**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**FORM      10-QSB**

| x | **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|---|------------------------------------------------------------------------------------------------------------------------------------------|

| For                the quarterly period ended: | March                31, 2007 |
|------------------------------------------------|-------------------------------|

| o | **TRANSITION                REPORT PURSUANT SECTION 13 OR 15(d) OF THE EXCHANGE                ACT** |
|---|------------------------------------------------------------------------------------------------------|

| For                the transition period from: |   | to |   |
|------------------------------------------------|--------|----|--------|

| Commission                file number: | 000-30375 |
|----------------------------------------|-----------|

| Las                Vegas Gaming, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Exact                name of small business issuer as specified in its                charter)                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |
| Nevada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 88-0392994 |
| (State                or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                    |   | (I.R.S.                Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4000                West Ali Baba Lane, Suite D, Las Vegas, Nevada 89118                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (Address                of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (702)                871-7111                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (Issuer’s                telephone number)                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (Former                name, former address and former fiscal year, if changed since last                report)                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Check                whether the issuer (1) filed all reports required to be filed by                Section                13 or 15(d) of the Exchange Act during the past 12 months (or for                such                shorter period that the registrant was required to file such reports),                and                (2) has been subject to such filing requirements for the past 90                days.  Yes x                 No                o   |
| Indicate                by check mark whether the registrant is a shell company (as defined                in                Rule 12b-2 of the Exchange Act). Yes o No                x                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **APPLICABLE                ONLY TO CORPORATE ISSUERS**                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| State                the number of shares outstanding of each of the issuer’s classes of common                equity, as of the latest practicable                date:  11,207,903                shares of Common Stock Series A, $.001 par value, as of March 31,                2007                                                                                                                                                                                        |
| Transitional                Small Business Disclosure Format (check one): Yes oNo                x                                                                                                                                                                                                                                                                                                                                                                                          |

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***Table          of Contents***

**LAS      VEGAS GAMING, INC.**

**FORM      10-QSB**

**TABLE      OF CONTENTS**

|                                                |                                                                                                                               | **Page**  |
|-----------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|----------------|
| **PART                  I - FINANCIAL INFORMATION** | 3                                                                                                                                  |
|                                                |                                                                                                                               |           |
| Item                  1.        | Financial                  Statements                                                                                              | 3              |
|                                                | Consolidated                  Balance Sheets                                                                                       | 3              |
|                                                | Consolidated                  Statements of                  Operations                                                            | 4              |
|                                                | Consolidated                  Statements of Stockholders’                  Equity                                            | 5              |
|                                                | Consolidated                  Statements of Cash Flow                                                                              | 6              |
|                                                | Notes                  to Unaudited Consolidated Financial                  Statements                                             | 7              |
| Item                  2.             | Management’s                  Discussion and Analysis of Financial Condition and                  Results of Operations | 15        |
|                                                | Critical                  Accounting Policies and                  Estimates                                                       | 16        |
|                                                | Recent                  Accounting Pronouncements                                                                                  | 17             |
|                                                | Results                  of Operations                                                                                             | 18        |
|                                                | Liquidity                  and Capital Resources                                                                                   | 19             |
|                                                | Off                  Balance Sheet Financing                                                                                       | 21             |
|                                                | Qualitative                  and Quantitative Disclosures about Market                  Risk                                       | 21             |
| Item                  3.             | Controls                  and Procedures                                                                                           | 21             |
|                                                |                                                                                                                               |
| **PART                  II - OTHER INFORMATION**    | 22                                                                                                                                 |
|                                                |                                                                                                                               |
| Item                  1.             | Legal                  Proceedings                                                                                                 | 22             |
| Item                  2.             | Unregistered                  Sales of Equity Securities                                                                           | 22             |
| Item                  3.             | Defaults                  Upon Senior Securities                                                                                   | 23             |
| Item                  4.             | Submission                  of Matters to a Vote of Security                  Holders                                              | 23             |
| Item                  5.             | Other                  Information                                                                                                 | 23             |
| Item                  6.             | Exhibits                                                                                                                           | 23             |

**_________________________________**

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***Table          of Contents***

**PART      I - FINANCIAL**
**INFORMATION**

**Item      1. Financial Statements.**

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

| **ASSETS**                                                                                                                                                           |   | **December                31****2006** |        | **March                31, 2007****(Unaudited)** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-------------|--------------------------------------------------|--------|
| **Current                assets**                                                                                                                                    |   |                                   |        |                                             |   |   |   |
| Cash                                                                                                                                                                 |   | $                                      | 1,675,588   |                                             | $      | 2,991,548 |   |
| Investment                in marketable trading securities                                                                                                           |   |                                   | 150,806     |                                             |   | 143,336 |   |
| Accounts                receivable, net of allowance of $9,096 and $11,937                                                                                           |   |                                   | 466,222     |                                             |   | 519,124 |   |
| Inventories                                                                                                                                                          |   |                                   | 514,972     |                                             |   | 489,562 |   |
| Prepaid                expenses, deposits and other                                                                                                                  |   |                                   | 576,090     |                                             |   | 463,186 |   |
| Jackpot                reserve deposits                                                                                                                              |   |                                   | 4,154,190   |                                             |   | 1,706,343 |   |
|                                                                                                                                                                 |   |                                   | 7,537,868   |                                             |   | 6,313,099 |   |
| **Equipment                and software, net of accumulated depreciation of $1,329,140 and                $1,424,625**                                               |   |                                   | 917,835     |                                             |   | 1,004,580 |   |
|                                                                                                                                                                 |   |                                   |        |                                             |   |   |   |
| **Other                assets**                                                                                                                                      |   |                                   |        |                                             |   |   |   |
| Goodwill                                                                                                                                                             |   |                                   | 955,277     |                                             |   | 955,277 |   |
| Trademarks,                copyrights, patents and other identifiable intangibles, net of accumulated                amortization of $616,170 and $736,844           |   |                                   | 1,800,066   |                                             |   | 1,679,392 |   |
| Other                long term assets                                                                                                                                |   |                                   | 116,878     |                                             |   | 136,852 |   |
|                                                                                                                                                                 |   | $                                      | 11,327,924  |                                             | $      | 10,089,200 |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                                              |   |                                   |        |                                             |   |   |   |
|                                                                                                                                                                 |   |                                   |        |                                             |   |   |   |
| **Current                liabilities**                                                                                                                               |   |                                   |        |                                             |   |   |   |
| Accounts                payable and accrued expenses                                                                                                                 |   | $                                      | 1,189,947   |                                             | $      | 869,310 |   |
| Current                portion of long-term debt                                                                                                                     |   |                                   | 1,310,874   |                                             |   | 983,644 |   |
| Progressive                jackpot liability                                                                                                                         |   |                                   | 1,625,051   |                                             |   | 1,706,343 |   |
|                                                                                                                                                                 |   |                                   | 4,125,872   |                                             |   | 3,559,297 |   |
| **Long-term                debt**                                                                                                                                    |   |                                   | 3,144,903   |                                             |   | 3,016,126 |   |
| **Conditionally                redeemable equity**                                                                                                                   |   |                                   |        |                                             |   |   |   |
| Series                B Convertible Preferred Stock, $.001 par value, 346,140 and 239,300                shares                issued and outstanding                |   |                                   | 1,730,700   |                                             |   | 1,196,500 |   |
|                                                                                                                                                                 |   |                                   | 1,730,700   |                                             |   | 1,196,500 |   |
| **Stockholders'                equity**                                                                                                                              |   |                                   |        |                                             |   |   |   |
| Convertible                Preferred Stock, $.001 par, 10,000,000 shares authorized:                                                                                 |   |                                   |        |                                             |   |   |   |
| Series                A: 536,400 and 0 shares issued and outstanding                                                                                                 |   |                                   | 536         |                                             |   | - |   |
| Series                C: 50,000 and 47,000 shares issued and outstanding                                                                                             |   |                                   | 50          |                                             |   | 47 |   |
| Series                D: 125,000 shares issued and outstanding                                                                                                       |   |                                   | 125         |                                             |   | 125 |   |
| Series                E: 351,000 and 417,400 shares issued and outstanding                                                                                           |   |                                   | 351         |                                             |   | 417 |   |
| Common                Stock Series A and Common stock $.001 par, 90,000,000 shares authorized,                9,819,680 and 11,207,903 shares issued and outstanding |   |                                   | 9,820       |                                             |   | 11,208 |   |
| Additional                paid-in capital                                                                                                                            |   |                                   | 21,576,045  |                                             |   | 24,145,908 |   |
| Deferred                compensation                                                                                                                                 |   |                                   | (123,031    | )                                                |   | (168,586 | ) |
| Due                from officers and stockholders                                                                                                                    |   |                                   | -           |                                             |   | (14,500 | ) |
| Deficit                                                                                                                                                              |   |                                   | (19,137,447 | )                                                |   | (21,657,342 | ) |
|                                                                                                                                                                 |   |                                   | 2,326,449   |                                             |   | 2,317,277 |   |
|                                                                                                                                                                 |   | $                                      | 11,327,924  |                                             | $      | 10,089,200 |   |

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**THREE      MONTHS ENDED MARCH 31, 2006 AND 2007 (UNAUDITED)**

|                                                   |   | **2006** |      | **2007** |   |
|--------------------------------------------------------|--------|----------|-----------|----------|--------|
|                                                   |   |     |      |     |   |
| **Revenues**                                           |   |     |      |     |   |   |   |
| Casino                games                            |   | $        | 455,733   |     | $      | 430,708 |   |
| Product                sales                           |   |     | 454,613   |     |   | 412,025 |   |
| Other                                                  |   |     | 425,872   |     |   | 413,319 |   |
|                                                   |   |     | 1,336,218 |     |   | 1,256,052 |   |
|                                                   |   |     |      |     |   |   |   |
| **Costs                and expenses**                  |   |     |      |     |   |   |   |
| Casino                games                            |   |     | 526,871   |     |   | 322,610 |   |
| Product                costs                           |   |     | 315,006   |     |   | 287,824 |   |
| Other                                                  |   |     | 329,560   |     |   | 340,436 |   |
|                                                   |   |     | 1,171,437 |     |   | 950,870 |   |
|                                                   |   |     |      |     |   |   |   |
| **Gross                operating income**              |   |     | 164,781   |     |   | 305,182 |   |
|                                                   |   |     |      |     |   |   |   |
| **Other                operating expenses**            |   |     |      |     |   |   |   |
| Selling,                general, and administrative    |   |     | 659,694   |     |   | 1,946,581 |   |
| Research                and development                |   |     | 202,000   |     |   | 338,896 |   |
| Depreciation                and amortization           |   |     | 147,029   |     |   | 216,159 |   |
|                                                   |   |     | 1,008,723 |     |   | 2,501,636 |   |
|                                                   |   |     |      |     |   |   |   |
| **Operating                loss**                      |   |     | (843,942  | )        |   | (2,196,454 | ) |
|                                                   |   |     |      |     |   |   |   |
| **Other                income and expense**            |   |     |      |     |   |   |   |
| Finance                costs                           |   |     | (141,326  | )        |   | (385,899 | ) |
| Interest                and other income               |   |     | 46,973    |     |   | 62,458 |   |
|                                                   |   |     |      |     |   |   |   |
| **Net                loss**                            |   | $        | (938,295  | )        | $      | (2,519,895 | ) |
|                                                   |   |     |      |     |   |   |   |
| **Net                loss per share**                  |   | $        | (0.11     | )        | $      | (0.24 | ) |
|                                                   |   |     |      |     |   |   |   |
| **Weighted                average shares outstanding** |   |     | 8,905,020 |     |   | 10,305,972 |   |

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’****EQUITY**

**THREE      MONTHS ENDED MARCH 31, 2007 (UNAUDITED)**

|                                                                                                      |   | Series                A ConvertiblePreferredStockPar                Value |   | Series                C ConvertiblePreferredStockPar                Value |   | Series                D ConvertiblePreferredStockPar                Value |   | Series                E ConvertiblePreferredStockPar                Value |   | CommonStockPar                Value |   |  AdditionalPaid-InCapital |   | DeferredCompensation |   | Less                Due FromOfficers                andStockholders |   | Deficit    |   |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|-------------------------------------|--------|--------------------------------|--------|----------------------|--------|---------------------------------------------------------------------|--------|------------|--------|
|                                                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                |   |                           |   |                 |   |                                                                |   |       |   |   |   |   |   |   |   |   |   |   |
| Balances,                January 1, 2007                                                                  |   | $                                                                         | 536    |                                                                      | $      | 50                                                                        |   | $                                                                         | 125    |                                | $      | 351                            |   | $                    | 9,820  |                                                                | $      | 21,576,045 |   | $ | (123,031 | ) | $ | - |   | $ | (19,137,447 | ) |
| Net                loss                                                                                   |   |                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                |   |                           |   |                 |   |                                                                |   |       |   |   |   |   |   |   |   |   | (2,519,895 | ) |
| Exercise                of warrants and options                                                           |   |                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                |   |                           |   |                 | 203    |                                                                |   | 390,170    |   |   |   |   |   | (14,500 | ) |   |   |   |
| Issuance                of warrants                                                                       |   |                                                                      |   |                                                                      |   |                                                                           |   |                                                                      |   |                                |   |                           |   |                 |   |                                                                |   | 705,288    |   |   |   |   |   |   |   |   |   |   |
| Stock                based compensation                                                                   |   |                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                |   |                           |   |                 |   |                                                                |   | 108,917    |   |   | (72,611 | ) |   |   |   |   |   |   |
| Vesting                of warrants                                                                        |   |                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                |   |                           |   |                 |   |                                                                |   |       |   |   | 27,056 |   |   |   |   |   |   |   |
| Issuance                of Common Stock Series A to officer and board member                              |   |                                                                      |   |                                                                      |   |                                                                           |   |                                                                      |   |                                |   |                           |   |                 | 100    |                                                                |   | 499,900    |   |   |   |   |   |   |   |   |   |   |
| Conversion                of Series A Convertible Preferred Stock to Common Stock Series                A |   |                                                                      | (536   | )                                                                         |   |                                                                      |   |                                                                      |   |                                |   |                           |   |                 | 536    |                                                                |   | -          |   |   |   |   |   |   |   |   |   |   |
| Conversion                of Series B Convertible Preferred Stock to Common Stock Series                A |   |                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                |   |                           |   |                 | 534    |                                                                |   | 533,666    |   |   |   |   |   |   |   |   |   |   |
| Conversion                of Series C Convertible Preferred Stock to Common Stock Series                A |   |                                                                      |   |                                                                      |   | (3                                                                        | )      |                                                                      |   |                                |   |                           |   |                 | 15     |                                                                |   | (12        | )      |   |   |   |   |   |   |   |   |   |
| Sales                of Series E Convertible Preferred Stock                                              |   |                                                                      |   |                                                                      |   |                                                                      |   |                                                                      |   |                                |   | 66                             |   |                 |   |                                                                |   | 331,934    |   |   |   |   |   |  |   |   |  |   |
| Balances,                March 31, 2007                                                                   |   | $                                                                         | (0     | )                                                                         | $      | 47                                                                        |   | $                                                                         | 125    |                                | $      | 417                            |   | $                    | 11,208 |                                                                | $      | 24,145,908 |   | $ | (168,586 | ) | $ | (14,500 | ) | $ | (21,657,342 | ) |

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOW**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2006 AND 2007 (UNAUDITED)**

|                                                                                                      |   | **March                31** |          |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------------|
|                                                                                                      |   | **2006**                    |          | **2007** |   |
| **Operating                activities**                                                                   |   |                        |          |   |   |   |   |
| Net                loss                                                                                   |   | $                           | (938,295      | ) | $ | (2,519,895 | ) |
| Investment                in marketable security received from licensing                                  |   |                        | -             |   |   | 7,470 |   |
| Depreciation                and amortization of equipment and software                                    |   |                        | 147,028       |   |   | 216,159 |   |
| Amortization                of debt issuance cost and intangibles                                         |   |                        | 66,239        |   |   | 184,567 |   |
| Stock-based                compensation                                                                   |   |                        | 136,212       |   |   | 601,183 |   |
| Other                                                                                                     |   |                        | -             |   |   | 18,371 |   |
| Changes                in operating assets and liabilities                                                |   |                        |          |   |   |   |   |
| Accounts                receivable                                                                        |   |                        | 178,204       |   |   | (52,902 | ) |
| Inventories                                                                                               |   |                        | (29,618       | ) |   | 25,410 |   |
| Prepaid                expenses, deposits and other                                                       |   |                        | 29,328        |   |   | 74,559 |   |
| Jackpot                reserve deposits                                                                   |   |                        | 124,927       |   |   | 2,447,847 |   |
| Accounts                payable and accrued expenses                                                      |   |                        | (232,173      | ) |   | (62,888 | ) |
| Progressive                jackpot liability                                                              |   |                        | 198,776       |   |   | 81,292 |   |
| Net                cash provided by (used in) operating activities                                        |   |                        | (319,372      | ) |   | 1,021,173 |   |
|                                                                                                      |   |                        |          |   |   |   |   |
| **Investing                activities**                                                                   |   |                        |          |   |   |   |   |
| Purchase                of property and equipment                                                         |   |                        | (39,317       | ) |   | (182,230 | ) |
|                                                                                                      |   |                        |          |   |   |   |   |
| **Financing                activities**                                                                   |   |                        |          |   |   |   |   |
| Proceeds                from litigation settlements                                                       |   |                        | 45,536        |   |   | 28,754 |   |
| Repayment                of other debt borrowings                                                         |   |                        | (1,860        | ) |   | (1,860 | ) |
| Sale                of Series E Convertible Preferred Stock                                               |   |                        | -             |   |   | 332,000 |   |
| Exercise                of warrants for common stock                                                      |   |                        | -             |   |   | 118,124 |   |
| Net                cash provided by financing activities                                                  |   |                        | 43,676        |   |   | 477,018 |   |
|                                                                                                      |   |                        |          |   |   |   |   |
| **Net                increase (decrease) in cash and cash equivalents**                                   |   |                        | **(315,013**  | **)** |   | **1,315,961** |   |
| **Cash                and cash equivalents, beginning of period**                                         |   |                        | **1,672,381** |   |   | **1,675,588** |   |
| **Cash                and cash equivalents, end of period**                                               |   | **$**                       | **1,357,368** |   | **$** | **2,991,549** |   |
|                                                                                                      |   |                        |          |   |   |   |   |
| **Non-cash                investing and financing activities**                                            |   |                        |          |   |   |   |   |
| Common                stock issued for acquisition of technology rights                                   |   | $                           | 1,400,000     |   |   | - |   |
| Conversion                of Series B Convertible Preferred Stock to Common Stock Series                A |   |                        | 25,000        |   | $ | 534,200 |   |
| Exercise                of stock warrants and options for accrued expense                                 |   |                        | 87,750        |   |   | - |   |
| Exercise                of stock warrants and options for subscription receivable                         |   |                        | -             |   |   | 14,500 |   |
| Conversion                of Series C Convertible Preferred Stock to Common Stock Series                A |   |                        | -             |   |   | 15 |   |
| Exercise                of warrants in settlement of accounts payable                                     |   |                        | -             |   |   | 257,750 |   |
| Deferred                cost to refinance Senior Secured Convertible Notes                                |   |                        | -             |   |   | 667,000 |   |

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL      STATEMENTS**

**1.      Nature of operations:**

| ·   | the                February 2005 acquisition of AdLine Gaming, Inc., a subsidiary of                AdLine                Network, LLC, whereby we acquired significant technology and engineering                talent that supports the PortalVision system and its related applications;                and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                February 2006 acquisition from AdLine Network, LLC of technology                related                to the ability to accept wagers through WagerVision from the homes                of                players. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **
**2.      Basis of Presentation**

**3.      Jackpot Reserve Deposits**

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

**4.      Equipment and Software**

|                                              |   | **December                31, 2006** |      | **March                31, 2007****Unaudited** |   |
|---------------------------------------------------|--------|--------------------------------------|-----------|------------------------------------------------|--------|
| Software                                          |   | $                                    | 404,946   |                                           | $      | 421,995 |   |
| Production                equipment               |   |                                 | 1,484,348 |                                           |   | 1,639,730 |   |
| Equipment,                furniture, and fixtures |   |                                 | 314,053   |                                           |   | 323,853 |   |
| Leasehold                improvements             |   |                                 | 43,627    |                                           |   | 43,627 |   |
|                                              |   |                                 | 2,246,974 |                                           |   | 2,429,205 |   |
| Less                accumulated depreciation      |   |                                 | 1,329,139 |                                           |   | 1,424,625 |   |
|                                              |   | $                                    | 917,835   |                                           | $      | 1,004,580 |   |

**5.      Debt**

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

|                                            |   | **December                31, 2006** |      | **March                31, 2007****Unaudited** |   |
|-------------------------------------------------|--------|--------------------------------------|-----------|------------------------------------------------|--------|
| Bridge                financing                 |   | $                                    | 3,766,182 |                                           | $      | 3,283,281 |   |
| Settlement                due third parties     |   |                                 | 678,433   |                                           |   | 707,186 |   |
| Other                notes payable              |   |                                 | 11,162    |                                           |   | 9,303 |   |
|                                            |   |                                 | 4,455,777 |                                           |   | 3,999,770 |   |
| Less                amounts due within one year |   |                                 | 1,310,874 |                                           |   | 983,644 |   |
|                                            |   | $                                    | 3,144,903 |                                           | $      | 3,016,126 |   |

**6.      Stockholders' Equity**

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

*Series      A Convertible Preferred Stock. *

*Series      B Convertible Preferred Stock. *

*Series      C Convertible Preferred Stock. *

*Stock      Warrants and Options.*

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

| Beginning                Balance, January 1, 2007 |   |   | 6,461,741 |   |
|---------------------------------------------------|--------|--------|-----------|--------|
|                                              |   | $      | 1.65      |   |
| Granted                                           |   |   | 340,000   |   |
|                                              |   | $      | 3.19      |   |
| Exercised                                         |   |   | (202,623  | )      |
|                                              |   | $      | 1.91      |   |
| Forfeited                                         |   |   | (20,000   | )      |
|                                              |   | $      | 1.00      |   |
| Ending                Balance, March 31, 2007     |   |   | 6,579,118 |   |
|                                              |   | $      | 1.72      |   |

**7.      Progressive Jackpots **

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                                                                                                                              |   | **December                31, 2006**             |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                                                                                                                                                                                                              |   | **Progressive                Jackpot Liability** |       | **Gross****Commitment** |   |
| **Nevada                Numbers**                                                                                                                                                                                                                 |   |                                             |       |   |   |   |   |
| Present                value of $5.0 million base progressive jackpot, payable in 20 equal                annual                installments using a 4.91% discount rate, the prevailing 20-year                Treasury                Bond rate |   | $                                                | 3,293,613  |   | $ | 3,293,613 |   |
| Present                value at 4.91% of the $1,306,433 increase to the progressive jackpot                meter                                                                                                                                  |   |                                             | 860,577    |   |   | 860,597 |   |
| Less                portion insured through conventional insurance providers                                                                                                                                                                      |   |                                             | (2,900,000 | ) |   | — |   |
| **Other                Games**                                                                                                                                                                                                                    |   |                                             | 370,861    |   |   | 1,370,861 |   |
|                                                                                                                                                                                                                                              |   | $                                                | 1,625,051  |   | $ | 5,525,071 |   |

|                                                                                                                                                                                                                                         |   | **March                31, 2007**                |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                                                                                                                                                                                                         |   | **Progressive                Jackpot Liability** |       | **Gross****Commitment** |   |
| **Nevada                Numbers**                                                                                                                                                                                                            |   |                                             |       |   |   |   |   |
| Present                value of $5.0 million base progressive jackpot, payable in 20 equal                annual                installments using a 4.92% discount rate, the prevailing 20-year                Treasury                Bond |   | $                                                | 3,291,125  |   | $ | 3,291,125 |   |
| Present                value at 4.92% of the $1,331,447 increase to the progressive jackpot                meter                                                                                                                             |   |                                             | 876,392    |   |   | 876,392 |   |
| Less                portion insured through conventional insurance providers                                                                                                                                                                 |   |                                             | (2,900,000 | ) |   | — |   |
| **Other                Games**                                                                                                                                                                                                               |   |                                             | 438,826    |   |   | 1,438,826 |   |
|                                                                                                                                                                                                                                         |   | $                                                | 1,706,343  |   | $ | 5,606,343 |   |

**8.      **
**Income      Taxes**

*Accounting      for Uncertainty in Income Taxes - An Interpretation of FASB Statement No.      109*

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

**9.      Acquisition of Technology**

**10.      Segment Information **

|                                   |   | **Three                months ended March 31,** |       |
|----------------------------------------|--------|-------------------------------------------------|------------|
|                                   |   | **2006**                                        |       | **2007** |   |
| Revenue                                |   |                                            |       |   |   |   |   |
| Casino                Games            |   | $                                               | 455,733    |   | $ | 430,708 |   |
| Product                Sales           |   |                                            | 454,613    |   |   | 412,025 |   |
| Other                                  |   |                                            | 425,872    |   |   | 413,319 |   |
|                                   |   | $                                               | 1,336,218  |   | $ | 1,256,052 |   |
| Operating                income (loss) |   |                                            |       |   |   |   |   |
| Casino                Games            |   | $                                               | (71,138    | ) | $ | 108,098 |   |
| Product                Sales           |   |                                            | 139,607    |   |   | 124,201 |   |
| Other                                  |   |                                            | 96,312     |   |   | 72,883 |   |
| Unallocated                            |   |                                            | (1,008,723 | ) |   | (2,501,636 | ) |
|                                   |   | $                                               | (843,942   | ) | $ | (2,196,454 | ) |

|                               |   | **December                31, 2006** |       | **March                31, 2007** |   |
|------------------------------------|--------|--------------------------------------|------------|-----------------------------------|--------|
| Identifiable                assets |   |                                 |       |                              |   |   |   |
| Casino                Games        |   | $                                    | 7,219,569  |                              | $      | 6,945,925 |   |
| Product                Sales       |   |                                 | 466,536    |                              |   | 534,412 |   |
| Other                              |   |                                 | 441,242    |                              |   | 396,177 |   |
| Unallocated                        |   |                                 | 3,200,577  |                              |   | 2,212,686 |   |
|                               |   | $                                    | 11,327,924 |                              | $      | 10,089,200 |   |

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***Table          of Contents***

**LAS      VEGAS GAMING, INC. AND SUBSIDIARIES**

**NOTES      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

|                                |   | **Three                months ended March 31** |   |
|-------------------------------------|--------|------------------------------------------------|--------|
|                                |   | **2006**                                       |   | **2007** |   |
| Capital                expenditures |   |                                           |   |   |   |   |   |
| Casino                Games         |   | $                                              | 19,346 |   | $ | 122,704 |   |
| Product                Sales        |   |                                           | -      |   |   | - |   |
| Other                               |   |                                           | 12,711 |   |   | 26,159 |   |
| Unallocated                         |   |                                           | 7,260  |   |   | 33,366 |   |
|                                |   | $                                              | 39,317 |   | $ | 182,230 |   |

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***Table          of Contents***

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

*You      should read the following discussion and analysis together with our unaudited      consolidated financial statements and the accompanying notes. This discussion      contains forward-looking statements, within the meaning of Section 27A of the      Securities Act of 1933, as amended, Section 21E of the Securities Exchange      Act      of 1934, as amended, and the Private Securities Litigation Reform Act of 1995,      including statements regarding our expected financial position, business and      financing plans. Some of the forward-looking statements can be identified by      the      use of forward-looking terms such as “believes,” “expects,” “may,” “will,”“should,” “could,” “seek,” “intends,” “plans,” “estimates,” “anticipates,” or      other comparable terms. Forward-looking statements involve inherent risks and      uncertainties which could cause actual results to differ materially from those      in the forward-looking statements, including those discussed herein and      elsewhere in our Form 10-KSB for the year ended December 31, 2006. We caution      readers not to place undue reliance upon any such forward-looking statements,      which speak only as of the date made. These historical financial statements      may      not be indicative of our future performance.*

**Overview**

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***Table          of Contents***

**Critical      Accounting Policies and      Estimates**

*Revenue      Recognition*

*PortalVision.*
** **
** **

*Casino      Games.*
** **

*Products.*

*Other.*

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***Table          of Contents***

*Goodwill*

*Income      Taxes*

*Accounting      for Uncertainty in Income Taxes - An Interpretation of FASB Statement No.      109*

*Stock-based      Compensation*

*Accounting      for Stock-based Compensation*
*Share      Based Payment*

*Marketable      Securities*

*Equipment      and Software and Depreciation*

**Recent      Accounting Pronouncements**

*Fair      Value Measurements*
*The      Fair Value Option for Financial Assets and Financial Liabilities-Including      an      Amendment of SFAS No. 115,*

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***Table          of Contents***

**Results      of Operations**
** **

*Three      Months Ended March 31, 2007 Compared with Three Months Ended March 31,      2006*

*Revenue.*

*Costs      and Expenses. *

*Operating      Expenses.*

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***Table          of Contents***

*Finance      Costs.*

*Interest      and Other Income.*

**Liquidity      and Capital Resources**
** **

*Cash*

*Capital      Expenditures*

| ·   | the                purchase of an estimated $150,000 in LCD monitors and printers associated                with the increased placement of Gamblers Bonus Million Dollar Ticket                through United Coin Machine Company;                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                purchase of hardware for the rollout of our PortalVision System,                where we                will owe $250,000 on our first order of 2,500 hardware units which                should                be paid in the second quarter of                2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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***Table          of Contents***

*Sources      of Capital*

| ·   | a                Warrant Agreement to purchase 2,500,000 shares of our Common Stock                Series                A at an exercise price of $1.48 for five years beginning on March                31,                2006, but subject to the limitation that the shares issued upon exercise,                together with shares issuable under the CAMOFI Note, cannot result                in the                beneficial ownership of more than 4.99% of our issued and outstanding                shares of Common Stock Series A. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                Security Agreement that secures the repayment of the CAMOFI note                and our                performance under the related agreements and grants to CAMOFI a security                interest in our assets, including all goods, all contract rights                and                intangibles, all accounts, all documents, all letter-of-credit rights,                all                instruments and chattel paper, all commercial tort claims, all deposit                accounts and cash, excluding cash tied to jackpot requirements, all                investment property, all supporting obligations, all files, records,                books                of account, business papers and computer programs, and all products                and                proceeds of the forgoing                collateral. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                Registration Rights Agreement, as amended, that requires us to have                declared effective by the SEC by December 26, 2007, a registration                statement for the offer and sale of 125% of all shares of Common                Stock                Series A issuable upon conversion of the CAMOFI Note, issuable exercise                of                all warrants issued to CAMOFI, and issued or issuable under the terms                and                conditions of the bridge financing from                CAMOFI. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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***Table          of Contents***

| ·   | a                Subsidiary Guarantee that obligates our subsidiaries to guarantee                our                performance under the CAMOFI Note and related                agreements. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                Lock-Up Agreement that restricts Russell R. Roth from selling his                shares                of Common Stock Series A for a period of six months following the                effective date of the registration                statement. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Outlook*

**Off      Balance Sheet Financing**

**Qualitative      and Quantitative Disclosures about Market      Risk**

**Item          3.  **
**Controlsand          Procedures**

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***Table          of Contents***

** **

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings.**

**Item      2. Unregistered Sales of Equity      Securities.**

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***Table          of Contents***

**Item      3. Defaults Upon Senior Securities.**

**Item      4. Submission of Matters to a Vote of Security      Holders.**

**Item      5. Other Information.**

**Item      6. Exhibits**** **

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***Table          of Contents***

**SIGNATURE**

|   |                         | **Las                Vegas Gaming, Inc.** |
|--------|------------------------------|-------------------------------------------|
|   |                         | (Registrant)                              |
|   |                         |                                      |   |   |
| Date:  | May                14 , 2007 | By:                                       | /s/              Bruce A. Shepard |   |
|   |                         |                                      | Bruce                A. Shepard |   |
|   |                         | Its:                                      | Interim                Chief                Executive Officer, InterimPresident                and Chief Financial Officer |   |

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***Table          of Contents***

**EXHIBIT      INDEX**

|  **Exhibit**  |   |  **Document                Description**                                            |   |  **Page**  |
|-------------------------|--------|-----------------------------------------------------------------------------------------------|--------|----------------------|
|  31.1              |   |  Certifications                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   |  25             |
|  31.2              |   |  Certifications                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   |  26             |
|  32.1              |   |  Certifications                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   |  27             |

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***Table          of Contents***

**EXHIBIT      31.1**

**CERTIFICATIONS      **

| 1.   | I                have reviewed this quarterly report on Form 10-QSB of Las Vegas Gaming,                Inc.; |
|----------------|---------------------------------------------------------------------------------------------------------------|

| 2.   | Based                on my knowledge, this report does not contain any untrue statement                of a                material fact or omit to state a material fact necessary to make                the                statements made, in light of the circumstances under which such statements                were made, not misleading with respect to the period covered by this                report; |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Based                on my knowledge, the financial statements, and other financial information                included in this report, fairly present in all material respects                the                financial condition, results of operations and cash flows of the                small                business issuer as of, and for, the periods presented in this report; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The                small business issuer’s other certifying officer(s) and I are establishing                and maintaining disclosure controls and procedures (as defined in                the                Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control                over                financial reporting (as defined in Exchange Act Rules 13a-15(f) and                15d-15(f)) for the small business issuer and                have: |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | Designed                such disclosure controls and procedures, or caused such disclosure                controls and procedures to be designed under our supervision, to                ensure                that material information relating to the small business issuer,                including                its consolidated subsidiaries, is made known to us by others within                those                entities, particularly during the period in which this report is                being                prepared; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | [Omitted]Designed                such internal control over financial reporting, or caused such internal                control over financial reporting to be designed under our supervision,                to                provide reasonable assurance regarding the reliability of financial                reporting and the preparation of financial statements for external                purposes in accordance with generally accepted accounting                principles; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c. | Evaluated                the effectiveness of the small business issuer’s disclosure controls and                procedures and presented in this report our conclusions about the                effectiveness of the disclosure controls and procedures, as of the                end of                the period covered by this report based on such evaluation; and |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d. | Disclosed                in this report any change in the small business issuer’s internal control                over financial reporting that occurred during the small business                issuer’s                most recent fiscal quarter (the small business issuer’s fourth fiscal                quarter in the case of an annual report) that has materially affected,                or                is reasonably likely to materially affect, the small business issuer’s                internal control over financial reporting;                and |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | The                small business issuer’s other certifying officer(s) and I have disclosed,                based on our most recent evaluation, to the small business issuer’s                auditors and the audit committee of the small business issuer’s board of                directors (or persons performing the equivalent                functions): |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | All                significant deficiencies and material weaknesses in the design or                operation of internal control over financial reporting which are                reasonably likely to adversely affect the small business issuer’s ability                to record, process, summarize and report financial information;                and |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Any                fraud, whether or not material, that involves management or other                employees who have a significant role in the small business issuer’s                internal control over financial                reporting. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date:                May 14, 2007 |   | By:    | /s/                Bruce A. Shepard                                                                                                                                                             |
|-----------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   |   | Bruce                A. Shepard, Interim Chief                Executive Officer, Interim                President and Chief Financial Officer (Principal                Executive Officer) |

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***Table          of Contents***

**EXHIBIT      31.2**

**CERTIFICATIONS      **

| 1.   | I                have reviewed this quarterly report on Form 10-QSB of Las Vegas Gaming,                Inc; |
|----------------|--------------------------------------------------------------------------------------------------------------|

| 2.   | Based                on my knowledge, this report does not contain any untrue statement                of a                material fact or omit to state a material fact necessary to make                the                statements made, in light of the circumstances under which such statements                were made, not misleading with respect to the period covered by this                report; |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Based                on my knowledge, the financial statements, and other financial information                included in this report, fairly present in all material respects                the                financial condition, results of operations and cash flows of the                small                business issuer as of, and for, the periods presented in this report; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The                small business issuer’s other certifying officer(s) and I are establishing                and maintaining disclosure controls and procedures (as defined in                the                Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control                over                financial reporting (as defined in Exchange Act Rules 13a-15(f) and                15d-15(f)) for the small business issuer and                have: |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | Designed                such disclosure controls and procedures, or caused such disclosure                controls and procedures to be designed under our supervision, to                ensure                that material information relating to the small business issuer,                including                its consolidated subsidiaries, is made known to us by others within                those                entities, particularly during the period in which this report is                being                prepared; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | [Omitted]Designed                such internal control over financial reporting, or caused such internal                control over financial reporting to be designed under our supervision,                to                provide reasonable assurance regarding the reliability of financial                reporting and the preparation of financial statements for external                purposes in accordance with generally accepted accounting                principles; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c. | Evaluated                the effectiveness of the small business issuer’s disclosure controls and                procedures and presented in this report our conclusions about the                effectiveness of the disclosure controls and procedures, as of the                end of                the period covered by this report based on such evaluation; and |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d. | Disclosed                in this report any change in the small business issuer’s internal control                over financial reporting that occurred during the small business                issuer’s                most recent fiscal quarter (the small business issuer’s fourth fiscal                quarter in the case of an annual report) that has materially affected,                or                is reasonably likely to materially affect, the small business issuer’s                internal control over financial reporting;                and |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | The                small business issuer’s other certifying officer(s) and I have disclosed,                based on our most recent evaluation, to the small business issuer’s                auditors and the audit committee of the small business issuer’s board of                directors (or persons performing the equivalent                functions): |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | All                significant deficiencies and material weaknesses in the design or                operation of internal control over financial reporting which are                reasonably likely to adversely affect the small business issuer’s ability                to record, process, summarize and report financial information;                and |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Any                fraud, whether or not material, that involves management or other                employees who have a significant role in the small business issuer’s                internal control over financial                reporting. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date:                May 14, 2007 |   | By:    | /s/                Bruce A. Shepard                                                                                                                                                                            |
|-----------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   |   | Bruce                A. Shepard, Interim                Chief                Executive Officer, Interim                President and Chief Financial Officer (Principal                Financial Officer) |

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***Table          of Contents***

**EXHIBIT      32.1**

**CERTIFICATIONS      PURSUANT TO **

**SECTION      906 OF THE SARBANES-OXLEY ACT OF 2002**

| 1.   | The                Report fully complies with the requirements of Section 13(a) or 15(d)                of                the Securities Exchange Act of 1934;                and |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | The                information contained in the Report fairly presents, in all material                respects, the financial condition and result of operations of the                Company. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| By:    | /s/                Bruce A. Shepard                                                                                                                                                                                    | Dated: |                     May 14, 2007 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|
|   | Bruce                A. Shepard                                                                                                                                                                                        |   |                                                 |
| Title: | Interim                Chief                Executive Officer, Interim President                and Chief Financial Officer(Principal                Executive Officer and Principal Financial                Officer) |   |                                                 |
|   |                                                                                                                                                                                                                   |   |                                                 |
|   |                                                                                                                                                                                                                   |   |                                                 |
|   |                                                                                                                                                                                                                   |   |                                                 |
|   |                                                                                                                                                                                                                   |   |                                                 |

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