VENGA AEROSPACE SYSTEMS INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

 VENGA AEROSPACE SYSTEMS INC.

Index to the Consolidated Financial Statements

DECEMBER 31, 2007 AND 2006

INDEX

Page

Auditors' report 1

FINANCIAL STATEMENTS

Consolidated balance sheet 2

Consolidated statement of operations and deficit 3

Consolidated statement of cash flows 4

Notes to the consolidated financial statements 5 - 16

 AUDITORS' REPORT

To the Shareholders of:

Venga Aerospace Systems Inc.

We have audited the consolidated balance sheet of VENGA AEROSPACE SYSTEMS INC. as at
December 31, 2007 and 2006 and the consolidated statements of operations and deficit and cash flows
for the years then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our
audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable assurance 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.

In our opinion, these consolidated financial statements present fairly, in all material respects, the
financial position of the Company as at December 31, 2007 and 2006 and the results of its
operations and the changes in cash flows for the years then ended in accordance with Canadian
generally accepted accounting principles.

Rich Rotstein
RICH ROTSTEIN LLP
Chartered Accountants
Licensed Public Accountants

Toronto, Canada
April 25, 2008

-1-
 VENGA AEROSPACE SYSTEMS INC.
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2007 AND 2006

ASSETS

(Restated)
2007 2006
$ $

Current Assets
Cash 31,159 56,486
Accounts receivable 5,118 4,830

36,277 61,316

Other Assets
Investment (note 9 and 5(b)) 600,000 667,722
Investment in Global Mineral Investments, LLC (note 10 and 5(c)) 50,400 50,400

Total Assets 686,677 779,438

LIABILITIES

Current Liabilities
Accounts payable and accrued charges 21,726 32,005
Deferred revenue 3,579 5,072

25,305 37,077

SHAREHOLDERS' EQUITY

Capital stock (note 11) 16,723,966 16,723,966

Contributed surplus 890,684 890,684
Deficit (16,953,278) (16,872,289)

661,372 742,361

Total Liabilities and Shareholders' Equity 686,677 779,438

Going concern (note 2)

Approved by the Board of Directors:

" Hirsh Kwinter " Director " Dr. Ezra Franken " Director

The accompanying notes are an integral part of these consolidated financial statements
-2-
 VENGA AEROSPACE SYSTEMS INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

(Restated)
2007 2006
$ $

REVENUE (note 12) 84,239 108,918

EXPENSES
Bad debt expense 50,000 0
General and administrative 31,670 216,624
Professional fees 11,291 40,408
Sundry costs 4,545 12,217
Settlement of lawsuit (note 15) 0 35,000

97,506 304,249

LOSS FROM OPERATIONS (13,267) (195,331)

Foreign exchange (67,722) (11,411)

NET LOSS FOR THE YEAR (80,989) (206,742)

DEFICIT - BEGINNING OF YEAR (16,872,289) (16,665,547)

DEFICIT - END OF YEAR (note 4) (16,953,278) (16,872,289)

Net loss per share - basic and fully diluted (0.0004) (0.0010)

The accompanying notes are an integral part of these consolidated financial statements
-3-
 VENGA AEROSPACE SYSTEMS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

(Restated)
2007 2006
$ $
OPERATING ACTIVITIES
Net (Loss) (80,989) (206,742)
Items not affecting cash
Deferred revenue amortization (1,492) (990)
Foreign exchange loss on investment 67,722 0
(14,759) (207,732)
Changes in non-cash working capital items
Accounts receivable (288) (1,633)
Inventory 0 12,217
Accounts payable and accrued charges (10,280) 216,841
(10,568) 227,425

CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (25,327) 19,693

INVESTING ACTIVITIES
Increase in investment 0 (667,722)
Investment in private company funded by liquidation of account receivable 0 (50,400)

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 0 (718,122)

FINANCING ACTIVITIES
Additional loan proceeds from 2930170 Canada Inc. 0 87,600
Proceeds from issuance of common stock 0 667,620
Share issue costs 0 (7,772)

CASH PROVIDED BY FINANCING ACTIVITIES 0 747,448

NET (DECREASE) INCREASE IN CASH (25,327) 49,019

Cash - beginning of year 56,486 7,467

CASH - END OF YEAR 31,159 56,486

Cash is represented by:

Cash 31,159 56,486

OTHER CASH FLOW INFORMATION:

Interest paid 0 1,519
Capital stock issued in exchange for debt (note 11(c)) 0 686,743

The accompanying notes are an integral part of these consolidated financial statements
-4-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

1. CORPORATE PROFILE

The Company was incorporated under the Business Corporations Act (Ontario) by certificates of
amalgamation dated April 26, 1979, amalgamating Frodac Mines Ltd., Great Bear Silver Mines
Limited and Silver Monard Mines Limited to become Frodac Consolidated Energy Resources Ltd.
On July 25, 1985, it changed its name to Global Aerospace Systems Inc. and on November 3,
1987, the company further changed its name to Venga Aerospace Systems Inc.

In addition, these consolidated financial statements include the wholly owned subsidiary Venga
Joint Venture Ltd., which is inactive.

2. GOING CONCERN

These financial statements have been prepared in accordance with Canadian generally accepted
accounting principles applicable to a going concern which assumes that the Company will be able
to realize its assets, including the ultimate realization of its long-term investments, and discharge
its liabilities in the normal course of business. Recurring sources of revenue have not yet proven
to be sufficient. The Company needs to obtain additional financing to enable it to continue its
business. In the absence of additional financing, the Company may not have sufficient funds to
meet its obligations. Management continues to monitor the cash needs and consider various
alternatives to raise additional financing. However, management is reasonably confident but can
offer no guarantee that it will be able to secure the necessary financing to enable the Company to
continue as a going concern. These financial statements do not give effect to adjustments that
would be necessary should the Company be unable to continue as a going concern. There is no
assurance that this will be successful.

If the going concern basis is not appropriate, material adjustments may be necessary in the
carrying amounts and/or classification of assets and liabilities and the loss for the period reported
in these financial statements.

-5-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

3. ACCOUNTING ERROR - RETROSPECTIVE RESTATEMENT

During 2007, the Company changed its accounting policy for the treatment of its investment in
3DP North America Joint Venture (the "New JV"). In the prior period, when the investment arose, it
was accounted for using the proportionate consolidation method applicable to joint ventures,
whereby the Company's proportionate share of revenues, expenses, assets and liabilities were
included in the Company's accounts. In the current period, this same investment has been
accounted for using the cost method. It was determined that the cost method was a more
appropriate method to use as the New JV does not meet the definition of a joint venture, as
defined in CICA Handbook section 3055 Interests in Joint Ventures. Furthermore, it was
determined that because the Company does not have significant influence over the New JV
investment, the equity method would not be appropriate either. The financial statements of 2006
have been restated to correct this error. The effect of the restatement on those financial
statements is summarized below. There is no effect in 2007.

Balance sheet items Income statement items

Effect on Effect on
2006 2006
$ $

(Decrease) in cash (151,193) (Increase) in revenue (42,631)

(Decrease) in inventory (12,885) Increase in expenses 31,361
(Decrease) in deposits on (Decrease) in net loss (11,270)
equipment (253,654)
(Decrease) in loan receivable (238,720)
Increase in investment in New JV 667,722
(Increase) in equity (11,270)

4. PRIOR YEAR DEFICIT RECONCILIATION

2006
$

DEFICIT - END OF YEAR -

As previously stated (16,883,559)
Accounting error (note 3) 11,270
DEFICIT - END OF YEAR AS RESTATED (16,872,289)

-6-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

5. OPERATIONS

a. Aerospace Unit

Venga's aeronautics division was engaged in the development of a full-scale, composite jet
drone/aircraft known as the TG-10 Brushfire. In May of 1998, a full-scale prototype of the
Company's drone/aircraft was destroyed in a fire. Further development of Venga's composite
drone/aircraft program has been held in abeyance pending the securing of adequate funding for
the program.

On June 17, 2004, the Company entered into a development agreement with Air Combat Warfare
International ("ACWI") of Ayr, Ontario, wherein both parties agreed to make coordinated efforts to
attempt to exploit ACWI's existing and potential head and sub-contracts to supply flight and
combat support services for the U.S. military and the military forces of Canada and various other
NATO countries. Though the Company has extended its development agreement with ACWI to
April 3, 2008, the Company is currently taking no further actions to attempt to exploit any potential
contracts with or through ACWI.

The Company, in association with ARINC Incorporated (www.arinc.com), has made an unsolicited
proposal to the Canadian government to provide replacement jet aircraft for the Canadian Forces'
Snowbirds aerial demonstration squadron. In July of 2007, ARINC advised the Company that as a
consequence of ARINC's decision to discontinue its aircraft maintenance division, ARINC was
withdrawing from further participation in the Company's Snowbirds' aircraft replacement proposal.
As a direct result of the continuing delays in the Canadian government's decision with respect to
selecting a program to replace or upgrade the Snowbirds' aircraft, the Company is holding its
Snowbirds' aircraft replacement proposal in abeyance pending receipt of a positive response from
the Canadian government.

b. 3D Graphics Unit

In November of 2006, the Company entered into a joint venture agreement (the "New JV
Agreement") with 3DP North America, Inc., of Kenner, Louisiana; United Business & Capital
Services, LLC of Kenner, Louisiana; EKG, LLC of Lafayette, Louisiana and Armadillo Photo
Supply, Inc. of Houston, Texas, creating a business venture, the 3DP North America Joint Venture
(the "New JV"), to provide a range of advanced 3D products and print services for both
commercial and consumer markets. The Company has a 30% ownership interest in the New JV
with 3DP North America, Inc., who acts as the managing venturer of the New JV, owning the
remaining 70% of the business venture. Pursuant to the terms of the New JV Agreement, the
Company advanced $600,000 USD of capital to the New JV and upon termination of the New JV,
the company is entitled to its capital account share in assets of the New JV. The Company has no
management rights or further funding requirements or obligations with respect to the New JV. The
Company's participation in the New JV is limited to the Company's right to receive 30% of the New
JV's net profits as and when such profits are distributed to the joint venturers in accordance with
the terms and provisions of the New JV Agreement. The Company is only liable to the extent of its
investment and is indemnified from the other joint venturers for any excess losses and liabilities.
The New JV has entered into a purchase agreement to acquire two 3D print/processors and
subject to the terms of this purchase agreement has paid deposits towards the purchase of this
equipment. In June of 2007, the New JV began to process 3D film orders that had been previously
forwarded to the Company's CLIK 3D business unit.

-7-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

c. Mining and Resource Unit

The Company initially acquired a 3% interest, together with an option to acquire up to an additional
15% interest, in Global Mineral Investments, LLC ("GMI"), a private U.S. corporation that proposes
to lease and develop gold mining concessions in West Africa. On August 31, 2007, GMI was
awarded four Class B Gold Mining Licences by the Ministry of Lands, Mines and Energy of the
Republic of Liberia for four, separate concessions located in the Sanquin Mining Zone, Sinoe
County in the Republic of Liberia. In consideration of services that the Company rendered GMI, on
September 6, 2007, the Company's ownership interest in GMI was increased from 3% to 4%.

6. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation

The consolidated financial statements include the accounts of Venga Aerospace Systems
Inc. ("the Company") and its subsidiary.

(b) Basis of Presentation

The Company has prepared these comparative financial statements on a consolidated

basis which includes its wholly-owned subsidiary, Venga Joint Venture Ltd.

(c) Use of Estimates

The preparation of these consolidated financial statements, in conformity with Canadian

generally accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expense during the reporting period. Actual results could differ
from these estimates. Significant estimates include prepaid expenses and certain accrued
liabilities.

(d) Financial Instruments

The Company classifies all financial instruments. The Company classifies cash, accounts
receivable, accounts payable and accrued liabilities as held for trading financial
instruments. Investments with a maturity date and fixed or determinable payments that the
entity has the positive intention and ability to hold to maturity, are classified as held-to-
maturity financial instruments. Investments that do not have fixed terms or determinable
payments and are not actively bought and sold for the purpose of profit taking, are
classified as available-for-sale financial instruments.
(e) Income Taxes

The Company uses the asset and liability method of accounting for income taxes under
which future tax assets and liabilities are recognized for differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax
bases. Future tax assets and liabilities are measured using substantively enacted tax rates
in effect in the year in which those temporary differences are expected to be recovered or
settled. The effect on future tax assets and liabilities of a change in tax rates is recognized
as part of the provision for income taxes in the year that includes the enactment date. A
valuation allowance is recorded to the extent there is uncertainty regarding realization of
future tax assets.

-8-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

(f) Translation of Foreign Currencies

Monetary assets and liabilities denominated in foreign currencies are translated at the rate
of exchange prevailing at the year end, non-monetary assets and liabilities are translated
at historical rates and revenue and expenses are translated at the rate of exchange in
effect on the transaction dates. Exchange gains and losses arising on translation of
monetary items are included in income in the year in which they occur.

(g) Long-term Investments

Long-term investments are recorded at cost. Long-term investments classified as held-to-

maturity financial instruments, are valued at amortized cost, with changes in valuation
charged to operations. Long-term investments classified as available-for-sale financial
instruments, are valued at fair market value, with changes in valuation charged to
comprehensive income. Gains and losses are recognized when investments are sold.
Income is recognized only to the extent dividends are received.

(h) Impairment of Long-lived Assets

Long-lived assets, including capital assets, are amortized over their useful lives. The
Company reviews long-lived assets for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable. If the sum of the
undiscounted cash flows expected to result from the use and eventual disposition of a
group of assets is less than its carrying amount, it is considered impaired. An impairment
loss is measured as the amount by which the carrying amount of the group of assets
exceeds its fair value. At December 31, 2007, no such impairment has occurred.

(i) Basic and Diluted Loss per Share

The Canadian Institute of Chartered Accountants ("CICA") recommends the use of the
treasury stock method in computing earnings/loss per share. Under this method, basic loss
per share is computed by dividing earnings available to common shareholders by the
weighted average number of common shares outstanding during the year. In computing
the loss per share on a fully diluted basis, the treasury stock method assumes that
proceeds received from in-the-money stock options are used to repurchase common
shares at the prevailing market rate.

The weighted average number of common shares outstanding during the year was
228,271,893 (2006 - 205,731,048).

(j) Revenue Recognition

Revenue is earned from the provision of consulting services, licence fees and providing
3D film print/processing services. The Company recognizes revenue from consulting
services when performance of the consulting services are complete and recognizes
revenue from the provision of 3D film print/processing services when the printed 3D
images are shipped to the customer. The licence fees represent an annual fee that the
New JV pays the Company for use of the Company's CLIK 3D trade name. Deferred
revenue is amortized to income as it is earned.

7. CHANGES IN ACCOUNTING POLICIES

On January 1, 2007, the Company adopted the revised CICA Handbook Section 1506 -
Accounting Changes. Under the revised section, voluntary changes in accounting policy are
permitted only if they result in financial statements which provide more reliable and relevant
information. Accounting policy changes are applied retrospectively unless it is impractical to

-9-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

determine the period or cumulative impact of the change. Corrections of prior period errors are
applied retrospectively and changes in accounting estimates are applied prospectively by including
these changes in earnings. The guidance was effective for all changes in accounting policies,
changes in accounting estimates and corrections of prior periods errors initiated in periods
beginning on or after January 1, 2007. This new standard did not affect the Company's
consolidated financial statements for the year ended December 31, 2007.

On January 1, 2007, the Company prospectively adopted CICA Handbook Section 1530 -
Comprehensive Income. Comprehensive income is the change in a company’s net assets that
results from transactions, events and circumstances from sources other than the company’s
shareholders and the company’s net income and Other Comprehensive Income. Other
Comprehensive Income includes items that would not normally be included in net earnings such
as unrealized gains or losses on available-for-sale investments. There were no such items
recognized in comprehensive income for the year ended December 31, 2007.

The Company also prospectively adopted CICA Handbook Section 3251, Equity which establishes
standards for the presentation of equity and changes in equity during the reporting period,
effective for fiscal years beginning October 2006. This standard had no impact on the Company's
consolidated financial statements for the year ended December 31, 2007.

On January 1, 2007, the Company prospectively adopted CICA Handbook Section 3855 -
Financial Instruments – Recognition and Measurement. In accordance with this new standard the
Company now classifies all financial instruments as either held-to-maturity, available-for-sale, held
for trading or loans and receivables.

On January 1, 2007, the Company prospectively adopted CICA Handbook Section 3865 - Hedges.
This new standard specifies the criteria under which hedge accounting can be applied and how
hedge accounting can be executed. Company has not designated any hedging relationships. This
new standard did not affect the Company's consolidated financial statements for the year ended
December 31, 2007.

FUTURE CHANGE IN ACCOUNTING POLICIES

As of January 1, 2008, the Company will be required to adopt CICA Handbook Section 3031 -
Inventories. This new standard provides guidance on the determination of cost and its subsequent
recognition as an expense, including any write-down to net realizable value. The Company is
assessing the impact of these new standards on its financial statements; however, the adoption is
not expected to have a material impact on its financial statements.

As of January 1, 2008, the Company will be required to adopt CICA Handbook Sections 3862 -
Financial Instruments – Disclosures; 3863 - Financial Instruments – Presentation; 1535 - Capital
Disclosures and 1400 - General Standards of Financial Statement Presentation. The Company is
assessing the impact of these new standards on its consolidated financial statements and
anticipates the main impact will be in terms of additional required disclosures.

As of January 1, 2009, the Company will be required to adopt CICA Handbook Section 3064 -
Goodwill and Intangible Assets which replaces CICA Handbook Sections 3062 - Goodwill and
Other Intangible Assets and Section 3450 - Research and Development Costs. The Company is
assessing the impact of these new standards on its consolidated financial statements; however,
the adoption is not expected to have a material impact on its consolidated financial statements.

-10-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

8. FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash, accounts receivable, investments, accounts
payable and accrued liabilities. It is the opinion of management that the Company is not exposed
to significant interest risk arising from its financial instruments. The fair values of these financial
instruments approximate their carrying values, unless otherwise noted.

Credit Risk:

The Company derived net sales from two (2006 - one) major customers amounting to
approximately $77,212 representing 92% of total revenues (2006 - $50,400 representing 46% of
total revenues). Accounts receivable from the above significant customers at December 31, 2007
amounted to approximately $Nil (2006 - $Nil).

Foreign Currency Risk:

Consulting contracts billed in U.S. dollars by the Company are recorded at the exchange rate in
effect at the time of sale, and are collected on standard trade payable terms. Excess U.S. dollar
balances are converted to Canadian dollars on a regular basis. The Company does not enter into
foreign currency hedges. Further devaluation in the U.S. dollar relative to the Canadian dollar
could impact the Company's ability to continue at current sales growth rates and attain cash
positive operations as substantially all of the sales contracts are denominated in U.S. dollars.

9. INVESTMENT IN NEW JV

The Company, which holds a 30% interest in the New JV has no management rights or ongoing
funding requirements or obligations with respect to the New JV. The Company's participation in the
management and operation of the New JV is limited to the Company's right to receive 30% of the
New JV's net profits or losses as and when such profits or losses are distributed to the joint
venturers in accordance with the terms and provisions of the New JV Agreement. The Company is
only liable to the extent of its investment and is indemnified from the other joint venturers for any
excess losses and liabilities. Upon termination of the New JV, the Company is entitled to its capital
account share in net assets of the New JV.

10. INVESTMENT IN PRIVATE COMPANY

The Company, currently has a 4% (2006 - 3%) interest and an option to acquire up to an additional
15% interest in Global Mineral Investments, LLC ("GMI") a private U.S. corporation engaged in the
leasing and development of gold mining concessions in West Africa. On August 31, 2007, GMI
was awarded four Class B Gold Mining Licences by the Ministry of Lands, Mines and Energy of the
Republic of Liberia for four, separate concession areas located in the Sanquin Mining Zone, Sinoe
County in the Republic of Liberia.

-11-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

11. CAPITAL STOCK

(a) Authorized:
Unlimited common stock

(b) Issued and outstanding:

Number of Amount
Shares $

Balance at December 31, 2004 196,754,833 15,155,885

Debt to equity conversions 4,429,800 221,490
Balance at December 31, 2005 201,184,633 15,377,375
Debt to equity conversions (c) 13,734,860 686,743
Private placement (d) 13,352,400 667,620
Share issuance costs 0 (7,772)
Balance at December 31, 2006 and 2007 228,271,893 16,723,966

Weighted average number of shares outstanding: 2007 2006

Basic and fully diluted 228,271,893 205,731,048

(c) Debt to equity conversion

On September 15, 2006, the Company announced that it had completed a series of agreements to
settle outstanding debts with creditors through the issuance of capital stock of the Company.
These agreements required the issuance of 13,734,860 common shares (the "Consideration
Shares") at a price of $0.05 CDN per common share for a total of $686,743 CDN. The Exchange,
on September 27, 2006, granted the Company its approval to the issuance of the Consideration
Shares.

(d) Private placement

As a further term of the New JV Agreement, EKG, LLC was required to advance the Company the
sum of $600,000 USD in the form of a private placement (the "EKG Private Placement") in
accordance with the Exchange's Policy 4.1 - Private Placements. On December 4, 2006, the
Exchange accepted and approved for filing documentation with respect to the EKG Private
Placement for the issuance of 13,352,400 common shares which EKG, LLC would purchase at a
price of $0.05 per share. On December 5, 2006, the Company received the first tranche of the
EKG Private Placement in the amount of $250,000 USD for which the Company issued 5,563,500
common shares. The Company closed the second tranche of the EKG Private Placement on
December 18, 2006 when it issued 4,784,610 common shares priced at $0.05 CDN for gross
proceeds of $215,000 USD. The final tranche of the EKG Private Placement was closed on
December 19, 2006 through the issuance of 3,004,290 common shares priced at $0.05 CDN for
gross proceeds of $135,000 USD.

-12-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

12. SEGMENTED INFORMATION

The Company has determined that it has two active operating segments (3D graphic's unit and
Mining and Resource unit). During the period ending December 31, 2007 revenues from U.S.
sales totaled $84,239 and Canadian sales totaled $Nil.

Segmented information:

2007 2006
$ $
3D graphics 57,251 58,518
Mining and resource 26,988 50,400
Total 84,239 108,918

13. ECONOMIC DEPENDENCE

Approximately 92% (2006 - 76%) of the Company's revenue has been derived from two (2006 -
one) customers.

-13-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

14. INCOME TAXES

(a) Provision of income taxes

The provision for income taxes differs from that calculated by applying statutory rates for
the following reasons:
2007 2006
$ $

Net loss before income taxes (80,989) (206,742)

Expected income tax recovery based upon the combined

Canadian federal and provincial expected tax rates of
36.12% (2006 - 36.12%) 29,253 78,746

Adjustments to tax benefit resulting from:

Permanent differences (items not deductible for tax
purposes) 0 (34)
Share issue costs tax effect 561 561
Timing differences 0 0
Unrecorded tax benefit of losses (29,814) (79,273)

Provision for income taxes 0 0

(b) Future income tax balances

The tax effect of temporary differences that gives rise to future income tax assets and
liabilities are as follows:
2007 2006
$ $

Non-capital losses 419,347 400,380

Share issue costs 1,685 2,246
Timing differences tax recovery (potential future taxes) 0 0
Total gross future tax assets 421,032 402,626
Valuation allowance (421,032) (402,626)
Total net future tax assets 0 0

In assessing the realizability of future tax assets, management considers whether it is more likely
than not that some portion or all of the future tax assets will not be realized. The ultimate
realization of future tax assets is dependent upon the generation of future taxable income during
the periods in which those temporary differences become deductible.

-14-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

The Company has accumulated losses for income tax purposes totaling approximately $1,160,984
for which the tax benefits have not been recognized in the financial statements. These losses can
be deducted from future years' taxable income and expire as follows:
$
2008 109,455
2009 47,853
2010 113,718
2014 345,277
2015 244,780
2026 219,473
2027 80,428
1,160,984

15. LITIGATION

The Company was subject to an arbitration proceeding (the "Ongoing Litigation") instituted by a
former insider (and other related parties of the insider) of the Company (collectively referred to as
the "Claimants") for matters that were the subject of claims that the Claimants had raised in a
number of Ontario small claims court actions; a Superior Court of Ontario action and matters
pertaining to the Claimants' past involvement in the Company's business operations. The
Company has denied liability to the Claimants for these claims and actions and had both defended
these claims and actions and had instituted its own counter-claim against the Claimants. On
August 30, 2006, the Company, other named respondents in the Ongoing Litigation and unnamed
related parties (collectively referred to as the "Releasors") reached a final settlement with the
Claimants that resolved and terminated the Ongoing Litigation and a settlement for $35,000. In
addition, the Releasors and the Claimants signed a full and final release (the "Mutual Releases")
releasing and indemnifying the other for any claims or demands that either the Releasors or the
Claimants could raise against the other with respect to any matter contained or referred to in the
Ongoing Litigation or could otherwise be raised or advanced as of the date of the Mutual
Releases.

16. COMPARATIVE FIGURES

The Company has reclassified the comparative figures, where necessary, to conform to the
current year's presentation.

17. SUBSEQUENT EVENTS

(a) On January 24, 2008, the Company announced the New JV had received delivery of the
first of the two CPX 1, 3D Print/Processors at the New JV's Houston, Texas production
facility.

(b) On March 12, 2008, the Company signed an agreement with GMI (the "Venga/GMI
Funding Agreement") wherein the parties agreed that in consideration of the Company
providing GMI with one million dollars USD in financing (the "GMI Funding") for GMI's
proposed gold dredging operation in those portions of the Upper Tartweh River that flows
through the GMI Concessions (the "Proposed Dredging Operations"), the Company's
equity ownership interest in GMI would be increased to 25%; the Company would be
granted a gross overriding royalty on all revenues derived from the Proposed Dredging
Operations (the "GMI Royalty"); the Company would be given full and complete control
and manage all financial aspects of the Proposed Dredging Operations and the agreement
of the parties that all rights to any future concessions and or mineral rights in Liberia and
West Africa that the parties wished to secure would be registered in the Company's sole
name.

-15-
 VENGA AEROSPACE SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

(c) On March 12, 2008 the Company signed a term sheet with Anchor Securities Limited of
Toronto, Canada (the "Term Sheet") wherein the Company would receive up to $1.75
million CDN (the "Issue Amount") in financing. Investors providing the Issue Amount would
receive units that were comprised of common shares, warrants and participatory share in
a gross overriding royalty ("GOR") on the revenues derived from the Proposed Dredging
Operations (the "Calculated Revenues"). Each investor will receive a pro rata share of the
GOR which starts at 8% of the Calculated Revenues and then is reduced, first to 4% and
then to 2% of the Calculated Revenues as specified distribution milestones are reached to
a maximum return or payout to the investors of $17.5 million CDN. In addition, the GOR
provides that all net revenues derived from the Proposed Dredging Operations are paid to
the investors until the investors have received distributions totaling the Issue Amount. To
insure that the investors receive payment of the GOR in accordance with the Term Sheet,
the Company has agreed and warranted in the Term Sheet to hold the GMI Royalty for the
benefit of the investors and to pay the proceeds of the GMI Royalty to the investors in
accordance with the terms and provisions of the GOR as set out in the Term Sheet. The
financing contemplated by the Term Sheet is conditional on the Company securing the
TSX Venture Exchange's approval of a private placement that would see the issue of 35
million common shares at $0.05 per share, plus the issue of a similar number of warrants,
that are exercisable for a period of two years at a rate of two warrants for one common
share at a price of $0.15 per share. The Term Sheet further required that the Issue
Amount be advanced on or by April 10, 2008 (the "Closing Date"). The Company
announced that it would use the net proceeds of the Issue Amount to provide the
Company with general working capital and, pursuant to the terms and conditions of the
Venga/GMI Funding Agreement, to increase the Company's equity position in GMI to 25%
and finance the Proposed Dredging Operations.

The Issue Amount was not advanced or closed by the Closing Date and on April 11, 2008,
the Company announced that the Term Sheet had lapsed. Upon the lapse of the Term
Sheet, the Venga/GMI Funding Agreement was terminated.

(d) On March 12, 2008 the Company announced that, pursuant to TSX Venture Exchange's
Policy 4.3 - Shares for Debt, it had completed a series of agreements to settle outstanding
debts with unsecured creditors. These agreements require the issuance of 3.2 million
common shares (the "Consideration Shares") at a price of $0.05 CDN per common share
for a total of $160,000 CDN. The TSX Exchange has yet to grant its final approval to the
issuance of the Consideration Shares.

-16-