----

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**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,        DC 20549**

**FORM        10-QSB**

|   | SHARP                  HOLDING CORPORATION                      |   |
|--------|-----------------------------------------------------------------|--------|
|   | (Name                  of Small Business Issuer in Its Charter) |   |

| DELAWARE                                         |   | 65-0970516                           |
|--------------------------------------------------|--------|--------------------------------------|
| (State                  or Other Jurisdiction of |   | (IRS                  Employer       |
| Incorporation                  or Organization)  |   | Identification                  No.) |

|   | 13231                  CHAMPION FOREST DRIVE, SUITE 213, HOUSTON, TEXAS 77069 |   |
|--------|-------------------------------------------------------------------------------|--------|
|   | (Address                  of Principal Executive Offices) (Zip Code)          |   |

|   | (713)                  960-9100                                         |   |
|--------|-------------------------------------------------------------------------|--------|
|   | (Issuer’s                  Telephone Number, Including Area code) |   |

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*Table          of Contents*

**TABLE      OF CONTENTS**

| PART                I  |                                                                                           |
|------------------------|------------------------------------------------------------------------------------------------|
|                   |                                                                                           |
| Item                1. | Financial                Statements                                                            |
|                   |                                                                                           |
| Item                2. | Management’s                Discussion and Analysis or Plan of                Operations |
|                   |                                                                                           |
| Item                3. | Controls                and Procedures                                                         |
|                   |                                                                                           |
|                   |                                                                                           |
| PART                II |                                                                                           |
|                   |                                                                                           |
| Item                2. | Unregistered                Sales of Equity Securities and Use of                Proceeds      |
|                   |                                                                                           |
| Item                6. | Exhibits                                                                                       |

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*Table          of Contents*

**PART      I**

**ITEM      1.     FINANCIAL STATEMENTS**

Consolidated      Balance Sheets as of September      30, 2005 (unaudited) and December 31, 2004

Consolidated      Statements of Operations for the three months and      nine      months ended September 30, 2005 and 2004 (unaudited)

Consolidated      Statement of Stockholders’ Deficit for the nine      months ended September 30, 2005 (unaudited)

Consolidated      Statements of Cash Flows for the nine      months ended September 30, 2005 and 2004 (unaudited)

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND      SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

**September      30, 2005 and December 31, 2004**

**__________**

|                                                                                                                                                                                             |   | **September                30, 2005** |        | **December                31, 2004** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------|--------------------------------------|--------|
| ** ****ASSETS**                                                                                                                                                                             |   | **(Unaudited)**                       |        | **(Note)    **   |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Current                assets:                                                                                                                                                                   |   |                                  |        |                                 |   |   |   |
| Cash                and cash equivalents                                                                                                                                                         |   | $                                     | 136         |                                 | $      | 35,074 |   |
| Accounts                receivable                                                                                                                                                               |   |                                  | 2,820       |                                 |   | - |   |
| Other                current assets                                                                                                                                                              |   |                                  | 27,207      |                                 |   | 42,700 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Total                current assets                                                                                                                                                              |   |                                  | 30,163      |                                 |   | 77,774 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Property                and equipment, net                                                                                                                                                       |   |                                  | 41,109      |                                 |   | 56,348 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Deferred                technology license, net                                                                                                                                                  |   |                                  | 85,150      |                                 |   | 180,955 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Other                noncurrent assets                                                                                                                                                           |   |                                  | 16,152      |                                 |   | 16,152 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Total                assets                                                                                                                                                                      |   | $                                     | 172,574     |                                 | $      | 331,229 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY (DEFICIT)**                                                                                                                                |   |                                  |        |                                 |   |   |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Current                liabilities:                                                                                                                                                              |   |                                  |        |                                 |   |   |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Accounts                payable                                                                                                                                                                  |   | $                                     | 723,340     |                                 | $      | 657,400 |   |
| Accrued                payroll taxes                                                                                                                                                             |   |                                  | 322,253     |                                 |   | 322,253 |   |
| Accrued                payroll and contract labor                                                                                                                                                |   |                                  | 856,951     |                                 |   | 635,897 |   |
| Other                accrued liabilities                                                                                                                                                         |   |                                  | 1,303,920   |                                 |   | 778,568 |   |
| Notes                payable to related parties                                                                                                                                                  |   |                                  | 960,259     |                                 |   | 1,006,315 |   |
| Notes                payable                                                                                                                                                                     |   |                                  | 1,419,559   |                                 |   | 1,530,844 |   |
| Deferred                revenue                                                                                                                                                                  |   |                                  | 274,485     |                                 |   | 224,485 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Total                current liabilities                                                                                                                                                         |   |                                  | 5,860,767   |                                 |   | 5,155,762 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Long                term notes payable                                                                                                                                                           |   |                                  | 93,541      |                                 |   | 68,222 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Total                liabilities                                                                                                                                                                 |   |                                  | 5,954,308   |                                 |   | 5,223,984 |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Commitments                and contingencies                                                                                                                                                     |   |                                  |        |                                 |   |   |   |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Stockholders’                equity (deficit):                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Common                stock, $.001 par value, 80,000,000 shares authorized,                77,662,696 shares and 27,075,452 shares issued and outstanding,                respectively |   |                                  | 77,663      |                                 |   | 27,076 |   |
| Additional                paid-in capital                                                                                                                                                        |   |                                  | 10,490,044  |                                 |   | 8,610,718 |   |
| Accumulated                deficit                                                                                                                                                               |   |                                  | (16,349,441 | )                                    |   | (13,530,549 | ) |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Total                stockholders’ equity (deficit)                                                                                                                                        |   |                                  | (5,781,734  | )                                    |   | (4,892,755 | ) |
|                                                                                                                                                                                             |   |                                  |        |                                 |   |   |   |
| Total                liabilities and stockholders’ equity (deficit)                                                                                                                        |   | $                                     | 172,574     |                                 | $      | 331,229 |   |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND      SUBSIDIARIES**

**UNAUDITED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**for      the three months and nine months ended September 30, 2005 and      2004**

**__________**

|                                                                                                         |   | **Three                Months Ended** |       | **Nine                Months Ended** |   |
|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|--------------------------------------|--------|
|                                                                                                         |   | **September                30,**      |       | **September                30,**     |   |
|                                                                                                         |   | **2005**                              |       | **2004**                             |   | **2005** |   | **2004** |   |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                                     |   | $                                     | 21,119     |                                 | $      | 13,340 |   | $ | 41,007 |   | $ | 55,060 |   |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Operating                expenses:                                                                           |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Cost                of sales and services                                                                    |   |                                  | 59,110     |                                 |   | 140,030 |   |   | 166,142 |   |   | 234,940 |   |
| Selling,                general and administrative                                                           |   |                                  | 605,273    |                                 |   | 561,114 |   |   | 1,790,451 |   |   | 1,382,179 |   |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Total                operating expenses                                                                      |   |                                  | 664,383    |                                 |   | 701,144 |   |   | 1,956,593 |   |   | 1,617,119 |   |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Loss                from operations                                                                          |   |                                  | (643,264   | )                                    |   | (687,804 | ) |   | (1,915,586 | ) |   | (1,562,059 | ) |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                                              |   |                                  | (378,866   | )                                    |   | (47,326 | ) |   | (1,203,306 | ) |   | (103,557 | ) |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Gain                on settlement of payables                                                                |   |                                  | -          |                                 |   | - |   |   | 300,000 |   |   | - |   |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                                      |   | $                                     | (1,022,130 | )                                    | $      | (735,130 | ) | $ | (2,818,892 | ) | $ | (1,665,616 | ) |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Basic                and diluted net loss per share                                                          |   | $                                     | (0.01      | )                                    | $      | (0.03 | ) | $ | (0.06 | ) | $ | (0.06 | ) |
|                                                                                                         |   |                                  |       |                                 |   |   |   |   |   |   |   |   |   |
| Weighted                average shares used in computing basic and diluted net loss per                share |   |                                  | 76,493,045 |                                 |   | 26,261,763 |   |   | 49,904,997 |   |   | 25,871,889 |   |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**UNAUDITED      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)**

**for      the nine months ended September 30, 2005**

**__________**

|                                                                                |   |                            |       |        |   |            |   |        |       | **Total**               |   |
|-------------------------------------------------------------------------------------|--------|---------------------------------|------------|-------------|--------|-----------------|--------|-------------|------------|-------------------------|--------|
|                                                                                |   |                            |       |        |   | **Additional**  |   |        |       | **Stockholders’** |   |
|                                                                                |   | **Common                Stock** |       | **Paid-In** |   | **Accumulated** |   | **Equity**  |       |
|                                                                                |   | **Shares**                      |       | **Value**   |   | **Capital**     |   | **Deficit** |       | **(Deficit)**           |   |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Balance                at December 31, 2004                                         |   |                            | 27,075,452 |        | $      | 27,076          |   | $           | 8,610,718  |                    | $      | (13,530,549 | ) | $ | (4,892,755 | ) |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Issuance                of common stock on exercise of warrants                     |   |                            | 310,731    |        |   | 311             |   |        | 50,796     |                    |   | - |   |   | 51,107 |   |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Issuance                of common stock and warrants as compensation to consultants |   |                            | 8,725,000  |        |   | 8,725           |   |        | 289,302    |                    |   | - |   |   | 298,027 |   |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Issuance                of warrants in conjunction with notes payable agreements    |   |                            | -          |        |   | -               |   |        | 95,082     |                    |   | - |   |   | 95,082 |   |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Effect                of beneficial conversion Feature                              |   |                            | -          |        |   | -               |   |        | 204,918    |                    |   | - |   |   | 204,918 |   |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Issuance                of common stock in settlement of debt                       |   |                            | 15,260,015 |        |   | 15,260          |   |        | 525,861    |                    |   | - |   |   | 541,121 |   |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Issuance                of common stock upon election to convert notes payable      |   |                            | 26,291,498 |        |   | 26,291          |   |        | 713,367    |                    |   | - |   |   | 739,658 |   |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Net                loss                                                             |   |                            | -          |        |   | -               |   |        | -          |                    |   | (2,818,892 | ) |   | (2,818,892 | ) |
|                                                                                |   |                            |       |        |   |            |   |        |       |                    |   |   |   |   |   |   |
| Balance                at September 30, 2005                                        |   |                            | 77,662,696 |        | $      | 77,663          |   | $           | 10,490,044 |                    | $      | (16,349,441 | ) | $ | (5,781,734 | ) |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**UNAUDITED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**for      the nine months ended September 30, 2005 and 2004**

**__________**

|                                                                                                                   |   | **2005** |       | **2004** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|
|                                                                                                                   |   |     |       |     |   |   |   |
| Cash                flows from operating activities:                                                                   |   |     |       |     |   |   |   |
| Net                loss                                                                                                |   | $        | (2,818,892 | )        | $      | (1,665,616 | ) |
| Adjustments                to reconcile net loss to net cash provided by (used in) operating                activities |   |     |       |     |   |   |   |
| Stock-based                consideration for services and financing costs                                              |   |     | 298,027    |     |   | 147,300 |   |
| Amortization                of debt discount                                                                           |   |     | 764,967    |     |   | - |   |
| Depreciation                and amortization                                                                           |   |     | 114,667    |     |   | 100,239 |   |
| Changes                in operating assets and liabilities-                                                            |   |     |       |     |   |   |   |
| Increase                in accounts receivable                                                                         |   |     | (2,820     | )        |   | - |   |
| Decrease                in other current assets                                                                        |   |     | 15,493     |     |   | - |   |
| Decrease                in other assets                                                                                |   |     | -          |     |   | (15,564 | ) |
| Increase                in accounts payable and accrued liabilities                                                    |   |     | 900,238    |     |   | 503,255 |   |
| Increase                in deferred revenue                                                                            |   |     | 50,000     |     |   | 144,485 |   |
|                                                                                                                   |   |     |       |     |   |   |   |
| Net                cash used in operating activities                                                                   |   |     | (678,320   | )        |   | (785,901 | ) |
|                                                                                                                   |   |     |       |     |   |   |   |
| Cash                flows from investing activities:                                                                   |   |     |       |     |   |   |   |
| Purchases                of property, plant and equipment                                                              |   |     | (3,623     | )        |   | (52,846 | ) |
|                                                                                                                   |   |     |       |     |   |   |   |
| Net                cash used in investing activities                                                                   |   |     | (3,623     | )        |   | (52,846 | ) |
|                                                                                                                   |   |     |       |     |   |   |   |
| Cash                flows from financing activities:                                                                   |   |     |       |     |   |   |   |
| Proceeds                from issuance of common stock                                                                  |   |     | 51,107     |     |   | 30,724 |   |
| Proceeds                from borrowings                                                                                |   |     | 787,954    |     |   | 995,000 |   |
| Repayment                of borrowings                                                                                 |   |     | (192,056   | )        |   | (103,293 | ) |
|                                                                                                                   |   |     |       |     |   |   |   |
| Net                cash provided by financing activities                                                               |   |     | 647,005    |     |   | 922,431 |   |
|                                                                                                                   |   |     |       |     |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                                    |   |     | (34,938    | )        |   | 83,684 |   |
|                                                                                                                   |   |     |       |     |   |   |   |
| Cash                and cash equivalents at beginning of period                                                        |   |     | 35,074     |     |   | 7,479 |   |
|                                                                                                                   |   |     |       |     |   |   |   |
| Cash                and cash equivalents at end of period                                                              |   | $        | 136        |     | $      | 91,163 |   |
|                                                                                                                   |   |     |       |     |   |   |   |
| Supplemental                disclosure of cash flow information:                                                       |   |     |       |     |   |   |   |
| Cash                paid for interest                                                                                  |   | $        | 55,765     |     | $      | 5,178 |   |
|                                                                                                                   |   |     |       |     |   |   |   |
| Supplemental                disclosure of noncash investing and financing activities:                                  |   |     |       |     |   |   |   |
| Issuance                of warrants in conjunction with notes payable agreements                                       |   | $        | 95,082     |     | $      | - |   |
| Beneficial                conversion feature on notes payable                                                          |   | $        | 204,918    |     | $      | - |   |
| Issuance                of common stock upon election to convert notes payable                                         |   | $        | 739,658    |     | $      | -- |   |
| Issuance                of common stock & warrants for notes payable & accrued                interest         |   | $        | 132,000    |     | $      | - |   |
| Issuance                of common stock in settlement of debt                                                          |   | $        | 522,401    |     | $      | - |   |
| Conversion                of accrued liabilities for notes payable                                                     |   | $        | 36,761     |     | $      | 478,000 |   |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **1.** | **Basis                Of Presentation** |
|--------|------------------------------------------|

| **2.** | **Organization                and Operations** |
|--------|------------------------------------------------|

| **3.** | **Notes                Payable** |
|--------|----------------------------------|

|                                                                                                                                     |   | ** ****2005   ** |    | ** ****2004   ** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|--------------------------------------|--------|
|                                                                                                                                                    |   |                                 |    |                                 |   |   |   |
| Note                  payable to an individual, bearing interest of 10% per year, payable                  on                  demand, uncollateralized |   | $                                    | 245,000 |                                 | $      | 245,000 |   |
|                                                                                                                                                    |   |                                 |    |                                 |   |   |   |
| Note                  payable to an individual                                                                                                          |   |                                 | 465,000 |                                 |   | 465,000 |   |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **3.** | **Notes                Payable, continued** |
|--------|---------------------------------------------|

| Note                payable to a company, bearing interest of 12% per year, payable on                December 31, 2003, uncollateralized                                                                                                                                                                                                                                                                                                    |   |   | 75,000    |   |   | 75,000    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
| Note                payable to a company, bearing interest of 6% per year, payable on                May 31,                2005, uncollateralized                                                                                                                                                                                                                                                                                           |   |   | -         |   |   | 370,000   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
| Notes                payable to one company and one individual, bearing interest of 8%                per                year, payable in May and June 2005, collateralized by 630,000 shares                of                the Company’s common stock                                                                                                                                                                              |   |   | 210,000   |   |   | 210,000   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
| Callable                convertible secured notes payable to four companies, bearing interest                of                8%, maturing in November 2006 through January 2007, collateralized                by                substantially all assets and intellectual property as well as registration                rights, net of debt discount of $166,802 at September 30, 2005 and                $631,778 at December 31, 2004 |   |   | 93,541    |   |   | 68,222    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
| Note                payable to an individual, due July 22, 2005                                                                                                                                                                                                                                                                                                                                                                              |   |   | 25,000    |   |   | -         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
| Notes                payable to six individuals, due September 30, 2005                                                                                                                                                                                                                                                                                                                                                                      |   |   | 184,715   |   |   | -         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
| Note                payable to an individual, due October 15, 2005                                                                                                                                                                                                                                                                                                                                                                           |   |   | 50,000    |   |   | -         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
| Notes                payable to two companies and one individual, non-interest bearing,                due in                monthly installments, with maturities in 2003 and 2004                                                                                                                                                                                                                                                          |   |   | 164,844   |   |   | 165,844   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $      | 1,513,100 |   | $      | 1,599,066 |   |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **3.** | **Notes                Payable, continued** |
|--------|---------------------------------------------|

| **4.** | **Related-Party                Transactions** |
|--------|-----------------------------------------------|

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **4.** | **Related-Party                Transactions,                continued** |
|--------|-------------------------------------------------------------------------|

| **5.** | **Commitments                and Contingencies** |
|--------|--------------------------------------------------|

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **6.** | **Segment                Reporting** |
|--------|--------------------------------------|

|                                            |   | **Other**      |    |        |   |     |   |       |     |
|-------------------------------------------------|--------|----------------|---------|-------------|--------|----------|--------|------------|----------|
|                                            |   | **Technology** |    | **Reserve** |   | **Scan** |   | **Totals** |     |
|                                            |   |           |    |        |   |     |   |       |     |   |   |   |   |
| Revenues                from external customers |   | $              | 19,784  |        | $      | -        |   | $          | 1,335    |   | $ | 21,119 |   |
| Segment                loss                     |   |           | (20,571 | )           |   | (61,904  | )      |       | (314,539 | ) |   | (397,014 | ) |
| Segment                assets                   |   |           | 88,342  |        |   | 41,938   |   |       | 14,485   |   |   | 144,765 |   |

|                                            |   | **Other**      |    |        |   |     |   |       |     |
|-------------------------------------------------|--------|----------------|---------|-------------|--------|----------|--------|------------|----------|
|                                            |   | **Technology** |    | **Reserve** |   | **Scan** |   | **Totals** |     |
|                                            |   |           |    |        |   |     |   |       |     |   |   |   |   |
| Revenues                from external customers |   | $              | 13,340  |        | $      | -        |   | $          | -        |   | $ | 13,340 |   |
| Segment                loss                     |   |           | (82,398 | )           |   | (87,690  | )      |       | (476,914 | ) |   | (647,002 | ) |
| Segment                assets                   |   |           | 215,421 |        |   | 142,857  |   |       | 6,480    |   |   | 364,758 |   |

|                                                                     |   |  **2005     ** |       | **2004     ** |   |
|--------------------------------------------------------------------------|--------|----------------------------------------------|------------|----------------------------------------|--------|
| **Profit                or Loss**                                        |   |                                         |       |                                   |   |   |   |
| Total                loss for reportable segments                        |   | $                                            | (397,014   | )                                      | $      | (647,002 | ) |
| Corporate                interest expense                                |   |                                         | (344,634   | )                                      |   | (27,863 | ) |
| Intercompany                management fees                              |   |                                         | -          |                                   |   | 5,000 |   |
| Unallocated                corporate general and administrative expenses |   |                                         | (280,482   | )                                      |   | (65,265 | ) |
|                                                                     |   |                                         |       |                                   |   |   |   |
| Loss                before income taxes                                  |   | $                                            | (1,022,130 | )                                      | $      | (735,130 | ) |
|                                                                     |   |                                         |       |                                   |   |   |   |
|                                                                     |   |                                         |       |                                   |   |   |   |
| **Assets**                                                               |   |                                         |       |                                   |   |   |   |
| Total                assets for reportable segments                      |   | $                                            | 144,765    |                                   | $      | 364,758 |   |
| Assets                held by corporate:                                 |   |                                         |       |                                   |   |   |   |
| Cash                                                                     |   |                                         | 14         |                                   |   | 8,334 |   |
| Other                current assets                                      |   |                                         | 27,207     |                                   |   | - |   |
| Other                assets                                              |   |                                         | 588        |                                   |   | 588 |   |
|                                                                     |   |                                         |       |                                   |   |   |   |
| Total                consolidated assets                                 |   | $                                            | 172,574    |                                   | $      | 373,680 |   |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **6.** | **Segment                Reporting, continued** |
|--------|-------------------------------------------------|

|                                            |   | **Other**      |    |        |   |     |   |       |     |
|-------------------------------------------------|--------|----------------|---------|-------------|--------|----------|--------|------------|----------|
|                                            |   | **Technology** |    | **Reserve** |   | **Scan** |   | **Totals** |     |
|                                            |   |           |    |        |   |     |   |       |     |   |   |   |   |
| Revenues                from external customers |   | $              | 37,857  |        | $      | -        |   | $          | 3,150    |   | $ | 41,007 |   |
| Segment                loss                     |   |           | (83,206 | )           |   | (218,858 | )      |       | (994,408 | ) |   | (1,296,472 | ) |

|                                            |   | **Other**      |     |        |   |     |   |       |     |
|-------------------------------------------------|--------|----------------|----------|-------------|--------|----------|--------|------------|----------|
|                                            |   | **Technology** |     | **Reserve** |   | **Scan** |   | **Totals** |     |
|                                            |   |           |     |        |   |     |   |       |     |   |   |   |   |
| Revenues                from external customers |   | $              | 55,060   |        | $      | -        |   | $          | -        |   | $ | 55,060 |   |
| Segment                loss                     |   |           | (138,121 | )           |   | (488,172 | )      |       | (486,439 | ) |   | (1,112,732 | ) |

|                                                                     |   | **2005** |       | **2004** |   |
|--------------------------------------------------------------------------|--------|----------|------------|----------|--------|
|                                                                     |   |     |       |     |   |   |   |
| Total                loss for reportable segments                        |   | $        | (1,298,472 | )        | $      | (1,112,732 | ) |
| Corporate                interest expense                                |   |     | (1,115,472 | )        |   | (76,335 | ) |
| Gain                on settlement of lawsuit                             |   |     | 300,000    |     |   | - |   |
| Intercompany                management fees                              |   |     | -          |     |   | 55,000 |   |
| Unallocated                corporate general and administrative expenses |   |     | (706,948   | )        |   | (531,549 | ) |
|                                                                     |   |     |       |     |   |   |   |
| Loss                before income taxes                                  |   | $        | (2,818,892 | )        | $      | (1,665,616 | ) |

| **7.** | **Settlement                of Lawsuit** |
|--------|------------------------------------------|

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **8.** | **Stock                Options and Warrants** |
|--------|-----------------------------------------------|

|                                                     |   |                         |      |            |   |         |   | **Weighted** |        |
|----------------------------------------------------------|--------|------------------------------|-----------|-----------------|--------|--------------|--------|--------------|-------------|
|                                                     |   |                         |      |            |   |         |   | **Average**  |        |
|                                                     |   | **Number                of** |      |            |   | **Exercise** |   | **Exercise** |        |
|                                                     |   | **Shares**                   |      | **Exercisable** |   | **Price**    |   | **Price**    |        |
|                                                     |   |                         |      |            |   |         |   |         |        |   |   |   |   |
| Options                outstanding at December 31, 2004  |   |                         | 3,156,469 |            |   | 3,156,469    |   | $            | 0.10-$15.00 |   | $ | 0.39 |   |
|                                                     |   |                         |      |            |   |         |   |         |        |   |   |   |   |
| Options                expired                           |   |                         | (28,333   | )               |   | (28,333      | )      | $            | 5.10-$6.00  |   | $ | 5.42 |   |
|                                                     |   |                         |      |            |   |         |   |         |        |   |   |   |   |
| Options                outstanding at September 30, 2005 |   |                         | 3,128,136 |            |   | 3,128,136    |   | $            | 0.10-$15.00 |   | $ | 0.35 |   |

|                          |                               | **Weighted**                         |         |
|-------------------------------|------------------------------------|--------------------------------------|--------------|
|                          | **Outstanding**                    | **Average**                          | **Weighted** |
| **Range                  of** | **as                  of**         | **Remaining**                        | **Average**  |
| **Exercise**                  | **September                  30,** | **Contractual**                      | **Exercise** |
| **Prices**                    | **2005**                           | **Life                  (In Years)** | **Price**    |
|                          |                               |                                 |         |
| $5.10-$15.00                  | 128,136                            | 1.60                                 | $6.12        |
| $0.10                         | 3,000,000                          | 3.20                                 | $0.10        |
|                          |                               |                                 |         |
| $0.10-$15.00                  | 3,128,136                          | 3.10                                 | $0.35        |

|                                      |   |                         |       |            |   |                        |   | **Weighted**                |       |
|-------------------------------------------|--------|------------------------------|------------|-----------------|--------|-----------------------------|--------|-----------------------------|------------|
|                                      |   |                         |       |            |   |                        |   |  **Average**           |       |
|                                      |   | **Number                of** |       |            |   | **Exercise**                |   | **Exercise**                |       |
|                                      |   | **Shares   ** |       | **Exercisable** |   | **Price   ** |   | **Price   ** |       |
|                                      |   |                         |       |            |   |                        |   |                        |       |   |   |   |   |
| Warrants                outstanding at    |   |                         |       |            |   |                        |   |                        |       |   |   |   |   |
| December                31, 2004          |   |                         | 8,864,346  |            |   | 8,864,346                   |   | $                           | 0.01-$6.00 |   | $ | 0.75 |   |
|                                      |   |                         |       |            |   |                        |   |                        |       |   |   |   |   |
| Warrants                issued            |   |                         | 3,100,000  |            |   | 3,100,000                   |   | $                           | 0.05-$0.30 |   | $ | 0.23 |   |
|                                      |   |                         |       |            |   |                        |   |                        |       |   |   |   |   |
| Warrants                exercised         |   |                         | (200,000   | )               |   | (200,000                    | )      | $                           | 0.25       |   | $ | 0.25 |   |
|                                      |   |                         |       |            |   |                        |   |                        |       |   |   |   |   |
| Warrants                expired/forfeited |   |                         | (1,000,555 | )               |   | (1,000,555                  | )      | $                           | 0.05-$6.00 |   | $ | 1.16 |   |
|                                      |   |                         |       |            |   |                        |   |                        |       |   |   |   |   |
| Warrants                outstanding at    |   |                         |       |            |   |                        |   |                        |       |   |   |   |   |
| June                30, 2005              |   |                         | 10,763,791 |            |   | 10,763,791                  |   | $                           | 0.01-$6.00 |   | $ | 0.57 |   |

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*Table          of Contents*

**SHARP      HOLDING CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**__________**

| **8.         ** | **Stock                Options and Warrants,                continued** |
|--------------------------------------------------------------|-------------------------------------------------------------------------|

|                                               |                                                     | **Weighted**                             |                                  |
|----------------------------------------------------|----------------------------------------------------------|------------------------------------------|---------------------------------------|
|                                               | **Outstanding**                                          | **Average**                              | **Weighted**                          |
| **Range                of**                        | **as                of**                                 | **Remaining**                            | **Average**                           |
| **Exercise**                                       | **September                30,**                         | **Contractual**                          | **Exercise**                          |
| **Prices                    ** | **2005        ** | **Life                (In Years) ** | ** ****Price   ** |
|                                               |                                                     |                                     |                                  |
| $0.01-$0.25                                        | 9,105,459                                                | 1.90                                     | $0.15                                 |
| $0.50-$1.00                                        | 700,000                                                  | 2.30                                     | $0.82                                 |
| $3.00-$6.00                                        |                  958,332                            | 2.90                                     | $4.44                                 |
|                                               |                                                     |                                     |                                  |
|                                               | 10,763,791                                               | 2.00                                     | $0.57                                 |
|                                               |                                                     |                                     |                                  |

|                               |   | **September**               |   | **September**               |   |
|------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                               |   | **30,                2005** |   | **30,                2004** |   |
|                               |   |                        |   |                        |   |   |   |
| Dividend                yield      |   |                        | -0-    | %                           |   | -0- | % |
| Expected                volatility |   |                        | 200    | %                           |   | 200 | % |
| Risk                free interest  |   |                        | 5      | %                           |   | 5 | % |
| Expected                lives      |   |                        | Actual |                        |   | Actual |   |

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*Table          of Contents*

**    ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION      AND RESULTS OF OPERATIONS**

**FORWARD      LOOKING STATEMENTS AND INFORMATION**

**OPERATIONS**

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*Table          of Contents*

**RESULTS      OF OPERATIONS FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2005      AND      2004**

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*Table          of Contents*

**LIQUIDITY      AND CAPITAL RESOURCES**

**New      Accounting Pronouncements**

**CRITICAL      ACCOUNTING POLICIES**

**Revenue      Recognition**

**Accounting      for Stock-Based Compensation**

**ITEM3.      CONTROLS AND PROCEDURES**

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*Table          of Contents*

**PART      II**

**ITEM      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

| (1)   | Each                of the persons who received these unregistered securities had knowledge                and experience in financial and business matters which allowed them                to                evaluate the merits and risk of the receipt of these securities,                and that                they were knowledgeable about our operations and financial                condition. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | No                underwriter participated in, nor did we pay any commissions or fees                to any                underwriter in connection with the                transactions. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | No transaction involved a public              offering. |
|-----------|---------------------------------------------------------|

| (4)   | Each                certificate issued for these unregistered securities contained a                legend                stating that the securities have not been registered under the Act                and                setting forth the restrictions on the transferability and the sale                of the                securities. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      6. EXHIBITS**

31.1

31.2 

32.1

32.2

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*Table          of Contents*

**SIGNATURES**

| By:                  /s/ George Sharp                             |   | November                  21, 2005 |
|-------------------------------------------------------------------|--------|------------------------------------|
|                                                              |   |                               |
| George                  Sharp, Director, Chief Executive Officer, |   |                               |
| Principal                  Financial Officer and President        |   |                               |
|                                                              |   |                               |

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