----

----

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549___________________**FORM 10-QSB**_______________________

**ý                                QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

  

For the quarterly period endedSeptember 30, 2006

  

or

** ̈                                TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

  

For the transition period from               to

  

Commissionfile number: 0-27511

  

**PEREGRINEINDUSTRIES, INC.**(Exact Name Of RegistrantAs Specified In Its Charter)
| Florida                                           | 65-0611007                              |
|---------------------------------------------------|-----------------------------------------|
| (State of Incorporation)                          | (I.R.S. Employer    Identification No.) |
|                                              |                                    |
| 115    East 57th Street, Suite 1118, New York, NY | 10022                                   |
| (Address of Principal    Executive Offices)       | (ZIP Code)                              |

 Registrant'sTelephone Number, Including Area Code: (646) 202-9679

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. Yes x No  ̈

At September 30,2006, the Registrant had 45,920,000 shares of common stock issued and outstanding.

Indicateby check mark whether the registrant is an accelerated filer (as defined inRule 12b-2 of the Exchange Act). Yes   ̈ No x Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Exchange Act). Yes x No  ̈

----

----

----

----

 

**TABLE OF CONTENTS**

 
| Item                                  |                          |                          |      | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |      | Page |
|---------------------------------------|--------------------------|--------------------------|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|------|
| **PART I    - FINANCIAL INFORMATION** |
|                                  |
| ITEM 1.                               |      |      |      |    FINANCIAL STATEMENTS.
        3  
ITEM 2.
            
   MANAGEMENT'S    DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
        3   
ITEM 3.
            
   CONTROLS AND PROCEDURES.
        3     
**PART    II - OTHER INFORMATION**
  
ITEM 1.
            
   LEGAL PROCEEDINGS.
        4  
ITEM 2.
            
   CHANGES IN SECURITIES.
        4   
ITEM 3.
            
   DEFAULT UPON    SENIOR SECURITIES.
        4   
ITEM 4.
            
   SUBMISSION OF    MATERS TO A VOTE OF SECURITY HOLDERS.
        4   
ITEM 5.
            
   OTHER INFORMATION.
        4   ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.4
 
****
**PART I - FINANCIAL INFORMATION**

ITEM1. FINANCIAL STATEMENTS****Backto Table of Contents

The Registrant's financial statements for thethree-month periods ended September 30, 2006 and 2005 are attached to this quarterlyreport.

Financial Statements

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONBack to Table of Contents

Some of the statements contained in this quarterlyreport of Peregrine Industries, Inc. (hereinafter the "Company", "We"or the "Registrant") discuss future expectations, contain projections of ourplan of operation or financial condition or state other forward-looking information.Forward-looking statements give our current expectations or forecasts of future events.You can identify these statements by the fact that they do not relate strictly tohistorical or current facts. They use of words such as "anticipate,""estimate," "expect," "project," "intend,""plan," "believe," and other words and terms of similar meaning inconnection with any discussion of future operating or financial performance. From time totime, we also may provide forward-looking statements in other materials we release to thepublic.

Plan of Operation

We have no present operations orrevenues and our current activities are related to seeking new business opportunities,including seeking an acquisition or merger with an operating company. The Registrant doesnot intend to limit itself to a particular industry and has not established any particularcriteria upon which it shall consider and proceed with a business opportunity.

If the Company seeks to acquire anotherbusiness or pursue a business opportunity, management would have substantial flexibilityin identifying and selecting a prospective business. Registrant would not be obligated nordoes management intend to seek pre-approval by our shareholders. Under the laws of theState of Florida, the consent of holders of a majority of the issued and outstandingshares, acting without a shareholders meeting, can approve an acquisition.

The Registrant is entirely dependent onthe judgment of management in connection with the selection process for a target company.In evaluating a prospective business opportunity, we would consider, among other factors,the following: (i) costs associated with effecting a transaction; (ii) equity interest inand opportunity to control the prospective candidate; (iii) growth potential of the targetbusiness; (iv) experience and skill of management and availability of additionalpersonnel; (v) necessary capital requirements; (vi) the prospective candidate'scompetitive position; (vii) stage of development of the business opportunity; (viii) themarket acceptance of the business its products or services; (ix) the availability ofaudited financial statements of the potential business opportunity; and (x) the regulatoryenvironment that may be applicable to any prospective business opportunity.

The foregoing criteria are not intendedto be exhaustive and there may be other criteria that management may deemed relevant. Inconnection with an evaluation of a prospective or potential business opportunity,management may be expected to conduct a due diligence review.

We had operating expenses of $3,500 and$10,963 during the three-month periods ended September 30, 2006 and 2005, respectively,consisting mainly of accounting fees, and general and administrative expenses. The Companydoes not expect its operating expenses to increase significantly until it starts to pursuea new business opportunity or enters into a business combination.

Liquidity and Capital Resources

During the three-month period endedSeptember 30, 2006, we received $3,500 through advances made to us by management and/orrelated parties. We are dependent upon interim funding provided by management and/orrelated parties to pay professional fees and other expenses. We have no written financeagreement with management and/or related parties to provide any continued funding.

At September 30, 2006, we had no assetsand $84,804 in liabilities.

Aspart of our intent to seek new business opportunities, we may determine to seek to raisefunds from the sale of equity or debt securities. We have no agreements to issue any debtor equity securities and cannot predict whether equity or debt financing will becomeavailable at terms acceptable to us, if at all.

We anticipate that in connection withthe commencement of a new business opportunity or consummation of a business combination,we will issue a substantial number of additional restricted shares or other securities. Ifsuch additional securities are issued, our shareholders will experience a dilution intheir ownership interest in the Company. If a substantial number of shares are issued inconnection with a business combination, a change in control may be expected to occur.

Thereare no limitations in our articles of incorporation on our ability to borrow funds orraise funds through the issuance of restricted common stock to pursue new businessopportunities. Our limited resources and lack of operating history may make it difficultto do borrow funds or raise capital. Our inability to borrow funds or raise funds throughthe issuance of restricted common stock required to facilitate new business opportunitiesmay have a material adverse effect on our financial condition and future prospects.

ITEM 3.CONTROLS AND PROCEDURES****Backto Table of Contents
*Evaluation of disclosure controls and procedures.As of September 30, 2006, the Company's chief executiveofficer and chief financial officer conducted an evaluation regarding the effectiveness ofthe Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or15d-15(e) under the  Exchange Act. Based upon the evaluation of these controls andprocedures, our chief executive officer and chief financial officer concluded that ourdisclosure controls and procedures were effective as of the end of the period covered bythis report.

*Changes in internal controls*. During the quarterly period covered by this report, no changesoccurred in our internal control over financial reporting that materially affected, or isreasonably likely to materially affect, our internal control over financial reporting.

**PART II - OTHER INFORMATION**

ITEM 1. LEGALPROCEEDINGS****Back to Table ofContents

None.

ITEM 2. CHANGESIN SECURITIESBack to Table ofContents

None.

ITEM3. DEFAULTS UPON SENIOR SECURITIES****Back to Table of Contents

None.

ITEM4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSBack to Table of Contents

None.

ITEM5. OTHER INFORMATION****Backto Table of Contents

None.

ITEM6. EXHIBITS AND REPORTS ON FORM 8-K****Back to Table of Contents

(a) The following documents are filed as exhibits tothis report on Form 10-QSB or incorporated by reference herein. Any document incorporatedby reference is identified by a parenthetical reference to the SEC filing that includedsuch document.

Exhibit    No.Description31.1Certification of CEO and CFO    pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the    Sarbanes-Oxley Act of 2002.32.1Certification of CEO and CFO    pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the    Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K during the quarter covered by this report:The Registrant filed a Form 8-K on September 28, 2006 with disclosure under Item 2.01Departure of Directors or Principal Officers; Election of Directors; Appointment ofPrincipal Officers.

 

SIGNATURES

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has been signed below bythe following persons on behalf of the registrant and in the capacities and on the dateindicated.

/s/ RichardRubinRichard Rubin*   Chief Executive Officer, CFO and Chairman  Dated: November 14, 2006*

**FinancialStatements**Back to Tableof Contents
**Peregrine    Industries, Inc.**Balance Sheet  **  ****September    30, 2006****June 30,    2006**(Unaudited)  
AssetsCurrent assets:Cash$0$0Advances to related parties00      Total current assets00                 Total assets$0$0  
Liabilities    and Stockholders' Deficiency  Current liabilities:Advances due to related parties$84,804$81,304      Total current liabilities$84,804$81,304  Stockholders' deficiency:   Preferred stock,    $0.0001 par value; 5,000,000 shares authorized; none issued--   Common stock,    $0.0001 par value; 100,000,000 shares authorized;         45,920,000 issued and outstanding at September 30, 2006; and        29,270,000 issued and outstanding at June 30, 20054,5924,592   Additional paid in    capital61,29261,292   Accumulated deficit(150,688)(147,188)     Total    stockholders' deficiency(84,804)(81,304)          Total liabilities and stockholders' deficiency$0$0     See    notes to unaudited interim financial statements**Peregrine    Industries, Inc.**Statement of    Operations Back to Table of Contents  **Three Months****Three Months****Ended****Ended****September 30, 2006****September 30, 2005**(Unaudited)(Unaudited)  Revenue$0$0Costs and Expenses:   General and    administrative3,50010,963Total costs and expenses3,50010,963  Loss before income taxes(3,500)(10,963)Income taxes00Loss from operations(3,500)(10,963)  Net loss$(3,500)$(10,963)  Per shares amounts:0  Basic and diluted from continuing    operations$(0.00)$0.00  Basic and diluted net loss$(0.00)$0.00  Weighted average shares outstanding:   Basic and diluted45,920,00043,305,556  See notes to    unaudited interim financial statements
 
**Peregrine Industries, Inc.**Statement of Cash Flows Back    to Table of Contents
        **Three Months****Three Months**** ****Ended****Ended****September 30, 2006****September 30, 2005**  (Unaudited)(Unaudited)  Cash flows from operating activities:Net loss$(3,500)$(10,963)Adjustments required to reconcile net loss to    cash used in operating activities:   Expenses paid by issuance of common    stock-5,385   (Increase) decrease in prepaid    expenses00   Increase (decrease) in accounts    payable and accrued expenses00     Cash    flows used by operating activities(3,500)(5,578)  Cash flows from investing    activities:   Purchase of equipment00     Cash    used in investing activities00   Cash flows from financing activities:   Loans from related parties3,5005,578     Cash    provided by financing activities3,5005,578  Change in cash00Cash - Beginning of period00Cash - End of period$0$0  See notes to    unaudited interim financial statements**PEREGRINE INDUSTRIES, INC.Notes to Unaudited Interim Financial StatementsSeptember 30, 2006 Back to Table ofContents**1. Basis of Presentation

Peregrine Industries, Inc. (the "Company") was formed onOctober 1, 1995 for the purpose of manufacturing residential pool heaters. On March 29,2004, the U.S. Bankruptcy Court confirmed the sale of the Peregrine corporate shellentity. The accounts of the former subsidiaries were not included in the sale and have notbeen carried forward. 

The Financial Statements presented herein have been prepared by us inaccordance with the accounting policies described in our June 30, 2006 Annual Report onForm 10-KSB and should be read in conjunction with the Notes to Consolidated FinancialStatements which appear in that report.

The preparation of these financial statements in conformity withaccounting principles generally accepted in the United States requires us to makeestimates and judgments that affect the reported amounts of assets, liabilities, revenuesand expenses, and related disclosure of contingent assets and liabilities. On an on goingbasis, we evaluate our estimates, including those related intangible assets, income taxes,insurance obligations and contingencies and litigation. We base our estimates onhistorical experience and on various other assumptions that are believed to be reasonableunder the circumstances, the results of which form the basis for making judgments aboutthe carrying values of assets and liabilities that are not readily apparent from otherresources. Actual results may differ from these estimates under different assumptions orconditions.

In the opinion of management, the information furnished in this Form10-QSB reflects all adjustments necessary for a fair statement of the financial positionand results of operations and cash flows as of and for the three-month periods endedSeptember 30, 2006 and 2005. All such adjustments are of a normal recurring nature. TheConsolidated Financial Statements have been prepared in accordance with the instructionsto Form 10-QSB and therefore do not include some information and notes necessary toconform with annual reporting requirements.
**"Fresh Start" Accounting: On September 4, 2002 all assetswere transferred to the chapter 7 trustee in settlement of all outstanding corporateobligations. We adopted "fresh-start" accounting as of September 5, 2002 inaccordance with procedures specified by AICPA Statement of Position ("SOP") No.90-7, "Financial Reporting by Entities in Reorganization under the BankruptcyCode."

On March 29, 2004, the U.S. Bankruptcy Court for the Southern Districtof Florida confirmed the order previously granted on March 15, 2004 for the sale ofPeregrine as a shell entity. All results for periods including and subsequent to September5, 2002 are referred to as those of the "Successor Company".

In accordance with SOP No. 90-7, the reorganized value of the Companywas allocated to the Company's assets based on procedures specified by SFAS No. 141,"Business Combinations". Each liability existing at the plan sale date, otherthan deferred taxes, was stated at the present value of the amounts to be paid atappropriate market rates. It was determined that the Company's reorganization valuecomputed immediately before September 5, 2002 was $0. We adopted "fresh-start"accounting because holders of existing voting shares immediately before filing andconfirmation of the sale received less than 50% of the voting shares of the emergingentity and its reorganization value is less than its post-petition liabilities and allowedclaims.

The accounts of the former subsidiaries were not included in thebankruptcy sale and have not been carried forward.
**Change of Control: On February 12, 2004, the Trustee for Peregrineand Park Avenue Group, Inc. entered into a contract resulting in a change in control ofPeregrine. On March 15, 2004, the Bankruptcy Court granted an order approving the contractand finding that Park Avenue Group is a good faith purchaser within the meaning of 11 USCSection 363(m). On March 29, 2004, the U.S. Bankruptcy Court for the Southern District ofFlorida confirmed the order previously granted on March 15, 2004.

The confirmed Court order provided that the existing officers anddirectors were deemed removed from office and also authorized the following: (i)the appointment of new members to the board of directors; (ii) the amendment of theArticle of Incorporation to increase the number of authorized shares to 100,000,000shares; (iii) the issuance of up to 30,000,000 shares of common stock, par value $0.0001to the new management;(iv) the authority to implement a reverse split of the issued andoutstanding shares in a ratio to be determined by the board of directors; (v) thecancellation and extinguishment of all common share conversion rights of any kind,including without limitation, warrants, options, convertible bonds, other convertible debtinstruments and convertible preferred stock; and (vi) the cancellation and extinguishmentof all preferred shares of every series and accompanying conversion rights of any kind.
**2. Earnings/Loss Per Share

Basic earnings per share is computed by dividing income available tocommon shareholders (the numerator) by the weighted-average number of common sharesoutstanding (the denominator) for the period. Diluted earnings per share assume that anydilutive convertible securities outstanding were converted, with related preferred stockdividend requirements and outstanding common shares adjusted accordingly. It also assumesthat outstanding common shares were increased by shares issuable upon exercise of thosestock options for which market price exceeds the exercise price, less shares which couldhave been purchased by us with the related proceeds. In periods of losses, diluted lossper share is computed on the same basis as basic loss per share as the inclusion of anyother potential shares outstanding would be anti-dilutive.
**3. Stockholders' Equity **
In July 2005, we issued 15,050,000 shares of common stock to relatedparties. 9,000,000 shares were issued to pay outstanding advances of $ 7,999 and 6,050,000shares, valued at $5,385, were issued to reflect the cost of services provided to ourcompany to meet ongoing reporting and compliance obligations. In January 2006, we issued1,600,000 shares valued at $45,000 to a related party for ongoing consulting &advisory services.
**4. New Accounting Standards

On January 1, 2006, we adopted the provisions of Statement of FinancialAccounting Standards ("SFAS") 123R, "Share-Based Payment" ("SFAS123(R)"), which requires that companies measure and recognize compensation expense atan amount equal to the fair value of share-based payments granted under compensationarrangements. Prior to January 1, 2006, we accounted for our stock-based compensationplans under the recognition and measurement principles of Accounting Principles Board("APB") Opinion 25, "Accounting for Stock Issued to Employees," andrelated interpretations, and would typically recognize no compensation expense for stockoption grants if options granted had an exercise price equal to the market value of theunderlying common stock on the date of grant. 

We adopted SFAS 123(R) using the "modified prospective"method, which results in no restatement of prior period amounts. Under this method, theprovisions of SFAS 123(R) apply to all awards granted or modified after the date ofadoption. In addition, compensation expense must be recognized for any unvested stockoption awards outstanding as of the date of adoption on a straight-line basis over theremaining vesting period. We calculate the fair value of options using a Black-Scholesoption pricing model. We do not currently have any outstanding options therefore no chargeis required for the three months ended September30, 2006. SFAS 123(R) also requires thebenefits of tax deductions in excess of recognized compensation expense to be reported inthe Statement of Cash Flows as a financing cash inflow rather than an operating cashinflow. In addition, SFAS 123(R) required a modification to the Company’s calculationof the dilutive effect of stock option awards on earnings per share. For companies thatadopt SFAS 123(R) using the "modified prospective" method, disclosure of proforma information for periods prior to adoption must continue to be made. 

In December 2004, the FASB issued SFAS No. 153, *"Exchanges ofNonmonetary Assets—an amendment of APB Opinion No. 29,"* which is effectivefor us starting July 1, 2005. In the past, we were frequently required to measure thevalue of assets exchanged in non-monetary transactions by using the net book value of theasset relinquished. Under SFAS No. 153, we will measure assets exchanged at fair value, aslong as the transaction has commercial substance and the fair value of the assetsexchanged is determinable within reasonable limits. A non-monetary exchange has commercialsubstance if the future cash flows of the entity are expected to change significantly as aresult of the exchange. The adoption of SFAS No. 153 is not anticipated to have a materialeffect on our consolidated financial position, results of operations or cash flows.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes andError Corrections," which replaces APB Opinion No. 20 "Accounting Changes,"and FASB Statement No. 3 "Reporting Accounting Changes in Interim FinancialStatements," and changes the requirements for the accounting for and reporting of achange in accounting principle. This Statement requires retrospective application to priorperiods’ financial statements of changes in accounting principle, unless it isimpracticable to determine either the period-specific effects or the cumulative effect ofthe change. This Statement shall be effective for accounting changes and corrections oferrors made in fiscal years beginning after December 15, 2005. Early adoption is permittedfor accounting changes and corrections of errors made in fiscal years beginning after thedate this Statement is issued. We do not believe that adoption of SFAS 154 will have amaterial impact on our financial statements.*************** |