the series, and the preferences and relative, participating, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such series.

Special Meetings of Stockholders . Our bylaws provide that special meetings of stockholders may be called only by the chairman or by our board. Stockholders are not permitted to call a special meeting of stockholders, to require that the board call such a special meeting, or to require that our board request the calling of a special meeting of stockholders.

While the foregoing provisions of our certificate of incorporation, bylaws and Delaware law may have an anti-takeover effect, these provisions are intended to enhance the likelihood of continuity and stability in the composition of the Board of Directors and in the policies formulated by the Board of Directors and to discourage certain types of transactions that may involve an actual or threatened change of control. In that regard, these provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management.

Delaware Takeover Statute

In general, Section 203 of the Delaware General Corporation Law prohibits a Delaware corporation that is a public company from engaging in any “business combination” (as defined below) with any “interested stockholder” (defined generally as an entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with such entity or person) for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the Board of Directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the Delaware General Corporation Law defines “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of ten percent or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

Transfer Agent and Registrar

Our transfer agent is Florida Atlantic Stock Transfer, Inc., located at 7130 Nob Hill Road, Tamarac, Florida 33321. The transfer agent’s telephone number is (954) 726-4954. The transfer agent is registered under the Securities and Exchange Act of 1934.

Listing

Our common stock is currently not listed on any stock exchange or consolidated quotation or reporting system.

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES

Since October 31, 2007 (the Company’s most recent fiscal year):

The Company has sold and issued an aggregate of 3,366,000 shares of common stock in a private placement offering exempt from registration under Rule 506 of the Securities Act of 1933. The shares were sold to a total of 28 accredited investors in Minnesota (and related offers and sales were exempt from the registration requirements of the Minnesota Securities Act) at the per share price of $0.25, resulting in aggregate gross proceeds to the Company of $841,500. In such private placement offering, the Company is offering a total of up to 4,000,000 common shares at a price of $0.25 per share. All of the certificates representing shares sold in the offering contain a restrictive legend indicating that the transferability of the shares is restricted under the Securities Act of 1933.

From October 31, 2005 to October 31, 2007:

Select Video issued to one person a total of 2,500 common shares for management-related consulting services in March 2006.

Select Video issued to one person an aggregate of 13,750 common shares for management-related consulting services from April to June 2006.

Select Video issued 2,700,000 common shares for management services to three officers and directors in August 2007.

Select Video issued an aggregate of 650,000 common shares in August and September 2007 in a private placement offering exempt from registration under Rule 506 of the Securities Act of 1933. The shares were sold to a total of nine accredited investors in Minnesota (and related offers and sales were exempt from the registration requirements of the Minnesota Securities Act) at the per-share price of $0.10, resulting in aggregate gross proceeds to the Company of $65,000. None of the shares issued in the private placement were registered under the Securities Act of 1933, and all of the certificates representing shares sold in the offering contain a restrictive legend indicating that the transferability of the shares is restricted under the Securities Act of 1933.

Select Video issued to one person 300,000 common shares for real estate-related consulting services in October 2007.

Select Video issued an aggregate of 15,818,251 common shares to a total of 19 persons and entities in the merger transaction with Webdigs, LLC on October 24, 2007. None of the shares issued in the merger transaction were registered under the Securities Act of 1933, and all of the certificates representing shares issued in the merger transaction contain a restrictive legend indicating that the transferability of the shares is restricted under the Securities Act of 1933.

Webdigs issued an aggregate of 300,000 common shares on October 25, 2007 and October 27, 2007 in a private placement offering exempt from registration under Rule 506 of the Securities Act of 1933. The shares were sold to a total of two accredited investors in Minnesota (and related offers and sales were exempt from the registration requirements of the Minnesota Securities Act) at the per-share price of $0.25, resulting in aggregate gross proceeds to the Company of $75,000. None of the shares issued in the private placement were registered under the Securities Act of 1933, and all of the certificates representing shares sold in the offering contain a restrictive legend indicating that the transferability of the shares is restricted under the Securities Act of 1933.

Except as noted above, the sales of the securities identified above were made in transactions that did not involve a public offering of securities and, accordingly, we believe that these transactions were exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof and rules promulgated thereunder. Each of the above-referenced cash investors in our common stock represented to us in connection with their investment that they were “accredited investors” (as defined by Rule 501 under the Securities Act of 1933) and were acquiring the shares for investment and not distribution, that they could bear the risks of the investment and could hold the securities for an indefinite period of time. The investors received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration or an available exemption from such registration. All of the foregoing securities were deemed restricted securities for purposes of the Securities Act when issued.

ITEM 11. DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED

The following is a description of our capital stock and the material provisions of our certificate of incorporation, bylaws and certain agreements to which we and our stockholders are parties. The following is only a summary and is qualified by applicable law and by the provisions of our certificate of incorporation, bylaws and such other agreements, copies of which are available as set forth under “Where You Can Find More Information.”

General

As of June 12, 2008, 21,808,840 shares of our common stock were issued and outstanding, and there were 200 holders of record of our common stock. As of the same date, our authorized capital consisted of 250,000,000 shares of capital stock, par value $0.001 per share, of which 125,000,000 shares are designated for issuance as common stock and 125,000,000 shares are designated for issuance as preferred stock. As of June 12, 2008, we also had outstanding options for the purchase of up to an aggregate of 600,000 shares of our common stock.

Common Stock

Voting . The holders of our common stock are entitled to one vote for each outstanding share of common stock owned by that stockholder on every matter properly submitted to the stockholders for their vote. Stockholders are not entitled to vote cumulatively for the election of directors.

Dividend Rights . Subject to the dividend rights of the holders of any outstanding series of preferred stock, holders of our common stock are entitled to receive ratably such dividends and other distributions of cash or any other right or property as may be declared by our Board of Directors out of our assets or funds legally available for such dividends or distributions.

Liquidation Rights . In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our common stock would be entitled to share ratably in our assets that are legally available for distribution to stockholders after payment of liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution or liquidation preferences. In either such case, we must pay the applicable distribution to the holders of our preferred stock before we may pay distributions to the holders of our common stock.

Conversion, Redemption and Preemptive Rights . Holders of our common stock have no conversion, redemption, preemptive, subscription or similar rights.

Preferred Stock

Under our Amended and Restated Certificate of Incorporation, as amended, our Board of Directors is authorized, subject to limitations prescribed by law, to issue up to 125,000,000 shares of preferred stock in one or more series without further stockholder approval. The Board of Directors has discretion to fix the number of shares of each series of our preferred stock and to determine the rights, preferences, privileges and restrictions of any preferred stock, including without limitation voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences. Accordingly, our Board of Directors could authorize the issuance of shares of preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest.

ITEM 12. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Under our Amended and Restated Certificate of Incorporation, as amended, we are required to indemnify and hold harmless, to the fullest extent permitted by law, each person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of ours or, while a director or officer of ours, is or was serving at our request as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in the certificate of incorporation, we are required to indemnify a Covered Person in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative (or part thereof) commenced by such Covered Person only if the commencement of such action, suit or proceeding (or part thereof) by the Covered Person was authorized by our Board of Directors.

In addition, as permitted by Delaware law, our certificate of incorporation provides that no director will be liable to us or to our stockholders for monetary damages for breach of certain fiduciary duties as a director. The effect of this provision is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of certain fiduciary duties as a director, except that a director will be personally liable for:

any breach of his or her duty of loyalty to us or our stockholders

acts or omissions not in good faith which involve intentional misconduct or a knowing violation of law

the payment of dividends or the redemption or purchase of stock in violation of Delaware law; or

any transaction from which the director derived an improper personal benefit.

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

ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements and Information

	Page

Consolidated Financial Statements from inception (May 1, 2007) to October 31, 2007

Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheet		F-2

Consolidated Statement of Operations		F-3

Consolidated Statement of Stockholders’ Equity		F-4

Consolidated Statement of Cash Flows		F-5

Notes to Consolidated Financial Statements		F-6

Consolidated Financial Statements for the three and six months ended April 30, 2008 (unaudited)

Consolidated Balance Sheets		F-22

Consolidated Statement of Operations		F-24

Consolidated Statements of Cash Flows		F-25

Notes to Consolidated Financial Statements		F-26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Webdigs, Inc.

Minneapolis, Minnesota

We have audited the accompanying consolidated balance sheet of Webdigs, Inc. (the Company) as of October 31, 2007 and the related statement of operations, changes in stockholders’ equity, and cash flows from inception (May 1, 2007) to October 31, 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 standards of the Public Company Accounting Oversight Board (United States of America). 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides 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 Webdigs, Inc. as of October 31, 2007, and the results of its operations and its cash flows from inception (May 1, 2007) to October 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered losses from operations since inception (May 1, 2007) and has a net working capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Carver Moquist & O’Connor, LLC

Bloomington, Minnesota

June 17, 2008

F-1

WEBDIGS, INC.

CONSOLIDATED BALANCE SHEET

October 31, 2007

ASSETS

Current assets:
Cash and cash equivalents	$	113,280
Commissions and fees receivable		12,255
Prepaid expenses and deposits		19,192

Total current assets		144,727

Office equipment and fixtures, net		55,699

Intangible assets, net		556,868

Total assets	$	757,294

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

WEBDIGS, INC.

CONSOLIDATED BALANCE SHEET (continued)

October 31, 2007

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of capital lease obligations	$	8,929
Accounts payable		98,581
Accounts payable - minority stockholder		274,413
Due to officer		17,601
Accrued expenses:
Professional fees		50,000
Commissions		11,183
Insurance and other		11,902

Total current liabilities		472,609

Long term liabilities:
Capital lease obligations, less current portion		36,470

Total long term liabilities		36,470

Total liabilities		509,079

Stockholders' equity
Common stock - $.001 par value; 125,000,000 shares authorized as
common stock and an additional 125,000,000 shares designated as
either common or preferred stock; 18,442,840 common shares
issued and outstanding		18,443
Additional paid-in capital		1,197,886
Unearned compensation		(365,398	)
Accumulated deficit		(602,716	)

Total stockholders' equity		248,215

Total liabilities and stockholders' equity	$	757,294

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

F-2

WEBDIGS, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

From Inception (May 1, 2007) to October 31, 2007

Revenue:
Gross revenue	$	105,675
Less: customer rebates and third-party agent commissions		(5,821	)

Net revenues		99,854

Operating expenses:
Selling		385,955
General and administrative		316,615

Total operating expenses		702,570

Operating loss		(602,716	)

Interest expense		-

Net loss before income taxes		(602,716	)

Income tax provision		-

Net loss	$	(602,716	)

Net loss per common share - basic and diluted	$	(0.06	)

Weighted average common shares outstanding -
basic and diluted		9,359,495

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

F-3

WEBDIGS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

Inception (May 1, 2007) to October 31, 2007

							Additional									Total
	Common Stock						Paid-in			Unearned			Accumulated			Stockholders'
	Shares			Amount			Capital			Compensation			Deficit			Equity

Balance at inception (May 1, 2007)		-		$	-		$	-		$	-		$	-		$	-

Issuance of founders' shares		4,403,020			4,403			6,097			-			-			10,500

Restricted common stock awards - value at grant date		8,610,347			8,610			454,750			(463,360	)		-			-

Shares issued to acquire Home Equity Advisors, LLC		260,920			261			31,739			-			-			32,000

Shares issued to acquire Marquest Financial, Inc.		260,920			261			63,739			-			-			64,000

Shares issued in private placement offering net of issuance costs of $6,563, pre-merger		1,936,510			1,936			466,501			-			-			468,437

Shares issued to officer (CEO) in lieu of cash compensation		346,534			347			84,653			-			-			85,000

Preferred dividends paid prior to the reverse merger with Select Video, Inc.		-			-			(5,857	)		-			-			(5,857	)

Recapitalization of shares issued by Select Video, Inc. prior to the merger		3,952,325			3,952			23,929			-			-			27,881

Shares issued in private placement offering, post-merger		300,000			300			74,700			-			-			75,000

Compensation related to vesting of restricted common stock awards, net of forfeitures		(1,627,736	)		(1,627	)		(2,365	)		97,962			-			93,970

Net loss for the period from inception (May 1, 2007) to October 31, 2007		-			-			-			-			(602,716	)		(602,716	)

Balances, October 31, 2007		18,442,840		$	18,443		$	1,197,886		$	(365,398	)	$	(602,716	)	$	248,215

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

F-4

WEBDIGS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

From Inception (May 1, 2007) to October 31, 2007

Cash flows from operating activities:
Net loss	$	(602,716	)
Adjustments to reconcile net loss to net cash flows
used in operating activities:
Depreciation		1,492
Amortization		14,911
Share based compensation		178,970
Changes in operating assets and liabilities:
Commissions and fees receivable		6,288
Prepaid expenses and deposits		(8,837	)
Accounts payable		43,942
Accounts payable - minority stockholder		274,413
Accrued expenses		34,656
Net cash flows used in operating activities		(56,881	)

Cash flows from investing activities:
Payments for web-site development costs		(413,516	)
Purchase of equipment and fixtures		(17,386	)
Cash paid in connection with acquisition of HEA,
net of cash acquired totaling $1,896		(92	)
Cash acquired with acquisition of Marquest,
net of legal costs of $560		7,593
Cash obtained from reverse merger with Select Video, Inc.		27,881
Net cash flows used in investing activities		(395,520	)

Cash flows from financing activities:
Payment of preferred dividends		(5,857	)
Issuance of common stock, net of issuance costs of $6,563		553,937
Increase in due to officer		17,601
Net cash flows provided by financing activities		565,681

Net change in cash and cash equivalents		113,280

Cash and cash equivalents, at May 1, 2007		-

Cash and cash equivalents, at October 31, 2007	$	113,280

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

F-5

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

1	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Webdigs, Inc. (“the Company”) was incorporated on May 25, 1994 under the name of Select Video, Inc. The Company changed to its current name on October 23, 2007. Select Video, Inc. was an inactive shell from February 29, 2000 to October 24, 2007 when it entered into a Agreement and Plan of Merger and Reorginization whereby it agreed to issue 15,818,251 shares of its common stock to its subsidiary Select Video Acquisition, LLC which in-turn used those shares to acquire all of the outstanding units of Webdigs, LLC, a private company organized in the state of Minnesota resulting in Webdigs, LLC as the surviving entity. Webdigs, LLC, based in Minneapolis, MN, was organized on May 1, 2007 and consists of two strategic operating segments; (1) mortgage broker, assisting homeowners in refinancing their home mortgages and assisting new home buyers in qualifying for home mortgages and brokering the financing, (2) online real estate broker, offering the same customer experience as a full service broker utilizing a flat fee structure for listing services to their selling customers and a graduated fee structure for their buying customers by rebating two-thirds of its broker commissions. The mortgage broker segment operates under the names of Home Equity Advisors, LLC (HEA) and Marquest Financial, Inc. (Marquest). The online real estate broker segment operates as Webdigs, LLC.

Upon completion of the transaction on October 24, 2007, Webdigs, LLC became a wholly owned subsidiary of Webdigs, Inc. Since the transaction resulted in the existing members of Webdigs, LLC acquiring control of Webdigs, Inc., for financial statement purposes, the merger has been accounted for as a recapitalization of Webdigs, Inc. (a reverse merger with Webdigs, LLC as the accounting acquirer).

The operations of Webdigs, LLC are the only continuing operations of the Company. In accounting for this transaction, Webdigs, LLC was deemed to be the purchaser and parent company for financial reporting purposes. Accordingly, its net assets were included in the consolidated balance sheet at their historical value. The accompanying consolidated financial statements as of October 31, 2007 present the historical financial information of Webdigs, LLC. The outstanding member units of Webdigs, LLC from May 1, 2007 to October 24, 2007 have been restated to reflect the shares issued upon the reorganization. The accompanying consolidated financial statements as of October 31, 2007 present the historical financial information of Webdigs, LLC from the period from inception (May 1, 2007) to October 31, 2007 consolidated with Webdigs, Inc. from the date of reorganization (October 24, 2007) to October 31, 2007.

Consolidation Policies

The consolidated financial statements for the period from inception (May 1, 2007) to October 31, 2007 include the accounts of Webdigs, Inc. and its wholly-owned subsidiary, Webdigs, LLC, which includes Marquest Financial, Inc., Home Equity Advisors, LLC, and Credit Garage, Inc. as wholly-owned subsidiaries, collectively the Company. All significant intercompany accounts and transactions have been eliminated in the consolidation.

F-6

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

Segment Information

SFAS No. 131 Disclosure About Segments of an Enterprise and Related Information defines operating segments as components of a company about which separate financial information is evaluated regularly by the chief decision maker in deciding how to allocate resources and assess performance. The Company has identified two operating segments: mortgage brokerage and online real estate brokerage.

Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, commissions and fees receivable, accounts payable and accrued expenses. Pursuant to Statement of Financial Accounting Standards (SFAS) No. 107, Disclosures about Fair Value of Financial Instruments, the Company is required to estimate the fair value of all financial instruments at the balance sheet date. The Company considers the carrying value of its financial instruments in the consolidated financial statements to approximate fair value due to their short-term nature.

Cash and Cash Equivalents

For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents.

Commissions and Fees Receivable

Loan commissions and fees receivable are recorded at the amount the Company expects to collect on loans or real estate transactions closed. These receivables represent broker commission balances due from the Company’s investors/lenders or listing real estate brokers and usually are settled within 10-15 days after closing.

F-7

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

The Company reviews the outstanding receivables on a monthly basis and receivables are considered past due when payment has not been received 30 days after a loan closes. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. Historically, the Company has not experienced significant losses related to receivables from individual customers. At October 31, 2007, the Company considers its accounts receivable to be fully collectible and therefore, has not recorded an allowance for doubtful accounts.

Impairment of Long-Lived Assets

In accordance with Statements of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets, such as website development costs, furniture, equipment and customer lists, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Intangible Assets

The Company has two types of intangible assets:

Website Development

The primary interface with the customer in the Company’s online real estate broker operation is the Webdigs.com website. Certain costs incurred in development of this website have been capitalized according to provisions in Emerging Issues Task Force Issue No. 00-2, Accounting for Website Development Costs (EITF 00-2), and AICPA Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. These capitalized costs totaled $413,516 from inception (May 1, 2007) to October 31, 2007. Amortization is on a straight-line basis over the estimated useful life of the website of 3 years.

Customer Lists

As part of the Company’s acquisitions of HEA and Marquest (See Note 2), the Company recorded the fair value of the pre-existing customer relationships of these two entities. The fair value estimated for each customer list was $27,404 for HEA and $130,859 for Marquest for a total of $158,263. The fair values of these relationships will be amortized on a straight-line basis (which approximates the anticipated revenue stream) over their estimated useful lives based on an estimated revenue period ranging from 2 to 3 years.

F-8

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

Office Equipment and Fixtures

Office equipment and fixtures are recorded at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the assets ranging from two to seven years. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in operating income.

Revenue Recognition

The Company’s mortgage brokerage business recognizes commissions received and loan fees earned at the time a mortgage loan closes.

The real estate brokerage business recognizes revenue at the closing of a real estate transaction. Commissions and rebates due to third party real estate agents or consumers are accrued at the time of closing and treated as an offset to gross revenues.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and items defined as other comprehensive income (loss). Items defined as other comprehensive income (loss) include items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities. For the period from inception (May 1, 2007) to October 31, 2007, there were no adjustments to net loss to arrive at comprehensive loss.

Net Loss per Common Share

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted average number of commons shares outstanding during the periods presented. Diluted net loss per common share is determined using the weighted average number of common shares outstanding during the periods presented, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of options, warrants and conversion of convertible debt. In periods where losses are reported, the weighted average number of commons shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. The Company did not have any common stock equivalents outstanding at October 31, 2007.

Income Taxes

Subsequent to the reverse merger on October 24, 2007, the Company accounts for income taxes in accordance with SFAS No. 109, as clarified by FIN No. 48, which requires an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the consolidated financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

F-9

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

FIN No. 48 requires the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. See Note 9 to the consolidated financial statements for additional information regarding income taxes.

Share-Based Compensation

The Company accounts for stock incentive plans under the recognition and measurement provisions of FASB Statement No. 123(R), Share-Based Payments , which requires the measurement and recognition of compensation expense for all stock-based awards based on estimated fair values, net of estimated forfeitures. Share-based compensation expense recognized for the period from inception (May 1, 2007) to October 31, 2007 under Statement 123(R) includes compensation cost for restricted stock awards.

Advertising

The Company expenses advertising costs as incurred. Advertising expense amounted to $150,599 for the period from inception (May 1, 2007) to October 31, 2007.

Concentrations, Risks and Uncertainties

Instability of the Housing and Mortgage Sectors in the Company’s Regional Markets:

The Company’s operations are concentrated within the mortgage origination and real estate brokerage industries throughout the Unites States and its prospects for success are tied indirectly to interest rates and the general housing and business climates in these regions.

Cash Deposits in Excess of Federally Insured Limits:

The Company maintains cash balances at two financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. At times, the cash balances in these accounts may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes they are not exposed to any significant credit risk on cash and cash equivalents.

F-10

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

2	GOING CONCERN

The Company has incurred significant operating losses from inception (May 1, 2007) to October 31, 2007. At October 31, 2007, the Company reports a negative working capital position of $327,882, accumulated deficit of $602,716 and a stockholders’ equity of $248,215. It is management’s opinion that these facts raise substantial doubt about the Company’s ability to continue as a going concern without additional debt or equity financing.

In order to meet its working capital needs through the next twelve months, the Company plans to seek additional financing, which could involve the issuance of equity, debt and/or equity-linked securities. The Company is also looking to reduce advertising expenditures and increase revenues through its existing customer base and website traffic.

3	ACQUISITIONS

The following acquisitions were accounted for as a purchase in accordance with the Statement of Financial Accounting Standards No. 141, Business Combinations ; accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values determined by the Company’s management based upon information currently available and on current assumptions as to future operations.

HEA

On July 15, 2007, the Company (then operating as Webdigs, LLC) acquired all issued and outstanding units of HEA for a total purchase price of $32,000 by issuing 64,000 member units valued at $0.50 per unit. The 64,000 units were converted into 260,920 shares of common stock on October 24, 2007 in connection with the reverse merger. The Company also incurred acquisition costs of $1,998.

The total purchase consideration of $33,998 was allocated to the acquired assets and liabilities assumed, including identifiable intangible assets, based on their estimated fair values at the acquisition date. The allocation of the purchase consideration was as follows:

Cash	$	1,896
Commissions receivable		15,543
Office equipment		900
Customer lists		27,404
Accounts payable and accrued expenses		(11,745	)

	$	33,998

F-11

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

Marquest

On October 22, 2007, the Company (then operating as Webdigs, LLC) acquired all issued and outstanding shares of Marquest for $64,000 by issuing 64,000 member units valued at $1.00 per unit. The 64,000 units were converted into 260,920 shares on October 24, 2007 in connection with the reverse merger. The Company also incurred acquisition costs of $560. Additionally, in connection with the acquisition of Marquest, the former owner of Marquest (a current shareholder of the Company) indemnified the Company of a certain prior debt obligation of Marquest totaling approximately $78,000 which was set forth in the purchase agreement. This debt has not been recorded by the Company in accounting for this acquisition as the Company believes the satisfaction of this debt will be settled by the former parties.

The total purchase consideration of $64,560 was allocated to the acquired assets and liabilities assumed, including identifiable intangible assets, based on their estimated fair values at the acquisition date. The allocation of the purchase consideration was as follows:

Cash	$	8,153
Commissions receivable		3,000
Prepaid expenses		10,355
Office equipment		38,905
Deferred tax assets, net		11,000
Valuation allowance		(11,000	)
Customer lists		130,859
Accounts payable		(49,281	)
Accrued expenses		(32,032	)
Capital lease obligation		(45,399	)

	$	64,560

F-12

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

The following unaudited pro forma consolidated results of operations of the Company assume that the acquisition of HEA and Marquest occurred as of May 1, 2007:

	Webdigs, Inc.			HEA			Marquest			Total

Net revenues	$	6,400		$	143,269		$	465,334		$	615,003
Selling, general and administrative expense		(538,699	)		(185,541	)		(530,212	)		(1,254,452	)

Operating (loss)		(532,299	)		(42,272	)		(64,878	)		(639,449	)
Interest expense		-			(266	)		(7,489	)		(7,755	)

Net loss before income taxes		(532,299	)		(42,538	)		(72,367	)		(647,204	)

Income tax provision		-			-			-			-

Net loss	$	(532,299	)	$	(4,538	)	$	(72,367	)	$	(647,204	)
Loss per common share - basic and diluted	$	(0.06	)	$	(0.00	)	$	(0.01	)	$	(0.07	)

Weighted average common shares outstanding - basic and diluted		9,359,494			9,359,494			9,359,494			9,359,494

The unaudited pro forma amounts represent the historical operating results of the entities acquired from HEA and Marquest with appropriate adjustments that give effect to depreciation and amortization and interest expense. The pro forma amounts are not necessarily indicative of the operating results that would have occurred in HEA and Marquest had they been in operation by Webdigs during the periods presented. In addition, the pro forma amounts do not reflect potential cost savings related to full optimization and the redundant effect of selling, general and administrative expense.

4	RELATED PARTY TRANSACTIONS

Accounts Payable – Minority Stockholder

The Company’s principal advertising agency/website developer was owed $274,413 at October 31, 2007. The two principals of this advertising company also are minority stockholders in the Company – holding approximately 3% of the Company’s outstanding shares at October 31, 2007. For the period from inception (May 1, 2007) to October 31, 2007, the Company incurred $586,912 in services and rent from this related party.

F-13

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

Included in the $586,912 is $6,000 in office rent expense for the Company from inception (May 1, 2007) to October 31, 2007. The Company informally rents office space for its headquarters and real estate operation in Minneapolis from the related party on a month to month basis. Beginning in March 2008, due to increased space requirements, the Company has agreed to pay a monthly rent of $3,500 for dedicated office space.

Due to Officer

As of October 31, 2007, the Company was indebted to its CEO/President in the amount of $17,601 for business expenses that he had paid on the Company’s behalf. The indebtedness is due on demand and is non-interest bearing.

5	OFFICE EQUIPMENT AND FIXTURES

Office equipment and fixtures consists of the following at October 31, 2007:

Office equipment and fixtures	$	57,191
Less accumulated depreciation		(1,492	)

Office equipment and fixtures, net	$	55,699

Depreciation expense amounted to $1,492 for the period from inception (May 1, 2007) to October 31, 2007. Office equipment and fixtures held under a capital lease, included above, had a total cost of $28,011 and no accumulated depreciation as it was leased near the end of the period.

6	INTANGIBLE ASSETS

Intangible assets consist of the following at October 31, 2007:

Website development	$	413,516
Customer lists		158,263
		571,779
Less accumulated amortization		(14,911	)

Intangible assets, net	$	556,868

Amortization expense amounted to $14,911 for the period from inception (May 1, 2007) to October 31, 2007.

F-14

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

The estimated remaining amortization expense is as follows:

Years ending October 31,

2008	$	195,164
2009		191,735
2010		169,969

	$	556,868

The future amortization expense is an estimate. Actual amounts may change from such estimated amounts due to additional intangible asset acquisitions, potential impairments, accelerated amortization or other events.

7	CAPITAL LEASE

The Company, through its acquisition of Marquest, assumed a capital lease obligation on two copiers. Under this agreement, the Company is required to make monthly payments of $1,063 through February 2012 with interest at 9.25%.

Future minimum lease payments including interest required under this lease are as follows:

Years ending October 31,

2008	$	12,756
2009		12,756
2010		12,756
2011		12,756
2012		4,252

Total		55,276
Less: amount representing interest		(9,877	)
Net capital lease obligation		45,399
Less: current portion		(8,929	)

Long-term obligations under capital lease	$	36,470

F-15

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

8	COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company conducts a portion of its Marquest mortgage operations in a leased facility under a non-cancelable operating lease expiring August 2009. In addition to base rent, the Company is obligated for its share of insurance, taxes, and common area expenses. Monthly base rent expense, including related insurance, and common area expenses is $5,546 per month in its Bloomington, Minnesota office. The Company also leases space in Naples, Florida for the Florida regional office. This non-cancelable lease expires May 2009. Monthly base rent in Naples is $1,774 per month. The Company assumed these lease obligations with its acquisition of Marquest. Rent expense was $2,415 for the period from inception (May 1, 2007) to October 31, 2007.

The Company also leases office equipment under operating leases which expire at various dates through 2009. Total base monthly lease payments for these operating leases are $1,878. For the period from inception (May 1, 2007) to October 31, 2007, total equipment and furniture lease payments totaled $657.

Additionally, the Company leases office space at its Minneapolis, Minnesota location on a month-to-month basis as noted in Note 3.

Future minimum lease payments

The future minimum lease payments under the Company’s noncancelable operating leases are as follows:

Years ending October 31,

2008	$	102,524
2009		77,967

Total	$	180,491

9	EMPLOYEE BENEFIT PLAN

One of the Company’s mortgage subsidiaries sponsors a 401(k) retirement plan covering all employees meeting certain eligibility requirements, such as age and term of employment. Under the plan, eligible employees may elect to defer a percentage of their salary, subject to Internal Revenue Service limits. The Company contributions are voluntary and at the discretion of the Board of Directors. No contributions were made during the period from inception (May 1, 2007) to October 31, 2007.

F-16

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

10	INCOME TAXES

On October 24, 2007, the Company entered into a reverse merger transaction with Select Video, Inc. and its subsidiary, Select Video Acquisition, LLC, thereby becoming a C-Corporation for income tax purposes. Prior to the merger, net income and loss of Webdigs, LLC was passed through and reported on the tax returns of the members of the LLC, therefore, there was no tax provision recorded for the period from inception (May 1, 2007) to October 23, 2007. Subsequent to the merger on October 24, 2007, the Company is following the income tax accounting guidance of FAS 109. Also, in connection with the merger, the Company recorded net deferred tax assets of $32,000 due to a change in tax status and a valuation allowance of $32,000 because realization of these net deferred tax assets are not reasonably assured.

The provision (benefit) for income taxes consists of the following for the period from October 24, 2007 (merger date and change in tax status) to October 31, 2007:

Current	$	-
Deferred		(8,000	)

		(8,000	)
Establishment of the net deferred tax asset as of October 24, 2007 due to the reverse merger and change in tax status		(32,000	)

		(40,000	)

Valuation allowance		40,000

Provision for income taxes	$	-

The provision for income taxes varies from the statutory rate applied to the total loss as follows for the period from inception (May 1, 2007) to October 31, 2007:

	Amount

Federal income tax benefit at statutory rate (34%)	$	(205,000	)
State tax benefit, net of federal		(36,000	)
Operating loss passed to LLC members prior to reverse merger (May 1, 2007 to October 23, 2007)		232,000
Non-deductible expenses		1,000
Establishment of net deferred tax asset due to tax status change		(32,000	)
Current valuation allowance		40,000

Provision for income taxes	$	-

F-17

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

Deferred income taxes, which result from the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes, consist of the following at October 31, 2007:

Deferred tax assets (liabilities):
Net operating loss carryforwards	$	76,000
Accrued expenses		20,000
Depreciation		(5,000	)
Amortization		(51,000	)

Net deferred tax assets		40,000
Valuation allowance		(40,000	)

Net deferred tax assets	$	-

The Company has a total net operating loss carryforward of approximately $192,000 which expires through 2027. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences will become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has recorded a full valuation allowance against its net deferred tax assets because it is not currently able to conclude that it is more likely than not that these assets will be realized. The amount of deferred tax assets considered to be realizable could be increased in the near term if estimates of future taxable income during the carryforward period are increased.

Under the Internal Revenue Code Section 382 (IRC 382), certain stock transactions which significantly change ownership, including the sale of stock to new investors, the exercise of options to purchase stock, or other transactions between shareholders could limit the amount of net operating loss carryforwards that may be utilized on an annual basis to offset taxable income in future periods. In October 2007, the Company acquired Marquest Financial, Inc. which had a net operating loss carryforward of $172,000. Due to the limitations of IRC 382, utilization of the loss is limited to $8,607 per year for the next 20 years expiring on 2027.

11	SHAREHOLDERS' EQUITY

At inception on May 1, 2007, the Company (then operating as Webdigs, LLC) issued member units equivalent to 4,403,020 shares to the Company’s founders for $10,500 in cash.

For the period from inception (May 1, 2007) to October 31, 2007, a portion of the CEO compensation was paid in stock. In total, 346,534 shares were issued with a fair value of $85,000.

F-18

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

During the period from July 1, 2007 to October 23, 2007, the Company (then operating as Webdigs, LLC), sold Class A member units equivalent to 1,936,510 shares for a price of $0.2425 per share. The Company raised $475,000 in proceeds from this sale to accredited investors. The Company incurred issuance costs of $6,563. Preferred dividends of $5,857 were declared and paid to these members prior to their recharacterization to common stock at the time of the reverse merger on October 24, 2007.

On July 15, 2007, the Company (then operating as Webdigs, LLC), issued member units equivalent to 260,920 shares to acquire the outstanding member units in Home Equity Advisors, LLC at a valuation of $32,000.

On October 23, 2007, the Company (then operating as Webdigs, LLC), issued member units equivalent to 260,920 shares to acquire the outstanding common shares in Marquest Financial, LLC at a valuation of $64,000.

During the period from October 24, 2007 to October 31, 2007, the Company sold 300,000 shares to accredited investors for $75,000 ($0.25 per share) in cash proceeds.

Restricted Stock

For the period from inception (May 1, 2007) to October 31, 2007, the Company awarded 8,610,347 of time-based restricted stock (non-vested shares), respectively, to certain officers and employees of the Company. As a condition of the award, the officers and employees must be employed with the Company in order to continue to vest in their shares over a two year period. The fair value of the non-vested shares is equal to the fair market value on the date of grant and is amortized ratably over the vesting period.

The Company recorded $93,970 of compensation expense in the consolidated statement of operations related to vested shares (restricted stock) for the period from inception (May 1, 2007) to October 31, 2007.

A summary of the status of non-vested shares and changes as of October 31, 2007 is set forth below:

	Shares			Unearned Compensation

Outstanding, May 1, 2007		-		$	-
Granted		8,610,347			463,360
Vested		(2,295,707	)		(93,970	)
Forfeited/canceled		(1,627,736	)		(3,992	)

Outstanding, October 31, 2007		4,686,904		$	365,398

F-19

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

Shares awarded as unearned compensation are scheduled to vest over periods ending October 31 as follows:

	Shares		Amount

2008		2,311,225	$	166,908
2009		2,375,679		198,490

		4,686,904	$	365,398

12	SEGMENT FINANCIAL INFORMATION

The Company has two reporting segments that fall within two primary business groups: mortgage broker and online real estate broker.

The mortgage broker segment assists homeowners in refinancing their home mortgages and assists prospective home buyers in qualifying for a home mortgage and brokering the financing. Its principal market is the United States.

The online real estate broker segment offers a superior customer experience to a full service real estate broker. The main distinction offered by the Company’s real estate brokerage services is that of a flat fee structure for listing services and a graduated fee structure offering customers a rebate up to two-thirds of the Company’s broker commission for real estate buyers. This business segment operates as Webdigs, Inc. Its principal market is also the United States.

The corporate segment consists primarily of investments in office equipment, personnel and other operating expenses associated with the Company’s corporate offices in Minneapolis, and certain technology initiatives.

Selected financial information about the Company’s operations by segment for the period from inception (May 1, 2007) to October 31, 2007 is as follows:

	Online Real Estate Brokerage			Retail Mortgage Brokerage			Corporate and Other			Total

Net revenues	$	6,400		$	93,454		$	-		$	99,854
Operating loss		(305,220	)		(70,267	)		(227,229	)		(602,716	)
Depreciation and amortization		11,486			3,425			1,492			16,403
Assets		412,030			187,372			157,892			757,294
Capital expenditures and
website development costs		413,516			-			17,386			430,902

F-20

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From Inception ( May 1, 2007) To October 31, 2007

13	SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash investing and financing activities:

Acquisition of HEA by issuing common stock valued at $32,000:
Fair value of assets acquired	$	45,743
Liabilities assumed		(11,745	)
Cash paid for acquisition costs		(1,998	)
Shares issued for the acquisition	$	32,000

Acquisition of Marquest by issuing common stock valued at $64,000:
Fair value of assets acquired	$	191,272
Liabilities assumed		(126,712	)
Cash paid for acquisition costs		(560	)
Shares issued for the acquisition	$	64,000

14	SUBSEQUENT EVENTS

During the period from November 1, 2007 to June 17, 2008 the Company sold 3,366,000 shares of unregistered common stock to accredited investors for $841,500 ($0.25 per share) in cash proceeds.

On May 7, 2008, the Company awarded stock options to each of its three outside directors. The grant total for all three directors is 600,000 shares with an exercise price of $0.25. The fair value of these option grants total $107,000 and will be amortized over the vesting period through October 24, 2009.

F-21

WEBDIGS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	April 30, 2008		October 31, 2007
	(Unaudited)		(Audited)
ASSETS

Current assets:
Cash and cash equivalents	$	114,338	$	113,280
Commissions and fees receivable		35,513		12,255
Prepaid expenses and deposits		12,586		19,192

Total current assets		162,437		144,727

Office equipment and fixtures, net		58,062		55,699

Intangible assets, net		459,287		556,868

Total assets	$	679,786	$	757,294

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

F-22

WEBDIGS, INC.

CONSOLIDATED BALANCE SHEETS (continued)

(Unaudited)

	April 30, 2008			October 31, 2007
	(Unaudited)			(Audited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Current portion of capital lease obligation	$	9,350		$	8,929
Accounts payable		277,497			98,581
Accounts payable - minority stockholder		340,426			274,413
Due to officer		-			17,601
Accrued expenses		54,729			73,085

Total current liabilities		682,002			472,609

Long term liabilities:
Capital lease obligation, less current portion		31,687			36,470

Total long term liabilities		31,687			36,470

Total liabilities		713,689			509,079

Stockholders' equity (deficit):
Common stock - $.001 par value; 125,000,000 shares authorized as common stock and an additional 125,000,000 shares designated as either common or preferred stock; 21,748,840 and 18,442,840 common shares issued and outstanding at April 30, 2008 and October 31, 2007, respectively		21,749			18,443
Additional paid-in capital		2,021,080			1,197,886
Unearned compensation		(281,945	)		(365,398	)
Accumulated deficit		(1,794,787	)		(602,716	)

Total stockholders' equity (deficit)		(33,903	)		248,215

Total liabilities and stockholders' equity (deficit)	$	679,786		$	757,294

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

F-23

WEBDIGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months			Six Months
	Ended			Ended
	April 30, 2008			April 30, 2008
Revenue:
Gross revenue	$	371,308		$	565,964
Less: customer rebates and third-party agent commissions		(41,329	)		(66,603	)

Net revenues		329,979			499,361

Operating expenses:
Selling		775,536			1,345,720
General and administrative		180,852			341,158

Total operating expenses		956,388			1,686,878

Operating loss		(626,409	)		(1,187,517	)

Interest expense		(2,344	)		(4,554	)

Net loss before income taxes		(628,753	)		(1,192,071	)

Income tax provision		-			-

Net loss	$	(628,753	)	$	(1,192,071	)

Net loss per common share - basic and diluted	$	(0.03	)	$	(0.06	)

Weighted average common shares outstanding - basic and diluted		20,984,507			20,131,891

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

F-24

WEBDIGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months
	Ended
	April 30, 2008
Cash flows from operating activities:
Net loss	$	(1,192,071	)
Adjustments to reconcile net income to net cash flows used in operating activities:
Depreciation		15,586
Amortization		97,581
Loss on disposal of fixed assets		267
Share based compensation		83,453
Changes in operating assets and liabilities:
Commissons and fees receivable		(23,258	)
Prepaid expenses and deposits		6,606
Accounts payable		178,916
Accounts payable - minority stockholder		66,013
Accrued expenses		(18,356	)

Net cash flows used in operating activities		(785,263	)

Cash flows from investing activities:
Purchases of computer equipment		(18,216	)

Net cash flows used in investing activities		(18,216	)

Cash flows from financing activities:
Issuance of common stock		826,500
Principal payments on capital lease obligation		(4,362	)
Decrease in due to officer		(17,601	)

Net cash flows provided by financing activities		804,537

Net increase in cash and cash equivalents		1,058

Cash and cash equivalents, beginning of year		113,280

Cash and cash equivalents, end of year	$	114,338

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

F-25

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For The Six Months Ended April 30, 2008

1	BASIS OF PRESENTATION

The accompanying unaudited consolidated financial information has been prepared by Webdigs, Inc. (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, it does not include all of the information and notes required by accounting principles generally accepted in the Untied States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of this financial information have been included. Financial results for the interim period presented are not necessarily indicative of the results that may be expected for the fiscal year as a whole or any other interim period. This financial information should be read in conjunction with the consolidated financial statements and notes for the period from inception (May 1, 2007) to October 31, 2007.

2	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Webdigs, Inc. (“the Company”) was incorporated on May 25, 1994 under the name of Select Video, Inc. The Company changed to its current name on October 23, 2007. Select Video, Inc. was an inactive shell from February 29, 2000 to October 24, 2007 when they entered into a Share Exchange and Acquisition Agreement whereby it agreed to issue 15,818,251 shares of its common stock to its subsidiary Select Video Acquisition, LLC which in-turn used those shares to acquire all of the outstanding units of Webdigs, LLC, a private company organized in the state of Minnesota resulting in Webdigs, LLC as the surviving entity. Webdigs, LLC, based in Minneapolis, MN, was organized on May 1, 2007 and consists of two strategic operating segments; (1) mortgage broker, assisting homeowners in refinancing their home mortgages and assisting new home buyers in qualifying for home mortgages and brokering the financing, (2) online real estate broker, offering the same customer experience as a full service broker utilizing a flat fee structure for listing services to their selling customers and a graduated fee structure for their buying customers by rebating two-thirds of its broker commissions. The mortgage broker segment operates under the names of Home Equity Advisors, LLC (HEA) and Marquest Financial, Inc. (Marquest). The online real estate broker segment operates as Webdigs, LLC.

The operations of Webdigs, LLC are the only continuing operations of the Company. In accounting for this transaction, Webdigs, LLC was deemed to be the purchaser and parent company for financial reporting purposes. Accordingly, its net assets were included in the consolidated balance sheet at their historical value. The accompanying consolidated financial statements as of April 30, 2008 and October 31, 2007 present the historical financial information of Webdigs, LLC. The outstanding member units of Webdigs, LLC from May 1, 2007 to October 24, 2007 have been restated to reflect the shares issued upon the reorganization. Since Webdigs, LLC began their operations on May 1, 2007, there is no comparative information for the six months ended April 30, 2007.

F-26

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For The Six Months Ended April 30, 2008

Consolidation Policies

The consolidated financial statements for the three and six month periods ended April 30, 2008 include the accounts of Webdigs, Inc. and its wholly-owned subsidiary, Webdigs, LLC, which has Marquest Financial, Inc., Home Equity Advisors, LLC, and Credit Garage, Inc. as wholly-owned subsidiaries, collectively the Company. All significant intercompany accounts and transactions have been eliminated in the consolidation.

Segment Information

Estimates

Income Taxes

F-27

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For The Six Months Ended April 30, 2008

3	GOING CONCERN

The Company has incurred significant operating losses for the six-month period ended April 30, 2008. At April 30, 2008, the Company reports a negative working capital position of $519,565, accumulated deficit of $1,794,787 and a stockholders’ deficit of $33,903. It is management’s opinion that these facts raise substantial doubt about the Company’s ability to continue as a going concern without additional debt or equity financing.

In order to meet its working capital needs through the next twelve months, the Company plans to seek additional financing, which could involve the issuance of equity, debt and/or equity-linked securities. The Company is also looking to reduce operating expenditures and increase revenues through its existing customer base and website traffic.

4	RELATED PARTY TRANSACTIONS

Accounts Payable – Minority Stockholder

The Company’s principal advertising agency/website developer was owed $340,426 at April 30, 2008 and $274,413 at October 31, 2007. The two principals of the website developer also are minority stockholders in the Company - holding approximately 3% of the Company’s outstanding shares at April 30, 2008. For the six months ended April 30, 2008, the Company incurred $396,894 in services from this minority stockholder.

Included in the $396,894 is $15,000 in office rent expense for the Company for the six-month period ended April 30, 2008. There is no ongoing commitment from the Company or the related party regarding rental office space for which the Company currently pays a market rate rent of $3,500 per month.

Due to Officer

As of October 31, 2007, the Company was indebted to its CEO/President in the amount of $17,601 for business expenses that he had paid on the Company’s behalf. This amount was repaid during the six months ended April 30, 2008.

5	SHAREHOLDERS' EQUITY

During the period from November 1, 2007 to January 31, 2008, the Company sold 1,076,000 shares to accredited investors for $269,000 ($0.25 per share) in cash proceeds.

During the period from February 1, 2008 to April 30, 2008, the Company sold 2,230,000 shares to accredited investors for $557,500 ($0.25 per share) in cash proceeds.

Restricted Stock

The Company recorded $83,453 of compensation expense in the consolidated statement of operations related to vested shares (restricted stock) for the six months ended April 30, 2008.

F-28

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For The Six Months Ended April 30, 2008

A summary of the status of non-vested shares and changes as of April 30, 2008 is set forth below:

	Restricted			Unearned
	Shares			Compensation

Outstanding, May 1, 2007		-		$	-
Granted		8,610,347			463,360
Vested		(2,295,707	)		(93,970	)
Forfeited/canceled		(1,627,736	)		(3,992	)

Outstanding, October 31, 2007		4,686,904			365,398
Granted		-			-
Vested from November 1, 2007 to January 31, 2008		(577,806	)		(41,727	)
Vested from February 1, 2008 to April 30, 2008		(577,806	)		(41,726	)

Outstanding, April 30, 2008		3,531,292		$	281,945

Shares awarded as unearned compensation are scheduled to vest over periods ending October 31 as follows:

	Shares		Amount

2008 - remaining		1,155,613	$	83,455
2009		2,375,679		198,490

		3,531,292	$	281,945

6	SEGMENT FINANCIAL INFORMATION

The Company has two reporting segments that fall within two primary business groups: mortgage broker and online real estate broker.

F-29

WEBDIGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For The Six Months Ended April 30, 2008

The corporate segment consists primarily of investments in fixed assets, personnel and other operating expenses associated with the Company’s corporate offices in Minneapolis, and certain technology initiatives.

Selected financial information about the Company’s operations by segment for the six month period ended April 30, 2008 is as follows:

	Online			Retail
	Real Estate			Mortgage			Corporate
	Brokerage			Brokerage			and Other			Total

Net revenues	$	65,333		$	434,028		$	-		$	499,361
Operating loss		(845,088	)		(79,902	)		(262,527	)		(1,187,517	)
Interest expense		-			4,512			42			4,554
Depreciation and amortization		73,392			39,775			-			113,167
Assets		371,130			194,318			114,338			679,786
Capital expenditures and website development costs		15,938			2,278			-			18,216

Selected financial information about the Company’s operations by segment for the three month period ended April 30, 2008 is as follows:

	Online			Retail
	Real Estate			Mortgage			Corporate
	Brokerage			Brokerage			and Other			Total

Net revenues	$	46,237		$	283,742		$	-		$	329,979
Operating loss		(458,926	)		(13,930	)		(153,553	)		(626,409	)
Interest expense		-			2,302			42			2,344
Depreciation and amortization		37,099			19,924			-			57,023

7	SUBSEQUENT EVENTS

During the period from May 1, 2008 to June 17, 2008 the Company sold 60,000 shares of unregistered common stock to accredited investors for $15,000 ($0.25 per share) in cash proceeds.

On May 7, 2008, the Company awarded stock options to each of its three outside directors for board service. The grant total for all three directors is 600,000 shares with an exercise price of $0.25. The fair value of these option grants total $107,000 and will be amortized on a straight - line basis over the vesting period through October 24, 2009.

F-30

ITEM 14.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 15.

FINANCIAL STATEMENTS AND EXHIBITS

List of Financial Statements

(a) Consolidated financial statements of Webdigs, Inc. from inception (May 1, 2007) to October 31, 2007, including Report of Independent Registered Public Accounting Firm

(b) Consolidated financial statements of Webdigs, Inc. for the three and six months ended April 30, 2008 (unaudited)

(c) Financial statements of Home Equity Advisors, LLC from inception (September 18, 2006) to December 31, 2006 (filed as Exhibit 99.1 to this Form 10)

(d) Financial statements of Marquest Financial, Inc. for the fiscal years ended December 31, 2006 and 2005 (filed as Exhibit 99.2 to this Form 10)

Exhibits

The following exhibits are filed as part of this registration statement:

Exhibit No.		Description
2.1		Agreement and Plan of Merger and Reorganization.

2.2		Stock Purchase Agreement with Home Equity Advisors, LLC.

2.3		Stock Purchase Agreement with Marquest Financial, Inc.

3.1		Amended and Restated Certificate of Incorporation of Webdigs, Inc. (originally submitted and filed under the Company’s prior name, “Select Video, Inc.”)

3.2		Amendment to Amended and Restated Certificate of Incorporation of Webdigs, Inc. (originally submitted and filed under the Company’s prior name, “Select Video, Inc.”) (filed with the Minnesota Secretary of State on October 23, 2007)

3.3		Bylaws of Webdigs, Inc.

4		Form of Specimen Stock Certificate.

10.1		Webdigs, Inc. Restricted Stock Plan.

10.2		Form of Webdigs, LLC Member Services Agreements.

21		Subsidiaries of Webdigs, Inc.

99.1		Financial statements of Home Equity Advisors, LLC from inception (September 18, 2006) to December 31, 2006

99.2		Financial statements of Marquest Financial, Inc. for the fiscal years ended December 31, 2006 and 2005

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form 10 (including the exhibits, schedules, and amendments to the registration statement) under the Securities Exchange Act of 1934, with respect to our common stock. Upon the effectiveness of the registration statement (generally, 60 days after filing with the SEC), we will become subject to the reporting and information requirements of the Securities Exchange Act of 1934, and, as a result, we will thereupon be required to file periodic and current reports, and other information with the SEC. You may read and copy this information at the Public Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Copies of all or any part of the registration statement may be obtained from the SEC’s offices upon payment of fees prescribed by the SEC. The SEC maintains an internet site that contains periodic and current reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of the SEC’s website is http://www.sec.gov .

Statements contained in this prospectus as to the contents of any contract, agreement or other document to which we make reference are not necessarily complete. In each instance, we refer you to the copy of such contract, agreement or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by the more complete description of the matter involved.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

	Webdigs, Inc.

Date: June 20, 2008	/s/ Robert A. Buntz, Jr.
	By: Robert A. Buntz, Jr.
	Chief Executive Officer and President

EXHIBIT 2.1

AGREEMENT AND PLAN OF MERGER

AND REORGANIZATION

This Agreement and Plan of Merger and Reorganization (this “ Agreement ”) is entered into as of October 24, 2007, by and among Select Video, Inc., a Delaware corporation having its principal place of business at 170 Ferndale Road S., Wayzata, Minnesota 55391 (“ Select Video ”), Select Video Acquisition Co., LLC, a Minnesota limited liability company having its principal place of business at 170 Ferndale Road S., Wayzata, Minnesota 55391 (“ Acquisition Co. ”), and Webdigs, LLC, a Minnesota limited liability company having its principal place of business at 3433 Broadway Street NE, Suite 501, Minneapolis, Minnesota 55413 (the “ Company ”).

INTRODUCTION

A. The board of directors of Select Video, and the respective boards of governors of Acquisition Co. and the Company, have determined that it is in the best interests of such entities and their respective owners to consummate a merger of Acquisition Co. with and into the Company, with the Company remaining as the surviving entity to the merger (the “ Merger ”).

B. Select Video, as the sole member of Acquisition Co., has approved this Agreement, the Merger and the other transactions contemplated by this Agreement pursuant to action taken by unanimous written consent of its board of directors in accordance with the requirements of the Delaware General Corporation Law (the “ Delaware Act ”), and the articles of organization and member control agreement of Acquisition Co.

C. The parties to this Agreement intend for the Merger to qualify as a tax-free transaction under Section 351 of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the regulations promulgated thereunder.

AGREEMENT

Now, Therefore , in consideration of the foregoing premises hereby made a part of this Agreement, and the representations, warranties and covenants contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

Article 1

Merger

1.1 The Merger . Subject to the satisfaction or waiver of the conditions set forth in Article 6 , at the Effective Time (as defined in Section 1.2(d) below), Acquisition Co. will merge with and into the Company, and the Company will be the surviving entity in the Merger and become a wholly owned subsidiary of Select Video. The term “ Surviving Company ” as used herein shall refer to the Company, in its state as a wholly owned subsidiary of Select Video after the Merger. The Merger will be effected pursuant to the execution and filing of articles of merger, in substantially the form attached hereto as Exhibit A (the “ Articles of Merger ”), in accordance with the provisions of, and with the effect provided in, the Minnesota Limited Liability Company Act, Chapter 322B of the Minnesota Statutes (the “ Minnesota Act ”), together with any other filings or documentation required under applicable law to effectuate the Merger.

1.2 Effects of Merger .

(a) From and after the Effective Time and until further altered, amended or repealed in accordance with applicable law, (i) Acquisition Co.’s articles of organization as in effect immediately prior to the Effective Time shall be the Surviving Company’s articles of organization, and (ii) Acquisition Co.’s bylaws as in effect immediately prior to the Effective Time shall be the Surviving Company’s bylaws.

(b) From and after the Effective Time and until further altered or amended in accordance with applicable law, (i) all of the rights, privileges, immunities, powers, franchises and authority (both public and private) of the Company and Acquisition Co. shall vest in the Surviving Company; (ii) all of the assets and property of the Company and Acquisition Co. of every kind, nature and description (real, personal and mixed, and both tangible and intangible) and every interest therein, wheresoever located, including without limitation all debts or other obligations belonging or due to the Company or Acquisition Co., and all claims and all causes of action, shall be vested absolutely and unconditionally in the Surviving Company; and (iii) all debts and obligations of the Company and Acquisition Co., all rights of creditors of the Company or Acquisition Co., and all liens or security interests encumbering any of the property of the Company or Acquisition Co. shall be vested in the Surviving Company and shall remain in full force and effect without modification or impairment and shall be enforceable against the Surviving Company and its assets and properties with the same full force and effect as if such debts, obligations, liens or security interests had been originally incurred or created by the Surviving Company in its own name and for its own behalf. Without limiting the generality of the foregoing, the Surviving Company specifically assumes all continuing obligations which the Company or Acquisition Co. would otherwise have to indemnify its officers and directors, to the fullest extent provided in the Minnesota Act, subject in all cases to the Surviving Company’s articles of organization and bylaws, with respect to any and all claims arising out of actions taken or omitted by Acquisition Co.’s officers and directors prior to the Effective Time.

(c) Each of Select Video, the Company and Acquisition Co. shall use commercially reasonable efforts to take all such action as may be necessary or appropriate to effectuate the Merger in accordance with the Minnesota Act at the Effective Time. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Company with full right, title and possession to all properties, rights, privileges, immunities, powers and franchises of either the Company or Acquisition Co., the officers of Select Video, and the officers of Surviving Company on behalf of the Company and Acquisition Co., shall take all such lawful and necessary action.

(d) Subject to the provisions of Article 6 and Article 7 , the closing of the transactions contemplated hereby (the “ Closing ”) shall take place at such location, on such date and at such time as the Company and Select Video mutually agree at the earliest practicable time after the satisfaction or waiver of the conditions in Article 6 , but in no event later than 20 business days after all such conditions have been satisfied or waived. On the Closing date, and to effect the Merger, the parties hereto will cause the Articles of Merger to be filed with the Minnesota Secretary of State in accordance with the Minnesota Act. The Merger shall be effective upon the filing of the Articles of Merger or at such later date or time as is specified in the Articles of Merger (the “ Effective Time ”).

1.3 Effect on the Membership Interests of the Company and Acquisition Co . To effectuate the Merger, and subject to the terms and conditions of this Agreement, at the Effective Time:

(a) Each unit representing a membership interest of the Company (collectively, and regardless of whether they are denominated as common units or Class A units, the “ Company Units ”) issued and outstanding immediately prior to the Effective Time, other than Company Units to be extinguished pursuant to Section 1.3(b) , shall convert into and be exchanged for fully paid and non-assessable shares of common stock of Select Video (the “ Select Video Common Stock ”) such that Select Video shall issue to each holder of a Company Unit, (i) other than holders of shares extinguished pursuant to Section 1.3(b) and (ii) other than as contemplated in paragraph ( b) below, that number of shares of Select Video Common Stock equal to the product of the number of Company Units held by such member multiplied by four (4) (the “ Exchange Ratio ”). Notwithstanding the foregoing, to the extent that any Company Unit is not vested, by its terms, at the Effective Time, the shares of Select Video Common Stock issued to the holder thereof in exchange therefor shall be restricted pursuant to a Restricted Stock Plan of Select Video in substantially the form attached hereto as Exhibit B (the “ Restricted Stock Plan ”). The shares of Select Video Common Stock received by holders of Company Units as a result of the Merger are sometimes collectively referred to herein as the “ Merger Consideration .”

(b) Each Company Unit issued and outstanding immediately prior to the Effective Time and owned by Acquisition Co. or Select Video, if any, shall be cancelled and extinguished without any conversion thereof and no payment shall be made with respect thereto .

(d) Notwithstanding paragraph (a) above: (i) if the capitalization representations and warranties of the Company or Select Video contained in Sections 2.3(a) and 3.3(a) , respectively, shall have failed to be absolutely true and accurate at the Closing, then the Exchange Ratio shall be deemed equitably adjusted without further action of the parties so that the number of shares of Select Video Common Stock received by former holders of Company Units shall constitute, immediately after the Effective Time, the same percentage of issued and outstanding securities of Select Video as would have been received by such former holders of Company securities had such representations and warranties been strictly true and accurate; and (ii) in no event shall the holders of Company Units receive, as Merger Consideration at the Effective Time, a number of shares of Select Video Common Stock equal to less than 80% of the total number of issued and outstanding shares of Select Video Common Stock, determined immediately after the Effective Time.

1.4 Rights of Holders of Company Capital Stock .

(a) From and after the Effective Time and until surrendered for exchange, each outstanding certificate, if any, that immediately prior to the Effective Time represented one or more Company Units (except Company Units cancelled or extinguished pursuant to Section 1.3(b) above) shall be deemed, for all purposes, to evidence ownership of and to represent the number of whole shares of Select Video Common Stock into which such Company Units shall have been converted pursuant to Section 1.3(a) . Accordingly, the record holder of each outstanding Company Unit shall, from and after the Effective Time, be entitled to vote the shares of Select Video Common Stock into which such Company Units shall have been converted on any matters with respect to which the holders of record of Select Video capital stock with voting rights shall be entitled to vote as of any record date after the Effective Time. In any matters relating to the conversion of Company Units into securities of Select Video pursuant to this Agreement, Select Video may rely conclusively upon the record of holders of Company Units maintained by the Company (or its agents) containing the names and addresses of the holders of record of such Company Units at the Effective Time.

(b) As of the Effective Time, Select Video shall have reserved a sufficient number of authorized but unissued shares of Select Video Common Stock for issuance as Merger Consideration pursuant to Section 1.3(a) .

1.5 Procedure for Surrender and Exchange of Certificates .

(a) Select Video or its agent(s) shall act as exchange agent in the Merger. As soon as practicable after the Effective Time, Select Video will mail or cause to be mailed, to each former holder of Company Units (except Company Units cancelled or extinguished pursuant to Section 1.3(b) above, and except for shares of Select Video Common Stock that are restricted pursuant to the Restricted Stock Plan) as recorded on the Company’s books and records immediately prior to the Merger, a letter of transmittal in customary form and containing instructions for use in effecting the surrender of certificates, if any, representing Company Units (“ Company Certificates ”) in exchange for certificates that represent Select Video Common Stock (“ Select Video Certificates ”) representing the Merger Consideration.

(b) Upon surrender of a Company Certificate to Select Video for exchange (except as otherwise contemplated by the last sentence of Section 1.4(a) ), together with a duly executed letter of transmittal and/or such other documents as Select Video may reasonably require to effect transfer of title to Company Certificates, each former holder of Company Units shall be entitled to receive Select Video Certificates representing the appropriate number of shares of Select Video Common Stock into which Company Units shall have been converted under Section 1.3(a) .

(c) In any matters relating to Company Certificates, Select Video may rely conclusively upon the record of holders of Company Units maintained by the Company containing the names and addresses of the holders of record of such Company Units at the Effective Time. Select Video shall not be obligated to deliver Select Video Certificates representing the Merger Consideration to which any former holder of Company Units is entitled until such holder surrenders the appropriate Company Certificates. Furthermore, in the event any Company Certificate shall have been lost, stolen or destroyed, Select Video shall, subject to the other terms and conditions of this Agreement, issue in exchange for such lost, stolen or destroyed Company Certificate upon the making of an affidavit of that fact by the holder thereof, appropriate Select Video Certificates. Upon surrender, each Company Certificate shall be cancelled.

(d) If there is a transfer of ownership of Company Units which is not registered in the Company’s transfer records, a Select Video Certificate representing the proper number of shares of Select Video Common Stock may be issued to a Person other than the Person in whose name the Company Certificate so surrendered is registered if: (i) upon presentation to the corporate secretary of Select Video, such certificate shall have been properly endorsed or otherwise be in proper form for transfer, (ii) the Person requesting such payment shall pay any transfer or other taxes required by reason of the issuance of shares of Select Video Common Stock to a Person other than the registered holder of such certificate or establish to the reasonable satisfaction of Select Video that such tax has been paid or is not applicable, and (iii) the issuance of such Select Video Common Stock shall not, in the sole discretion of Select Video, violate the requirements of applicable securities laws and regulations with respect to the private placement of Select Video Common Stock that will result from the Merger. For all purposes of this Agreement, the term “ Person ” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, governmental authority or other entity.

(e) Shares of Select Video Common Stock issued in the Merger will not be transferable except (i) pursuant to an effective registration statement under the Securities Act of 1933 (the “ Securities Act ”), or (ii) upon receipt by Select Video of a written opinion of counsel reasonably satisfactory to Select Video to the effect that the proposed transfer is exempt from the registration requirements of the Securities Act and relevant state securities laws. Restrictive legends shall be placed on all Select Video Certificates representing Select Video Common Stock issued in the Merger, in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND CERTAIN OTHER CONDITIONS.

NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER AND ALL APPLICABLE STATE SECURITIES LAWS OR (B) THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS.

Except as otherwise provided by applicable law, the failure of Select Video Certificates to contain a legend in substantially the form set forth above shall not affect the enforceability of restrictions set forth in this Section 1.5 . In addition, Select Video Certificates representing any restricted shares subject to the Restricted Stock Plan shall bear appropriate restrictive legends.

1.6 Directors and Officers of Surviving Company . Immediately after the Effective Time, the governors and managers of the Surviving Company shall be, respectively, the persons who were governors and managers of the Company immediately prior to the Effective Time. Such governors and managers of the Surviving Company shall hold office for the term specified in, and subject to the provisions contained in, the Surviving Company’s articles of organization, bylaws and applicable law. If, at or after the Effective Time, a vacancy shall exist on the board of governors or in any of the offices of the Surviving Company, such vacancy shall be filled in the manner provided in the Surviving Company’s articles of organization, bylaws and applicable law.

1.7 Directors and Officers of Select Video . Immediately after the Effective Time, Select Video’s board of directors shall appoint Robert A. Buntz, Jr., and Tom Meckey as directors of Select Video; Robert A. Buntz, Jr. shall be appointed as Select Video’s Chief Executive Officer and President, and Edward Wicker shall be appointed as Select Video’s Chief Financial Officer and Treasurer, all effective upon the Effective Time. In addition, at the Closing, the Company shall have identified three new director-appointees for Select Video, all of whom shall be (i) non-employee directors who qualify as “independent” under Nasdaq Stock Market Rules and (ii) acceptable to the directors of Select Video who were directors prior to the Closing. Subject to the foregoing, the three new director-appointees shall be appointed as directors of Select Video, and the directors of Select Video who were serving immediately prior to the Effective Time shall resign.

Article 2
Representations and Warranties of the Company

The Company hereby represents and warrants to Select Video and Acquisition Co. as follows:

2.1 Organization and Qualification . The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Minnesota, and has the requisite corporate power to carry on its business as now conducted. The Company has no subsidiaries except Credit Garage, LLC, a Minnesota limited liability company, Home Equity Advisers, LLC, a Minnesota limited liability company, and Marquest Financial, Inc., a Minnesota corporation, and any other subsidiaries listed on Schedule 2.1 , and each such subsidiary is duly organized, validly existing and in good standing under the laws of the State of Minnesota, and has the requisite power to carry on its business as now conducted. The Company and each subsidiary is licensed or qualified to do business in every jurisdiction in which the nature of its business or its ownership of property requires it to be licensed or qualified, except where the failure to be so licensed or qualified would not have a Material Adverse Effect on the Company or the Surviving Company (in each case, on a consolidated basis) given the Company’s current business operations conducted through its subsidiaries. For all purposes of this Agreement, the term “ Material Adverse Effect ” shall, with respect to an entity, mean a material adverse effect on the business, operations, results of operations, prospects or financial condition of such entity.

2.2 Authority Relative to this Agreement; Non-Contravention . The Company has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by the Company’s board of governors and, except for approval of this Agreement and the Merger by the requisite vote of the Company’s members (the “ Required Company Member Vote ”), no other company proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and, assuming it is a valid and binding obligation of Select Video and Acquisition Co., constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally. The Company is not subject to, or obligated under, any provision of (a) its articles of organization, member control agreement or bylaws, (b) any agreement, arrangement or understanding, (c) any license, franchise or permit or (d) subject to obtaining the approvals referred to in the next sentence, any law, regulation, order, judgment or decree, which would conflict with, be breached or violated, or in respect of which a right of termination or acceleration or any security interest, charge or encumbrance on any of its assets would be created, by the execution, delivery or performance of this Agreement, or the consummation of the transactions contemplated hereby, except as would not have a Material Adverse Effect on the Company. Except for (i) approvals under applicable blue sky laws, (ii) the filing of the Articles of Merger with the appropriate state authorities, and (iii) such other filings, authorizations or approvals as may be required by applicable state laws, no authorization, consent or approval of, or filing with, any public body, court or authority is necessary on the part of the Company for the consummation by the Company of the transactions contemplated by this Agreement, except for such authorizations, consents, approvals and filings as to which the failure to obtain or make the same would not, in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company or the Surviving Company or adversely affect the consummation of the transactions contemplated hereby.

2.3 Capitalization .

(a) The Company has issued and outstanding 4,000,000 Company Units as of the date hereof. The issued and outstanding Company Units have been duly authorized, validly issued, fully paid and non-assessable and have not been issued in violation of any preemptive rights and, to the Company’s Knowledge (as defined in Section 8.2 below), are free from any restrictions on transfer (other than restrictions under the Securities Act or state securities laws, the member control agreement or customary transfer conditions in Company bylaws or other organizational documents) or any option, lien, pledge, security interest, encumbrance or charge of any kind. Other than the outstanding Company Units referenced above, neither the Company nor any of its subsidiaries has any other equity interests or securities, equity-linked interests or securities or interests or securities containing any equity features (including securities or other rights convertible into or exercisable for any equity securities, equity-linked securities or securities of such entity containing any equity features) authorized, issued or outstanding. There are no agreements or other rights or arrangements existing which provide for the sale or issuance of membership interests by the Company or any subsidiary of the Company and there are no rights, subscriptions, warrants, options, conversion rights or agreements of any kind outstanding to purchase or otherwise acquire from the Company or any subsidiary of the Company any membership interests or other securities of the Company (or a subsidiary of the Company) of any kind. There are no agreements or other obligations (contingent or otherwise) which may require the Company or a Company subsidiary to repurchase or otherwise acquire any membership interests or any other securities.

(b) Neither the Company nor any Company subsidiary owns, or is a party to any contract to acquire, any equity securities or other securities of any entity or any direct or indirect equity or ownership interest in any other entity. To the Company’s Knowledge, there exist no voting trusts, proxies, or other contracts with respect to the voting of Company Units or any membership interests of a Company subsidiary.

2.4 Litigation . Except as set forth on Schedule 2.4 , there are no actions, suits, proceedings, orders or investigations pending or threatened against the Company or any subsidiary, at law or in equity, or before or by any federal, state or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.

2.5 Brokers and Finders . There are no claims for brokerage commissions, finder fees, investment-advisory fees or similar compensation in connection with the Merger based on any arrangement, understanding, commitment or agreement made by or on behalf of the Company.

2.6 Tax Matters .

(a) (i) The Company and each subsidiary has timely filed all returns, declarations, reports, estimates, information returns, and statements, including any schedules and amendments to such documents (collectively, the “ Company Returns ”), required to be filed or sent by it in respect of any Taxes or required to be filed or sent by it by any taxing authority having jurisdiction; (ii) all such Company Returns are complete and accurate in all material respects; (iii) the Company and each subsidiary have timely and properly paid (or has had paid on its behalf) all Taxes required to be paid by it; (iv) the Company and each subsidiary have established on the Company Latest Balance Sheet (as defined in Section 2.14 below), in accordance with United States generally accepted accounting principles (“ GAAP ”), reserves that are adequate for the payment of any Taxes not yet due and payable; and (v) the Company and each subsidiary have complied with all applicable laws, rules, and regulations relating to the collection or withholding of Taxes from third parties, including without limitation employees, and the payment thereof (including without limitation withholding of Taxes under Code Sections 1441 and 1442, or similar provisions under any foreign laws).

(b) For all purposes of this Agreement, the terms “ Tax ” and “ Taxes ” shall mean any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property or windfall profits taxes, environmental taxes, customs duties, capital stock, franchise, employees’ income withholding, foreign or domestic withholding, social security, unemployment, disability, workers’ compensation, employment-related insurance, real property, personal property, sales, use, transfer, value added, alternative or add-on minimum or other governmental tax, fee, assessment or charge of any kind whatsoever including any interest, penalties or additions to any Tax or additional amounts in respect of the foregoing.

(d) No deficiency for any Taxes has been proposed, asserted or assessed against the Company or any subsidiary that has not been resolved and paid in full or is not being contested in good faith. No waiver, extension or comparable consent given by the Company or a subsidiary regarding the application of the statute of limitations with respect to any Taxes or Returns is outstanding, nor is any request for any such waiver or consent pending. There has been no Tax audit or other administrative proceeding or court proceeding with regard to any Taxes or Company Returns, nor is any such Tax audit or other proceeding pending, nor has there been any notice to the Company or any subsidiary by any Taxing authority regarding any such Tax audit or other proceeding, or, to the Knowledge of the Company, is any such Tax audit or other proceeding threatened with regard to any Taxes or Company Returns. The Company does not expect the assessment of any additional Taxes of the Company or any subsidiary for any period prior to the date hereof and has no Knowledge of any unresolved questions, claims or disputes concerning the liability for Taxes of the Company or any subsidiary which would exceed the estimated reserves established on its books and records.

(e) At the Closing, neither the Company nor any subsidiary is liable with respect to any indebtedness the interest of which is not deductible for applicable federal, foreign, state or local income tax purposes. Neither the Company nor any subsidiary has filed or been included in a combined, consolidated or unitary Tax return (or the substantial equivalent thereof) of any Person.

(f) Neither the Company nor any subsidiary has requested any extension of time within which to file any Company Return, which return has not since been filed.

2.7 Contracts and Commitments .

(a) Schedule 2.7 lists the following agreements, if any, whether oral or written, to which the Company or any subsidiary is a party, which are currently in effect, and which relate to the operation of the Company’s business: (i) collective bargaining agreement or contract with any labor union; (ii) bonus, pension, profit sharing, retirement or other form of deferred compensation plan; (iii) hospitalization insurance or other welfare benefit plan or practice, whether formal or informal; (iv) Company Unit purchase or option plan; (v) contract for the employment of any officer, individual employee or other Person on a full-time or consulting basis or relating to severance pay for any such Person; (vi) confidentiality agreement; (vii) contract, agreement or understanding relating to the voting of Company Units; (viii) agreement or indenture relating to the borrowing of money or to mortgaging, pledging or otherwise placing a lien on any of the assets of the Company or any subsidiary; (ix) guaranty of any obligation for borrowed money or otherwise; (x) lease for real or personal party (for which the annual rental exceeds $10,000); (xi) contract which prohibits the Company from freely engaging in business anywhere in the world; (xii) license agreement or agreement providing for the payment or receipt of royalties or other compensation by the Company in connection with the intellectual property rights listed in Schedule 2.18 ; (xiii) other agreement which is either material to the Company’s business or was not entered into in the ordinary course of business.

(b) To the Company’s Knowledge, the Company and each subsidiary has performed, in all material respects, the obligations required to be performed by it in connection with the contracts or commitments required to be disclosed in Schedule 2.7 and is not in receipt of any claim of default under any contract or commitment required to be disclosed under such caption; the Company has no present expectation or intention of not fully performing any material obligation pursuant to any contract or commitment required to be disclosed under such caption; and the Company has no knowledge of any breach or anticipated breach by any other party to any contract or commitment required to be disclosed under such caption.

2.8 Affiliate Transactions . Except as set forth in Schedule 2.8 , and other than pursuant to this Agreement, no officer, manager, director, governor or employee of the Company, or any member of the immediate family of any such Person, or any entity in which any of such Persons owns any beneficial interest in the Company (other than any publicly held corporation whose stock is traded on a national securities exchange or in the over-the-counter market and less than five percent of the stock of which is beneficially owned by any of such Persons) (collectively, the “ Company Insiders ”), has any agreement with the Company (other than normal employment arrangements) or any interest in any property, real, personal or mixed, tangible or intangible, used in or pertaining to the business of the Company (other than ownership of Company Units). Except as set forth on Schedule 2.8 , the Company is not indebted to any Company Insider (except for amounts due as normal salaries and bonuses and in reimbursement of ordinary business expenses) and no Company Insider is indebted to the Company (except for cash advances for ordinary business expenses). None of the Company Insiders has any direct or indirect interest in any competitor, supplier or customer of the Company or in any Person from whom or to whom the Company leases any property, or in any other Person with whom the Company transacts business of any nature. For purposes of this Section 2.8 , the members of the immediate family of an officer, manager, director, governor or employee shall consist of the spouse, parents, children and siblings of such Person.

2.9 Compliance with Laws; Permits .

(a) Except for any noncompliance that would not reasonably be expected to have a Material Adverse Effect on the Company or the Surviving Company, the Company and its subsidiaries, and the Company’s and the respective subsidiaries’ managers, officers, governors, directors, agents and employees have complied with all applicable laws, regulations and other requirements, including but not limited to federal, state, local and foreign laws, ordinances, rules, regulations and other requirements pertaining to equal employment opportunity, employee retirement, affirmative action and other hiring practices, occupational safety and health, workers’ compensation, unemployment and building and zoning codes, and no claims have been filed against the Company or any subsidiary, and neither the Company nor any subsidiary has received any notice, alleging a violation of any such laws, regulations or other requirements.

(b) The Company and each subsidiary has, in full force and effect, all licenses, permits and certificates, from federal, state, local and foreign authorities (including without limitation federal and state agencies regulating occupational health and safety) necessary to conduct its business and operate its properties after the Merger (collectively, the “ Company Permits ”). The Company has conducted its business in compliance with all material terms and conditions of the Company Permits.

2.10 Financial Statements . The Company has provided Select Video with copies of the unaudited balance sheet of the Company as of October 1, 2007, along with the related statements of income, changes in shareholders’ equity, and cash flows of the Company for the period then ended (collectively, the “ Company Financial Statements ”). The Company Financial Statements have been prepared in accordance with GAAP consistently applied with past practice and on that basis present fairly, in all material respects, the financial position and the results of operations, changes in shareholders’ equity, and cash flows of the Company as of the date of and for the period referred to in the Company Financial Statements.

2.11 Books and Records . The books of account, minute books, records relating to the issuance and transfer and ownership of Company Units, and other records of the Company, have been made available to Select Video, have been properly kept and contain no inaccuracies except for inaccuracies that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company or the Surviving Company.

2.12 Real Property . The Company does not own any real property. In addition, Schedule 2.12 contains an accurate list of all leaseholds and other interests of the Company in any real property. The Company has good and valid title to those leaseholds and any other property interests free and clear of all liens and encumbrances, and the real property to which those leasehold and other interests pertain, together with the owned real property disclosed on Schedule 2.12 , constitutes the only real property used in the Company’s business.

2.13 Insurance . All insurance policies of the Company (including any subsidiaries) are in full force and effect, and all premiums due and payable thereon have been paid (other than retroactive or retrospective premium adjustments that the Company is not currently required, but may in the future be required, to pay with respect to any period ending prior to the date of this Agreement), and the Company has received no notice of cancellation or termination with respect to any such policy that has not been replaced on substantially similar terms prior to the date of such cancellation.

2.14 No Undisclosed Liabilities . Except as reflected in the balance sheet of the Company at October 1, 2007, comprising a portion of the Company Financial Statements (such balance sheet, the “ Latest Company Balance Sheet ”), the Company has no liabilities (whether accrued, absolute, contingent, unliquidated or otherwise) except liabilities which have arisen after the date of the Latest Company Balance Sheet in the ordinary course of business.

2.15 Absence of Certain Developments . Except as disclosed in the Company Financial Statements or as otherwise contemplated by this Agreement, since the Latest Company Balance Sheet, the Company has conducted its business only in the ordinary course consistent with past practice and there has not occurred (a) any event having a Material Adverse Effect on the Company or likely to have a Material Adverse Effect on the Surviving Company, (b) any event that would reasonably be expected to prevent or materially delay the performance of the Company’s obligations pursuant to this Agreement, (c) any material change by the Company in its accounting methods, principles or practices, (d) any declaration, setting aside or payment of any dividend or distribution in respect of the shares of capital stock of the Company or any redemption, purchase or other acquisition of any of the Company’s securities, (e) any increase in the compensation or benefits or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, option (including without limitation the granting of options, appreciation rights, performance awards or restricted membership interest awards), membership-interest purchase or other employee benefit plan of the Company, or any other increase in the compensation payable or to become payable to any employees, managers, officers, consultants, directors or governors of the Company, (f) other than issuances of options pursuant to duly adopted option plans, any issuance, grant or sale of any stock, options, warrants, notes, bonds or other securities, or entry into any agreement with respect thereto by the Company, (g) any amendment to the Company’s articles of organization, member control agreement or bylaws, (h) other than in the ordinary course of business consistent with past practice, any (1) purchase, sale, assignment or transfer of any material assets by the Company, (2) mortgage, pledge or existence of any lien, encumbrance or charge on any material assets or properties, tangible or intangible, of the Company, except for liens for taxes not yet due and such other liens, encumbrances or charges which, individually or in the aggregate, do not have a Material Adverse Effect on the Company and would not have a Material Adverse Effect on the Surviving Company, or (3) cancellation, compromise, release or waiver by the Company of any rights of material value or any material debts or claims, (i) any incurrence by the Company of any material liability (absolute or contingent), except for current liabilities and obligations incurred in the ordinary course of business consistent with past practice, (j) damage, destruction or similar loss, whether or not covered by insurance, materially affecting the business or properties of the Company, (k) entry into any agreement, contract, lease or license other than in the ordinary course of business consistent with past practice, (l) any acceleration, termination, modification or cancellation of any agreement, contract, lease or license to which the Company is a party or by which it is bound, (m) entry by the Company into any loan or other transaction with any officers, managers, directors, governors or employees of the Company, (n) entry by the Company into any transaction of a material nature other than in the ordinary course of business consistent with past practice, or (o) any negotiation or agreement by the Company to do any of the things described in the preceding clauses (a) through (o).

2.16 Employee Benefits .

(a) Schedule 2.16(a) lists all material (i) “employee benefit plans,” within the meaning of Section 3(3) of ERISA, of the Company, (ii) bonus, option, unit purchase, appreciation right, incentive, deferred compensation, supplemental retirement, severance, and fringe benefit plans, programs, policies or arrangements, and (iii) employment or consulting agreements, for the benefit of, or relating to, any current or former employee (or any beneficiary thereof) of the Company, in the case of a plan described in (i) or (ii) above, that is currently maintained by the Company or with respect to which the Company has an obligation to contribute, and in the case of an agreement described in (iii) above, that is currently in effect (the “ Company Plans ”).

(b) No Company Plan is (1) a “multiemployer plan” within the meaning of Sections 3(37) or 4001(a)(3) of ERISA, (2) a “multiple employer plan” within the meaning of Section 3(40) of ERISA or Section 413(c) of the Code, or (3) subject to Title IV of ERISA or Section 412 of the Code.

(c) There is no proceeding pending or, to the Company’s Knowledge, threatened against the assets of any Company Plan or, with respect to any Company Plan, against the Company other than proceedings that would not reasonably be expected to have a Material Adverse Effect on the Company, and to the Company’s Knowledge, there is no proceeding pending or threatened in writing against any fiduciary of any Company Plan other than proceedings that would not reasonably be expected to have a Material Adverse Effect on the Company.

(d) Each of the Company Plans has been operated and administered in all material respects in accordance with its terms and applicable law, including, but not limited to, ERISA and the Code.

(e) Each of the Company Plans that is intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination, notification, or opinion letter from the IRS.

(f) Except as set forth in Schedule 2.16(f) , no director, governor, officer, manager or employee of the Company will become entitled to retirement, severance or similar benefits or to enhanced or accelerated benefits (including any acceleration of vesting or lapsing of restrictions with respect to equity-based awards) under any Company Plan solely as a result of consummation of the transactions contemplated by this Agreement.

2.17 Proprietary Information and Inventions . Each current Company employee, consultant, and manager is a party to either a non-disclosure agreement or an employment agreement with the Company containing comparable non-disclosure provisions. To the Company’s knowledge, no current or former Company employee, consultant or advisory board member who is a party to a non-disclosure agreement has breached such non-disclosure agreement. To the Company’s knowledge, no current or former Company employee, consultant or advisory board member who is a party to an employment agreement with the Company has breached the non-disclosure provisions of such agreement

2.18 Intellectual Property . Set forth on Schedule 2.18 is a complete and accurate list of all Intellectual Property owned or licensed by the Company, and accurately identifies all Persons from which/whom or to which/whom the Company licenses such listed Intellectual Property. For purposes of this Agreement, the term “ Intellectual Property ” means: (a) patents (including any registrations, continuations, continuations in part, renewals and any applications for any of the foregoing); (b) registered and unregistered copyrights and copyright applications; (c) registered and unregistered trademarks, service marks, trade names, slogans, logos, designs and general intangibles of the like nature, together with all registrations and applications therefor; and (d) trade secrets, confidential or proprietary technical information, know-how, designs, processes, research in progress, inventions and invention disclosures (whether patentable or unpatentable).

Article 3

Representations and Warranties of Select Video and Acquisition Co.

Select Video and Acquisition Co. hereby jointly and severally represent and warrant to the Company as follows:

3.1 Organization and Qualification . Select Video and Acquisition Co. are a corporation and limited liability company, respectively, duly organized, validly existing and in good standing under the laws of the State of Delaware (in the case of Select Video) and the State of Minnesota (in the case of Acquisition Co.); and each has the requisite power to carry on their respective businesses as now conducted. Each of Select Video and Acquisition Co. is in good standing under the laws of the state of its incorporation or organization. Select Video and Acquisition Co. are each licensed or qualified to do business in every jurisdiction in which the nature of its respective businesses or ownership of property requires it to be licensed or qualified, except where the failure to be so licensed or qualified would not have a Material Adverse Effect on Select Video.

3.2 Authority Relative to this Agreement; Non-Contravention . Each of Select Video and Acquisition Co. has the requisite power and authority to enter into this Agreement, and to carry out its obligations hereunder. The execution and delivery of this Agreement by Select Video and Acquisition Co., and the consummation by them of the transactions contemplated hereby have been duly authorized by the respective board of directors of Select Video and board of governors of Acquisition Co. Except for approval of the Merger by Select Video (in its capacity as the sole member of Acquisition Co.) in accordance with the Minnesota Act and the articles of organization and bylaws of Acquisition Co., no other proceedings on the part of Select Video or Acquisition Co. are necessary to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by Select Video and Acquisition Co. and, assuming it is a valid and binding obligation of the Company, constitutes a valid and binding obligation of Select Video and Acquisition Co. enforceable in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally. Neither Select Video nor Acquisition Co. is subject to, nor obligated under, any provision of (a) its articles of incorporation or organization or bylaws, (b) any agreement, arrangement or understanding, (c) any license, franchise or permit, nor (d) subject to obtaining the approvals referred to in the next sentence, any law, regulation, order, judgment or decree, which would conflict with, be breached or violated, or in respect of which a right of termination or acceleration or any security interest, charge or encumbrance on any of its assets would be created, by the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby, other than any such conflicts, breaches, violations, rights of termination or acceleration or security interests, charges or encumbrances which, in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Select Video. Except for (i) approvals under applicable blue sky laws, and (ii) the filing of the Articles of Merger with the appropriate state authorities, no authorization, consent or approval of, or filing with, any public body, court or authority is necessary on the part of Select Video or Acquisition Co. for the consummation by Select Video or Acquisition Co. of the transactions contemplated by this Agreement, except for such authorizations, consents, approvals and filings as to which the failure to obtain or make the same would not, in the aggregate, reasonably be expected to have a Material Adverse Effect on Select Video.

3.3 Capitalization .

(a) The authorized capital stock of Select Video consists of two hundred fifty million (250,000,000) shares of capital stock; of which 125,000,000 shares may be issued as Select Video Common Stock and 125,000,000 shares may be issued as either preferred stock or Select Video Common Stock. The number and type of issued and outstanding shares of capital stock of Select Video, and all securities convertible into or exchangeable for capital stock of Select Video, as of the date hereof are correctly set forth on Schedule 3.3(a) . Furthermore, the number of outstanding shares of capital stock of Select Video at Closing (after giving effect to the Reverse Stock Split) will be no more than 3,955,000 shares of Select Video Common Stock (including pending subscriptions for Select Video Common Stock). The issued and outstanding shares of capital stock of Select Video are duly authorized, validly issued, fully paid and non-assessable and have not been issued in violation of any preemptive rights and, to Select Video’s Knowledge, are free from any restrictions on transfer (other than restrictions under the Securities Act or state securities laws) or any option, lien, pledge, security interest, encumbrance or charge of any kind except as may be described on Schedule 3.3(a) . Other than as described on Schedule 3.3(a) , Select Video has no other equity securities, equity-linked securities or securities containing any equity features (including securities or other rights convertible into or exercisable for any equity securities, equity-linked securities or securities of Select Video containing any equity features) authorized, issued or outstanding. Except as set forth in Schedule 3.3(a) , there are no agreements or other rights or arrangements existing which provide for the sale or issuance of capital stock by Select Video and there are no rights, subscriptions, warrants, options, conversion rights or agreements of any kind outstanding to purchase or otherwise acquire from Select Video any shares of capital stock or other securities of Select Video of any kind. Except as set forth on Schedule 3.3(a) , there are no agreements or other obligations (contingent or otherwise) which may require Select Video to repurchase or otherwise acquire any shares of its capital stock or other securities.

(b) To Select Video’s Knowledge, there exist no voting trusts, proxies, or other contracts with respect to the voting of shares of capital stock of Select Video or Acquisition Co.

3.4 Litigation . As of the date hereof, there are no actions, suits, proceedings, orders or investigations pending or, to the Knowledge of Select Video, threatened against Select Video or Acquisition Co., at law or in equity, or before or by any federal, state or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.

3.5 Brokers or Finders . There are no claims for brokerage commissions, finder fees, investment-advisory fees or similar compensation in connection with the Merger based on any arrangement, understanding, commitment or agreement made by or on behalf of Select Video or Acquisition Co.

3.6 Tax Matters .

(a) (i) Since its revival with the State of Delaware, Select Video has timely filed all returns, declarations, reports, estimates, information returns, and statements, including any schedules and amendments to such documents (“ Select Video Returns ”), required to be filed or sent by it in respect of any Taxes or required to be filed or sent by it by any taxing authority having jurisdiction; (ii) all such Select Video Returns are complete and accurate in all material respects; (iii) Select Video has timely and properly paid (or has had paid on its behalf) all Taxes required to be paid by it; and (iv) Select Video has complied with all applicable laws, rules, and regulations relating to the collection or withholding of Taxes from third parties, including without limitation employees, and the payment thereof (including, without limitation, withholding of Taxes under Code Sections 1441 and 1442, or similar provisions under any foreign laws).

(b) There are no liens for Taxes upon any assets of Select Video or Acquisition Co., except liens for Taxes not yet due.

(c) To the Knowledge of Select Video, no deficiency for any Taxes has been proposed, asserted or assessed against Select Video that has not been resolved and paid in full or is not being contested in good faith. No waiver, extension or comparable consent given by Select Video regarding the application of the statute of limitations with respect to any Taxes or Returns is outstanding, nor is any request for any such waiver or consent pending. There has been no Tax audit or other administrative proceeding or court proceeding with regard to any Taxes or Select Video Returns, nor is any such Tax audit or other proceeding pending, nor has there been any notice to Select Video by any Taxing authority regarding any such Tax audit or other proceeding, or, to the Knowledge of Select Video, is any such Tax audit or other proceeding threatened with regard to any Taxes or Select Video Returns. Select Video does not expect the assessment of any additional Taxes of Select Video for any period prior to the date hereof and has no Knowledge of any unresolved questions, claims or disputes concerning the liability for Taxes of Select Video that would exceed the estimated reserves established on its books and records.

(d) Select Video has not requested any extension of time within which to file any Select Video Return, which return has not since been filed.

3.7 Books and Records . At the Closing, all of Select Video’s material records will be in the possession of Select Video.

3.8 Real Property . Select Video does not own any real property and does not lease any real property.

3.9 Absence of Undisclosed Liabilities . Except for trade payables for legal fees and costs, Select Video has no liabilities (whether accrued, absolute, contingent, unliquidated or otherwise) except liabilities which have arisen in the ordinary course of business.

3.10 Absence of Certain Developments . Except as set forth in Schedule 3.10 or as otherwise contemplated by this Agreement, since September 28, 2007, there has not occurred with respect to Select Video (a) any event having a Material Adverse Effect on Select Video, (b) any event that would reasonably be expected to prevent or materially delay the performance of Select Video’s obligations pursuant to this Agreement, (c) any material change by Select Video in its accounting methods, principles or practices, (d) any declaration, setting aside or payment of any dividend or distribution in respect of the shares of capital stock of Select Video or any redemption, purchase or other acquisition of any of Select Video’s securities, (e) any increase in the compensation or benefits or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan of Select Video, or any other increase in the compensation payable or to become payable to any employees, officers, consultants or directors of Select Video, (f) any issuance, grants or sale of any stock, options, warrants, notes, bonds or other securities, or entry into any agreement with respect thereto by Select Video, (g) except with respect to the Reverse Stock Split to be effected prior to Closing, any amendment to the articles of incorporation or bylaws of Select Video, (h) other than in the ordinary course of business consistent with past practice, any (1) capital expenditures by Select Video, (2) purchase, sale, assignment or transfer of any material assets by Select Video, (3) mortgage, pledge or existence of any lien, encumbrance or charge on any material assets or properties, tangible or intangible of Select Video, except for liens for taxes not yet due and such other liens, encumbrances or charges which do not, individually or in the aggregate, have a Material Adverse Effect on Select Video, or (4) cancellation, compromise, release or waiver by Select Video of any rights of material value or any material debts or claims, (i) any incurrence by Select Video of any material liability (absolute or contingent), except for current liabilities and obligations incurred in the ordinary course of business consistent with past practice, (j) damage, destruction or similar loss, whether or not covered by insurance, materially affecting the business or properties of Select Video, (k) entry by Select Video into any agreement, contract, lease or license other than in the ordinary course of business consistent with past practice, (l) any acceleration, termination, modification or cancellation of any agreement, contract, lease or license to which Select Video is a party or by which any of them is bound, (m) entry by Select Video into any loan or other transaction with any officers, directors or employees of Select Video, (n) entry by Select Video into any transaction of a material nature other than in the ordinary course of business consistent with past practice, or (o) any negotiation or agreement by the Select Video to do any of the things described in the preceding clauses (a) through (o).

Article 4
Conduct of Business Pending the Merger

4.1 Conduct of Business by Select Video . From the date of this Agreement through the Effective Time, unless the Company shall otherwise agree in writing or as otherwise expressly contemplated or permitted by other provisions of this Agreement, Select Video shall not directly or indirectly (a) except as contemplated by Section 5.7 , amend its articles of incorporation or bylaws, (b) except as contemplated by Section 5.7 , split, combine or reclassify any outstanding shares of capital stock of Select Video, (c) except as contemplated by Section 5.8 , declare, set aside, make or pay any dividend or distribution in cash, stock, property or otherwise with respect to the capital stock of Select Video, (d) default in its obligations under any material debt, contract or commitment which default results in the acceleration of obligations due thereunder, except for such defaults arising out of Select Video’s entry into this Agreement for which consents, waivers or modifications are required to be obtained as set forth on Schedule 3.2 , (e) conduct its operations other than in the ordinary course on an arms-length basis and in accordance in all material respects with all applicable laws, rules and regulations and Select Video’s past custom and practice, (f) except with respect to any existing subscriptions or obligations to issue securities, issue or sell any additional shares of, or options, warrants, conversions, privileges or rights of any kind to acquire any shares of, any of its capital stock, (g) acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership, joint venture or other business organization or division or material assets thereof, or (h) make or change any material tax elections, settle or compromise any material tax liability or file any amended tax return.

4.2 Conduct of Business by the Company . From the date of this Agreement through the Effective Time, unless Select Video shall otherwise agree in writing or as otherwise expressly contemplated or permitted by other provisions of this Agreement, the Company shall not directly or indirectly (a) amend its articles of organization, member control agreement or bylaws, (b) split, combine or reclassify any outstanding membership interests of the Company, (c) declare, set aside, make or pay any distribution in cash, stock, property or otherwise with respect to membership interests of the Company, (d) default in its obligations under any material debt, contract or commitment which default results in the acceleration of obligations due thereunder, except for such defaults arising out of the Company’s entry into this Agreement for which consents, waivers or modifications are required to be obtained as set forth on Schedule 2.2 , (e) conduct its business other than in the ordinary course on an arms-length basis and in accordance in all material respects with all applicable laws, rules and regulations and the Company’s past custom and practice, (f) issue or sell any additional shares of, or options, warrants, conversions, privileges or rights of any kind to acquire any shares of, any of its capital stock, (g) acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership, joint venture or other business organization or division or material assets thereof, or (h) make or change any material tax elections, settle or compromise any material tax liability or file any amended tax return.

Article 5

Additional Covenants and Agreements

5.1 Governmental Filings . Each party will use all reasonable efforts and will cooperate with the other party in the preparation and filing, as soon as practicable, of all filings, applications or other documents required under applicable law to consummate the transactions contemplated by this Agreement. Prior to submitting each filing, application, registration statement or other document with the applicable regulatory authority, each party will, to the extent practicable, provide the other party with a meaningful opportunity to review and comment on each such application, registration statement or other document to the extent permitted by applicable law. Each party will use all reasonable efforts and will cooperate with the other party in taking any other actions necessary to obtain such regulatory or other approvals and consents at the earliest practicable time, including participating in any required hearings or proceedings. Subject to the terms and conditions herein provided, each party will use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement.

5.2 Expenses . All costs and expenses incurred by each party in connection with this Agreement and the transactions contemplated hereby shall be borne solely by such party.

5.3 Due Diligence; Access to Information; Confidentiality .

(a) Between the date hereof and the Effective Time, the Company and Select Video shall afford to the other party and their authorized representatives the opportunity to conduct and complete a due-diligence investigation of the other party (including, in the case of the Company, an investigation of Acquisition Co.) as described herein. Each party shall permit the other party full access on reasonable notice and at reasonable hours to its properties and shall disclose and make available (together with the right to copy) to the other party and its officers, employees, attorneys, accountants and other representatives, all books, papers and records relating to the assets, stock, properties, operations, obligations and liabilities of such party and its subsidiaries, including without limitation all books of account (including without limitation the general ledger), tax records, minute books of director/governor and shareholder/member meetings, organizational documents, bylaws, contracts and agreements, filings with any regulatory authority, accountants’ work papers, litigation files (including without limitation legal research memoranda), attorney’s audit response letters, documents relating to assets and title thereto (including without limitation abstracts, title insurance policies, surveys, environmental reports, opinions of title and other information relating to the real and personal property), plans affecting employees, securities-transfer records and shareholder lists, and any books, papers and records relating to other assets or business activities in which such party may have a reasonable interest, and otherwise provide such assistance as is reasonably requested in order that each party may have a full opportunity to make such investigation and evaluation as it shall reasonably desire to make of the business and affairs of the other party; provided, however , that the foregoing rights granted to each party shall, whether or not and regardless of the extent to which the same are exercised, in no way affect the nature or scope of the representations, warranties and covenants of the respective party set forth herein. In addition, each party shall cooperate fully (including providing introductions, where necessary) with such other party to enable the party to contact third parties, including customers, prospective customers, specified agencies or others as the party deems reasonably necessary to complete its due diligence; provided further, that such party agrees not to initiate such contacts without the prior approval of the other party, which approval will not be unreasonably withheld.

(b) Prior to Closing and if, for any reason, the transactions contemplated by this Agreement are not consummated and this Agreement is terminated, neither Select Video, Acquisition Co. nor the Company, including their respective directors, governors, managers, officers, employees, attorneys, accountants and other representatives, shall disclose to third parties or otherwise use any confidential information received from the other parties hereto in the course of investigating, negotiating, and performing the transactions contemplated by this Agreement; provided, however , that nothing shall be deemed to be confidential information which:

(i) is known to the party receiving the information at the time of disclosure and is documented as such, unless any individual who knows the information is under an obligation to keep that information confidential;

(ii) becomes publicly known or available without the disclosure thereof by the party receiving the information in violation of this Agreement; or

(iii) is received by the party receiving the information from a third party not under an obligation to keep that information confidential.

This provision shall not prohibit the disclosure of information required to be made under federal or state securities laws, rules and regulations or by order of any federal, state or local regulatory agency or as otherwise required to be disclosed under applicable law. If any disclosure is so required, the party making such disclosure shall consult with the other party prior to making such disclosure, and the parties shall use all reasonable efforts, acting in good faith, to agree upon a text for such disclosure that is satisfactory to both parties.

5.4 Company Member Meeting . As promptly as practicable after the date hereof, the Company shall, in accordance with the applicable provisions its articles of organization, member control agreement and bylaws and the Minnesota Act, duly call, give notice of, convene and hold a special meeting of its members for the purpose of considering and taking action upon this Agreement and the Merger, or obtain written consents in lieu thereof from Company members holding not less than the minimum number of votes that would be necessary to take action and authorize this Agreement and the Merger at a meeting of the Company’s members (in any case and regardless of whether pursued through a special meeting or written consent in lieu thereof, the “ Company Member Meeting ”).

5.5 Issuance of Merger Consideration; Private Placement . Each of the Company and Select Video shall take all action, mutually agreed upon to be necessary or advisable, on its part such that the issuance of the Merger Consideration to the Company’s members constitutes a valid private placement exempt from the registration requirements of the Securities Act and applicable state securities laws.

5.6 Inability to Fulfill Conditions . If any party hereto determines that a condition to its obligations to consummate the transactions contemplated hereby cannot be fulfilled on or prior to the termination date of this Agreement, it will promptly notify the other parties.

5.7 Reverse Stock Split by Select Video . Prior to the Closing, Select Video shall, in accordance with the applicable provisions its certificate of incorporation and bylaws and the Delaware Act, amend its certificate of incorporation to effect a stock combination (i.e., reverse stock split) on a 1-for-20 basis (the “ Reverse Stock Split ”). The Reverse Stock Split has already been approved by the board of directors and stockholders of Select Video.

5.8 Formation of Subsidiary and Spinoff . Prior to the Closing, Select Video shall form and organize a wholly owned subsidiary corporation and cause shares of such subsidiary to be distributed to the then-current stockholders of Select Video in a dividend. The subsidiary shall be capitalized by a transfer from Select Video of all rights and obligations associated with that certain Asset Purchase Agreement with Poker Magic, Inc., a Minnesota corporation, dated as of March 10, 2006.

5.9 Post-Closing Covenants . Select Video and the Company shall use their commercially reasonable best efforts to cause the filing, promptly after the Closing, of a Form 15c2-11 by one or more market makers on behalf of Select Video for the purpose of having Select Video Common Stock be listed for trading on at least the Pink Sheets quotation service. Furthermore, Select Video and the Company shall use their commercially reasonable best efforts, promptly after the Closing and the successful listing of Select Video Common Stock, to engage an independent registered accounting firm to perform an SEC-compliant audit of Select Video, on a consolidated basis, for the purpose of preparing and filing a registration statement under either the Securities Act of 1933 or the Securities and Exchange Act of 1934, and thereby cause Select Video to become a public reporting corporation.

Article 6

Conditions

6.1 Conditions to Obligations of Each Party . The respective obligations of each party to effect the transactions contemplated hereby are subject to the fulfillment or waiver at or prior to the Effective Time of the conditions set forth in the paragraphs below:

(a) There shall have been no law, statute, rule or regulation, domestic or foreign, enacted or promulgated which would prohibit or make illegal the consummation of the transactions contemplated hereby.

(b) This Agreement and all of the transactions contemplated hereby shall have been, and shall at the Effective Time remain, duly authorized by the board of directors of Select Video and the boards of governors of each of Acquisition Co. and the Company. Further, Select Video, as the sole member of Acquisition Co., and the members of the Company shall have approved the Merger and this Agreement.

(c) There shall not be threatened, instituted or pending any action or proceeding before any court or governmental authority or agency (i) challenging or seeking to make illegal, or to delay or otherwise directly or indirectly restrain or prohibit, the consummation of the transactions contemplated hereby or seeking to obtain material damages in connection with such transactions; (ii) seeking to prohibit direct or indirect ownership or operation by Select Video of all or a material portion of the business or assets of the Company, or to compel Select Video or Acquisition Co. or the Company to dispose of or to hold separately all or a material portion of the business or assets of Select Video or of the Company, as a result of the transactions contemplated hereby; (iii) seeking to invalidate or render unenforceable any material provision of this Agreement or any of the other agreements attached as exhibits hereto or contemplated hereby; or (iv) otherwise relating to and materially adversely affecting the transactions contemplated hereby.

(d) There shall not be any action taken, or any statute, rule, regulation, judgment, order or injunction proposed, enacted, entered, enforced, promulgated, issued or deemed applicable to the transactions contemplated hereby, by any federal, state or other court, government or governmental authority or agency, that would reasonably be expected to result, directly or indirectly, in any of the consequences referred to in Section 6.1(c) .

(e) There shall not have occurred any general suspension of trading on the New York Stock Exchange, the Nasdaq Stock Markets or American Stock Exchange, or any general bank moratorium or closing or any war, national emergency or other event affecting the economy or securities trading markets generally that would make completion of the Merger impractical, in the reasonable discretion of either party.

(f) There shall be available exemptions from the registration requirements of the Securities Act and all applicable state securities laws for the offer and issuance of the Merger Consideration.

(g) The board of directors of Select Video shall have adopted and approved the Restricted Stock Plan.

6.2 Additional Conditions to Obligations of Select Video and Acquisition Co . The obligations of Select Video and Acquisition Co. to effect the transactions contemplated hereby in accordance with the terms of this Agreement are also subject to the fulfillment or waiver of the conditions set forth in the paragraphs below:

(a) Since the date of this Agreement, the Company shall have continued to conduct its operations in accordance with the provisions of Section 4.2 .

(b) The representations of the Company contained in this Agreement shall be accurate as of the date of this Agreement and as of the Effective Time, in all respects (in the case of any representation containing any materiality qualification) or in all material respects (in the case of any representation without any materiality qualification). The Company shall have performed each obligation and agreement and complied with each covenant to be performed and complied with by it hereunder at or prior to the Effective Time.

(c) The Company shall have obtained all consents and approvals necessary to consummate the transactions contemplated by this Agreement, in order that the transactions contemplated herein not constitute a breach or violation of, or result in a right of termination or acceleration of, or creation of any encumbrance on any of the Company’s assets pursuant to the provisions of, any agreement, arrangement or undertaking of or affecting the Company or any license, franchise or permit of or affecting the Company.

(d) This Agreement and the Merger shall have been approved by the Required Company Member Vote, with no members of the Company having attempted to exercise dissenters’ rights under the Minnesota Act.

(e) The Company shall have furnished to Select Video a certificate of the President and the Chief Financial Officer of the Company, dated as of the date of Closing, in which such officers shall certify that the conditions set forth in Sections 6.2(a) , (b) , (c) and (d) have been fulfilled.

(f) The Company shall have acquired all of the ownership interests in, or all or substantially all of the assets of, Home Equity Advisors, LLC, a Minnesota limited liability company, and Marquest Financial, Inc., a Minnesota corporation.

(g) The Company shall have furnished to Select Video (i) copies of the resolutions of the board of governors of the Company approving this Agreement and the transactions contemplated hereby, (ii) a copy of the Company’s articles of organization, certified by the Secretary of State of Minnesota, and (iii) a certificate, dated as of the date of Closing, executed on behalf of the Company by its corporate secretary or one of its assistant corporate secretaries, certifying to Select Video that such copies are true, correct and complete copies of such resolutions, that such resolutions were duly adopted and have not been amended or rescinded, and that the certified copy of the Company’s articles of organization is true, correct and complete as received from such governmental office.

6.3 Additional Conditions to Obligations of the Company . The obligations of the Company to effect the transactions contemplated hereby in accordance with the terms of this Agreement are also subject to the fulfillment or waiver of the conditions set forth in the paragraphs below:

(a) Since the date of this Agreement, Select Video shall have continued to conduct its operations in accordance with the provisions of Section 4.1 .

(b) The representations of Select Video and Acquisition Co. contained in this Agreement shall be accurate as of the date of this Agreement and as of the Effective Time, in all respects (in the case of any representation containing any materiality qualification) or in all material respects (in the case of any representation without any materiality qualification). Select Video and Acquisition Co., respectively, shall in all material respects have performed each obligation and agreement and complied with each covenant to be performed and complied with by them hereunder at or prior to the Effective Time.

(c) Select Video and Acquisition Co. shall have obtained all consents and approvals necessary to consummate the transactions contemplated by this Agreement, including without limitation those set forth on Schedule 3.2 , in order that the transactions contemplated herein not constitute a breach or violation of, or result in a right of termination or acceleration of, or creation of any encumbrance on any of Select Video’s or Acquisition Co.’s assets pursuant to the provisions of, any agreement, arrangement or undertaking of or affecting Select Video or any license, franchise or permit of or affecting Select Video.

(d) Select Video shall have furnished to the Company a certificate of the Chief Executive Officer and the Chief Financial Officer of Select Video, dated as of the date of Closing, in which such officers shall certify that the conditions set forth in Sections 6.3 (a) , (b), and (c) have been fulfilled.

(e) Select Video and Acquisition Co. shall have furnished to the Company (i) copies of the resolutions of their respective board of directors and board of governors approving this Agreement and the transactions contemplated hereby, (ii) a copy of the certificate of incorporation of Select Video, certified by the Secretary of State of Delaware, and a copy of the articles of organization of Acquisition Co., certified by the Secretary of State of Minnesota, and (iii) a certificate of their respective corporate secretaries, dated as of the date of Closing, certifying to the Company that copies of the resolutions referred to in clause (i) above are true, correct and complete copies of such resolutions, that such resolutions were duly adopted and have not been amended or rescinded, and that the certificates furnished pursuant to clause (ii) above are true, correct and complete as received from such governmental offices.

Article 7
Termination

7.1 Termination . This Agreement may be terminated prior to the Effective Time:

(a) by mutual consent of the Company and Select Video, if the board of directors and board of governors of each so authorizes by vote of a majority of the members of its entire board;

(b) by Select Video, if the Company shall have breached any of its representations or failed to perform any of its covenants herein, which breach or failure to perform (i) causes the condition set forth in Section 6.2(b) not to be satisfied, and (ii) is incapable of being cured or has not been cured within 20 business days after the giving of written notice of such breach or failure to perform; provided, however , that Select Video may only terminate this Agreement pursuant this Section 7.1(b) if the subject breach or failure to perform would be reasonably likely to have a Material Adverse Effect on Select Video and the Surviving Company taken as a whole;

(c) by the Company, if Select Video or Acquisition Co. shall have breached any of their representations or failed to perform any of their covenants herein, which breach or failure to perform (i) causes the condition set forth in Section 6.3(b) not to be satisfied, and (ii) is incapable of being cured or has not been cured within 20 business days after the giving of written notice of such breach or failure to perform; provided, however , that the Company may only terminate this Agreement pursuant this Section 7.1(c) if the subject breach or failure to perform would be reasonably likely to have a Material Adverse Effect on and the Surviving Company taken as a whole; or

(d) by either the Company or Select Video if the Effective Time has not occurred on or before November 30, 2007, or such later date as the Company and Select Video may mutually agree upon in writing (unless the failure to consummate the Merger by such date shall be due to the action or failure to act of the party seeking to terminate this Agreement in breach of such party’s obligations under this Agreement).

Any party desiring to terminate this Agreement shall give prior written notice of such termination and the reasons therefor to the other parties.

Article 8
General Provisions

8.1 Notices . All notices and other communications hereunder shall be in writing and shall be sufficiently given if made by hand delivery, by fax, by overnight delivery service, or by registered or certified mail (postage prepaid and return receipt requested) to the parties at the addresses (or at such other address for a party as shall be specified by it by like notice) set forth in the introductory paragraph of this Agreement. All such notices and other communications shall be deemed to have been duly given as follows: when delivered by hand, if personally delivered, when received, if delivered by registered or certified mail (postage prepaid and return receipt requested), when receipt acknowledged; if faxed, on the day of transmission or, if that day is not a business day, on the next business day; and the next day delivery after being timely delivered to a recognized overnight delivery service.

8.2 Knowledge Convention . For all purposes of this Agreement, the term “ Knowledge ” means, with respect to an individual, that such individual is actually aware of a particular fact or other matter, after conducting a reasonable inquiry or investigation to determine the accuracy of such fact or other matter. A Person other than an individual shall be deemed to have Knowledge of a particular fact or other matter if the officers, directors or other management personnel of such Person had Knowledge of such fact or other matter.

8.3 No Survival . The representations and warranties contained in this Agreement will terminate at the Effective Time or on termination of this Agreement in accordance with Section 7.1 ; provided, however , that the obligation of a party to perform any covenants hereunder, whether wholly or partially, on a post-Closing basis shall survive indefinitely, specifically including but not limited to the covenants set forth in Section 5.9 .

8.4 Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties shall negotiate in good faith to modify this Agreement and to preserve each party’s anticipated benefits under this Agreement.

8.5 Amendment . This Agreement may not be amended or modified except by an instrument in writing approved by the parties to this Agreement and signed on behalf of each of the parties hereto.

8.6 Waiver . At any time prior to the Effective Time, any party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other party hereto or (b) waive compliance with any of the agreements of the other party or with any conditions to its own obligations, in each case only to the extent such obligations, agreements and conditions are intended for its benefit. Any such extension or waiver shall only be effective if made in writing and duly executed by the party giving such extension or waiver.

8.7 Entire and Binding Agreement . This Agreement (together with all other documents and instruments referred to herein), together with that certain letter of intent dated as of September 28, 2007: (a) constitutes the entire agreement, and supersedes all other prior agreements and undertakings, both written and oral, among the parties, with respect to the subject matter hereof; and (b) shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but shall not be assignable or delegable by either party hereto without the prior written consent of the other parties hereto.

8.8 Counterparts; Delivery . This Agreement may be executed in counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. In addition, executed counterparts may be delivered by means of facsimile or other electronic transmission, and signatures so delivered shall be fully and validly binding to the same extent as the delivery of original signatures.

8.9 Third-Party Beneficiaries . This Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto; provided, however , that (i) the members of the Company shall be third-party beneficiaries with respect to their right to receive Merger Consideration under Article 1 of this Agreement and (ii) the current directors of Select Video shall be third-party beneficiaries with respect to the obligations of Select Video and the Company under Section 5.9 .

8.10 Governing Law . The internal laws of the State of Minnesota, without regard to its conflicts-of-law principles, shall govern the interpretation and enforcement of this Agreement.

8.11 Arbitration .

(a) The parties will, to the greatest extent possible, endeavor to resolve any disputes relating to the Agreement through amicable negotiations. Failing an amicable settlement, any controversy, claim or dispute arising under or relating to this Agreement, including the existence, validity, interpretation, performance, termination or breach of this Agreement, will finally be settled by binding arbitration before a single arbitrator (the “ Arbitration Tribunal ”) which will be jointly appointed by the parties. The Arbitration Tribunal shall self-administer the arbitration proceedings utilizing the Commercial Rules of the American Arbitration Association (“ AAA ”); provided, however , that the AAA shall not be involved in administration of the arbitration. The arbitrator must be a retired judge of a state or federal court of the United States or a licensed lawyer with at least ten years of corporate or commercial law experience and have at least an AV rating by Martindale Hubbell. If the parties cannot agree on an arbitrator, either party may request the AAA to appoint an arbitrator which appointment will be final.

(b) The arbitration will be held in Minneapolis, Minnesota. Each party will have discovery rights as provided by the Federal Rules of Civil Procedure within the limits imposed by the arbitrator; provided, however , that all such discovery will be commenced and concluded within 60 days of the selection of the arbitrator. It is the intent of the parties that any arbitration will be concluded as quickly as reasonably practicable. Once commenced, the hearing on the disputed matters will be held four days a week until concluded, with each hearing date to begin at 9:00 a.m. and to conclude at 5:00 p.m. The arbitrator will use all reasonable efforts to issue the final written report containing award or awards within a period of five business days after closure of the proceedings. Failure of the arbitrator to meet the time limits of this Section will not be a basis for challenging the award. The Arbitration Tribunal will not have the authority to award punitive damages to either party. Each party will bear its own expenses, but the parties will share equally the expenses of the Arbitration Tribunal. The Arbitration Tribunal shall award attorneys’ fees and other related costs payable by the losing party to the successful party as it deems equitable. This Agreement will be enforceable, and any arbitration award will be final and non-appealable, and judgment thereon may be entered in any court of competent jurisdiction. Notwithstanding the foregoing, any party may bring claims for injunctive relief in a state or federal court located in the State of Minnesota.

* * * * *

In Witness Whereof , the parties hereto have caused this Agreement and Plan of Merger and Reorganization to be executed effective as of the date first written above.

WEBDIGS, LLC:		SELECT VIDEO, INC.:
a Minnesota limited liability company		a Delaware corporation

By:	/s/ Robert A. Buntz, Jr.	By:	/s/ Daniel J. Shrader.
	Name: Robert A. Buntz, Jr.		Name: Daniel J. Shrader
	Title: Chief Manager		Title: Chief Executive Officer

		SELECT VIDEO ACQUISITION CO., LLC:
		a Minnesota limited liability company

		By:	/s/ Daniel J. Shrader
			Name: Daniel J. Shrader
			Title: Chief Manager

Signature Page – Agreement and Plan of Merger and Reorganization

EXHIBIT 2.2

MEMBERSHIP UNIT PURCHASE AGREEMENT

This MEMBERSHIP UNIT PURCHASE AGREEMENT (this “ Agreement ”) between WebDigs, LLC, a Minnesota limited liability company (the “ Buyer ”), and Casey Murray, a Minnesota resident, (the “ Seller ”), shall be effective as of July 15, 2007 (the “ Effective Date ”). The Buyer and the Seller are referred to individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

A.	The Seller owns all of the issued and outstanding membership units (the “ HEA Units ”), of Home Equity Advisors, LLC, a Minnesota limited liability company (the “ Company ”).

B.	The Buyer will purchase from the Seller, and the Seller will sell to the Buyer, all of the issued and outstanding HEA Units, on the terms and subject to the conditions of this Agreement.

AGREEMENT

In consideration of the above recitals and the promises set forth in this Agreement, the Parties agree as follows:

1. Purchase and Sale of the HEA Units .

1.1

Basic Transaction . On the terms and subject to the conditions of this Agreement, the Buyer agrees to purchase and accept delivery from the Seller, and the Seller agrees to sell, assign, transfer and deliver to the Buyer, the HEA Units, free and clear of all restrictions on transfer and security interests of any kind or nature, as of the Effective Date.

1.2

Purchase Price . In exchange for the HEA Units, Buyer will issue to Seller 64,000 units of Buyer (the “ WebDigs Units ”), which are common units of membership interest as described in the Company’s Member Control Agreement dated May 1, 2007 (the “ Member Control Agreement ”).

1.4

Seller’s Deliveries . The Seller has made the following deliveries in connection with this Agreement, duly executed and properly acknowledged, as appropriate:

(a)

certificates representing the HEA Units, if any, endorsed in blank or accompanied by duly executed assignment documents, along with duly executed spousal consents, as necessary;

(b)

the written resignations of all of the incumbent officers, directors or persons holding similar positions of the Company;

(c)

a signature page to the Member Control Agreement executed by Seller; and

(d)

all necessary third party consents, authorizations and approvals; and

(e)

the original minute book and stock records, all accounting and tax records, and certified Articles of Organization and Bylaws of the Company.

1.5

Buyer’s Deliveries . The Buyer has made the following deliveries in connection with this Agreement, duly executed and properly acknowledged, as appropriate,

(a)

Member Control Agreement confirming Seller’s ownership of the WebDigs Units; and

(b)

copies of the Articles of Organization and Bylaws of Buyer.

2. Representations and Warranties Concerning the Transaction .

2.1

Representations and Warranties of the Seller . The Seller represents and warrants to the Buyer that the statements contained in this Section 2.1 are correct and complete as of the date of this Agreement, except as set forth in the disclosure schedule of the Seller (the “ Seller’s Disclosure Schedule ”) attached to this Agreement. The Seller’s Disclosure Schedule will be arranged in paragraphs corresponding to the sections contained in this Section 2.1.

(a)

Authorization of Transaction . The Seller has the full power and authority to execute and deliver this Agreement and any ancillary documents to which the Seller is a party and to perform his obligations thereunder. This Agreement and any ancillary documents to which the Seller is a party constitute the valid and legally binding obligation of the Seller, enforceable in accordance with their terms.

(b)

Noncontravention . Neither the execution and the delivery of this Agreement or any ancillary documents to which the Seller is a party, nor the consummation of the contemplated transactions, will: (i) violate any law, order or regulation to which the Seller is subject; (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which the Seller is a party or is bound, or to which any of the Seller’s assets is subject; or (iii) result in the imposition or creation of any restrictions on transfer or security interests of any kind or nature in the HEA Units.

(c)

Brokers’ Fees . The Seller has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which the Buyer or the Company could become liable or obligated.

(d)

HEA Units . The Seller holds of record and owns beneficially all of the HEA Units, free and clear of any restrictions on transfer, security interests, options, warrants, purchase rights, contracts, commitments, equities, claims and demands. The Seller is not a party to any option, warrant, purchase right or other contract or commitment that could require the Seller to sell, transfer or otherwise dispose of the HEA Units (other than this Agreement). The Seller is not a party to any voting trust, proxy or other agreement or understanding with respect to the voting of the HEA Units. There are no outstanding powers of attorney executed by the Seller that would affect the Seller’s ability to transfer the HEA Units to the Buyer. The Seller is not now nor has he been a party or is or has been threatened to be made a party, to any action, suit proceeding, hearing or investigation of, in or before any court or governmental authority that would affect the Seller’s ability to transfer the HEA Units to the Buyer.

(e)

Intellectual Property . The Seller has not developed any of the intellectual property of the Company on the Seller’s own time or without the use of the Company’s equipment, supplies, facilities or trade secret information.

2.2

Representations and Warranties of the Buyer . The Buyer represents and warrants to the Seller that the statements contained in this Section 2.2 are correct and complete as of the date of this Agreement.

(a)

Organization of the Buyer . The Buyer is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Minnesota.

(b)

Authorization of Transaction . The Buyer has the full power and authority to execute and deliver this Agreement and any ancillary documents to which the Buyer is a party and to perform its obligations thereunder. This Agreement and any ancillary documents to which the Buyer is a party constitute the valid and legally binding obligation of the Buyer, enforceable in accordance with their terms.

(c)

Noncontravention . Neither the execution and the delivery of this Agreement or any ancillary documents to which the Buyer is a party, nor the consummation of the contemplated transactions, will: (i) violate any law, order or regulation to which the Buyer is subject; (ii) violate any provision of the articles, bylaws or other organizational documents of the Buyer; or (iii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which the Buyer is a party or is bound.

(d)

Brokers’ Fees . The Buyer has no liability to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which the Seller could become liable or obligated.

(e)

Investment . The Buyer is not acquiring the HEA Units with a view to or for the sale in connection with any distribution of such HEA Units within the meaning of the Securities Act of 1933, as amended.

Representations and Warranties Concerning the Company . The Seller represents and warrants to the Buyer that the statements contained in this Section 3 are correct and complete as of the date of this Agreement except as set forth in the Seller’s Disclosure Schedule. The Seller’s Disclosure Schedule will be arranged in paragraphs corresponding to the sections contained in this Section 3.

3.1

Organization, Qualification and Power . The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Minnesota. The Company is in good standing under the laws of each jurisdiction where foreign qualification is required. The Company has full corporate power and authority and has all permits necessary to carry on the businesses in which it is engaged and in which it presently proposes to engage, and to own and use the property owned and used by it. The Seller has delivered to the Buyer correct and complete copies of the charter, bylaws or other governing documents and the minute books, any certificate books and other record books of the Company. The Company is not in violation of its charter, bylaws or other governing documents.

3.2

Capitalization . All issued and outstanding units of the Company have been duly authorized, validly issued, fully paid and nonassessable, and are held of record by the Seller. There are no outstanding or authorized options, warrants or other contracts or commitments that could require the Company to issue any membership units. The Company does not have any outstanding or authorized appreciation, phantom interest, profit participation or similar rights. The Company does not have any voting trusts, proxies or other agreements or understandings with respect to the any units of the Company.

3.3

Noncontravention; Consents and Approvals . Neither the execution and the delivery of this Agreement or any ancillary documents, nor the consummation of the contemplated transactions, will: (a) violate any law, order or regulation to which the Company is subject; (b) violate any provision of the articles, bylaws or other organizational documents of the Company; (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice or consent under any agreement, contract, lease, license, instrument or other arrangement to which the Company is a party or by which it is bound, or to which any of its assets is subject (or result in the imposition of any security interest upon its assets); or (d) result in the cancellation, forfeiture, revocation, suspension or adverse modification of any permit owned or held by the Company. The Company is not required to give any notice to, make any filing with, or obtain any authorization, consent or approval of any person, entity or governmental authority for the Parties to consummate the transactions contemplated by this Agreement.

3.4

Brokers’ Fees . The Company has no liability to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

3.5

Title to Assets . The Company has good and marketable title to all properties or assets (tangible or intangible) necessary for the Company to conduct or used by the Company in its business as presently conducted and holds such properties and assets free and clear of all security interests, liens and other restrictions on transfer. Each such tangible asset is free from defects (patent and latent), is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.

3.6

Subsidiaries . The Company has no subsidiaries and does not otherwise control, own directly or indirectly, or have any equity participation directly or indirectly in any corporation, limited liability company, partnership, joint venture, trust or other business association.

3.7

Financial Statements . The Seller has delivered to the Buyer copies of the Company’s financial statements for the fiscal years ended 2006 and the period ended May 15, 2006. The financial statements are true, complete and correct and fairly present the financial condition and assets and liabilities (whether accrued, absolute, contingent or otherwise) of the Company as of the dates indicated, and the results of operations of the Company for the periods then ended. T he Company has no liabilities except as set forth on the financial statements. Since May 15, 2006, there have been no material changes in the assets, business, financial condition, operations, results of operations or future prospects of the Company.

3.8

Compliance with Laws. The Company has been and is in compliance with all federal, state and local laws and regulations, including without limitation all environmental, health and safety laws, administrative orders, determinations and regulations concerning public health and safety, workers’ health and safety, and pollution or protection of the environment.

3.9

Tax Matters . The Company has filed all tax returns and statements required to be filed for periods ending on or before the Effective Date and has paid all taxes due pursuant to such returns and statements, and pursuant to any assessment which the Company has received. No extension of the time for filing any return or statement is presently in effect. All tax returns filed by the Company with respect to periods ending on or before the Effective Date are true and correct.

3.10

Real Property . The Company does not currently own and has never owned any real property. The Company has not leased or subleased any real property.

3.11

Intellectual Property . All of the Company’s intellectual property is set forth on Schedule 3.11 of the Seller’s Disclosure Schedule. The Company owns or has the right to use all such intellectual property which is necessary for the operation of the business of the Company as presently conducted and as presently proposed to be conducted. Each such item of intellectual property owned or used by the Company immediately before the Effective Date will be owned or available for use by the Company on identical terms and conditions immediately after the Effective Date. The Company has taken all necessary action to maintain and protect each item of intellectual property that it owns or uses. The Company has not interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of any third party.

3.12

Contracts and Permits . Section 3.12 of the Seller’s Disclosure Schedule sets forth all of the permits, contracts or other agreements to which the Company is a party or by which it is bound. The Company has provided the Buyer with correct and complete copies of each listed permit, contract or agreement. Each such permit, contract or agreement is valid and binding on the Company and is in full force and effect. The Company is in compliance with all of its obligations with respect to such permit, contract or agreement. The Company is not aware of any event that allows or, upon the giving of notice or the lapse of time, would allow, revocation or termination of any such permit, contracts or agreement.

3.13

Accounts Receivable . All notes and accounts receivable of the Company are reflected properly on its books and records, are valid receivables subject to no setoffs or counterclaims, are current and collectible, and will be collected in accordance with their terms at their recorded amounts

3.14

Powers of Attorney . There are no outstanding powers of attorney executed on behalf of the Company.

3.15

Customers . No customer, supplier or independent contractor of the Company has indicated that it will stop or decrease the rate of business done with the Company or with the Buyer after the Effective Date.

3.16

Litigation. There are no pending or threatened claims, actions, suits, proceedings or investigations affecting the Company. The Company is not operating under or subject to, or in default with respect to, any order, writ, injunction or decree of any court or governmental agency.

3.17

Employee Benefits . The Company has no pension, profit sharing plans or employee benefit plans. All the accrued obligations of the Company, whether arising by operation of law, by contract or by past custom, for payments by it to trust or other funds or any governmental agency with respect to unemployment compensation benefits, social security benefits or any other benefits for employees of the Company have been paid prior to the Effective Date.

3.18

Guaranties . T he Company is not a guarantor or otherwise liable for any liability (including indebtedness) of any other person.

3.19

Transactions with Affiliates . Section 3.19 of the Seller’s Disclosure Schedule lists all contracts and agreements between the Company (on the one hand) and the Seller or its affiliates (on the other hand). All such contracts and agreements will, except as noted on Section 3.19 of the Seller’s Disclosure Schedule, be terminated immediately prior to the Effective Date. Neither the Seller nor the Company’s governors, officers, employees or members, own any asset, tangible or intangible, that is used by the Company.

3.20

Restrictions on Business Activities . There is no agreement, order, regulation or law binding upon the Company, as opposed to the application of such to those operating in the business industry generally, that has or could reasonably be expected to have the effect of prohibiting or impairing any current business practice of the Company.

3.21

Banking Arrangements . All of the arrangements that the Company has with any banking or financial institution are completely and accurately described in Section 3.21 of the Seller’s Disclosure Schedule, indicating with respect to each of such arrangements the type of arrangement maintained (such as checking accounts, borrowing arrangements, safe deposit boxes, etc.) and the person authorized in respect to such account. All cash held in such accounts is held in demand deposits and is not subject to any restriction or documentation as to withdrawal.

3.22

Other Information . The information concerning the Company set forth in this Agreement and the Schedules and Exhibits attached to this Agreement, and any statement or certificate of the Company furnished or to be furnished to the Buyer pursuant to this Agreement, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated herein or therein or necessary to make the statements and facts contained herein or therein, in light of the circumstances in which they are made, not false or misleading.

4.	Covenants . The Parties agree as follows with respect to the period following the Effective Date.

4.1

General . If, after the Effective Date, any further action is necessary or desirable to carry out the purposes of this Agreement or any ancillary documents, the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request. The Seller acknowledges and agrees that from and after the Effective Date the Buyer will be entitled to possession of all documents, books, records (including tax records), agreements and financial data relating to the Company.

4.2

Transition . The Seller will not take any action that is designed or intended to have the effect of discouraging any lessor, licensor, customer, supplier or other business associate of the Company from maintaining the same business relationships with the Company after the Effective Date as it maintained with the Company prior to the Effective Date. The Seller will refer all customer inquiries relating to the businesses of the Company to the Buyer from and after the Effective Date.

4.3

Confidentiality . Any information concerning the business and affairs of the Company that is not already generally available to the public is considered to be confidential information. The Seller will treat and hold as such all of such confidential information and refrain from using any of such confidential information except in connection with this Agreement and the transactions contemplated by this Agreement or with the written consent of the Buyer.

4.4

Covenant Not to Compete . For a period of one year from and after the Effective Date, the Seller will not engage directly or indirectly (except having less than 1% ownership of the outstanding stock in any publicly-traded corporation) become employed with, provide services to, or engage in any business which is in competition with the business of the Company in any geographic area in which the Company conducts its business as of the Effective Date.

4.5

Nonsolicitation; Non-Hire and Noninterference . For a period of one year from and after the Effective Date, the Seller will not directly or indirectly: (a) induce or attempt to induce any person employed by the Company to leave the employ of the Company or its affiliates, or in any way interfere adversely with the relationship between any such employee and the Company or its affiliates; (b) induce or attempt to induce any such employee to work for, render services or provide advice to or supply confidential business information or trade secrets of the Company or its affiliates to any person or entity; (c) employ, or otherwise pay for services rendered by, any such employee in any business enterprise with which the Seller may be associated, connected or affiliated; or (d) induce or attempt to induce any customer, supplier, licensee, licensor or other person or entity having a business relationship with the Company or its affiliates to cease doing business with the Company or its affiliates, or in any way interfere with the relationship between any such customer, supplier, licensee, licensor or other such person or entity and the Company or its affiliates.

4.6

Blue Pencil . If the final judgment of a court of competent jurisdiction declares that any term or provision of Sections 4.4 or 4.5 is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will be enforceable as so modified after the expiration of the time within which the judgment may be appealed.

4.7

Membership . Seller agrees to take any and all actions and to execute any and all documents necessary for Seller to become a member of the Company, including but not limited to executing and delivering the Company’s Member Control Agreement. Buyer, subject to Seller’s compliance with the foregoing requirements set forth in this paragraph, shall confirm Seller’s status as a member of the Company.

5. Remedies for Breaches of this Agreement .

5.1

Survival of Representations, Warranties and Covenants .

(a)

Notwithstanding any investigation made by or on behalf of any of the Parties or the results of any investigation, and notwithstanding the participation of the Parties in consummating the transactions contemplated hereby, all of the representations and warranties of the Parties contained in Section 2, 3 and 4 of this Agreement will survive the Effective Date (even if the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of the Effective Date) and continue in full force and effect forever.

(b)

The covenants set forth in this Agreement will survive indefinitely, unless a shorter period of survival is specifically set forth in this Agreement.

5.2

Indemnification Provisions for Benefit of the Buyer .

(a)

In the event the Seller breaches (or in the event any third party alleges facts that, if true, would mean the Seller has breached) any of his representations, warranties or covenants contained in this Agreement or any ancillary document to which he is a party, then the Seller shall indemnify the Buyer and its officers, governors, employees, members, agents and affiliates (the “ Buyer Parties ”) from and against the entirety of any actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses and fees, including court costs and reasonable attorney fees and expenses (collectively, “ Adverse Consequences ”) any of the Buyer Parties may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by such breach (or alleged breach).

(b)

The Seller is obligated to indemnify the Buyer Parties from and against the entirety of any Adverse Consequences any of the Buyer Parties may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by any liability of the Company (i) for any taxes of the Company with respect to any tax year or portion thereof ending on or before the Effective Date (or for any tax year beginning before and ending after the Effective Date to the extent allocable to the portion of such period beginning before and ending on the Effective Date as provided in Section 6.2 of this Agreement ), to the extent such taxes are not reflected in the reserve for tax liability (rather than any reserve for deferred taxes established to reflect timing differences between book and tax income) shown on the face of the Company’s financial statements; and (ii) for the unpaid taxes of any person (other than the Company) under Reg. Section 1.1502-6 (or any similar provision of law), as a transferee or successor, by contract or otherwise.

5.3

Indemnification Provisions for Benefit of the Seller . In the event the Buyer breaches (or in the event any third party alleges facts that, if true, would mean the Buyer has breached) any of its representations, warranties or covenants contained in this Agreement, then the Buyer is obligated to indemnify the Seller from and against the entirety of any Adverse Consequences the Seller may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by such breach (or alleged breach).

5.4

Other Indemnification Provisions . The above indemnification provisions are in addition to, and not in derogation of, any statutory, equitable or common law remedy any Party may have with respect to the transactions contemplated by this Agreement. The Seller agrees that he will not make any claim for indemnification against the Buyer or its subsidiaries (including the Company) because Seller was a governor, officer, employee, member or agent of the Company or was serving at the request of the Company as a partner, trustee, governor, director, officer, employee or agent of another entity.

6.	Tax Matters . The following provisions will govern the allocation of responsibility between the Buyer and the Seller for certain tax matters following the Effective Date:

6.1

Tax Periods Ending on or Before the Effective Date . The Buyer will prepare and file all tax returns for the Company for periods ending on or before the Effective Date that are filed after the Effective Date (other than income tax returns). The Buyer will permit the Seller to review and comment on each tax return described in the preceding sentence prior to filing and will make such revisions as are reasonably requested by the Seller. The Seller will pay the Buyer for taxes of the Company with respect to such periods within 15 days after payment by the Buyer or the Company of such taxes.

6.2

Tax Periods Beginning Before and Ending After the Effective Date . The Buyer will prepare and file any tax returns of the Company for tax periods that begin before the Effective Date and end after the Effective Date. Within 15 days after the payment by the Buyer or Company of such taxes, the Seller will pay the Buyer the Seller’s portion of the taxes of the Company which are equal to the amount due for the period of time beginning before and ending on the Effective Date. For purposes of this Section 6.2 and Section 5.2(b) of this Agreement , in the case of any taxes that are imposed on a periodic basis and are payable for a taxable period that includes (but does not end on) the Effective Date, the portion of such tax that relates to the period beginning before and ending on the Effective Date will: (a) in the case of any taxes other than taxes based upon or related to income or receipts, be deemed to be the amount of such tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Effective Date and the denominator of which is the number of days in the entire taxable period; and (b) in the case of any tax based upon or related to income or receipts be deemed equal to the amount that would be payable if the relevant taxable period ended on the Effective Date. Any credits relating to a taxable period that begins before and ends after the Effective Date will be taken into account as though the relevant taxable period ended on the Effective Date. All determinations necessary to give effect to the foregoing allocations will be made in a manner consistent with prior practice of the Company.

6.3

Refunds and Tax Benefits . The Seller is entitled to receive any tax refunds that are received by the Buyer or the Company, and any amounts credited against tax to which the Buyer or the Company becomes entitled, that relate to tax periods ending on or before the Effective Date, and the Buyer will pay the Seller any such refund or the amount of any such credit within 15 days after receipt or entitlement thereto.

6.4

Cooperation on Tax Matters .

(a)

Upon a reasonable request by one Party, the other Party will fully cooperate with filing the tax returns pursuant to this Section 6 and providing records and relevant information for any audit, litigation or other proceeding with respect to taxes. The Parties agree to make Company employees available on a mutually convenient basis to provide additional information and explanation that are needed. The Company and the Seller agree: (i) to retain all books and records with respect to tax matters pertinent to the Company relating to any taxable period beginning before and ending on the Effective Date until the expiration of the statute of limitations (and to the extent notified by the Buyer or the Seller, for any extensions thereof) of the respective taxable periods; (ii) to abide by all record retention agreements entered into with any taxing authority; and (iii) to give the other Party reasonable written notice prior to transferring, destroying or discarding any books and records and, upon the Buyer’s request, allow the Buyer to take possession of such books and records.

(b)

Upon a reasonable request by one Party, the other Party will use his or its best efforts to obtain any certificate or other document from any governmental authority or any other person as may be necessary to mitigate, reduce or eliminate any tax that could be imposed.

6.5

Transfer and Income Taxes . The Buyer will pay all taxes and fees including penalties and interest, if any, arising out of or in connection with this Agreement or and the contemplated transactions, and will indemnify, defend and hold harmless the Seller with respect to such taxes. The Buyer will file all necessary documentation and tax returns with respect to such taxes. The Seller, however, will pay all individual income taxes and file all necessary tax returns and other documentation with respect to all such income taxes in connection with the Seller’s receipt of the WebDigs Units.

7. Miscellaneous .

7.1

No Third-Party Beneficiaries . This Agreement will not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.

7.2

Entire Agreement . This Agreement (including the documents referred to in this Agreement) and the ancillary documents thereto constitute the entire agreement among the Parties and supersede any prior understandings, agreements or representations by or among the Parties, written or oral, to the extent they related in any way to the subject matter of this Agreement.

7.3

Succession and Assignment . This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests or obligations under this Agreement without the prior written approval of the other Party.

7.4

Counterparts and Facsimile Signatures . This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument, and by facsimile.

7.5

Notices . All notices, requests, demands, claims and other communications under this Agreement must be in writing and will be deemed duly given when delivered by hand, transmitted by facsimile or three (3) days after the day when deposited in the United States mail, certified or registered, return receipt requested, postage prepaid and properly addressed to the intended recipient as set forth below:

If to the Seller:	with a copy, which does not
	constitute notice to:

Casey Murray	3433 Broadway Street NE
	Minneapolis, MN 55433

If to the Buyer:	with a copy, which does not
	constitute notice to:

WebDigs, LLC	Douglas M. Ramler
	Gray Plant Mooty Mooty & Bennett, P.A.
	500 IDS Center
	80 South 8 ^th Street
	Minneapolis, MN 55402

Any Party may send any notice, request, demand, claim or other communication to the intended recipient at the address set forth above using any other means, but no such notice, request, demand, claim or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient.

7.6

Governing Law; Consent to Jurisdiction . This Agreement will be governed by and construed in accordance with the domestic laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule. Each of the Parties submits to the jurisdiction of any state or federal court sitting in Hennepin County, Minnesota, in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect to the action or proceeding may be heard and determined there.

7.7

Amendments and Waivers . No amendment of any provision of this Agreement will be valid unless the same is in writing and signed by the Parties. No waiver by any Party of any provision of this Agreement or any default, misrepresentation or breach of warranty or covenant under this Agreement, whether intentional or not, will be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant under this Agreement.

7.8

Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

7.9

Expenses . Each Party will bear his or its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the contemplated transactions. The Seller agrees that the Company has not borne or will bear any of the Seller’s costs and expenses (including any of his legal fees and expenses) in connection with this Agreement or any ancillary documents.

7.10

Press Releases and Public Announcements . No Party will issue any press release or make any public announcement relating to the subject matter of this Agreement prior to the Effective Date without the prior written approval of the other Party.

7.11

Specific Performance . Each Party acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Party is entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement in any action instituted, in addition to any other remedy to which it may be entitled, at law or in equity.

[THE REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGE FOLLOWS.]

The Parties have executed this Membership Unit Purchase Agreement as of the date first above written.

	BUYER:

	WEBDIGS, LLC

	By		/s/ Robert A. Buntz, Jr.
			Robert A. Buntz, Jr.
			Chief Manager

	SELLER:

	/s/ Casey Murray
	Casey Murray

EXHIBIT 2.3

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “ Agreement ”) between WebDigs, LLC, a Minnesota limited liability company (the “ Buyer ”), and Edward Graca, a Minnesota resident, (the “ Seller ”), shall be effective as of October 22, 2007 (the “ Effective Date ”). The Buyer and the Seller are referred to individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

A.	The Seller owns all of the issued and outstanding shares (the “ Marquest Shares ”), of Marquest Financial, Inc., a Minnesota corporation (the “ Company ”).

B.	The Buyer will purchase from the Seller, and the Seller will sell to the Buyer, all of the issued and outstanding Marquest Shares, on the terms and subject to the conditions of this Agreement.

AGREEMENT

In consideration of the above recitals and the promises set forth in this Agreement, the Parties agree as follows:

1.	Purchase and Sale of the Marquest Shares .

1.1

Basic Transaction . On the terms and subject to the conditions of this Agreement, the Buyer agrees to purchase and accept delivery from the Seller, and the Seller agrees to sell, assign, transfer and deliver to the Buyer, the Marquest Shares, free and clear of all restrictions on transfer and security interests of any kind or nature, effective as of the Effective Date.

1.2

Purchase Price . In exchange for the Marquest Shares, Buyer will issue to Seller 64,000 units of Buyer (the “ WebDigs Units ”), which are common units of membership interest as described in the Buyer’s Member Control Agreement dated as of May 1, 2007 (the “ Member Control Agreement ”).

1.3

Seller’s Deliveries . The Seller has made the following deliveries in connection with this Agreement, duly executed and properly acknowledged, as appropriate:

(a)

certificates representing the Marquest Shares, if any, endorsed in blank or accompanied by duly executed assignment documents, along with duly executed spousal consents, as necessary;

(b)

the written resignations of all of the incumbent officers, directors or persons holding similar positions of the Company;

(c)

a signature page to the Member Control Agreement executed by Seller; and

(d)

all necessary third party consents, authorizations and approvals; and

(e)

the original minute book and stock records, all accounting and tax records, and certified Articles of Incorporation and Bylaws of the Company.

1.4

Buyer’s Deliveries . The Buyer has made the following deliveries in connection with this Agreement, duly executed and properly acknowledged, as appropriate:

(a)

Member Control Agreement confirming Seller’s ownership of the WebDigs Units; and

(b)

copies of the Articles of Organization and Bylaws of Buyer.

2.	Representations and Warranties Concerning the Transaction .

2.1

(a)

(b)

(c)

(d)

Marquest Shares . The Seller holds of record and owns beneficially all of the Marquest Shares, free and clear of any restrictions on transfer, security interests, options, warrants, purchase rights, contracts, commitments, equities, claims and demands. The Seller is not a party to any option, warrant, purchase right or other contract or commitment that could require the Seller to sell, transfer or otherwise dispose of the Marquest Shares (other than this Agreement). The Seller is not a party to any voting trust, proxy or other agreement or understanding with respect to the voting of the Marquest Shares. There are no outstanding powers of attorney executed by the Seller that would affect the Seller’s ability to transfer the Marquest Shares to the Buyer. The Seller is not now nor has he been a party or is or has been threatened to be made a party, to any action, suit proceeding, hearing or investigation of, in or before any court or governmental authority that would affect the Seller’s ability to transfer the Marquest Shares to the Buyer.

(e)

2.2

(a)

Organization of the Buyer . The Buyer is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Minnesota.

(b)

(c)

(d)

(e)

Investment . The Buyer is not acquiring the Marquest Shares with a view to or for the sale in connection with any distribution of such Marquest Shares within the meaning of the Securities Act of 1933, as amended.

3.1

Organization, Qualification and Power . The Company is a corporate duly organized, validly existing and in good standing under the laws of the State of Minnesota. The Company is in good standing under the laws of each jurisdiction where foreign qualification is required. The Company has full corporate power and authority and has all permits necessary to carry on the businesses in which it is engaged and in which it presently proposes to engage, and to own and use the property owned and used by it. The Seller has delivered to the Buyer correct and complete copies of the charter, bylaws or other governing documents and the minute books, any certificate books and other record books of the Company. The Company is not in violation of its charter, bylaws or other governing documents.

3.2

Capitalization . All issued and outstanding units of the Company have been duly authorized, validly issued, fully paid and nonassessable, and are held of record by the Seller. There are no outstanding or authorized options, warrants or other contracts or commitments that could require the Company to issue any capital stock. The Company does not have any outstanding or authorized appreciation, phantom interest, profit participation or similar rights. The Company does not have any voting trusts, proxies or other agreements or understandings with respect to the any units of the Company.

3.3

3.4

Brokers’ Fees . The Company has no liability to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

3.5

3.6

3.7

Financial Statements . The Seller has delivered to the Buyer copies of the Company’s financial statements for the fiscal years ended 2005 and 2006 and the period ended June 30, 2007. The financial statements are true, complete and correct and fairly present the financial condition and assets and liabilities (whether accrued, absolute, contingent or otherwise) of the Company as of the dates indicated, and the results of operations of the Company for the periods then ended. T he Company has no liabilities except as set forth on the financial statements. Since June 30, 2007, there have been no material changes in the assets, business, financial condition, operations, results of operations or future prospects of the Company.

3.8

3.9

Tax Matters . The Company has filed all tax returns and statements required to be filed for periods ending on or before the Effective Date (other than with respect to fiscal/calendar years ended December 31, 2005 and 2006) and has paid all taxes due pursuant to such returns and statements, and pursuant to any assessment which the Company has received. No extension of the time for filing any return or statement is presently in effect. All tax returns filed by the Company with respect to periods ending on or before the Effective Date are true and correct.

3.10

Real Property . The Company does not currently own and has never owned any real property. The Company has not leased or subleased any real property.

3.11

3.12

3.13

3.14

Powers of Attorney . There are no outstanding powers of attorney executed on behalf of the Company.

3.15

3.16

3.17

3.18

Guaranties . T he Company is not a guarantor or otherwise liable for any liability (including indebtedness) of any other person.

3.19

3.20

3.21

3.22

4.	Covenants . The Parties agree as follows with respect to the period following the Effective Date.

4.1

4.2

4.3

4.4

4.5

4.6

5.	Remedies for Breaches of this Agreement .

5.1

Survival of Representations, Warranties and Covenants .

(a)

Notwithstanding any investigation made by or on behalf of any of the Parties or the results of any investigation, and notwithstanding the participation of the Parties in the transactions contemplated by this Agreement, all of the representations and warranties of the Parties contained in Section 2, 3 and 4 of this Agreement will survive the Effective Date (even if the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of the Effective Date) and continue in full force and effect forever.

(b)

The covenants set forth in this Agreement will survive indefinitely, unless a shorter period of survival is specifically set forth in this Agreement.

5.2

Indemnification Provisions for Benefit of the Buyer .

(a)

(b)

5.3

5.4

6.	Tax Matters . The following provisions will govern the allocation of responsibility between the Buyer and the Seller for certain tax matters following the Effective Date:

6.1

Tax Periods Ending on or Before the Effective Date . The Buyer will prepare and file all tax returns for the Company for periods ending on or before the Effective Date that are filed after the Effective Date (other than income tax returns); and will prepare and file, at Seller’s sole cost and expense, all tax returns for the Company for the fiscal/calendar years ended December 31, 2005 and 2006. The Buyer will permit the Seller to review and comment on each tax return described in the preceding sentence prior to filing and will make such revisions as are reasonably requested by the Seller. The Seller will pay the Buyer for taxes of the Company with respect to such periods within 15 days after payment by the Buyer or the Company of such taxes.

6.2

6.3

6.4

Cooperation on Tax Matters .

(a)

(b)

6.5

7.	Miscellaneous .

7.1

No Third-Party Beneficiaries . This Agreement will not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.

7.2

7.3

7.4

7.5

If to the Seller:	with a copy, which does not
	constitute notice to:

Edward Graca


If to the Buyer:	with a copy, which does not
	constitute notice to:

WebDigs, LLC	Douglas M. Ramler
	Gray Plant Mooty Mooty & Bennett, P.A.
	500 IDS Center
	80 South 8 ^th Street
	Minneapolis, MN 55402

7.6

7.7

7.8

7.9

7.10

7.11

[THE REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGE FOLLOWS.]

The Parties have executed this Stock Purchase Agreement as of the date first above written.

	BUYER:

	WEBDIGS, LLC

	By		/s/ Robert A. Buntz, Jr.
			Robert A. Buntz, Jr.
			Chief Manager

	SELLER:

	/s/ Edward Graca
	Edward Graca

EXHIBIT 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

SELECT VIDEO, INC.

Select Video, Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

1. The name of the corporation is Select Video, Inc., formerly known as Spectrum Gaming Ventures, Inc. The date of filing of its original Certificate of Incorporation with the Secretary of State was May 25, 1994.

2. The Board of Directors of the corporation adopted resolutions, in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, setting forth a proposed Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”), declaring the Amended and Restated Certificate to be advisable. The resolution setting forth the proposed Amended and Restated Certificate is as follows:

“RESOLVED, that, subject to the approval of the holders of a majority of the outstanding shares of the Corporation’s common stock, par value $.001 per share, the corporation’s Certificate of Incorporation, as amended, shall be amended and restated in the manner set forth on the attached Annex A.”

[Please see Annex A attached hereto.]

3. The Amended and Restated Certificate was duly adopted by vote of the stockholders of this corporation in accordance with the provisions of Sections 222, 242 and 245 of the General Corporation Law of the State of Delaware.

4. The Amended and Restated Certificate was duly adopted in accordance with the applicable provisions of Sections 222, 242 and 245 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, this corporation has caused this document to be executed in its corporate name as of August 20, 2007.

Select Video, Inc.

By:	/s/ Daniel J. Shrader
	Daniel J. Shrader, Chief Executive Officer

Annex A

1. Name. The name of the corporation is Select Video, Inc. (the “Corporation”).

2. Address; Registered Office and Agent. The address of the Corporation’s registered office is 160 Greentree Drive, Suite 101, City of Dover, County of Kent, Delaware 19904. The name of the Corporation’s registered agent is National Registered Agents, Inc. The Corporation may from time to time, in the manner provided by law, change the registered agent and the registered office within the State of Delaware. The Corporation may also maintain offices for the conduct of its business, either within or without the State of Delaware.

3. Purposes. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.

4. Number of Shares. The total number of shares of all classes of stock that the Corporation shall have authority to issue is Two Hundred Fifty Million (250,000,000) shares consisting of: One Hundred Twenty-Five Million (125,000,000) shares of common stock, $.001 par value per share; and One Hundred Twenty-Five Million (125,000,000) shares which may be designated as common or preferred stock, $.001 par value per share.

The preferred stock may be divided into, and may be issued from time to time in one or more series. The Board of Directors of the Corporation (the “Board”) is authorized from time to time to establish and designate any such series of preferred stock, to fix and determine the variations in the relative rights, preferences, privileges and restrictions as between and among such series and any other class of capital stock of the Corporation and any series thereof, and to fix or alter the number of shares comprising any such series and the designation thereof. The authority of the Board from time to time with respect to each such series shall include, but not be limited to, determination of the following:

a. The designation of the series;

b. The number of shares of the series and (except where otherwise provided in the creation of the series) any subsequent increase or decrease therein;

c. The dividends, if any, for shares of the series and the rates, conditions, times and relative preferences thereof;

d. The redemption rights, if any, and price or prices for shares of the series;

e. The terms and amounts of any sinking fund provided for the purchase or redemption of the series;

f. The relative rights of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;

g. Whether the shares of the series shall be convertible into shares of any other class or series of shares of the Corporation, and, if so, the specification of such other class or series, the conversion prices or rate or rates, any adjustments thereof, the date or dates as of which such shares shall be convertible and all other terms and conditions upon which such conversion may be made;

h. The voting rights, if any, of the holders of such series; and

i. Such other designations, powers, preference and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof.

5. Election of Directors. Unless and except to the extent that the bylaws of the Corporation (the “Bylaws”) shall so require, the election of directors of the Corporation need not be by written ballot.

6. Limitation of Liability. To the fullest extent permitted under the Delaware General Corporation Law, as amended from time to time, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any amendment, repeal or modification of the foregoing provision shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, repeal or modification.

7. Indemnification.

7.1 Right to Indemnification. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity (an “Other Entity”), including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 7.3, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.

7.2 Prepayment of Expenses. The Corporation shall pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition, provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article 7 or otherwise.

7.3 Claims. If a claim for indemnification or advancement of expenses under this Article 7 is not paid in full within 30 days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

7.4 Nonexclusivity of Rights. The rights conferred on any Covered Person by this Article 7 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, the Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

7.5 Other Sources. The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of an Other Entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such Other Entity.

7.6 Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Article 7 shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such repeal or modification.

7.7 Other Indemnification and Prepayment of Expenses. This Article 7 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

8. Adoption, Amendment and/or Repeal of ByLaws. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board is expressly authorized to make, alter and repeal the Bylaws, subject to the power of the stockholders of the Corporation to alter or repeal any Bylaw whether adopted by them or otherwise.

9. Certificate Amendments. The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by applicable law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this article.

EXHIBIT 3.2

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

SELECT VIDEO, INC.

Pursuant to Section 242 of the General

Corporation Law of the State of Delaware

It is hereby certified that:

1. Select Video, Inc. (the “Corporation”) is a corporation formed under the laws of the State of Delaware, and its certificate of incorporation was originally filed in the office of the Secretary of State on May 25, 1994, and most recently amended and restated on August 22, 2007.

2. The Corporation’s amended and restated certificate of incorporation is hereby amended by deleting the text of Article 4 “Number of Shares” in its entirety and replacing it with the following:

4. Number of Shares .

A. The total number of shares of all classes of stock that the Corporation shall have authority to issue is Two Hundred Fifty Million (250,000,000) shares consisting of: One Hundred Twenty-Five Million (125,000,000) shares of common stock, $.001 par value per share; and One Hundred Twenty-Five Million (125,000,000) shares which may be designated as common or preferred stock, $.001 par value per share.

B. The preferred stock may be divided into, and may be issued from time to time in one or more series. The Board of Directors of the Corporation (the “Board”) is authorized from time to time to establish and designate any such series of preferred stock, to fix and determine the variations in the relative rights, preferences, privileges and restrictions as between and among such series and any other class of capital stock of the Corporation and any series thereof, and to fix or alter the number of shares comprising any such series and the designation thereof. The authority of the Board from time to time with respect to each such series shall include, but not be limited to, determination of the following: (i) the designation of the series; (ii) the number of shares of the series and (except where otherwise provided in the creation of the series) any subsequent increase or decrease therein; (iii) the dividends, if any, for shares of the series and the rates, conditions, times and relative preferences thereof; (iv) the redemption rights, if any, and price or prices for shares of the series; (v) the terms and amounts of any sinking fund provided for the purchase or redemption of the series; (vi) the relative rights of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation; (vii) whether the shares of the series shall be convertible into shares of any other class or series of shares of the Corporation, and, if so, the specification of such other class or series, the conversion prices or rate or rates, any adjustments thereof, the date or dates as of which such shares shall be convertible and all other terms and conditions upon which such conversion may be made; (viii) the voting rights, if any, of the holders of such series; and (ix) such other designations, powers, preference and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof.

C. Effective as of the filing hereof (the “Effective Time”), every twenty (20) shares of common stock of the Corporation issued and outstanding immediately prior to the Effective Time (“Old Common Stock”) shall automatically be combined, without any action on the part of the holder thereof, into one (1) share of fully paid and non-assessable common stock of the Corporation (“New Common Stock”), subject to the treatment of fractional share interests described below.

D. Following the Effective Time, each holder of Old Common Stock shall be entitled to receive upon surrender of such holder’s certificate(s) representing Old Common Stock (whether one or more, the “Old Certificates”) for cancellation pursuant to procedures adopted by the Corporation, one or more certificate(s) representing the number of whole shares of New Common Stock (whether one or more, the “New Certificates”) into which and for which the shares of Old Common Stock formerly represented by such Old Certificates so surrendered are reclassified under the terms of this hereof. From and after the Effective Time, until surrendered for exchange, each outstanding Old Certificate shall be deemed for all purposes to represent (i) the whole number of shares of New Common Stock into which the Old Common Stock represented by such Old Certificate shall be combined, and (ii) the right to receive New Certificates and, where applicable, cash in lieu of fractional shares, as provided below.

E. No fractional shares of common stock of the Corporation shall be issued. No stockholder of the Corporation shall transfer any fractional shares of common stock of the Corporation. The Corporation shall not recognize on its stock record books any purported transfer of any fractional share of common stock of the Corporation. A holder of Old Certificates at the Effective Time who would otherwise be entitled to any fraction of a share of New Common Stock shall, in lieu thereof, be entitled to the next highest whole share. For example if a holder of Old Certificates at the Effective Time would otherwise be entitled to One Hundred Twenty and One-Fourth (120 ^1/4 ) shares of New Common Stock, that holder would instead be entitled to receive One Hundred Twenty-One (121) shares of New Common Stock.

3. This amendment to the amended and restated certificate of incorporation has been duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware.

The undersigned is signing this certificate on August 21, 2007.

/s/ Daniel J. Shrader

Daniel J. Shrader, Chief Executive Officer

EXHIBIT 3.3

AMENDED AND RESTATED BYLAWS

SELECT VIDEO, INC.

(a Delaware Corporation)

ARTICLE 1

CERTAIN DEFINITIONS

As used in these Bylaws, unless the context otherwise requires, the term:

1.1 “Assistant Secretary” means an Assistant Secretary of the Corporation.

1.2 “Assistant Treasurer” means an Assistant Treasurer of the Corporation.

1.3 “Board” means the Board of Directors of the Corporation.

1.4 “Bylaws” means the these Amended and Restated Bylaws of the Corporation, as amended from time to time.

1.5 “Certificate of Incorporation” means the initial certificate of incorporation of the Corporation, as amended, supplemented or restated from time to time.

1.6 “Chairman” means the Chairman of the Board of Directors of the Corporation.

1.7 “Corporation” means Select Video, Inc.

1.8 “Directors” means directors of the Corporation.

1.9 “Entire Board” means all then-authorized directors of the Corporation.

1.10 “General Corporation Law” means the General Corporation Law of the State of Delaware, as amended from time to time.

1.11 “Office of the Corporation” means the executive office of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding.

1.12 “President” means the President of the Corporation.

1.13 “Secretary” means the Secretary of the Corporation.

1.14 “Stockholders” means stockholders of the Corporation.

1.15 “Treasurer” means the Treasurer of the Corporation.

1.16 “Vice President” means a Vice President of the Corporation.

ARTICLE 2

STOCKHOLDERS

2.1 Place of Meetings . Every meeting of Stockholders may be held at such place, within or without the State of Delaware, as may be designated by resolution of the Board from time to time.

2.2 Annual Meeting . If required by applicable law, a meeting of Stockholders shall be held annually for the election of Directors at such date and time as may be designated by resolution of the Board from time to time. Any other business may be transacted at the annual meeting.

2.3 Special Meetings . Unless otherwise prescribed by applicable law, special meetings of Stockholders may be called at any time by the Board and may not be called by any other person or persons. Business transacted at any special meeting of Stockholders shall be limited to the purpose stated in the notice.

2.4 Fixing Record Date . For the purpose of (a) determining the Stockholders entitled (i) to notice of or to vote at any meeting of Stockholders or any adjournment thereof, (ii) unless otherwise provided in the Certificate of Incorporation, to express consent to corporate action in writing without a meeting or (iii) to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock; or (b) any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date was adopted by the Board and which record date, unless otherwise required by applicable law, shall not be (x) in the case of clause (a)(i) above, more than 60 nor less than 10 days before the date of such meeting, (y) in the case of clause (a)(ii) above, more than 10 days after the date upon which the resolution fixing the record date was adopted by the Board and (z) in the case of clause (a)(iii) or (b) above, more than 60 days prior to such action. If no such record date is fixed:

2.4.1 the record date for determining Stockholders entitled to notice of or to vote at a meeting of Stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;

2.4.2 the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting (unless otherwise provided in the Certificate of Incorporation), when no prior action by the Board is required by applicable law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law; and when prior action by the Board is required by applicable law, the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board adopts the resolution taking such prior action; and

2.4.3 the record date for determining Stockholders for any purpose other than those specified in Sections 2.4.1 and 2.4.2 shall be at the close of business on the day on which the Board adopts the resolution relating thereto. When a determination of Stockholders of record entitled to notice of or to vote at any meeting of Stockholders has been made as provided in this Section 2.4, such determination shall apply to any adjournment thereof unless the Board fixes a new record date for the adjourned meeting.

2.5 Notice of Meetings of Stockholders . Whenever under the provisions of applicable law, the Certificate of Incorporation or these Bylaws, Stockholders are required or permitted to take any action at a meeting, notice shall be given stating the place, if any, date and hour of the meeting ,the means of remote communication, if any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, notice of any meeting shall be given, not less than 10 nor more than 60 days before the date of the meeting, to each Stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with postage prepaid, directed to the Stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice required by this Section 2.5 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Any meeting of Stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted at the meeting as originally called. If, however, the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Stockholder of record entitled to vote at the meeting.

2.6 Waivers of Notice . Whenever the giving of any notice to Stockholders is required by applicable law, the Certificate of Incorporation or these Bylaws, a waiver thereof, given by the person entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Stockholder at a meeting shall constitute a waiver of notice of such meeting except when the Stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Stockholders need be specified in any waiver of notice unless so required by applicable law, the Certificate of Incorporation or these Bylaws.

2.7 List of Stockholders . The Secretary shall prepare and make, at least 10 days before every meeting of Stockholders, a complete list of the Stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder. Such list shall be open to the examination of any Stockholder, the Stockholder’s agent, or attorney, at the Stockholder’s expense, for any purpose germane to the meeting, for a period of at least 10 days prior to the meeting, during ordinary business hours at the principal place of business of the Corporation, or on a reasonably accessible electronic network as provided by applicable law. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for examination as provided by applicable law. Upon the willful neglect or refusal of the Directors to produce such a list at any meeting for the election of Directors, they shall be ineligible for election to any office at such meeting. Except as provided by applicable law, the stock ledger shall be the only evidence as to who are the Stockholders entitled to examine the stock ledger, the list of Stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of Stockholders.

2.8 Quorum of Stockholders; Adjournment . Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, at each meeting of Stockholders, the presence in person or by proxy of the holders of a majority in voting power of all outstanding shares of stock entitled to vote at the meeting of Stockholders, shall constitute a quorum for the transaction of any business at such meeting. In the absence of a quorum, the holders of a majority in voting power of the shares of stock present in person or represented by proxy at any meeting of Stockholders, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however , that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

2.9 Voting; Proxies . Unless otherwise provided in the Certificate of Incorporation, every Stockholder entitled to vote at any meeting of Stockholders shall be entitled to one vote for each share of stock held by such Stockholder which has voting power upon the matter in question. At any meeting of Stockholders, all matters, except as otherwise provided by the Certificate of Incorporation, these Bylaws, the rules and regulations of any stock exchange applicable to the Corporation, applicable law or pursuant to any rules or regulations applicable to the Corporation or its securities, shall be decided by the affirmative vote of a majority in voting power of shares of stock present in person or represented by proxy and entitled to vote thereon. At all meetings of Stockholders for the election of Directors, a plurality of the votes cast shall be sufficient to elect. Each Stockholder entitled to vote at a meeting of Stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such Stockholder by proxy but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A Stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or by delivering a new proxy bearing a later date.

2.10 Voting Procedures and Inspectors of Election at Meetings of Stockholders . The Board, in advance of any meeting of Stockholders, may, and shall if required by applicable law, appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting may, and shall if required by applicable law, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the Stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies or votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a Stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of Stockholders, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for office at an election may serve as an inspector at such election.

2.11 Conduct of Meetings; Organization . The Board may adopt by resolution such rules and regulations for the conduct of the meeting of Stockholders as it shall deem appropriate. Unless another officer is designated by the Board, at each meeting of Stockholders, the President, or in the absence of the President, the Chairman, or if there is no Chairman or if there be one and the Chairman is absent, a Vice President, and in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President, based on age, present), shall preside over the meeting. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the person presiding over any meeting of Stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to Stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding officer at any meeting of Stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding officer should so determine, such person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of Stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The Secretary, or in his or her absence, one of the Assistant Secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting, respectively, shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board, and in case the Board has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting.

2.12 Order of Business . The order of business at all meetings of Stockholders shall be as determined by the person presiding over the meeting.

2.13 Written Consent of Stockholders Without a Meeting . Unless otherwise provided in the Certificate of Incorporation, any action required by the General Corporation Law to be taken at any annual or special meeting of Stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of Stockholders are recorded. Every written consent shall bear the date of signature of each Stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 2.13, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by applicable law, be given to those Stockholders who have not consented in writing, and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

ARTICLE 3

DIRECTORS

3.1 General Powers . Except as otherwise provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and regulations, not inconsistent with the Certificate of Incorporation or these Bylaws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation.

3.2 Number; Qualification; Term of Office . The Board shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board. Directors need not be Stockholders. Each Director shall hold office until a successor is duly elected and qualified or until the Director’s earlier death, resignation, disqualification or removal.

3.3 Newly Created Directorships and Vacancies . Unless otherwise provided by applicable law or the Certificate of Incorporation, any newly created directorships resulting from an increase in the authorized number of Directors and vacancies occurring in the Board for any cause, may be filled by the affirmative votes of a majority of the remaining members of the Board, although less than a quorum, or by a sole remaining Director, or may be elected by a plurality of the votes cast. A Director so elected shall be elected to hold office until the expiration of the term of office of the Director whom he or she has replaced or until a successor is elected and qualified, or until the Director’s earlier death, resignation or removal.

3.4 Resignation . Any Director may resign at any time by notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect at the time therein specified, and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.

3.5 Regular Meetings . Regular meetings of the Board may be held without notice at such times and at such places within or without the State of Delaware as may be determined from time to time by resolution of the Board.

3.6 Special Meetings . Special meetings of the Board may be held at such times and at such places within or without the State of Delaware whenever called by the Chairman, the President or the Secretary or by any two or more Directors then serving as Directors on at least 24 hours’ notice to each Director given by one of the means specified in Section 3.9 hereof other than by mail, or on at least three days’ notice if given by mail. Special meetings shall be called by the Chairman, President or Secretary in like manner and on like notice on the written request of any two or more of the Directors then serving as Directors.

3.7 Telephone Meetings . Directors or members of any committee designated by the Board may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.7 shall constitute presence in person at such meeting.

3.8 Adjourned Meetings . A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. At least 24 hours’ notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.9 hereof other than by mail, or at least three days’ notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

3.9 Notice Procedure . Subject to Sections 3.6 and 3.10 hereof, whenever, under applicable law, the Certificate of Incorporation or these Bylaws, notice is required to be given to any Director, such notice shall be deemed given effectively if given in person or by telephone, by mail addressed to such Director at such Director’s address as it appears on the records of the Corporation, with postage thereon prepaid, or by telegram, telecopy or, if consented to by the Director to whom notice is given, by other means of electronic transmission.

3.10 Waiver of Notice . Whenever the giving of any notice to Directors is required by applicable law, the Certificate of Incorporation or these Bylaws, a waiver thereof, given by the Director entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Director at a meeting shall constitute a waiver of notice of such meeting except when the Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Directors or a committee of Directors need be specified in any waiver of notice unless so required by applicable law, the Certificate of Incorporation or these Bylaws.

3.11 Organization . At each meeting of the Board, the Chairman, or in the absence of the Chairman, the President, or in the absence of the President, a chairman chosen by a majority of the Directors present, shall preside. The Secretary shall act as secretary at each meeting of the Board. In case the Secretary shall be absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.

3.12 Quorum of Directors . The presence in person of a majority of the Entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board.

3.13 Action by Majority Vote . Except as otherwise expressly required by applicable law, the Certificate of Incorporation or these Bylaws, the vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.

3.14 Action Without Meeting . Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee.

ARTICLE 4

COMMITTEES OF THE BOARD

The Board may, by resolution, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law and to the extent provided in the resolution of the Board designating such committee, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it. Unless otherwise specified in the resolution of the Board designating a committee, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3 of these Bylaws.

ARTICLE 5

OFFICERS

5.1 Positions . The officers of the Corporation shall be a President, a Secretary, a Treasurer and such other officers as the Board may elect, including a Chairman, one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers, who shall exercise such powers and perform such duties as shall be determined from time to time by resolution of the Board. The Board may elect one or more Vice Presidents as Executive Vice Presidents and may use descriptive words or phrases to designate the standing, seniority or areas of special competence of the Vice Presidents elected or appointed by it. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide.

5.2 Election . The officers of the Corporation shall be elected by the Board at its annual meeting or at such other time or times as the Board shall determine.

5.3 Term of Office . Each officer of the Corporation shall hold office for the term for which he or she is elected and until such officer’s successor is elected and qualifies or until such officer’s earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer may be removed at any time, with or without cause by the Board. Any vacancy occurring in any office of the Corporation may be filled by the Board. The removal of an officer with or without cause shall be without prejudice to the officer’s contract rights, if any. The election or appointment of an officer shall not of itself create contract rights.

5.4 Fidelity Bonds . The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.

5.5 Chairman . The Chairman, if one shall have been appointed, shall preside at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by resolution of the Board.

5.6 President . Unless a separate Chief Executive Officer has been appointed by the Board, the President shall be the Chief Executive Officer of the Corporation and shall have general supervision over the business of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of the Board. Except as otherwise provided in Section 2.11, the President shall preside at all meetings of the Stockholders and shall also preside at all meetings of the Board at which the Chairman (if there be one) is not present. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by resolution of the Board or by these Bylaws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed and, in general, the President shall perform all duties incident to the office of President of a corporation and such other duties as may from time to time be assigned to the President by resolution of the Board.

5.7 Vice Presidents . At the request of the President, or, in the President’s absence, at the request of the Board, the Vice Presidents shall (in such order as may be designated by the Board, or, in the absence of any such designation, in order of seniority based on age) perform all of the duties of the President and, in so performing, shall have all the powers of, and be subject to all restrictions upon, the President. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by resolution of the Board or by these Bylaws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed, and each Vice President shall perform such other duties as from time to time may be assigned to such Vice President by resolution of the Board or by the President.

5.8 Secretary . The Secretary shall attend all meetings of the Board and of the Stockholders and shall record all the proceedings of the meetings of the Board and of the Stockholders in a book to be kept for that purpose, and shall perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the Stockholders and shall perform such other duties as may be prescribed by the Board or by the President, under whose supervision the Secretary shall be. The Secretary shall have custody of the corporate seal of the Corporation, and the Secretary, or an Assistant Secretary, shall have authority to affix the same on any instrument requiring it, and when so affixed, the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may, by resolution, give general authority to any other officer to affix the seal of the Corporation and to attest the same by such officer’s signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the President or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, shall see that the reports, statements and other documents required by applicable law are properly kept and filed and, in general, shall perform all duties incident to the office of Secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by resolution of the Board or by the President.

5.9 Treasurer . The Treasurer, who may also be the Chief Financial Officer, shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board; against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed; regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation; have the right to require from time to time reports or statements giving such information as the Treasurer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same; render to the President or the Board, whenever the President or the Board shall require the Treasurer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation; disburse the funds of the Corporation as ordered by the Board; and, in general, perform all duties incident to the office of Treasurer of a corporation and such other duties as may from time to time be assigned to the Treasurer by resolution of the Board or by the President.

5.10 Assistant Secretaries and Assistant Treasurers . Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by resolution of the Board or by the President.

ARTICLE 6

INDEMNIFICATION

6.1 Right to Indemnification . The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity (an “Other Entity”), including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.

6.2 Prepayment of Expenses . The Corporation shall pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition, provided , however , that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article 6 or otherwise.

6.3 Claims . If a claim for indemnification or advancement of expenses under this Article 6 is not paid in full within 30 days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

6.4 Nonexclusivity of Rights . The rights conferred on any Covered Person by this Article 6 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, the Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

6.5 Other Sources . The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of an Other Entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such Other Entity.

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

6.7 Other Indemnification and Prepayment of Expenses . This Article 6 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

ARTICLE 7

GENERAL PROVISIONS

7.1 Certificates Representing Shares . Shares of the Corporation's stock may be certificated or uncertificated, as provided under Delaware law. Every holder of stock represented by certificates, and upon request every holder of uncertificated shares, shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman, if any, or the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, certifying the number of shares owned by such Stockholder in the Corporation. Any or all of the signatures upon a certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

7.2 Transfer and Registry Agents . The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board.

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

7.4 Form of Records . Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

7.5 Seal . The Board may provide for a corporate seal, in which case such corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

7.6 Fiscal Year . The fiscal year of the Corporation shall be determined by resolution of the Board and may be changed by the Board.

7.7 Amendments . These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board, but the Stockholders may make additional Bylaws and may alter and repeal any Bylaws whether adopted by them or otherwise.

EXHIBIT 10.1

SELECT VIDEO, INC.

RESTRICTED STOCK PLAN

1. Purpose . The purpose of the 2007 Restricted Stock Plan (the “ Plan ”) of Select Video Inc., a Delaware corporation (the “ Company ”), is to allow the Company, in connection with that certain proposed merger transaction with Webdigs, LLC, a Minnesota limited liability company (“ Webdigs ”), to issue certain shares of Company common stock, $.001 par value, the sale or other transfer of which will be restricted and subject to forfeiture based on certain service-oriented conditions (the “ Restricted Stock ”). The Restricted Stock will be issued in the above-referenced merger transaction (the “ Merger ”), pursuant to the terms of that certain Agreement and Plan of Merger by and among the Company, Webdigs and a Company subsidiary, in exchange for membership interests in Webdigs, LLC that, at the time of the merger, are unvested and subject to forfeiture based on substantially identical service-oriented criteria.

2. Administration by Board of Directors . The Plan shall be administered by the board of directors of the Company (the “ Board ”). The Board shall have complete authority to interpret the Plan and make any other determination which it believes necessary and advisable for the proper administration of the Plan. The Board’s decisions and matters relating to the Plan shall be final and conclusive on the Company and the holders of the Restricted Stock.

3. Shares Subject to the Plan . Subject to adjustment as provided in Section 9.3 , the number of shares of common stock which may be issued under the Plan shall not exceed 7,215,000. After the closing of the Merger, no further shares of Restricted Stock will be issued under this Plan.

4. Restricted Stock . A share of Restricted Stock consists of a share of common stock which is issued by the Company in the Merger to a former holder of Webdigs membership interests that are unvested, and subject to restrictions on its sale or other transfer by the holder thereof. Specifically, for so long as any Company common stock is “Restricted Stock” under this Plan, it shall be subject to the following restrictions: (a) no Restricted Stock may be sold, transferred, pledged or otherwise encumbered; and (b) all then-Restricted Stock shall be forfeited, automatically and without any further action required on the part of the Company or any consideration therefor, in the event that (i) the holder of Restricted Stock is no longer providing services to the Company (or Webdigs) pursuant to a Member Services Agreement between such holder and Webdigs (the “ Services Agreement ”) or (ii) the holder of Restricted Stock materially violates the terms of their Services Agreement with Webdigs.

5. Acknowledgment of Restrictions . The Board may require the holder of Restricted Stock to enter into an agreement with the Company acknowledging the conditions and restrictions pertaining to the Restricted Stock.

6. Book Entries; No Certificates . Upon issuance, any Restricted Stock will be registered on the books of the Company and will bear such restrictive notations and be subject to such stop-transfer instructions as the Company shall deem necessary or appropriate in light of such restrictions. The Board will provide that all shares of Restricted Stock, for so long as they remain “Restricted Stock” under this Plan, shall not be certificated.

7. End of Restrictions; Delivery of Certificates . Shares of Restricted Stock hereunder shall cease to be restricted and subject to the terms of this Plan at such times as are set forth in the Services Agreement that each holder of Restricted Stock has entered into with Webdigs. Promptly following the lapse of restrictions on shares of Restricted Stock, the Company will cause such shares to be delivered in certificated form, free of all contractual restrictions, to the holder thereof (or to the holder’s legal representative, beneficiary or heir).

8. Rights of Holders of Restricted Stock . Subject to the terms and conditions of the Plan, each holder of Restricted Stock hereunder shall have all the rights of a stockholder with respect to shares of Company common stock held by such holder during any period in which such shares are “Restricted Shares” and subject to forfeiture and restrictions on transfer hereunder, including without limitation, the right to vote such shares and to receive all dividends and other distributions paid with respect thereto.

9. General Provisions .

9.1. Duration . The Plan shall remain in effect until all shares of Restricted Stock issued under the Plan have been forfeited or the restrictions imposed thereon have lapsed as provided hereunder.

9.2. Limited Transferability of Restricted Stock . The Company shall not be required to recognize any attempted assignment or transfer of shares of Restricted Stock by a holder of such shares; and the rights and interest of a holder of Restricted Stock subject to this Plan may not be assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise, including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no such right or interest of any holder of Restricted Stock hereunder shall be subject to any obligation or liability of such holder.

9.3. Adjustment . In the event of any recapitalization, stock dividend, stock split, combination of shares or other change in the common stock, the number of shares of common stock then subject to the Plan, including outstanding shares of Restricted Stock, shall be adjusted in proportion to the change in outstanding shares of common stock.

9.4. Withholding . The Company shall have the right to withhold from any payments made under the Plan or to collect as a condition of payment, any taxes required by law to be withheld. At any time when a participant is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with a distribution of common stock or upon the vesting of Restricted Stock, the participant may satisfy this obligation in whole or in part by electing (the “ Election ”) to have the Company withhold, from the distribution or from such shares of Restricted Stock, shares of common stock having a value up to the minimum amount of withholding taxes required to be collected on the transaction. The value of the shares to be withheld shall be based on the Fair Market Value of the common stock on the date that the amount of tax to be withheld shall be determined (“ Tax Date ”). Each Election must be made prior to the Tax Date. The Board may disapprove of any Election or may suspend or terminate the right to make Elections. An Election is irrevocable. To the extent that the receipt of the Restricted Stock or the lapse of any restrictions thereon results in income to the holder of such Restricted Stock for federal or state income tax purposes, the holder shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money or shares of unrestricted common stock, as the Company may require to meet its withholding obligation under applicable tax laws or regulations, and, if the holder fails to do so, the Company is authorized to withhold from any cash or common stock remuneration then or thereafter payable to the holder any tax required to be withheld by reason of such resulting compensation income.

9.5. No Continued Employment, Engagement or Right to Corporate Assets . No holder of Restricted Stock subject to the Plan shall have any right, because of his, her or its participation and ownership of Restricted Stock hereunder, to continue in the employ of the Company for any period of time or to any right to continue his, her or its present or any other rate of compensation. Nothing contained in the Plan shall be construed as giving an employee, a consultant, such persons’ beneficiaries or any other person any equity or interests of any kind in the assets of the Company or creating a trust of any kind or a fiduciary relationship of any kind between the Company and any such person.

9.6. Amendment of the Plan . The Board may amend or discontinue the Plan at any time. However, no such amendment or discontinuance shall adversely change or impair, without the consent of the holders of a majority of the then-outstanding Restricted Stock subject to this Plan, any Restricted Stock previously granted.

9.7. Definition of Fair Market Value . For purposes of this Plan, the “ Fair Market Value ” of a share of common stock at a specified date shall, unless otherwise expressly provided in this Plan, be the amount which the Board determines in good faith to be 100% of the fair market value of such a share as of the date in question. Notwithstanding the foregoing:

(a) If such shares are listed on a U.S. securities exchange, then Fair Market Value shall be determined by reference to the last sale price of a share of common stock on such U.S. securities exchange on the applicable date. If such U.S. securities exchange is closed for trading on such date, or if the common stock does not trade on such date, then the last sale price used shall be the one on the date the common stock last traded on such U.S. securities exchange.

(b) If such shares are publicly traded but are not listed on a U.S. securities exchange, then Fair Market Value shall be determined by reference to the trading price of a share of common stock on such date (or, if the applicable market is closed on such date, the last date on which the common stock was publicly traded), by a method consistently applied by the Board.

(c) If such shares are not publicly traded, then the Board’s determination will be based upon a good faith valuation of the Company’s common stock as of such date, which shall be based upon such factors as the Board deems appropriate. The valuation shall be accomplished in a manner that complies with Code Section 409A and shall be consistently applied to Restricted Stock under the Plan.

9.8. Compliance with Code Section 409A . The Plan and the agreement shall be interpreted and administered so as to be exempt from the requirements of Code Section 409A or to comply with such requirements. Notwithstanding the foregoing, Restricted Stock may be awarded or amended in a manner which does not comply with Code Section 409A, but only if and to the extent that the Board specifically provides in written resolutions that the Restricted Stock is not intended to comply with Code Section 409A.

Approved by the board of directors on October 23, 2007.

EXHIBIT 10.2

MEMBER SERVICES AGREEMENT

This Member Services Agreement (this “ Agreement ”) is entered into and effective as of ________, 20__ (the “ Effective Date ”) by and between WEBDIGS, LLC a Minnesota limited liability company (the “ Company ”), and _______________ (“ Contractor ”). Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Company’s Member Control Agreement, dated May 1, 2007 (the “ Member Control Agreement ”).

RECITAL

The Company desires to engage Contractor to serve as its ________________________, and Agent, and Contractor desires to provide such services to the Company, pursuant to the terms and conditions set forth in this Agreement.

AGREEMENT

In consideration of the above recitals and the mutual covenants and conditions set forth in this Agreement, the Company and Contractor hereby agree as follows:

Engagement. The Company hereby engages Contractor in those capacities set forth in the Recitals above, pursuant to the terms and conditions of this Agreement, to perform all of the duties and functions of said position and such other duties and functions as the Company may from time to time reasonably request (the “ Services ”). Contractor hereby accepts such engagement and agrees to perform and be available to perform such Services on a substantially full-time basis. Contractor understands that he or she is a Member of the Company, and is not an employee of the Company.

Term of Service. Contractor’s engagement with the Company shall commence on the Effective Date and shall continue until terminated, pursuant to terms and conditions herein below. Contractor understands that this Agreement and his or her Services hereunder may be terminated at any time by the Company with or without cause. Contractor agrees to give no less than 30 days written notice to the Company prior to his or her resignation from any of the capacities set forth in the Recitals above.

Duties. Contractor agrees to serve the Company faithfully and to the best of his or her ability, and shall devote substantially all of his or her full working time, attention and effort to the business of the Company during his engagement with the Company. Contractor also agrees that he or she shall not, during the course of performance of Services for the Company, without prior written approval of the Board of Governors, become an employee, member, director, officer, agent, partner of or consultant to, or a stockholder of (except a stockholder of a public company in which Contractor owns less than five percent (5%) of the issued and outstanding capital stock of such company) any company or other business entity which is a competitor, supplier or customer of the Company.

4.	Compensation, Benefits and Expenses.

4.1

Compensation . Beginning on the Effective Date, the Company shall pay Contractor compensation equal to $________, payable in accordance with the Company’s regular payroll cycle. This Agreement may be amended from time to time by agreement in writing between the Company and Contractor to adjust the compensation provided for herein, based on Contractor’s performance or the performance and financial situation of the Company.

4.2

Benefits . While providing Services to the Company, Contractor shall be entitled to participate in any of the Company’s employee benefits programs available to Members to the extent permitted by applicable federal or state tax law (i.e., to the extent that the Code permits a tax partner to participate in an employee benefits program). Contractor agrees to pay all applicable tax liabilities associated with such payments or benefits.

4.3

Guaranteed Payments . The Company and Contractor acknowledge and agree that the payments made to Contractor under Sections 4.1 and 4.2 constitute “guaranteed payments” within the meaning of Section 707(c) of the Code, and shall be treated as such for income tax purposes by the Company and Contractor. Contractor agrees that the Company shall not make any deductions, withholding or other contributions on account of Social Security, unemployment compensation, income tax or otherwise, under any federal, state or local law with respect to payments made to him under this Agreement. Contractor agrees and understands that he shall be solely responsible for the payment of all income, self-employment, and other applicable taxes that are due with respect to such payments.

4.4

Expense Reimbursement . The Company shall reimburse Contractor for business expenses reasonably incurred by Contractor in connection with the performance of Contractor’s duties hereunder, upon the presentation by Contractor of receipts and itemized accounts of such expenditures in accordance with the rules and regulations of the Internal Revenue Code and the Company’s expense reimbursement policies.

5.	Termination.

5.1

Termination . Notwithstanding anything contained herein to the contrary, this Agreement and Contractor’s engagement by the Company may be terminated by the Company or by Contractor, for any reason or for no reason, upon written notice to the other party. In the event of any such termination or a termination under Section 5.2 below, Contractor will retain his or her vested units and a prorated number of unvested units of those which would have vested at the end of the year of termination. All other unvested units shall be forfeited.

5.2

Termination Due to Death . This Agreement shall terminate immediately upon the event of Contractor’s death. In such event, Contractor’s estate or legal representative shall be paid any earned and unpaid compensation, if any, on a pro rata basis for the period through Contractor’s date of death.

Grant of Units. In consideration of the Services, the Company is granting to Contractor, effective as of the Effective Date, a membership interest in the Company (which shall be a profits interest for federal income tax purposes, since no capital is being contributed by the Contractor in exchange for such membership interest and no credit will be ascribed to the Contractor’s capital account in consideration of the Services) consisting of ________ unvested Common Units of the Company. Of the ______ unvested units, ______ units shall vest on the one-year anniversary of this Agreement and _______ units shall vest on the two-year anniversary of this Agreement. Until any unvested units shall vest, they shall be treated as issued and outstanding for all purposes under the Member Control Agreement and applicable law, but shall be subject to immediate forfeiture pursuant to Section 5 hereof and in the event that Contractor materially breaches the provisions of this Agreement. In the event any units are forfeited, the Company shall be automatically entitled to cancel such units on its books and records without any payment or consideration with respect thereto.

Confidential Information.

7.1

Definition . For purposes of this Agreement, “ Confidential Information ” means any information in any way related to the Company that Contractor has learned or developed since the Company’s inception and any information that Contractor learns or develops during the course of his Services to the Company that derives independent economic value from being not generally known or readily ascertainable by other persons who could obtain economic value from its disclosure or use. Confidential Information includes, but is not limited to, information contained in or relating to technology and development plans or proposals, source code, marketing plans or proposals, strategies, financial statements, budgets, pricing formulas, customer and supplier information, employee information and other proprietary information of the Company, whether written, oral or communicated in another medium, whether disclosed directly or indirectly, whether disclosed prior to or after the date of this Agreement, whether originals or copies and whether or not legal protection has been obtained or sought under applicable law. Contractor shall treat all such information as Confidential Information regardless of its source and whether or not marked as confidential.

7.2

Restriction . Except as permitted by the Board of Governors, during the term of Contractor’s engagement with the Company (except as may be reasonable in conjunction with Contractor’s duties hereunder) and at all times thereafter, Contractor shall not directly or indirectly use or disclose any Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose without the prior written consent or authorization of the Board of Governors. Such restriction shall continue to be binding upon Contractor after termination and is an independent covenant. Contractor recognizes that the Confidential Information constitutes a valuable asset of the Company and hereby agrees to act in such a manner as to prevent its disclosure and use by any person unless such use is for the benefit of the Company. Contractor’s obligations under this Section 7 are unconditional and will not be excused by any conduct on the part of the Company, except prior voluntary approval of disclosure by the Company of the Confidential Information.

7.3

Return of Confidential Information . Upon the termination of Contractor’s engagement with the Company, for whatever reason, Contractor shall promptly deliver to the Company all originals and copies in his possession or control of all documents, records, software, media and other materials containing any Confidential Information.

8.	Inventions.

8.1

Obligation to Disclose . Contractor hereby agrees to disclose promptly to the Company (or any persons designated by it) all developments, designs, creations, improvements, original works of authorship, formulas, processes, know-how, techniques and/or inventions, (hereinafter referred to collectively as “ Inventions ”) (i) which are made or conceived or reduced to practice by Contractor, either alone or jointly with others, during the term of this Agreement, or which are reduced to practice during the period of twelve (12) months following the termination of this Agreement, that relate to in the present or future business of the Company; or (ii) which result from tasks assigned Contractor by the Company, or from Contractor’s use of the premises or other resources owned, leased or contracted by the Company.

8.2

Obligation to Assign . Contractor agrees that all such Inventions which the Company determines to be related to its business or its research or development, or which result from work performed by Contractor for the Company, shall be the sole and exclusive property of the Company and its assigns, and the Company and its assigns shall have the right to use and/or to apply for patents, copyrights or other statutory or common law protections for such Inventions in any and all countries. Contractor further agrees to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights and other statutory or common law protections for such Inventions in any and all countries. To that end, Contractor will execute all documents for use in applying for and obtaining such patents, copyrights and other statutory or common law protections therefor and enforcing the same, as the Company may desire, together with any assignments thereof to the Company or to persons or entities designated by the Company.

8.3

Scope . Contractor’s obligations under this Section 8 shall continue beyond the termination of this Agreement, but the Company shall compensate Contractor at a reasonable rate after such termination for time actually spent by Contractor at the Company’s request in providing such assistance. Any provision in this Agreement requiring Contractor to assign Contractor’s rights in any Invention to the Company shall not apply to any Invention for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on Contractor’s own time, and (1) which does not relate (a) directly to the business of the Company or (b) to the Company’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by Contractor for the Company.

Non-Compete and Non-Solicitation. The Company and Contractor agree that the Company would be substantially harmed if Contractor competes with the Company during the one year period after termination of this Agreement or termination of Contractor’s Services hereunder. Therefore, the Company and Contractor agree as follows:

9.1

No Competing Business . During the term of this Agreement, and for a period of one year after the termination of this Agreement, regardless of the reason for such termination, Contractor agrees to not, directly or indirectly, engage in any business that is in competition with the Company, engaged in a similar business model, within the geographic area being served by the Company. Contractor also agrees not to plan or otherwise take any preliminary steps, either alone or in concert with others, to set up or engage in any business enterprise that would be in competition with the Company. For purposes of this Agreement, the Company is in the business of providing products and services to facilitate and enhance sales of real estate, including real estate brokerage services, title and property insurance services, and mortgage brokerage services and may engage in other or additional businesses over time.

9.2

No Solicitation of Customers . During the term of this Agreement, and for a period of one year after the termination of this Agreement, regardless of the reason for such termination, Contractor agrees to not, directly or indirectly, solicit or work for any former or current customers of the Company, nor divert any business from the Company. Contractor agrees that for the same one year period after Contractor ceases working for the Company, Contractor shall not in any way contact, attempt to contact, interfere or attempt to interfere with the Company’s relationships with any of its customers. During the one year period after the termination of this Agreement, if any of the Company’s customers, without solicitation by Contractor, contact Contractor about performing work for said customer in any way related to the business of the Company, Contractor shall obtain written permission from the Company’s Board of Governors before performing such work.

9.3

No Solicitation of Employees . During the term of this Agreement, and for a period of one year after the termination of this Agreement, regardless of the reason for such termination, Contractor agrees to not, directly or indirectly, solicit for employment, employ, or otherwise contract with for services, any of the Company’s employees, consultants or subcontractors on behalf of himself or any other person or entity.

9.4

No Employment with Customers . During the term of this Agreement, and for a period of one year after the termination of this Agreement, regardless of the reason for Contractor’s termination, Contractor shall not, directly or indirectly, become employed with or provide any services to any customer of the Company.

10.

Remedies for Breach of Agreement. Contractor recognizes that if he or she violates any portion of this Agreement, irreparable damage will result to the Company that could not be remedied by monetary damages. As a result, Contractor hereby agrees that in the event of any breach by him of any portion of this Agreement, or in the event of apparent danger of such breach, the Company shall be entitled, in addition to any other legal or equitable remedies available to it, to an injunction to restrain such breach, without the necessity of posting a bond or complying with any similar requirement.

11.	Tax Matters.

11.1

Section 83 . Section 83 of the Internal Revenue Code of 1986 (the “ Code ”) provides that Contractor is not subject to federal income tax with respect to the grant of units described in Section 6 above until the forfeiture restrictions with respect to such units lapse. If Contractor chooses, he or she may make an election under Code Section 83(b), which would cause Contractor to recognize income in the amount of the excess (if any) of the fair market value of the granted units (determined as of the date of grant) over the purchase price (which, in this case, is zero). A Code Section 83(b) election must be filed with the Internal Revenue Service within 30 days after the date of grant, even if no tax is due because the fair market value of the granted units on the date of their grant equals $0.00. Contractor hereby acknowledges that it is his or her sole responsibility to timely file Code Section 83(b) election(s) and that failure to file a Code Section 83(b) election within the applicable 30-day period may result in the recognition of ordinary income when the forfeiture restrictions lapse (i.e., the one- and two-year anniversaries of the grant date), if ever. In this regard, the Company agrees to reasonably cooperate with Contractor to provide its valuation of the granted units (which may appear on a Form 1099 or Form W-2), if any, when Contractor determines to make a Code Section 83(b) election.

11.2

Withholding Requirements . As a condition to the award of granted units hereunder, the Company may withhold any tax (or other governmental obligation) arising from such award, the filing of a Code Section 83(b) election, or the lapse of forfeiture restrictions; and Contractor shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements, if applicable.

12.	Miscellaneous.

12.1

Integration. This Agreement embodies the entire agreement and understanding by and between the Company and Contractor relative to the subject matter hereof and supersedes all prior agreements and understandings relating to the same.

12.2.

Applicable Law. This Agreement and the rights of the Company and Contractor hereunder shall be governed by and construed and enforced in accordance with the laws of the State of Minnesota. The venue for any action hereunder shall be in the State of Minnesota, whether or not such venue is or subsequently becomes inconvenient, and the Company and Contractor hereby consent to the jurisdiction of the courts of the State of Minnesota, County of Hennepin, and the U.S. District Court, District of Minnesota.

12.3

Modification . This Agreement shall not be modified or amended except by a written instrument signed by the Company and Contractor.

12.4

Waiver . No waiver of any term, condition or covenant of this Agreement by the Company or by Contractor shall be deemed a waiver of any subsequent breaches of the same or other terms, conditions or covenants hereof by such party.

12.5

Counterparts . This Agreement may be executed in several counterparts and as so executed shall constitute one agreement binding on the parties hereto.

12.6

Severability . The invalidity or partial invalidity of any portion of this Agreement shall not invalidate the remainder thereof, and said remainder shall remain in full force and effect. Moreover, if one or more of the provisions contained in this Agreement shall, for any reason, be held to be excessively broad as to scope, activity, subject or otherwise, so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent compatible with then applicable law.

12.7

Survival . The Company and Contractor acknowledge and agree that the provisions of this Agreement which by their terms extend beyond the termination of this Agreement and the termination of Contractor’s engagement hereunder shall continue in full force and effect notwithstanding termination of this Agreement or termination of Contractor’s engagement.

12.8

Binding Effect . Except as herein or otherwise provided to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, successors, assigns and personal representatives; provided, however, that neither party may assign its rights or obligations hereunder without the prior written consent of the other party.

12.9

Notices . All notices, requests and other communications hereunder shall be given in writing and deemed to have been duly given or served if personally delivered, or sent by first class, certified mail, return receipt requested, postage prepaid, to the party at the address as provided below, or to such other address as such party may hereafter designate by written notice to the other party: (a) if to the Company, to the address of its then principal office, and (b) if to Contractor, to the address last shown in the records of the Company.

12.10

Captions . The various headings or captions in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement.

[ Remainder of this Page Blank. Signature Page Follows .]

The parties have executed this Member Services Agreement to be made effective as of the Effective Date.

	COMPANY:

	WEBDIGS, LLC:


	Robert A. Buntz, Jr., Chief Manager

	MEMBER:

[Signature Page to WebDigs, LLC / Member Services Agreement]

Exhibit 21

Webdigs, LLC (a Minnesota limited liability company)

Marquest Financial, Inc. (a Minnesota corporation)

Home Equity Advisors, LLC (a Minnesota limited liability company)

Credit Garage, LLC (a Minnesota limited liability company)

EXHIBIT 99.1

HOME EQUITY ADVISORS, LLC

FINANCIAL STATEMENTS

SEPTEMBER 18, 2006 (INCEPTION)

TO DECEMBER 31, 2006

HOME EQUITY ADVISORS, LLC

TABLE OF CONTENTS

	PAGE

Independent Auditor’s Report		1

Financial Statements:

Balance Sheet		2

Statement of Income		3

Statement of Changes in Members’ Capital		4

Statement of Cash Flows		5

Notes to Financial Statements		6

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors

Home Equity Advisors, LLC

Minneapolis, Minnesota

We have audited the accompanying balance sheet of Home Equity Advisors, LLC (the Company) as of December 31, 2006, and the related statements of income, changes in members’ capital, and cash flows from September 18, 2006 (inception) to December 31, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Home Equity Advisors, LLC as of December 31, 2006, and the results of its operations and its cash flows from September 18, 2006 (inception) to December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

/s/ Carver Moquist & O’Connor, LLC

Bloomington, Minnesota

January 31, 2008

HOME EQUITY ADVISORS, LLC

BALANCE SHEET
December 31, 2006

ASSETS

Current assets:
Cash and cash equivalents	$	2,208
Commissions and fees receivable		13,794
Employee advances		2,000
Total current assets	$	18,002

LIABILITIES AND MEMBERS' CAPITAL

Current liabilities:
Accounts payable	$	391
Accrued commissions		6,694
Total current liabilities		7,085

Members' capital:
Common units, no par value, 1,000,000 units issued and outstanding		7,040
Accumulated earnings		3,877
Total members' capital		10,917

Total liabilities and members' capital	$	18,002

See notes to financial statements

HOME EQUITY ADVISORS, LLC

STATEMENT OF INCOME
September 18, 2006 (inception) to December 31, 2006

			Percent
	Amount		of Revenues
Revenues:
Commissions and fees	$	47,537		100.0	%

Total revenues		47,537		100.0


Operating expenses:
Member guaranteed payments		14,993		31.5
Payroll and taxes		3,754		7.9
Advertising and promotion costs		2,500		5.3
Travel		2,498		5.3
Dues and subscriptions		2,152		4.5
Broker commissions		2,114		4.4
Training and education		1,670		3.5
Telephone and internet		747		1.6
License, fees and permits		425		0.9
Consulting		325		0.7
Insurance - general		312		0.7
Appraisal fees		300		0.6
Outside services		100		0.2
Office supplies		67		0.1
Postage and courier		24		0.1
Total operating expenses		31,981		67.3

Operating income		15,556		32.7

Interest expense		262		0.6

Net income	$	15,294		32.1	%

See notes to financial statements

HOME EQUITY ADVISORS, LLC

STATEMENT OF CHANGES IN MEMBERS' CAPITAL
September 18, 2006 (inception) to December 31, 2006

	Common		Common					Total
	Units		Units		Accumulated			Members'
	Number		Dollars		Earnings			Capital

Balance, September 18, 2006		-	$	-	$	-		$	-

Initial contributions for common units		1,000,000		2,040		-			2,040

Distributions to members						(11,417	)		(11,417	)

Member loan forgiven				5,000					5,000

Net income for the period from September 18, 2006 (inception) to December 31, 2006		-		-		15,294			15,294

Balance, December 31, 2006		1,000,000	$	7,040	$	3,877		$	10,917

See notes to financial statements

HOME EQUITY ADVISORS, LLC

STATEMENT OF CASH FLOWS
September 18, 2006 (inception) to December 31, 2006

Cash flows from operating activities:
Net income	$	15,294
Adjustments to reconcile net income to net cash flows provided by operating activities:
Changes in operating assets and liabilities:
Commissions and fees receivable		(13,794	)
Employee advances		(2,000	)
Accounts payable		391
Accrued commission		6,694
Net cash flows provided by operating activities		6,585

Cash flows from financing activities:
Member contributions		2,040
Member distributions		(11,417	)
Loan from member		10,000
Repayment of loan from member		(5,000	)
Net cash flows used in investing activities		(4,377	)

Net increase in cash and cash equivalents		2,208

Cash and cash equivalents, beginning of period		-

Cash and cash equivalents, end of period	$	2,208

Supplemental Disclosure of Cash Flow Information Cash paid for interest	$	262

Non-cash financing activity:
Member loan converted to capital	$	5,000

See notes to financial statements

HOME EQUITY ADVISORS, LLC

NOTES TO FINANCIAL STATEMENTS

September 18, 2006 (inception) to December 31, 2006

1	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION

Nature of Business

Home Equity Advisors, LLC (the Company), based in Minneapolis, Minnesota, is a mortgage broker assisting homeowners in refinancing their home mortgages and assisting prospective home buyers in qualifying for a home mortgage and brokering the financing.

The members of the Company established its existence on September 18, 2006.

Revenue Recognition

Commissions and loan fees generated by the Company are recognized at the time the loan closes.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations, Risks and Uncertainties

The Company operates within the mortgage origination industry in Minnesota and its prospects for success are tied indirectly to interest rates and the general housing and business climates in this region. The Company maintains a relationship with a Minnesota wholesale lender, which requires that all mortgage originations brokered by the Company go through the wholesaler for funding. The Company acts as a correspondent lender for the wholesaler. The Company’s contract with the wholesaler can be renegotiated or cancelled by the Company or the wholesaler without advance notification.

Cash and Cash Equivalents

For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with a maturity of less than 90 days to be cash and cash equivalents.

HOME EQUITY ADVISORS, LLC

NOTES TO FINANCIAL STATEMENTS

September 18, 2006 (inception) to December 31, 2006

Commissions and Fees Receivable

Loan commissions and fees receivable are recorded at the amount the Company expects to collect on loans closed prior to year-end. These receivables represent balances due from the Company’s principal loan wholesaler and usually are settled within 10-15 days after closing. All the receivables recorded as of December 31, 2006 were received in full by the Company in January 2007.

Employee Advances

For certain newly hired loan agents, the Company on occasion will advance funds in order that necessary computer hardware and software can be purchased by the agent. As of December 31, 2006 balances totaling $2,000 remained outstanding against these employee advances. The entire balance of $2,000 was paid in full in February 2007. The Company does not accrue any interest on employee advances.

Furniture and Equipment

Although the Company maintained no fixed assets in 2006, its policy is to record furniture and equipment at cost. Depreciation is provided on the straight-line method over the estimated useful lives of assets. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in operating income.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents and accounts receivable. Pursuant to SFAS No. 107 “Disclosures about Fair Value of Financial Instruments,” the Company is required to estimate the fair value of all financial instruments at the balance sheet date. The Company considers the carrying value of its financial instruments in the financial statements to approximate fair value.

Income Taxes

The Company has elected to be taxed under the provisions of Limited Liability Corporations (LLC) of the Internal Revenue Code. Under those provisions, the Company does not pay corporate income tax on its taxable income. Instead, each member of the Company is liable for individual income taxes on the Company’s taxable income and other distributions received from the Company. Therefore, no provision or liability for income taxes has been included in these financial statements.

Advertising

The Company expenses advertising costs as incurred. Advertising expense amounted to $2,500 for the period from September 18, 2006 (inception) to December 31, 2006.

HOME EQUITY ADVISORS, LLC

NOTES TO FINANCIAL STATEMENTS

September 18, 2006 (inception) to December 31, 2006

2	RELATED PARTY TRANSACTIONS

As of December 31, 2006 the Company had accrued $3,577 of commissions payable to its members. Total commissions paid to its members for services were $14,993 from September 18, 2006 (inception) to December 31, 2006 and have been classified as member guaranteed payments in the statement of operations.

During the period September 18, 2006 (inception) to December 31, 2006, the Company received a $10,000 loan from one of its members. During the same period, the Company repaid the member $5,000. Additionally, interest was paid to this member totaling $262. The remaining $5,000 was subsequently forgiven and recorded as additional capital (see Note 3).

3	SUBSEQUENT EVENTS

In July 2007, a member forgave $5,000 owed to the member by the Company. The Company has accounted for the forgiveness as a capital contribution as of December 31, 2006 in accordance with Accounting Principals Board (APB) Opinion No. 26 “Early Extinguishment of Debt”.

On July 15, 2007, Webdigs, LLC (a private company) acquired all outstanding member units in the Company. Webdigs, LLC issued 64,000 member units to pay for the acquisition of all of the Company’s outstanding member units. At the time of sale, the 64,000 units issued by Webdigs had an estimated value of $32,000. Webdigs is an on-line real estate broker who plans to offer the Company’s mortgage brokerage services as a complementary service to its own real estate customers.

EXHIBIT 99.2

MARQUEST FINANCIAL, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2006 AND 2005

MARQUEST FINANCIAL, INC.

TABLE OF CONTENTS

		PAGE

Report of Independent Registered Public Accounting Firm		1

Financial Statements:

Balance Sheets		2

Statements of Operations		4

Statements of Changes in Stockholder’s Equity (Deficit)		5

Statements of Cash Flows		6

Notes to Financial Statements		7

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors

Marquest Financial, Inc.

Minneapolis, Minnesota

We have audited the accompanying balance sheet of Marquest Financial, Inc. (the Company) as of December 31, 2006 and the related statements of operations, changes in stockholder’s equity (deficit), and cash flows for the year then ended. The financial statements of Marquest Financial, Inc. as of December 31, 2005 were audited by other auditors whose report dated February 22, 2006 and January 8, 2008, expressed an unqualified opinion on those statements. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Marquest Financial, Inc. as of December 31, 2006, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had a net loss for the years ended December 31, 2006 and 2005 and had a stockholder’s deficit at December 31, 2006. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those 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/ Carver Moquist & O’Connor, LLC

Bloomington, Minnesota

June 4, 2008

MARQUEST FINANCIAL, INC.

BALANCE SHEETS

December 31, 2006 and 2005

	2006			2005
ASSETS

Current assets:
Cash and cash equivalents	$	1,126		$	28,320
Commissions and fees receivable		14,096			-
Employee advances		1,973			6,405
Deferred income taxes		-			21,000
Prepaid expenses and deposits		11,541			17,158

Total current assets		28,736			72,883

Equipment and improvements, at cost:
Office equipment and fixtures		182,671			254,610
Leasehold improvements		-			50,877
		182,671			305,487
Less accumulated depreciation		(107,717	)		(233,491	)

Net equipment and improvements		74,954			71,996

Other assets:
Due from stockholder		-			69,450
Deferred income taxes		-			19,000

Total other assets		-			88,450

Total assets	$	103,690		$	233,329

See notes to financial statements.

	2006			2005
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	40,512		$	54,941
Accrued expenses		37,529			34,846
Note payable		49,828			49,828
Due to related parties		73,559			-
Current maturities of capital lease obligations		8,924			-

Total current liabilities		210,352			139,615

Capital lease obligations - less current maturities		43,967			-

Total liabilities		254,319			139,615

Stockholder's equity (deficit)
Common stock ($.01 par value; 50,000 shares authorized; 1,000 shares issued and outstanding)		10			10
Additional paid-in capital		263,459			376,170
Accumulated deficit		(414,098	)		(282,466	)

Total stockholder's equity (deficit)		(150,629	)		93,714

Total liabilities and stockholder's equity (deficit)	$	103,690		$	233,329

See notes to financial statements.

MARQUEST FINANCIAL, INC.

STATEMENTS OF OPERATIONS

Years ended December 31, 2006 and 2005

	2006						2005
				Percent						Percent
	Amount			of Revenues			Amount			of Revenues

Net revenues	$	1,049,448			100.0	%	$	1,308,231			100.0	%

Operating expenses:
Selling		836,803			79.7			1,041,757			79.6
General and administrative		255,908			24.4			278,804			21.3
Depreciation expense		21,934			2.1			24,484			1.9
(Gain) loss on disposal of fixed assets		8,760			0.8			(750	)		(0.1	)
					-
Total operating expense		1,123,405			107.0			1,344,295			102.8

Operating income		(73,957	)		(7.0	)		(36,064	)		(2.8	)

Other income (expense):
Interest expense		(17,675	)		(1.7	)		(32,893	)		(2.5	)
Interest income		-			-			1,151			0.1

Total other expense		(17,675	)		(1.7	)		(31,742	)		(2.4	)

Loss before income tax provision (benefit)		(91,632	)		(8.7	)		(67,806	)		(5.2	)

Income tax provision (benefit)		40,000			3.8			(16,000	)		(1.2	)
					-						-
Net loss	$	(131,632	)		(12.5	)%	$	(51,806	)		(4.0	)%

See notes to financial statements.

MARQUEST FINANCIAL, INC.

STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)

Years ended December 31, 2006 and 2005

					Additional						Total
	Common stock				paid-in			Accumulated			stockholder's
	Shares		Amount		capital			deficit			equity (deficit)

Balances, December 31, 2004		1,000	$	10	$	376,170		$	(230,660	)	$	145,520

Net loss		-		-		-			(51,806	)		(51,806	)

Balances, December 31, 2005		1,000		10		376,170			(282,466	)		93,714

Due from stockholder reclassed as a return of capital		-		-		(69,450	)		-			(69,450	)

Net loss		-				-			(131,632	)		(131,632	)

Capital distributions		-		-		(43,261	)		-			(43,261	)

Balances, December 31, 2006		1,000	$	10	$	263,459		$	(414,098	)	$	(150,629	)

See notes to financial statements.

MARQUEST FINANCIAL, INC.

STATEMENTS OF CASH FLOWS

Years Ended December 31, 2006 and 2005

	2006			2005
Cash flows from operating activities:
Net loss	$	(131,632	)	$	(51,806	)
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:
Depreciation		21,934			24,484
(Gain) loss on disposal of equipment		8,760			(750	)
Deferred income taxes		40,000			(16,000	)
Changes in operating assets and liabilities:
Commissions and fees receivable		(14,096	)		-
Employee advances		4,432			(6,405	)
Prepaid expenses and deposits		5,617			(10,836	)
Accounts payable		(14,429	)		47,300
Accrued expenses		2,683			31,821

Net cash flows provided by (used in) operating activities		(76,731	)		17,808

Cash flows from investing activities:
Proceeds from certificate of deposit		-			26,825
Purchases of furniture and equipment		(5,641	)		(13,316	)
Advances to stockholder		-			(45,268	)
Proceeds from sale of equipment		-			750

Net cash flows used in investing activities		(5,641	)		(31,009	)

Cash flows from financing activities:
Advances from related parties		80,000			-
Repayments of advances from related parties		(6,441	)		-
Cash received in connection with a capital lease		24,880			-
Net repayments under line of credit		-			(15,729	)
Capital distributions		(43,261	)		-

Net cash flows provided by (used in) financing activities		55,178			(15,729	)

Net decrease in cash and cash equivalents		(27,194	)		(28,930	)

Cash and cash equivalents, beginning of year		28,320			57,250

Cash and cash equivalents, end of year	$	1,126		$	28,320

Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,057		$	-

Non-cash investing and financing activities:
Office equipment purchased with capital lease financing	$	28,011		$	-
Forgiveness of stockholder receivable considered a return of capital	$	(69,450	)	$	-

See notes to financial statements.

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

1	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION

Nature of Business

Marquest Financial, Inc. (the Company), based in Bloomington, Minnesota, is a mortgage broker assisting homeowners in refinancing their home mortgages and assisting prospective home buyers in qualifying for a home mortgage and brokering the financing. Its principal market is the United States.

On October 22, 2007, Webdigs, LLC (a private company) acquired all outstanding stock in the Company. Webdigs, LLC issued 64,000 member units to pay for the acquisition of all of the Company’s outstanding stock. At the time of sale, the 64,000 units issued by Webdigs, Inc. had an estimated value of $64,000. Webdigs, Inc. is an on-line real estate broker who plans to offer the Company’s mortgage brokerage services as a complementary service to its own real estate customers. Marquest Financial, Inc. will continue as a wholly owned subsidiary of Webdigs, LLC.

Revenue Recognition

Commissions and loan fees generated by the Company are recognized at the time the loan closes.

Estimates

Concentrations, Risks and Uncertainties

Vitality of the Housing and Mortgage Sectors in the Company’s Regional Markets

The Company operations are concentrated within the mortgage origination industry in Minnesota, Florida and Illinois and its prospects for success are tied indirectly to interest rates and the general housing and business climates in these regions.

Cash Deposits in Excess of Federally Insured Limits

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable accounts payable, accrued expenses, notes payable and capital lease obligations. Pursuant to SFAS No. 107 “Disclosures about Fair Value of Financial Instruments,” the Company is required to estimate the fair value of all financial instruments at the balance sheet date. The Company considers the carrying value of its financial instruments in the financial statements to approximate fair value due to their short-term nature.

Cash and Cash Equivalents

For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with a maturity of less than 90 days to be cash and cash equivalents.

Commissions and Fees Receivable

Loan commissions and fees receivable are recorded at the amount the Company expects to collect on loans closed. These receivables represent broker commission balances due from the Company’s investors/lenders and usually are settled within 10-15 days after closing. All the receivables recorded as of December 31, 2006 were received in full by the Company in January 2007.

The Company reviews the outstanding receivables on a monthly basis and receivables are considered past due when payment has not been received 30 days after a loan closes. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. Historically, the Company has not experienced significant losses related to receivables from individual customers. At December 31, 2006 and 2005, the Company considers its accounts receivable to be fully collectible and therefore have not recorded an allowance for doubtful accounts.

Furniture and Equipment

Furniture and equipment are recorded at cost. Depreciation is provided on the straight-line method over the estimated useful lives of assets ranging from three to seven years. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in operating income.

The estimated useful lives are as follows:

		Years
Computer software and equipment		3 to 7
Office equipment		5 to 7
Leasehold improvements		term of related lease

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

Impairment of Long-Lived Assets

Long-lived assets, such as furniture and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Income Taxes

Income taxes are accounted for in accordance with SFAS No. 109, as clarified by FIN No. 48, which requires an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

Advertising

The Company expenses advertising costs as incurred. Advertising expense amounted to $2,313 and $41,746 for the years ended December 31, 2006 and 2005, respectively.

2	GOING CONCERN

The Company incurred significant net losses for the years ended December 31, 2006 and 2005 and had a stockholder’s deficit at December 31, 2006 totaling $150,629. Management anticipates these losses will continue in the near future. In October 2007, the Company was acquired by Webdigs, LLC and has continued to operate as a wholly owned subsidiary of Webdigs, LLC. Webdigs, LLC has financed the losses incurred subsequent to the acquisition of the Company. However, there is no assurance that Webdigs, LLC would continue to do so in the future. Management intends to increase their sales and reduce administrative costs through their affiliation with Webdigs, LLC. Webdigs, LLC is an online real estate company that the Company believes will be a significant source of leads and source of administrative support.

3	DUE FROM STOCKHOLDER

As of December 31, 2005, the Company had made various advances to the stockholder for non-reimburseable expenses incurred by the stockholder totaling $69,450. In anticipation of the purchase by Webdigs, LLC on October 22, 2007, this amount due from the stockholder was forgiven by the Company and was reclassed to additional paid in capital as a return of capital as of December 31, 2006.

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

4	NOTE PAYABLE

The note payable consists of a 16% note secured by all assets of the Company and a personal guarantee by the stockholder of the Company. The sole stockholder has also pledged 3,000,000 shares of the lender’s common stock that is owned personally. Accrued interest on this note totaled $27,949 as of December 31, 2006. In connection with the acquisition of the Company by Webdigs, LLC, the entire note balance of $49,828 and the related accrued interest of $27,949 was assumed personally by the former stockholder of the Company.

5	DUE TO RELATED PARTIES

During 2006, two separate related parties contributed $80,000 to the Company in support of ongoing working capital obligations. There are no formal agreements in place and therefore no stated interest rates. The loans are due on demand. One party loaned the Company $50,000. No interest was paid or accrued on this loan for the year ended December 31, 2006. A second party loaned $30,000. The Company has paid interest to the second party totaling $2,308 at an effective rate of 12% during the year ended December 31, 2006.

At December 31, 2006, a balance of $73,559 remained outstanding. The Company has repaid an additional $13,000 in the first quarter of 2007. The remaining unpaid balances were repaid with member units in Webdigs, LLC, the entity which acquired the Company on October 22, 2007.

6	CAPITAL LEASE PAYABLE

In November 2006, the Company entered into a capital lease agreement to acquire two document imaging machines. In addition to the equipment leased, the Company received cash proceeds of $24,880 for working capital needs. Under this agreement, the Company is required to make monthly payments of $1,063 through February 2012.

At December 31, 2006, the gross amount of equipment and related accumulated depreciation recorded under capital leases were as follows:

	2006
Equipment	$	28,011
Less: accumulated depreciation		-

Net book value of capital lease equipment	$	28,011

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

Future minimum lease payments including interest required under this lease are as follows:

Year ending December 31,

2007	$	13,819
2008		12,756
2009		12,756
2010		12,756
2011		12,756
2012		2,126

Total		66,969
Less: amount representing interest		(14,078	)

Net capital lease obligation		52,891
Less: current portion		(8,924	)

Long-term obligations under capital lease	$	43,967

7	COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company conducts its operations in leased facilities under non-cancelable operating leases expiring through August 31, 2009. In addition to base rent, the Company is obligated for its share of insurance, taxes, and common area expenses. Monthly base rent expenses, including related insurance, and common area expenses is $8,300 per month in its Bloomington, Minnesota office. A second office is leased in Naples, Florida to house the Company’s Florida regional office. Monthly base rent in Naples is $2,500 per month.

Office rents totaled $120,300 and $125,800 for the years ended December 31, 2006 and 2005, respectively.

The Company also leases equipment and furniture under operating leases which expire at various dates in 2007 and 2008. Total base monthly lease payments for the entirety of these operating leases are $2,234. For the years ended December 31, 2006 and 2005, respectively, total equipment and furniture lease payments totaled $29,683 and $32,329.

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

The future minimum lease payments under the Company’s noncancelable operating leases are as follows:

Years ending December 31,

2007	$	156,407
2008		130,901
2009		78,900

Total	$	366,208

8	EMPLOYEE BENEFIT PLANS

The Company sponsors a 401(k) retirement plan covering all employees meeting certain eligibility requirements. Company contributions are voluntary and at the discretion of the Board of Directors. No contributions were made during the years ended December 31, 2006 and 2005 respectively.

9	INCOME TAXES

The provision (benefit) for income taxes consists of the following:

	2006		2005
Current:
Federal	$	-	$	-
States		-		-

		-		-

Deferred:
Federal		24,000		(9,600	)
States		16,000		(6,400	)

		40,000		(16,000	)

Provision (benefit) for income taxes	$	40,000	$	(16,000	)

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

The differences between the federal and state statutory income tax rate and the actual tax rates result principally from the following:

	2007						2006
	Amount			Percent			Amount			Percent

Expected income tax	$	(22,900	)		25.0	%	$	(16,900	)		25.0	%
Non-deductible expenses		200			(0.9	)		900			(1.4	)
Valuation allowance		62,700			(67.8	)		-			0.0

Provision (benefit) for income taxes	$	40,000			(43.7	)%	$	(16,000	)		23.6	%

The deferred tax assets and liabilities consisted of the following for the years ended December 31:

	2007			2006
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	54,700		$	28,400
Accrual to cash basis adjustments		13,900			21,400
Depreciation		(5,900	)		(9,800	)

Net deferred tax assets		62,700			40,000
Valuation allowance		( 62,700	)		-

Net deferred tax assets	$	-		$	40,000

Net operating loss carryforwards totaling $220,000 begin to expire in 2022 and continue through 2027. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences will become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has recorded a full valuation allowance against its net deferred tax assets because it is not currently able to conclude that it is more likely than not that these assets will be realized. The amount of deferred tax assets considered to be realizable could be increased in the near term if estimates of future taxable income during the carryforward period are increased.

MARQUEST FINANCIAL, INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2006 and 2005

Under the Internal Revenue Code Section 382, certain stock transactions which significantly change ownership, including the sale of stock to new investors, the exercise of options to purchase stock, or other transactions between shareholders could limit the amount of net operating loss carryforwards that may be utilized on an annual basis to offset taxable income in future periods. On October 22, 2007, a significant ownership change occurred for the Company due to the stock acquisition by Webdigs, LLC. In accordance with Internal Revenue Code Section 382, the maximum amount of net operating losses available for carryforwards after the change in ownership was reduced to approximately $8,600 per year over the next 20 years reducing the total NOL carryover to approximately $172,600.

10	RECLASSIFICATIONS

Certain amounts in the 2005 financial statements have been reclassified to conform to the 2006 presentation. The reclassifications had no effect on the 2005 cash flows, financial position or net loss as originally reported.