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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006.

Commission File Number 033-90355

ACTIONVIEW INTERNATIONAL,
INC.(Exact name of registrant as specified in its charter)

|Nevada                 | 87-0542172                          
|---------------------- | ------------------------------------
|State of organization) | (I.R.S. Employer Identification No.)

1892 West Broadway, 2ndfloor,
Vancouver, British Columbia,Canada V6Y 1J9(Address of
principal executive offices)

(604) 878-0200(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the
ActNone

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act [ ]

Check whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
and (2) has been subject to such filing requirements for the past 90 days.
YES [ X ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in PART III of this Form
10-KSB or any amendments to this Form 10-KSB. x

Indicate by check mark whether the registrant is a shell company
(as defined in rule 12b-2 of the Exchange Act) Yes [ ] No [ X ]

1

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The Companys revenues during the year ended December 31, 2006
were $86,755:

The aggregate market value of the voting stock held by
non-affiliates of the Company, (29,719,695 shares) based upon the closing price
of the Companys common stock on April 13, 2007 was approximately $327,000.

As of December 31, 2006, the Company had 42,788,094 issued and
outstanding shares of common stock. (included in this figure are the 8,072,675
issued but not outstanding exchangeable shares of common stock held in trust,
see Item 1(a): The ActionView Advertising System Transaction).

DOCUMENTS INCORPORATED BY REFERENCE: None

ACTIONVIEW INTERNATIONAL, INC. TABLE OF CONTENTS

PART I


|Item
      1 | Description of Business                                   | 3                                                                                                                                
|------------ | --------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------
|             | a)                                                        | Company History and Development                                                                                                  
|             | b)                                                        | Principal
      Products, Services and Product Development                                                                       
|             | c)                                                        | Target Market, Strategy
      and Product Distribution                                                                           
|             | d)                                                        | Competition
      and Main Competitors                                                                                           
|             | e)                                                        | Competitive Position
      and Methods of Competition                                                                            
|             | f)                                                        | Principal
      Suppliers                                                                                                        
|             | g)                                                        | Dependence on One or
      a Few Major Customers Intellectual Property Patents/Trademarks/Licenses/Franchises/Concessions/Royalty
|             | h)                                                        | Agreements/or Labour
      Contracts                                                                                             
|             | i)                                                        | Employees                                                                                                                        
|             | j)                                                        | Projects in Progress
      & Strategic Alliance                                                                                  
|             | k)                                                        | Risk Factors                                                                                                                     
|Item
      2 | Description
      of Properties                           | 19                                                                                                                               
|Item
      3 | Legal Proceedings                                         | 19                                                                                                                               
|Item
      4 | Submission
      of Matters to a Vote of Security Holders | 19                                                                                                                               

PART II


|Item
      5  | Market
      for Common Equity and Related Stockholder Matters                             | 19
|------------- | ------------------------------------------------------------------------------------------ | --
|Item
      6  | Managements Discussion
      and Analysis or Plan of Operations                           | 22
|Item
      7  | Financial
      Statements                                                                 | 32
|Item
      8  | Changes in and Disagreements
      With Accountants on Accounting and Financial Disclosure | 32
|Item
      8A | Controls
      and Procedures                                                              | 32
|Item
      8B | Other Information                                                                          | 33

PART III


|Item
      9  | Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a) of the Exchange Act | 33
|------------- | --------------------------------------------------------------------------------------------------------------------------- | --
|Item
      10 | Executive Compensation                                                                                                      | 33
|Item
      11 | Security
      Ownership of Certain Beneficial Owners and Management                                                        | 36
|Item
      12 | Certain Relationships
      and Related Transactions                                                                        | 37

|Item 13 | Exhibits and Reports on Form 8-K       | 38
|------- | -------------------------------------- | --
|Item 14 | Principal Accountant Fees and Services | 38

2

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Forward Looking Statements

This report contains forward-looking statements. The forward-looking statements
  include all statements that are not statements of historical fact. The forward-looking
  statements are often identifiable by their use of words such as may,
  expect, believe, anticipate intend,
  could, estimate, or continue, or the negative
  or other variations of these terms or comparable terms. The Companys actual
  results could differ materially from the anticipated results described in the
  forward-looking statements. Factors that could effect the Companys results
  include, but are not limited to, those discussed in Item 6, Managements
  Discussion and Analysis and included elsewhere in this report.

PART I


ITEM 1 DESCRIPTION OF BUSINESS

a) Company History and Development

ActionView International, Inc. formerly known as Acquisition
Media, Inc. (the Company), is a Nevada Corporation which currently trades on
the OTC Bulletin Board under the symbol AVWI and is referred to in this
document as the Company.

The Streamscape Transaction

On November 13, 2000, the Company announced and entered into an
agreement to acquire 100% of Streamscape, a private corporation. Pursuant to the
terms of the acquisition agreement, the Company would acquire all of
Streamscapes issued and outstanding shares (14,610,000 shares of Streamscape's
common stock) in exchange for 17,700,000 shares of the Company's common stock.
The 17,700,000 shares of the Company's common stock were issued and placed in an
escrow, subject to certain escrow conditions being satisfied before they could
be distributed to the shareholders of Streamscape.

By April of 2001, the management of Streamscape could not
deliver all the shares of Streamscape. Additionally, Streamscape was unable to
obtain additional financing to continue operations, a condition to the
consummation of the Streamscape transaction. As a result, in April 2001, the
agreement was rescinded and the acquisition of Streamscape stock in exchange for
the Companys stock was terminated. The rescission occurred prior to the Company
commencing operations with Streamscape and the 17,700,000 shares of the
Company's common stock previously issued were returned to the transfer agent for
cancellation. The financial statements do not include the transaction or
consolidate the operations of Streamscape with the Companys as the ActionView
shares were never distributed to the Streamscape shareholders and the
transaction never consummated.

The Company advanced $340,000 to Streamscape in the form of
loans which were used by Streamscape for operating purposes. For the year-ended
December 31, 2001, the loans to Streamscape were written off by the Company as a
bad debt because Streamscape went into receivership.

The Inform Online, Inc., transaction

On November 26, 2001, the Company entered into an agreement to
  acquire substantially all of the assets of Inform Online, Inc., which developed
  a system that provided advertisements to digital display systems. The terms
  of the asset acquisition called for ActionView to issue 1,000,000 restricted
  shares of the Company's common stock. Inform Online, Inc. was unable by June
  30, 2002, to reach an agreement with a major vendor to supply online advertising,
  and therefore the November 26, 2001, agreement to acquire all of Inform Online,
  Inc.s assets was rescinded and terminated, effective June 24, 2002. The
  Company returned all the transferred assets to Inform Online, Inc. (hardware
  and equipment, $70,000; computer software, $230,000; and intellectual properties,
  $250,000) and cancelled the 1,000,000 restricted shares of common stock previously
  issued to Inform Online, Inc.

3

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The Tele Pacific Communications (Samoa) Inc., transaction

On March 25, 2002, the Company entered into an agreement to
acquire all the issued and outstanding shares of Tele Pacific Communications
(Samoa) Inc. from Pacific E-Link Corporation in exchange for 2,500,000
restricted shares of the Company's common stock. Tele Pacific Communications
(Samoa) Inc. owned a 75% interest in Chengdu Publicis International Advertising
Co. Ltd., a Sino-foreign joint venture advertising agency with offices in
Beijing, Shanghai, Chengdu and Guangzhou, China. As of August 8, 2002, Pacific
E-Link Corporation did not provide the Company with the contractually required
two years of audited financial statements for Tele Pacific Communications
(Samoa) Inc., and Chengdu Publicis International Advertising Co. Ltd., nor did
it deliver all of the issued and outstanding shares of Tele Pacific
Communications (Samoa) Inc. So the Company decided to rescind the March 25, 2002
agreement with Pacific E-Link Corporation for non-performance on their part, and
cancelled the 2,500,000 restricted common shares.

On May 7, 2002 the Company announced an agreement to acquire
all of the issued and outstanding shares of J&M Insurance Replacement Centre
Ltd., by the issuance of 4,654,000 restricted common shares to the shareholders
of J&M Insurance Replacement Centre Ltd. Upon the completion of due
diligence, the Company decided not to proceed with this acquisition.

The ActionView Advertising Systems, Inc.,
transaction

In August 2002, the Company changed its name from Inform Media
Group, Inc. to Acquisition Media, Inc. Subsequently, in August 2003, in
preparation for the closing of its acquisition of Action View Advertising
Systems, Inc., Acquisition Media, Inc. changed its name to ActionView
International, Inc. in order to better reflect the new business operations of
the Company. Also, in August 2003, the Company obtained a new CUSIP number and
changed its trading symbol on the OTC Bulletin Board to AVWI and is presently
trading under the name: ActionView International, Inc.

On August 11, 2003, ActionView International Inc., incorporated
a wholly-owned Canadian subsidiary, 6126421 Canada Ltd. Pursuant to an agreement
dated September 9, 2003, ActionView International, Inc., through its
wholly-owned Canadian subsidiary (612 Canada) acquired 100% of the issued and
outstanding shares of ActionView Advertising Systems, Inc. (ActionView), a
British Columbia Canadian Corporation incorporated on July 6, 1999, and issued
1,000,000 exchangeable shares of 612 Canada as consideration. This transaction
was completed during the quarter ended September 30, 2003 with all of the
acquired shares of ActionView Advertising Systems, Inc., being exchanged for the
1,000,000 exchangeable shares of 612 Canada. In conjunction with this
transaction, the Company acquired the Intellectual Property Rights relating to a
computer programmable scrolling, backlit billboard poster sign marketed and sold
through ActionView. This technology forms the basis of the Companys current
operations.

Pursuant to the terms of the agreement, the Exchangeable Shares
can be exchanged into shares of ActionView International, Inc. on a one-for-one
basis at the option of the shareholder. Concurrently, with the acquisition of
Action View Advertising Systems, Inc., acquisition, the Company issued an
additional 327,325 restricted common shares to settle the shareholder's loans
between Action View Advertising Systems, Inc. and its two principals - Chris
Stringer and Rick Mari. A holder of an exchangeable share may, at any time,
require 612 Canada to repurchase the exchangeable share for an amount equal to
the then current market value of the Company's common stock. 612 Canada may, at
its option, satisfy the resulting

4

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obligation to repurchase the exchangeable shares in cash or it may elect to have the obligation satisfied by the issuance of shares of common stock by the Company. The Company has issued to a trustee, a sufficient number of shares of common stock to
satisfy this obligation. The holders of the exchangeable shares are granted votes in the Company on the basis of one vote for every exchangeable share held. The exchangeable shares can be exchanged into shares of the Company on a one-for-one basis
at the option of the exchangeable shareholder. Concurrently with 612 Canada's issuance of 8,422,675 exchangeable shares, the Company issued 8,422,675 of its common shares to a Trustee in the event that the exchangeable shares were exchanged. To-date
350,000 exchangeable shares have been exchanged for company shares leaving a balance of exchangeable shares issued as at December 31, 2006 of 8,072,675.

The Companys Current Business Operations

The Company's principal place of business is located at 1892 West Broadway, 2nd floor, Vancouver, British Columbia, Canada V6Y1J9 with telephone number (604) 878-0200 or toll free (866) 878-0200 and website www.actionview.ca. The Company,
through ActionView, its wholly-owned subsidiary, is currently engaged in the business of designing, marketing and manufacturing proprietary illuminated, programmable, motion billboard signs for use in airports, mass transit stations, shopping malls,
and other high traffic locations to reach people on-the-go with targeted messaging. The Companys billboards utilize digital motor controllers for enhanced advertising capabilities, proprietary source code for enhanced operating performance and
LED displays for timely on-site communications. They offer the following advantages over their stationary counterparts: (i) the necessary movement to attract the attention of passersby; and (ii) the display of multiple advertisements (up to twelve
different scrolling images per sign), typically where space is at a premium, thereby lowering costs to advertisers and increasing revenue to landlords. Studies have shown that motion billboard advertising increases the likelihood of attracting
attention by 3 to 4 times over static billboards.

Business Background

ActionView Advertising Systems, Inc. (an operating and wholly owned subsidiary of ActionView International, Inc.) was formed in 1998 as a British Columbia Corporation. The Managing partners and sole shareholders were Rick Mari, Founder/Secretary
Treasurer and Christopher Stringer, President. The purpose of the company was to further expand the scrolling backlit sign technologies that were originally created by Rick Mari and to develop the most appropriate ways of taking the ActionView
products to market.

At the outset, a franchise system was developed with Uniform Franchise Offering Circular (UFOC) documentation completed. A franchise marketing program was implemented and 7 franchises were sold over 6 years. This program has not
succeeded to the Companys expectation due to the difficulty that local franchise owners experienced with finding locations to place their signs.

In 2002, a revenue sharing program was developed, initially for point of purchase advertising, with the plan to place the ActionView scrolling signs in open areas of large retail stores for the vendors of store merchandise to advertise. The proposed
program required that ActionView International would finance and place the signs at its own cost. The store would assist ActionView with the acquisition of vendor advertising in return for a share of the revenue. This program was tested by one Home
Depot store in Toronto and by one Shoppers Drug Mart Store in Canada. But neither company implemented the ActionView program nor disclosed the test results to ActionView. The program was also tested at one Canadian Tire store which led to the
ordering of 2 signs for newly constructed stores.

In 2003, the Company began developing its present strategy
  of placing scrolling signs into high traffic locations and then marketing advertising
  space on the signs by means of new alliances that were developing in China and
  other international markets. The intention was for ActionView to maintain ownership
  of its signs and share the on-going revenue generated from the signs with the
  advertising agency and the location owner. The benefit to advertisers would
  be big, bold exposure at top tier locations at much lower cost. With this new
  strategy and at this early stage, the Company decided to move manufacturing
  offshore from Canada to China in order to benefit from the positive trend towards
  high-tech, good quality mass manufacturing in China at lower cost. The Company's
  signs are currently assembled by a team of design engineers and computer technicians
  at its contract manufacturing facility located in Guangdong Province, China.

5

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In 2003, Spinney supermarkets in Dubai tested and implemented
  both the signs and the program. Signs were placed in 6 locations and revenue
  was generated by the local ActionView Franchise.

In 2003, FAL Stores /Action Supermarkets in Australia tested
  the signs and indicated their intention to proceed with placement in selected
  stores. Subsequently, Action Supermarkets was purchased by the IGA food group
  and the advertising program, originally intended for 37 stores, was expanded
  in early 2006 to over 400 stores within the IGA group of stores. The beginning
  of this program was to be in Brisbane Australia with approximately 60 signs
  expected to be installed in the second quarter of 2006 But this didnt
  happen due to on-going delays in final negotiations between Open Media and Claude
  Neon.

In February 2004, the Company completed the incorporation of ActionView Far East Limited (AVFE) for the purpose of representing the Company and marketing its scrolling billboard products in both China and Hong Kong. The Company has a
50.1% interest in AVFE and a voting majority on the Board of Directors. The other 49.9% owner of AVFE is a local business group headed by AVFEs Managing Director.

In February 2004, the Company secured the installation of a backlit, scrolling sign system at the Showcase Store, one of Canada's largest automotive and hardware products retailer. In December, the company sold and installed 2 scrolling signs in 2
newly constructed stores for this retailer.

In the second quarter of 2004, the Company delivered 6 ActionView scrolling signs to the ActionView Franchise in the Northwest Territories, Canada, from which the Company has begun to receive royalty income in 2005..

In July, 2004 the Company entered into an agreement with Way Cool Concepts Inc. to develop the Eastern Canadian market from Toronto. However, this business has since ceased operations for unknown reasons.

In the second quarter 2004, the Company manufactured 10 signs for installation in the Guangzhou Mass Transit Rail system (MTR) for beta-testing This was the first contract negotiated by Chuangrun Media Ltd, a Hong Kong corporation which
currently operates an established business in China. It was followed closely by Chuangrun requesting ActionView to begin product development for a large Panorama sign for presentation to the new Guangzhou airport to fulfill a contract that Chuangrun
had for airport advertising in the domestic terminal.

In September 2004, the Company completed a license and supply agreement with ActionView Australia (Proprietary) Limited (AVAU) for the purpose of representing the Company and marketing its scrolling sign products in both Australia and
New Zealand. The Company has an option to purchase a 51% interest in AVAU for a nominal amount at any time. The other 49% owner of AVAU is a local business group headed by AVAUs Managing Director.

In October 2004, an ActionView sign was installed in the Loews theatre in Lincoln Square, New York for beta-testing and possible future expansion to additional Loews theaters. The sign was subsequently removed and to the best of the
Companys knowledge the potential use of ActionView signs is still under consideration by Loews.

6

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Also, in 2004, ActionView installed 20 signs in two movie
theater chains in Hong Kong for beta-testing. Subsequently, this project and
the Guangzhou MTR project above were put on hold in order to focus its efforts
and resources on the more important Guangzhou Airport contract.

In May 2005, AVFE entered into a five year revenue sharing
agreement with Chuangrun Media Ltd, Chuangrun is responsible for obtaining site
locations and advertisers for the Company-owned scrolling signs; the Company is
responsible for the delivered cost of manufactured signs; and AVFE is
responsible for the installation and on-going maintenance of the signs. On-going
business developments in China are reviewed in Item 1(j) entitled Projects in
Progress and Strategic Alliances.

In June 2005, AVAU entered into a three year revenue sharing
agreement with Open Media Management Pty Ltd (Open Media), an Australian
corporation with ties to the advertising community and business establishment in
Australia and New Zealand. Open Media and AVAU are responsible for obtaining the
site locations and the advertisers along with installation and on-going
maintenance of the Company-owned scrolling signs; and the Company is responsible
for the delivered cost of manufactured signs. On-going business developments in
Australia are reviewed in Item 1(j) entitled Projects in Progress and Strategic
Alliances.

Also in 2005, the ActionView sign was tested in McCarran
International Airport in Las Vegas. The testing is now complete and airport
management and their advertising company are in the process of determining the
potential future use of the ActionView signs in this location.

b) Principal Products, Services and Product

Over the past six years, the Companys wholly-owned subsidiary,
ActionView Advertising Systems Inc., has researched, designed, and manufactured
programmable, scrolling, backlit billboard poster signs under the guidance of
its founder, Rick Mari, the Companys CEO and a Director. The initial product
was a 4 foot by 6 foot (4x6) sign for use in retail and other high traffic
advertising venues. It was site tested in malls and business concourses in
Vancouver, Canada, with the support of local and national advertisers. Ad
revenues from rental signs placed three years ago continue to flow from three
separate shopping centers in Vancouver.

Since initial product development, the company has developed
several custom designed signs in different sizes to suit specific customer needs
as follows:

Sign Size
    List PriceOriginal 4x6 sign scrolling 12 poster advertisements (*)
    $ 10,0003.5 x 5 double sided scrolling 12 poster advertisements
      with LED display on top
    $16,0003.5 x5 signs scrolling 12 poster advertisements
    $ 10,0003.5 x5 sign scrolling 6 advertisements (called ActionView
      Light)
    $ 6,0006x9 sign portrait mode scrolling 5 poster advertisements
    $ 18,0005 x10 sign scrolling 4 poster advertisements
    $ 16,0005 x15 sign scrolling 3 poster advertisements
    $ 23,000


* The Company also designs and distributes a 4 x 6 non-scrolling
  (static) sign with a depth of 5 inches which is ideal for narrow passage ways
  where advertising on the walls has typically been confined to non-backlit products.
  It has a list price of $2,500.

In general, there are two significant benefits to scrolling
backlit signs compared to static backlit signs:

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| | i)  | Scrolling signs permit the display of
      multi-advertisements in a single location. In a world where space is at a
      premium and advertisers are required to compete for their advertising
      positioning, ActionView signs reduce costs to advertisers and increase
      income to property owners who lease advertising sign space.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                 
| | ii) | scrolling advertising provides the movement necessary to
      attract the attention of passers-by.                                                                                                                                                                                                                                             

Many innovative technical features and benefits have been
developed by ActionView over the years and built into their scrolling backlit
smart sign system giving it superior functionality for advertisers:

| | i)   | capable of combining motion posters with an LED messaging
      system on top of each sign (hybrid), networked to all other signs in a
      given installation enabling a simultaneous display of ads and messages
      throughout the venue.                                                                                                                                                                                                                                                                                                                                                
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ii)  | 30% increase in lighting brightness without creating hot
      spots through the use of diffuser lenses creating a highly visible and
      more eye-catching advertisement than standard advertising billboards.
      Other companies put a sheet of opaque glass in front of their bulbs to
      achieve the same purpose which decreases brightness. Furthermore, the
      diffusers in the ActionView sign act as structural components, adding
      strength to the signs and providing channels to hide wiring which makes
      them safer and gives a significantly cleaner look.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | iii) | equipped with a specially developed computer software to
      provide an easily accessible audit trail for advertisers to track
      billboard location, how many times and how long each ad is shown,
    etc.                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | iv)  | capable of trouble-free operation with more than 100
      types of poster material having various thicknesses and stiffness. Most
      competitive signs are limited to specific types of poster material, which
      is not practical in this business particularly on an international scale
      when poster material control is very difficult.                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | v)   | capable of being programmed to display a variety of 3 to
      12 posters on the same sign in any order at any time of the day or night
      for 7 day periods to add versatility, spontaneity and relevance to ad
      campaigns.                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | vi)  | capable of changing the poster shuttle speed depending on
      the needs of specific advertising venues, ie. slower movement in tranquil
      food court venues and faster movement in the hustle and bustle of airport
      venues.                                                                                                                                                                                                                                                                                                                                                        

The main operating procedures behind the ActionView scrolling
signs are as follows:

- the posters are a series of separate and distinct print
images connected on a continuous roll installed in a display cabinet constructed
from high gloss extruded aluminum for viewing through a plexiglass window
located either in the front or back of the display cabinet.

- the first poster is attached to a roller spanning the top of
the display cabinet and the last poster is attached to the roller spanning the
bottom of the display cabinet.

- with the use of motors and a digital controller, the roll of
posters can be scrolled up to display each poster individually in the window for
a short period of time (generally 15 seconds) before scrolling on to the next
poster. When the roll of posters is wrapped around the top roller the controller
reverses the mechanism to scroll the roll of posters in the same manner to the
bottom roller, in reverse order.

- fluorescent bulbs and diffuser lenses are housed in the
display cabinet behind the advertising posters. The high gloss aluminum display
cabinet can be custom designed and colored to fit advertiser needs.

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Product Development

The Company has developed many products that it believes are
versatile, attractive and reliable mainly because of the sophisticated,
digitally controlled, electronic components and high quality mechanics.

Several new products and support technologies have been
researched and developed over the past two years including :

| | i)   | several new sizes of signs: the 5x15 scrolling 3 posters,
      the 5x10 scrolling 4 posters, the 3.5x5 scrolling 6 posters (known as
      ActionView Lite) for which a new digital controller was
  developed.                                                                                                   
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                    
| | ii)  | the existing digital controller and source code was
      upgraded to work with new billboard models.                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                    
| | iii) | New poster mounting tools and processes that make
      changing posters faster and more efficient                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                    
| | iv)  | upgraded software for programming controllers for sign
      operations utilizing Windows- based hand-held remote units (pocket PCs or
      PDAs) replaced lap top computers.                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                    
| | v)   | LED display unit placed on top and integrated with an
      existing sign to facilitate timely communications throughout a particular
      venue. This is the most significant new development in the ActionView
      scrolling sign system and is a leading feature in the Guangzhou airport
      installation.

The company has spent approximately $260,000 in product
development expenses over the past two years under the direction of Rick Mari,
the Companys CEO and founder. In Vancouver, product development is performed at
the companys headquarters and at local independent technical labs. In China,
product development is performed at the Companys contract manufacturing
facility located in Guangdong Province, China under the direction of a full time
Company employee, bilingual in English and Mandarin. This gives the Company
considerable direct input and influence over product development and
manufacturing of signs which for the most part are custom designed for specific
end user needs.

Product development expenses include the salaries and wages of
two full-time technical employees, a partial allocation of the CEOs
compensation, travel expenses to and from the plant site in China and product
testing venues, the cost of manufacturing products for testing, independent
contractor costs and sundry development costs. Additional qualified employees,
agents, or independent contractors, augmented by the leasing or purchase of
specialized equipment as required, will continue into the future in order to
keep Company products on the leading edge.

c) Target Market, Strategy and Product
Distribution

Since the acquisition of ActionView Advertising Systems Inc in
September 2003, the Company has been focused on developing and implementing its
business plan including building brand recognition, gaining market share,
meeting customer expectations, tailoring products to meet customer
specifications, following up to ensure customer satisfaction, and staying on the
leading edge of technology with product development spending to enhance the
product line.

ActionView markets its multiple poster signs to managers of
high traffic public locations such as airports, train stations, shopping malls,
movie theaters, etc. ActionViews business strategy is to establish
relationships with media advertising companies that will purchase the poster
advertising on the ActionView signs on behalf of their clients. ActionView is
also in the process of selling and/or renting its signs to retail store chains
for placement inside the retail stores or in the store windows. Once signs are
placed in stores at the point of purchase, advertising time will then be sold
to vendors of products.

9

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The Companys business plan is based upon maintaining ownership of its manufactured signs and generating monthly revenues from signs placed in airports, train stations, convention centers, shopping malls, supermarkets, department stores, movie
theatres, gas stations, and other high traffic locations. These revenues from Company signs will be shared with the sellers of the advertising and the sign location landlord.

The Company sells its signs to locally based franchises and will receive royalty income from the advertising revenues generated by those signs. The Company also intends to sell custom manufactured less sophisticated scrolling signs to customers on a
large volume basis if demand for these exists.

The business strategy is centered around a unique vertically integrated business model of revenue sharing through international partnerships and license agreements. The model is supported by in-house developed products including: the unique sign
designs (unlike others in the industry) the digital motor drive controllers, the integrated LED display unit for timely communication and the source code used to program and manage the reliable operation of the signs.

The Companys main target markets at the present time are China, Australia and the USA.

All projects in progress and strategic alliances are reviewed in detail in Item 1(j) below

Media Advertising Markets in China

According to AC Nielsen Media Research, the China advertising market will be the 2nd largest in the world by 2010. It is the fastest growing and largest consumer market and the advertising industry grew by 40% in 2003 (Source: X-tribes China, Xtreme
Information). Advertising expenditure in China soared to US$13 billion in 2003, covering 0.92% of GDP compared to an average of 3% in developed countries. In the past 20+ years, average growth rate was nearly 40% (source: China Advertisement
Association). There are more than 100 million middle class in China today and projected to grow to over 500 million by 2012 (two-fifths of the population), wrote Pacific Chief Economist Andy Xie of Morgan Stanley Asia. China is already a large
consumer market and will become larger as the economy grows. Some of the statistics collected by AC Capital Consulting Group as reported by China Online are:

- 38 million urban families can afford US$12,000 on buying a car;

- More than 70% of adults living in Beijing, Shanghai and Guangzhou (combined pop. 33 million) plan to buy a car in the next 5 years;

- Housing sales in Beijing, Shanghai and Guangzhou are growing at close to 40% per annum;

- The market for toiletries and cosmetics has passed US$ 3 billion, expected to reach US$ 22 billion by 2013;

- Chinese tourist currently spent US$ 20 billion+ overseas every year It will be the country with the largest number of outbound tourists by 2020.

Registering a 21% year-on-year growth to nearly US$37 billion in 2005, China is now just behind Japan as the 3rd ranked advertising economy in the world. In particular over the last 10 years, China has witnessed a rapidly
expanding outdoor advertising industry averaging 19% growth per year according to Chinas State Administration of Industry and Commerce. It is a great investment opportunity for foreign investors and local companies as well.

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Media Advertising Markets in Australia

According to AC Nielsen Media Research, Australia is now the 2nd largest ad spending market in the Asia Pacific of the 12 markets measured, behind China only. A sound economy, political stability and on-going consumer and business
confidence contributed to double digit growth in Media expenditures in 2005. This augers well for the future in the majority of the top 10 ad categories including retail, motor vehicles, entertainment & leisure and real estate.

Media Advertising Markets in USA

A number of qualified sources indicate that strong advertising spending will continue in the US: -

- The Outdoor Advertising Association of America (OAAA) states that annual advertising sales approximate US$5.2 billion of out of home advertising. Since 1998, outdoor advertising has grown at a CAGR (compound annual growth rate) of
approximately 8.1% that is 1% faster growth than the overall advertising market. Outdoor advertising in such key markets as Europe and the U.S. grew by a CAGR of 10% with a projected CAGR of 8.7% over the next three years, compared to 6.7% for the
overall advertising market.

- Both Zenith Media and the Outdoor Advertising Association of Canada (OAAC) report similar growth figures in the US.

- Outdoor Advertising in the USA June 2002, Price Waterhouse Coopers indicates that Global advertising spending is predicted to increase at a 4.8% Compound Annual Growth Rate reaching a total of $405 billion in 2006, compared to $321
billion in 2001. The US market will grow from $46 billion in 2001 to $59 billion in 2006.

d) Competition and Main Competitors

ActionView competes with a variety of other companies providing advertising space or services. The outdoor advertising segment is highly competitive and is becoming more concentrated. The top three advertising companies in the world, Clear Channel
Group, Infinity (Viacom) Inc. and the JC Decaux Group had a 9% market share in 1996 and a 30% market share in 2000 with consolidation and acquisition of companies taking place in the industry. In Canada, the Out-Of-Home advertising segment is even
more highly concentrated with Pattison Outdoor Inc. accounting for close to 47% of the outdoor market segment according to the Canadian Outdoor Advertising Association.

These companies, due to their size, compete with one another for the largest existing outdoor advertising markets in North America. These markets include outdoor billboards on buildings and street sides, poster sized signs in malls, airports, train
stations etc. The only company that uses scroller technology is JC Decaux who is ActionViews main competition in Europe, Australia and parts of Asia. In Australia the major outdoor competitors are JC Decaux, EYE Corp, Cody Outdoor and GOA
Billboards.

In the scrolling sign product supply market the competitors are Revolution, Postermatic and Charvet-Industrie in North America.

ActionView will continue to focus on two markets for the placement
  of its signs: (i) mass transit locations such as airports and subway stations;
  and (ii) point of purchase locations such as high volume retailers ActionView
  has created some unique signage products that complement the here-to-for under
  utilized space at airports with the introduction of the new Motion poster /LED
  combinations signs which are now in the process of being placed at bus stop
  locations at the Guangzhou Airport. Currently we know of no other sign manufacturer
  that supplies signs at no charge to media companies for a share of the advertising
  revenue.

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e) Competitive Position and Methods of Competition

The Company will not attempt to compete in the North American outdoor advertising markets because of the size, strength and maturity of JC Decaux, Clear Channel, ViaCom and Pattison. Instead ActionView will concentrate on the point of purchase
market where manufacturers and vendors of retail products need to advertise in the retail department, hardware or food store chains at the point of purchase. ActionView intends to place its scrolling signs in the store windows and inside the
entrance and at the end of aisles. ActionView will receive its revenue from renting the signs to the retail stores or by receiving a percentage of the ongoing revenue stream generated from the advertising. Because the Companys business
strategy is to maintain ownership of its signs and enter into revenue sharing agreements with the sign location hosts, the Company does not intend to compete with sign suppliers for core business and revenues. However, the Company can and does sell
signs and may increase this portion of its business if sufficient demand for the direct sale of its products develops. The Company does not anticipate that outdoor advertising market sign sales will become a substantial portion of its business or
operations and has not relied upon this assumption in its business model. When the Company does compete in the outdoor advertising sign sales market, it is comparable in price to similar quality products offered by competitors. At this time we are
not aware of any competition in this market from scrolling billboard suppliers.

ActionView has no plans to enter the European market in the near future.

The outdoor advertising market in China and the Middle East is fragmented. They are serviced by many local companies and a few international companies like JC Decaux. It is still difficult for the international companies to gain a foothold because
of the protectionist attitudes in these countries which tend to favor local companies. Because of ActionViews local partnerships the company is perceived as local with the benefits of international technology and management input. Accordingly,
we do not perceive any risk from local protectionist attitudes.

In Australia, the market is similar to North America, so the ActionView strategy is to direct our Australian partner to pursue the point of purchase market in retail store chains. This has resulted in a contract, through our joint venture partner
Open Media, with the IGA supermarket chain for multiple store locations for the placement of scrolling signs.

In the competitive marketplace for scrolling sign products, the Companys dual strategy has always been to provide our customers with top quality products, well researched and tested before distribution, at competitive prices. This
prompted the change of sign production to China in 2003.

f) Principal Suppliers

The purchase, fabrication and assembly of the aluminum bodies of the ActionView signs was transferred to a supplier in China to reduce manufacturing costs.

The electronic components for the circuit boards of the proprietary digital sign controllers continue to be assembled in Canada for trans-shipment to China for installation.

g) Dependence on One or a Few Major Customers

Presently, ActionView has no major customers but potential
  exists in China, Australia and USA. ActionView continues to try and establish
  reliable distribution channels in all three countries and the Middle East. However,
  the Company has not yet achieved its desired market penetration or client base.
  It has been the Companys experience that prior to committing to a purchase
  or entering into a franchise or strategic alliance, customers typically request
  a testing period of 3 to 12 months to determine mechanical dependability of
  the signs; to identify sales uplift for advertised products; and to understand
  customer comfort with the new scrolling technology.

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If the Company is able to install signs and realize revenues
  in various countries, it will not be dependent on only one or a few major customers.

h) Intellectual Property, Patents, Trademarks, Licenses,
Franchises, Concessions, Royalty Agreements or Labour Contracts

The Company owns the intellectual property rights to the
ActionView sign technology through its acquisition of 100% of ActionView
Advertising Systems Inc which owns 100% of 6216421 Canada Ltd.

(i) Pending Trademark Applications

ActionView has applied for trademark rights in the United
States and Canada for the trade name ActionView. This trademark is on the
primary register in the United States as is the phrase ActionView: we leave the
competition standing still.

(ii) Pending Patents, Copyrights and Trade Secrets

Managements determination is that its technology is not a
likely target for intellectual property theft. Company products are not mass
produced for the consumer market and are not sold at the retail level. The
Company believes that it would be difficult and costly to reverse engineer the
source code written onto our microprocessors which is used in our motor
controllers. As working capital permits, the company will apply for patents on
some or all of its new developments. The patent eligibility of any of the
Companys planned applications is uncertain at this time.

ActionView had previously applied for the following US patents
which applications have since been abandoned due to lack of sufficient funding
to pursue them:

Pending Application No. 09/90652: Display Sign End Controller

Pending Application No. 09/528812: System and Method of
Cross-Selling Advertising

The second patent pending application had also been made in
Canada under the Canadian patent pending number 2341053.

Company copyright applications have been processed, registered
and completed with respect to our trade name and marks.

(iii) Royalties and Labour Contracts

The Company does not pay any third party royalty on the use of
its intellectual property.

There are no labour contracts or unionized employees.

(iv) Franchises

At present, there are 5 ActionView franchises at various stages
of development, as follows:

- In Canada: Northwest Territories, Kelowna,
  Calgary (3)

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- In USA: Las Vegas (1)

- In UAE: Dubai (1)

i) Staff

ActionView presently operates with 4 staff - two are working in
management and sales & marketing activities; one in service; and one
primarily in accounting and administration. In addition and as required,
ActionView engages independent consultants and contractors to supplement its
activities or conduct specific technical and market research studies. All staff
currently operate as independent contractors and no long term commitments have
been made to anyone.

ActionViews subsidiaries in Hong Kong and Australia may
require new staff in 2007 should any business be developed. The use of
sub-contractors will continue to be the primary source of help to keep related
costs down and variable.

j) Projects in Progress and Strategic
Alliances

The Company has been directing its focus towards niche
advertising opportunities in foreign markets for the most part. We have chosen
to take this route because the growth in out-of-home media is much greater
outside of North America. Countries like China and India hold tremendous
potential as millions within their population rise to world-class levels of
economic prosperity. With this prosperity both new and established consumer
brands try to compete for market share. ActionView hopes to take advantage of
these opportunities in niche markets identified. Large supermarket chains have
also been identified as a viable source of development for the Company which is
currently underway in Australia.

While the United States would appear to be the obvious market
for company pursuit, large scale replacement of traditional static signs that
are already installed would be required to obtain slotting space and numerous
long term competitor contracts are still in effect at the high traffic outlets.
Thus, a strategy of seeking newer, rapidly growing and as yet under-served
marketing opportunities appeared to be a logical course of action to the
Company. Through management contacts and long term relationships, the Company
has established connections in China and Australia and intends to utilize them
as a show and tell demonstration method for rapidly obtaining new business in
these countries as well as using them as an example for market development in
the USA.

China

In May 2005, AVFE entered into a five year revenue sharing
agreement with Chaungrun Media Ltd (Chuangrun), a Hong Kong corporation
operating an established advertising business in China. The Company owns 50.1%
of AVFE and the other 49.9% is owned by a local business group headed by AVFEs
Managing Director, Justin Kwei. AVFE is located at 1102 -148 Electric Road,
Northpoint, Hong Kong. Chuangrun was to have been responsible for obtaining the
site locations and the advertisers for the Company-owned scrolling signs; the
Company, for the delivered cost of manufactured signs; and AVFE, for the
installation and on-going maintenance of the signs.

Through Chuangrun and AVFE, the Company had secured two
contracts at the Guangzhou New Baiyun International Airport in Southern China
for the placement of: (i) 50 double-sided 4x6 Company-owned billboards in the
airport-link outdoor bus stop locations, each scrolling 12 posters; and (ii) 100
indoor panorama 10x5 Company-owned billboards at the international arrivals
and domestic departures locations, each scrolling 3 posters.

The 50 bus stop signs had been manufactured and paid for by the
Company and were ready for installation for most of 2005 and the first half of
2006, subject to many unexpected delays relating to numerous custom design
change requests by Chuangrun Media and the construction / infrastructure methods
used in China to prepare the airport site.

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Due to these delays and misleading information with respect to final installation, the Company became suspicious of Chuangrun and its management and initiated direct contact with the Guangzhou Airport Advertising Management to try and help complete
the project. In the past, the Company had relied exclusively on Chuangrun to liaise with the Airport and had dealt primarily with the management of China Media1, a US listed Company and owner of the Guangzhou Airport contracts, for all information
regarding design changes and installation of the signs.

Chuangrun claimed to have had negotiated advertising contracts with a national Advertising Agency in China, Chi Shang Ling Yue Advertising Agency, for $6.425 million covering their clients use of 60% of the outdoor sign space in the first
full year and $13 million for use of 70% of the indoor sign space in the first full year. The Company was informed that clients secured by the Agency included China Mobile, China Unicom, Ping An Insurance, Samsung, LG, etc. Under the Chuangrun
contracts, the ActionView Group was entitled to approximately 15% of the gross advertising revenues generated from the signs.

In late June 2006, the CEO of ActionView, Rick Mari, initiated a meeting with the Airport and invited the CEO of Chuangrun, Adrian Choi, and the President of China Media One, Ernest Cheung to participate. The purpose of the meeting was to introduce
ActionView management to the Airport and try to finalize the installation requirements. As a result of the meeting, ActionView was encouraged to maintain direct contact with the Airport and subsequently learned that all pre-installation wiring was
not ready, contrary to the information received from Chuangrun and China Media1 many months previous. This initial false claim by Chuangrun prompted ActionView to begin dealing directly with Airport management through the Canadian Consulates
office located in Guangzhou, China.

The Company subsequently severed its relationship and all
  association with China Media1 (OTC: CMDA.OB) and Chuangrun Media Ltd after a
  lengthy investigation into the business practices of both parties. This followed
  the revelation that the contracts they proclaimed to have with the Guangzhou
  Airport Authority in southern China were both non-existant.

Fortunately, ActionView had not released any of the Companys assets relating to the projects Chuangrun and China Media1 were involved in. Consequently, the Company has retained all 50 of the advanced bus stop signs and is currently in active
discussions with two other parties to replace its former partner in China. The Company plans on actively resuming its business development plans in China with a new partner when once additional financing is available.

Hong Kong

In May 2006, the Company and its subsidiary, AVFE Limited, entered into an agreement with Cadence Media of Hong Kong to supply company-owned multiple-scrolling billboards to selected shopping malls managed by The Link Management Ltd, Hong
Kongs largest property management company responsible with 180 retail malls and car park facilities adjacent to 40% of Hong Kongs 7.2 million population.

The first phase of the project involved the supply and installation of 20 Company-owned billboards from inventory into six premium shopping malls, 15 of which were installed. This was intended to establish ActionViews state-of-the-art
billboards as a viable media choice for advertisers in this specialized market. The first advertisers started on the signs in October 2006 but the income was minimal. During the first quarter of 2007, the Company was unable to continue to fund the
development of the Hong Kong project which was subsequently terminated due to lack of funds.

Australia and New Zealand

In June 2005, ActionView Australia (AVAU) entered
  into a three year revenue sharing agreement with Open Media Management Pty Ltd
  (Open Media), an Australian corporation with ties to the advertising
  community and business establishment in Australia and New Zealand. The Company
  has an option to purchase 51% of AVAU for a nominal amount at any time. The
  other 49% owner of AVAU is a local business group headed by AVAUs Managing
  Director. Open Media and AVAU are responsible for obtaining the site locations
  and the advertisers along with installation and on-going maintenance of the
  Company-owned scrolling signs; and the Company is responsible for the delivered
  cost of manufactured signs and on-going technical services, if required.

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Open Media had originally negotiated a contract with IGA Distribution
  Pty Ltd for the placement of approximately 200 scrolling signs in the IGA supermarket
  chain across Australia in 2006 and 2007, which has not materialized to date
  . In 2006, the minimum number of signs was increased to 400 with a further 210
  signs to fill in the balance of the IGA controlled stores allotted for signage.
  Approximately $1.4 million will be required from new fund raising or operating
  cash flows in order to meet the balance of this commitment.

Advertising contracts for the signs are presently being secured through Open Media and its strategic / operational partner, Claude Neon, which is part of a large global outdoor media company. Under the Open Media contract, the ActionView Group is
entitled to approximately 20% of the gross advertising revenues generated from the signs once they are installed and advertising posters are in place. The Company may also go the route of early contract buy out if it deems this to be the best
direction to take. The Company was expecting the Australian project to start before end of 2006; however, continued delays reported by our Australian partner, Open Media, have caused serious doubt about the reality of completion of this project in
the near future.

Vancouver, British Columbia

The Company continues to generate relatively small amounts of revenue from 10 rental signs located in 5 Vancouver shopping malls. Subsequent to December 31, 2006, the Company committed to an active plan to sell this operation and related operating
assets comprised primarily of inventory signs, spare parts and rental signs.

Yellowknife, Northwest Territories, Canada (franchise):The Company continues to receive royalty revenue from the local advertisements placed on 8 ActionView signs sold to this franchise operation in 2004 and 2005. This revenue is expected to
continue into the foreseeable future due to a strong economy in the region.

Las Vegas, USA (franchise):ActionView Nevada Ltd was set up late last year as a new franchise to help develop the lucrative Las Vegas market including: the McCarron International Airport, and bus stop shelters along the Las Vegas strip and
casinos. Other US business opportunities are also being pursued in Las Vegas mainly in market sectors less developed by the major competitors such as convention centers, supermarket chains and auto dealerships. The Company could see meaningful
results from these pursuits during 2007 provided sufficient funding is available.

k) Risk Factors

Investors should consider each of the following risk factors and the other information in this Annual Report, including ActionViews financial statements and the related notes, in evaluating the Companys business and prospects. The risks
and uncertainties described below are not the only ones that impact on ActionViews business. Additional risks and uncertainties not presently known to the Company or that the Company currently considers immaterial may also impair its business
operations. If any of the following risks actually occur, the Companys business and financial results could be harmed. In that case, the trading price of ActionViews Common Stock would probably decline.

Risks associated with ActionView's own business and products

1. The advertising services industry could be impacted by global economic weakness which reduces advertising expenditures and which could negatively affect the Company's revenues and operating results.

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To the extent that the global and local economies are weak, the Company will face diminished ad revenues and sign sales, which may be material to the Companys operations. The magnitude of such risk cannot be predicted with any degree of
certainty.

2. ActionView lacks an operating history and has accumulated significant losses that may or may not continue into the future. If the losses continue, the Company might have to suspend or cease operations.

3. ActionView will derive most of its revenues from sales outside North America and numerous factors related to international business activities subject the Company to risks that could reduce the demand for its products and negatively affect its
operating results. External risks include currency risks, foreign governmental regulation, foreign governmental and economic instability, lack of accessibility to clients and customers in foreign countries, and the inability to collect receivables
from foreign clients and customers may all adversely effect the Company. Any combination of these factors would compound the risks to the Company and could result in significant harm to the Companys operations abroad and thus its results of
operations.

4. ActionView depends primarily upon two suppliers for the components to produce its sign products. Any disruptions in the operations of, or the loss of, these suppliers could harm the Company's ability to meet its delivery obligations to its
customers and could increase its cost of sales. If the Company is unable to promptly replace one or both of its suppliers, it would be unable to meet its contractual obligations and would not be able to manufacture products which the Company relies
upon for its revenues. A reduction or interruption in sign product supply or a significant increase in product prices could have a material adverse effect on ActionView's business and profitability.

5. Defects or errors in ActionView's products or in the components made by its principal suppliers could harm the Company's relations with its customers and expose it to forms of product liability. Similar problems related to the products of
ActionView's customers would also harm its business. If ActionView experiences any product liability claims or recalls, the Company may also incur significant expenses and experience decreased demand for its products.

6. ActionView's business and operations would suffer if its sign products or systems fail. Problems with or failure of the Companys products might result in a recall of the systems. The need to repair or replace the systems would likely result
in the loss of revenues and additional expenses incurred by the Company to repair the problems. Additionally, the Company would likely lose customers and accounts if the sign systems failed. The failure of a significant number or percentage of the
Companys systems and/or the loss of a significant number of the Companys customers could have a material adverse effect on ActionView's business and profitability.

Risks associated with ActionView's industry

7. The out-of-home advertising services industry is subject to rapid technological change that ActionView must keep pace with to successfully compete. The Companys inability to adapt to technological change or compete in the Companys
line of business would result in the loss of the Companys customers, the inability to obtain new customers and market share and would have a material adverse effect on ActionView's business.

8. ActionView faces significant competition from much larger companies with greater experience and resources. The Companys inability to compete in the Companys line of business against larger companies would result in the loss of the
Companys customers, the inability to obtain new customers and market share and would have a material adverse effect on ActionView's business.

9. Currency fluctuations could negatively affect future product sales or advertising revenue and harm

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ActionView's ability to collect receivables. Because a portion of the Companys business is conducted in foreign currencies, the Company is subjected to foreign currency risks, including adverse trends in valuation or exchange rates, exchange
and transfer fees, inflation and other economic uncertainties not faced by companies which do not transact their business in foreign currencies.

10. ActionView's business and operating results may be harmed by inflation and/or deflation.

11. Government regulation or any change in such regulation may adversely affect ActionView's business. Governmental regulation of the industry or specific products which the Company manufactures and sells may increase the costs associated with such
business or may make the business unprofitable to the Company. Any regulation or laws which hinder the Companys ability to sell its products or which increases its costs would have a material adverse effect on ActionView's business.

Risks associated with ActionView and its subsidiaries

12. ActionView's stock price is volatile with wide fluctuations in the past that are likely to continue in the future. The Companys common stock trades domestically on the OTC-BB, a relatively illiquid and extremely volatile market. In order
to maintain its listing status on the OTC-BB, the Company must file periodic reports with the SEC in a timely manner. If the Company does not maintain its reporting status it may have its securities delisted from the OTC-BB.

13. A small number of ActionView's stockholders own a substantial amount of the Company's Common Stock, and if such stockholders were to sell those shares in the public market within a short period of time, the price of ActionView's Common Stock
could drop significantly.

14. ActionView may not be able to attract and retain qualified personnel necessary for the implementation of its business strategy. If the Company is not able to attract or retain qualified personnel, it is likely that the Company would be unable to
remain competitive in its business resulting in a material adverse effect on ActionView's operations.

15. ActionView's business and operating results will be harmed if it is unable to successfully manage growth in its business.

16. ActionView does not expect to pay dividends in the foreseeable future. Because the Company does not intend to pay dividends in the foreseeable future, the potential return on an investors investment in the Companys common stock
cannot include any dividend income.

17. Penny Stock rules may make buying or selling ActionView's Common Stock difficult, and severely limit market liquidity. The Companys common stock is defined as a penny stock under applicable federal securities laws.
As such, the Companys shares are more difficult to purchase and sell than other securities not subject to the penny stock rules.

Additional Risks

18. Future equity financings may dilute your ownership interests. The Company relies upon the availability of equity capital to fund its growth, which financing may or may not be available on favorable terms or at all. We cannot guarantee that
additional financing, refinancing or other capital will be available in the amounts we desire or on favorable terms.

19. As of the date of this prospectus we have raised equity capital through the issuance of shares of our restricted common stock and will continue to do so for the foreseeable future. Subject to the implementation of our ongoing plan of operations
and any revenues generated in relation thereto, we anticipate continuing to rely on equity sales of our common stock in order to fund our business operations.

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Issuances of additional shares will result in dilution to our
existing stockholders. There is no assurance that we will achieve any additional
sales of our equity securities or arrange for debt or other financing to fund
our planned business activities.

20. The Company does not carry Directors and Officers Liability
Insurance coverage which would reduce the ability of investors to recover
damages in the case of a claim against the Company and or its officers and
directors for breach of duties or other liability claims.

ITEM 2 DESCRIPTION OF PROPERTIES

The Company does not own any real estate property as of
December 31, 2006.

In addition, the Company, through its wholly-owned subsidiary,
Action View Advertising Systems, Inc. rents an administrative office on
month-to-month basis at 1892 West Broadway Ave., Suite 200, Vancouver BC, V6J
1Y9 and a small warehouse.nearby. The monthly rent for the office is $860,
excluding common area charges, effective January 1, 2007.

ITEM 3 LEGAL PROCEEDINGS

Management is not aware of any legal proceedings (either
presently engaged in or contemplated) by any government authority or other party
involving the Company or its properties, except for a small claim from its
former landlord amounting to approximately $9,200 regarding removal of certain
fixtures belonging to the Company. The Company disputes the claim, considers it
to be without merit and plans to defend itself against this claim.

No directors, offices, or affiliate of the Company is (i) a
party adverse to the Company in any legal proceedings, or (ii) has an adverse
interest to the Company in any legal proceedings.

ITEM 4 SUBMISSION OF MATTERS FOR VOTE OF SECURITY
HOLDERS

None

PART II


ITEM 5 MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS

Market Information

The Companys Common Stock is traded on the OTC Bulletin Board
under the trading symbol AVWI. Set forth below is the range of high and low
bid quotations for the periods indicated as reported by the OTC Bulletin Board.
The market quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and may not necessarily represent actual
transactions.

2006
    2005High Bid
    Low Bid
    High Bid
    Low BidFirst Quarter
    0.095
    0.061
    0.115
    0.06Second Quarter
    0.100
    0.046
    0.16
    0.07Third Quarter
    0.065
    0.036
    0.13
    0.08Fourth Quarter
    0.055
    0.036
    0.11
    0.075


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As of December 31, 2006, the Company had 215 shareholders of record, excluding approximately 47% of issued and outstanding shares held in street name by CEDE & Co.

Dividends

Holders of common stock are entitled to receive dividends as may be declared by the Board of Directors and, in the event of liquidation, to share pro-rate in any distribution of the Companys assets after payment of liabilities. The Board of
Directors is not obligated to declare a dividend. No dividends have ever been declared or paid by the Board of Directors of the Company on its common stock. The Companys losses prevent the Company from paying any cash dividends, and the
Company does not intend to pay cash dividends on its common stock in the foreseeable future.

Recent Sales of Securities

A summary of the shares of common stock issued by the Company for each of the last three years is presented below:

During the year ended December 31, 2005:

(i)
  the Company implemented a Retainer Stock Plan which was filed on a Form S-8
  Registration Statement in January 2005. Under the Plan, a total of 3,000,000
  shares of common stock can be issued to compensate directors, employees and
  consultants for services rendered to the Company at prices and terms to be determined
  by the Board of Directors.

(ii)
  the Company issued 3,025,000 units under Private Placement for cash consideration
  of $250,000 at prices ranging from $0.08 to $0.10 per unit. Each
  unit consists of one share of restricted common stock and a non-transferable
  share purchase warrant entitling the holder to purchase one-half share of restricted
  common stock at an exercise price of $0.17 for one year expiring by June
  30, 2006. The fair value of the warrants was estimated to be $25,000 and
  was recorded as a separate component of stockholders equity.

(iii)
  the Company issued 1,275,177 shares of registered common stock in return for
  consulting services with a fair value of $124,760 regarding the preparation
  of legal contracts, continuous disclosure documents, business planning and sales
  & marketing at prices ranging from $0.07 to $0.10 per share.

(iv)
  the Company issued 437,500 shares of restricted common stock in return for business
  consulting services valued at $43,500.

(v)
  the Company issued 1,468,000 shares of registered common stock for the settlement
  of accounts payable of $146,800.

(vi)
  the Company issued 2,500,000 shares of restricted common stock for the settlement
  of $200,000 of amounts owing to Company officers who are also directors.

(vii)
  the Company issued 231,390 shares of restricted common stock as an equity inducement
  with a fair value of $23,129 for $335,700 of promissory notes payable.

(viii)
  the Company issued 1,285,700 shares of restricted common stock as an equity
  inducement with a fair value of $141,427 for a $225,000 convertible
  term loan.

During the year ended December 31, 2006:

(i)
  the Company registered an additional 3,000,000 shares of common stock under
  its 2005 Retainer Stock Plan on a Form S-8 Registration Statement. Under the
  Plan, these shares can be issued to compensate directors, employees and consultants
  of the Company for services rendered to the Company at prices and terms to be
  determined by the Board of Directors.

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(ii)
  the company issued 228,000 shares of Rule 144 restricted common stock for cash
  consideration of $20,178,

(iii)
  the company issued 2,329,449 shares of registered common stock for various consulting
  services with a fair value of $161,802 regarding the preparation of legal contracts,
  continuous disclosure documents, business planning and sales & marketing
  services at prices ranging from $0.04 to $0.10 per share.

(iv)
  the company issued 520,238 shares of restricted common stock for conversion
  of half of one promissory note payable with a fair value of $21,850.

(v)
  the company issued 98,450 shares of restricted common stock with a fair value
  of $6,934 as equity inducement for two promissory notes amounting to $32,000
  and for all promissory note holders agreeing to change their interest payments
  from quarterly in advance to quarterly in arrears.

Exchangeable shares

The 8,422,675 exchangeable shares were issued to a trustee of
the two officers and directors of the Company as part of the acquisition of AASI
and 612 Canada in September 2003. The holders of these Exchangeable Shares may,
at any time, require 612 Canada to repurchase the Exchangeable Shares for an
amount equal to the then current market value of the Companys common stock. 612
Canada may, at its option, satisfy the resulting obligation to repurchase the
exchangeable shares in cash or it may elect to have the obligation satisfied by
the issuance of shares of the common stock of the Company on the basis of one
common share for one exchangeable share. The holders of the exchangeable shares
have been granted voting rights on a basis of on vote for every exchangeable
share held. During the year ended December 31, 2003, 350,000 exchangeable shares
were exchanged for shares of the Company at $0.30 each, leaving 8,072,675
exchangeable shares issued and outstanding as at December 31, 2006 and 2005.

Stock Options

A summary of the Companys outstanding stock options as of
December 31, 2006 and 2005 and changes during these years is presented
below:

|                            | 2006    |          | 2005        |         
|--------------------------- | ------- | -------- | ----------- | --------
|                            |         | Exercise |             | Exercise
|                            | Options | Price    | Options     | Price   
|                            |         |          |             |         
|Balance, beginning of year  | -       | -        | 1,275,000   | $0.50   
|                            |         |          |             |         
|Granted                     | -       | -        | -           | -       
|                            |         |          |             |         
|Exercised/expired/cancelled | -       | -        | (1,275,000) | -       
|                            |         |          |             |         
|Balance, end of year        | -       | -        | -           | $0.50   

Warrants

During the year ended December 31, 2005, the Company
issued two lots of warrants as follows:

21

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i)
  1,512,500 warrants to purchase 1,512,500 shares of the Companys common
  stock at $0.17 per share as part of a private placement. These warrants
  initially expired on June 15, 2006 which was extended to June 30, 2007 in 2006.

ii)
  768,750 warrants to purchase 768,750 shares of the Companys common stock
  at $0.10 per share as part of a convertible debt instrument with two investors.
  These warrants have an indefinite expiry date.

During the year ended December 31, 2006, the Company issued 90,000 warrants to purchase 90,000 shares of the Companys common stock at $0.13 per share as part of a consulting agreement. These warrants expire in three years from date
of issuance by February 14, 2009. In addition, the Company extended terms by one year to June 30, 2007 on 1,512,500 warrants. All other warrant terms remain unchanged.

Dilutive securities

At December 31, 2006, the Company had 11,637,675 potentially dilutive securities outstanding (December 31, 2005  12,438,925) in the form of exchangeable shares (8,072,675), stock purchase warrants (2,796,250), and convertible loans (768,750).

Subsequent to December 31, 2006, the Company received notice of default from CLX requesting conversion of the loan into 8,907,100 common shares of the Company stock. If converted, convertible promissory notes and loans could result in the Company
issuing approximately an additional 18,200,000 shares.

ITEM 6 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

The following discussion should be read in conjunction with the Companys consolidated financial statements and the notes related thereto which have been audited and prepared in accordance with the accounting principles generally accepted in
the United States of America. The discussion of results, causes and trends should not be construed to imply any conclusion that such results, causes or trends will necessarily continue in the future.

a) Brief Company History and Development

ActionView International, Inc. formerly known as Acquisition Media, Inc. was incorporated on January 26, 1986, as Vantage, Inc., under the laws of the State of Nevada. It currently trades on the OTC Bulletin Board under the symbol "AVWI" and is
referred to in this Form 10-KSB as the "Company", the "Registrant" or the "Issuer".

Following a number of name changes since incorporation, the Company changed its name again to ActionView International, Inc. on August 20, 2003. This was done to better reflect its new business operations during the process of acquiring 100% of
ActionView Advertising Systems, Inc. (ActionView) and related Intellectual Property Rights through its 100% owned subsidiary company, 6126421 Canada Ltd (612 Canada). These acquisitions closed in September 2003.

The Company custom-designs, markets and manufactures illuminated
  programmable motion billboard signs for use in airports, mass transit stations,
  shopping malls and other high traffic advertising locations designed to reach
  people on the go with targeted messaging. The Companys business model
  has three main revenue sources: (i) advertising revenues from Company- owned
  signs placed in high traffic locations being shared with Ad Agencies, location
  owners and local business partners; (ii) revenues from start-up franchise fees,
  from on-going royalty fees on advertising revenues generated on the signs sold
  to the franchisees, and from fees on signs when sold by the franchisees to 3rd
  parties. and (iii) sale of signs to franchise operators or large volume customers
  This has been the Companys primary business since its inception.

22

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The Business

The business plan is based upon the Company maintaining ownership of its manufactured signs to generate recurring monthly revenues from signs placed under long term contracts into airports, train stations, convention centers, shopping malls,
supermarkets, department stores, movie theatres, gas stations, and other high traffic locations. The revenues from Company-owned signs will be shared with the sellers of the advertising and the sign location landlord.

The Companys billboard signs utilize digital motor controllers and proprietary source code for enhanced performance and offer the following advantages over their stationary counterparts: (i) the display of multiple advertisements in a single
location, typically where space is at a premium and (ii) the necessary movement to attract the attention of passersby. (studies have shown that motion billboard advertising increases the likelihood of attracting attention by 3 to 4 times over static
billboards) The Company targets the point of purchase advertising market in North America and the outdoor advertising market in the China/Hong Kong, Australia and the Middle East. The significant developments in China and Australia are described
more fully below.

The Company also sells its signs to locally based franchises and receives royalty income from the advertising revenues generated by those signs. The Company also intends to sell custom manufactured less sophisticated scrolling signs to customers on
a large volume basis.

The History

The ActionView 4 feet x 6 feet life sized backlit scrolling sign has been researched and developed under the guidance of its founder, Rick Mari, for over 6 years. Site testing has been conducted in the malls and business concourses of Vancouver,
Canada with the support of local and national advertisers. In Vancouver rental signs have been installed and ad revenues have been realized since 2003 in three separate shopping centres.

The R&D process resulted in a product that is versatile, attractive and technically ahead of its competitors because of its sophisticated digitally controlled electronic components and high quality mechanics.

Manufacturing was moved off-shore from Canada to China in 2003 in order to benefit from the mass manufacturing capabilities and economies of scale in China. The Companys signs are being assembled in China by a team of design engineers and
computer technicians located in Guangdong Province, China.

Sales of the ActionView product began with a franchising program that exposed the product to shopping mall markets in Canada and the United States. Over the past three years, the Company has tried to expand its business model to international
markets through strategic alliances for the ActionView product in conjunction with revenue sharing programs with only limited success.

The detailed arrangements regarding the acquisition of ActionView Advertising Systems Inc in September 2003, including related Intellectual Property Rights, are described fully in Item 1 (a) of this report.

b) Critical Accounting Policies and New Accounting Pronouncements

The Company believes the estimates, assumptions and judgments
  involved in the accounting policies described below have the greatest potential
  impact on its financial statements. They are considered to be the most critical
  accounting policies. Because of the uncertainty inherent in these matters, actual
  results could differ from the estimates used in applying the critical accounting
  policies. Within the context of these critical accounting policies, the Company
  not currently aware of any reasonably likely event that would result in materially
  different amounts being reported.

23

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Revenue Recognition

ActionView generates or plans to generate its revenue primarily from three sources:

i) revenue from sale of advertising  earned when Company-owned signs are placed in point-of-purchase and high traffic advertising locations. This revenue is shared with the ad agencies who sell the advertising, the location owners and the
local business partners who put the contracts together, and is recognized over the period when the advertising is provided.

ii) revenue from franchise operators  earned from start-up franchise fees, from on-going royalty fees on advertising revenues generated on the signs sold to the franchisees, and from fees on signs when sold by the franchisees to 3rd
parties. Non-refundable franchise fees are earned when all material services relating to the sale have been substantially performed by the Company including arranging the franchise agreements and providing initial training services and related
materials.

iii) revenue from sale of signs  earned when signs are sold to franchise operators or large volume customers.

Revenue from all sources is recognized when the amount is fixed or determinable, delivery has occurred or initial services have been performed, and collection is reasonably assured. Any amounts received in advance of the goods being delivered or
services being performed are recorded as deferred revenue.

Signs manufactured for inventory and/ or fixed assets

Signs manufactured for sale to franchisees and other customers, located primarily in North American markets, are recorded as inventory at laid down cost when the signs are received and disclosed  for financial reporting purposes at the lower of cost
or net realizable market value. Cost of sales is recorded on the first-in first-out basis.

Signs manufactured for rental to ad agencies and/or sign location landlords, located primarily in offshore markets, are recorded as fixed assets at laid down cost. Cost is amortized on a straight line basis less residual value over the estimated
useful life of 5 years. The book value of rental signs is reviewed for impairment whenever circumstances indicate that it exceeds fair value and the full amount is not recoverable from undiscounted future cash flows.During the annual
impairment review, the Company determined that the carrying value of its fixed assets at December 31, 2006, was fully impaired.

Impairment of goodwill and intangible assets

The Company has adopted the provisions of the Statement of Financial Accounting Standards No. 142 (SFAS 142), Goodwill and Other Intangible Assets. Goodwill and other intangible assets with indefinite lives are no longer
amortized under SFAS 142, but instead are tested for impairment at least annually. In addition, intangible assets with a definite life are amortized over that expected life and tested for impairment at least annually or whenever events or
circumstances indicate a revision to the remaining period of amortization is warranted.

Prior to December 31, 2005, goodwill arising from the acquisition of ActionView in September 2003 was carried at fair value and the cost of Intellectual Property Rights acquired was amortized on a straight line basis over 10 years. The determination
of any impairment of goodwill and Intellectual Property Rights includes a comparison of net carrying value with estimated future operating cash flows anticipated during the remaining life; and is dependent on the Companys ability to continue
operating as a going concern. During the year ended December 31, 2005 and in accordance with the provisions of the Statement of

24

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Financial Accounting Standards No. 142 (SFAS 142), Goodwill
and Other Intangible Assets, the Company wrote down its Intellectual Property
Rights and Goodwill to nominal value of $1 resulting in an asset impairment of
$2,138,787.

Impairment of operating assets

Due to the delays in generating revenue from the sale or rental
of scrolling billboard signs and the lack of profitability to date, the Company
has determined there is significant uncertainty as to the realization of the
carrying value of substantially all of its remaining assets. Accordingly, these
assets have either been written off or written down to estimated recoverable
amounts. The following specific events occurred in the second half of 2006
leading to this decision:

| | (i)   | the August 2006 termination of AVFEs contract with
      Chuangrun Media Ltd regarding the installation of 150 motion billboard
      signs following the revelation that the contracts it proclaimed to have
      with the Guangzhou Airport Authority in southern China were both
      fraudulent and counterfeit;
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                        
| | (ii)  | the significant delay in shipping 400 motion billboard
      signs to Australia;                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                        
| | (iii) | the inability to maintain the contract for rental signs
      at the retail shopping malls in Hong Kong; and                                                                                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                                                        
| | (iv)  | the on-going difficulty for the Company to raise working
      capital to carry on its business.                                                                                                                                                                                                                       

Accordingly, the Company has recorded an operating asset
impairment provision of $379,134 for the year ended December 31, 2006 comprised
of the following:

Provision for uncollectible accounts
      receivable
    $ 13,093Write down of inventory to net realizable
      value
    88,844Write down of rental signs to recoverable
      amounts
    231,816Unamortized balance of deferred finance
      charges written off
    42,091Unamortized balance of accretion expense
      written off
    3,290Total operating asset impairment
    $379,134


Subsequent to the year end, the Company committed to an active
plan to sell certain of the above rental signs and inventory.

Recent accounting pronouncements

The Company believes that all four of the recent accounting
pronouncements identified in the notes to the financial statements will have no
impact on the financial statements of the Company. These are:

| | i)   | Fair Value Measures (SFAS No.157) issued by the
      Financial Accounting Standards Boards (FASB) in September 2006
      effective for fiscal years ending after November 15, 2007.                                                                                                  
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                             
| | ii)  | Employers Accounting for Defined Benefit Pension and
      Other Postretirement Plans (SFAS No. 158) issued by FASB in September
      2006 effective for fiscal years ending after December 15, 2006.                                                                                   
| |      |                                                                                                                                                                                                                                                                                             
| | iii) | Considering the Effects of Prior Year Misstatements
        when Quantifying Misstatements in Current Year Financial Statements
        (SAB No. 108) issued by the Securities and Exchange Commission in September
        2006 effective for fiscal years ending after November 15, 2006

25

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| | iv) | The Fair Value Option for Financial Assets and Financial Liabilities
      (SFAS No.159) issued by FASB in February 2007 effective for fiscal years
      ending after November 15, 2007.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

c) Results of Operation

The financial statements for the year ended December 31, 2006 (2006 year) are compared below to the financial statements for the year ended December 31, 2005 (2005 year).

Net Sales

The Company reported revenues of $86,755 for the 2006 year compared to $83,182 for the 2005 year. This $3,573 revenue increase was the result of much higher advertising revenue from signs placed in five Vancouver shopping malls due to
employing a commissioned sales rep for the full year, partially offset by much lower sign sales to franchisees and other customers, lower royalties from and sales of spare parts to existing franchisees. Advertising revenue from Company-owned signs
at the Guangzhou airport, fully expected at the beginning of 2006, did not materialize when it was revealed by the Airport Authority that the contracts proclaimed by Chuangrun Media and China Meda1 were fraudulent and counterfeit.

Gross Profit

The Company realized a 52% gross margin in the 2006 year, generating a gross profit of $44,690 compared to 53% and $43,962 in the 2005 year.

Operating Expenses

The Company reported operating expenses of $1,142,257
  in the 2006 year compared to $1,196,396 in the 2005 year. This net $54,139
  decrease in the 2006 year was due to the following:

Operating expense decreases

| |  | decrease in product development expenses to $125,198 from $134,938
      due to reclassification from lower base figures in 2006 than 2005.                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                  
| |  | significant decrease in depreciation and amortization expense to $79,847
      from $267,805 following the December 31, 2005 year end impairment write
      down and no related amortization of intellectual property in 2006.                  
| |   |                                                                                                                                                                                                                                                  
| |  | significant decrease in office and administration expenses to $106,464
      from $158,795 due to cutback in overhead expenses following collapse
      of the Guangzhou Airport project and the continuing delay of the Australian
      project
| |   |                                                                                                                                                                                                                                                  
| |  | significant decrease in investor relations expense to $11,041 from
      $108,722 due to fewer press releases and less use of market advice services
      following demise of the Guangzhou project in August 2006.                             
| |   |                                                                                                                                                                                                                                                  
| |  | decrease in professional fees to $68,755 from $77,971 due to lower
      audit fees resulting from reduced business activity following the demise
      of the Guangzhou project. Legal costs were quite low in both years.                      

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| |                            | a $5,253 gain on foreign exchange in the 2006 year compared to a $12,385
      loss in the 2005 year due to weakening of the US dollar                                                                                                                                                 
| | --------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                             |                                                                                                                                                                                                                                                                                        
| | Operating expense increases
| |                             |                                                                                                                                                                                                                                                                                        
| |                            | increase in marketing and business promotion expenses to $102,231
        from $76,078 due to significantly increased efforts to make a business
        deal in the Australian and Las Vegas markets.                                                                                 
| |                             |                                                                                                                                                                                                                                                                                        
| |                            | increase in salaries and management fees to $323,083 from $279,215
      due to a sizeable year end management compensation accrual for the two principals
      to compensate them for their personal funding of essential on-going Company
      expenses in the 2ndhalf of the year.
| |                             |                                                                                                                                                                                                                                                                                        
| |                            | significant increase in consulting fees to $30,000 from $3,750
        due to 2006 first quarter business consulting regarding management advertisement
        and strategic planning not applicable in 2005.                                                                         
| |                             |                                                                                                                                                                                                                                                                                        
| |                            | significant increase in finance and interest expense to $300,891 from
      $76,737 due to approximately $675,000 of interest bearing debt outstanding
      throughout the 2006 year compared to a much lower average debt in the 2005
      year.                                    

Asset Impairments

Due to the delays in generating revenue from the sale or rental of scrolling billboard signs and the lack of profitability to date, the Company determined there is significant uncertainty as to the realization of the carrying value of almost all of
its remaining assets. Accordingly, these assets (accounts receivable, inventory, property & equipment and deferred finance charges) have either been written off or written down to estimated recoverable amounts giving rise to an asset impairment
provision of $379,134 as of December 31, 2006.

This followed the Companys decision as of December 31, 2005 to write off the carrying value of Intellectual Property Rights ($1,707,216) and Goodwill ($431,572) during its annual asset impairment review, primarily due to the
installation delays at the Guangzhou Airport and for accounting and transparency reasons.

Net Loss

The net loss decreased to $1,476,701 in the 2006 year from $3,291,221 in the 2005 year mainly due to a $1,759,653 decrease in asset impairment losses in 2006 and a $54,139 decrease in operating expenses in 2006, both explained in
detail above.

d) Liquidity and Capital Resources

At December 31, 2006, the Company had a working capital deficiency of $1,415,760, including a bank loan of $42,715, compared to a working capital deficiency of $230,793, including a cash balance of $96,434 at December 31, 2005.

The $139,149 decrease in cash in the 2006 year ($147,213
  increase in cash during the 2005 year) was due to the following:

| |  | Net cash used in operating activities was $466,897 in the 2006 year
      ($679,172 in the 2005 year) arising from the net loss for the year significantly
      offset by the add-back of non-cash charges including stock-based operating
      expenses, debt financing costs, and the operating asset impairment along
      with an increase in accounts payable and accruals.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27

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| |  | Net cash used in investing activities was $nil in the 2006 year ($205,985
      in the 2005 year) since no rental signs were manufactured in 2006 like the
      ones built for the Guangzhou project and some for the Australian project
      in 2005.                                                                                      
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Net cash flow from financing activities was $327,748 in the 2006 year
      ($1,032,370 in the 2005 year) arising primarily from related party transactions,
      including both personal loans and accrued but unpaid compensation, proceeds
      from new promissory notes and proceeds from sale of common stock early in
      the year.

As at December 31, 2006, the Company had third party debt obligations totaling
  $737,092 as follows:

(i) HSBC Bank of Canada (HSBC) line
of credit of $42,715, bearing interest at HSBC prime plus 1.55% per annum
repayable on demand.

(ii) Convertible promissory notes of
$383,850, bearing interest at 15% per annum repayable in cash or shares at the
option of the note holder one year from the date of issuance. As of December 31,
2006, none of the nine promissory notes were in default notwithstanding the fact
that 3 of them, totaling $180,000, matured in January 2007.

(iii) Business Development Corporation
(BDC) loan of $13,730, bearing interest at BDC prime plus 4% per annum with
monthly principal repayments of $686 (Cdn $800) plus interest commencing October
2002 and maturing March 2008.

(iv) BDC loan of $10,297 bearing
interest at BDC prime plus 2% per annum with monthly principal repayments of
$686 (Cdn $800) plus interest commencing June 2002 and maturing November 2008.

(v) Convertible non-interest bearing
loans of $61,500 with unspecified repayment terms.

(vi) CLX Investment Company line of
credit of $225,000, bearing interest at 8% per annum. Notice of repayment
default was received by the Company subsequent to December 31, 2006.

The Company's continuation as a going concern is uncertain and
dependant upon successfully bringing its products and services to market;
achieving profitable business operations in the future; and obtaining additional
sources of financing to sustain its operations, the outcome of which cannot be
predicted at this time. In the event the Company cannot obtain the necessary
funds, it will be necessary to delay, curtail or cancel further development of
its products and services.

e)Plan of Operation for Next Twelve
Months

China

The Company has severed its relationship and all association
with China Media1 (OTC: CMDA.OB) and Chuangrun Media Ltd after a lengthy
investigation into the business practices of both parties revealed that they
were raising funds and inducing business associates with forged contracts.

Chuangrun owner and CEO, Hangxion Cai AKA Adrian Choi is also
the Chairman and largest shareholder of China Media1 , a US listed OTC company
(CMDA.OB). The parties had knowingly been using fraudulent contract documents
with forged signatures in an effort to advance their business with the
Company.

28

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During the summer of 2006 ActionView headed up the
investigation along with the Canadian Government Consular staff in Guangzhou
China which eventually uncovered the scam created by Hangxion Cai and his two
Companies, Chuangrun Media and China Media1.

Fortunately, ActionView had not released any of the Companys
assets relating to the projects Chuangrun and China Media1 were involved in.
Consequently, the Company has retained all 50 of the advanced bus stop signs and
is currently in active discussions with two other parties to replace its former
partner in China. The Company plans on actively resuming its business
development plans in China with a new partner when and if additional finances
are available.

Item 1(j) in this report provides more background on this
situation,

Hong Kong

In May 2006, the Company and its subsidiary, ActionView Far
East Limited, entered into an agreement with Cadence Media of Hong Kong to
supply company-owned multiple-scrolling billboards to selected shopping malls
managed by The Link Management Ltd, Hong Kongs largest property management
company responsible for 180 retail malls and car park facilities adjacent to 40%
of Hong Kongs 7.2 million population.

The first phase of the project involved the supply and
installation of 20 Company-owned billboards from inventory into six premium
shopping malls, 15 of which were successfully installed in third quarter of
2006. This would establish ActionViews state-of-the-art billboards as a viable
media choice for advertisers in this specialized market. Following successful
completion of a test period, the intention was to expand the project to include
substantially all properties managed by The Link Group. The first advertisers
started on the signs in October 2006 but the income was minimal pending the
installation of significantly more signs. Subsequent to December 31, 2006, the
Company became unable to continue the development of this project due to lack of
funds.

Australia and New Zealand

Open Media had originally negotiated a contract with IGA
Distribution Pty Ltd for the placement of approximately 200 scrolling signs in
the IGA supermarket chain across Australia in 2006 and 2007. In 2006, the
minimum number of signs was increased to 400 with a further 210 signs to fill in
the balance of the IGA controlled stores allotted for signage. Approximately
$1.4 million will be required from new fund raising or operating cash flows in
order to meet the balance of this commitment.

Advertising contracts for the signs are presently being secured
through Open Media and its strategic / operational partner, Claude Neon, which
is part of a large global outdoor media company. Under the Open Media contract,
the ActionView Group is entitled to approximately 20% of the gross advertising
revenues generated from the signs once they are installed and advertising
posters are in place. The Company may also go the route of early contract buy
out if it deems this to be the best direction to take. The Company was expecting
the Australian project to start before end of 2006; however, continued delays
reported by our Australian partner, Open Media, have caused serious doubt about
the reality of completion of this project in the near future.

Vancouver, British Columbia: The Company continues to
generate relatively small amounts of revenue from 10 rental signs located in 5
Vancouver shopping malls. Subsequent to December 31, 2006, the Company has
committed to an active plan to dispose of this operation and related operating
assets comprised primarily of inventory signs, spare parts and rental signs.

Yellowknife, Northwest Territories, Canada (franchise):The
  Company continues to receive royalty revenue from the local advertisements placed
  on 8 ActionView signs sold to this franchise operation in 2004 and 2005. This
  revenue is expected to continue into the foreseeable future due to a strong
  economy in the region.

29

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Las Vegas, USA (franchise):ActionView Nevada Ltd was
  set up late last year as a new franchise to help develop the lucrative Las Vegas
  market including: the McCarron International Airport, and bus stop shelters
  along the Las Vegas strip and casinos. Other US business opportunities are also
  being pursued in Las Vegas mainly in market sectors less developed by the major
  competitors such as convention centers, supermarket chains and auto dealerships.
  The Company can see meaningful results from these pursuits during 2007 provided
  sufficient funding is available.

Product Development

The Company's design and production staff was successful in
developing several new products and support technologies over the last two years
which helped to create the new advanced signage for the Guangzhou Airport
project. The most significant of these new products was the designing and
manufacturing of the ActionView double-sided 12 poster scrolling sign combined
with an LED display attached on top. The LED feature is intended to convey
messages to the general public in the airport. The scrolling posters would have
generated revenue for the airport from the advertising displayed on them.

The Company is committed to continuing its product development
efforts in order to meet ongoing customer demands for new and improved products
as described in Item 1b), subject to the availability of much needed working
capital. There has only been very little effort in this important area for the
last six months due to a serious working capital shortage.

Expected profitability and capital requirements

The Companys primary goal over the next three months is to
place or sell the existing inventory produced for the Guangzhou Airport and to
begin the Australian project. Should these potential contracts come to fruition
over the next three to six months, the 2007 revenues for the ActionView Group
will be significantly higher. However, the pursuit of these ventures is entirely
dependent on the Companys ability to secure sufficient funding.

This business plan requires the Company to raise approximately
$2.0 million in financing over the next three to six months from either
traditional equity sources or more creative sources like sale and leaseback
arrangements which have long been under negotiation. The approximate use of the
funds will be as follows:

Sign manufacturing
      $1,500,000Working capital for on-going operating expenses
      $ 350,000Product development
      $ 100,000Contingency allowance
      $ 50,000Total
      $2,000,000


However, there are various risk factors beyond the Companys
control. There can be no assurance it will be able to obtain the additional
financing required to meet objectives. Failure to do so could result in the
Company being unable to meet its commitments and continue its operations.

Additions to Management Team

The Company plans to expand its management team with two key
appointments, Director of Sales & Marketing for North America and Chief
Financial Officer, when and if significant revenues begin to flow in 2007. These
positions are now contracted-out on a variable cost basis.

30

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f) Contractual Obligations and Off-Balance Sheet
Arrangements

The following table provides a summary of the Companys
  current third party contractual obligations, all for borrowed monies, at December
  31, 2006:

HSBC Bank of Canada line of credit
    $
      42,715Convertible promissory notes (1)
    
      383,850Two BDC loans
    
      24,027Convertible non-interest bearing loans
    
      61,500CLX Investment Company convertible line of
      credit (2)
    
      225,000Total contractual obligations
    $
      737,092


(1) may be converted into common stock of the Company at a 15%
discount to the volume weighted average price during the 10 days prior to the
due dates after one year from issuance at the note holders option. At December
31, 2006, none of the notes were in default.

(2) notice of default was received subsequent to December 31,
2006 calling for payment in 8,907,100 restricted shares of the Company

As of the date of this Report, the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors. The
term "off-balance sheet arrangement" generally means any transactions, agreement
or other contractual arrangement to which an entity unconsolidated with the
Company is a party, under which the Company has (i) any obligation arising under
a guarantee contract, derivative instrument or variable interest: or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support of such
assets.

g) Inflation

Management does not believe that inflation has had or will have
a material adverse affect on its operations.

h) Uncertainties Relating to Forward Looking
Statements

This Form 10-KSB Annual Report contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements may be identified by their use of words like plans,
expect, aim, believe, projects, anticipate, intend, estimate,
will, should, could and other expressions that indicate future events and
trends. All statements that address expectations or projections about the
future, including statements about the Companys strategy for growth, product
development, market position, expenditures and financial results are
forward-looking statements.

All forward-looking statements are made as of the date of
filing of this Form 10-KSB and the Company disclaims any duty to update such
statements.

The Company may, from time to time, make oral forward-looking
  statements. The Company strongly advises that the above paragraph and the risk
  factors described in this annual report and in the Companys other documents
  filed with the United States Securities and Exchange Commission should be read
  for a description of certain factors that could cause the actual results of
  the Company to materially differ from those in the oral forward-looking statements.
  The Company disclaims any intention or obligation to update or revise any oral
  or written forward-looking statements whether as a result of new information,
  future events or otherwise.

31

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ITEM 7 FINANCIAL STATEMENTS

The audited Consolidated Financial Statements are included in
this Form 10-KSB beginning on page F-1 following the signature page.

ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

Effective August 5, 2003, the Company retained Dale Matheson
Carr-Hilton,(DMCL) formerly LaBonte & Company, Chartered Accountants to
act as Companys independent Chartered Accountants. In this regard, DMCL
replaced Stonefield Josephson, Inc. (SJI) as the Companys independent
Chartered Accountants. The Company replaced SJI with DMCL as a result of the
change in the Companys management and the relocation of the Companys officers
from Washington to British Columbia, Canada. SJI audited the Companys financial
statements for the fiscal years ended December 31, 2001 and 2002. The SJI audit
reports for those fiscal years did not contain an adverse opinion, or disclaimer
of opinion and was not qualified or modified as to audit scope or accounting
principles. However, the report of SJI for those fiscal years contained an
explanatory paragraph with respect to uncertainty as to the Companys ability to
continue as a going concern.

The change in the Companys auditors was recommended and
approved by the Board of Directors of the Company. The Company does not at
present, have an audit committee.

During the Companys two most recent fiscal years, there have
been no disagreements with the Companys independent accountants on any matter
of accounting principle or practices, financial statement disclosure or auditing
scope or procedure. In addition, there were no reportable events as described in
Item 304(a)(1)(iv)(B)1 through 3 of Regulation S-B that occurred within the
Companys two most recent fiscal years and the subsequent interim periods.

ITEM 8A CONTROLS AND PROCEDURES

The Company has established and currently maintains disclosure
controls and other procedures designed to ensure that material information
required to be disclosed in its reports filed under the Securities Exchange Act
of 1934 is recorded, processed, summarized and reported, within the time periods
specified by the Securities and Exchange Commission. In conjunction with the
close of each fiscal quarter, the Company conducts a review and evaluation of
the effectiveness of the Companys disclosure controls and procedures.

It is the opinion of the Companys principal accounting officer
and President, based upon an evaluation completed within 90 days prior to the
filing of this report, that the Companys disclosure controls and procedures are
effective and ensure that any material information relating to the Company is
recorded, processed, summarized and reported to its principal officers to allow
timely decisions regarding required disclosures.

There have been no significant changes in the Company's internal
  controls over financial reporting during the fiscal year ended December 31,
  2006 that have materially affected or are reasonably likely to materially affect,
  the internal controls over financial reporting.

32

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ITEM 8B OTHER INFORMATION

There were no events or activities required to be reported hereunder
  during the fourth quarter of the year covered by this report which have not
  previously been reported on Form 8K.

PART III


ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table contains disclosure concerning the
directors, officers and control persons of the Company. There are no persons who
have acted as a promoter, controlling person, or significant employee of the
Company other than as disclosed below.

Name
    Position
    Ages
    Date ElectedChristopher Stringer
    President, Chief Financial Officer and
      Director
    63
    August 2003 to presentRick Mari
    Chief Executive Officer, Treasurer and
      Director
    53
    August 2003 to present


Christopher Stringer, President, CFO and Director

Christopher Stringer, age 63, is the President, Chief Financial
Officer, and a Director of the Company and a Director of its wholly-owned
Canadian subsidiary, ActionView Advertising Systems, Inc. Mr. Stringer has been
with ActionView Advertising Systems, Inc. for over six years and is one of its
founders. Prior to that, he was a self-employed franchise management consultant
and has spent the past 25 years as a business innovator, with specific expertise
in the initial organization, development, operations and leadership of both new
and established service companies.

As President of ActionView International, Mr Stringer brings a
strong background as a business leader of international companies. He was a
founder of Molly Maid International, Inc., which now has 500 franchisees in four
countries. He has also managed the development of ServiceMaster in Canada. Prior
to that he managed the expansion of Loomis Courier Services into the Eastern
United States and Canada.

Rick Mari, CEO, Secretary and Director

Rick Mari, age 53, is the Chief Executive Officer and a
Director of the Company and a Director of its wholly-owned Canadian subsidiary
ActionView Advertising Systems, Inc. for the last six years. Prior to that, he
was employed by Productive Electronic Marketing Inc., a company which developed
electronic advertising and signage products.

Rick directs the product development and manufacturing of the
ActionView scrolling sign and still-view product. Over the past eight years, he
developed the original ActionView scrolling billboard, 4x6 sign, and all related
improvements in the technology taking advantage of his over twenty years of
experience as President and owner of Productive Electronic Marketing Ltd.

ITEM 10 EXECUTIVE COMPENSATION

The following table sets forth in summary form, the
compensation received by the directors and senior officers of the Company for
the three years ended December 31 2006, 2005 and 2004. The Company does not have
a Compensation Committee.

33

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Name **and**principal position (a)
      **Year** (b)
      Annual Compensation
      Long-term compensationSalary ($) (c)
      Bonus ($) (d)
      Other Annual Compen
        sation ($) (e)
      Awards
      Payouts
      All
        other Compen sation ($)
        (i)Restric ted Stock Awards ($) (f)
      Securities Underlyingoptions/ SARs (#) (g)
      LTIP **payouts**($) (h)Chris Stringer- 
        President, Chief 
        Financial Officer 
        and Director
      2006 
        2005 
        2004
      105,847 
        100,840 
        99,696
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0Rick Mari  Chief 
        Executive Officer, 
        Treasurer and 
        Director
      2006 
        2005 
        2004
      158,771 
        100,840 
        99,696
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0
      0 
        0 
        0


|(c) | The dollar value of base salary accrued of which $34,619
      was paid in cash to Mr Stringer ($26,206 in 2005) and $16,276 was paid in
      cash to Mr Mari ($11,371 in 2005). In 2005, the company issued 2,500,000
      shares of restricted common stock at $0.08 per share for the settlement of
      $200,000 of the amounts due to related parties.                                                                                                                                                                            
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(d) | The dollar value of bonus received (cash and
    non-cash)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(e) | Any other annual compensation not properly categorized as
      salary or bonus, including perquisites and other personal benefits,
      securities or property                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(f) | During the periods covered by the table, the value of the
      shares of restricted stock issued as compensation for services to the
      persons listed in the table                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(g) | The shares of common stock to be received upon the
      exercise of all stock options granted during the periods covered by the
      Table                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(h) | All other compensation received that the Company could
      not properly report in any other column of the Table including annual
      Company contributions or other allocations to vested and unvested defined
      contribution plans, and the dollar value of any insurance premiums paid
      by, or on behalf of, the Company with respect to term life insurance for
      the benefit of the named executive officer, and the full dollar value of
      the remainder of the premium paid by, or on behalf of, the
  Company.

At the date of this report, the two principals had advanced
approximately $87,000 to the Company in order to meet emergency operating
expenses of which $51,000 was advanced to December 31, 2006.

Employment Contracts

The Company does not have any employment contracts with its two
executive officers.

Employee Pension, Profit Sharing or Other Retirement
Plans

None

34

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Compensation of Directors and Senior Officers

i) Standard Arrangements.

Currently the Company does not pay its directors for serving as
directors. The Company has no standard arrangement pursuant to which directors
of the Company are compensated for any services provided as a director or for
committee participation or special assignments.

ii) Other Arrangements.

Stock Option Plans

In September 2003, the Company adopted a Non-Qualified Stock
Option Plan (the Plan) which authorizes the issuance of up to 1,750,000 shares
of common stock on exercise of options granted pursuant to the Plan. In
addition, the Company adopted a Stock Bonus Plan which authorizes the issuance
of up to 1,000,000 shares of common stock. Under the Stock Bonus Plan, the
Companys employees, directors, officers, consultants and advisors are eligible
to receive a grant of the Companys shares, provided however that bona fide
services must be rendered by consultants or advisors and such services must not
be in connection with the offer or sale of securities in a capital-raising
transaction.

In September 2003 and pursuant to the Plan, the Company granted
options to purchase 1,475,000 shares of common stock to the Companys officers,
directors, employees and to consultants of the Company exercisable at a price of
$0.50 per share for the two years ending September 30, 2005. These options were
recorded at a fair value of $446,100 at the date the options were granted using
the Black-Scholes option pricing model assuming a dividend yield of 0%, a
risk-free interest rate of 3%, an expected option life of 2 years and an
expected volatility of 145%. In accordance with the provisions of APB No. 25,
this fair value compensation was expensed in the accounts and credited to
additional paid-in capital. These options expired on September 30, 2005.

In December 2003 and pursuant to the Plan, 50,000 options were
granted to consultants of the company exercisable at a price of $0.50 per share
for the two years ending December 31, 2006. These options were recorded at a
fair value of $30,200 at the date the options were exercisable using the
Black-Scholes option pricing model assuming a dividend yield of 0%, a risk-free
interest rate of 3%, an expected option life of 2 years and an expected
volatility of 139%. In accordance with the provisions of APB No. 25, this fair
value compensation was expensed in the accounts and credited to additional
paid-in capital. These options were subsequently cancelled on December 1,
2005.

A summary of the Companys outstanding stock options to
directors, employees and consultants as of December 31, 2006 and 2005 and
changes during these years is presented below:

|                            | 2006    |          | 2005        |         
|--------------------------- | ------- | -------- | ----------- | --------
|                            |         | Exercise |             | Exercise
|                            | Options | Price    | Options     | Price   
|Balance, beginning of year  | -       | -        | 1,275,000   | $0.50   
|Granted                     | -       | -        | -           | -       
|Exercised/expired/cancelled | -       | -        | (1,275,000) | -       
|Balance, end of year        | -       | -        | -           |         

Each option represents the right to purchase one share of the
Companys common stock. The Plans have not been approved by the Companys
shareholders. A summary of the Companys remaining stock options available for
granting to directors, employees and consultants pursuant to the plans as of
December 31, 2006 is as follows:

35

---

Name of Plan
    Total Reserved Under
      Plans
    Shares Shares Reserved
      **for**Outstanding Options
    Shares Issuedas
      Stock Bonus
    **Remaining**
      Options/ Shares **Under**
      PlansNon-Qualified Stock Option
    1,750,000
    0
    0
    1,750,000Stock Bonus Plan
    1,000,000
    0
    0
    1,000,000


Retainer Stock Plan

In January 2005, the Company implemented a Retainer Stock Plan.
Under the Plan, 3,000,000 shares of common stock of the Company can be issued to
compensate directors, employees and consultants for services rendered to the
Company. In January 2005 and 2006, the Company registered a total of 6,000,000
shares of common stock under the plan. To date, 5,688,126 shares have been
issued under the Plan.

The terms of the Plan are fully disclosed in the Form S-8 registration
  statements filed with respect to the Plan, including the following:

| |  | price and other terms of issuance of shares under the Plan are to be determined
      by the Board of Directors, who administer the Plan and who will take into
      account the market price of the Companys securities at the date of
      any agreement to issue shares under the Plan.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                              
| |  | the shares of common stock issuable under the Plan have the same rights
      and restrictions as all other issued and issuable shares of common stock
      of the Company.                                                                                                                 

Any shares issuable under the Plan, although registered by way
  of the Form S-8 registration statement, may require a resale prospectus prior
  to resale by affiliates or others.

ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth the name and address, as of the
date of this Annual Report, and the approximate number of shares of common stock
of the Company owned of record or beneficially by each person who owned of
record, or was known by the Company to own beneficially, more than five percent
(5%) of the Company's common stock, and the name and shareholdings of each
officer and director, and all officers and directors as a group.

At December 31, 2006 and the date of this Annual Report, the
Company had 42,788,094 shares of common stock issued (including the 7,492,675
issued to CD Farber Law Corporation-In Trust, see Item 1: Share Exchange
Agreement). The following table sets forth certain information regarding the
beneficial ownership of the common stock of the Company as of April 13, 2007 of
(1) each person who is known to the Company to own beneficially more than 5% of
the Companys outstanding common stock, (2) each of the Companys directors,
officers, and (3) all directors and officers of the Company as a group:

36

---

Name and Address
    Position
    Amount of **Stock**Beneficially Owned
    Percentage of ClassRick Mari
        4329 West 3rdAve Vancouver, BC
      Canada
      Chief Executive Officer, 
        Secretary,
      Director and greater than 5%shareholder
    6,463,216 (1)
    15.1%Christopher Stringer 1121 Crestline Rd West Vancouver
      BC Canada
    President, Chief Financial Officer, Director,
      and greater then 5% shareholder
    3,856,784 (2)
    9.0%Thomas Schulte 1900 Faywood St Las Vegas, NV
    Franchisee and sales agent
    2,748,399
    6.4%Directors, Officers and 5% stockholders in
      total (3 Persons)
    
    13,068,399
    30.5%


|1. | Of the 6,463,216 common shares attributed to Rick Mari,
      1,468,216 are common shares which he owns and which were issued to him in
      settlement of debts the Company incurred to him. The remaining 4,995,450
      shares are held in trust by the Trustee in the event that Rick Mari wishes
      to exchange his 4,995,450 Exchangeable Shares for them. Rick Mari, not the
      Trustee, has the right to vote these Exchangeable Shares at any meeting of
      the Companys shareholders.                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | Of the 3,856,784 common shares attributed to Christopher
      Stringer, 1359,109 are common shares which he owns and which were issued
      to him in settlement of debts the Company incurred to him. The remaining
      2,497,675 shares are held in trust by the Trustee in the event that
      Christopher Stringer wishes to exchange his 2,497,675 Exchangeable Shares
      for them. Christopher Stringer, not the Trustee, has the right to vote
      these Exchangeable Shares at any meeting of the Companys
    shareholders.

ITEM 12 CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

Shares Issued to Officers and Directors

Pursuant to an agreement stated September 9, 2003, the Company,
through its wholly-owned Canadian subsidiary (6126421 Canada Ltd.) acquired 100%
of the issued and outstanding common shares of Action View Advertising Systems,
Inc. 6126421 issued 1,000,000 exchangeable shares to the existing shareholders
of Action View Advertising Systems, Inc. in exchange for 100% ownership of the
Company.

Of the 1,000,000 Exchangeable Shares issued to the shareholders
of Action View Advertising Systems, Inc., 200,000 were issued to Rick Mari and
100,000 were issued to Chris Stringer.

Pursuant to an agreement dated September 9, 2003, the Company,
  through its wholly-owned Canadian subsidiary (6126421 Canada Ltd.) issued 7,422,675
  Exchangeable Shares to the principals of Action View Advertising Systems, Inc.
  (Rick Mari and Christopher Stringer) for the Intellectual Property Rights they
  held as the developers of the ActionView products. Of the 7,422,675 Exchangeable
  Shares issued, 4,948,450 were issued to Rick Mari, and 2,474,225 were issued
  to Christopher Stringer. Subsequently in 2003, 350,000 Exchangeable Shares were
  converted into shares of common stock in the Company.

37

---

A holder of an exchangeable share may, at any time, require
  6126421 Canada Ltd. to repurchase the exchangeable share for an amount equal
  to the then current market value of the Companys common stock. 6126421
  Canada Ltd. may, at its option, satisfy the resulting obligation to repurchase
  the exchangeable shares in cash or it may elect to have the obligation satisfied
  by the issuance of shares of common stock by the Company. The Company is required
  to issue to a trustee, a sufficient number of shares of common stock to satisfy
  this obligation. The holders of the exchangeable shares will be granted votes
  in the Company on a basis of one vote for every exchangeable share held.

Concurrent with the acquisition of Action View Advertising Systems, Inc., the Company issued 327,325 restricted shares of common stock in settlement of a total of $98,198 owing to two officers of ActionView who became directors of the Company.
218,216 shares were issued to Rick Mari and 109,109 shares were issued to Christopher Stringer.

During the year ended December 31, 2005, the Company issued 2,500,000 shares of restricted shares of common stock in settlement of $200,000 of amounts owing to the Company officers who are also directors. 1,250,000 shares were issued to both
Rick Mari and Christopher Stringer.

During the year ended December 31, 2006, no shares were issued to the Company officers who are also directors.

ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K

The exhibits to be filed with this Form 10-KSB are listed below in the Exhibit Index.

There were no Reports on Form 8-K filed during the fourth quarter of the fiscal year ended December 31, 2006.

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

As of the date of this Annual Report, the Company has not appointed members to an audit committee and, therefore, the respective role of an audit committee has been conducted by the board of directors of the Company. When established, the audit
committees primary function will be to provide advice with respect to the Companys financial matters and to assist the board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, tax and legal
compliance.

The audit committees primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor the Companys financial reporting process and internal control system; (ii) review and appraise the audit
efforts of the Companys independent accountants; (iii) evaluate the Companys quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee managements establishment and enforcement of
financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and the board of directors.

The board of directors has considered whether the regulatory provision of non-audit services is compatible with maintaining the principal independent accountants independence.

Audit fees

During the fiscal years ended December 31, 2006 and 2005,
  the Company incurred approximately $52,000 and $51,000 respectively
  in fees to its principal independent accountants for professional services rendered
  in connection with the audits of the Companys financial statements and
  for other accounting services consisting of review of the Companys quarterly
  reports filed on Forms 10Q-SB and its annual report filed on Form 10K-SB.

38

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Financial Information Systems Design and Implementation Fees

During fiscal year ended December 31, 2006, the Company did not
incur any fees for professional services rendered by its principal independent
accountant for certain information technology services which may include, but is
not limited to, operating or supervising or managing the Companys information
or local area network or designing or implementing a hardware or software system
that aggregate source data underlying the financial statements.

All Other Fees

During fiscal year ended December 31, 2006, the Company
incurred $nil in other fees for professional services rendered by its principal
independent accountant for all other non-assurance services which may include,
but are not limited to tax-related services, actuarial services or valuation
services.

EXHIBIT INDEX

|Number | Exhibit Description                                                                                                                                                  
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                      
|3.1    | Articles of Incorporation
      (incorporated by reference to Exhibit 3.2 of the Report on Form 10KSB for
      the year ended December 31, 1997) - previously filed.
|       |                                                                                                                                                                      
|3.2    | By-Laws (incorporated by
      reference to Exhibit 3.3 of the Report on Form 10KSB for the year ended
      December 31, 1997) - previously filed.                  
|       |                                                                                                                                                                      
|31.1   | Section
      302 certification of Chief Executive Officer                                                                                                           
|       |                                                                                                                                                                      
|31.2   | Section
      302 certification of Chief Financial Officer                                                                                                           
|       |                                                                                                                                                                      
|32.1   | Section
      906 certification of Chief Executive Officer                                                                                                           
|       |                                                                                                                                                                      
|32.2   | Section
      906 certification of Chief Financial Officer                                                                                                           

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

ACTIONVIEW INTERNATIONAL, INC.

|Dated: April 16, 2007 | By: | /s/ Christopher Stringer                       
|--------------------- | --- | -----------------------------------------------
|                      |     | Christopher Stringer                           
|                      |     | President, Chief Financial Officer and Director
|                      |     |                                                
|                      |     |                                                
|Dated: April 16, 2007 | By: | /s/ Rick Mari                                  
|                      |     | Rick Mari                                      
|                      |     | Chief Executive Officer, Secretary and Director

39

---

ACTIONVIEW INTERNATIONAL, INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

****

****

|REPORT OF INDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM | **F-2**
|------------------------------------------------------------- | -------
|                                                              |        
|CONSOLIDATED BALANCE
      SHEETS                             | **F-3**
|                                                              |        
|CONSOLIDATED STATEMENTS
      OF OPERATIONS AND DEFICIT       | **F-4**
|                                                              |        
|CONSOLIDATED STATEMENTS
      OF CASHFLOWS                    | **F-5**
|                                                              |        
|CONSOLIDATED STATEMENT OF STOCKHOLDERS
      DEFICIT         | **F-6**
|                                                              |        
|NOTES TO THE CONSOLIDATED
      FINANCIAL STATEMENTS          | **F-7**

F-1

---

|REPORT OF INDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM
|-------------------------------------------------------------

To the Stockholders and Board of Directors of Actionview International,
  Inc.

We have audited the consolidated balance sheets of Actionview
  International, Inc. (the Company) (a development-stage company)
  as of December 31, 2006 and 2005and the related consolidated statements of operations
  and deficit, cash flows and stockholders equity for the years then ended
  and for the period from January 26, 1986 (inception) to December 31, 2006. These
  financial statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based
  on our audits. The Companys financial statements as at December 31, 2002,
  and for the year then ended were audited by other auditors whose report dated
  March 9, 2003 included an explanatory paragraph regarding the Company's ability
  to continue as a going concern. The financial statements for the period from
  January 26, 1986 (inception) to December 31, 2002 reflect a total net loss of
  $1,591,629 of the related cumulative totals. Our opinion, insofar as it relates
  to amounts included for such prior periods, is based solely on the reports of
  such other auditors.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform an audit to obtain reasonable assurance whether the
  financial statements are free of material misstatement. The Company is not required
  to have, nor were we engaged to perform, an audit of its internal control over
  financial reporting. Our audits included consideration of internal control over
  financial reporting as a basis for designing audit procedures that are appropriate
  in the circumstances, but not for the purpose of expressing an opinion on the
  effectiveness of the Companys internal control over financial reporting.
  Accordingly, we express no such opinion. An audit also includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation. We believe that our audits provide a reasonable
  basis for our opinion.

In our opinion, based on our audits and the reports of other
  auditors, these consolidated financial statements present fairly, in all material
  respects, the financial position of the Company as at December 31, 2006 and
  2005 and the results of its operations and its cash flows and the changes in
  stockholders equity for the years then ended and for the period from January
  26, 1986 (inception) to December 31, 2006 in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying consolidated financial statements have been
  prepared assuming that the Company will continue as a going concern. As discussed
  in Note 1 to the financial statements, to date the Company has realized significant
  losses and further losses are anticipated. At December 31, 2006 the Company
  had a working capital deficiency of $1,415,760, has incurred losses since inception
  of $8,780,677 and requires additional funds to meet its obligations and fund
  the costs of its operations. These factors raise substantial doubt about the
  Companys ability to continue as a going concern. Managements plans
  in this regard are described in Note 1. These financial statements do not include
  any adjustments that might result from the outcome of this uncertainty.

Dale Matheson Carr-Hilton LaBonte LLP 
  DMCL Chartered Accountants

Vancouver, B.C. 
  April 10, 2007

---

ACTIONVIEW INTERNATIONAL, INC. 
  (A Development Stage Company) 
  CONSOLIDATED BALANCE SHEETS

|                                                                         |  | December 31, |   |  | December 31, |  
|------------------------------------------------------------------------ |  | ------------ | - |  | ------------ | -
|                                                                         |  | 2006         |   |  | 2005         |  
|                                                                         |  | $            |   |  | $            |  
|                                                                         |  |              |   |  |              |  
|ASSETS                                                                   |  |              |   |  |              |  
|                                                                         |  |              |   |  |              |  
|CURRENT ASSETS                                                           |  |              |   |  |              |  
|Cash                                                                     |  | -            |   |  | 96,434       |  
|Accounts receivable                                                      |  | 10,870       |   |  | 19,865       |  
|Inventory                                                                |  | 34,325       |   |  | 121,964      |  
|Prepaid expenses                                                         |  | 10,331       |   |  | 63,051       |  
|Current portion of deferred finance
      charges (Note 3)               |  | -            |   |  | 147,935      |  
|                                                                         |  | 55,526       |   |  | 449,249      |  
|                                                                         |  |              |   |  |              |  
|PROPERTY AND EQUIPMENT(Note 4)                                           |  | 1            |   |  | 311,663      |  
|DEFERRED FINANCE CHARGES(Note 3)                                         |  | -            |   |  | 41,125       |  
|INTELLECTUAL PROPERTY RIGHTS AND GOODWILL                                |  | 1            |   |  | 1            |  
|                                                                         |  |              |   |  |              |  
|                                                                         |  | 55,528       |   |  | 802,038      |  
|                                                                         |  |              |   |  |              |  
|LIABILITIES                                                              |  | $            |   |  | $            |  
|                                                                         |  |              |   |  |              |  
|CURRENT LIABILITIES                                                      |  |              |   |  |              |  
|Bank indebtedness (Note 5)                                               |  | 42,715       |   |  | -            |  
|Accounts payable
      and accrued liabilities                           |  | 334,652      |   |  | 182,485      |  
|Deferred revenue                                                         |  | 7,641        |   |  | 1,338        |  
|Convertible promissory
      notes payable (Note 6)                      |  | 383,850      |   |  | 335,700      |  
|Current portion of convertible and
      other long-term debt (Note 7)   |  | 310,527      |   |  | 16,466       |  
|Due to related parties
      (Note 8)                                    |  | 391,901      |   |  | 144,053      |  
|                                                                         |  | 1,471,286    |   |  | 680,042      |  
|                                                                         |  |              |   |  |              |  
|CONVERTIBLE AND OTHER LONG-TERM DEBT(Note 7)                             |  | -            |   |  | 281,317      |  
|                                                                         |  |              |   |  |              |  
|                                                                         |  | 1,471,286    |   |  | 961,359      |  
|                                                                         |  |              |   |  |              |  
|COMMITMENTS AND CONTINGENCIES(Note 1 , 5, 6 and 7)                       |  |              |   |  |              |  
|SUBSEQUENT EVENTS(Note 13)                                               |  |              |   |  |              |  
|LITIGATION(Note 13)                                                      |  |              |   |  |              |  
|                                                                         |  |              |   |  |              |  
|STOCKHOLDERS' DEFICIENCY                                                 | 
|                                                                         |  |              |   |  |              |  
|COMMON STOCK(Note 9)                                                     |  |              |   |  |              |  
|$0.001 par value;
      75,000,000 shares authorized                     |  |              |   |  |              |  
|34,715,419 issued and outstanding
      (December 31, 2005 - 31,539,282) |  | 34,715       |   |  | 31,539       |  
|EXCHANGEABLE SHARES(Note 9)                                              |  | 2,421,803    |   |  | 2,421,803    |  
|ADDITIONAL PAID IN CAPITAL                                               |  | 4,725,601    |   |  | 4,508,513    |  
|OBLIGATION TO ISSUE SHARES                                               |  | 52,000       |   |  | 52,000       |  
|COMMON STOCK PURCHASE WARRANTS(Note 9)                                   |  | 130,800      |   |  | 130,800      |  
|DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE                             |  | (8,780,677   | ) |  | (7,303,976   | )
|                                                                         |  |              |   |  |              |  
|                                                                         |  | (1,415,758   | ) |  | (159,321     | )
|                                                                         |  |              |   |  |              |  
|                                                                         |  | 55,528       |   |  | 802,038      |  

The accompanying notes are an integral part of these consolidated
  financial statements.

F-3

---

ACTIONVIEW INTERNATIONAL, INC. 
  (A Development Stage Company) 
  CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

|                                                        |  |            |   |  |            |   |  | Cumulative            |  
|------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | --------------------- | -
|                                                        |  |            |   |  |            |   |  | From Inception        |  
|                                                        |  |            |   |  |            |   |  | (January 26, 1986) to |  
|                                                        |  | 2006       |   |  | 2005       |   |  | December 31, 2006     |  
|                                                        |  | $          |   |  | $          |   |  | $                     |  
|REVENUES                                                |  |            |   |  |            |   |  |                       |  
|Advertising revenue                                     |  | 57,708     |   |  | 45,148     |   |  | 181,262               |  
|Royalties
      and other                               |  | 15,224     |   |  | 19,328     |   |  | 105,304               |  
|Sign sales                                              |  | 13,823     |   |  | 18,706     |   |  | 55,027                |  
|                                                        |  | 86,755     |   |  | 83,182     |   |  | 341,593               |  
|COST OF GOODS SOLD                                      |  | 42,065     |   |  | 39,220     |   |  | 164,591               |  
|                                                        |  |            |   |  |            |   |  |                       |  
|GROSS PROFIT                                            |  | 44,690     |   |  | 43,962     |   |  | 177,002               |  
|                                                        |  |            |   |  |            |   |  |                       |  
|OPERATING EXPENSES                                      |  |            |   |  |            |   |  |                       |  
|Consulting
      fees                                   |  | 30,000     |   |  | 3,750      |   |  | 721,950               |  
|Depreciation and amortization                           |  | 79,847     |   |  | 267,805    |   |  | 698,101               |  
|Finance and
      interest expense                      |  | 300,891    |   |  | 76,737     |   |  | 833,375               |  
|Investor relations                                      |  | 11,041     |   |  | 108,722    |   |  | 540,617               |  
|(Gain) loss
      on foreign exchange                   |  | (5,253     | ) |  | 12,385     |   |  | 13,744                |  
|Marketing and business promotion                        |  | 102,231    |   |  | 76,078     |   |  | 294,088               |  
|Office and
      general administration                 |  | 106,464    |   |  | 158,795    |   |  | 1,570,831             |  
|Professional fees                                       |  | 68,755     |   |  | 77,971     |   |  | 368,351               |  
|Product development                                     |  | 125,198    |   |  | 134,938    |   |  | 411,498               |  
|Salaries and management fees                            |  | 323,083    |   |  | 279,215    |   |  | 987,203               |  
|                                                        |  | 1,142,257  |   |  | 1,196,396  |   |  | 6,439,758             |  
|                                                        |  |            |   |  |            |   |  |                       |  
|NET LOSS BEFORE THE FOLLOWING                           |  | (1,097,567 | ) |  | (1,152,434 | ) |  | (6,262,756            | )
|                                                        |  |            |   |  |            |   |  |                       |  
|Operating
      asset impairment (Note 11)              |  | (379,134   | ) |  | -          |   |  | (379,134              | )
|Goodwill impairment (Note
      11)                     |  | -          |   |  | (1,707,215 | ) |  | (1,707,215            | )
|Intellectual
      property rights impairment (Note 11) |  | -          |   |  | (431,572   | ) |  | (431,572              | )
|                                                        |  |            |   |  |            |   |  |                       |  
|NET LOSS                                                |  | (1,476,701 | ) |  | (3,291,221 | ) |  | (8,780,677            | )
|                                                        |  |            |   |  |            |   |  |                       |  
|DEFICIT, BEGINNING                                      |  | (7,303,976 | ) |  | (4,012,755 | ) |  | -                     |  
|                                                        |  |            |   |  |            |   |  |                       |  
|DEFICIT, ENDING                                         |  | (8,780,677 | ) |  | (7,303,976 | ) |  | (8,780,677            | )
|                                                        |  |            |   |  |            |   |  |                       |  
|                                                        |  |            |   |  |            |   |  |                       |  
|BASIC AND DILUTED LOSS PER SHARE                        |  | (0.04      | ) |  | (0.13      | ) |  |                       |  
|                                                        |  |            |   |  |            |   |  |                       |  
|WEIGHTED AVERAGE NUMBER OF                              |  |            |   |  |            |   |  |                       |  
|SHARES OUTSTANDING-BASIC AND DILUTED                    |  | 33,172,930 |   |  | 25,410,175 |   |  |                       |  

The accompanying notes are an integral part of these consolidated
  financial statements

F-4

---

ACTIONVIEW INTERNATIONAL, INC. 
  (A Development Stage Company) 
  CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                       |  |                                 |   |  |                       |   |  | Cumulative        |  
|---------------------------------------------------------------------- |  | ------------------------------- | - |  | --------------------- | - |  | ----------------- | -
|                                                                       |  |                                 |   |  |                       |   |  | From Inception    |  
|                                                                       |  | For the Year Ended December 31, |   |  | (January 26, 1986) to |  
|                                                                       |  | 2006                            |   |  | 2005                  |   |  | December 31, 2006 |  
|                                                                       |  | $                               |   |  | $                     |   |  | $                 |  
|CASH FLOW PROVIDED BY (USED IN )                                       |  |                                 |   |  |                       |   |  |                   |  
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|OPERATING ACTIVITIES                                                   |  |                                 |   |  |                       |   |  |                   |  
|Net loss                                                               |  | (1,476,701                      | ) |  | (3,291,221            | ) |  | (8,780,677        | )
|Non-cash items included
      in net loss                              |  |                                 |   |  |                       |   |  |                   |  
|Depreciation
      and amortization                                    |  | 79,847                          |   |  | 267,805               |   |  | 699,284           |  
|Stock
      based operating expenses                                   |  | 178,236                         |   |  | 174,120               |   |  | 1,003,031         |  
|Finance expenses                                                       |  | 200,739                         |   |  | 18,558                |   |  | 582,431           |  
|Operating
      asset impairment                                       |  | 379,134                         |   |  | -                     |   |  | 379,134           |  
|Intellectual
      Property Rights impairment                          |  | -                               |   |  | 1,707,215             |   |  | 1,707,215         |  
|Goodwill
      impairment                                              |  | -                               |   |  | 431,572               |   |  | 431,572           |  
|Warrants issued
      for services                                     |  | -                               |   |  | -                     |   |  | 98,713            |  
|Changes in non-cash working
      capital                              |  |                                 |   |  |                       |   |  |                   |  
|Accounts receivable                                                    |  | 8,995                           |   |  | 5,869                 |   |  | 60,470            |  
|Inventories                                                            |  | (1,205                          | ) |  | 17,567                |   |  | (94,525           | )
|Prepaid expenses                                                       |  | 39,627                          |   |  | (20,808               | ) |  | 28,043            |  
|Deferred
      finance charges                                         |  | 11,009                          |   |  | -                     |   |  | 11,009            |  
|Accounts payable
      and accrued liabilities                         |  | 107,119                         |   |  | 11,148                |   |  | 939,118           |  
|Deferred
      revenue                                                 |  | 6,303                           |   |  | (997                  | ) |  | 4,829             |  
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|                                                                       |  | (466,897                        | ) |  | (679,172              | ) |  | (2,930,353        | )
|INVESTING ACTIVITIES                                                   |  |                                 |   |  |                       |   |  |                   |  
|Acquisition of rental signs
      and other property                   |  | -                               |   |  | (205,985              | ) |  | (375,922          | )
|Net cash from acquisition of ActionView                                |  | -                               |   |  | -                     |   |  | (53,439           | )
|Cash acquired on reorganization                                        |  | -                               |   |  | -                     |   |  | 23,540            |  
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|                                                                       |  | -                               |   |  | (205,985              | ) |  | (405,821          | )
|FINANCING ACTIVITIES                                                   |  |                                 |   |  |                       |   |  |                   |  
|(Increase) decrease in
      bank indebtedness                         |  | -                               |   |  | -                     |   |  | (39,668           | )
|Advances from related parties                                          |  | 247,848                         |   |  | 176,406               |   |  | 584,362           |  
|Proceeds from convertible
      promissory notes payable               |  | 70,000                          |   |  | 335,700               |   |  | 948,700           |  
|Cash increase (decrease) in convertible
      and other long term debt |  | (10,278                         | ) |  | 270,264               |   |  | 228,399           |  
|Issuance of common stock
      for cash                                |  | 20,178                          |   |  | 250,000               |   |  | 1,489,178         |  
|Additional contributed capital                                         |  |                                 |   |  | -                     |   |  | 82,488            |  
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|                                                                       |  | 327,748                         |   |  | 1,032,370             |   |  | 3,293,459         |  
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|INCREASE (DECREASE) IN CASH                                            |  | (139,149                        | ) |  | 147,213               |   |  | (42,715           | )
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|CASH (DEFICIENCY), BEGINNING                                           |  | 96,434                          |   |  | (50,779               | ) |  | -                 |  
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|CASH (DEFICIENCY), ENDING                                              |  | (42,715                         | ) |  | 96,434                |   |  | (42,715           | )
|                                                                       |  |                                 |   |  |                       |   |  |                   |  
|                                                                       |  | $                               |   |  | $                     |   |  | $                 |  
|Supplemental information and disclosure(note 12)                       |  |                                 |   |  |                       |   |  |                   |  
|Cash paid for Interest and bank charges                                |  | 55,105                          |   |  | 29,318                |   |  | 540,169           |  
|Cash paid for Income taxes                                             |  | -                               |   |  | -                     |   |  |                   |  

The accompanying notes are an integral part of these consolidated
  financial statements.

F-5

---

ACTIONVIEWINTERNATIONAL,INC. 
  (ADevelopmentStageCompany) 
  CONSOLIDATEDSTATEMENTOFSTOCKHOLDERS'DEFICIENCY

|                                                                               |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  | Common   |  |  |             |   |  |               |  
|------------------------------------------------------------------------------ | ------------------- |  | ------------------------- | ------ |  | ---------- |  |  | ---------- |  |  | --------- | - |  | -------- |  |  | -------- |  |  | ----------- | - |  | ------------- | -
|                                                                               | Common
      Shares |  | Exchangeable
      Shares |        |  | Additional |  |  | Obligation |  |  | Stock     |   |  |          |  |  | Total    | 
|                                                                               | Number of           |  |                           |        |  | Number of  |  |  |            |  |  | Paid-in   |   |  | to Issue |  |  | Purchase |  |  | Accumulated |   |  | Stockholders' |  
|                                                                               | Shares              |  |                           | Amount |  | Shares     |  |  | Amount     |  |  | Capital   |   |  | Shares   |  |  | Warrants |  |  | Deficit     |   |  | Deficiency    |  
|                                                                               |                     |  |                           | $      |  |            |  |  | $          |  |  | $         |   |  | $        |  |  | $        |  |  | $           |   |  | $             |  
|                                                                               |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|Balance - December 31, 2003                                                    | 16,300,015          |  |                           | 16,300 |  | 8,072,675  |  |  | 2,421,803  |  |  | 2,952,628 |   |  | -        |  |  | 56,700   |  |  | (2,553,043  | ) |  | 2,894,388     |  
|                                                                               |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|Stock options granted                                                          |                     |  |                           |        |  |            |  |  |            |  |  | 30,200    |   |  |          |  |  |          |  |  |             |   |  | 30,200        |  
|Exercise of warrants on a cashless basis at $0.001
      per share             | 1,741,500           |  |                           | 1,741  |  |            |  |  |            |  |  | (1,741    | ) |  |          |  |  |          |  |  |             |   |  | -             |  
|Units issued under Regulation S for
      cash of $0.50 per unit               | 250,000             |  |                           | 250    |  |            |  |  |            |  |  | 112,250   |   |  |          |  |  | 12,500   |  |  |             |   |  | 125,000       |  
|Units issued under Regulation S for cash of $0.40 per
      unit               | 175,000             |  |                           | 175    |  |            |  |  |            |  |  | 62,825    |   |  |          |  |  | 7,000    |  |  |             |   |  | 70,000        |  
|Private placement shares issued under
      Reg D, Rule 506 for cash of        |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|$0.20 per share, net of share issue costs                                      | 2,500,000           |  |                           | 2,500  |  |            |  |  |            |  |  | 388,000   |   |  | 50,000   |  |  |          |  |  |             |   |  | 440,500       |  
|Exercise of warrants on a cashless
      basis at $0.001 per share             | 250,000             |  |                           | 250    |  |            |  |  |            |  |  | (250      | ) |  |          |  |  |          |  |  |             |   |  | -             |  
|Private placement shares issued under Reg D, Rule 506
      for cash of        |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|$0.20 per share, net of share issue
      costs                                | 100,000             |  |                           | 100    |  |            |  |  |            |  |  | 15,900    |   |  | 2,000    |  |  |          |  |  |             |   |  | 18,000        |  
|Net loss for year ended December 31, 2004                                      |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  | (1,459,712  | ) |  | (1,459,712    | )
|Balance December 31, 2004                                                      | 21,316,515          |  |                           | 21,316 |  | 8,072,675  |  |  | 2,421,803  |  |  | 3,559,812 |   |  | 52,000   |  |  | 76,200   |  |  | -4,012,755  |   |  | 2,118,376     |  
|                                                                               |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|Private placement units issued under
      Reg D, Rule 501 for cash of         |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|$0.08 to $0.10 per unit                                                        | 3,025,000           |  |                           | 3,025  |  |            |  |  |            |  |  | 221,975   |   |  |          |  |  | 25,000   |  |  |             |   |  | 250,000       |  
|Stock issued for various consulting
      services at $0.07 to $0.10 per share | 1,275,177           |  |                           | 1,275  |  |            |  |  |            |  |  | 123,485   |   |  |          |  |  |          |  |  |             |   |  | 124,760       |  
|Stock issued for consulting services at $0.10 per share                        | 437,500             |  |                           | 438    |  |            |  |  |            |  |  | 43,063    |   |  |          |  |  |          |  |  |             |   |  | 43,500        |  
|Stock issued in settlement of account
      payable at $0.10 per share         | 1,468,000           |  |                           | 1,468  |  |            |  |  |            |  |  | 145,332   |   |  |          |  |  |          |  |  |             |   |  | 146,800       |  
|Stock issued in settlement of Director's advances at
      $0.10 per share     | 2,500,000           |  |                           | 2,500  |  |            |  |  |            |  |  | 197,500   |   |  |          |  |  |          |  |  |             |   |  | 200,000       |  
|Stock issued as equity inducement for
      financing services and one         |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|promissory note at $0.15 per share                                             | 231,390             |  |                           | 231    |  |            |  |  |            |  |  | 22,898    |   |  |          |  |  |          |  |  |             |   |  | 23,129        |  
|Stock issued as equity inducement for
      financing services and a           |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|drawdown line of credit at $0.11 per share                                     | 1,285,700           |  |                           | 1,286  |  |            |  |  |            |  |  | 140,141   |   |  |          |  |  |          |  |  |             |   |  | 141,427       |  
|Stock purchase warrants granted as
      discount on convertible debt          |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  | 29,600   |  |  |             |   |  | 29,600        |  
|Intrinsic value of beneficial conversion rights of
      promissory notes and  |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|convertible debt                                                               |                     |  |                           |        |  |            |  |  |            |  |  | 54,308    |   |  |          |  |  |          |  |  |             |   |  | 54,308        |  
|Net loss for year ended December 31, 2005                                      |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  | (3,291,221  | ) |  | (3,291,221    | )
|Balance December 31, 2005                                                      | 31,539,282          |  |                           | 31,539 |  | 8,072,675  |  |  | 2,421,803  |  |  | 4,508,513 |   |  | 52,000   |  |  | 130,800  |  |  | (7,303,976  | ) |  | (159,321      | )
|                                                                               |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|Stock issued for cash at $0.0885 per
      share                               | 228,000             |  |                           | 228    |  |            |  |  |            |  |  | 19,950    |   |  |          |  |  |          |  |  |             |   |  | 20,178        |  
|Stock issued for various consulting services at $0.04
      to $0.10 per share | 2,329,449           |  |                           | 2,329  |  |            |  |  |            |  |  | 159,473   |   |  |          |  |  |          |  |  |             |   |  | 161,802       |  
|Stock issued for debt conversion at
      $0.042 per share                     | 520,238             |  |                           | 520    |  |            |  |  |            |  |  | 21,330    |   |  |          |  |  |          |  |  |             |   |  | 21,850        |  
|Stock issued as equity inducement for financing services
      and two         |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  |             |   |  |               |  
|promissory notes at $0.04 to $0.08
      per share                             | 98,450              |  |                           | 98     |  |            |  |  |            |  |  | 6,836     |   |  |          |  |  |          |  |  |             |   |  | 6,934         |  
|Intrinsic value of beneficial conversion rights of
      two promissory notes  | -                   |  |                           | -      |  |            |  |  |            |  |  | 9,500     |   |  |          |  |  |          |  |  |             |   |  | 9,500         |  
|Net loss for year ended December 31,
      2006                                |                     |  |                           |        |  |            |  |  |            |  |  |           |   |  |          |  |  |          |  |  | (1,476,701  | ) |  | (1,476,701    | )
|Balance December 31, 2006                                                      | 34,715,419          |  |                           | 34,715 |  | 8,072,675  |  |  | 2,421,803  |  |  | 4,725,601 |   |  | 52,000   |  |  | 130,800  |  |  | (8,780,677  | ) |  | (1,415,758    | )

The accompanying notes are an integral part of these consolidated
  financial statements.

F-6

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

(1)      NATURE OF BUSINESS AND CONTINUANCE
  OF OPERATIONS

ActionView International, Inc. (the "Company"), was incorporated
  on January 26, 1986, as Vantage, Inc., under the laws of the State of Nevada.

Following a number of name changes since incorporation, the Company
  changed its name from Acquisition Media, Inc. to ActionView International, Inc.
  on August 20, 2003. This was done to better reflect its new business operations
  during the process of acquiring 100% of ActionView Advertising Systems, Inc.
  (AASI), a company incorporated in British Columbia on July 6, 1999,
  and related Intellectual Property Rights through its 100% owned subsidiary company,
  6126421 Canada Ltd (612 Canada), incorporated in Canada on August
  10, 2003. This acquisition closed in September 2003.

The Company custom-designs, markets and manufactures illuminated
  programmable motion billboard signs for use in airports, mass transit stations,
  shopping malls and other high traffic advertising locations designed to reach
  people on-the-go with targeted messaging. The Companys business model
  has two main revenue streams: (i) advertising revenues from Company-owned signs
  placed in high traffic locations being shared with Ad Agencies, location owners
  and local business partners; and (ii) sale of signs to franchise operators and
  on-going royalties from the advertising revenue generated from these signs by
  the franchise operators in their local market areas.

In connection with its advertising business from Company-owned
  signs, the Company incorporated ActionView Far East Limited (AVFE)
  in February 2004 for the purpose of representing the Company and marketing its
  scrolling billboard signs in both China and Hong Kong. The Company has a 50.1%
  interest in AVFE and a voting majority on the Board of Directors. The other
  49.9% interest is owned by a local business group headed by AVFEs Managing
  Director. Commercial operations have not yet commenced.

The Company completed a license and supply agreement with ActionView
  Australia (Proprietary) Limited (AVAU) in September 2004 for the
  purpose of representing the Company and marketing its scrolling billboard signs
  in both Australia and New Zealand. The Company has the option to purchase a
  51% interest in AVAU for a nominal amount at any time with the other 49% being
  retained by a local business group headed by AVAUs Managing Director.
  Commercial operations have not yet commenced.

Due to the delays in raising the necessary funding to establish
  the Company’s business and to date generating only modest revenues from
  the sale or rental of scrolling billboard signs and the lack of profitability
  to date, the Company has determined there is significant uncertainty as to the
  realization of the carrying value of substantially all of its remaining assets.
  Accordingly, assets have been impaired to realizable values as of December 31,
  2006 (See note 11). Subsequent to the year end, the Company committed to an
  active plan to sell some of the impaired assets (See note 13). In addition,
  the Company was in default on a loan (See note 13).

F-7

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

Going Concern

These financial statements have been prepared on a going concern
  basis. The Company has incurred losses since inception resulting in an accumulated
  deficit of $8,780,677 and working capital deficiency of $1,415,760 at December
  31, 2006. Subsequent to year end the Company committed to a plan to dispose
  of substantially all of its operations and operating assets (See Note 13). These
  factors raise substantial doubt about the Company’s ability to continue
  as a going concern. Its ability to continue as a going concern is dependent
  upon the ability of the Company to generate profitable operations from a new
  business venture in the future and to obtain the necessary financing to meet
  its obligations when they become due. Management has plans to seek additional
  financing through private placements of its common stock and/or loans from directors.
  These financial statements do not include any adjustments relating to the recoverability
  and classification of recorded assets, or the amounts of and classification
  of liabilities that might be necessary in the event the Company cannot continue.

(2)SUMMARY OF SIGNIFICANT
  ACCOUNTING POLICIES

(a)      Basis of presentation
  
  These consolidated financial statements have been prepared in accordance with
  generally accepted accounting principles in the United States of America and
  are presented in United States dollars. They include the accounts of the Company
  and its subsidiaries: AASI, 612 Canada and AVFE.

The Company is currently considered a Development Stage Enterprise,
  under the guidelines of Statement of Financial Accounting Standards (SFAS)
  No. 7. Since its formation, the Company has been primarily focused on development
  of its business nationally and internationally and only modest revenues have
  been realized from its business operations.

(b)      Cash and cash equivalentsCash and cash equivalents consist of balances with banks, unrestricted cash
  balances in lawyer trust accounts and investments in financial instruments with
  maturities within 90 days held for the purpose of meeting short-term cash commitments
  rather than for investing or other purposes. As of December 31, 2006, the Company
  had no cash and cash equivalents.

(c)      InventoryInventory consists of illuminated programmable motion billboard signs held
  for sale along with related spare component parts valued at the lower of cost
  or net realizable value. Cost is determined on the first-in, first-out basis.

F-8

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

(d)      Property and equipmentProperty and equipment is recorded at cost. Depreciation is computed using
  the following methods and rates to depreciate the cost of the property and equipment
  less residual values over estimated useful lives.

Rental Signs
      5 yearsLeasehold Improvements
      3 yearsFurniture and fixtures
      4 years


The cost of rental signs includes component parts, labour and
  freight up to the point of substantial completion of the signs. The signs are
  considered substantially complete and ready for their intended use at the date
  of completion of their construction.

(e)      Impairment of long-lived
  assetsThe Company records the impairment of long-lived assets whenever events
  or changes in circumstances indicate that the carrying value of an asset may
  not be recoverable. Recoverability of assets to be held and used over the long
  term are measured by a comparison of the carrying value of the asset to future
  undiscounted net cash flows expected to be generated by the asset. If such assets
  are considered to be impaired, the amount of the impairment is measured by the
  amount by which the carrying amount of the asset exceeds its fair value.

(f)      Goodwill and other intangible
  assetsThe Company has adopted the provisions of the Statement of Financial Accounting
  Standards No. 142 (SFAS 142), Goodwill and Other Intangible
  Assets. Goodwill and other intangible assets with indefinite lives are
  no longer amortized under SFAS 142, but instead are tested for impairment at
  least annually. In addition, intangible assets with a definite life are amortized
  over that expected life and tested for impairment at least annually or whenever
  events or circumstances indicate a revision to the remaining period of amortization
  is warranted.

(g)      Translation of foreign currenciesIn accordance with SFAS No. 52, Foreign Currency Translation,
  foreign denominated monetary assets and liabilities are translated into their
  United States dollar equivalents using foreign exchange rates which prevailed
  at the balance sheet date. Non-monetary assets are translated at the exchange
  rates prevailing at the transaction date. Revenue and expenses are translated
  at average rates of exchange during the year. Gains or losses resulting from
  foreign currency transactions during the year and the translation of subsidiary
  company financial statements at the year end are included in the results of
  operations.

F-9

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

(h)      Revenue recognitionThe Companys business plan calls for revenue generation primarily
  from two sources: i) revenue from sale of advertising  earned when Company-owned
  signs are placed in point-of-purchase and high traffic advertising locations.
  This revenue is shared with the ad agencies who sell the advertising, the location
  owners and the local business partners who put the contracts together, and is
  recognized over the period when the advertising is provided. ii) revenue from
  franchise operators  earned from start-up franchise fees, from on-going
  royalty fees on advertising revenues generated on the signs sold to the franchisees,
  and from fees on signs when sold by the franchisees to 3rd parties.
  Non-refundable franchise fees are earned when all material services relating
  to the sale have been substantially performed by the Company including arranging
  the franchise agreements and providing initial training services and related
  materials.

Revenue from all sources is recognized when the amount is fixed
  or determinable, delivery has occurred or initial services have been performed,
  and collection is reasonably assured. Any amounts received in advance of the
  goods being delivered or services being performed are recorded as deferred revenue.

(i)      Income taxesThe Company follows the liability method of accounting for income taxes.
  Under this method, deferred tax assets and liabilities are recognized for the
  deferred tax consequences attributable to differences between the financial
  statement carrying amounts of assets and liabilities and their respective tax
  balances. Deferred tax assets and liabilities are measured using enacted tax
  rates expected to apply to the taxable income in the years in which those differences
  are expected to be recovered or settled. The effect on deferred tax assets and
  liabilities of a change in tax rates is recognized in income in the period that
  includes the date of enactment. For deferred tax assets, the full amount of
  the potential future benefit is recorded. Then, a valuation allowance is used
  to adjust for the probability of realization.

(j)      Financial instrumentsThe Companys financial instruments consist of cash, bank indebtedness,
  accounts receivable, accounts payable and accrued liabilities, loans payable,
  promissory notes and amounts due to related parties. It is managements
  opinion that the Company is not exposed to significant interest, currency or
  credit risks arising from these financial instruments. The fair value of these
  financial instruments approximates their carrying values due to their immediate
  or short-term maturity.

The fair value of long-term debt is based on available market
  prices. When quoted market prices are not available, fair values are estimated
  using discounted cash flow analysis, based on the Company's current incremental
  borrowing rates for similar types of borrowing arrangements.

F-10

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

(k)      Use of estimates and assumptionsThe preparation of financial statements in conformity with accounting principles
  generally accepted in the United States of America requires management to make
  estimates and assumptions that affect the reported amounts of assets and liabilities
  and disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenue and expenses during the reporting
  period. Significant estimates used in preparing these financial statements include:
  valuation of accounts receivable, inventory, property and equipment, intellectual
  property rights and goodwill along with the equity component of debt and stock
  purchase warrants. Actual results could differ from these estimates.

(l)      Stock-based compensationIn December 2004, the Financial Accounting Standards Board (FASB)
  issued SFAS No. 123R, Share-Based Payment, which replaced SFAS No.
  123, Accounting for Stock-Based Compensation and superseded APB
  Opinion No. 25, Accounting for Stock Issued to Employees. In January
  2005, the Securities and Exchange Commission (SEC) issued Staff
  Accounting Bulletin (SAB) No. 107, Share-Based Payment,
  which provides supplemental implementation guidance for SFAS No. 123R. SFAS
  No. 123R requires all share-based payments to employees, including grants of
  employee stock options, to be recognized in the financial statements based on
  the grant date fair value of the award. SFAS No. 123R was to be effective for
  interim or annual reporting periods beginning on or after June 15, 2005, but
  in April 2005 the SEC issued a rule that will permit most registrants to implement
  SFAS No. 123R at the beginning of their next fiscal year, instead of the next
  reporting period as required by SFAS No. 123R. The pro-forma disclosures previously
  permitted under SFAS No. 123 no longer will be an alternative to financial statement
  recognition. Under SFAS No. 123R, the Company must determine the appropriate
  fair value model to be used for valuing share-based payments, the amortization
  method for compensation cost and the transition method to be used at date of
  adoption.

The transition methods include prospective and retroactive adoption
  options. Under the retroactive options, prior periods may be restated either
  as of the beginning of the year of adoption or for all periods presented. The
  prospective method requires that compensation expense be recorded for all unvested
  stock options and restricted stock at the beginning of the first quarter of
  adoption of SFAS No. 123R, while the retroactive methods would record compensation
  expense for all unvested stock options and restricted stock beginning with the
  first period restated. The Company has adopted the prospective method of SFAS
  No. 123R beginning January 1, 2006. As the Company had no unvested stock options
  on January 1, 2006, no stock-based compensation expense was recorded on adoption
  of SFAS No. 123R.

(m)      Net loss per shareThe computation of basic net loss per share is computed by dividing net
  loss available to common stockholders by the weighted average number of outstanding
  common shares of the company during the period. The diluted net loss per share
  gives effect to all potentially dilutive common shares outstanding during the
  period. The computation of diluted net loss per share does not assume conversion,
  exercise or contingent exercise of securities that would have an anti-dilutive
  effect on net loss.

F-11

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

As of December 31, 2006, the Company had 11,637,675 potentially
  dilutive securities outstanding in the form of exchangeable shares, share purchase
  warrants and convertible loans. The basic net loss per share equals the dilutive
  net loss per share since the potentially dilutive securities are anti-dilutive
  to the basic net loss per share.

(n)      Comparative figures
  
  Certain comparative figures have been reclassified to conform to the current
  periods presentation.

(o)      Recent accounting pronouncements
  
  In September 2006, the FASB issued SFAS No. 157, Fair Value Measures(SFAS No. 157). This Statement defines fair value, establishes
  a framework for measuring fair value in generally accepted accounting principles
  (GAAP), expands disclosures about fair value measurements, and applies under
  other accounting pronouncements that require or permit fair value measurements.
  SFAS No. 157 does not require any new fair value measurements. However, the
  FASB anticipates that for some entities, the application of SFAS No. 157 will
  change current practice. SFAS No. 157 is effective for financial statements
  issued for fiscal years beginning after November 15, 2007, which for the Company
  would be its fiscal year beginning January 1, 2008. The Company is currently
  evaluating the impact of SFAS No. 157 but does not expect that it will have
  a material impact on its financial statements.

In September 2006, the FASB issued SFAS No. 158, Employers
  Accounting for Defined Benefit Pension and Other Postretirement Plans.
  This Statement requires an employer to recognize the over funded or under funded
  status of a defined benefit post retirement plan (other than a multiemployer
  plan) as an asset or liability in its statement of financial position, and to
  recognize changes in that funded status in the year in which the changes occur
  through comprehensive income. SFAS No. 158 is effective for fiscal years ending
  after December 15, 2006. The adoption of SFAS No. 158 had no impact on the financial
  position or result of operations of the Company.

In February 2007, the FASB issued SFAS No. 159, The Fair
  Value Option for Financial Assets and Financial Liabilities. This Statement
  permits entities to choose to measure many financial assets and financial liabilities
  at fair value. Unrealized gains and losses on items for which the fair value
  option has been elected are reported in earnings. SFAS No. 159 is effective
  for fiscal years beginning after November 15, 2007. The Company is currently
  assessing the impact of SFAS No. 159 on its financial position and results of
  operations.

In September 2006, the SEC issued Staff Accounting Bulletin (SAB)
  No. 108, Considering the Effects of Prior Year Misstatements when Quantifying
  Misstatements in Current Year Financial Statements. SAB No. 108 addresses
  how the effects of prior year uncorrected misstatements should be considered
  when quantifying misstatements in current year financial statements. SAB No.
  108 requires companies to quantify misstatements using a balance sheet and income
  statement approach and to evaluate whether either approach results in quantifying
  an error that is material in light of relevant quantitative and qualitative
  factors. SAB No. 108 is effective for periods ending after November 15, 2006.
  The adoption of SAB No.108 had no impact on the financial position or result
  of operations of the Company.

F-12

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

(3)      DEFERRED FINANCE CHARGES

| |                                    |  | December 31, |   |  | December 31, |  
| | ---------------------------------- |  | ------------ | - |  | ------------ | -
| |                                    |  | 2006         |   |  | 2005         |  
| |                                    |  | $            |   |  | $            |  
| |                                    |  |              |   |  |              |  
| |                                    |  |              |   |  |              |  
| | Unamortized equity inducement fees |  | 36,517       |   |  | 135,694      |  
| | Unamortized embedded beneficial    |  |              |   |  |              |  
| | conversion features                |  | 5,574        |   |  | 42,327       |  
| | Quarterly prepaid interest         |  | -            |   |  | 11,039       |  
| |                                    |  |              |   |  |              |  
| |                                    |  | 42,091       |   |  | 189,060      |  
| | Less: Long term portion            |  | -            |   |  | (41,125      | )
| | Impairment
      loss              |  |              |   |  |              |  
| | (See Note 11)                      |  | (42,091      | ) |  | -            |  
| |                                    |  |              |   |  |              |  
| | Current portion                    |  | -            |   |  | 147,935      |  

These deferred finance charges relate to the convertible promissory
  notes payable and the two long term convertible loans payable described in Note
  7 and are comprised of unamortized equity inducement fees, unamortized embedded
  beneficial conversion features and quarterly prepaid interest, where applicable.
  The unamortized balance of all deferred finance charges amounting to $42,091
  was written off to asset impairment loss at December 31, 2006 (See Note 11).

(4)      PROPERTY AND EQUIPMENT

| |                                |  | December 31, |   |  | December |  
| | ------------------------------ |  | ------------ | - |  | -------- | -
| |                                |  | 2006         |   |  | 31, 2005 |  
| |                                |  | $            |   |  | $        |  
| |                                |  |              |   |  |          |  
| | Rental signs                   |  | 461,235      |   |  | 461,235  |  
| | Furniture and computers        |  | 6,249        |   |  | 6,249    |  
| | Leasehold improvements         |  | 10,785       |   |  | 10,785   |  
| |                                |  |              |   |  |          |  
| |                                |  |              |   |  |          |  
| |                                |  | 478,269      |   |  | 478,269  |  
| |                                |  |              |   |  |          |  
| | Less: Accumulated depreciation |  | (246,453     | ) |  | (166,606 | )
| | Impairment loss (See Note 11)  |  | (231,815     | ) |  | -        |  
| |                                |  |              |   |  |          |  
| | Net book value                 |  | 1            |   |  | 311,663  |  

F-13

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

Both the bank indebtedness and the Business Development Corporation
  (BDC) loan, described in Notes 5 and 7, respectively, are secured
  by a general security agreement over all the Company assets and are guaranteed
  by the Companys two directors.

(5)      BANK INDEBTEDNESS

At December 31, 2006, the Companys bank line of credit
  was fully utilized at $42,715 (December 31, 2005 - $nil). The bank indebtedness
  is payable on demand, bears interest at the banks prime rate plus 1.55%
  per annum, is secured by a general security agreement over all Company assets
  and is guaranteed by the Companys two directors.

(6)      CONVERTIBLE PROMISSORY NOTES
  PAYABLE

During 2005 and the first half of 2006, the Company borrowed
  $405,700 from nine private lenders by way of promissory notes bearing interest
  at 15% per annum. At December 31, 2006, $383,850 was payable (December 31, 2005
  - $335,700) following partial conversion by one of the note holders into restricted
  common stock of the Company.

Principal is repayable in cash or restricted shares, at the option
  of the lender, after one year from the date of issuance. As an equity inducement,
  the Company issued 249,390 shares of restricted common stock with a fair value
  of $24,249. These inducements were recorded as a deferred finance charge (See
  Note 3) to be amortized on a straight-line basis over the twelve month term
  of the notes. In this regard, $19,126 was expensed as non-cash interest for
  the year ended December 31, 2006 (December 31, 2005 - $4,766).

Interest was previously payable to the note holders quarterly
  in advance but was renegotiated to quarterly in arrears during the second half
  of 2006 for all lenders. This was done in exchange for an equity inducement
  of 66,450 shares with a fair value of $4,614, which was expensed as non-cash
  interest for the year ended December 31, 2006 (December 31, 2005 - $nil). Interest
  payable on these notes at December 31, 2006 amounted to $26,716 (December 31,
  2005  $nil).

At the note holders option, the notes may be converted
  into common stock of the Company at a 15% discount to the volume weighted average
  price during the ten days prior to the due dates. In accordance with EITF 98-5
  Accounting for Convertible Securities with Beneficial Conversion Features
  or Contingently Adjustable Conversion Ratios, the Company recognized
  the value of this embedded beneficial conversion feature at $50,855 at the time
  of issuance. This amount was also deferred (See note 3) and is being amortized
  on a straight-line basis over the twelve month term of the notes. In this regard,
  $37,973 was expensed as non-cash interest for the year ended December 31, 2006
  (December 31, 2005 - $9,102). The unamortized balance of $4,135 was written
  off as an asset impairment provision at December 31, 2006. (See Note 11)

During the second half of 2006, the Company obtained agreement
  from four lenders with combined promissory notes of $155,700 to extend their
  repayment term by one year expiring from June to September, 2007. An equity
  inducement of 18,000 shares with a fair value of $1,200 was given to an additional
  note holder for extending their loan by one year, which amount was expensed
  as non-cash interest for the year ended December 31, 2006 (December 31, 2005
  - $nil). For another note holder, half the loan was extended for one more year
  with the other half being converted into 520,238 restricted shares with a fair
  value of $21,850.

F-14

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

The Company has guaranteed an annualized return of 40% to four
  noteholders holding promissory notes with a value of $200,000. The annualized
  return was made up of interest and the fair value of the restricted stock issued
  as the equity inducement at issuance of the promissory note. The due dates range
  from January 2006 to April 2007. If there is a shortfall in this return at maturity
  or if repayment is in default, the Company must issue additional restricted
  common stock in order to meet this return. In this regard, the Company recorded
  a non-cash interest expense of $45,047 (December 31, 2005 - $nil). If converted
  to common stock at December 31, 2006, this amount would represent approximately
  1,126,200 shares.

(7)      CONVERTIBLE AND OTHER LONG
  TERM DEBT

The convertible and other long term debt is comprised of the
  following:

| |                             |   | December 31, |  |   | December 31, | 
| | --------------------------- | - | ------------ |  | - | ------------ | 
| |                             |   | 2006         |  |   | 2005         | 
| |                             |   | $            |  |   | $            | 
| | BDC Term loans              |   | -            |  |   | 17,838       | 
| | Long term convertible loans |   | 61,500       |  |   | 38,479       | 
| | CLX Convertible Term Loan   |   | 225,000      |  |   | 225,000      | 
| |                             |   |              |  |   |              | 
| |                             | $ | 286,500      |  | $ | 281,317      | 

(i)     
  Term Loans

| |                                       |  | December 31, |   |  | December 31, |  
| | ------------------------------------- |  | ------------ | - |  | ------------ | -
| |                                       |  | 2006         |   |  | 2005         |  
| | BDC loan, bearing interest at BDC     |  | $            |   |  | $            |  
| | prime plus 4% per annum with monthly  |  |              |   |  |              |  
| | principal payments of $686 (Cdn $800) |  |              |   |  |              |  
| | commencing October 2002 and maturing  |  |              |   |  |              |  
| | March 2008                            |  | 13,730       |   |  | 18,524       |  
| | BDC loan, bearing interest at BDC     |  |              |   |  |              |  
| | prime plus 2% per annum with monthly  |  |              |   |  |              |  
| | principal payments of $686 (Cdn $800) |  |              |   |  |              |  
| | commencing June 2002 and maturing     |  |              |   |  |              |  
| | November 2008.                        |  | 10,297       |   |  | 15,780       |  
| |                                       |  | 24,027       |   |  | 34,304       |  
| |                                       |  |              |   |  |              |  
| | Less: current portion                 |  | (24,027      | ) |  | (16,466      | )

| | long term portion |  | - |  |  | 17,838 | 
| | ----------------- |  | - |  |  | ------ | 

F-15

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

The term loans are secured by a general security agreement over
  all Company assets and guaranteed by the Companys two directors. The Company
  plans to repay these loans during 2007 resulting in their classification as
  current liabilities.

ii)     Long term convertible loans
  - private

During the year ended December 31, 2005, the company borrowed
  $61,500 of non-interest bearing loans from two private individuals with no specified
  repayment terms. After March 2007, the loans are convertible at the lenders
  option into units consisting of 768,570 shares of common stock and an equivalent
  number of share purchase warrants exercisable at $0.10 per share.

In accordance with EITF 98-5 Accounting for Convertible
  Securities with Beneficial Conversion Features or Contingently Adjustable Conversion
  Ratios, the Company recognized the value of the embedded beneficial
  conversion feature of $12,953 (See Note 3). This value was recorded as a deferred
  charge and is being amortized over the eighteen month term of the notes. In
  this connection, $8,635 was expensed as non-cash interest for the year ended
  December 31, 2006 (December 31, 2005  $2,878). The unamortized balance
  of $1,439 was expensed as non-cash interest at December 31, 2006 (See Note 11).

In addition and in accordance with EITF 00-27 Application
  of Issue No. 98-5 to Certain Convertible Instruments, the Company has
  allocated the proceeds of issuance between the convertible debt and the detachable
  warrants based on their relative fair values. Accordingly, the Company recognized
  the fair value of the detachable warrants of $29,600 as common stock purchase
  warrants and will record further non-cash interest expense over the term of
  the Convertible Loans resulting from this difference between the stated value
  and carrying value at the date of issuance. As an offset, the carrying value
  of the Convertible Loans will be accreted to the face value of $61,500 at maturity.
  In this connection, non-cash interest expense of $19,733 was accreted for the
  year ended December 31, 2006 (December 31, 2005 - $6,578), thereby increasing
  the carrying value of the Convertible Loans from $31,900 at the date funds were
  received to $58,210 at December 31, 2006. The remaining $3,290 balance of accretion
  was expensed as non-cash interest bringing the carrying value of the loans back
  to their original value of $61,500 at December 31, 2006.

iii)    Long term convertible
  loan - CLX

During the year ended December 31, 2005, the Company borrowed
  $225,000 from CLX Investment Company, Inc. (CLX), bearing interest
  at 8% per annum compounded quarterly in arrears under Financing Agreement dated
  July 15, 2005 and amended January 16, 2006. The loan is repayable to CLX in
  an amount equal to 25% of net quarterly income of the Company or $75,000 whichever
  is greater, commencing on the earlier of May 31, 2007 or the month following
  the quarter in which the Company generates net quarterly income of at least
  $150,000. Interest payable on this loan at December 31, 2006 amounted to $19,052
  (December 31, 2005  nil).

F-16

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

As an inducement, the Company issued 1,285,700 shares of restricted
  common stock with a fair value of $141,427. The inducement was recorded as a
  deferred finance charge (See Note 3) and was being amortized straight-line over
  the twenty-one month term of the loan. In this connection, $80,815 was expensed
  as non-cash interest for the year ended December 31, 2006 (December 31, 2005
  - $24,095). The unamortized balance of $36,517 applicable to this deferred finance
  charge was expensed as non-cash interest at December 31, 2006 (See Note 11).

At December 31, 2006 the Company were in default with the terms
  of the CLX Financing agreement as the required interest payments under the Financing
  agreements was in arrears and the loan became payable on demand. Consequently,
  the entire loan balance was re-classified as a current liability.

(8)      DUE TO RELATED PARTIES

At December 31, 2006, the Company owed a total of $391,901 (December
  31, 2005 - $144,053) to two Company officers who are also directors and their
  private companies. The balances owing are unsecured and non-interest bearing
  with no specific terms of repayment. For the year ended December 31, 2006, management
  fees of $265,000 (December 31, 2005 - $202,000) were accrued for the two Company
  officers and their private companies.

All related party transactions are conducted in the ordinary
  course of business and measured at the exchange amount, which is the consideration
  established and agreed by the related parties.

(9)      COMMON STOCK

During the year ended December 31, 2005:

i)      
  the Company implemented a Retainer Stock Plan which was filed on a Form S-8
  Registration Statement in January 2005. Under the Plan, a total of 3,000,000
  shares of common stock can be issued to compensate directors, employees and
  consultants for services rendered to the Company at prices and terms to be determined
  by the Board of Directors.

ii)    
   the Company issued 3,025,000 units under Private Placement for cash consideration
  of $250,000 at prices ranging from $0.08 to $0.10 per unit. Each unit consists
  of one share of restricted common stock and a non-transferable share purchase
  warrant entitling the holder to purchase one-half share of restricted common
  stock at an exercise price of $0.17 for one year expiring by June 30, 2006.
  The fair value of the warrants was estimated to be $25,000 and was recorded
  as a separate component of stockholders equity.

F-17

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

(iii)   
  the Company issued 1,275,177 shares of registered common stock in return for
  consulting services with a fair value of $124,760 regarding the preparation
  of legal contracts, continuous disclosure documents, business planning and sales
  & marketing at prices ranging from $0.07 to $0.10 per share.

(iv)    
  the Company issued 437,500 shares of restricted common stock in return for business
  consulting services valued at $43,500.

(v)    
   the Company issued 1,468,000 shares of registered common stock for the
  settlement of accounts payable of $146,800.

(vi)    
   the Company issued 2,500,000 shares of restricted common stock for the
  settlement of $200,000 of amounts owing to Company officers who are also directors.

(vii)     the
  Company issued 231,390 shares of restricted common stock as an equity inducement
  with a fair value of $23,129 for $335,700 of promissory notes.

(viii)    
  the Company issued 1,285,700 shares of restricted common stock as an equity
  inducement with a fair value of $141,427 for a $225,000 convertible term loan.

During the year ended December 31, 2006:

(i)     
   the Company registered an additional 3,000,000 shares of common stock
  under its 2005 Retainer Stock Plan on a Form S-8 Registration Statement. Under
  the Plan, these shares can be issued to compensate directors, employees and
  consultants of the Company for services rendered to the Company at prices and
  terms to be determined by the Board of Directors.

(ii)     
  the company issued 228,000 shares of restricted common stock for cash consideration
  of $20,178,

(iii)   
   the company issued 2,329,449 shares of registered common stock for various
  consulting services with a fair value of $161,802 regarding the preparation
  of legal contracts, continuous disclosure documents, business planning and sales
  & marketing services at prices ranging from $0.04 to $0.10 per share.

(iv)    
  the company issued 520,238 shares of restricted common stock for conversion
  of half of one promissory note payable with a fair value of $21,850.

(v)   
   the company issued 98,450 shares of restricted common stock with a fair
  value of $6,934 as equity inducement for two promissory notes amounting to $32,000
  and for all promissory note holders agreeing to change their interest payments
  from quarterly in advance to quarterly in arrears.

F-18

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

Exchangeable shares

The 8,422,675 exchangeable shares were issued to a trustee of
  the two officers and directors of the Company as part of the acquisition of
  AASI and 612 Canada in September 2003. The holders of these Exchangeable Shares
  may, at any time, require 612 Canada to repurchase the Exchangeable Shares for
  an amount equal to the then current market value of the Companys common
  stock. 612 Canada may, at its option, satisfy the resulting obligation to repurchase
  the exchangeable shares in cash or it may elect to have the obligation satisfied
  by the issuance of shares of the common stock of the Company on the basis of
  one common share for one exchangeable share. The holders of the exchangeable
  shares have been granted voting rights on a basis of on vote for every exchangeable
  share held. During the year ended December 31, 2003, 350,000 exchangeable shares
  were exchanged for shares of the Company at $0.30 each, leaving 8,072,675 Exchangeable
  Shares issued and outstanding as at December 31, 2006 and 2005.

Stock OptionsA summary of the Companys outstanding stock options as of December
  31, 2006 and 2005 and changes during these years is presented below:

| |                             |  | 2006    |  |  | 2005     | 
| | --------------------------- |  | ------- |  |  | -------- | 
| |                             |  |         |  |  | Exercise | 
| |                             |  | Options |  |  | Price    | 
| | Balance, beginning of year  |  | -       |  |  | -        | 
| | Granted                     |  | -       |  |  | -        | 
| | Exercised/expired/cancelled |  | -       |  |  | -        | 
| | Balance, end of year        |  | -       |  |  | -        | 

Warrants

During the year ended December 31, 2005, the Company issued:

i)      
  1,512,500 warrants to purchase 1,512,500 shares of the Companys common
  stock at $0.17 per share as part of a private placement. These warrants initially
  expired on June 15, 2006 which was extended to June 30, 2007 in 2006.

ii)     
  768,750 warrants to purchase 768,750 shares of the Companys common stock
  at $0.10 per share as part of a convertible debt instrument with two investors.
  These warrants have an no expiry date.

During the year ended December 31, 2006, the Company issued:

(i)      90,000 warrants to purchase 90,000 shares
  of the Companys common stock at $0.13 per share as part of a consulting
  agreement. These warrants expire in three years from date of issuance by February
  14, 2009.

F-19

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

In addition, the Company extended terms by one year on 1,512,500
  warrants to June 30, 2007. All other warrant terms remain unchanged.

A summary of the Companys warrants as at December 31, 2006
  and 2005 and changes during the current year is presented below:

Number of
      
      
      
      
      
      
      
      
      Number ofShares
      
      
      
      
      
      
      
      
      SharesExercise
      
      
      Issuable at
      
      
      
      
      
      Exercised
      
      
      Issuable atPrice
      
      
      December 31,
      
      
      Issued
      
      
      and
      
      
      December 31,Expiry Date
      
      
      
      
      2005
      
      
      
      
      
      Expired
      
      
      2006Oct 10, 2006
      
      0.55
      
      
      30,000
      
      
      
      
      
      (30,000
      )
      
      -Oct 15, 2006
      
      0.55
      
      
      70,000
      
      
      
      
      
      (70,000
      )
      
      -Oct 28, 2006
      
      0.55
      
      
      120,000
      
      
      -
      
      
      (120,000
      )
      
      -Nov 4, 2006
      
      0.55
      
      
      50,000
      
      
      -
      
      
      (50,000
      )
      
      -Nov 26, 2006
      
      0.55
      
      
      108,000
      
      
      -
      
      
      (108,000
      )
      
      -Dec 8, 2006
      
      0.55
      
      
      540,000
      
      
      -
      
      
      (540,000
      )
      
      -Dec 31, 2006
      
      0.55
      
      
      40,000
      
      
      -
      
      
      (40,000
      )
      
      -July 25, 2006
      
      0.30
      
      
      102,000
      
      
      -
      
      
      (102,000
      )
      
      -Sept 2, 2006
      
      0.45
      
      
      250,000
      
      
      -
      
      
      (250,000
      )
      
      -Jan 15, 2007
      
      0.55
      
      
      150,000
      
      
      -
      
      
      -
      
      
      150,000Jan 22, 2007
      
      0.55
      
      
      50,000
      
      
      -
      
      
      -
      
      
      50,000Feb 20, 2007
      
      0.55
      
      
      50,000
      
      
      
      
      
      -
      
      
      50,000Mar 10, 2007
      
      0.45
      
      
      175,000
      
      
      -
      
      
      -
      
      
      175,000Jun 30, 2007
      
      0.17
      
      
      1,412,500
      
      
      -
      
      
      -
      
      
      1,412,500Jun 30, 2007
      
      0.17
      
      
      100,000
      
      
      -
      
      
      -
      
      
      100,000Feb 14, 2009
      
      0.13
      
      
      -
      
      
      90,000
      
      
      
      
      
      90,000Indefinite
      
      0.10
      
      
      768,750
      
      
      -
      
      
      -
      
      
      768,750Totals
      
      
      
      
      4,016,250
      
      
      90,000
      
      
      (1,310,000
      
      
      2,796,250


The weighted average exercise price and remaining life of the
  stock purchase warrants is $0.20 and 302 days, respectively.

Dilutive Securities

At December 31, 2006, the Company had 11,637,675 potentially
  dilutive securities outstanding (December 31, 2005  12,438,925) in the
  form of exchangeable shares (8,072,675), stock purchase warrants (2,796,250),
  and convertible loans (768,750).

F-20

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

Subsequent to December 31, 2006, the Company received notice
  of default from CLX requesting conversion of the loan into 8,907,100 common
  shares of the Company stock (See Note 13). If converted, convertible promissory
  notes and loans could result in the Company issuing approximately an additional
  18,200,000 shares (See Notes 6 and 7).

10)      INCOME TAXES

At December 31, 2006, the Company had accumulated non-capital
  loss carry-forwards of approximately $5,212,000, which are available to reduce
  taxable income in future taxation years. These losses begin to expire in 2018
  after a carry forward period of 25 years. The Company is required to compute
  the deferred tax asset from non-capital loss carry-forwards. However, due to
  the uncertainty of realization of these loss carry-forwards, a full valuation
  allowance has been provided for this deferred tax asset. The components of the
  deferred tax asset at December 31, 2006 and December 31, 2005, the statutory
  tax rate, the effective tax rate and the elected amount of the valuation allowance
  are shown below:

| |                                | December 31, 2006 | December 31, 2005
| | ------------------------------ | ----------------- | -----------------
| |                                | $                 | $                
| | Non-capital loss carry forward | 5,212,000         | 4,340,000        
| | Statutory tax rate             | 35%               | 35%              
| | Effective tax rate             |                  |                 
| | Deferred tax asset             | 1,824,000         | 1,519,000        
| | Less: valuation allowance      | (1,824,000)       | (1,519,000)      
| | Net deferred tax asset         |                  |                 

11)      IMPAIRMENT

Due to the delays in generating revenue from the sale or rental
  of scrolling billboard signs and the lack of profitability to date, the Company
  has determined there is significant uncertainty as to the realization of the
  carrying value of substantially all of its remaining assets. Accordingly, these
  assets have either been written off or written down to estimated recoverable
  amounts. The following specific events occurred in the second half of 2006 leading
  to this decision:

| | (i) | the August 2006 termination of AVFE’s contract
        with Chuangrun Media Ltd regarding the installation of 150 motion billboard
        signs following the revelation that the contracts it proclaimed to have
        with the Guangzhou Airport Authority in southern China were both non-existent.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-21

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ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

| | (ii)  | the inability to finalize the order for motion billboard
        signs to Australia;                          
| | ----- | --------------------------------------------------------------------------------------------------------------
| |       |                                                                                                               
| | (iii) | the inability to maintain the contract for rental signs
        at the retail shopping malls in Hong Kong; and
| |       |                                                                                                               
| | (iv)  | the on-going difficulty for the Company to raise working
        capital to carry on its business.            

Accordingly, the Company has recorded an operating asset impairment
  provision of $379,134 for the year ended December 31, 2006 comprised of the
  following:

| | Provision for uncollectible accounts receivable                   | $ | 13,093  | 
| | ----------------------------------------------------------------- | - | ------- | 
| | Write down of inventory to net realizable value                   |   | 88,844  | 
| | Write down of rental signs to estimated recoverable
      amounts |   | 231,816 | 
| | Unamortized balance of deferred finance charges written off       |   | 42,091  | 
| | Unamortized balance of accretion expense written
      off        |   | 3,290   | 
| | Total operating asset impairment                                  | $ | 379,134 | 

Subsequent to the year end, the Company committed to an active
  plan to sell certain of its rental signs and inventory (See Note 13).

During the year ended December 31, 2005 and in accordance with
  the provisions of the Statement of Financial Accounting Standards No. 142 (SFAS
  142), Goodwill and Other Intangible Assets, the Company wrote
  down its Intellectual Property Rights and Goodwill to nominal value of $1 resulting
  in an asset impairment of $2,138,787.

(12)      SUPPLEMENTAL DISCLOSURE
  WITH RESPECT TO CASH FLOWS

The shares of common stock issued by the Company for non-cash
  consideration during the years ended December 31, 2005 and 2006 is presented
  below:

During the year ended December 31, 2005,the Company issued
  7,197,767 shares of common stock in settlement of various consulting services,
  accounts payable and debt financing obligations valued at $763,525 as follows:

F-22

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 200505

(i)     
   the Company issued 1,275,177 shares of registered common stock in return
  for consulting services valued at $124,760 regarding the preparation of legal
  contracts, continuous disclosure documents, business planning and sales &
  marketing at market prices ranging from $0.07 to $0.10 per share.

(ii)     
  the Company issued 437,500 shares of restricted common stock in return for business
  consulting services valued at $43,500.

(iii)    
  the Company issued 1,468,000 shares of registered common stock for the settlement
  of accounts payable of $146,800.

(iv)     
  the Company issued 2,500,000 shares of restricted common stock for the settlement
  of $200,000 of amounts owing to Company officers who are also directors.

(v)     
   the Company issued 231,390 shares of restricted common stock as an equity
  inducement valued at $23,129 for $335,700 of promissory notes payable pursuant
  to an exemption from registration provided by Section 4 (2) of the Securities
  Act of 1933.

(vi)    
   the Company issued 1,285,700 shares of Rule 144 restricted common stock
  as an equity inducement valued at $141,427 for a $225,000 convertible term loan.
  (See Note 7(iii))

During the year ended December 31, 2006,the Company issued
  2,948,137 shares of common stock in settlement of various consulting services
  and debt financing obligations valued at $200,086 as follows:

(i)      
  the company issued 2,329,449 shares of registered common stock for various consulting
  services valued at $161,802 regarding the preparation of legal contracts, continuous
  disclosure documents, business planning and sales & marketing services at
  prices ranging from $0.04 to $0.10 per share.

(ii)    
   the company issued 520,238 shares of restricted common stock for conversion
  of half of one promissory note payable valued at $21,850.

(iii)   
   the company issued 98,450 shares of restricted common stock valued at
  $6,934 as equity inducement for two promissory notes amounting to $32,000 and
  for all promissory note holders agreeing to change their interest payments from
  quarterly in advance to quarterly in arrears.

(13)      SUBSEQUENT EVENTS

Subsequent to the year ended December 31, 2006, the following
  significant events occurred: i) the Company received written notice of default
  from CLX, as prescribed under their Financing Agreement, requesting conversion
  of the $225,000 principal owing plus $21,727 accrued interest into restricted
  common stock of the Company, equivalent to 8,907,100 shares.

F-23

---

ACTIONVIEW INTERNATIONAL, INC 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2006 and 2005

ii)     
  the Company committed to a plan to dispose of substantially all of its operations
  and operational assets. The assets comprise inventory of signs and related spare
  parts and rental signs earning advertising revenue.

iii)    
  the Company received notice of claim for $9,208 from its former landlord, regarding
  removal of certain fixtures installed by the Company. The Company disputes the
  claim, considers it to be without merit and plans to defend itself against this
  claim.

iv)     
  the Company did not repay $180,000 of convertible promissory notes in January
  2007 and consequently are in default of the repayment terms of these notes (See
  Note 6).

F-24

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