Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Information

This quarterly report on Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. Any statements about our expectations, beliefs, plans, objectives, strategies or future events or performance constitute forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend" and similar words or phrases. Accordingly, these statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied in them. All forward-looking statements are qualified in their entirety by reference to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2006. Among the key factors that could cause actual results to differ materially from the forward-looking statements are the following:

§ dependence on commercialization of our Molecularly Imprinted Polymer (MIP) technology;

§ our ability to continue as a "going concern";

§ our need and ability to raise sufficient additional capital;

§ ineffective internal operational and financial control systems;

§ our ability to hire and retain specialized and key personnel;

§ dependence on our ability to purchase Float Concentrate at a discount of its gold value in the marketplace;

§ our limited operating history and continued losses;

§ restrictions contained in our outstanding convertible notes;

§ rapid technological change;

§ uncertainty of intellectual property protection;

§ potential infringement on the intellectual property rights of others;

§ factors affecting our common stock as a "penny stock;"

§ extreme price fluctuations in our common stock;

§ price decreases due to future sales of our common stock;

§ general economic and market conditions;

§ future shareholder dilution; and

§ absence of dividends.

Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of future events or developments. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The following discussion of our financial condition and results of operations should be read together with our audited financial statements and accompanying notes that are included elsewhere in this report.

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Executive Overview

We continue to need additional capital to fund the development of our Molecularly Imprinted Polymer ("MIP") technology as well as cover our general and administrative expenses.

In the period ending June 30, 2008 our current liabilities decreased $74,662 to $210,644 from $285,306, our accumulated deficit increased $814,659 from $955,684 to $1,770,343 and, our stockholders deficit decreased $65,810 from $196,156 to 130,346 from the year ended December 31, 2007. The decrease in current liabilities, increase of accumulated deficit, and decrease of stockholders deficit was primarily caused by the issuance of 675,000 shares of common stock for services valued at $407,000, 137,334 "units" (described below) for services valued at $136,569, 57,000 shares of common stock for the exercise of 57,000 warrants and cash of $28,500, 168,000 "units" for the payment of debt valued at $84,000, 20,400 "units" for the purchase of an asset valued at $10,200, 308,400 "units" for accrued payroll of $154,200, and 120,000 "units" for $60,000 in cash. These items also contributed to operating expenses increasing $630,551 from $171,264 in the period ended June 30, 2007 to $801,815 for the period ended June 30, 2008.

As noted below under Item 2, the Company is currently accepting subscriptions for "units' consisting of one common share (.001 par value) and one common stock purchase warrant to purchase an additional common share (.001 par value) for $.50 per unit through it's private placement offering of securities pursuant to Rule 506 of Regulation D approved at a meeting of the Board of Directors on April 15, 2008. Should the company be unable to continue to raise sufficient capital through the private placement of it securities then it is unlikely that will be able to continue as a going concern unless it is able to borrow capital form shareholders or financial institutions which is unlikely.