FrankSpeech Network Inc (FSBN)

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ITEM 2. DESCRIPTION OF PROPERTY.

The Company currently owns $578,721 in fixed assets and $2,250,096 ($6,092,216 less amortization of $3,842,120) of DVD and video games inventory. The Company's corporate office is located in Franklin, Kentucky at the chief executive officer's home-based office; the Company does pay rent for this office. The Company's distribution centers are located at:

California (north): 4600 Roseville Road, Suite 160, North Highlands, California 95660; three year pre-paid lease (commenced in July 2006), with a rent of $1,700 per month for a 1,096 square foot space.

California (south): 20705 S. Western Avenue, Suite 209, Torrance, California 98032; three year pre-paid lease (commenced in September 2006), with a rent of $893 per month for a 703 square foot space.

Colorado: 18234 County Road 24, Sterling, Colorado 80751; 2,600 square foot space being provided rent free to Company.

Florida: 600 S. North Lake Boulevard, #270, Altamonte Springs, Florida 32701; three year pre-paid lease (commenced in April 2006), with a rent of $1,244 per month for a 950 square foot space.

Kentucky: 130 West Kentucky Ave, Franklin, Kentucky 42134; five year pre-paid lease (commenced in January 2006), with a rent of $4,150 per month for a 5,600 square foot space.

Maryland: 847 Quince Orchard Blvd. Suite B, Gaithersburg, Maryland 20878; one year pre-paid lease (commenced in May 2006), with a rent of $1,500 per month for a 1,048 square foot space.

Massachusetts: 12 Harvard St, Front Suite, Worcester, Massachusetts; two year pre-paid lease (commenced in March 2006), with a rent of $800 per month for a 950 square foot space.

Texas: 4747 Irving Blvd, Suite 243, Dallas, Texas 75247; one year pre-paid lease (commenced in July 2006), with a rent of $2,400 per month for a 1,440 square foot space.

Washington: 6627 South 191st Place, #F101, Kent, Washington 98032; two year pre-paid lease (commenced in September 2006), with a rent of $1,090 per month for a 505 square foot space.

Management believes that the office and distribution spaces are currently adequate for the needs of the Company.